As filed with the Securities and Exchange Commission on July 18, 2014

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 20-F‘ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF
THE SECURITIES EXCHANGE ACT OF 1934
OR
È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2014
OR
‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition periodtoOR‘ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
Commission file number 000-54189

KABUSHIKI KAISHA MITSUBISHI UFJ FINANCIAL GROUP(Exact name of Registrant as specified in its charter)

MITSUBISHI UFJ FINANCIAL GROUP, INC.
(Translation of Registrant’s name into English)
Japan(Jurisdiction of incorporation or organization)

7-1, Marunouchi 2-chome
Chiyoda-ku, Tokyo 100-8330
Japan(Address of principal executive offices)

Hiroshi Fukunaga, +81-3-3240-8111, +81-3-3240-7073, same address as above(Name, Telephone, Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each className of each exchange on which registered
Common stock, without par value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
American depositary shares, each of which represents one share of common stock . . . . . . . . . . . . . . . . . . . . . . . . . .

New York Stock Exchange(1)New York Stock Exchange(1) The listing of the registrant’s common stock on the New York Stock Exchange is for technical purposes only and without trading privileges.
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
$2,300,000,000 Fixed/Floating Rate Non-Cumulative Preferred Securities of MUFG Capital Finance 1 Limited, and Mitsubishi UFJ Financial Group, Inc.’s
Guarantee thereof€750,000,000 Fixed/Floating Rate Non-Cumulative Preferred Securities of MUFG Capital Finance 2 Limited, and Mitsubishi UFJ Financial Group, Inc.’s
Guarantee thereof
Restricted Share Units granting rights to common stock pursuant to the UnionBanCal Corporation Stock Bonus Plan and the Bank of Tokyo-Mitsubishi UFJ,
Ltd. Headquarters for the Americas Stock Bonus Plan
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
As of March 31, 2014, (1) 14,164,026,420 shares of common stock (including 3,389,416 shares of common stock held by the registrant and its consolidated
subsidiaries as treasury stock) and (2) 1,000 shares of class 11 preferred stock. All of the outstanding class 11 preferred stock as of July 31, 2014 will be acquired
mandatorily by the registrant on August 1, 2014.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes È No ‘
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
Yes ‘ No È
Note—Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes È No ‘
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required tobe submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files).
Yes È No ‘
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer andlarge accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filerÈ
Accelerated filer‘
Non-accelerated filer‘
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP
ÈInternational Financial Reporting Standards as issued
Other‘by the International Accounting Standards Board‘
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
Item 17 ‘ Item 18 ‘
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ‘ No ÈTABLE OF CONTENTS
Page

Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1.
Identity of Directors, Senior Management and Advisers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2.
Offer Statistics and Expected Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 3.
Key Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4.
Information on the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4A. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 5.
Operating and Financial Review and Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6.
Directors, Senior Management and Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7.
Major Shareholders and Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8.
Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9.
The Offer and Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 10.
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11.
Quantitative and Qualitative Disclosures about Credit, Market and Other Risk . . . . . . . . . . . . .
Item 12.
Description of Securities Other than Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 13.
Defaults, Dividend Arrearages and Delinquencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 14.
Material Modifications to the Rights of Security Holders and Use of Proceeds . . . . . . . . . . . . .
Item 15.
Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16A. Audit Committee Financial Expert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16B. Code of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16C. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16D. Exemptions from the Listing Standards for Audit Committees . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers . . . . . . . . . . . . . . . . . . .
Item 16F. Change in Registrant’s Certifying Accountant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16G. Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16H. Mine Safety Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 17.
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 18.
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 19.
Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selected Statistical Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3
4
4
4
25
55
56
139
157
159
161
162
184
210
212
212
212
216
216
216
217
218
218
218
220
221
221
221
A-1
F-1

For purposes of this Annual Report, we have presented our consolidated financial statements in accordancewith accounting principles generally accepted in the United States, or U.S. GAAP, except for risk-adjusted
capital ratios, business segment financial information and some other specifically identified information. Unlessotherwise stated or the context otherwise requires, all amounts in our financial statements are expressed inJapanese yen.
When we refer in this Annual Report to “MUFG,” “we,” “us,” “our” and the “Group,” we generally mean
Mitsubishi UFJ Financial Group, Inc. and its consolidated subsidiaries, but from time to time as the context
requires, we mean Mitsubishi UFJ Financial Group, Inc. as an individual legal entity. Similarly, references to“MTFG” and “UFJ Holdings” are to Mitsubishi Tokyo Financial Group, Inc. and to UFJ Holdings, Inc., as single
entities, respectively, as well as to MTFG and UFJ Holdings and their respective consolidated subsidiaries, as thecontext requires. Unless the context otherwise requires, references in this Annual Report to the financial results orbusiness of the “MTFG group” and the “UFJ group” refer to those of MTFG and UFJ Holdings and their respective
consolidated subsidiaries. In addition, our “commercial banking subsidiaries” refers to The Bank of TokyoMitsubishi UFJ, Ltd., or “BTMU,” and, as the context requires, its consolidated subsidiaries engaged in thecommercial banking business. Our “trust banking subsidiaries” refers to Mitsubishi UFJ Trust and Banking
Corporation, or “MUTB,” and, as the context requires, its consolidated subsidiaries engaged in the trust banking
business. Our “banking subsidiaries” refers to BTMU and MUTB and, as the context requires, their respective
consolidated subsidiaries engaged in the banking business.
References to “MUAH” and “MUB” are to MUFG Americas Holdings Corporation and MUFG Union
Bank, N.A., as single entities, respectively, as well as to MUAH and MUB and their respective consolidated1

subsidiaries, as the context requires. Effective July 1, 2014, we integrated BTMU’s operations in the Americas
region with the operations of UnionBanCal Corporation, or “UNBC,” which is a wholly owned subsidiary of
BTMU, and changed UNBC’s corporate name to “MUFG Americas Holdings Corporation.” Union Bank, N.A.,
which is MUAH’s principal subsidiary, was also renamed “MUFG Union Bank, N.A.,” effective the same day.
References in this Annual Report to “yen” or “¥” are to Japanese yen, references to “U.S. dollars,” “U.S.
dollar,” “dollars,” “U.S.$” or “$” are to United States dollars, and references to “euro” or “€” are to the currency ofthe member states of the European Monetary Union. Our fiscal year ends on March 31 of each year. References toyears not specified as being fiscal years are to calendar years.
We usually hold the ordinary general meeting of shareholders of Mitsubishi UFJ Financial Group, Inc. inJune of each year in Tokyo.

2Forward-Looking Statements
We may from time to time make written or oral forward-looking statements. Written forward-looking
statements may appear in documents filed with or submitted to the U.S. Securities and Exchange Commission, orSEC, including this Annual Report, and other reports to shareholders and other communications.
The U.S. Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking
information to encourage companies to provide prospective information about themselves. We rely on this safe
harbor in making these forward-looking statements.
Forward-looking statements appear in a number of places in this Annual Report and include statements
regarding our current intent, business plan, targets, belief or expectations or the current belief or current
expectations of our management with respect to our results of operations and financial condition, including,among other matters, our problem loans and loan losses. In many, but not all cases, we use words such as“anticipate,” “aim,” “believe,” “estimate,” “expect,” “intend,” “plan,” “probability,” “risk,” “will,” “may” andsimilar expressions, as they relate to us or our management, to identify forward-looking statements. Thesestatements reflect our current views with respect to future events and are subject to risks, uncertainties andassumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions
prove incorrect, actual results may vary materially from those which are aimed, anticipated, believed, estimated,
expected, intended or planned, or otherwise stated.
Our forward-looking statements are not guarantees of future performance and involve risks anduncertainties. Actual results may differ from those in the forward-looking statements as a result of various
factors. We identify in this Annual Report in “Item 3.D. Key Information—Risk Factors,” “Item 4.B. Informationon the Company—Business Overview,” “Item 5. Operating and Financial Review and Prospects” and elsewhere,
some, but not necessarily all, of the important factors that could cause these differences.
We are under no obligation, and disclaim any obligation, to update or alter our forward-looking statements,
whether as a result of new information, future events or otherwise.

3

PART I
Item 1.

Identity of Directors, Senior Management and Advisers.

Not applicable.
Item 2.

Offer Statistics and Expected Timetable.

Not applicable.
Item 3.
A.

Key Information.

Selected Financial Data

The selected statement of income data and selected balance sheet data set forth below has been derived from
our audited consolidated financial statements.
Except for risk-adjusted capital ratios, which are calculated in accordance with Japanese banking regulations
based on information derived from our consolidated financial statements prepared in accordance with accounting
principles generally accepted in Japan, or Japanese GAAP, the selected financial data set forth below are derived
from our consolidated financial statements prepared in accordance with U.S. GAAP.
You should read the selected financial data set forth below in conjunction with “Item 5. Operating and
Financial Review and Prospects,” “Selected Statistical Data” and our consolidated financial statements and otherfinancial data included elsewhere in this Annual Report. These data are qualified in their entirety by reference toall of that information.

4

Fiscal years ended March 31,
2010
2011
2012
2013
2014
(in millions, except per share data and number of shares)
Statement of income data:
Interest income(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,757,866
774,400¥ 2,550,144
670,673¥ 2,595,956
640,139¥ 2,427,521
556,418¥ 2,522,283
560,972

Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision (credit) for credit losses . . . . . . . . . . . . . . . . . . . .

1,983,466
647,793

1,879,471
292,035

1,955,817
223,809

1,871,103
144,542

1,961,311(106,371)

Net interest income after provision (credit) for credit
losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,335,673
2,469,411
2,508,060

1,587,436
1,694,822
2,460,446

1,732,008
1,440,576
2,322,642

1,726,561
2,067,909
2,378,599

2,067,682
1,821,081
2,468,320

Income before income tax expense . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,297,024
413,105

821,812433,625

849,942429,191

1,415,871
296,020

1,420,443
337,917883,919

388,187

420,751

1,119,851

1,082,526

15,257(64,458)

4,520

50,727

67,133

Net income before attribution of noncontrollinginterests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to noncontrollinginterests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to Mitsubishi UFJ Financial
Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥868,662¥452,645¥416,231¥ 1,069,124¥ 1,015,393

Net income available to common shareholders of
Mitsubishi UFJ Financial Group . . . . . . . . . . . . . . . . . . .

¥846,984¥

431,705¥

398,291¥ 1,051,184¥

994,152

¥

68.72

¥

30.55

¥

28.17

¥

¥

70.21

Amounts per share:
Basic earnings per common share—net income available
to common shareholders of Mitsubishi UFJ Financial
Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted earnings per common share—net income available
to common shareholders of Mitsubishi UFJ Financial
Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of shares used to calculate basic earnings percommon share (in thousands) . . . . . . . . . . . . . . . . . . . . .
Number of shares used to calculate diluted earnings percommon share (in thousands)(2) . . . . . . . . . . . . . . . . . . . .
Cash dividends per share paid during the fiscal year:—Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—Preferred stock (Class 3) . . . . . . . . . . . . . . . . . . . . . . . . .
—Preferred stock (Class 5)(3) . . . . . . . . . . . . . . . . . . . . . . . .
—Preferred stock (Class 11) . . . . . . . . . . . . . . . . . . . . . . . .

Balance sheet data:
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans, net of allowance for credit losses . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital stock—common stock . . . . . . . . . . . . . . . . . .

74.30

68.59

30.43

28.09

74.16

69.98

12,324,315

14,131,567

14,140,136

14,148,060

14,158,698

12,332,681

14,144,737

14,156,820

14,169,080

14,180,080

¥
$
¥
$
¥
$
¥
$

11.00
0.12
60.00
0.65
100.50
1.10
5.30
0.06

¥
$
¥
$
¥
$
¥
$

12.00
0.14
30.00
0.34
115.00
1.33
5.30
0.06

¥
$

¥
$
¥
$

12.00
0.15
—
—
115.00
1.45
5.30
0.07

¥
$

¥
$
¥
$

12.00
0.15
—
—
115.00
1.42
5.30
0.07

¥
$

¥
$
¥
$

14.00
0.14
—
—
115.00
1.14
5.30
0.05

2010

2011

As of March 31,
2012(in millions)

2013

2014

¥200,081,462
90,870,295
190,980,363
135,472,496
14,162,424
9,101,099
1,643,238¥202,850,243
86,261,519
194,187,331
136,631,704
13,356,728
8,662,912
1,644,132¥215,202,514
91,012,736
206,344,067
139,493,730
12,593,062
8,858,447
1,645,144¥230,559,276
97,254,242
219,617,296
148,209,739
12,182,358
10,941,980
1,646,035¥253,661,077
109,181,991
240,909,633
162,517,786
14,498,678
12,751,444
1,647,145

5

Fiscal years ended March 31,
2011
2012
2013
(in millions, except percentages)

2010
Other financial data:
Average balances:
Interest-earning assets . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing liabilities . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥175,370,688
158,156,363
195,571,703
7,871,505

Return on equity and assets:
Net income available to common shareholders as apercentage of total average assets . . . . . . . . . . . . .
Net income available to common shareholders as apercentage of total average equity . . . . . . . . . . . . .
Dividends per common share as a percentage ofbasic earnings per common share . . . . . . . . . . . . .
Total average equity as a percentage of total averageassets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net interest income as a percentage of total averageinterest-earning assets . . . . . . . . . . . . . . . . . . . . . .
Credit quality data:
Allowance for credit losses . . . . . . . . . . . . . . . . . . . .
Allowance for credit losses as a percentage ofloans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impaired loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impaired loans as a percentage of loans . . . . . . . . . . .
Allowance for credit losses related to impaired loans
as a percentage of impaired loans . . . . . . . . . . . . .
Net loan charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loan charge-offs as a percentage of averageloans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average interest rate spread . . . . . . . . . . . . . . . . . . . .
Risk-adjusted capital ratio calculated under JapaneseGAAP(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥180,260,385
161,344,664
204,781,984
8,987,129¥184,179,147
165,420,569
211,835,389
8,594,310¥193,824,256
173,399,441
225,682,785
9,244,530

2014¥212,176,348
189,413,309
247,729,744
10,683,098

0.43%

0.21%

0.19%

0.47%

0.40%

10.76%

4.80%

4.63%

11.37%

9.31%

16.01%

39.28%

42.60%

16.15%

19.94%

4.02%

4.39%

4.06%

4.10%

4.31%

1.13%

1.04%

1.06%

0.97%

0.92%

¥

1,315,615¥

1.43%
1,825,852 ¥
1.98%

1.42%
1,893,098 ¥
2.16%

1.39%
2,031,868 ¥
2.20%

1.36%
2,200,766 ¥
2.23%

0.99%
1,861,027
1.69%

42.19%
468,400 ¥39.30%
342,100 ¥42.92%
173,370 ¥43.39%
112,862 ¥40.32%
153,748

0.49%
1.08%

0.39%
0.99%

0.20%
1.02%

0.12%
0.93%

0.15%
0.89%

14.87%

14.89%

14.91%

16.68%

15.53%¥¥

1,240,456¥

1,285,507¥

1,335,987¥

1,094,420

Notes:(1) Interest income for the fiscal year ended March 31, 2012 includes a gain of ¥139,320 million on the conversion rate adjustment of
Morgan Stanley’s convertible preferred stock. Exclusive of the one-time gain associated with the conversion, interest income would havebeen lower for the fiscal year ended March 31, 2012.
(2) Includes the common shares potentially issuable upon conversion of the Class 11 Preferred Stock.
(3) Preferred dividends were ¥57.5 per share semi-annually, except for the semi-annual period ended March 31, 2009 when preferred
dividends were ¥43.0 per share.
(4) Risk-adjusted capital ratios have been calculated in accordance with Japanese banking regulations as applicable on the relevant
calculation date, based on information derived from our consolidated financial statements prepared in accordance with Japanese GAAP.
For a description of the applicable capital ratio calculation and other requirements applicable, see “Item 4.B. Information on the
Company—Business Overview—Supervision and Regulation—Japan—Capital adequacy” and “Item 5.B. Operating and Financial
Review and Prospects—Liquidity and Capital Resources—Capital Adequacy.”

6

Exchange Rate Information
The tables below set forth, for each period indicated, certain information concerning the rate of exchange ofJapanese yen per U.S. $1.00 based on exchange rate information found on Bloomberg. On July 7, 2014, theclosing exchange rate was ¥101.86 to U.S.$1.00 and the inverse rate was U.S.$0.98 to ¥100.00.

High . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FebruaryMarch¥102.83¥100.76¥103.76¥101.20

Year 2014
April
May

¥104.13¥101.33¥103.02¥100.82

July(1)

June¥102.80 ¥102.27¥101.24 ¥101.30

Note:(1) Period from July 1, 2014 to July 7, 2014.

2010

Average (of month-end rates) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B.

¥92.51

Fiscal years ended March 31,
2011
2012
2013

¥84.99¥78.90¥83.32

2014¥100.38

Capitalization and Indebtedness
Not applicable.

C.

Reasons for the Offer and Use of Proceeds
Not applicable.

D.

Risk Factors

Investing in our securities involves a high degree of risk. You should carefully consider the risks describedin this section, which is intended to disclose all of the risks that we consider material based on the information
currently available to us, as well as all the other information in this Annual Report, including our consolidated
financial statements and related notes, “Item 5. Operating and Financial Review and Prospects,” “Item 11.
Quantitative and Qualitative Disclosures about Credit, Market and Other Risk” and “Selected Statistical Data.”
Our business, operating results and financial condition could be materially and adversely affected by any of
the factors discussed below. The trading price of our securities could decline due to any of these factors. This
Annual Report also contains forward-looking statements that involve risks and uncertainties. Our actual results
could differ materially from those anticipated in these forward-looking statements as a result of various factors,
including the risks faced by us described in this section and elsewhere in this Annual Report. See “ForwardLooking Statements.”
Risks Related to Our Business
Because a large portion of our assets as well as our business operations are in Japan, we may incur
losses if economic conditions in Japan worsen.
Our performance is particularly affected by the general economic conditions of Japan where we areheadquartered and conduct a significant amount of our business. As of March 31, 2014, 62.6% of our total assets
were related to Japanese domestic assets, including Japanese national government and Japanese government
agency bonds, which accounted for 75.6% of our total investment securities portfolio and 16.5% of our total
assets, respectively. Interest and non-interest income in Japan represented 71.6% of our total interest and noninterest income for the fiscal year ended March 31, 2014. Furthermore, as of March 31, 2014, our loans in Japanaccounted for 64.0% of our total loans outstanding.
7

Since December 2012, the Japanese government has put forth a series of policies, including emergency
economic measures and a supplementary budget, expanded monetary easing, and a growth strategy. The Bank ofJapan introduced quantitative and qualitative monetary easing in April 2013 in an effort to achieve an inflation
target of two percent in two years. However, there is still significant uncertainty surrounding Japan’s economy. If
these government policies prove ineffective, the growing debt burden of the Japanese government may adversely
affect Japan’s economy. For example, if the prices of Japanese government bonds decrease, resulting in
unexpectedly higher interest rates, our investment securities portfolio as well as our lending, borrowing, trading
and other operations may be negatively impacted. In addition, under the legislation enacted by the Japanese Diet
in August 2012, the consumption tax rate increased from 5% to 8% on April 1, 2014 and will increase further to
10% by October 2015, which may significantly weaken consumer spending in Japan. In recent periods, several
credit rating agencies have downgraded the credit ratings of Japan’s sovereign debt, including a downgrade by
Moody’s Japan K.K., or Moody’s, in August 2011 and a downgrade by Fitch Ratings Japan Limited, or Fitch, in
May 2012. For a more detailed discussion of the risks related to increases in interest rates, see “—Risks Related
to Our Business—Increases in interest rates could adversely affect the value of our bond portfolio.”
Instability in the Japanese stock market and foreign currency exchange rates may also have a significant
adverse impact on our asset and liability management as well as our results of operations. Various other factors,
including stagnation or deterioration of economic and market conditions in other countries, and growing global
competition, may also have a material negative impact on the Japanese economy. For a detailed discussion on thebusiness environment in Japan and abroad, see “Item 5. Operating and Financial Review and Prospects—
Business Environment.”
Since our domestic loans in Japan accounted for a significant portion of our loan portfolio, deteriorating or
stagnant economic conditions in Japan may cause adverse effects on our financial results, such as increases incredit costs, as the credit quality of some borrowers could deteriorate. For example, due to the intensifying global
competition and weakening consumer spending in recent periods, some Japanese companies, including
electronics manufacturers, have experienced significant financial difficulties. For a further discussion, see“—Risks Related to Our Business—We may suffer additional credit-related losses in the future if our borrowers
are unable to repay their loans as expected or if the measures we take in reaction to, or in anticipation of, ourborrowers’ deteriorating repayment abilities prove inappropriate or insufficient.”
If the global economy deteriorates further, our credit-related losses may increase, and the value of thefinancial instruments we hold may decrease, resulting in losses.
Global economic conditions remain volatile, and it is uncertain how the global economy will evolve overtime. The shift in the monetary policy in the United States, slowing economic growth in China due to thedeterioration of the Chinese financial market and other causes, and the political turmoil in various regions aroundworld could negatively impact wider markets, including those of both emerging and developed countries. As of
March 31, 2014, based principally on the domicile of the obligors, assets related to Europe accounted forapproximately 8.8% of our total assets, assets related to Asia and Oceania excluding Japan accounted forapproximately 8.8% of our total assets, and assets related to the United States accounted for approximately
16.0% of our total assets. If the global economy deteriorates or the global economic recovery significantly slows
down again, the availability of credit may become limited, and some of our borrowers may default on their loan
obligations to us, increasing our credit losses. In addition, concerns over the sovereign debt problem in some
European countries may limit liquidity in the global financial markets. Some of our credit derivative transactions
may also be negatively affected, including the protection we sold through single name credit default swaps, index
and basket credit default swaps, and credit linked notes. The notional amounts of these protections sold as ofMarch 31, 2014 were ¥2,692.1 billion, ¥773.8 billion and ¥4.5 billion, respectively. In addition, if credit market
conditions worsen, our capital funding structure may need to be adjusted or our funding costs may increase,which could have a material adverse impact on our financial condition and results of operations.

8

Furthermore, we have incurred losses, and may incur further losses, as a result of changes in the fair valueof our financial instruments resulting from weakening market conditions. For example, declines in the fair valueof our investment securities, particularly equity investment securities, resulted in our recording impairment lossesof ¥195.7 billion, ¥124.2 billion and ¥6.5 billion for the fiscal years ended March 31, 2012, 2013 and 2014,
respectively. As of March 31, 2014, approximately 36.7% of our total assets were financial instruments for which
we measure fair value on a recurring basis, and less than 0.5% of our total assets were financial instruments forwhich we measure fair value on a non-recurring basis. Generally, in order to establish the fair value of these
instruments, we rely on quoted prices. If the value of these financial instruments declines, a corresponding writedown may be recognized in our consolidated statements of income. In addition, because we hold a large amountof investment securities, short-term fluctuations in the value of our securities may trigger losses or exit costs for
us to manage our risk. For more information on our valuation method for financial instruments, see“Item 5. Operating and Financial Review and Prospects—Critical Accounting Estimates.”
Our business operations are exposed to risks of natural disasters, terrorism and other disruptions causedby external events.
As a major financial institution incorporated in Japan and operating in major international financial markets,
our business operations, ATMs and other information technology systems, personnel, and facilities and otherphysical assets are subject to the risks of earthquakes, typhoons, floods and other natural disasters, terrorism andother political and social conflicts, health epidemics, and other disruptions caused by external events, which arebeyond our control. Our risk management policies and procedures may be insufficient to address these
unanticipated risks, resulting in our inability to continue to operate a part or the whole of our business.
As with other Japanese companies, we are exposed to heightened risks of large-scale natural disasters,
particularly earthquakes. Our redundancy and backup measures may not be sufficient to avoid a material
disruption in our operations, and our contingency and business continuity plans may not address all eventualities
that may occur in the event of a material disruption. For example, large-scale natural disasters such as the March2011 Great East Japan Earthquake, which led to tsunamis, soil liquefaction and fires, as well as electricity power
supply shortages and electricity power conservation measures resulting from the suspension of the operations of
the nuclear power plants, could significantly disrupt our facilities and other operational infrastructures, including
branches, offices, ATMs and information technology systems.
As a consequence of earthquakes and other events, we may be required to incur significant costs andexpenses for remedial measures or compensation to customers or transaction counterparties for resulting losses.
We may also suffer loss of business. In addition, earthquakes and other events may have various other significant
adverse effects, including deterioration in economic conditions, declines in the business performance of ourborrowers and decreases in stock prices, which may result in higher credit costs or impairment or valuation losseson the financial instruments we hold. These effects could materially and adversely affect our business, operating
results and financial condition.
We may suffer additional credit-related losses in the future if our borrowers are unable to repay theirloans as expected or if the measures we take in reaction to, or in anticipation of, our borrowers’ deteriorating
repayment abilities prove inappropriate or insufficient.
When we lend money or commit to lend money, we incur credit risk which is the risk of losses if ourborrowers do not repay their loans. We may incur significant credit losses or have to provide for a significant
amount of additional allowance for credit losses if:‰

large borrowers become insolvent or must be restructured;‰domestic or global economic conditions, either generally or in particular industries in which large
borrowers operate, deteriorate;9‰

the value of the collateral we hold, such as real estate or securities, declines; or‰

we are adversely affected by corporate credibility issues among our borrowers, to an extent that is worse
than anticipated.

As a percentage of total loans, impaired loans, which primarily include nonaccrual loans and troubled debt
restructurings, or TDRs, ranged from 1.69% to 2.23% as of the five most recent fiscal year-ends. As of March 31,
2014, impaired loans were ¥1,861.0 billion, representing 1.69% of our total outstanding loans. If the economic
conditions in Japan or other parts of the world to which we have significant credit risk exposure worsen, ourproblem loans and credit-related expenses may increase. An increase in problem loans and credit-related
expenses would adversely affect our results of operations, weaken our financial condition and erode our capitalbase. For a discussion of our problem loans, see “Item 5.B. Operating and Financial Review and Prospects—
Liquidity and Capital Resources—Financial Condition.”
We may provide additional loans, equity capital or other forms of support to troubled borrowers in order tofacilitate their restructuring and revitalization efforts. We may also forbear from exercising some or all of ourrights as a creditor against them, and we may forgive loans to them in conjunction with their debt restructurings.
We may take these steps even when such steps might not be warranted from the perspective of our short-term or
narrow economic interests or a technical analysis of our legal rights against those borrowers, in light of otherfactors such as our longer-term economic interests, and our commitment to support the Japanese economy. These
practices may substantially increase our exposure to troubled borrowers and increase our losses. Credit losses
may also increase if we elect, or are forced by economic or other considerations, to sell or write off our problem
loans at a larger discount, in a larger amount or in a different time or manner, than we may otherwise want.
Although we, from time to time, enter into credit derivative transactions, including credit default swap
contracts, to manage our credit risk exposure, such transactions may not provide the protection against credit
defaults that we intended due to counterparty defaults or similar issues. The credit default swap contracts could
also result in significant losses. As of March 31, 2014, the total notional amount of the protection we soldthrough single name credit default swaps, index and basket credit default swaps, and credit-linked notes was¥3.46 trillion. In addition, negative changes in financial market conditions may restrict the availability andliquidity of credit default swaps. For more information on our credit derivative transactions, see Note 23 to ourconsolidated financial statements included elsewhere in this Annual Report.
Our loan losses could prove to be materially different from our estimates and could materially exceed ourcurrent allowance for credit losses, in which case we may need to provide for additional allowance for credit losses
and may also record credit losses beyond our allowance. Our allowance for credit losses in our loan portfolio isbased on evaluations of customers’ creditworthiness and the value of collateral we hold. Negative changes in
economic conditions, government policies or our borrowers’ repayment abilities could require us to provide for
additional allowance. For example, companies in the Japanese electronics manufacturing industry in particular haveexperienced significant declines in sales and financial difficulties due to increased global competition. Moreover,
the Japanese electric utility companies, including The Tokyo Electric Power Company, Incorporated, have beensignificantly affected by the accidents at the Fukushima Daiichi Nuclear Power Plants in March 2011 andsubsequent developments, including the suspension of all of the nuclear power plants for seismic safety inspections
and other reasons, higher fuel prices in recent periods and compensation issues for affected individuals andcompanies. Other borrowers in Japan may be adversely affected by electricity power supply shortages andelectricity rate increases. As a result, our borrowers may incur financial and non-financial losses that exceed ourestimations. In such case, we may need to provide for additional allowance for credit losses. Also, the regulatory
standards or guidance on establishing allowances may also change, causing us to change some of the evaluations
used in determining the allowances. As a result, we may need to provide for additional allowance for credit losses.
For a discussion of our allowance policy, see “Item 5.B. Operating and Financial Review and Prospects—Liquidity
and Capital Resources—Financial Condition.”

10For the fiscal year ended March 31, 2014, we recorded ¥106.4 billion of credit for credit losses, which was
included in our consolidated statements of income. When there is an improvement in asset quality, a credit for credit
losses is recorded to reverse the allowance for credit losses to a level management deems appropriate. However, wehave historically more often provided for credit losses rather than recording credit for credit losses, and in future
periods we may need to recognize a provision for credit losses, which may have a significant negative effect on our
results of operations.
If the Japanese stock market or other global markets decline in the future, we may incur losses on our
securities portfolio and our capital ratios will be adversely affected.
A decline in Japanese stock prices could reduce the value of the Japanese domestic marketable equity
securities that we hold, which accounted for 8.7% of our total investment securities portfolio, or 1.9% of our total
assets, as of March 31, 2014. The Nikkei Stock Average, which is the average of 225 blue chip stocks listed on
the Tokyo Stock Exchange, fluctuated throughout the fiscal year ended March 31, 2014 declining to the intra-day
lowest price of ¥11,805.78 on April 2, 2013 and rising to the intra-day highest price of ¥16,320.22 on
December 30, 2013. As of July 7, 2014, the closing price of the Nikkei Stock Average was ¥15,379.44. Recent
fluctuations in the Nikkei Stock Average have reflected the volatility in the global economy and investor
sentiment as investors continue to observe the changes in the economic and monetary policies mainly in Japan,
the United States, the Eurozone and Asian countries. For example, in Japan, if the economic measures under theJapanese government’s “Abenomics” policy prove ineffective or result in adverse consequences, the Japanesestock market will likely be adversely affected. In addition, weakening or stagnant economic conditions in otherregions may have a significant negative impact on Japanese companies, which in turn will cause their stock
prices to decline. Concerns over the impact of geopolitical tensions and conflicts in various parts of the world on
Japanese companies may also adversely affect stock prices in Japan. If stock market prices decline or do not
improve, we may incur losses on our securities portfolio. Because we hold a large amount of Japanese domestic
marketable equity securities, even short-term fluctuations in the value of our securities may trigger losses or exit
costs for us to manage our risk. Declines in the Japanese stock market or other global markets may alsomaterially and adversely affect our capital ratios and financial condition. For a detailed discussion of ourholdings of marketable equity securities and the effect of market declines on our capital ratios, see “Item 5.B.
Operating and Financial Review and Prospects—Liquidity and Capital Resources—Capital Adequacy” and“Selected Statistical Data—Investment Portfolio.”
Increases in interest rates could adversely affect the value of our bond portfolio.
The aggregate carrying amount of the Japanese government and corporate bonds and foreign bonds,
including U.S. Treasury bonds, that we held as of March 31, 2014 was 17.5% of our total assets. In particular, theJapanese national government and Japanese government agency bonds accounted for 16.5% of our total assets asof March 31, 2014. For a detailed discussion of our bond portfolio, see “Selected Statistical Data—Investment
Portfolio.”
The Bank of Japan has been maintaining a very low policy rate (uncollateralized overnight call rate) of
0.10% in an effort to lift the economy out of deflation. Short-term interest rates in Japan continue to decline
because of the Bank of Japan’s so-called “quantitative and qualitative monetary easing” policy. As part of thispolicy, the Bank of Japan purchases up to ¥6.0 to ¥8.0 trillion of Japanese national government bonds eachmonth. The central bank’s policies, however, may change, resulting in an interest rate increase. Separate from thecentral bank’s monetary policies, interest rates could also significantly increase in the event that Japanese
government bonds decline in value due to such factors as a decline in confidence in the Japanese government’s
fiscal administration, further issuances of government bonds in connection with emergency economic measuresand concerns over excessive government intervention with the Bank of Japan, or in the event that interest rates on
U.S. Treasury securities rise due to such factors as the tapering of quantitative easing in the United States if
implemented earlier than expected. The yield on newly issued ten-year Japanese government bonds rose above
1% in May 2013 for the first time in a year. If relevant interest rates increase for these or other reasons,11particularly if such increase is unexpected or sudden, we may incur significant losses on sales of, and valuation
losses on, our bond portfolio. See “Item 5. Operating and Financial Review and Prospects—Business
Environment.”
Fluctuations in foreign currency exchange rates may result in transaction losses on translation ofmonetary assets and liabilities denominated in foreign currencies as well as foreign currency translation
losses with respect to our foreign subsidiaries and equity method investees.
Fluctuations in foreign currency exchange rates against the Japanese yen create transaction gains or losses on
the translation into Japanese yen of monetary assets and liabilities denominated in foreign currencies. To the extent
that our foreign currency-denominated assets and liabilities are not matched in the same currency or appropriately
hedged, we could incur losses due to future foreign exchange rate fluctuations. During the fiscal year ended
March 31, 2014, the average balance of our foreign interest-earning assets was ¥77.09 trillion and the averagebalance of our foreign interest-bearing liabilities was ¥47.54 trillion, representing 36.3% of our average totalinterest-earning assets and 25.1% of our average total interest-bearing liabilities during the same period. For the
fiscal year ended March 31, 2014, net foreign exchange losses, which primarily include net transaction losses on thetranslation into Japanese yen of monetary assets and liabilities denominated in foreign currencies, net losses oncurrency derivative instruments entered into for trading purposes, and net gains on translation into Japanese yen of
securities accounted for under the fair value option, were ¥61.8 billion, compared to ¥39.0 billion for the previous
fiscal year. In addition, we may incur foreign currency translation losses with respect to our foreign subsidiaries andequity method investees due to fluctuations in foreign currency exchange rates. The average exchange rate for the
fiscal year ended March 31, 2014 was ¥100.24 per U.S.$1.00, compared to ¥83.10 per U.S.$1.00 for the previous
fiscal year. The change in the average exchange rate of the Japanese yen against the U.S. dollar and other foreign
currencies had the effect of increasing total revenue by ¥285.2 billion, increasing net interest income by¥171.0 billion and income before income tax expense by ¥115.4 billion, respectively, for the fiscal year ended
March 31, 2014. Since the introduction of “Abenomics” in December 2012, the exchange rate between the Japanese
yen and the U.S. dollar has been fluctuating with the Japanese yen depreciating from ¥92.57 to the U.S. dollar on
April 2, 2013 to ¥105.44 to the U.S. dollar on January 2, 2014. As of July 7, 2014, the exchange rate was ¥101.86 to
the U.S. dollar. For more information on foreign exchange gains and losses and foreign currency translation gains
and losses, see “Item 5. Operating and Financial Review and Prospects—Business Environment” and “Item 5.A.
Operating and Financial Review and Prospects—Operating Results.”
We may become subject to regulatory actions or other legal proceedings relating to our transactions orother aspects of our operations, which could result in significant financial losses, restrictions on ouroperations and damage to our reputation.
We conduct our business subject to ongoing regulation and associated regulatory and legal risks. Global
financial institutions, including us, currently face heightened regulatory scrutiny as a result of the concerns
developing in the global financial sector, and growing public pressure to demand even greater regulatory
surveillance following several high-profile scandals and risk management failures in the financial industry. In thecurrent regulatory environment, multiple government authorities with overlapping jurisdiction more frequently
conduct investigations and take other regulatory actions in coordination with one another or separately on thesame or related matters.
In December 2012, The Bank of Tokyo-Mitsubishi UFJ, Ltd., or BTMU, agreed to make an approximately$8.6 million payment to the Office of Foreign Assets Control, or OFAC, of the U.S. Department of the Treasury
to settle potential civil liability for apparent violations of certain U.S. sanctions regulations from 2006 to 2007. In
June 2013, BTMU entered into a consent agreement with the New York State Department of Financial Services,or DFS, to resolve issues relating to certain U.S. dollar payments that were routed through New York from 2002
to 2007. Under the terms of the agreement with DFS, BTMU made a civil monetary payment of $250 million to
DFS and retained an independent consultant to conduct a compliance review of the relevant controls and related
matters in BTMU’s current operations. BTMU continues to cooperate closely with all relevant regulators and isundertaking necessary actions.
12We have received requests and subpoenas for information from government agencies in some jurisdictions
that are conducting investigations into past submissions made by panel members, including us, to the bodies thatset various interbank benchmark rates. We are cooperating with these investigations and have been conducting aninternal investigation among other things. In connection with these matters, we and other panel members havebeen named as defendants in a number of civil lawsuits, including putative class actions, in the United States. In
June 2013, BTMU was censured by the Monetary Authority of Singapore for deficiencies in its governance, risk
management and internal controls for its involvement in benchmark submissions and was directed, among otherthings, to adopt measures to address these deficiencies.
These developments or other similar matters may result in additional regulatory actions against us oragreements to make significant additional settlement payments. These developments or other similar matters may
also expose us to substantial monetary damages, legal defense costs, criminal and civil liability, and restrictions
on our business operations as well as damage to our reputation. The outcome of such matters, including theextent of the potential impact of any unfavorable outcome on our financial results, however, is inherently
uncertain and difficult to predict. The extent of financial, human and other resources required to conduct any
investigations or to implement any corrective or preventive measures is similarly uncertain and could besignificant.
Legal and regulatory changes could have a negative impact on our business, financial condition andresults of operations.
As a global financial services provider, our business is subject to ongoing changes in laws, regulations,policies, voluntary codes of practice and interpretations in Japan and other markets where we operate. Major
global financial institutions currently face an increasingly stricter set of laws, regulations and standards as aresult of the concerns enveloping the global financial sector. There is also growing political pressure to demandeven greater internal compliance and risk management systems following several high-profile scandals and risk
management failures in the financial industry. We may not be able to enhance our compliance risk management
systems and programs, which, in some cases, are supported by third-party service providers, in a timely manneror as planned. Our risk management systems and programs may not be fully effective in preventing all violationsof laws, regulations and rules.
Our failure or inability to comply fully with the stricter set of laws and regulations could lead to fines,
public reprimands, damage to reputation, civil liability, enforced suspension of operations or, in extreme cases,
withdrawal of authorization to operate, adversely affecting our business and results of operations. Legal or
regulatory compliance failure may also adversely affect our ability to obtain regulatory approvals for future
strategic initiatives. Furthermore, failure to take necessary corrective action, or the discovery of violations oflaws in the process of further review of any of the matters mentioned above or in the process of implementing
any corrective measures, could result in further regulatory action.
We could also be required to incur significant expenses to comply with new or revised regulations. For
example, if we adopt a new information system infrastructure in the future, we may be required to incur
significant additional costs for establishing and implementing effective internal controls, which may materiallyand adversely affect our financial condition and results of operations.
Future developments or changes in laws, regulations, policies, voluntary codes of practice and their effects
are expected to require greater capital resources and significant management attention, and may require us tomodify our business strategies and plans. For example, since March 31, 2013, Japanese banking institutions withinternational operations have become subject to stricter capital adequacy requirements adopted by the Financial
Services Agency of Japan, an agency of the Cabinet Office, or the FSA, based in part on the international
regulatory framework generally known as “Basel III.” For more information, see “—Risks Related to Our
Business—We may not be able to maintain our capital ratios above minimum required levels, which could resultin the suspension of some or all of our operations.” and “Item 4.B. Information on the Company—Business
Overview—Supervision and Regulation—Japan.”
13

Furthermore, regulatory reforms recently implemented, proposed and currently being debated in the UnitedStates may also significantly affect our business operations. For example, in February 2014, the Federal Reserve
Board, or FRB, approved final rules strengthening supervision and regulation of large U.S. bank holding
companies and foreign banking organizations, or FBOs. These final rules require a large FBO with $50 billion ormore in U.S. combined assets excluding the assets held by its U.S. branches or agencies, such as us, to organize
all of our U.S. bank and non-bank subsidiaries under a U.S. intermediate holding company that would be subject
to U.S. capital requirements, capital stress testing, liquidity buffer requirements, and other enhanced prudential
standards comparable to those applicable to top-tier U.S. bank holding companies of the same size. The rules will
become effective in July 2016, and we continue to analyze the rules to assess its impact on our U.S. operations
and overall governance structure. Significant resources and management attention may be required to ensurecompliance with the rules. See “Item 4.B. Information on the Company—Business Overview—Supervision andRegulation—United States.”
Global financial regulatory reform measures may also have a significant impact on our business operations.
For example, various international organizations, including the Financial Stability Board and the BaselCommittee on Banking Supervision, are currently considering ways to address, among other things, issues
including the “too big to fail” issue and the measurement of interest rate risk in the banking book. We intend tocontinue to monitor developments relating to global regulatory reforms.
Any adverse changes in the business of MUFG Americas Holdings Corporation, an indirect whollyowned subsidiary in the United States, could significantly affect our results of operations.
MUFG Americas Holdings Corporation, or MUAH, which is an indirect wholly owned subsidiary in the
United States formerly called UnionBanCal Corporation, or UNBC, has historically contributed to a significant
portion of our net income. MUAH reported net income of $762 million, $628 million and $667 million for the
fiscal years ended December 31, 2011, 2012 and 2013, respectively. Any adverse developments which could
arise at MUAH may have a significant negative impact on our results of operations and financial condition. The
risks relating to MUAH have increased as MUAH has been expanding its business through acquisitions ofcommunity banks and other financially-related businesses in the United States. If MUAH is unable to achieve thebenefits expected from its business strategies, including its business expansion strategy through acquisitions ofcommunity banks and other financially-related businesses, we may suffer an adverse financial impact. For more
information, see “Item 5. Operating and Financial Review and Prospects—Recent Developments.”
Other factors that have negatively affected, and could continue to negatively affect, MUAH’s results ofoperations include difficult economic conditions, such as a downturn in the real estate and housing industries in
California and other states within the United States, the fiscal challenges being experienced by the U.S. federal
and California state governments, substantial competition in the banking markets in California and other states
within the United States and uncertainty over the U.S. economy, as well as fluctuating oil prices, negative trends
in debt ratings, and interest rate uncertainties. Since the financial crisis in 2008 and 2009, the U.S. banking
industry has operated in an extremely low interest rate environment as a result of the highly accommodative
monetary policy of the FRB, which has placed downward pressure on the net interest margins of U.S. banks,
including MUAH. To the extent this policy continues, negative pressure on the net interest margins of
U.S. banks, including MUAH, can be expected.
Significant costs may arise from enterprise-wide compliance and risk management requirements, or failure
to comply, with applicable laws and regulations, such as the U.S. Bank Secrecy Act and related amendments
under the USA PATRIOT Act, and any adverse impact of the implementation of the Dodd-Frank Act. In
addition, the FRB and other U.S. bank regulators have adopted final rules to implement the Basel III global
regulatory framework for U.S. banks and bank holding companies which require higher quality of capital, as wellas significantly revise the calculations for risk-weighted assets. The FRB has also adopted final rules toimplement various enhanced prudential standards required by the Dodd-Frank Act for larger U.S. bank holding
companies, such as MUAH. These standards require the larger bank holding companies to meet enhanced capital,
14liquidity and leverage standards. Further, the FRB has adopted final regulations applicable to FBOs operating in
the United States, which require MUFG’s and BTMU’s U.S. operations, including those of MUAH, to be
restructured and, subject to certain exceptions, conducted under a single U.S. intermediate holding company, or
IHC, with its own capital and liquidity requirements. Any actions management may take in response to these
proposed regulatory changes may involve the issuance of additional capital or other measures. For more
information, see “Item 4.B. Information on the Company—Business Overview—Supervision and Regulation—
United States.”
MUFG Union Bank, N.A., or MUB, which is the principal subsidiary of MUAH, and reportedly otherfinancial institutions have been the targets of various denial-of-service or other cyberattacks as part of what
appears to be a coordinated effort to disrupt the operations of financial institutions and potentially test theircybersecurity in advance of future and more advanced cyberattacks. These denial-of-service attacks may require
substantial resources to defend against and affect customer satisfaction and behavior. Moreover, MUB’s
information security measures may not be sufficient to defend against cyberattacks and other information
security breaches, in which case the consequences could be significant in terms of financial, reputational andother losses. In addition, there have been increasing efforts to breach data security at financial institutions as wellas other types of companies, such as large retailers, or with respect to financial transactions, including throughthe use of social engineering schemes such as “phishing.” Even if cyberattacks and similar tactics are not directed
specifically at MUB, such attacks on other large institutions could disrupt the overall functioning of the U.S. or
global financial system and undermine consumer confidence in banks generally to the detriment of otherfinancial institutions, including MUB.
Any adverse changes in the business of Bank of Ayudhya, an indirect subsidiary in Thailand, could
significantly affect our results of operations.
Any adverse changes to the business or management of Bank of Ayudhya Public Company Limited, orKrungsri, in Thailand, which became one of our major subsidiaries in December 2013 following our acquisitionof 72.01% of its total outstanding shares through a Voluntary Tender Offer for ¥545.8 billion, may negatively
affect our financial condition and results of operations. Factors that may negatively affect Krungsri’s financial
condition and results of operations include:‰

volatile political and social conditions, adverse economic conditions, substantial competition in thebanking industry, natural disasters including floods, terrorism and armed conflicts, restrictions underapplicable financial systems and regulations, or significant fluctuations in interest rates, currency
exchange rates, stock prices or commodity prices, in Southeast Asia, particularly in Thailand,‰

the business performance of companies making investments in and entering into markets in theSoutheast Asian region, as well as the conditions of economies, financial systems, laws and financial
markets in the countries where such companies primarily operate,‰

losses from legal proceedings involving Krungsri,‰

credit rating downgrades and declines in stock prices of Krungsri’s borrowers, and bankruptcies ofKrungsri’s borrowers resulting from such factors,‰

defaults on Krungsri’s loans to individuals,‰

adverse changes in the cooperative relationship between us and the other major shareholder of Krungsri,‰

higher-than-expected costs incurred as we integrate Krungsri into our group, and‰costs incurred due to unexpected weaknesses in the internal controls and regulatory compliance systemsof Krungsri or any of its subsidiaries.

In connection with our acquisition of Krungsri, we recorded ¥217.4 billion of goodwill. If the business ofKrungsri deteriorates, we may be required to record impairment losses, which could have a material adverse
15effect on our results of operations and financial condition. See “Item 5. Operating and Financial Review andProspects—Recent Developments” and “—Risks Related to Our Business—If the goodwill recorded inconnection with our acquisitions becomes impaired, we may be required to record impairment losses, which may
adversely affect our financial results and the price of our securities.”
Our strategy to expand the range of our financial products and services and the geographic scope of ourbusiness globally may fail if we are unable to anticipate or manage new or expanded risks that entail such
expansion.
We continue to seek opportunities to expand the range of our products and services beyond our traditionalbanking and trust businesses, through development and introduction of new products and services or throughacquisitions of or investments in financial institutions with products and services that complement our business.
For example, taking advantage of our financial holding company status which enables us to underwrite securities,
we are currently seeking to expand our corporate banking operations in the United States. In addition, thesophistication of financial products and management systems has been growing significantly in recent years. As aresult, we are exposed to new and increasingly complex risks, while market and regulatory expectations that wemanage these risk properly continue to rise. Some of the activities that our subsidiaries are expected to engage in,such as derivatives and foreign currency trading, present substantial risks. In some cases, we have only limited
experience with the risks related to the expanded range of these products and services. In addition, we may not beable to successfully develop or operate the necessary information systems. As a result, we may not be able toforesee the risks relating to new products and services.
As we expand the geographic scope of our business, we will also be exposed to risks that are unique toparticular jurisdictions or markets. For example, in an effort to further develop our operations in Asia, BTMU
entered into a capital and business alliance with Vietnam Joint Stock Commercial Bank for Industry and Trade in
December 2012 and acquired approximately 20% of the ordinary shares of the Vietnamese bank in May 2013. In
addition, in December 2013, BTMU purchased 72.01% of the outstanding shares of Krungsri. In some cases, wehold minority stakes in financial institutions as we seek to enter new markets or jurisdictions by collaboratingwith a local business partner. In such circumstances, the controlling shareholder may make or cause to be madebusiness decisions that are inconsistent with our interests and, as a result, we may be unable to achieve the goals
initially set out for the expansion strategy.
Our risk management systems may prove to be inadequate and may not work in all cases or to the degree
required. The substantial market, credit, compliance and regulatory risks in relation to the expanding scope of our
products, services and trading activities or expanding our business beyond our traditional markets, could result in
us incurring substantial losses. In addition, our efforts to offer new services and products or penetrate newmarkets may not succeed if product or market opportunities develop more slowly than expected, if our new
services or products are not well accepted among customers, or if the profitability of opportunities is underminedby competitive pressures. For more information on our recent acquisition transactions, see “Item 5. Operating
and Financial Review and Prospects—Recent Developments.”
Unanticipated economic changes in, and measures taken in response to such changes by, emerging
market countries could result in additional losses.
We are increasingly active, through a network of branches and subsidiaries, in emerging market countries,
particularly countries in Asia, Latin America, Central and Eastern Europe, and the Middle East. For example,
based principally on the domicile of the obligors, assets related to Asia and Oceania excluding Japan increased
40.0% from ¥15.94 trillion as of March 31, 2013 to ¥22.31 trillion as of March 31, 2014, accounting for 8.8% of
our total assets as of March 31, 2014. The economies of emerging market countries can be volatile andsusceptible to adverse changes and trends in the global financial markets. For example, a decline in the value of
local currencies of these countries could negatively affect the creditworthiness of some of our borrowers in thesecountries. The loans we have made to borrowers and banks in these countries are often denominated in16

U.S. dollars, Euro or other foreign currencies. These borrowers often do not hedge the loans to protect against
fluctuations in the values of local currencies. A devaluation of the local currency would make it more difficult fora borrower earning income in that currency to pay its debts to us and other foreign lenders. In addition, somecountries in which we operate may attempt to support the value of their currencies by raising domestic interest
rates. If this happens, the borrowers in these countries would have to devote more of their resources to repaying
their domestic obligations, which may adversely affect their ability to repay their debts to us and other foreign
lenders. The limited credit availability resulting from these conditions may adversely affect economic conditions
in some countries. This could cause a further deterioration of the credit quality of borrowers and banks in thosecountries and cause us to incur further losses. In addition, should there be excessively rapid economic growth andincreasing inflationary pressure in some of the emerging market countries, such developments could adversely
affect the wider regional and global economies. Some emerging market countries may also change theirmonetary or other economic policies in response to economic and political instabilities or pressures, which are
difficult to predict. As of March 31, 2014, based on the domicile of the obligors, our assets in Europe, Asia andOceania excluding Japan, and other areas excluding Japan and the United States, were ¥22.35 trillion,¥22.31 trillion and ¥9.56 trillion, representing 8.8%, 8.8% and 3.8% of our total assets, respectively. See“Item 5.B. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Financial
Condition.”
If our strategic alliance with Morgan Stanley fails, we could suffer financial or reputational loss.
We have a global strategic alliance with Morgan Stanley, under which we operate two joint venture
securities companies in Japan, engage in joint corporate finance operations in the United States and pursue othercooperative opportunities. We hold approximately 21.9% of the voting rights in Morgan Stanley as of March 31,
2014 and continue to hold approximately $521.4 million, or ¥ 53.6 billion, of perpetual non-cumulative nonconvertible preferred stock with a 10% dividend. In addition, we currently have two representatives on Morgan
Stanley’s board of directors.
We initially entered into this strategic alliance in October 2008 with a view towards long-term cooperation
with Morgan Stanley, and currently plan to deepen the strategic alliance. However, due to any unexpectedchanges in social, economic or financial conditions, changes in the regulatory environment, or any failure tointegrate or share staff, products or services, or to operate, manage or implement the business strategy of the
securities joint venture companies or other cooperative opportunities as planned, we may be unable to achieve
the expected synergies from this alliance.
If our strategic alliance with Morgan Stanley is terminated, it could have a material negative impact on ourbusiness strategy, financial condition, and results of operations. For example, because we conduct our securities
operations in Japan through the joint venture companies we have with Morgan Stanley, such termination may
result in our inability to attain the planned growth in this line of business.
In addition, with our current investment in Morgan Stanley, we have neither a controlling interest in, nor
control over the business operations of Morgan Stanley. If Morgan Stanley makes any business decisions that areinconsistent with our interests, we may be unable to achieve the goals initially set out for the strategic alliance.
Furthermore, although we do not control Morgan Stanley, given the magnitude of our investment, if Morgan
Stanley encounters financial or other business difficulties due to adverse changes in the economy, regulatoryenvironment or other factors, we may suffer a financial loss on our investment or damage to our reputation. For
example, we recorded an impairment loss of ¥579.5 billion on our investment in Morgan Stanley’s common
stock for the fiscal year ended March 31, 2012.
In the fiscal year ended March 31, 2012, Morgan Stanley became an equity-method affiliate in ourconsolidated financial statements. Accordingly, Morgan Stanley’s performance has a more significant impact on
our results of operations as a result of equity method accounting. Further, fluctuations in Morgan Stanley’s stock
price or in our equity ownership interest in Morgan Stanley may cause us to recognize additional losses on ourinvestment in Morgan Stanley.
17

We may incur further losses as a result of financial difficulties relating to other financial institutions, both
directly and through the effect they may have on the overall banking environment and on their borrowers.
Some domestic and foreign financial institutions, including banks, non-bank lending and credit institutions,securities companies and insurance companies, have experienced declining asset quality, capital adequacy andother financial problems. This may lead to severe liquidity and solvency problems, which have in the past
resulted in the liquidation, government control or restructuring of affected institutions. In addition, allegations or
governmental prosecution of improper trading activities or inappropriate business conduct of a specific financial
institution could also negatively affect the public perception of other global financial institutions individually andthe global financial industry as a whole. These developments may adversely affect our financial results.
Financial difficulties relating to financial institutions could adversely affect us because we have extendedloans, some of which may need to be classified as impaired loans, to banks, securities companies, insurancecompanies and other financial institutions that are not our consolidated subsidiaries. Our loans to banks and otherfinancial institutions have been more than 5% of our total loans as of each year-end in the three fiscal years
ended March 31, 2014, with the percentage increasing from 11.0% to 12.5% between March 31, 2013 andMarch 31, 2014. We may also be adversely affected because we are a shareholder of some other banks andfinancial institutions that are not our consolidated subsidiaries, including our shareholdings in Japanese regionalbanks and our 21.9% voting interest in Morgan Stanley as of March 31, 2014. If some of the financial institutions
to which we have exposure experience financial difficulties, we may need to provide financial support to themeven when such support might not be warranted from the perspective of our narrow economic interests becausesuch institutions may be systematically important to the Japanese or global financial system.
We may also be adversely affected because we enter into transactions, such as derivative transactions, in theordinary course of business, with other banks and financial institutions as counterparties. For example, we enter
into credit derivatives with banks, broker-dealers, insurance companies and other financial institutions for
managing credit risk exposures, for facilitating client transactions, and for proprietary trading purposes. The
notional amount of the protection we sold through these instruments was ¥3.46 trillion as of March 31, 2014.
In addition, financial difficulties relating to financial institutions could indirectly have an adverse effect on
us because:‰

we may be requested to participate in providing assistance to support distressed financial institutions
that are not our consolidated subsidiaries;‰

the government may elect to provide regulatory, tax, funding or other benefits to those financial
institutions to strengthen their capital, facilitate their sale or otherwise, which in turn may increase theircompetitiveness against us;‰

deposit insurance premiums could rise if deposit insurance funds prove to be inadequate;‰

bankruptcies or government support or control of financial institutions could generally undermine
confidence in financial institutions or adversely affect the overall banking environment;‰

failures or financial difficulties experienced by other financial institutions could result in additional
regulations or requirements that increase the cost of business for us; and‰negative media coverage of the financial industry, regardless of its accuracy and applicability to us,
could affect customer or investor sentiment, harm our reputation and have a materially adverse effect on
our business or the price of our securities.

Because of our loans to consumers and our shareholdings in companies engaged in consumer lending,changes in the business or regulatory environment for consumer finance companies in Japan may further
adversely affect our financial results.
We have a large loan portfolio in the consumer lending industry as well as large shareholdings in
subsidiaries and equity method investees in the consumer finance industry. Our domestic loans to consumers
18amount to approximately one-seventh of our total outstanding loans. Of this amount, the consumer loans
provided by Mitsubishi UFJ NICOS, Co., Ltd., which is our primary consumer financing subsidiary, were¥608.6 billion as of March 31, 2014, compared to ¥671.6 billion as of March 31, 2013.
Mitsubishi UFJ NICOS’s consumer loan portfolio has been adversely affected by a series of regulatory reforms
recently implemented in Japan, which has affected the consumer lending industry in recent years. In December
2006, the Diet passed legislation to reform the regulations relating to the consumer lending business, including
amendments to the Act Regulating the Receipt of Contributions, the Receipt of Deposits, and Interest Rates, which,effective June 18, 2010, reduced the maximum permissible interest rate from 29.2% per annum to 20% per annum.
The regulatory reforms also included amendments to the Money Lending Business Act, which, effective June 18,
2010, abolished the so-called “gray-zone interest.” Gray-zone interest refers to interest rates exceeding the limits
stipulated by the Interest Rate Restriction Act (between 15% per annum to 20% per annum depending on theamount of principal). Prior to June 18, 2010, gray-zone interest was permitted under certain conditions set forth in
the Money Lending Business Act. As a result of the regulatory reforms, all interest rates are now subject to thelower limits imposed by the Interest Rate Restriction Act, compelling lending institutions, including our consumer
finance subsidiaries and equity method investees, to lower the interest rates they charge borrowers. The regulations
that became effective on June 18, 2010 also have had a further negative impact on the business of consumer financecompanies as one of the new regulations requires, among other things, consumer finance companies to limit theirlending to a single customer to a maximum of one third of the customer’s annual income regardless of thecustomer’s repayment capability, significantly affecting consumer financing companies.
The regulations and regulatory reforms affecting the consumer finance business were one of the main
factors that contributed to the decrease in interest income attributable to our consumer finance business. Ourinterest income attributable to the consumer finance business was approximately ¥190 billion and ¥160 billion
for the fiscal years ended March 31, 2009 and 2010, respectively. However, following the regulatory changes inJune 2010, our interest income attributable to the consumer finance business decreased to approximately¥130 billion, ¥120 billion and ¥100 billion for the fiscal years ended March 31, 2011, 2012 and 2013,
respectively. For the fiscal year ended March 31, 2014, our interest income attributable to the consumer financebusiness was approximately ¥100 billion.
In addition, as a result of decisions by the Supreme Court of Japan prior to June 18, 2010 imposing stringent
requirements under the Money Lending Business Act for charging gray-zone interest rates, consumer financecompanies have experienced a significant increase in borrowers’ claims for reimbursement of previously
collected interest payments in excess of the limits stipulated by the Interest Rate Restriction Act.
Following the various legal developments in June 2010 and other industry developments, Mitsubishi UFJ
NICOS revised its estimate by updating management’s future forecast to reflect new reimbursement claims
information and other data. As of March 31, 2012, 2013 and 2014, we had ¥99.4 billion, ¥77.6 billion and¥54.1 billion of allowance for repayment of excess interest, respectively. For the same periods, one of our equity
method investees engaged in consumer lending, ACOM CO., LTD., had a negative impact of ¥19.3 billion,¥17.0 billion and ¥18.0 billion, respectively, on net equity in losses of equity method investees in ourconsolidated statements of income. We intend to carefully monitor future developments and trends.
These developments have adversely affected, and these and any future developments may further adversely
affect, the operations and financial condition of our subsidiaries, equity method investees and borrowers which
are engaged in consumer lending, which in turn may affect the value of our related shareholdings and loan
portfolio.
Our business may be adversely affected by competitive pressures, which have partly increased due toregulatory changes and recent market changes in the financial industry domestically and globally.
In recent years, the Japanese financial system has been undergoing significant changes and regulatory
barriers to competition have been reduced. In particular, any further reform of the Japanese postal savings
19system, under which the Japan Post Group companies, including Japan Post Bank Co., Ltd., were established in
October 2007, could substantially increase competition within the financial services industry as Japan Post Bank,
with the largest deposit base and branch network in Japan, may begin to offer financial services in competition
with our business operations generating fee income. In May 2012, amendments to the postal privatization law
became effective under which Japan Post Bank and Japan Post Insurance may enter into new businesses upon
obtaining government approvals, and if the government’s equity holdings decrease to a certain level, the twocompanies will be allowed to enter into new businesses upon submission of a notice to the government. As aresult, the Japan Post Group companies may seek to enter into new financial businesses. The privatization of theJapan Post Group companies remains subject to political negotiations and government action.
We also face intensifying competition in areas of our strategic expansion. For example, the Japanese megabanks, including us, and other major international banks have been expanding, or are expected to expand, theiroperations in the Asian market, where leading local banks have recently been growing and increasing theirpresence. In addition, there has been significant consolidation and convergence among financial institutions
domestically and globally, and this trend may continue in the future and further increase competition in themarket. A number of large commercial banks and other broad-based financial services firms have merged orformed strategic alliances with, or have acquired, other financial institutions both in Japan and overseas. As aresult of the strategic alliance and the joint venture companies that we formed with Morgan Stanley, we may be
newly perceived as a competitor by some of the financial institutions with which we had a more cooperative
relationship in the past. If we are unable to compete effectively in this more competitive and deregulated businessenvironment, our business, results of operations and financial condition will be adversely affected. For a moredetailed discussion of our competition in Japan, see “Item 4.B. Information on the Company—Business
Overview—Competition.”
Future changes in accounting standards could have a negative impact on our business and results ofoperations.
Future developments or changes in accounting standards are unpredictable and beyond our control. For
example, in response to the recent instabilities in global financial markets, several international organizations
which set accounting standards have released proposals to revise standards on accounting for financial
instruments. Accounting standards applicable to financial instruments remain subject to debate and revision byinternational organizations which set accounting standards. If the current accounting standards change in the
future, the reported values of some of our financial instruments may need to be modified, and such modification
could have a significant impact on our financial results or financial condition. For more information, see “Item 5.
Operating and Financial Review and Prospects—Critical Accounting Estimates.”
We could also be required to incur significant expenses to comply with new accounting standards andregulations. For example, if we adopt a new accounting system in the future, we may be required to incur
significant additional costs for establishing and implementing effective internal controls, which may materiallyand adversely affect our financial condition and results of operations.
Transactions with counterparties in countries designated by the U.S. Department of State as state
sponsors of terrorism may lead some potential customers and investors in the United States and othercountries to avoid doing business with us or investing in our shares.
We, through our subsidiaries, engage in business activities with entities in or affiliated with Iran, includingtransactions with counterparties owned or controlled by the Iranian government, and our commercial banking
subsidiary has a representative office in Iran. The U.S. Department of State has designated Iran and othercountries as “state sponsors of terrorism,” and U.S. law generally prohibits U.S. persons from doing businesswith such countries. We currently have business activities with entities in or affiliated with such countries inaccordance with our policies and procedures designed to ensure compliance with regulations applicable in thejurisdictions in which we operate.
20

We have loan transactions with counterparties in or affiliated with Iran, the outstanding balance of which
was approximately $4.5 million, representing less than 0.001% of our total assets, as of March 31, 2014. We do
not have any loans outstanding to the financial institutions specifically listed by the U.S. government. In addition
to such loan transactions, our other transactions with counterparties in or affiliated with countries designated asstate sponsors of terrorism consist of receiving deposits or holding assets on behalf of individuals residing inJapan who are citizens of countries designated as state sponsors of terrorism, processing payments to or fromentities in or affiliated with these countries on behalf of our customers, and issuing letters of credit andguarantees in connection with transactions with entities in or affiliated with such countries by our customers.
These transactions do not have a material impact on our business or financial condition. For a further discussionof transactions required to be disclosed under the U.S. Iran Threat Reduction and Syria Human Rights Act of2012, see “Item 4.B. Information on the Company—Business Overview—Supervision and Regulation—
United States—Disclosure pursuant to Section 13(r) of the Securities Exchange Act of 1934.”
We are aware of initiatives by U.S. governmental entities and non-government entities, including institutional
investors such as pension funds, to adopt or consider adopting laws, regulations or policies prohibiting transactions
with or investment in, or requiring divestment from, entities doing business with Iran and other countries identified asstate sponsors of terrorism. It is possible that such initiatives may result in our being unable to gain or retain entities
subject to such prohibitions as customers, counter-parties or investors in our shares. In addition, depending on sociopolitical developments, our reputation may suffer due to our transactions with counterparties in or affiliated with thesecountries. The above circumstances could have an adverse effect on our business and financial condition.
Global financial institutions, including us, have become subject to an increasingly complex set of sanctions
laws and regulations in recent years, and this regulatory environment is expected to continue. Moreover, themeasures proposed or adopted vary across the major jurisdictions, increasing the cost and resources necessary todesign and implement an appropriate global compliance program. The U.S. federal government and some state
governments in the United States have enacted legislation designed to limit economic and financial transactions
with Iran by limiting the ability of financial institutions that may have engaged in any one of a broad range ofactivities related to Iran to conduct various transactions in the relevant jurisdictions. The Japanese government
has also implemented a series of measures under the Foreign Exchange and Foreign Trade Act, such as freezing
the assets of designated financial institutions and others that could contribute to Iran’s nuclear activities, and ourmost recently modified policies and procedures take into account the current Japanese regulatory requirements.
There remains a risk of potential U.S. regulatory action against us, however, if U.S. regulators perceive themodified policies and procedures not to be in compliance with applicable regulations.
We may not be able to maintain our capital ratios above minimum required levels, which could result inthe suspension of some or all of our operations.
We, as a holding company, and our Japanese banking subsidiaries are required to maintain risk-weighted
capital ratios above the levels specified in the capital adequacy guidelines of the FSA which have been revised asof March 31, 2013, as described below. As of March 31, 2014, our total risk-adjusted capital ratio was 15.53%
compared to the minimum risk-adjusted capital ratio required of 8.00%, our Tier 1 capital ratio was 12.45%
compared to the minimum Tier 1 capital ratio required of 5.50%, and our Common Equity Tier 1 capital ratio
was 11.25% compared to the minimum Common Equity Tier 1 capital ratio required of 4.00%. Our capital ratios
are calculated in accordance with Japanese banking regulations based on information derived from our financial
statements prepared in accordance with Japanese GAAP. In addition, some of our subsidiaries are also subject tothe capital adequacy rules of various foreign countries, including the United States where each of MUFG,
BTMU, Mitsubishi UFJ Trust and Banking Corporation, or MUTB, and MUAH is a financial holding company
under the U.S. Bank Holding Company Act. We or our banking subsidiaries may be unable to continue to satisfy
the capital adequacy requirements because of:‰increases in our and our banking subsidiaries’ credit risk assets and expected losses because offluctuations in our or our banking subsidiaries’ portfolios due to deterioration in the creditworthiness ofborrowers and the issuers of equity and debt securities,21

‰difficulty in refinancing or issuing instruments upon redemption or at maturity of such instruments toraise capital under terms and conditions similar to prior financings or issuances,‰declines in the value of our or our banking subsidiaries’ securities portfolios,‰

adverse changes in foreign currency exchange rates,‰

adverse revisions to the capital ratio requirements,‰

reductions in the value of our or our banking subsidiaries’ deferred tax assets, and‰other adverse developments.

The Group of Central Bank Governors and Heads of Supervision has made a series of announcements
regarding the new global regulatory framework, which has been referred to as “Basel III,” to strengthen theregulation, supervision and risk management of the banking sector. Various Basel III measures are being phasedin from the calendar year 2013, including those designed to raise the level of minimum capital requirements andto establish an internationally harmonized leverage ratio and a global minimum liquidity standard. In addition,
the Basel Committee on Banking Supervision has proposed additional loss absorbency requirements to
supplement the Common Equity Tier 1 capital requirement ranging from 1% to 3.5% for global systemicallyimportant banks, or G-SIBs, depending on the bank’s systemic importance. The Financial Stability Board
identified us as a G-SIB in its most recent annual report published in November 2013, and indicated that, as a
G-SIB, we would be required to hold an additional 1.5% of Tier 1 common equity. The group of banks identified
as G-SIBs is expected to be updated annually, and the first group of G-SIBs to which the stricter capitalrequirements will initially be applied is expected to be identified in 2014. The stricter capital requirements are
expected to be implemented in phases between January 1, 2016 and December 31, 2018 and will become fully
effective on January 1, 2019. Based on the Basel III framework, the Japanese capital ratio framework has beenrevised to implement the more stringent requirements, which are being implemented in phases beginning on
March 31, 2013. Likewise, local banking regulators outside of Japan, such as those in the United States, havebegun, or are expected, to revise the capital and liquidity requirements imposed on our subsidiaries andoperations in those countries to implement the more stringent requirements of Basel III as adopted in thosecountries.
Under the capital adequacy guidelines of the FSA, which have been revised in connection with the adoptionof Basel III, there is a transitional measure relating to the inclusion as a capital item of capital raising instruments
issued in or prior to March 2013, and such instruments can be included as a capital item when calculating capitalratios to the extent permitted by the transitional measure. Such capital raising instruments may require
refinancing upon the expiration of the transition period during which such instruments can be included as acapital item in the calculation of capital ratios. However, in order for newly issued capital raising instruments,
other than common stock, to be included as a capital item in the calculation of capital ratios under the capital
adequacy guidelines, such instruments must have a clause in their terms and conditions that requires them to be
written off or converted into common stock upon the occurrence of certain events, including when the issuingfinancial institution is deemed non-viable or when the issuing financial institution’s capital ratios decline below
prescribed levels. As a result, under certain market conditions, we may be unable to refinance or issue capitalraising instruments under terms and conditions similar to those of capital raising instruments issued in or prior to
March 2013. If such circumstances arise, our and our banking subsidiaries’ capital could be reduced, and our andour bank subsidiaries’ capital ratio could decrease.
In addition, under the FSA’s capital adequacy guidelines, deferred tax assets can be included as a capital
item when calculating capital ratios up to a prescribed amount. However, this upper limit is expected to be
reduced in phases. If and to the extent the amount of deferred tax assets exceeds this limit and cannot be included
in Common Equity Tier 1 capital, our and our banking subsidiaries’ capital ratios can decrease.
If our capital ratios fall below required levels, the FSA could require us to take a variety of corrective
actions, including withdrawal from all international operations or suspension of all or part of our business
operations. In addition, if the capital ratios of our subsidiaries subject to capital adequacy rules of foreign
22jurisdictions fall below the required levels, the local regulators could also take action against them that may result
in reputational damage or financial losses to us. Since maintaining our capital ratios at acceptable levels is crucial
to our business, our management devotes a significant amount of attention and resources to capital ratio related
issues and may also significantly alter our business strategy or operations if our capital ratios decline to
unacceptable levels. For a discussion of our capital ratios and the related regulatory guidelines, see “Item 4.B.
Information on the Company—Business Overview—Supervision and Regulation” and “Item 5.B. Operating and
Financial Review and Prospects—Liquidity and Capital Resources—Capital Adequacy.”
If the goodwill recorded in connection with our acquisitions becomes impaired, we may be required torecord impairment losses, which may adversely affect our financial results and the price of our securities.
In accordance with U.S. GAAP, we account for our business combinations using the acquisition method of
accounting. We recorded the excess of the purchase price over the fair value of the assets and liabilities of theacquired companies as goodwill. U.S. GAAP requires us to test goodwill for impairment at least annually, or
more frequently if events or changes in circumstances indicate that goodwill may be impaired. As of March 31,
2014, the total balance of goodwill was ¥728.5 billion.
For the fiscal year ended March 31, 2014, we recognized ¥7.8 billion in impairment of goodwill relating to
the Integrated Trust Assets Business Group segment. We readjusted our future projection of a reporting unit inthis segment, considering a subsidiary’s recent business performance. As a result, the fair value of this reporting
unit, which is based on discounted future cash flows, fell below the carrying amount of the reporting unit, and the
impairment loss was recognized on the related goodwill.
We may be required to record additional impairment losses relating to goodwill in future periods if the fairvalue of any of our reporting units declines below the fair value of related assets net of liabilities. Any additional
impairment losses will negatively affect our financial results, and the price of our securities could be adversely
affected. For a detailed discussion of our periodic testing of goodwill for impairment and the goodwill recorded,
see “Item 5. Operating and Financial Review and Prospects—Critical Accounting Estimates—Accounting for
Goodwill and Intangible Assets.”
A further downgrade of our credit ratings could trigger additional collateral obligations under ourderivative contracts and increase our funding costs.
In August 2011, Moody’s announced that it downgraded the long-term credit ratings of BTMU and MUTB
by one-notch from Aa2 to Aa3, and the long-term credit rating of Mitsubishi UFJ Securities Holding Co., Ltd., or
MUSHD, by one-notch from A1 to A2. On July 20, 2012, Fitch downgraded the ratings assigned to BTMU and
MUTB by one-notch from A to A-, although Fitch subsequently upgraded them. A further credit rating
downgrade by Moody’s, Fitch, Standard & Poor’s Ratings Services LLC or any other credit rating agency may
have an adverse impact on us. Substantially all of the derivative contracts with collateral obligations entered intoby BTMU, MUTB and MUSHD are subject to a Credit Support Annex, or CSA, as published by the International
Swaps and Derivatives Association, Inc., or ISDA. Following the downgrades by Moody’s and Fitch, some ofour existing CSAs were modified to require, and some of the new CSAs that we entered into required, additional
collateral at lower thresholds.
Assuming all of the relevant credit rating agencies downgraded the credit ratings of BTMU, MUTB and
MUSHD by one-notch on March 31, 2014, we estimate that our three main subsidiaries under their derivative
contracts as of the same date, would have been required to provide additional collateral of approximately¥6.5 billion. Assuming a two-notch downgrade by all of the relevant credit rating agencies occurred on the samedate, we estimate that the additional collateral requirements for BTMU, MUTB and MUSHD under theirderivative contracts as of the same date would have been approximately ¥12.6 billion. In addition, a further
downgrade of the credit ratings of our major subsidiaries could result in higher funding costs. For additional
information on the impact of recent downgrades, see “Item 5.B. Operating and Financial Review and Prospects—
Liquidity and Capital Resources—Financial Condition—Sources of Funding and Liquidity.”
23

Failure to safeguard personal and other confidential information may result in liability, reputational
damage or financial losses.
As our operations expand in volume, complexity and geographic scope, we are exposed to increased risk ofconfidential information in our possession being lost, leaked, altered or falsified as a result of human or systemerror, misconduct, unlawful behavior or scheme, unauthorized access or natural or human-caused disasters. Our
information systems and information management policies and procedures may not be sufficient to safeguard
confidential information against such risks.
As a financial institution in possession of customer information, we are required to treat personal and otherconfidential information as required by the Act on the Protection of Personal Information of Japan, as well as the
Banking Law and the Financial Instruments and Exchange Law. In the event that personal information in ourpossession about our customers or employees is leaked or improperly accessed and subsequently misused, we
may be subject to liability and regulatory action. We may have to provide compensation for economic loss andemotional distress arising out of a failure to protect such information. In addition, such incidents could create anegative public perception of our operations, systems or brand, which may in turn decrease customer and market
confidence and materially and adversely affect our business, operating results and financial condition.
Moreover, any loss, leakage, alteration or falsification of confidential information, or any malfunction or
failure of our information systems, may result in significant disruptions to our business operations or plans or
may require us to incur significant financial, human and other resources to implement corrective measures orenhance our information systems and information management policies and procedures.
Risks Related to Owning Our Shares
It may not be possible for investors to effect service of process within the United States upon us or our
directors, corporate auditors or other management members, or to enforce against us or those persons
judgments obtained in U.S. courts predicated upon the civil liability provisions of the U.S. federal or state
securities laws.
We are a joint stock company incorporated under the laws of Japan. Almost all of our directors, corporate
auditors or other management members reside outside the United States. Many of our assets and the assets ofthese persons are located in Japan and elsewhere outside the United States. It may not be possible, therefore, for
U.S. investors to effect service of process within the United States upon us or these persons or to enforce, against
us or these persons, judgments obtained in the U.S. courts predicated upon the civil liability provisions of the
U.S. federal or state securities laws.
We believe there is doubt as to the enforceability in Japan, in original actions or in actions brought inJapanese courts to enforce judgments of U.S. courts, of claims predicated solely upon the U.S. federal or state
securities laws mainly because the Civil Execution Act of Japan requires Japanese courts to deny requests for theenforcement of judgments of foreign courts if foreign judgments fail to satisfy the requirements prescribed by the
Civil Execution Act, including:‰the jurisdiction of the foreign court be recognized under laws, regulations, treaties or conventions;‰

proper service of process be made on relevant defendants, or relevant defendants be given appropriate
protection if such service is not received;‰

the judgment and proceedings of the foreign court not be repugnant to public policy as applied in Japan;
and‰there exist reciprocity as to the recognition by a court of the relevant foreign jurisdiction of a final
judgment of a Japanese court.

Judgments obtained in the U.S. courts predicated upon the civil liability provisions of the U.S. federal orstate securities laws may not satisfy these requirements.
24

Risks Related to Owning Our ADSs
As a holder of ADSs, you have fewer rights than a shareholder of record in our shareholder register since
you must act through the depositary to exercise these rights.
The rights of our shareholders under Japanese law to take actions such as voting, receiving dividends anddistributions, bringing derivative actions, examining our accounting books and records and exercising appraisal
rights are available only to shareholders of record. Because the depositary, through its custodian, is the record
holder of the shares underlying the American Depositary Shares, or ADSs, only the depositary can exercise
shareholder rights relating to the deposited shares. ADS holders, in their capacity, will not be able to directly
bring a derivative action, examine our accounting books and records and exercise appraisal rights. We haveappointed The Bank of New York Mellon as depositary, and we have the authority to replace the depositary.
Pursuant to the deposit agreement among us, the depositary and a holder of ADSs, the depositary will makeefforts to exercise voting or any other rights associated with shares underlying ADSs in accordance with the
instructions given by ADS holders, and to pay to ADS holders dividends and distributions collected from us.
However, the depositary can exercise reasonable discretion in carrying out the instructions or making
distributions, and is not liable for failure to do so as long as it has acted in good faith. Therefore, ADS holders
may not be able to exercise voting or any other rights in the manner that they had intended, or may lose some or
all of the value of the dividends or the distributions. Moreover, the depositary agreement that governs theobligations of the depositary may be amended or terminated by us and the depositary without your consent,
notice, or any reason. As a result, you may be prevented from having the rights in connection with the deposited
shares exercised in the way you had wished or at all.
ADS holders are dependent on the depositary to receive our communications. We send to the depositary allof our communications to ADS holders, including annual reports, notices and voting materials, in Japanese.
ADS holders may not receive all of our communications with shareholders of record in our shareholder registerin the same manner or on an equal basis. In addition, ADS holders may not be able to exercise their rights as
ADS holders due to delays in the depositary transmitting our shareholder communications to ADS holders. For adetailed discussion of the rights of ADS holders and the terms of the deposit agreement, see“Item 10.B. Additional Information—Memorandum and Articles of Association.”
Item 4.
A.

Information on the Company.

History and Development of the Company

Mitsubishi UFJ Financial Group, Inc.
MUFG is a bank holding company incorporated as a joint stock company (kabushiki kaisha) under theCompany Law of Japan. We are the holding company for The Bank of Tokyo-Mitsubishi UFJ, Ltd., or BTMU,
Mitsubishi UFJ Trust and Banking Corporation, or MUTB, Mitsubishi UFJ Securities Holdings Co., Ltd., or
MUSHD, Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., or MUMSS, Mitsubishi UFJ NICOS Co., Ltd.,and other companies engaged in a wide range of financial businesses.
On April 2, 2001, The Bank of Tokyo-Mitsubishi, Ltd., Mitsubishi Trust and Banking Corporation, orMitsubishi Trust Bank, and Nippon Trust and Banking Co., Ltd. established Mitsubishi Tokyo Financial Group,
Inc., or MTFG, to be a holding company for the three entities. Before that, each of the banks had been a publicly
traded company. On April 2, 2001, through a stock-for-stock exchange, they became wholly-owned subsidiaries
of MTFG, and the former shareholders of the three banks became shareholders of MTFG. Nippon Trust andBanking was later merged into Mitsubishi Trust Bank.
On June 29, 2005, the merger agreement between MTFG and UFJ Holdings was approved at the generalshareholders meetings of MTFG and UFJ Holdings. As the surviving entity, Mitsubishi Tokyo Financial Group,
Inc. was renamed “Mitsubishi UFJ Financial Group, Inc.” The merger of the two bank holding companies wascompleted on October 1, 2005.
25

On September 30, 2007, MUSHD, which was then called “Mitsubishi UFJ Securities Co., Ltd.,” or MUS,
became our wholly-owned subsidiary through a share exchange transaction.
On October 13, 2008, we formed a global strategic alliance with Morgan Stanley and, as part of the alliance,
made an equity investment in Morgan Stanley in the form of convertible and non-convertible preferred stock, andsubsequently appointed a representative to Morgan Stanley’s board of directors.
On October 21, 2008, we completed a tender offer for outstanding shares of ACOM CO., LTD. common
stock, raising our ownership in ACOM to approximately 40%.
On November 4, 2008, BTMU completed the acquisition of all of the shares of common stock ofUnionBanCal Corporation, or UNBC, not previously owned by BTMU and, as a result, UNBC became a whollyowned indirect subsidiary of MUFG.
On May 1, 2010, we and Morgan Stanley integrated our securities and investment banking businesses inJapan into two joint venture securities companies, one of which is MUMSS. MUMSS was created by spinning
off the wholesale and retail securities businesses conducted in Japan from MUSHD and subsequently assuming
certain operations in Japan from a subsidiary of Morgan Stanley.
On June 30, 2011, we converted all of our Morgan Stanley’s convertible preferred stock into Morgan
Stanley’s common stock, resulting in our holding approximately 22.4% of the voting rights in Morgan Stanley.
Further, we appointed a second representative to Morgan Stanley’s board of directors on July 20, 2011.
Following the conversion on June 30, 2011, Morgan Stanley became our equity-method affiliate. As of
March 31, 2014, we held approximately 21.9% of the voting rights in Morgan Stanley and had two
representatives appointed to Morgan Stanley’s board of directors. We and Morgan Stanley continue to pursue avariety of business opportunities in Japan and abroad in accordance with the global strategic alliance.
On December 18, 2013, we acquired approximately 72.0% of the total outstanding shares of Bank of
Ayudhya Public Company Limited, or Krungsri, through BTMU. As a result of the transaction, Krungsri has
become a consolidated subsidiary of BTMU.
On July 1, 2014, we integrated BTMU’s operations in the Americas region with UNBC’s operations, andchanged UNBC’s corporate name to “MUFG Americas Holdings Corporation,” or MUAH. On the same day,
Union Bank, N.A., which is MUAH’s principal subsidiary and our primary operating subsidiary in the UnitedStates, was also renamed “MUFG Union Bank, N.A.,” or MUB. MUAH currently oversees BTMU’s operationsin the Americas region as well as the operations of MUB.
Our registered address is 7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo 100-8330, Japan, and our telephone
number is 81-3-3240-8111.
For a discussion of recent developments, see “Item 5. Operating and Financial Review and Prospects—
Recent Developments.”
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
BTMU is a major commercial banking organization in Japan that provides a broad range of domestic andinternational banking services from its offices in Japan and around the world. BTMU’s registered head office islocated at 7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo 100-8388, Japan, and its telephone number is81-3-3240-1111. BTMU is a joint stock company (kabushiki kaisha) incorporated in Japan under the Company
Law.
BTMU was formed through the merger, on January 1, 2006, of Bank of Tokyo-Mitsubishi and UFJ Bank
Limited after their respective parent companies, MTFG and UFJ Holdings, merged to form MUFG on October 1,
2005.
26

Bank of Tokyo-Mitsubishi was formed through the merger, on April 1, 1996, of The Mitsubishi Bank,
Limited and The Bank of Tokyo, Ltd.
The origins of Mitsubishi Bank can be traced to the Mitsubishi Exchange Office, a money exchange houseestablished in 1880 by Yataro Iwasaki, the founder of the Mitsubishi industrial, commercial and financial group.
In 1895, the Mitsubishi Exchange Office was succeeded by the Banking Division of the Mitsubishi Goshi
Kaisha, the holding company of the “Mitsubishi group” of companies. Mitsubishi Bank had been a principalbank to many of the Mitsubishi group companies but broadened its relationships to cover a wide range ofJapanese industries, small and medium-sized companies and individuals.
Bank of Tokyo was established in 1946 as a successor to The Yokohama Specie Bank, Ltd., a special
foreign exchange bank established in 1880. When the government of Japan promulgated the Foreign ExchangeBank Law in 1954, Bank of Tokyo became the only bank licensed under that law. Because of its license, Bank ofTokyo received special consideration from the Ministry of Finance in establishing its offices abroad and in manyother aspects relating to foreign exchange and international finance.
UFJ Bank was formed through the merger, on January 15, 2002, of The Sanwa Bank, Limited and The
Tokai Bank, Limited.
Sanwa Bank was established in 1933 when the three Osaka-based banks, the Konoike Bank, the Yamaguchi
Bank, and the Sanjyushi Bank merged. Sanwa Bank was known as a city bank having the longest history inJapan, since the foundation of Konoike Bank can be traced back to the Konoike Exchange Office established in
1656. The origin of Yamaguchi Bank was also a money exchange house, established in 1863. Sanjyushi Bank
was founded by influential fiber wholesalers in 1878. The corporate philosophy of Sanwa Bank had been thecreation of premier banking services especially for small and medium-sized companies and individuals.
Tokai Bank was established in 1941 when the three Nagoya-based banks, the Aichi Bank, the Ito Bank, andthe Nagoya Bank merged. In 1896, Aichi Bank took over businesses of the Jyuichi Bank established bywholesalers in 1877 and the Hyakusanjyushi Bank established in 1878. Ito Bank and Nagoya Bank were
established in 1881 and 1882, respectively. Tokai Bank had expanded the commercial banking business tocontribute to economic growth mainly of the Chubu area in Japan, which is known for its manufacturingindustries, especially automobiles.
Mitsubishi UFJ Trust and Banking Corporation
MUTB is a major trust bank in Japan, providing trust and banking services to meet the financing andinvestment needs of clients in Japan and the rest of Asia, as well as in the United States and Europe. MUTB’s
registered head office is located at 4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8212, Japan, and its
telephone number is 81-3-3212-1211. MUTB is a joint stock company (kabushiki kaisha) incorporated in Japan
under the Company Law.
MUTB was formed on October 1, 2005 through the merger of Mitsubishi Trust Bank and UFJ Trust Bank
Limited. As the surviving entity, Mitsubishi Trust Bank was renamed “Mitsubishi UFJ Trust and Banking
Corporation.”
Mitsubishi Trust Bank traces its history to The Mitsubishi Trust Company, Limited, which was founded by
the leading members of the Mitsubishi group companies in 1927. The Japanese banking and financial industry
was reconstructed after World War II and, in 1948, Mitsubishi Trust Bank was authorized to engage in thecommercial banking business, in addition to its trust business, under the new name Asahi Trust & Banking
Corporation. In 1952, the bank changed its name again, to “The Mitsubishi Trust and Banking Corporation.”
Nippon Trust and Banking and The Tokyo Trust Bank, Ltd., which were previously subsidiaries of Bank ofTokyo-Mitsubishi, was merged into Mitsubishi Trust Bank on October 1, 2001.
27

UFJ Trust Bank was founded in 1959 as The Toyo Trust & Banking Company, Limited, or Toyo Trust
Bank. The Sanwa Trust & Banking Company, Limited, which was a subsidiary of Sanwa Bank, was merged into
Toyo Trust Bank on October 1, 1999. The Tokai Trust & Banking Company, Limited, which was a subsidiary of
Tokai Bank, was merged into Toyo Trust Bank on July 1, 2001. Toyo Trust Bank was renamed “UFJ Trust Bank
Limited” on January 15, 2002.
Mitsubishi UFJ Securities Holdings Co., Ltd.
MUSHD is a wholly-owned subsidiary of MUFG. MUSHD functions as an intermediate holding company
of MUFG’s global securities business. MUSHD’s registered head office is located at 5-2, Marunouchi 2-chome,
Chiyoda-ku, Tokyo 100-0005, Japan, and its telephone number is 81-3-6213-2550. MUSHD is a joint stockcompany (kabushiki kaisha) incorporated in Japan under the Company Law. MUSHD has major overseas
subsidiaries in London, New York, Hong Kong, Singapore and Geneva.
In April 2010, MUSHD, which was previously called “Mitsubishi UFJ Securities Co., Ltd.,” or MUS,
became an intermediate holding company by spinning off its securities and investment banking business
operations to a wholly-owned operating subsidiary established in December 2009, currently MUMSS. Upon the
consummation of the corporate spin-off transaction, the intermediate holding company was renamed “Mitsubishi
UFJ Securities Holdings Co., Ltd.” and the operating subsidiary was renamed “Mitsubishi UFJ
Securities Co., Ltd.” The operating subsidiary was subsequently renamed MUMSS in May 2010 upon integrationof our securities operations in Japan with those of Morgan Stanley.
MUS was formed through the merger between Mitsubishi Securities Co., Ltd. and UFJ Tsubasa
Securities Co., Ltd. on October 1, 2005, with Mitsubishi Securities being the surviving entity. The surviving
entity was renamed “Mitsubishi UFJ Securities Co., Ltd.” and, in September 2007, became our wholly-owned
subsidiary through a share exchange transaction.
Mitsubishi Securities was formed in September 2002 through a merger of Bank of Tokyo-Mitsubishi’ssecurities subsidiaries and affiliate, KOKUSAI Securities Co., Ltd., Tokyo-Mitsubishi Securities Co., Ltd. andTokyo-Mitsubishi Personal Securities Co., Ltd., and Mitsubishi Trust Bank’s securities affiliate, Issei
Securities Co., Ltd. In July 2005, MTFG made Mitsubishi Securities a directly-held subsidiary by acquiring all of
the shares of Mitsubishi Securities common stock held by Bank of Tokyo-Mitsubishi and Mitsubishi Trust Bank.
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
MUMSS is our core securities and investment banking subsidiary. MUMSS was created as one of the two
Japanese joint venture securities companies in May 2010 between Morgan Stanley and us as part of our global
strategic alliance. MUMSS succeeded to the investment banking operations conducted in Japan by a subsidiaryof Morgan Stanley and the wholesale and retail securities businesses conducted in Japan by MUS. MUFG,
through MUSHD, holds 60% voting and economic interests in MUMSS. MUMSS’s registered head office islocated at 5-2 Marunouchi 2-chome, Chiyoda-ku, Tokyo, 100-0005 Japan, and its telephone number is81-3-6213-8500. MUMSS is a joint stock company (kabushiki kaisha) incorporated in Japan under the Company
Law. For more information on our joint venture securities companies, see “—B. Business Overview—Global
Strategic Alliance with Morgan Stanley.”
Mitsubishi UFJ NICOS Co., Ltd.
Mitsubishi UFJ NICOS is a major credit card company in Japan that issues credit cards, including thoseissued under the MUFG, NICOS, UFJ and DC brands, and provides a broad range of credit card and other related
services for its card members in Japan. Mitsubishi UFJ NICOS is a consolidated subsidiary of MUFG. Mitsubishi
UFJ NICOS’s registered head office is located at 33-5, Hongo 3-chome, Bunkyo-ku, Tokyo 113-8411, Japan, andits telephone number is 81-3-3811-3111. Mitsubishi UFJ NICOS is a joint stock company (kabushiki kaisha)
incorporated in Japan under the Company Law.
28

On August 1, 2008, Mitsubishi UFJ NICOS became a wholly-owned subsidiary of MUFG through a shareexchange transaction. On the same day, we entered into a share transfer agreement with The Norinchukin Bank,or Norinchukin, under which we sold some of our shares of Mitsubishi UFJ NICOS common stock to
Norinchukin. Currently, Mitsubishi UFJ NICOS is a consolidated subsidiary of MUFG. In March 2011, we andNorinchukin made additional equity investments in Mitsubishi UFJ NICOS in proportion to our andNorinchukin’s respective beneficial ownership of approximately 85% and 15%, respectively.
Mitsubishi UFJ NICOS was formed through the merger, on April 1, 2007, of UFJ NICOS Co., Ltd. and
DC Card Co., Ltd. As the surviving entity, UFJ NICOS Co., Ltd. was renamed “Mitsubishi UFJ NICOS Co.,Ltd.”
UFJ NICOS was formed through the merger, on October 1, 2005, of Nippon Shinpan Co., Ltd. and
UFJ Card Co., Ltd. Originally founded in 1951 and listed on the Tokyo Stock Exchange in 1961, Nippon Shinpan
was a leading company in the consumer credit business in Japan. Nippon Shinpan became a subsidiary of MUFG
at the time of the merger with UFJ Card.
Prior to the merger between MTFG and UFJ Holdings in October 2005, DC Card was a subsidiary of MTFG
while UFJ Card was a subsidiary of UFJ Holdings.
B.

Business Overview

We are one of the world’s largest and most diversified financial groups with total assets of ¥253.66 trillion
as of March 31, 2014. The Group is comprised of BTMU, MUTB, MUMSS (through MUSHD), Mitsubishi
UFJ NICOS and other subsidiaries and affiliates, for which we are the holding company. As a bank holding
company, we are regulated under the Banking Law of Japan. Our services include commercial banking, trust
banking, securities, credit cards, consumer finance, asset management, leasing and many more fields of financial
services. The Group has the largest overseas network among the Japanese banks, comprised of offices andsubsidiaries, including MUB and Krungsri, in more than 40 countries.
While maintaining the corporate cultures and core competencies of BTMU, MUTB, MUMSS (through
MUSHD) and Mitsubishi UFJ NICOS, we, as the holding company, seek to work with them to find ways to:‰establish a more diversified financial services group operating across business sectors;‰

leverage the flexibility afforded by our organizational structure to expand our business;‰benefit from the collective expertise of BTMU, MUTB, MUMSS (through MUSHD) and Mitsubishi
UFJ NICOS;‰

achieve operational efficiencies and economies of scale; and‰enhance the sophistication and comprehensiveness of the Group’s risk management expertise.

Since April 2004, we have adopted an integrated business group system comprising our core business areas,
which serve as the Group’s core sources of net operating profit. As of March 31, 2014, we have five businesssegments: Integrated Retail Banking Business, Integrated Corporate Banking Business, Integrated Trust Assets
Business, Integrated Global Business and Global Markets. MUFG’s role as the holding company is tostrategically manage and coordinate the activities of these business segments. Group-wide strategies are
determined by the holding company and executed by the banking subsidiaries and other subsidiaries. For further
information on our business segments, see “Item 5.A. Operating and Financial Review and Prospects—Operating
Results—Business Segment Analysis.”
In October 2008, each of MUFG, BTMU, MUTB and UNBC (now MUAH) became a financial holding
company under the U.S. Bank Holding Company Act. For more information, see “Item 3.D. Key Information—
Risk Factors—Risks Related to Our Business—We may not be able to maintain our capital ratios above
minimum required levels, which could result in the suspension of some or all of our operations” and “—B.
Information on the Company—Business Overview—Supervision and Regulation—United States.”29

MUFG Management Policy
MUFG Group has formulated the Group Corporate Vision to clarify the nature of the Group’s overall
mission and the type of group it should aspire to be, and as a shared principle to unify the hearts and minds ofGroup employees, while meeting the expectations of our customers and society. Throughout the Group, thepeople of MUFG are working under three shared values—Integrity and Responsibility, Professionalism andTeamwork, and Challenging Ourselves to Grow—while aiming to be the world’s most trusted financial group.
Corporate Vision
OUR MISSION
To be a foundation of strength, committed to meeting the needs ofour customers, serving society, and fostering shared and sustainablegrowth for a better world.
OUR VISION—Be the world’s most trusted financial group—
1. Work together to exceed the expectations of our customers
2. Provide reliable and constant support to our customers
3. Expand and strengthen our global presence
OUR VALUES
1. Integrity and Responsibility 2. Professionalism and Teamwork 3. Challenge Ourselves to Grow

We have declared our message to the world as “Quality for You,” with management’s emphasis on quality.
“Quality for You” means that by providing high-quality services, we aspire to help improve the quality of the
lives of individual customers and the quality of each corporate customer. The “You” expresses the basic stance of
MUFG that we seek to contribute not only to the development of our individual customers but also communities
and society. We believe that delivering superior quality services, reliability, and global coverage will result in
more profound and enduring contributions to society.
Integrated Retail Banking Business GroupThe Integrated Retail Banking Business Group covers all retail businesses, including commercial banking,trust banking and securities businesses, and offers a full range of banking products and services, including
financial consulting services, to retail customers in Japan. This business group integrates the retail businesses of
BTMU, MUTB, MUMSS and other affiliate companies of MUFG. We offer a full range of bank deposit
products, including a non-interest-bearing deposit account that is redeemable on demand and intended primarily
for payment and settlement functions. We also offer a variety of asset management and asset administration
services, and trust products and other investment products, as well as other products and services described
below.
MUFG, as an integrated financial service group, aims to respond to customers’ specific needs, utilizing its
breadth of businesses such as commercial banking, trust banking, securities and credit card businesses. The
MUFG Group is committed to offering customers safe and reliable services by strengthening frameworks for,among other things, customer protection, legal compliance, and security response.
Service Improvement Project. BTMU has launched a project titled “Do Smartš” with an aim to improve
quality of services for individual customers. In order to contribute to the lifelong wellbeing of customers andtheir families, this project focuses on enhancing online banking services with smartphones and other devices, andproviding customized consulting to satisfy their needs.
Responding to Investment Needs. We aim to ensure that customers can adequately inform themselves ofinvestment opportunities by providing various mediums such as appointments with representatives, seminars at
branches with investment experts as lecturers, and “investment consultation sessions” on weekends and national30

holidays, and during evening hours. We have also been expanding our product lines, adding services such as
investment trusts and foreign currency deposits, in order to be better able to respond to customers’ various
investment needs. MUFG has also been working proactively to promote the Japanese individual savings accountsystem, generally referred to as the NISA program, which was launched in January 2014 and offers tax
exemptions on capital gains and dividend income for investments up to ¥1.0 million a year for a maximum of
five years. The MUFG Group focuses on strengthening collaboration among group companies. For example,
foreign bonds made available by MUMSS and other group securities companies are also available for purchases
at BTMU and MUTB. Also, BTMU provides “Retail Money Desk” services at 63 branches across Japan, where
investment experts seconded from MUMSS respond to customers’ sophisticated investment needs. We have
implemented methods that are designed to better communicate information regarding product and service options
to customers. The use of tablet computers enables BTMU’s sales representatives to propose products andservices that match individual customers’ needs by showing them the latest market information, detailed
information on major products and services, and asset management and life-plan simulations. All MUTB
branches now offer “Private Account,” an asset management account service through which each customer canconsult with his or her portfolio manager in person to manage investments according to a personalized plan.
Responding to Insurance Needs. BTMU acts as a sales channel for a variety of insurance products,
including annuity insurance, single premium whole life insurance, flat-rate premium whole life insurance,
medical insurance, cancer insurance and nursing-care insurance. Insurance-sales specialists (insurance planners)
and staffs who have taken insurance-sales and other relevant training take care of customers’ various insurance
needs. Individual annuity insurance, whole life insurance and medical insurance plans are available at all MUTB
branches. Continued efforts will be made to further reinforce product lines and sales framework.
Responding to Needs Relating to Inheritance, Gift and Real Estate. MUTB offers a number of services
including a testamentary trust service called “Ishindenshin” which helps customers prepare, maintain and execute
wills, an inheritance planning service called “Shisan Keisho Planning” which helps customers manage andanalyze financial assets and real estate properties comprehensively, and an inheritance procedure support service
called “Wakachi Ai” which helps customers navigate the necessary procedures upon inheritance. BTMU andMUMSS also offer inheritance-related products and services, serving as sales agents of MUTB. In January 2013,
MUTB’s asset management service called “Zutto Anshin Shintaku,” which helps customers and their families
protect their funds and allows them to receive funds according to their chosen plan, received the “Nikkei Veritas
Award” in the Nikkei Excellent Products & Services Awards for 2012. In April 2013, an educational fund gift
trust product called “Magoyorokobu” was launched. BTMU also sells this product as a sales agent of MUTB.
MUTB and Mitsubishi UFJ Real Estate Services offer real estate brokerage services for both investment andbusiness properties and residential properties, responding to customers’ various real-estate-related needs.
Responding to Loan Needs. With respect to housing loans, BTMU offers “Loans with Supplemental
Health Insurance for Seven Major Illnesses” through a third party insurance company to help with loan payments
in case of unexpected major illnesses such as cancer or heart attacks, a group credit life insurance plan which ismandatory for housing loans, with reduced qualification requirements (“Wide Danshin”) and a preferred interest
rate plan (“Gun-to Ureshii Housing Loan”). MUTB also offers housing loan plans incorporating “Wide Danshin”
and other plans to respond to customers’ needs. BTMU also offers “Card Loans” and “Purpose-Specific Term
Loans,” depending on customers’ needs. A card loan service called “BANQUIC” offers access to cash as quickly
as in 40 minutes after the submission of an application through a video teller machine. Also, online applications
are accepted 24 hours a day, 365 days a year, and the underwriting process can be completed as quickly as in
30 minutes. Applications are also accepted over the phone. A card loan service called “My Card Plus”
automatically loans money into the customers linked account when its balance becomes negative. Customers whoalready have an account with BTMU can apply for this service online. “Net DE Loan” is a purpose-specific termloan, which BTMU-account-holder customers can, in most circumstances, apply for without visiting a bankbranch. This loan can be used to pay for education, motor vehicle purchases and other purposes.
Responding to Internet Banking Needs. BTMU and MUTB offer Internet banking services called“Mitsubishi Tokyo UFJ Direct” and “Mitsubishi UFJ Trust Direct,” respectively, which allow customers to,31among other things, transfer money, check their balance, make time deposits, make investments, apply for
housing loans, and consult specialists regarding investments. In 2013, transaction screens of “Mitsubishi Tokyo
UFJ Direct” were renewed, making the service even more user-friendly. The number of users has grown toapproximately 14 million as of March 31, 2014. Jibun Bank Corporation was founded by BTMU in collaboration
with KDDI Corporation in June 2008. The convenience that Jibun Bank offers by allowing users to executetransactions at any time on their cellphones has attracted customers in a wide age group. In addition to enablingusers to check their balance and transfer money, Jibun Bank offers other products and services such as yendenominated time deposits, foreign currency deposits, and, since June 2013, “Jibun Bank FX” (over-the-counter
foreign exchange margin trading). As of March 31, 2014, Jibun Bank had approximately 1.6 million retailcustomer accounts with a total balance of deposits of ¥560 billion. Jibun Bank aims to continue offering highquality services under the motto of “a bank in the palm of your hand.”Credit Card Business. Mitsubishi UFJ Nicos offers a variety of credit cards, including “MUFG Card
(Gold Card),” a credit card with an annual fee starting at as low as ¥2,000. With five international credit card
brands (JCB, Visa, Master Card®, American Express® and China UnionPay) available, MUFG Card is designed
to meet customers’ various needs. BTMU’s “Mitsubishi Tokyo UFJ VISA” offers numerous attractive reward
programs, such as cash-back in exchange for earned points.
Development of Branch and ATM Networks. We have an extensive network of branches in the greater
Tokyo, Nagoya and Osaka areas. Also, “MUFG Plazas,” which are operated jointly by BTMU, MUTB and
MUMSS, are strategically located across Japan. BTMU and MUTB have a nationwide ATM network, making
use of convenience store ATMs and partnerships with other banks in addition to BTMU and MUTB’s own
ATMs. In an effort to improve access to its ATMs, BTMU increased its ATM locations and extended operating
hours and transaction-fee-free hours in 2013. At the same time, BTMU introduced a revised fee schedule forusing partner banks’ ATMs and transferring money using ATMs.
Finance Facilitation. We believe that finance facilitation for customers is one of our most important social
responsibilities and strive to exemplify that standard. Although the Act Concerning Temporary Measures toFacilitate Financing for Small and Medium-sized Firms and Others has expired, our basic policy has notchanged. We seek to offer consultation and otherwise deal attentively with small and medium-sized enterprise, or
SME, customers who wish to modify terms and conditions for repayment.
Strengthening the Compliance Framework. We have been making efforts to strengthen our frameworks forcustomer protection and legal compliance. BTMU has 260 compliance specialists stationed at its branches acrossthe country. As for MUTB, branches are given guidance by compliance officers based in the Head Office. We
intend to continue to strictly monitor the legal compliance associated with selling financial products and services.
Integrated Corporate Banking Business GroupThe Integrated Corporate Banking Business Group covers domestic corporate businesses, includingcommercial banking, investment banking, trust banking and securities businesses, as well as businesses outsideof Japan assisting mainly Japanese companies in executing and expanding their operations. Through the
integration of these business lines, diverse financial products and services are provided mainly to our Japanese
corporate customers, from large corporations to medium-sized and small businesses. The business group hasclarified strategic domains, sales channels and methods to match the different growth stages and financial needsof our corporate customers.
Commercial Banking
We provide various financial solutions, such as loans and fund management, remittance and foreignexchange services, to meet the requirements of small and medium-sized enterprise customers. We also help ourcustomers develop business strategies, such as overseas expansions, inheritance-related business transfers andstock listings.
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CIB (Corporate and Investment Banking)We offer advanced financial solutions mainly to large corporations through corporate and investmentbanking services. Product specialists globally provide derivatives, securitization, syndicated loans, structured
finance, and other services. We also provide investment banking services, such as M&A advisory, bond andequity underwriting, to meet our customers’ needs.
A large part of our investment banking business in Japan is provided by MUMSS which was formed in
May 2010 through the integration of the domestic wholesale and retail securities business previously conductedby MUS and the investment banking business conducted by Morgan Stanley Japan. See “—Global Strategic
Alliance with Morgan Stanley” below.
Transaction Banking
Our transaction banking operations support customers with capital management, focusing on cash
management and trade finance. Through our global network we support customers who wish to establish a global
manufacturing and sales network with our friendly services and commitment to quality.
Trust Banking
MUTB’s experience and know-how in the asset management business, real estate brokerage and appraisal
services, and stock transfer agency services also enable us to offer services tailored to the financial strategies ofeach client, including securitization of real estate, receivables and other assets.
Integrated Trust Assets Business GroupThe Integrated Trust Assets Business Group covers asset management and administration services for
products such as pension trusts and security trusts by integrating the trust banking expertise of MUTB and theinternational strengths of BTMU. The business group provides a full range of services to corporate and pension
funds, including stable and secure pension fund management and administration, advice on pension schemes, andpayment of benefits to scheme members.
Our Integrated Trust Assets Business Group combines MUTB’s trust assets business, comprising trust assets
management services, asset administration and custodial services, and the businesses of Mitsubishi UFJ Global
Custody S.A., Mitsubishi UFJ Fund Services, Mitsubishi UFJ Asset Management Co., Ltd. and KOKUSAI AssetManagement Co., Ltd.
Mitsubishi UFJ Global Custody S.A. and Mitsubishi UFJ Fund Services provide global custody services,administration services for investment funds and fiduciary and trust accounts, and other related services mainly
to institutional investors.
Mitsubishi UFJ Asset Management and KOKUSAI Asset Management provide asset management and trust
products and services mainly to individual customers and corporate clients in Japan.
MUTB acquired Mitsubishi UFJ Fund Services (MFS), formerly known as Butterfield Fulcrum Group, in
September 2013. We have taken this opportunity to establish and promote a new brand called “MUFG Investor
Services.” Under this brand, we provide a full suite of global asset administration services, including fundadministration, custody, securities lending and foreign exchange as a one stop shop.
With an aim to further enhance its business, MUTB has strategic alliances with asset managementcompanies outside of Japan, including Aberdeen Asset Management PLC, a U.K. asset manager, and AMP
Capital Holdings Limited, an Australian asset manager.
Integrated Global Business GroupThe Integrated Global Business Group was established on July 1, 2011 to effectively coordinate and enhance
our group-wide efforts to strengthen and expand overseas operations. Integrated Global Business Group is designed
to clarify the leadership in, and enhance the coordination for, our overseas strategies on a group-wide basis.
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Overseas business development has been an important pillar of our growth strategy. Aiming to further raise
our presence in the global financial market, we are shifting our approach where each of our group companies
individually promotes its overseas business to a more group-wide approach. The new approach is designed toenable us to exercise our comprehensive expertise to provide our customers with value-added services more
effectively.
As global financial regulations have become increasingly stringent following the recent global financial
crisis, the realignment in the global financial industry has accelerated with financial institutions merging andentering into alliances particularly in Europe and the United States. Moreover, the importance of emerging
markets in Asia and other regions has been rapidly growing, and the business environment surrounding theinternational financial industry is becoming more complex. In addition, customers’ financing needs are becoming
more diverse and sophisticated as their activities are becoming more globalized.
Amidst this dynamic environment, the Integrated Global Business Group covers our overseas businesses,
including commercial banking services such as loans, deposits and cash management services, retail banking,trust assets and securities businesses (with the retail banking and trust assets businesses being conducted through
MUB), through a global network of more than 500 offices outside of Japan to provide customers with financial
products and services that meet their increasingly diverse and sophisticated financing needs.
CIB (Corporate and Investment Banking)
Our global CIB business primarily serves large corporations, financial institutions, and sovereign andmultinational organizations with a comprehensive set of solutions for their financing needs. Through our global
network of offices and branches, we provide a full range of services, including corporate banking services suchas project finance, export credit agency, or ECA, finance, and financing through asset-backed commercial papers.
We also provide investment banking services such as debt/equity issuance and M&A advisory services to help
our clients develop their financial strategies and realize their goals. In order to meet clients’ various financing
needs, we have established a client-oriented coverage model through which we coordinate our product experts
who offer innovative finance services globally. We are among the world’s top providers of project finance, oneof the core businesses of CIB. We provide professional services in arranging limited-recourse finance andoffering financial advice in various sectors, including natural resources, power, and infrastructure, backed by ourexperience, expertise, knowledge, and global network.
Transaction Banking
We have Transaction Banking offices in six locations around the globe through which we provide
commercial banking products and services primarily for large corporations and financial institutions in managing
and processing domestic and cross-border payments, mitigating risks in international trade, and providing
working capital optimization. A team of approximately 400 officers provides customers with support for theirdomestic, regional and global trade finance and cash management programs through our extensive global
network.
MUFG Union Bank, N.A., (MUB)
MUB is the primary subsidiary of MUAH, which is a wholly owned subsidiary of BTMU and is a bankholding company in the United States. Effective July 1, 2014, BTMU’s operations in the Americas region were
integrated with MUAH’s operations. MUAH oversees BTMU’s operations in the Americas region and MUB is
the primary operating entity of BTMU in the United States. MUB is a leading regional bank in California, ranked
by the Federal Deposit Insurance Corporation, or FDIC, as the 20th largest bank in the United States in terms of
total deposits as of March 2014. MUB provides a wide range of financial services to consumers, small
businesses, middle-market companies and major corporations, primarily in California, Oregon, Washington, andTexas as well as nationally and internationally. In October 2012, MUB acquired Smartstreet, formerly a divisionof Atlanta-based PNC Bank, N.A. which had approximately $1.0 billion in deposits and provided banking
34

services nationwide to homeowners associations and community association management companies in the
United States. In December 2012, MUAH acquired Pacific Capital Bancorp, a bank holding company based in
California with approximately $6.7 billion in total assets and approximately $4.7 billion in deposits. In June
2013, MUB acquired PB Capital Corporation’s institutional commercial real estate lending division platform.
Headquartered in New York, the commercial real estate lending division of PB Capital had approximately$3.5 billion in loans outstanding on properties in various major metropolitan areas in the United States as ofJune 14, 2013. In November 2013, MUB completed the acquisition of First Bank Association Bank Services, aunit of First Bank, which provided a full range of banking services to homeowners associations and community
management companies. MUB acquired approximately $570 million in deposits in this transaction. For more
information, see “Item 5. Operating and Financial Review and Prospects—Recent Developments.”
Activities in Asia
We have been expanding our operations in Asia in an effort to further develop our operations abroad. We
opened five office and branch locations recently, namely Ulaanbaatar Representative Office in Mongolia,
Suryacipta City of Industry Service Point in Indonesia, BTMU (China) Shanghai Pilot Free Trade Zone SubBranch, Bangalore Branch in India, and BTMU (China) Suzhou branch.
Global Markets
Global Markets covers asset and liability management and strategic investments of BTMU and MUTB, andsales and trading of financial products of BTMU, MUTB and MUSHD. Effective July 1, 2012, the Integrated
Global Business Group and Global Markets started working jointly on some of the sales and trading businesses
of MUSHD’s foreign subsidiaries as part of our efforts to strengthen the cooperation between BTMU and
MUSHD of their markets businesses and to expand investor relationships while improving our trading
capabilities to seize interest rate and foreign exchange market opportunities for loans and corporate bondtransactions. Accordingly, during the year ended March 31, 2013, we began reporting a portion of the securities
sales and trading businesses, which previously was presented within the Integrated Global Business Group, aspart of Global Markets.
Global Strategic Alliance with Morgan Stanley
As of March 31, 2014, we hold approximately 432 million shares of Morgan Stanley’s common stock
representing approximately 21.9% of the voting rights in Morgan Stanley and Series C Preferred Stock with aface value of approximately $521.4 million, or ¥53.6 billion, and 10% dividend. As of the same date, we had two
representatives appointed to Morgan Stanley’s board of directors. We adopted the equity method of accounting
for our investment in Morgan Stanley beginning with the fiscal year ended March 31, 2012.
In conjunction with Morgan Stanley, we formed two securities joint venture companies in May 2010 tointegrate our respective Japanese securities companies. We converted the wholesale and retail securities
businesses conducted in Japan by MUS into MUMSS. Morgan Stanley contributed the investment banking
operations conducted in Japan by its former wholly-owned subsidiary, Morgan Stanley Japan, to MUMSS, andconverted the sales and trading and capital markets businesses conducted in Japan by Morgan Stanley Japan into
an entity called Morgan Stanley MUFG Securities, Co., Ltd., or MSMS. We hold a 60% economic interest in
MUMSS and MSMS, and Morgan Stanley holds a 40% economic interest in MUMSS and MSMS. We hold a
60% voting interest and Morgan Stanley holds a 40% voting interest in MUMSS, and we hold a 49% votinginterest and Morgan Stanley holds a 51% voting interest in MSMS. Morgan Stanley’s and our economic andvoting interests in the securities joint venture companies are held through intermediate holding companies. We
have retained control of MUMSS and we account for our interest in MSMS under the equity method due to oursignificant influence over MSMS. The board of directors of MUMSS has fifteen members, nine of whom aredesignated by us and six of whom are designated by Morgan Stanley. The board of directors of MSMS has ten
members, six of whom are designated by Morgan Stanley and four of whom are designated by us. The CEO of
MUMSS is designated by us and the CEO of MSMS is designated by Morgan Stanley.
35

We have also expanded the scope of our global strategic alliance with Morgan Stanley into othergeographies and businesses, including (1) a loan marketing joint venture that provides clients in the United Stateswith access to expand the world-class lending and capital markets services from both companies, (2) anagreement to establish business referral arrangements in Asia, Europe, the Middle East and Africa, covering
capital markets, loans, fixed income sales and other businesses, (3) a global commodities referral agreement
whereby BTMU and its affiliates refer clients in need of commodities-related hedging solutions to certain
affiliates of Morgan Stanley, and (4) an employee secondment program to share best practices and expertise in awide range of business areas.
We completed transactions to transfer shares of Mitsubishi UFJ Merrill Lynch PB Securities Co., Ltd.
among our consolidated subsidiaries on March 20, 2014. Upon completion of the transactions, MUMSS holds
75%, and BTMU holds the remaining 25%, of the voting rights in the company. Prior to the transactions,
MUSHD held 51%, and BTMU held the remaining 49%, of the voting rights in the company. Concurrent withthe completion of the transactions, the company changed its name to “Mitsubishi UFJ Morgan Stanley PB
Securities Co., Ltd.” In connection with its new shareholdings, Mitsubishi UFJ Morgan Stanley PB Securities
entered into a new service agreement with Morgan Stanley. Mitsubishi UFJ Morgan Stanley PB Securities
leverages MUFG’s broad customer base, utilizes Morgan Stanley’s global and high quality insight, and further its
collaborations with other group companies by strengthening its coordination with MUMSS. It aims for further
development of its wealth management business, which is one of the largest in Japan.
See “Item 3.D. Key Information—Risk Factors—Risks Related to Our Business—If our strategic alliancewith Morgan Stanley fails, we could suffer financial or reputational loss.”
Acquisition of Bank of Ayudhya Shares through Voluntary Tender Offer
On December 18, 2013, BTMU completed a voluntary tender offer (VTO) for shares of Krungsri in
Thailand at 39 Thai Baht per share. BTMU purchased 72.01% (4,373,714,120 shares) shares of Krungsri for¥545.8 billion in cash. As a result, Krungsri became a subsidiary of BTMU. Under a Conditional Branch
Purchase Agreement between BTMU and Krungsri, or the BPA, dated September 18, 2013, BTMU’s Bangkok
Branch will be integrated with Krungsri through a contribution in kind of the BTMU Bangkok Branch businessto Krungsri within one year from the date of the acquisition of Krungsri shares through the VTO. The effective
date of the integration, however, is subject to change in accordance with an agreement between the parties andregulatory approval. In exchange for the contribution in kind, Krungsri will issue 1,143,221,782 common shares
to BTMU, and BTMU’s ownership in Krungsri is expected to be 76.44% immediately following the integration.
However, the number of shares to be issued by Krungsri is subject to change in accordance with a priceadjustment clause with a maximum of 1,500,000,000 shares and no specified minimum under the BPA.
For more information on recent transactions in Asia, see “Item 5. Operating and Financial Review andProspects—Recent Developments.”
Competition
We face strong competition in all of our principal areas of operations. The structural reforms in the regulationof the financial industry and recent developments in financial markets have resulted in some significant changes in
the Japanese financial system and prompted banks to merge or reorganize their operations, thus changing the natureof competition from other financial institutions as well as from other types of businesses.
Japan
Since their formation in 2000 and 2001, the so-called Japanese “mega bank” groups, including us, theMizuho Financial Group and the Sumitomo Mitsui Financial Group, have continued to expand their businesses
and take measures designed to enhance their financial group capabilities. For example, Mizuho Bank, Ltd. andMizuho Corporate Bank, Ltd. merged in July 2013, and the merged entity presently operates under the corporatename of “Mizuho Bank, Ltd.”36

Heightened competition among the mega bank groups is currently expected in the various financial sectors
as they have recently announced plans to expand, or have expanded, their respective businesses. For example, inthe securities sector, in May 2010, we created two securities joint venture companies in Japan in conjunction
with Morgan Stanley, MUMSS and MSMS, by integrating the operations of MUS and Morgan Stanley Japan. In
May 2009, Mizuho Securities Co., Ltd. acquired Shinko Securities Co., Ltd. In September 2011, the Norinchukin
Bank, Mizuho Corporate Bank and Mizuho Securities entered into definitive agreements to expand areas ofbusiness cooperation and enhance collaborative relationships. In January 2013, Mizuho Securities and Mizuho
Investors Securities Co., Ltd. merged. In October 2009, the Sumitomo Mitsui Financial Group acquired theformer Nikko Cordial Securities Inc. and other businesses from Citigroup Inc. For a discussion of the two
securities joint venture companies created by us and Morgan Stanley, see “—B. Business Overview—Global
Strategic Alliance with Morgan Stanley.”In the retail business sector, customers often have needs for a broad range of financial products and services,such as investment trusts and insurance products. Recently, competition has increased due to the development of
products and distribution channels. For example, Japanese banks have started competing with one another bydeveloping innovative proprietary computer technologies that allow them to deliver basic banking services in amore efficient manner, such as internet banking services, and to create sophisticated new products in response tocustomer demand. In addition, the Japanese individual savings account system, generally referred to as the NISA
program, commenced in January 2014, and offers tax exemptions on capital gains and dividend income forinvestments up to ¥1 million a year for a maximum of five years. Competition in the retail business sector is also
expected to increase due to the implementation of the NISA program.
In the private banking sector, competition among the mega bank groups has intensified as a result of recent
corporate actions designed to strengthen their operations. We made Mitsubishi UFJ Merrill Lynch PB Securities
Co., Ltd. a wholly owned subsidiary in December 2012 to enhance our private banking services for high networth customers, and changed its name to Mitsubishi UFJ Morgan Stanley PB Securities, Ltd. in March 2014. In
October 2013, Sumitomo Mitsui Banking Corporation acquired the former Société Générale Private Banking
Japan, Ltd. from Société Générale S.A. and changed its name to SMBC Trust Bank Ltd.
In the consumer finance sector, recent regulatory reforms and legal developments have negatively impacted
the business environment, resulting in failures of several consumer finance companies and intensifiedcompetitions among consumer finance companies that have remained in business, particularly among thoseaffiliated with the mega banks. In April 2012, Promise Co., Ltd. became a wholly owned subsidiary of theSumitomo Mitsui Financial Group, and changed its name as SMBC Consumer Finance Co., Ltd. in July 2012.
See “Item 3.D. Key Information—Risk Factors—Risks Related to Our Business—Because of our loans to
consumers and our shareholdings in companies engaged in consumer lending, changes in the business orregulatory environment for consumer finance companies in Japan may further adversely affect our financial
results.”
The trust assets business is an area that is becoming increasingly competitive because of regulatory changes
in the industry that have expanded the products and services that can be offered since the mid-2000s. In addition,
there is growing corporate demand for changes in the trust regulatory environment, such as reforms of thepension system and related accounting regulations under Japanese GAAP. Competition may increase in the
future as changes are made to respond to such corporate demand and regulatory barriers to entry are lowered. In
October 2009, The Sumitomo Trust and Banking Co., Ltd. acquired Nikko Asset Management Co., Ltd. from
Citigroup Inc. In April 2011, Sumitomo Trust and Banking and Chuo Mitsui Trust Holdings, Inc. established
Sumitomo Mitsui Trust Holdings, Inc., a holding company, to integrate their operations. In April 2012,
Sumitomo Trust and Banking, The Chuo Mitsui Trust and Banking Company, Limited and Chuo Mitsui Asset
Trust and Banking Company, Limited, the three trust bank subsidiaries of Sumitomo Mitsui Trust Holdings,
merged and were renamed Sumitomo Mitsui Trust Bank, Limited. As a result, competition is expected tointensify in the asset management and trust assets businesses.
37

In recent years, the Japanese government has identified several governmental financial institutions ascandidates to privatize. In particular, the privatization of the Japan Post Group companies could substantially
increase competition within the financial services industry as Japan Post Bank Co., Ltd. is one of the world’s
largest holders of deposits. Although the Japanese government’s privatization plan for the Japan Post Group
companies was suspended in December 2009, a revised postal privatization law became effective in May 2012,
allowing the government to commence its sales of shares in the Japan Post Group companies. The revised law
requires Japan Post Holdings Co., Ltd. to make efforts to sell its shares in Japan Post Bank and Japan Post
Insurance Co., Ltd. as soon as possible but does not provide a specific deadline. Additionally, under the revisedlaw, Japan Post Bank and Japan Post Insurance may enter into new business areas upon obtaining required
government approvals, and if the government’s equity holdings decrease to a certain level, the two companies
will be allowed to enter into new business areas upon submission of a notice to the government. As a result, theJapan Post Group companies may seek to enter into new financial businesses and increasingly compete with us.
The privatization of the Japan Post Group companies remains subject to political negotiations and government
action. Nonetheless, Japan Post may seek new business opportunities that compete with our business in Japan.
See “Item 3.D. Key Information—Risk Factors—Risks Related to Our Business—Our business may be adversely
affected by competitive pressures, which have partly increased due to regulatory changes and recent market
changes in the financial industry domestically and globally” and “—B. Business Overview—The Japanese
Financial System—Government Financial Institutions.”
The mega bank groups face significant competition with other domestic and foreign financial groups. For
example, the Nomura Group has been a major player in the securities market in Japan, and Citigroup Inc.
conducts its banking business in Japan through a locally incorporated banking subsidiary. In addition, various
Japanese non-bank financial institutions and non-financial companies have entered into the Japanese banking
sector. For example, Orix Corporation, a non-bank financial institution, and the Seven & i Holdings group andSony Corporation, which were both non-financial companies, offer various banking services, often through nontraditional distribution channels.
Foreign
In the United States, we face substantial competition in all aspects of our business. We face competition
from large U.S. and non-U.S. money-center banks, as well as from similar institutions that provide financial
services. Through MUB, we currently compete principally with U.S. and non-U.S. money-center and regionalbanks, thrift institutions, asset management companies, investment advisory companies, consumer financecompanies, credit unions and other financial institutions.
In other international markets, we also face competition from commercial banks and similar financial
institutions, particularly major international banks and the leading domestic banks in the local financial markets
in which we conduct business. For example, Japanese mega banks, including us, and other major internationalbanks have been expanding, or are expected to expand, their operations in the Asian market, where leading local
banks have been growing and increasing their presence recently. As a result, we are exposed to intensecompetition in Asia. Furthermore, we are aiming to expand our retail and small and medium enterprises
businesses along with our corporate banking business in South East Asia through our acquisition of Krungsri in
Thailand, and compete with leading local banks in such businesses.
In addition, we may face further competition as a result of recent investments, mergers and other businesstie-ups among global financial institutions.
The Japanese Financial System
Japanese financial institutions may be categorized into three types:‰

the central bank, namely the Bank of Japan;‰

private banking institutions; and‰government financial institutions.
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The Bank of JapanThe Bank of Japan’s role is to maintain price stability and the stability of the financial system to ensure asolid foundation for sound economic development.
Private Banking Institutions
Private banking institutions in Japan are commonly classified into two categories (the following numbers
are based on information published by the Financial Services Agency of Japan available as of June 23, 2014):‰

ordinary banks (125 ordinary banks and 55 foreign commercial banks with ordinary banking
operations); and‰trust banks (16 trust banks, including two Japanese subsidiaries of foreign financial institutions).

Ordinary banks in turn are classified as city banks, of which there are four, including BTMU, and regionalbanks, of which there are 106 and other banks, of which there are 15. In general, the operations of ordinary banks
correspond to commercial banking operations in the United States. City banks and regional banks are
distinguished based on head office location as well as the size and scope of their operations.
The city banks are generally considered to constitute the largest and most influential group of banks inJapan. Generally, these banks are based in large cities, such as Tokyo and Osaka, and operate nationally throughnetworks of branch offices. City banks have traditionally emphasized their business with large corporate clients,
including the major industrial companies in Japan. However, many of these banks, including BTMU, in recent
years have increased their emphasis on other markets, such as small and medium-sized companies and retailbanking.
With some exceptions, the regional banks tend to be much smaller in terms of total assets than the city
banks. Each of the regional banks is based in one of the Japanese prefectures and extends its operations intoneighboring prefectures. Their clients are mostly regional enterprises and local public utilities. The regionalbanks also lend to large corporations. In line with the recent trend among financial institutions toward mergers orbusiness tie-ups, various regional banks have announced or are currently negotiating or pursuing integrationtransactions.
Trust banks, including MUTB, provide various trust services relating to money trusts, pension trusts andinvestment trusts and offer other services relating to real estate, stock transfer agency and testamentary services
as well as banking services.
In recent years, almost all of the city banks have consolidated with other city banks and in some cases,
integrated with trust banks. Consolidation or integration among these banks was achieved, in most cases, throughthe use of a bank holding company.
In addition to ordinary banks and trust banks, other private financial institutions in Japan, including shinkinbanks, or credit associations, and credit cooperatives, are engaged primarily in making loans to small businesses
and individuals.
Government Financial Institutions
There are a number of government financial institutions in Japan, which are corporations wholly owned by
the government and operate under the government’s supervision. Their funds are provided mainly fromgovernment sources. Certain types of operations undertaken by these institutions have been or are planned to be
assumed by, or integrated with the operations of, private corporations through privatization and other measures.
Among them are the following:‰

The Development Bank of Japan, which was established for the purpose of contributing to the economic
development of Japan by extending long-term loans, mainly to primary and secondary sector industries,
39and which was reorganized as a joint stock company in October 2008 as part of its ongoing privatization
process, the target completion date for which has been postponed until sometime between April 2020
and March 2022;‰

Japan Finance Corporation, which was formed in October 2008, through the merger of the international
financial operations of the former Japan Bank for International Cooperation, National Life FinanceCorporation, Agriculture, Forestry and Fisheries Finance Corporation, and Japan Finance Corporationfor Small and Medium Enterprise, for the primary purposes of supplementing and encouraging theprivate financing of exports, imports, overseas investments and overseas economic cooperation, andsupplementing private financing to the general public, small and medium enterprises and those engaged
in agriculture, forestry and fishery. In April 2012, Japan Finance Corporation spun off its international
operations to create Japan Bank for International Cooperation as a separate government-owned entity;‰

Japan Housing Finance Agency, which was originally established in June 1950 as the Government
Housing Loan Corporation for the purpose of providing housing loans to the general public, and which
was reorganized as an incorporated administrative agency and started to specialize in securitization of
housing loans in April 2007; and‰The Japan Post Group companies, a group of joint stock companies including Japan Post Bank, whichwere formed in October 2007 as part of the Japanese government’s privatization plan for the former
Japan Post, a government-run public services corporation, which had been the Postal Service Agency
until March 2003. The Japanese government’s privatization plan for the Japan Post Group companies
was suspended in December 2009. In May 2012, a revised postal privatization law became effective,
allowing the government to commence its sales of shares in the Japan Post Group companies in the
future.

Supervision and Regulation
Japan
Supervision. The Financial Services Agency of Japan, an agency of the Cabinet Office, or the FSA, is
responsible for supervising and overseeing financial institutions, making policy for the overall Japanese financial
system and conducting insolvency proceedings with respect to financial institutions. The Bank of Japan, as thecentral bank for financial institutions, also has supervisory authority over banks in Japan, based primarily on its
contractual agreements and transactions with the banks.
The Banking Law. Among the various laws that regulate financial institutions, the Banking Law and its
subordinated orders and ordinances are regarded as the fundamental law for ordinary banks and other private
financial institutions. The Banking Law addresses capital adequacy, inspections and reporting to banks and bankholding companies, as well as the scope of business activities, disclosure, accounting, limitation on granting
credit and standards for arm’s length transactions for them. As a result of the amendment to the Banking Law and
the Financial Instruments and Exchange Law, effective as of June 2009, firewall regulations that separate bankholding companies or banks from affiliated securities companies have become less stringent. On the other hand,bank holding companies, banks and other financial institutions are required to establish an appropriate system tobetter cope with conflicts of interest that may arise from their business operations.
In June 2013, the Diet passed a bill to amend various financial regulation related laws, including the
Banking Law, which includes certain deregulations on restrictions for shareholdings by banks. For example,
although a bank is generally prohibited from holding more than 5% of the outstanding shares of another company(other than certain financial institutions) under the Banking Law, the bank may be exempt from such requirement
and allowed to hold more than 5% of the outstanding shares of such company, if, among other exempted cases, abank’s shareholding contributes to revitalizing a company’s business or the local economy related to suchcompany. The exemption became effective on April 1, 2014.

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Bank holding company regulations. A bank holding company is prohibited from carrying out any businessother than the management of its subsidiaries and other incidental businesses. A bank holding company may haveany of the following as a subsidiary: a bank, a securities company, an insurance company and a foreignsubsidiary that is engaged in the banking, securities or insurance business. In addition, a bank holding company
may have as a subsidiary, any company that is engaged in a finance-related business, such as a credit cardcompany, a leasing company or an investment advisory company. Certain companies that are designated by aministerial ordinance as those that cultivate new business fields may also become the subsidiary of a bankholding company.
Capital adequacy. The capital adequacy guidelines adopted by the FSA that are applicable to Japanesebank 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, or BIS.
The Group of Central Bank Governors and Heads of Supervision reached an agreement on the new global
regulatory framework, which has been referred to as “Basel III,” in July and September 2010. In December 2010,
the Basel Committee agreed on the details of the Basel III rules. The agreement on Basel III includes thefollowing: (1) raising the quality of capital to ensure banks are able to better absorb losses on both a going
concern and a gone concern basis, (2) increasing the risk coverage of the capital framework, in particular for
trading activities, securitizations, exposures to off-balance sheet vehicles and counterparty credit exposuresarising from derivatives, (3) raising the level of minimum capital requirements, including an increase in theminimum common equity requirement from 2% to 4.5%, which is planned to be phased in between January 1,
2013 and January 1, 2015, and a capital conservation buffer of 2.5%, which is planned to be phased in between
January 1, 2016 and year end 2018, bringing the total common equity requirement to 7%, (4) introducing aninternationally harmonized leverage ratio to serve as a backstop to the risk-based capital measure and to containthe build-up of excessive leverage in the system, (5) raising standards for the supervisory review process(Pillar 2) and public disclosures (Pillar 3), together with additional guidance in the areas of sound valuation
practices, stress testing, liquidity risk management, corporate governance and compensation, (6) introducing
minimum global liquidity standards consisting of both a short term liquidity coverage ratio and a longer term,
structural net stable funding ratio, and (7) promoting the build-up of capital buffers that can be drawn down inperiods of stress, including both a capital conservation buffer and a countercyclical buffer to protect the banking
sector from periods of excess credit growth.
Certain provisions of Basel III were adopted by the FSA effective March 31, 2013 for Japanese banking
institutions with international operations conducted by their foreign offices. Based on the Basel III framework,
the Japanese capital ratio framework has been revised to implement more stringent capital adequacy
requirements to prevent excessive risk takings. Under Basel III, Common Equity Tier 1, Tier 1 and total capitalratios are used to assess capital adequacy, which ratios are determined by dividing applicable capital components
by risk-weighted assets. Total capital is defined as the sum of Tier 1 and Tier 2 capital, and the target minimum
total capital ratio is 8.0%, which consists of a target minimum Tier 1 capital ratio of 6.0% (including a target
minimum Common Equity Tier 1 capital ratio of 4.5% and a target minimum Additional Tier 1 capital ratio of
1.5%) and a target minimum Tier 2 capital ratio of 2.0%. These minimum capital ratios are applicable to MUFG
on a consolidated basis and to BTMU and MUTB on a consolidated as well as stand-alone basis.
Under Basel III, Tier 1 capital is defined to include Common Equity Tier 1 and Additional Tier 1 capital.
Common Equity Tier 1 capital is a new category of capital primarily consisting of:‰common stock,‰capital surplus,‰

retained earnings, and‰other comprehensive income (progressively phased into the capital ratio calculation over several years).

41

Regulatory adjustments including certain intangible fixed assets, such as goodwill, and defined benefit
pension fund net assets (prepaid pension costs) will be deducted from Common Equity Tier 1 capital. The
amount of adjustments to be deducted will increase progressively over time.
Additional Tier 1 capital generally consists of Basel III compliant preferred securities and, during thetransition period, other capital that meets Tier I requirements under the former Basel II standards, net of
regulatory adjustments. Subject to transitional measures, adjustments are made to Additional Tier 1 capital for
items including intangible fixed assets, such as goodwill, and foreign currency translation adjustments, with theamounts of such adjustments to Additional Tier 1 capital progressively decreasing over time.
Tier 2 capital generally consists of:‰Basel III compliant deferred obligations,‰

during the transition period, capital that meet Tier II requirements under the former Basel II standards,‰

allowances for credit losses, and‰non-controlling interests in subsidiaries’ Tier 2 capital instruments.

Subject to transitional measures, certain items including 45% of unrealized profit on securities available forsale and revaluation of land are reflected in Tier 2 capital with the amounts progressively decreasing over time.
In order to qualify as Tier 1 or Tier 2 capital under Basel III, applicable instruments such as preferred sharesand subordinated debt must have a clause in their terms and conditions that requires them to be written-off orforced to be converted into common stock upon the occurrence of certain trigger events.
Risk-weighted assets are the sum of risk-weighted assets compiled for credit risk purposes, quotient ofdividing the amount equivalent to market risk by 8%, and quotient of dividing the amount equivalent tooperational risk by 8%, and also include amount to be added due to transitional measures as well as floor
adjustments, if necessary. Risk-weighted assets include the capital charge of the credit valuation adjustment(CVA), the credit risk related to asset value correlation multiplier for large financial institutions, the 250%
risk-weighted threshold items not deducted from Common Equity Tier 1 capital, and certain Basel II capital
deductions that were converted to risk-weighted assets under Basel III, such as securitizations and significant
investments in commercial entities. Under the FSA guidelines, Basel III is expected to be adopted progressively
over several years. For example, from March 31, 2013 until March 30, 2014, the minimum capital ratio is 3.5%
for Common Equity Tier 1, 4.5% for Tier 1 capital, and 8.0% for total capital, and the requirement will be
progressively raised to meet the Basel III requirement by March 31, 2015. Additionally, certain items that will nolonger be counted towards Tier 1 and Tier 2 capital will be progressively phased out of the capital ratio
calculation over several years to arrive at the capital base required by Basel III.
We have been granted an approval by the FSA to exclude the majority of our investment in Morgan Stanleyfrom being subject to double gearing adjustments. The approval was granted for a 10-year period, but theapproval amount will be phased out by 20% each year starting from March 31, 2019. As of March 31, 2014, afull application of double gearing adjustments with respect to our investment in Morgan Stanley would have
reduced our Common Equity Tier 1 capital ratio by approximately 0.7%.
The Basel Committee on Banking Supervision has proposed additional loss absorbency requirements to
supplement the Common Equity Tier 1 capital requirement ranging from 1% to 3.5% for global systemicallyimportant banks, or G-SIBs, depending on the bank’s systemic importance. The Financial Stability Board
identified us as a G-SIB in its most recent annual report published in November 2013, and indicated that, as a
G-SIB, we would be required to hold an additional 1.5% of Tier 1 common equity. The group of banks identified
as G-SIBs is expected to be updated annually, and the first group of G-SIBs to which the stricter capitalrequirements will initially be applied is expected to be identified in 2014. The stricter capital requirements are
expected to be implemented in phases between January 1, 2016 and December 31, 2018 and will become fully
effective on January 1, 2019.
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As for local banking regulations outside of Japan, such as those in the United States, in July 2013, the FRB
and the other U.S. federal banking agencies adopted final rules making significant changes to the U.S. regulatory
capital framework for U.S. banking organizations to conform it to the Basel III global regulatory capitalframework. The final rules establish more restrictive capital definitions, create additional categories and higher
risk weightings for certain asset classes and off-balance sheet exposures, higher minimum capital and leverage
ratios and capital conservation buffers that will be added to the minimum capital requirements. The final rules
began to apply to MUAH and MUB on January 1, 2014, subject to certain transition provisions.
For a discussion on our capital ratios, see “Item 5.B. Operating and Financial Review and Prospects—
Liquidity and Capital Resources—Capital Adequacy.”
Inspection and reporting. By evaluating banks’ systems of self-assessment, auditing their accounts andreviewing their compliance with laws and regulations, the FSA monitors the financial soundness of banks,
including the status and performance of their control systems for business activities. The FSA applies the
Financial Inspection Rating System, or FIRST, to major banks. By providing inspection results in the form ofgraded evaluations (i.e., ratings), the FSA expects this rating system to motivate financial institutions tovoluntarily improve their management and operations. Additionally, the FSA currently takes the “better
regulation” approach in its financial regulation and supervision. This consists of four pillars: (1) optimal
combination of rules-based and principles-based supervisory approaches, (2) timely recognition of priority issues
and effective responses, (3) encouraging voluntary efforts by financial firms and placing greater emphasis on
providing them with incentives, and (4) improving the transparency and predictability of regulatory actions, inpursuit of improvement of the quality of financial regulation and supervision.
In September 2013, the FSA announced its updated policy for monitoring financial institutions, whichplaces a greater emphasis on identifying and minimizing significant risks to the financial system as a whole.
Under the new policy, the FSA is expected to increase monitoring of, and communication with, financial
institutions, particularly large global financial institutions, including us, and enhance cooperation with financial
regulatory bodies in other jurisdictions.
The FSA, if necessary to secure the sound and appropriate operations of a bank’s business, may request thesubmission of reports or materials from, or conduct an on-site inspection of, the bank or the bank holding
company. If a bank’s capital adequacy ratio falls below a specified level, the FSA may request the bank to submit
an improvement plan and may restrict or suspend the bank’s operations when it determines that action isnecessary.
In addition, the Securities and Exchange Surveillance Commission of Japan inspects banks in connection
with their securities business as well as financial instruments business operators, such as securities firms.
The Bank of Japan also conducts inspections of banks. The Bank of Japan Law provides that the Bank ofJapan and financial institutions may agree as to the form of inspection to be conducted by the Bank of Japan.
Laws limiting shareholdings of banks. The provisions of the Antimonopoly Act that generally prohibit abank from holding more than 5% of another company’s voting rights do not apply to a bank holding company.
However, the Banking Law prohibits a bank holding company and its subsidiaries from holding, on an
aggregated basis, more than 15% of the voting rights of companies other than those which can legally become
subsidiaries of bank holding companies.
In addition, a bank is prohibited from holding shares in other companies exceeding the aggregate of its
Common Equity Tier 1 capital amount and Additional Tier 1 capital amount. For a detailed discussion on thecapital requirements for Japanese banks, see “Item 5.B. Operating and Financial Review and Prospects—
Liquidity and Capital Review—Capital Adequacy.”
The Financial Instruments and Exchange Law. The Financial Instruments and Exchange Law provides
protection for investors and also regulates sales of a wide range of financial instruments and services, requiring
43

financial institutions to improve their sales rules and strengthen compliance frameworks and procedures. Amongthe instruments that the Japanese banks deal in, derivatives, foreign currency-denominated deposits, and variableinsurance and annuity products are subject to regulations covered by the sales-related rules of conduct under thelaw.
Article 33 of the Financial Instruments and Exchange Law generally prohibits banks from engaging insecurities transactions. However, bank holding companies and banks may, through a domestic or overseas
securities subsidiary, conduct all types of securities businesses, with appropriate approval from the FSA.
Similarly, registered banks are permitted to provide securities intermediation services and engage in certain othersimilar types of securities related transactions, including retail sales of investment funds and government andmunicipal bonds.
Subsidiaries of bank holding companies engaging in the securities business are subject to the supervision of
the FSA as financial instruments business operators. The Prime Minister has the authority to regulate thesecurities industry and securities companies, which authority is delegated to the Commissioner of the FSA under
the Financial Instruments and Exchange Law. In addition, the Securities and Exchange SurveillanceCommission, an external agency of the FSA, is independent from the FSA’s other bureaus and is vested with theauthority to conduct day-to-day monitoring of the securities markets and to investigate irregular activities thathinder fair trading of securities, including inspections of securities companies as well as banks in connection with
their securities business. Furthermore, the Commissioner of the FSA delegates certain authority to the Director
General of the Local Finance Bureau to inspect local securities companies and their branches. A violation of
applicable laws and ordinances may result in various administrative sanctions, including revocation ofregistration, suspension of business or an order to discharge any director or executive officer who has failed tocomply with applicable laws and ordinances. Securities companies are also subject to the rules and regulations of
the Japanese stock exchanges and the Japan Securities Dealers Association, a self-regulatory organization of
securities companies.
Act on Sales, etc. of Financial Instruments. The Act on Sales, etc. of Financial Instruments was enacted toprotect customers from incurring unexpected losses as a result of purchasing financial instruments. Under thisact, sellers of financial instruments have a duty to their potential customers to explain important matters such as
the nature and magnitude of risks involved regarding the financial instruments that they intend to sell. If a seller
fails to comply with the duty, there is a rebuttable presumption that the loss suffered by the customer due to theseller’s failure to explain is equal to the amount of decrease in the value of the purchased financial instruments.
Anti-money laundering laws. Under the Act on Prevention of Transfer of Criminal Proceeds, banks andother financial institutions are required to report to the responsible ministers—in the case of banks, theCommissioner of the FSA—any assets which they receive while conducting their businesses that are suspected ofbeing illicit profits from criminal activities.
Acts concerning trust business conducted by financial institutions. Under the Trust Business Act, joint
stock companies that are licensed by the Prime Minister as trust companies, including non-financial companies,
are allowed to conduct trust business. In addition, under the Act on Provision, etc. of Trust Business by Financial
Institutions, banks and other financial institutions, as permitted by the Prime Minister, are able to conduct trust
business. The Trust Business Act provides for a separate type of registration for trustees who conduct only
administration type trust business. The Trust Business Act also provides for various duties imposed on the trustee
in accordance with and in addition to the Trust Act.
Deposit insurance system and government measures for troubled financial institutions. The Deposit
Insurance Act is intended to protect depositors if a financial institution fails to meet its obligations. The Deposit
Insurance Corporation was established in accordance with this act.
City banks (including BTMU), regional banks, trust banks (including MUTB), and various other credit
institutions participate in the deposit insurance system on a compulsory basis.
44

Under the Deposit Insurance Act, the maximum amount of protection is ¥10 million per customer within
one bank. All deposits are subject to the ¥10 million maximum, except for non-interest bearing deposits that areredeemable on demand and used by the depositor primarily for payment and settlement functions (the “settlement
accounts”). Deposits in settlement accounts are fully protected without a maximum amount limitation. Certain
types of deposits are not covered by the deposit insurance system, such as foreign currency deposits andnegotiable certificates of deposit. As of April 1, 2014, the Deposit Insurance Corporation charges insurance
premiums equal to 0.108% per year on the deposits in the settlement accounts, which are fully protected as
mentioned above, and premiums equal to 0.081% per year on the deposits in other accounts. If no financial
institution becomes insolvent during the year ending on March 31, 2015, the premiums will be retrospectively
revised to 0.090% per year and 0.068% per year, respectively, and the balance will be returned.
Under the Deposit Insurance Act, a Financial Reorganization Administrator can be appointed by the Prime
Minister if a bank is unable to fully perform its obligations with its assets or may suspend or has suspended
repayment of deposits. The Financial Reorganization Administrator will take control of the assets of the troubledbank, dispose of the assets and search for another institution willing to take over its business. The troubled bank’sbusiness may also be transferred to a “bridge bank” established by the Deposit Insurance Corporation for the
purpose of the temporary maintenance and continuation of operations of the troubled bank, and the bridge bankwill seek to transfer the troubled bank’s assets to another financial institution or dissolve the troubled bank. The
Deposit Insurance Corporation protects deposits, as described above, either by providing financial aid for costs
incurred by the financial institution succeeding the insolvent bank or by paying insurance money directly todepositors. The financial aid, provided by the Deposit Insurance Corporation, may take the form of a monetary
grant, loan or deposit of funds, purchase of assets, guarantee or assumption of debts, subscription of preferredstock, or loss sharing. The Deposit Insurance Act also provides for exceptional measures to cope with systemicrisk in the financial industry.
In June 2013, the Diet passed the amendments to the Deposit Insurance Act, which established a newprocedures for orderly processing of assets and liabilities of distressed financial institutions to stabilize thefinancial system, and expand the scope of financial institutions covered by the new procedures to include
financial holding companies, securities firms and insurance companies. Under the new procedures, in case adesignated financial institution becomes distressed, such financial institution will be subject to compulsory
management of its operations and assets and receive financial assistance in the form of loans or subscription ofshares. These amendments became effective on March 6, 2014.
Further, the Act on Special Measures for Strengthening of Financial Function enables the Japanese
government to take special measures to strengthen the capital of financial institutions. Under the act, banks andother financial institutions may apply to receive capital injections from the Deposit Insurance Corporation,subject to government approval, which will be granted subject to the fulfillment of certain requirements,
including, among other things, the improvement of profitability and efficiency, facilitation of financing to small
and medium-sized business enterprises in the local communities, and that the financial institution be notinsolvent. In response to the Great East Japan Earthquake in March, 2011, the act was revised in July 2011,
adding a special case for the financial institutions suffering damage from the disaster. The requirement to create
the improvement plan of profitability and efficiency is eased for such financial institutions. Moreover, theapplication deadline has been extended from March 31, 2012 to March 31, 2017.
Regulatory Developments Relating to Lending to Small and Medium-sized Firms and Others. The Act
Concerning Temporary Measures to Facilitate Financing for Small and Medium-sized Firms and Others required
financial institutions, among other things, to make an effort to reduce their customers’ burden of loan repayment
by employing methods such as modifying the term of loans at the request of eligible borrowers, including small
and medium-sized firms and individual home loan borrowers. This legislation also required financial institutions
to internally establish a system to implement the requirements of the legislation and periodically make public
disclosure of and report to the relevant authority on the status of implementation. Although this legislation
expired on March 31, 2013, the FSA is encouraging the financial institutions to continue to provide support to45

small and medium-sized firms by revising the Inspection Manual, Supervisory Policy and Ordinance for
Enforcement of the Baking Law in order to encourage financial institutions to modify the terms of loans, provide
smooth financing, and take active roles in supporting operations of such companies.
The Act on the Protection of Personal Information. With regard to protection of personal information, theAct on the Protection of Personal Information requires, among other things, Japanese banking institutions to limit
the use of personal information to the stated purpose and to properly manage the personal information in theirpossession, and forbids them from providing personal information to third parties without consent. If a bankviolates certain provisions of the act, the FSA may advise or order the bank to take proper action. In addition, theBanking Law and the Financial Instruments and Exchange Law provide certain provisions with respect toappropriate handling of customer information.
Act Concerning Protection of Depositors from Illegal Withdrawals Made by Counterfeit or Stolen
Cards. The Act on Protection, etc. of Depositors and Postal Saving Holders from Unauthorized AutomatedWithdrawal, etc. Using Counterfeit Cards, etc. and Stolen Cards, etc. requires financial institutions to establish
internal systems to prevent illegal withdrawals of deposits made using counterfeit or stolen bank cards. The act
also requires a financial institution to compensate depositors for any amount illegally withdrawn using stolenbank cards except in certain cases, including those where the financial institution can verify that it acted in goodfaith without negligence and there was gross negligence on the part of the relevant depositor. In addition, the act
provides that illegal withdrawals with counterfeit bank cards are invalid unless the financial institution acted ingood faith without negligence and there was gross negligence on the part of the relevant account holder.
Government Reforms to Restrict Maximum Interest Rates on Consumer Lending Business. In December
2006, the Diet passed legislation to reform the regulations relating to the consumer lending business, including
amendments to the Act Regulating the Receipt of Contributions, Receipt of Deposits and Interest Rates which,effective June 18, 2010, reduced the maximum permissible interest rate from 29.2% per annum to
20% per annum. The regulatory reforms also included amendments to the Law Concerning Lending Business
which, effective June 18, 2010, abolished the so-called “gray-zone interest.” Gray-zone interest refers to interest
rates exceeding the limits stipulated by the Interest Rate Restriction Act (between 15% per annum to
20% per annum depending on the amount of principal). Prior to June 18, 2010, gray-zone interests werepermitted under certain conditions set forth in the Law Concerning Lending Business. As a result of theregulatory reforms, all interest rates are now subject to the lower limits imposed by the Interest Rate Restriction
Act, compelling lending institutions, including our consumer finance subsidiaries and equity method investees, tolower the interest rates they charge borrowers. Furthermore, the new regulations, which became effective on
June 18, 2010, require, among other things, consumer finance companies to limit their lending to a single
customer to a maximum of one third of the customer’s annual income regardless of the customer’s repayment
capability.
In addition, as a result of decisions made by the Supreme Court of Japan prior to June 18, 2010, imposing
stringent requirements for charging such gray-zone interest rates, consumer finance companies have been
responding to borrowers’ claims for reimbursement of previously collected interest payments in excess of thelimits stipulated by the Interest Rate Restriction Act. We continue to carefully monitor future developments andtrends of the claims. See “Item 3.D. Key Information—Risk Factors—Risks Related to Our Business—Becauseof our loans to consumers and our shareholdings in companies engaged in consumer lending, changes in thebusiness or regulatory environment for consumer finance companies in Japan may further adversely affect our
financial results.”
United States
As a result of our operations in the United States, we are subject to extensive U.S. federal and statesupervision and regulation.

46

Overall supervision and regulation. We are subject to supervision, regulation and examination withrespect to our U.S. operations by the FRB pursuant to the U.S. Bank Holding Company Act of 1956, as amended,or the BHCA, and the International Banking Act of 1978, as amended, or the IBA, because we are a bank holding
company and a foreign banking organization, respectively, as defined pursuant to those statutes. The FRB
functions as our “umbrella” supervisor under amendments to the BHCA effected by the Gramm-Leach-Bliley
Act of 1999, which among other things:‰

prohibited further expansion of the types of activities in which bank holding companies, acting directlyor through non-bank subsidiaries, may engage;‰authorized qualifying bank holding companies to opt to become “financial holding companies,” andthereby acquire the authority to engage in an expanded list of activities; and‰modified the role of the FRB by specifying new relationships between the FRB and the functional
regulators of non-bank subsidiaries of both bank holding companies and financial holding companies.

The BHCA generally prohibits each of a bank holding company and a foreign banking organization thatmaintains branches or agencies in the United States from, directly or indirectly, acquiring more than 5% of thevoting shares of any company engaged in non-banking activities in the United States unless the bank holding
company or foreign banking organization has elected to become a financial holding company, as discussed
above, or the FRB has determined, by order or regulation, that such activities are so closely related to banking as
to be a proper incident thereto and has granted its approval to the bank holding company or foreign banking
organization for such an acquisition. The BHCA also requires a bank holding company or foreign banking
organization that maintains branches or agencies in the United States to obtain the prior approval of an
appropriate federal banking authority before acquiring, directly or indirectly, the ownership of more than 5% of
the voting shares or control of any U.S. bank or bank holding company. In addition, under the BHCA, a
U.S. bank or a U.S. branch or agency of a foreign bank is prohibited from engaging in various tying
arrangements involving it or its affiliates in connection with any extension of credit, sale or lease of any property
or provision of any services.
On October 6, 2008, we became a financial holding company in the United States. At the same time,
BTMU, MUTB, and UNBC (now MUAH), which are also bank holding companies, elected to become financial
holding companies. As noted above, as a financial holding company we are authorized to engage in an expanded
list of activities. These activities include those deemed to be financial in nature or incidental to such financial
activity, including among other things merchant banking, insurance underwriting, and a full range of securities
activities. In addition, we are permitted to engage in certain specified non-banking activities deemed to be closely
related to banking, without prior notice to or approval from the FRB. To date, we have utilized this expandedauthority by electing to engage in certain securities activities, including securities underwriting, indirectly
through certain of our securities subsidiaries. In order to maintain our status as a financial holding company thatallows us to expand our activities, we must continue to meet certain standards established by the FRB. Thosestandards require that we exceed the minimum standards applicable to bank holding companies that have notelected to become financial holding companies. These higher standards include meeting the “well capitalized”
and “well managed” standards for financial holding companies as defined in the regulations of the FRB. In
addition, as a financial holding company, we must ensure that our U.S. banking subsidiaries identified below
meet certain minimum standards under the Community Reinvestment Act of 1977. At this time, we continue tocomply with these standards.
U.S. branches and agencies of subsidiary Japanese banks. Under the authority of the IBA, our banking
subsidiaries, BTMU and MUTB, operate four branches, one agency and eight representative offices in the
United States. BTMU operates branches in Los Angeles, California; Chicago, Illinois; New York, New York; anagency in Houston, Texas; and representative offices in Washington, D.C; San Francisco, California; Seattle,
Washington; Atlanta, Georgia; Minneapolis, Minnesota; Dallas, Texas; Jersey City, New Jersey; and Florence,
Kentucky. MUTB operates a branch in New York, New York.
47

The IBA provides, among other things, that the FRB may examine U.S. branches and agencies of foreignbanks, and each branch and agency shall be subject to on-site examination by the appropriate federal or statebank supervisor as frequently as would a U.S. bank. The IBA also provides that if the FRB determines that aforeign bank is not subject to comprehensive supervision or regulation on a consolidated basis by the appropriate
authorities in its home country, or if there is reasonable cause to believe that the foreign bank or its affiliate hascommitted a violation of law or engaged in an unsafe or unsound banking practice in the United States, the FRB
may order the foreign bank to terminate activities conducted at a branch or agency in the United States.
U.S. branches and agencies of foreign banks must be licensed, and are also supervised and regulated, by astate or by the Office of the Comptroller of the Currency, or the OCC, the federal regulator of U.S. nationalbanks. All of the branches and agencies of BTMU and MUTB in the United States are state-licensed. Under
U.S. federal banking laws, state-licensed branches and agencies of foreign banks may engage only in activities
that would be permissible for their federally-licensed counterparts, unless the FRB determines that the additional
activity is consistent with safe and sound practices. U.S. federal banking laws also subject state-licensed branches
and agencies to the single-borrower lending limits that apply to federal branches and agencies, which generally
are the same as the lending limits applicable to national banks, but are based on the capital of the entire foreignbank.
As an example of state supervision, the branches of BTMU and MUTB in New York are licensed by the
New York State Department of Financial Services, pursuant to the New York Banking Law. Under the
New York Banking Law and the Superintendent’s Regulations, each of BTMU and MUTB must maintain withbanks in the State of New York eligible assets as defined and in amounts determined by the Superintendent.
These New York branches must also submit written reports concerning their assets and liabilities and othermatters, to the extent required by the Superintendent, and are examined at periodic intervals by the New YorkState Department of Financial Services. In addition, the Superintendent is authorized to take possession of thebusiness and property of BTMU and MUTB located in New York whenever events specified in the New York
Banking Law occur.
U.S. banking subsidiaries.

We indirectly own and control two U.S. banks:‰

Mitsubishi UFJ Trust & Banking Corporation (U.S.A.), New York, New York (through MUTB, aregistered bank holding company), and‰MUFG Union Bank, N.A. or MUB (known prior to July 1, 2014 as Union Bank, N.A.), through BTMU
and its subsidiary, MUAH, a registered bank holding company.

Mitsubishi UFJ Trust & Banking Corporation (U.S.A.) is chartered by the State of New York and is subject
to the supervision, examination and regulatory authority of the Superintendent pursuant to the New York
Banking Law. MUB is a national bank subject to the supervision, examination and regulatory authority of the
OCC pursuant to the National Bank Act.
The FDIC is the primary federal agency responsible for the supervision, examination and regulation of
Mitsubishi UFJ Trust & Banking Corporation (U.S.A.). The FDIC may take enforcement action, including theissuance of prohibitive and affirmative orders, if it determines that a financial institution under its supervision has
engaged in unsafe or unsound banking practices, or has committed violations of applicable laws and regulations.
The FDIC insures the deposits of both of our U.S. banking subsidiaries up to legally specified maximum
amounts. In the event of a failure of an FDIC-insured bank, the FDIC is virtually certain to be appointed asreceiver, and would resolve the failure under provisions of the Federal Deposit Insurance Act. An FDIC-insured
institution that is affiliated with a failed or failing FDIC-insured institution can be required to indemnify the
FDIC for losses resulting from the insolvency of the failed institution, even if this causes the affiliated institution
also to become insolvent. In the liquidation or other resolution of a failed FDIC-insured depository institution,
deposits in its U.S. offices and other claims for administrative expenses and employee compensation are afforded
priority over other general unsecured claims, including deposits in offices outside the United States, non-deposit48

claims in all offices and claims of a parent company. Moreover, under longstanding FRB policy, a bank holding
company is expected to act as a source of financial strength for its banking subsidiaries and to commit resources
to support such banks.
Bank capital requirements and capital distributions. Our U.S. banking subsidiaries are subject to applicablerisk-based and leverage capital guidelines issued by U.S. regulators for banks and bank holding companies. In
addition, BTMU and MUTB, as foreign banking organizations that have U.S. branches and agencies and that arecontrolled by us as a financial holding company, are subject to the FRB’s requirements that they be “wellcapitalized” based on Japan’s risk based capital standards, as well as “well managed.” All of our U.S. banking
subsidiaries and BTMU, MUTB, and MUAH are “well capitalized” as defined under, and otherwise comply with,all U.S. regulatory capital requirements applicable to them. The Federal Deposit Insurance Corporation
Improvement Act of 1991, or FDICIA, provides, among other things, for expanded regulation of insured depository
institutions, including banks, and their parent holding companies. As required by FDICIA, the federal banking
agencies have established five capital tiers ranging from “well capitalized” to “critically undercapitalized” forinsured depository institutions. As an institution’s capital position deteriorates, the federal banking regulators may
take progressively stronger actions, such as further restricting affiliate transactions, activities, asset growth orinterest payments. In addition, FDICIA generally prohibits an insured depository institution from making capital
distributions, including the payment of dividends, or the payment of any management fee to its holding company, if
the insured depository institution would subsequently become undercapitalized.
The availability of dividends from insured depository institutions in the United States is limited by various
other statutes and regulations. The National Bank Act and other federal laws prohibit the payment of dividends
by a national bank under various circumstances and limit the amount a national bank can pay without the priorapproval of the OCC. In addition, state-chartered banking institutions are subject to dividend limitations imposedby applicable federal and state laws.
Other regulated U.S. subsidiaries. Our non-bank subsidiaries that engage in securities-related activities in
the United States are regulated by appropriate functional regulators, such as the SEC, any self-regulatoryorganizations of which they are members, and the appropriate state regulatory agencies. These non-banksubsidiaries are required to meet separate minimum capital standards as imposed by those regulatory authorities.
Anti-Money Laundering Initiatives and the USA PATRIOT Act. A major focus of U.S. governmental policy
relating to financial institutions in recent years has been aimed at preventing money laundering and terrorist
financing. The USA PATRIOT Act of 2001 substantially broadened the scope of U.S. anti-money laundering laws
and regulations by imposing significant new compliance and due diligence obligations, creating new crimes andpenalties and expanding the extra-territorial jurisdiction of the United States. The U.S. Department of the Treasury
has issued a number of regulations that impose obligations on financial institutions to maintain appropriate policies,
procedures and controls to detect, prevent and report money laundering and terrorist financing, and to verify theidentity of their customers. In addition, the bank regulatory agencies carefully scrutinize the adequacy of an
institution’s policies, procedures and controls. As a result, there has been an increased number of regulatory
sanctions and law enforcement authorities have been taking a more active role in enforcing these laws. Failure of afinancial institution to maintain and implement adequate policies, procedures and controls to prevent money
laundering and terrorist financing could in some cases have serious legal and reputational consequences for the
institution, including the incurrence of expenses to enhance the relevant programs, the imposition of limitations on
the scope of their operations and the imposition of fines and other monetary penalties.
Foreign Corrupt Practices Act. In recent years, U.S. regulatory and enforcement agencies including the U.S.
Securities and Exchange Commission, or SEC, and the U.S. Department of Justice have significantly increased theirenforcement efforts of the Foreign Corrupt Practices Act, or the FCPA. The FCPA prohibits U.S. securities issuers,
U.S. domestic entities, and parties doing substantial business within the United States (including their shareholders,
directors, agents, officers, and employees) from making improper payments to non-U.S. government officials inorder to obtain or retain business. The FCPA also requires U.S. securities issuers to keep their books and records in49

detail, accurately, and in such a way that they fairly reflect all transactions and dispositions of assets. Those
enforcement efforts have targeted a wide range of U.S. and foreign-based entities and have been based on a broad
variety of alleged fact patterns, and in a number of cases have resulted in the imposition of substantial criminal andcivil penalties or in agreed payments in settlement of alleged violations. Failure of a financial institution doing
business in the United States to maintain adequate policies, procedures, internal controls, and books and records ona global basis that address compliance with FCPA requirements could in some cases have serious legal andreputational consequences for the institution, including the incurrence of expenses to enhance the relevant programsand the imposition of fines and other monetary penalties.
Regulatory Reform Legislation. In response to the global financial crisis and the perception that lax
supervision of the financial industry in the United States may have been a contributing cause, new legislation
designed to reform the system for supervision and regulation of financial firms doing business in the UnitedStates, the so-called Dodd-Frank Act, was signed into law on July 21, 2010. The Dodd-Frank Act is complex andextensive in its coverage and contains a wide range of provisions that would affect financial institutions operatingin the United States, including our U.S. operations. Included among these provisions are sweeping reforms
designed to reduce systemic risk presented by very large financial firms, promote enhanced supervision,
regulation, and prudential standards for financial firms, establish comprehensive supervision of financial
markets, impose new limitations on permissible financial institution activities and investments, expand regulationof the derivatives markets, protect consumers and investors from financial abuse, and provide the government
with the tools needed to manage a financial crisis. Many aspects of the legislation require subsequent regulatory
action by supervisory agencies for full implementation. While some regulatory rule-making has been adopted as
discussed below, others remain pending or require further interpretive guidance by the relevant supervisoryagencies. Accordingly, while we expect the legislation to have an impact on our operations, we are unable toassess with certainty the degree of impact of the Dodd-Frank Act on our operations at this time.
Currently, the components of the Dodd-Frank Act that have impacted or may impact our operations are theprovisions relating to the “Volcker Rule,” enhanced prudential standards (including capital , liquidity, andstructural requirements), resolution plans, credit reporting, derivatives regulation, incentive-based compensation,
the establishment of the Consumer Financial Protection Bureau, and debit interchange fees. Although asignificant portion of the regulatory rules regarding the foregoing components are still pending, based on
information currently available to us, other than the Volcker Rule and derivatives regulations as discussed below,
the impact of these components is expected to be mainly limited to our U.S. operations and not to be material to
us on a consolidated basis. We intend to continue to monitor developments relating to the Dodd-Frank Act andthe potential impact on our activities inside and outside of the United States.
With respect to the Dodd-Frank Act provisions related to enhanced prudential standards, in February 2014
the FRB issued final rules that established enhanced prudential standards for the U.S. operations of foreignbanking organizations such as MUFG. These rules will require us to organize by July 2016 all of our U.S. bankand non-bank subsidiaries under a U.S. intermediate holding company that would be subject to U.S. capitalrequirements and enhanced prudential standards comparable to those applicable to top-tier U.S. bank holding
companies of the same size. Under these rules, we will be required to change the structure of our U.S. operations,
including the manner in which we oversee and manage those operations, and may be required to inject capital
into our U.S. operations. The rules require that financial banking organizations that have U.S. non-branch assets
of $50 billion or more as of June 30, 2014, including MUFG, prepare an Implementation Plan for filing with theFederal Reserve by January 1, 2015, describing how we intend to meet the requirements of the rules. MUFG is in
the process of preparing that Plan, and until that Plan is finalized and filed with and reviewed by the Federal
Reserve, we are unable to assess the extent to which the rules may affect our operations in the United States.
The Volcker rule was issued in final form by the Federal Reserve in December 2013. Under the Volcker
Rule, we are required to cease conducting certain proprietary trading activities (i.e., trading in securities andfinancial instruments for our own account) subject to certain exceptions, including market-making, hedging, andunderwriting activities if such activities are conducted within a rigorous compliance framework. We are also50

restricted from engaging in certain activities regarding hedge funds and private equity funds. While the Volcker
Rule excludes restrictions on such activities conducted solely outside of the United States, the regulatory
definition of such exempted activities is narrow and complex and in some cases requires further clarification. Our
proprietary trading activities are generally executed outside of the United States, but certain activities within the
United States could potentially fall within the scope of the definition of proprietary trading. The Federal Reserve
has extended the conformance period under the Rule until July 2015, during which time further clarification
under the Rule may be necessary to fully ascertain its impact on those activities. Given the limited amount ofpotentially restricted activities in which we engage within the United States, we do not expect the proprietary
trading revenues attributable to our U.S. subsidiaries as a result of the implementation of the Volcker Rule to bematerial to our operations based on our current revenues attributable to the proprietary trading activities
conducted in our U.S. subsidiaries.
U.S. regulators have also begun to issue final regulations governing swaps and derivatives markets ascontemplated by the Dodd-Frank Act. To date, BTMU and Mitsubishi UFJ Securities International, plc, or
MUSI, have registered as swap dealers with the U.S. Commodity Futures Trading Commission, or CFTC.
Depending on the final outcome of the regulations governing swaps and derivatives markets under the
Dodd-Frank Act, as well as the activities of our other subsidiaries located inside and outside of the United States,
our other subsidiaries may have to register as swap dealers with, or be subject to the regulations of, the CFTC
and/or SEC. Regulation of swap dealers by the CFTC and SEC will impose numerous corporate governance,business conduct, capital, margin, reporting, clearing, execution, and other regulatory requirements on ouroperations, which may adversely impact our derivatives businesses and make us less competitive than thosecompetitors that are not subject to the same regulations. Although many regulations applicable to swap dealers
are already in effect, it is difficult to assess the full impact of these requirements because some of the mostimportant rules have not yet been implemented or finalized. For example, U.S. regulators are adopting guidance
and rules on the application of U.S. regulations to activities of registered swap dealers outside of the UnitedStates. The potential extraterritorial application of swap dealer regulatory requirements could impose significant
operational and compliance burdens on our swaps activities outside of the United States.
Foreign Account Tax Compliance Act. The Hiring Incentives to Restore Employment Act was enacted in
March 2010 and contains provisions commonly referred to as the Foreign Account Tax Compliance Act, or
FATCA. The U.S. Treasury, acting through the Internal Revenue Service, or the IRS, issued final regulations of
FATCA in January 2013.
The FATCA framework has been expanded with the introduction of Intergovernmental Agreements, or
IGAs, between the U.S. Treasury and foreign governments, which pursue a framework for intergovernmental
cooperation to facilitate the implementation of FATCA. The United States and Japan have entered into an IGA.
Within our Japanese operations, we have developed internal procedures and processes that we believe
address the regulatory requirements under FATCA. However, doing so has required us to develop extensive
systems capabilities and internal processes to identify and report U.S. account holders who are subject to FATCA
requirements, which has been a complex and costly process requiring significant internal resources. If ourprocedures and processes are determined not to be adequate to meet the requirements of FATCA, we could
potentially be subject to serious legal and reputational consequences, including the imposition of withholding
taxes on certain amounts payable to us from U.S. sources, and could be required to expend additional resources
to enhance our systems, procedures and processes and take other measures in response to such consequences.
Disclosure pursuant to Section 13(r) of the Securities Exchange Act of 1934
Section 13(r) of the U.S. Securities Exchange Act of 1934 requires an issuer to disclose whether it or any of its
affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with natural persons or
entities designated by the U.S. government under specified Executive Orders. The scope of activities that must bereported includes activities not prohibited by U.S. law and conducted outside the United States in compliance withapplicable local law.
51

During the fiscal year ended March 31, 2014, one of our non-U.S. affiliates engaged in business activities
with entities in or affiliated with Iran, including counterparties owned or controlled by the Iranian government.
These activities were consistent with rules and regulations applicable to the non-U.S. affiliate. Specifically, ournon-U.S. banking subsidiary, BTMU, issued letters of credit and guarantees and provided remittance and othersettlement services mainly in connection with customer transactions related to the purchase and exportation of
Iranian crude oil to Japan, and in some cases, in connection with other petroleum-related transactions with Iranby its customers. These transactions did not involve U.S. dollars nor clearing services of U.S. banks for thesettlement of payments, and were reviewed for compliance with applicable U.S. and non-U.S. laws andregulations. For the fiscal year ended March 31, 2014, the aggregate interest and fee income relating to thesetransactions was less than ¥130 million, representing less than 0.005% of our total interest and fee income. Someof these transactions were conducted through the use of non-U.S. dollar correspondent accounts and other similar
settlement accounts maintained with BTMU outside the United States by Iranian financial institutions and otherentities in or affiliated with Iran. In addition to such accounts, BTMU receives deposits in Japan from andprovides settlement services in Japan to fewer than ten Iranian government-related entities and fewer than 100
Iranian government-related individuals such as Iranian diplomats, and maintains settlement accounts outside theUnited States for certain other financial institutions specified in Executive Order 13382, which settlement
accounts were frozen in accordance with applicable laws and regulations. For the fiscal year ended March 31,
2014, the average aggregate balance of deposits held in these accounts represented less than 0.01% of the averagebalance of our total deposits. The fee income from the transactions attributable to these account holders was lessthan ¥3 million, representing less than 0.001% of our total fee income. BTMU also holds loans that werearranged prior to changes in applicable laws and regulations to borrowers in or affiliated with Iran, including
entities owned by the Iranian government, the outstanding balance of which was less than ¥500 million,
representing less than 0.001% of our total loans, as of March 31, 2014. For the fiscal year ended March 31, 2014,
the aggregate gross interest and fee income relating to these loan transactions was less than ¥45 million,
representing less than 0.005% of our total interest and fee income.
In addition, in accordance with the Joint Plan of Action agreed to among the P5+1 (the United States, United
Kingdom, Germany, France, Russia and China) and Iran in November 2013, BTMU has been providing
settlement services in connection with humanitarian trade to assist Iran in meeting its domestic needs, namely
food, agricultural products, medicine and medical devices, since April 2014. The overall framework for these
settlement services was based on an agreement between U.S. and Japanese authorities, and the relevant U.S.
regulator has authorized the settlement services as compliant with applicable U.S. laws and regulations. The
purchasers of the humanitarian goods were entities in or affiliated with Iran, including entities related to the
Iranian government. The sellers of the humanitarian goods were entities permitted by U.S. and Japanese
regulators. These transactions did not involve U.S. dollars nor clearing services of U.S. banks for the settlementof payments. These transactions were conducted through the use of special purpose yen accounts maintained with
BTMU outside the United States by an Iranian financial institution which is affiliated with the Iranian
government but through which these transactions were permitted to be settled. In connection with thesetransactions, the Iranian financial institution has increased the amount of its non-U.S. dollar deposits at BTMU
used for the settlement purposes. BTMU intends to continue to provide the settlement services in connection withthe exports of humanitarian goods to Iran in close coordination with U.S. and Japanese authorities.
BTMU will continue to limit its participation in these types of transactions mainly to arrange financing
transactions relating to customer imports of Iranian crude oil into Japan and authorized exports of humanitarian
goods to Iran, maintain accounts in Japan of Iranian entities and individuals, and obtain interest and fee income
and repayment of principal in connection with existing loans to borrowers in or affiliated with Iran, in each caseto the extent permitted by applicable laws and regulations.

52

C.

Organizational Structure
The following chart presents our corporate structure summary as of March 31, 2014:
Mitsubishi UFJ Financial Group, Inc.
Domestic
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

kabu.com Securities Co., Ltd.
MU Frontier Servicer Co., Ltd.
The Mitsubishi UFJ Factors Limited
Mitsubishi UFJ Research and Consulting Co., Ltd.
Mitsubishi UFJ Capital Co., Ltd.
BOT Lease Co., Ltd.
Overseas
UnionBanCal Corporation(1)BTMU Capital Leasing & Finance, Inc.
BTMU Capital Corporation
BTMU Leasing & Finance, Inc.
Bank of Ayudhya Public Company Limited
PT U Finance Indonesia

Domestic
Mitsubishi UFJ Trust and Banking
Corporation

Mitsubishi UFJ Financial GroupPT. BTMU-BRI Finance

Mitsubishi UFJ Trust and Banking Corporation
The Master Trust Bank of Japan, Ltd.
MU Investments Co., Ltd.
Mitsubishi UFJ Asset Management Co., Ltd.
Mitsubishi UFJ Real Estate Services Co., Ltd.
Overseas
Mitsubishi UFJ Trust & Banking Corporation (U.S.A.)
Mitsubishi UFJ Global Custody S.A.
Mitsubishi UFJ Asset Management (UK) Limited
Mitsubishi UFJ Fund Service Holdings Limited

CF subsidiaries(2)Mitsubishi UFJ Securities Holdings
Co., Ltd.

Mitsubishi UFJ Trust International Limited
Domestic
Mitsubishi UFJ Securities Holdings Co., Ltd.
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
Mitsubishi UFJ Morgan Stanley PB Securities Co., Ltd.
KOKUSAI Asset Management Co., Ltd.
Overseas
Mitsubishi UFJ Securities International plc
Mitsubishi UFJ Securities (USA), Inc.
Mitsubishi UFJ Wealth Management Bank (Switzerland), Ltd.
Mitsubishi UFJ Securities (HK) Holdings, Limited
Domestic
Mitsubishi UFJ NICOS Co., Ltd.

(1) Effective July 1, 2014, UnionBanCal Corporation has been renamed MUFG Americas Holding Corporation in connection with the
integration of BTMU’s operations in the Americas region with the operations of UnionBanCal. See “Item 5. Operating and Financial
Review and Prospects—Recent Developments.”(2) Consumer finance subsidiaries.

53

Set forth below is a list of our principal consolidated subsidiaries as of March 31, 2014:

Country ofIncorporation

Name

The Bank of Tokyo-Mitsubishi UFJ, Ltd. …………………………………..
kabu.com Securities Co., Ltd. ……………………………………………….
MU Frontier Servicer Co., Ltd. ...……………………………………………
Mitsubishi UFJ Home Loan CREDIT CO., LTD. …………………………..
The Mitsubishi UFJ Factors Limited …………........………………………..
Mitsubishi UFJ Research and Consulting Ltd. ………………………………
Mitsubishi UFJ Capital Co.,Ltd. ..……………………………………………
BOT Lease Co., Ltd. ...………………………………………………………
Tokyo Credit Services, Ltd. ...……………………………………………….
Mitsubishi UFJ Personal Financial Advisers Co., Ltd. ...……………………
MU Bu s in es s En g in eering , Ltd . ……………………………………………….
Jap an Electro n ic M o n et ary Claim Org an izatio n …………………………….
Defined Contribution Plan Consulting of Japan Co., Ltd. …………………..
Mitsubishi UFJ Financial Partners Co., Ltd. ........…………………………..
Mits u b is h i UFJ Tru s t an d Ban kin g Co rpo ratio n ……………………………
Th e M as ter Tru s t Ban k o f Jap an , Ltd . ………………………………………
MU In v es tmen ts Co.,Ltd . ……………………………………………………
Mits u b is h i UFJ A s s et M an ag emen t Co ., Ltd . ………………………………
Mits u b is h i UFJ Real Es t ate Serv ices Co ., Ltd . ………………………………
Ry o s h in DC Card Co mp an y , Ltd . ……………………………………………
Mits u b is h i UFJ Secu rities Ho ld in g s Co ., Ltd . ...….…………………………
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. ……………………….
Mitsubishi UFJ Morgan Stanley PB Securities Co., Ltd.
. ...……..….………..
KOKUSAI Asset Management Co., Ltd. ……………………………………
Mits u b is h i UFJ NICOS Co ., Lt d . …………………………………………….
UnionBanCal Corporation (1) .................…………………………..……….
BTMU Cap ital Leas in g & Fin an ce, Inc. …………………………………….
BTMU Cap ital Co rp o ratio n ………………………………………………….
BTMU Leas in g & Fin an ce, In c. ……………………………………………..
BTMU LF Cap it al LLC……………………………………………………….
PT U Finance Indonesia …………………………………………………….
PT. BTMU-BRI Fin an ce ……………………………………………………..
Bank of Ayudhya Public Company Limited ................……………………..
BTMU Particip atio n (Th ailan d ) Co ., Ltd . ……………………………………
BTMU Leas e (Deu ts ch lan d ) Gmb H …………………………………………
Mitsubishi UFJ Trust & Banking Corporation (U.S.A.) …………………….
Mitsubishi UFJ Fund Services Holdings Limited ........……………………..
Mitsubishi UFJ Global Custody S.A. ……………………………………….
Mitsubishi UFJ Asset Management (UK) Ltd. .............……………………..
Mits u b is h i UFJ Tru s t In ternatio n al Limited …………………………………
Mitsubishi UFJ Baillie Gifford Asset Management Limited ………………...
Mits u b is h i UFJ Secu rities (USA ), In c. ………………………………………
Mits u b is h i UFJ Secu rities In tern atio n al p lc …………………………………
Mitsubishi UFJ Wealth Management Bank (Switzerland), Ltd. …………….
Mitsubishi UFJ Securities (HK) Holdings, Limited …………………………
Mitsubishi UFJ Securities (Singapore), Limited. ……………………………

Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Jap anJap anJapan
Japan
Jap anJap anJap anJap anJap anJap anJap anJapan
Japan
Jap anJap an
USA
USA
USA
USA
USA
Indonesia
Indonesia
Th ailan dTh ailan dGerman y
USA
BermudaLu xembourg
UK
UK
UK
USA
UK
Switzerland
Peoples' Republicof China
Singapore

Proportion of
Ownership
Interest

Proportion of
VotingInterest(%)(%)

100.00%56.10%
96.47%
99.88%
100.00%69.45%
41.22%
22.57%
74.00%
73.69%
100.00%100.00%77.50%
100.00%100.00%46.50%
100.00%100.00%100.00%100.00%100.00%60.00%
100.00%67.02%
84.98%
100.00%100.00%100.00%100.00%100.00%95.00%
55.00%
72.01%
24.50%
100.00%100.00%100.00%100.00%100.00%100.00%51.00%
100.00%100.00%100.00%100.00%56.11%
96.47%
99.88%
100.00%69.45%
41.22%
22.57%
74.00%
73.69%
100.00%100.00%77.50%
100.00%100.00%46.50%
100.00%100.00%100.00%100.00%100.00%60.00%
100.00%67.08%
84.98%
100.00%100.00%100.00%100.00%100.00%95.00%
55.00%
72.01%
24.50%
100.00%100.00%100.00%100.00%100.00%100.00%51.00%
100.00%100.00%100.00%100.00%100.00%100.00%100.00%Note:(1) Effective July 1, 2014, UnionBanCal Corporation has been renamed MUFG Americas Holding Corporation in connection with the
integration of BTMU’s operations in the Americas region with the operations of UnionBanCal. See “Item 5. Operating and Financial
Review and Prospects—Recent Developments.”

54

D.

Property, Plant and Equipment
Premises and equipment as of March 31, 2013 and 2014 consisted of the following:
As of March 31,
2013
2014
(in millions)Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 379,943 ¥ 403,184
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
723,902
747,998
Equipment and furniture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
767,733
929,939
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
236,353
251,875
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17,976
27,606
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,125,907
1,066,853

2,360,602
1,123,954

Premises and equipment—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,059,054¥1,236,648

Our registered address is 7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo 100-8330, Japan. As of March 31,
2014, we and our subsidiaries conducted our operations either in premises we owned or in properties we leased.
The following table presents the book values of our material offices and other properties as of March 31,
2014:Book value(in millions)

Owned land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Owned buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥403,184
226,407

The buildings and land we own are primarily used by us and our subsidiaries as offices and branches. Mostof the buildings and land we own are free from material encumbrances.
During the fiscal year ended March 31, 2014, we invested approximately ¥158.5 billion, primarily for officerenovations and relocation.
Item 4A. Unresolved Staff Comments.
None.

55

Item 5.

Operating and Financial Review and Prospects.

The following discussion and analysis should be read in conjunction with “Item 3.A. Key Information—
Selected Financial Data,” “Selected Statistical Data” and our consolidated financial statements and related
notes included elsewhere in this Annual Report.
Page

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Critical Accounting Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounting Changes and Recently Issued Accounting Pronouncements . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57
64
73
77
83

A.

Operating Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business Segment Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Geographic Segment Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of Change in Exchange Rates on Foreign Currency Translation . . . . . . . . . . . . . . . . . . . . . . .

84
84
101
106
107

B.

Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-exchange Traded Contracts Accounted for at Fair Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

108
108
131
137

C.

Research and Development, Patents and Licenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

137

D.

Trend Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

137

E.

Off-Balance Sheet Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

138

F.

Tabular Disclosure of Contractual Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

139

G.

Safe Harbor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

139

56

Introduction
We are a holding company for The Bank of Tokyo-Mitsubishi UFJ, Ltd., or BTMU, Mitsubishi UFJ Trustand Banking Corporation, or MUTB, Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., or MUMSS (throughMitsubishi UFJ Securities Holdings Co., Ltd., or MUSHD, an intermediate holding company), Mitsubishi UFJ
NICOS Co., Ltd., or Mitsubishi UFJ NICOS, and other subsidiaries. Through our subsidiaries and affiliatedcompanies, we engage in a broad range of financial businesses and services, including commercial banking,investment banking, trust banking and asset management services, securities businesses, and credit cardbusinesses, and provide related services to individual and corporate customers.
Summary of Our Recent Financial Results
The following table presents some key figures relating to our financial results:
Fiscal years ended March 31,
2012
2013
2014
(in billions, except per share data)

Net interest income(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,955.8 ¥1,871.1 ¥1,961.3
Provision (credit) for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
223.8
144.5
(106.4)
Non-interest income(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,440.6
2,068.0
1,821.0
Non-interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,322.7
2,378.7
2,468.3
Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
849.9
1,415.9
1,420.4
Net income before attribution of noncontrolling interests . . . . . . . . . . . . . . . . . .
420.7
1,119.9
1,082.5
Net income attributable to Mitsubishi UFJ Financial Group . . . . . . . . . . . . . . . .
416.2
1,069.1
1,015.4
Diluted earnings per common share—earnings applicable to commonshareholders of Mitsubishi UFJ Financial Group . . . . . . . . . . . . . . . . . . . . . . .
28.09
74.16
69.98
Notes:(1) Interest income for the fiscal year ended March 31, 2012 includes a gain of ¥139.3 billion on the conversion rate adjustment of Morgan
Stanley’s convertible preferred stock. For more information, see Note 2 to our consolidated financial statements included elsewhere inthis Annual Report.
(2) Non-interest income for the fiscal year ended March 31, 2012 reflects an impairment loss of ¥579.5 billion on our investment in Morgan
Stanley’s common stock resulting from a decline in the quoted price of Morgan Stanley’s common stock that we determined to be otherthan temporary in light of the increasingly stringent regulatory environment and the existing adverse economic events in Europe. For
more information, see Note 2 to our consolidated financial statements included elsewhere in this Annual Report.

We reported net income attributable to Mitsubishi UFJ Financial Group of ¥1,015.4 billion for the fiscal
year ended March 31, 2014, a decrease of ¥53.7 billion from ¥1,069.1 billion for the fiscal year ended March 31,
2013. Domestic net income attributable to Mitsubishi UFJ Financial Group was ¥859.8 billion, and foreign net
income attributable to Mitsubishi UFJ Financial Group was ¥155.6 billion, for the fiscal year ended March 31,
2014. Asia and Oceania excluding Japan, Europe, and other areas including Canada, Latin America, theCaribbean and the Middle East contributed ¥149.4 billion, ¥6.5 billion and ¥131.2 billion, respectively, to foreign
net income which were partly offset by net loss of ¥131.5 billion in the United States.
For the fiscal year ended March 31, 2014, our domestic revenue, which consists of interest income andnon-interest income attributable to our operations in Japan, was ¥3,110.1 billion, while our total foreign revenue,
which consists of interest income and non-interest income attributable to our operations outside of Japan, was¥1,233.3 billion, with revenue attributable to our operations in the United States contributing ¥219.0 billion, Asiaand Oceania excluding Japan contributing ¥569.0 billion, and Europe contributing ¥155.0 billion. As apercentage of total revenue, domestic revenue increased to 71.6% for the fiscal year ended March 31, 2014 from
67.1% for the previous fiscal year.

57More specifically, our net income attributable to Mitsubishi UFJ Financial Group for the fiscal year ended
March 31, 2014 mainly reflected the following:
Net interest income.

Net interest income is a function of:‰

the amount of interest-earning assets,‰

the amount of interest-bearing liabilities,‰

the general level of interest rates,‰

the so-called “spread,” or the difference between the rate of interest earned on interest-earning assets
and the rate of interest paid on interest-bearing liabilities, and‰the proportion of interest-earning assets financed by non-interest-bearing liabilities and equity.

Net interest income for the fiscal year ended March 31, 2014 was ¥1,961.3 billion, an increase of¥90.2 billion from ¥1,871.1 billion for the fiscal year ended March 31, 2013. Interest income increased¥94.8 billion while interest expense increased only ¥4.6 billion. The increase in interest income reflected higher
interest income from foreign loans, foreign currency denominated trading debt securities and deposits in central
banks primarily due to increased volumes of these assets, which were partially offset by a decrease in interest
income from domestic loans due to lower interest rates and intensified competition among lending institutions,and a decrease in interest income from domestic investment securities due to our reduced holding of suchsecurities, including Japanese government bonds. The increase in interest expense reflected higher interest
payments on foreign deposits due to an increased balance of such deposits, and larger long-term debt primarilyreflecting an increase in the balance of borrowings with longer maturities.
The average interest spread decreased 0.04 percentage points to 0.89% for the fiscal year ended March 31,
2014 from 0.93% for the fiscal year ended March 31, 2013, reflecting the continued low interest rateenvironment and intensified competition among financial institutions.
The following table shows changes in our net interest income by changes in volume and by changes in rates
for the fiscal year ended March 31, 2013 compared to the fiscal year ended March 31, 2012, and the fiscal year
ended March 31, 2014 compared to the fiscal year ended March 31, 2013:
Fiscal Year Ended March 31, 2012
Fiscal Year Ended March 31, 2013
versusversusFiscal Year Ended March 31, 2013
Fiscal Year Ended March 31, 2014
Increase (decrease)
Increase (decrease)
due to changes indue to changes inVolume(1)Rate(1)
Net change
Volume(1)Rate(1)
Net change(in millions)

Domestic . . . . . . . . . . . . . . . . . . . . . . .
Foreign(2) . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . .

¥ 34,889 ¥(108,724) ¥(73,835) ¥(22,455) ¥ (48,533)
174,449(185,328) (10,879) 254,092(92,896)¥(70,988)
161,196¥209,338¥ 90,208¥(294,052) ¥(84,714) ¥ 231,637¥(141,429)

Notes:(1) Volume/rate variance is allocated based on the percentage relationship of changes in volume and changes in rate to the total “netchange.”(2) Interest income on foreign activities for the fiscal year ended March 31, 2012 includes a gain of ¥139.3 billion on the conversion rateadjustment of Morgan Stanley’s convertible preferred stock. For more information, see Note 2 to our consolidated financial statements
included elsewhere in this Annual Report.

58

The following table is a summary of the amount of interest-earning assets and interest-bearing liabilities,
average interest rates, the interest rate spread and non-interest-bearing liabilities for the fiscal years ended
March 31, 2012, 2013 and 2014:
Fiscal years ended March 31,
2012
2013
2014
Average
Average
Average
Average
Average
Averagebalanceratebalanceratebalancerate(in billions, except percentages)

Interest-earning assets:
Domestic . . . . . . . . . . . . . . . . . . . . . . .
Foreign(1) . . . . . . . . . . . . . . . . . . . . . . .

¥130,856.7
53,322.4

1.07% ¥134,759.6
2.24
59,064.7

0.95% ¥135,087.3
1.95
77,089.0

0.87%
1.75

Total . . . . . . . . . . . . . . . . . . . . . .

¥184,179.1

1.41% ¥193,824.3

1.25% ¥212,176.3

1.19%

Financed by:Interest-bearing liabilities:
Domestic . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . .

¥130,916.6
34,504.0

0.26% ¥135,974.9
0.88
37,424.6

0.21% ¥141,878.0
0.73
47,535.3

0.18%
0.64

Total . . . . . . . . . . . . . . . . . . . . . .
Non-interest-bearing liabilities . . . . . . . . . .

165,420.6
18,758.5

0.39
—

0.32
—

0.30
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . .

¥184,179.1

0.35% ¥193,824.3

0.29% ¥212,176.3

0.26%

1.02%

0.93%

0.89%

1.06%

0.97%

0.92%

Interest rate spread . . . . . . . . . . . . . . . . . . .
Net interest income as a percentage of totalinterest-earning assets . . . . . . . . . . . . . . .

173,399.5
20,424.8

189,413.3
22,763.0

Note:(1) Interest income on foreign activities for the fiscal year ended March 31, 2012 includes a gain of ¥139.3 billion on the conversion rateadjustment of Morgan Stanley’s convertible preferred stock. For more information, see Note 2 to our consolidated financial statements
included elsewhere in this Annual Report.

Provision (credit) for credit losses. Provision for credit losses is charged to operations to maintain theallowance for credit losses at a level deemed appropriate by management. When there is an improvement in asset
quality, credit for credit losses is recorded to reverse the allowance for credit losses to an appropriate level. For
the fiscal year ended March 31, 2014, we recorded ¥106.4 billion of credit for credit losses, compared toprovision for credit losses of ¥144.5 billion for the previous fiscal year. For details of the provision for credit
losses and a description of the approach and methodology used to establish the allowance for credit losses,
see “—B. Liquidity and Capital Resources—Financial Condition—Loan Portfolio.”
Non-interest income.
‰Non-interest income consists of:fees and commissions income, including:‰trust fees,‰

fees on funds transfer and service charges for collections,‰

fees and commissions on international business,‰fees and commissions on credit card business,‰

service charges on deposits,‰

fees and commissions on securities business,59‰

fees on real estate business,‰insurance commissions,‰

fees and commissions on stock transfer agency services,‰guarantee fees,‰

fees on investment funds business, and‰other fees and commissions,‰foreign exchange gains (losses)—net, which include gains (losses) on foreign exchange derivative
contracts (for example, foreign exchange gains (losses) on currency derivatives), foreign exchange gains(losses) on other than derivative contracts (for example, gains (losses) on foreign exchangetransactions), and foreign exchange gains (losses) related to the fair value option (for example, foreignexchange gains (losses) on securities under the fair value option),‰trading account profits (losses)—net, which primarily include net profits (losses) on trading accountsecurities and interest rate derivative contracts entered into for trading purposes, including assets
relating to the following activities:‰

trading purpose activities, which are conducted mainly for the purpose of generating profits either
through transaction fees or arbitrage gains and involve frequent and short-term selling and buying of
securities, commodities or others, and‰trading account assets relating to application of certain accounting rules, which are generally not
related to trading purpose activities but are classified as trading accounts due to application ofcertain accounting rules, such as assets that are subject to fair value option accounting treatment orinvestment securities held by variable interest entities that are classified as trading accountsecurities.
Of the two categories, trading purpose activities represent a smaller portion of our trading accountprofits,‰

investment securities gains (losses)—net, which primarily include net gains or losses on sales andimpairment losses on securities available for sale,‰equity in earnings (losses) of equity method investees—net, which includes our equity interest in theearnings of our equity investees and impairment losses on our investments in equity method investees,‰

gains on sales of loans, and‰other non-interest income.

The following table is a summary of our non-interest income for the fiscal years ended March 31, 2012,2013 and 2014:
Fiscal years ended March 31,
2012
2013
2014
(in billions)

Fees and commissions income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,100.0 ¥1,160.9 ¥1,294.1
Foreign exchange gains (losses)—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34.3(39.0)(61.8)
Trading account profits (losses)—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
667.3
570.3
(33.9)
Investment securities gains—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19.4
156.0
303.5
Equity in earnings (losses) of equity method investees—net . . . . . . . . . . . . . . . .
(499.4)
60.2
110.5
Gains on sales of loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15.6
14.8
17.7
Government grant for transfer of substitutional portion of Employees’ Pension
Fund Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
115.2
Other non-interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
103.4
144.8
75.7
Total non-interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60¥1,440.6¥2,068.0¥1,821.0

Fees and commissions income for the fiscal year ended March 31, 2014 was ¥1,294.1 billion, an increase of¥133.2 billion from ¥1,160.9 billion for the fiscal year ended March 31, 2013. The increase reflected our
improved performance in the securities, investment funds, trust and international businesses.
Net foreign exchange losses for the fiscal year ended March 31, 2014 were ¥61.8 billion, compared to¥39.0 billion of net foreign exchange losses for the fiscal year ended March 31, 2013. This was mainly due tolower net foreign exchange gains related to the fair value option. This decrease was primarily because theJapanese yen depreciated to smaller degrees against other major currencies during the fiscal year ended
March 31, 2014, compared to the previous fiscal year. This decrease was partially offset by decreases in losses
related to foreign exchange derivative contracts and foreign exchange other than derivatives.
We recorded net trading account losses of ¥33.9 billion for the fiscal year ended March 31, 2014, comparedto net trading account profits of ¥570.3 billion for the previous fiscal year. This was primarily attributable tolower fair values of foreign bonds, including U.S. Treasury bonds, due to higher interest rates in the UnitedStates, reflecting the tapering of the quantitative monetary easing program by the FRB.
Net investment securities gains for the fiscal year ended March 31, 2014 were ¥303.5 billion, an increase of¥147.5 billion from ¥156.0 billion for the fiscal year ended March 31, 2013. This increase mainly reflected
higher stock prices in Japan, increasing realized gains from sales of marketable equity securities, and a reductionof impairment losses on marketable equity securities.
Net equity in earnings of equity method investees for the fiscal year ended March 31, 2014 was¥110.5 billion, compared to net equity in earnings of equity method investees of ¥60.2 billion for the previous
fiscal year, mainly due to higher earnings from the equity method investees such as Morgan Stanley.
We recorded a one-time adjustment of ¥115.2 billion, which was reported as a component of our noninterest income, for the fiscal year ended March 31, 2014, as we transferred the substitutional portion of MUTB’s
benefit obligations relating to employee benefit funds to the Japanese government.
Core Business Areas
We operate our main businesses under an integrated business group system. This integrates the operations of
BTMU, MUTB, MUMSS (through MUSHD), Mitsubishi UFJ NICOS and other subsidiaries in the following
five areas—Retail, Corporate, Trust Assets, Global, and Global Markets. These five businesses serve as the coresources of our revenue. Operations that are not covered under the integrated business group system, whichmainly consists of the corporate center of MUFG, BTMU, MUTB and MUMSS and the elimination of net
revenues among business segments, are classified under Other. For further information, see “—A. Operating
Results—Business Segment Analysis.”Our business segment information is based on financial information prepared in accordance with Japanese
GAAP, as adjusted in accordance with internal management accounting rules and practices and is not consistent
with our consolidated financial statements included elsewhere in this Annual Report, which have been preparedin accordance with U.S. GAAP. For information on a reconciliation of operating profit under our internalmanagement reporting system to income before income tax expense shown on the consolidated statements ofincome, see Note 29 to our consolidated financial statements included elsewhere in this Annual Report.

61

The following table sets forth the relative contributions to operating profit for the fiscal year ended
March 31, 2014 of the five core business areas and other based on our business segment information:
Global Business
Integrated Integrated Integrated IntegratedGroup
RetailCorporate
Trust
Banking
Banking
AssetsOther
Business Business Business
than
Group
Group
Group
MUAH MUAH Total(in billions)GlobalMarkets

Other

Total

Net revenue . . . . . . . . . . . . ¥1,290.6 ¥924.5
Operating expenses . . . . . .
961.9 438.4¥159.2 ¥567.9 ¥375.9 ¥943.8
94.4 299.5 266.9 566.4¥568.6176.5¥ (13.6) ¥3,873.1
172.4 2,410.0

Operating profit (loss) . . . . ¥ 328.7 ¥486.1¥ 64.8 ¥268.4 ¥109.0 ¥377.4¥392.1¥(186.0) ¥1,463.1

Summary of Our Recent Financial Condition
The following table presents some key asset figures:
As of March 31,
2013
2014
(in trillions)

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans, net of unearned income, unamortized premiums and deferred loan fees . . . . . . .
Allowance for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities available for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities being held to maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading derivative assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-earning deposits in other banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥230.56 ¥253.66
97.25
109.1898.59
110.28(1.34)(1.10)
61.87
55.33
58.84
51.89
2.13
2.71
40.83
40.65
26.18
28.84
14.65
11.81
8.11
20.50

Total assets as of March 31, 2014 were ¥253.66 trillion, an increase of ¥23.10 trillion from ¥230.56 trillion
as of March 31, 2013.
Total loans outstanding as of March 31, 2014 were ¥110.28 trillion, an increase of ¥11.69 trillion from
¥98.59 trillion as of March 31, 2013. This primarily reflected an increase in foreign loans mainly due tofavorable economic fundamentals in the United States, our acquisition of Bank of Ayudhya Public Company
Limited, or Krungsri, and an appreciation of the relevant foreign currencies against the Japanese yen, as well as
an increase in domestic loans particularly to government related institutions.
Total allowance for credit losses as of March 31, 2014 was ¥1,094.4 billion, a decrease of ¥241.6 billion
from ¥1,336.0 billion as of March 31, 2013. The decrease mainly reflected charge-offs, and reversal of allowancefor credit losses due to an overall improvement in the credit quality of our loan portfolio.
Total investment securities as of March 31, 2014 were ¥55.33 trillion, a decrease of ¥6.54 trillion from¥61.87 trillion as of March 31, 2013. This was mainly due to a decrease in our holding of Japanese government
bonds primarily in response to the Bank of Japan’s monetary policy and measure to purchase such bonds in themarket to stimulate the economy by increasing liquidity, and also as part of our asset and liability management.
Trading account assets as of March 31, 2014 were ¥40.65 trillion, compared to ¥40.83 trillion as ofMarch 31, 2013. While the fair values of foreign currency-denominated bonds held by our commercial and trust
banking subsidiaries increased on a Japanese yen basis, the fair values of trading derivatives, particularly interest
rate-related derivatives, in our securities subsidiaries declined.
62

Interest-earning deposits in other banks as of March 31, 2014 was ¥20.50 trillion, an increase of ¥12.39
trillion from ¥8.11 trillion as of March 31, 2013 mainly due to increased interest-earning deposits with the Bankof Japan and the FRB. A significant portion of the cash received as a result of our sale of Japanese government
bonds was deposited with the Bank of Japan. Similarly, a significant portion of the cash received as a result of
our sale of U.S. Treasury bonds was deposited with the FRB.
The following table presents some key liability figures:
As of March 31,
2013
2014
(in trillions)

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Overseas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under repurchase agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥219.62148.21118.33
29.88
15.70
11.61
14.97
12.18

¥240.91
162.52121.51
41.01
21.27
11.11
11.98
14.50

Total liabilities as of March 31, 2014 were ¥240.91 trillion, an increase of ¥21.29 trillion from ¥219.62 trillion
as of March 31, 2013.
Total deposits as of March 31, 2014 were ¥162.52 trillion, an increase of ¥14.31 trillion from¥148.21 trillion as of March 31, 2013. This was mainly due to a higher balance of interest-bearing deposits in the
United States.
Payables under repurchase agreements as of March 31, 2014 were ¥21.27 trillion, an increase of¥5.57 trillion from ¥15.70 trillion as of March 31, 2013. This increase was primarily due to increases in thevolumes of transactions by our commercial banking, securities and trust banking subsidiaries.
Trading account liabilities as of March 31, 2014 were ¥11.98 trillion, compared to ¥14.97 trillion as ofMarch 31, 2013, as the fair values of trading derivatives, particularly interest rate-related derivatives, in our
securities subsidiaries, declined.
Long-term debt as of March 31, 2014 was ¥14.50 trillion, an increase of ¥2.32 trillion from ¥12.18 trillion
as of March 31, 2013. This primarily reflected increased long-term borrowings and issuances of bonds by ourcommercial banking, trust banking and securities subsidiaries.
Shareholders’ Equity
The following table presents some key shareholders’ equity figures:
As of March 31,
2013
2014
(in trillions)Shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrealized gains on investment securities, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

63¥10.61 ¥12.21
1.60
2.40
1.11
1.27
(0.21)
0.29

Capital Ratio
The following tables present our risk-adjusted capital ratio in accordance with Basel III as of March 31,
2013 and 2014. Underlying figures are calculated in accordance with Japanese banking regulations based on
information derived from our consolidated financial statements prepared in accordance with Japanese GAAP, asrequired by the FSA. The figures in the tables below are rounded down.
Common Equity Tier 1 (minimum capital ratios required: 4.00%)
As of March 31,
2013
2014

MUFG (consolidated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU (consolidated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU (stand-alone) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB (consolidated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB (stand-alone) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11.70% 11.25%
11.71 11.05
11.76 11.88
13.12 14.21
12.49 13.72

Tier 1 Capital (minimum capital ratios required: 5.50%)
As of March 31,
2013
2014

MUFG (consolidated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU (consolidated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU (stand-alone) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB (consolidated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB (stand-alone) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12.74% 12.45%
13.11 12.21
13.99 13.74
13.77 14.76
13.22 14.37

Total Capital (minimum capital ratios required: 8.00%)
As of March 31,
2013
2014

MUFG (consolidated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU (consolidated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU (stand-alone) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB (consolidated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB (stand-alone) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16.68% 15.53%
17.51 15.57
18.52 17.52
17.79 18.38
17.94 18.51

Business Environment
Through our subsidiaries and affiliated companies, we engage in a broad range of financial businesses andservices, including commercial banking, investment banking, trust banking and asset management services,
securities businesses and credit card businesses, and provide related services to individuals primarily in Japanand the United States and to corporate customers around the world. Our results of operations and financial
condition are exposed to changes in various external economic factors, including:‰

general economic conditions,‰interest rates,‰

foreign currency exchange rates, and‰stock and real estate prices.

64

The global economy lacked strong momentum during the fiscal year ended March 31, 2014. Although
gradually improving trends in Japan and the United States generally continued, recovery in Europe and in other
Asian countries was limited.
In Japan, since the introduction of the “Abenomics” policy at the end of the calendar year 2012 and the
Bank of Japan’s “quantitative and qualitative monetary easing” policy in April 2013, the Japanese yen
depreciated against other major currencies, and this has generally had a positive effect on the Japanese economy
while concerns still remain over the effectiveness of the government’s economic measures in the longer-term. In
the United States, stock, land and housing prices gradually improved while the FRB maintained its zero-interest
rate policy, a policy to maintain the federal funds target rate between zero and 0.25%. However, uncertainty
remains as to whether the improving trends would continue if, for example, the FRB further tapers or
discontinues its economic stimulus measures. Eurozone GDP growth turned positive in the quarter ended June30, 2013 for the first time in seven quarters and it maintained a positive growth for the four consecutive quarters
since then, but the rate of economic recovery in the region has remained slow. Emerging economics have beenslowing partially due to decreased foreign investments and heightened geopolitical risks.
Economic Environment in Japan
Signs of improvement in the Japanese economy continued to emerge in the fiscal year ended March 31,
2014. The depreciation of the Japanese yen against other major currencies after the introduction of the“Abenomics” policy helped large-scale exporters improve their financial performance, which led to higher stock
prices. The stronger stock market led to increased corporate and household spending, production of goods andexports. The trend among large corporations to increase salaries through “base-up” (raising base pay rather thangiving a one-time raise) in response to the Abe administration’s encouragement and the temporary increase in
private demand before the increase in the consumption tax rate from 5% to 8% on April 1, 2014, supported
stronger private spending and economic growth, particularly in the second half of the fiscal year ended March 31,
2014. However, concerns still remain over the effectiveness of the government’s economic measures in thelonger-term particularly in light of the disparate effects of “Abenomics,” the increasing public debt, the adverse
impact of higher consumption tax rates on private consumption, and the negative effect of a weaker Japanese yen
on imports.
The “Abenomics” policy consists of three fundamental strategies. As part of the first fundamental strategy, aseries of anti-deflation and other monetary measures are being implemented in coordination with the Bank ofJapan. The Bank of Japan put forth in January 2014 an inflation target of 2% in terms of a year-on-year rate ofchange in the consumer price index to be achieved in approximately two years, and began to implement measures
under its “quantitative and qualitative monetary easing” policy in April 2014. The policy measures set forth by
the Bank of Japan include:‰

money market operations with an aim to double Japan’s monetary base in two years,‰

market purchase of Japanese government bonds of up to ¥6.0 to ¥8.0 trillion per month, and‰market purchases of exchange-traded funds, Japanese real estate investment trust, commercial paper andcorporate bonds.

According to the Bank of Japan, under this policy, Japan’s monetary base increased ¥73.84 trillion to¥219.89 trillion as of March 31, 2014 from ¥146.04 trillion as of March 31, 2013. As of June 30, 2014, themonetary base increased to ¥243.43 trillion. The aggregate amount that the Bank of Japan spent on purchasing
long-term Japanese government bonds under the policy during the fiscal year ended March 31, 2014 was¥88.03 trillion. The aggregate purchase amount of long-term Japanese government bonds during the quarter
ended June 30, 2014 was ¥20.06 trillion. The continued supply of cash by the Bank of Japan in the market has
had the effect of keeping interest rates low and contributed to increased stock and real estate purchases.

65

The second fundamental strategy set forth by the Abe administration includes increased government
spending to stimulate the economy. Measures discussed in connection with this strategy include the accelerationof measures to promote reconstruction, disaster prevention and safety, and mitigation of the adverse impact of thegovernment’s economic measures on low-income earners and child-rearing households. The third fundamental
strategy includes deregulation and other growth measures, as well as plans focused on, among other things, thehealth, energy, infrastructure and agriculture sectors, foreign investments and trade, and labor and employment.
Measures discussed in connection with this strategy include corporate tax reform, reform of investments ofpublic and quasi-public funds, provision of services to enable women to participate more actively in theworkforce, utilization of foreign human resources, and the introduction of flexible and diversified ways ofworking.
Despite the indicia of improvement in economic conditions in Japan seen thus far, however, there is still
uncertainty surrounding Japan’s economy, including the medium and long-term effects of the “Abenomics”
measures on Japan’s economy. Moreover, the “Abenomics” measures have affected, and may continue to affect,each economic segment differently, potentially creating varying business environments for our customers,
borrowers and investees depending on their industry and particular circumstances.
The following table sets forth Japan’s real gross domestic product and its components on a quarter onquarter basis for the periods indicated:

Gross Domestic Product . . . . . . .
Private Consumption . . . . . .
Private Residential
Investment . . . . . . . . . . . .
Private Non-Residential
Investment . . . . . . . . . . . .
Government
Consumption . . . . . . . . . .
Public Investment . . . . . . . .
Exports . . . . . . . . . . . . . . . .
Imports . . . . . . . . . . . . . . . .

Calendar Year
2012
2Q
3Q
4Q

1Q

2013
2Q
3Q

4Q

(Unit: %)
2014
1Q

0.0
0.5

1.3
1.0

0.7
0.7

0.3
0.2

0.1
0.4

1.6
2.2

2.4

1.8

0.8

3.3

4.3

3.1

(1.5) (0.2) (2.2) 0.9

0.9

1.6

7.6

0.9 0.4 0.2 0.2
4.6 6.4 6.8 1.1
4.3 2.9 (0.7) 0.5
1.1 1.8 2.4 3.7

0.1
(2.7)
6.0
6.3

2Q

2011
3Q

4Q

1Q

(0.8)
1.0

2.6
1.6

0.2
0.6

1.0 (0.6) (0.8)
0.4 0.4 (0.5)

(2.3)

5.2

(1.8) (1.6)

3.1

1.8

(0.4)

2.3

8.3

0.5

0.3 0.1 0.2
2.5 (2.4) (4.8)(7.5) 9.6 (3.0)(0.5) 3.3 1.9(2.9)

1.5 (0.6) 0.4 0.7
9.9 (2.0) (2.4) (0.3)
2.8 (0.5) (4.0) (3.0)
2.0 1.4 (0.4) (1.9)

Source: Cabinet Office, Government of Japan

Japan’s GDP grew for the six consecutive quarters ended March 31, 2014 reflecting stronger domestic
demand. The following trends were observed for each component of Japan’s GDP in recent periods:‰

Private consumption continued to grow during the fiscal year ended March 31, 2014. In the quarter
ended December 31, 2013, durable goods (such as vehicles) and services (such as financial services)
contributed to the positive growth, while semi-durable goods showed little change, and non-durable
goods (such as gasoline) contributed to the negative growth. In the quarter ended March 31, 2014,
durable goods (such as vehicles, home electronics, personal computers and household items) contributed
to positive growth. The improved economic environment after the introduction of the “Abenomics”
policy, expectation of increases in salaries and bonuses, and the temporary increase in private demand
before the increase in consumption tax from 5% to 8% on April 1, 2014 were among the key-drivers of
the positive growth in private consumption. The impact of the increase in consumption tax on April 1,2014 has been limited, although decreases were reported, for example, in the number of vehicles soldand the sales volume of luxury department stores. Private consumption may significantly weaken,
however, if the consumption tax rate is increased again from 8% to 10% in October 2015 as currently
planned.
66

‰Private residential investment continued to grow during the fiscal year ended March 31, 2014, marking
eight consecutive quarters of positive growth. The increase in private residential investment partly
reflected the recovery from the negative impact of the Great East Japan Earthquake in 2011, and thepositive impact of the “Abenomics” measures. In the fiscal year ended March 31, 2013, the Tohoku
area, the northeastern area of Japan that suffered damages from the earthquake was the main region toshow strong growth. In the fiscal year ended March 31, 2014, wider areas including the Tohoku area
showed firm growth. However, this trend may not continue, as the number of new housing projects
began to show negative growth in the quarter ended March 31, 2014.

‰

Private non-residential investment grew during the fiscal year ended March 31, 2014. In the quarter
ended December 31, 2013, private investments in manufacturing industries increased 0.7% compared tothe quarter ended December 31, 2012, mainly due to increases in the automobile, electronics andcommunications devices industries, which were partially offset by a decrease in the chemical industry.
Non-residential investments in non-manufacturing industries increased 5.7% compared to the quarter
ended December 31, 2012, mainly due to increases in the service and transportation industries, whichwere partially offset by a decrease in the wholesale and retail industry. In the quarter ended March 31,
2014, private non-residential investments in manufacturing industries increased 6.8% compared to thequarter ended March 31, 2013, mainly due to increases in the automobile and food industries, whichwere partially offset by a decrease in the chemical industry. Non-residential investments in nonmanufacturing industries increased 7.7% compared to the quarter ended March 31, 2013, mainly due toincreases in the transportation and wholesale and retail industries, which were partially offset by adecrease in the telecommunications industry. Private inventory investments, however, showed negative
growth in the quarter ended December 31, 2013, as finished goods inventories in the automobile andraw steels industries decreased. Decreases were recorded in finished goods inventories and channel
inventories in the quarter ended March 31, 2014.

‰

Government consumption grew during the fiscal year ended March 31, 2014 mainly due to increasedsocial benefit expenses, including government spending on medical and nursing care services.

‰

Public investment increased 2.3% in the quarter ended December 31, 2013, but decreased 2.4% in thequarter ended March 31, 2014, marking the first negative growth recorded in six quarters. The positiveeffects of the ¥3.3 trillion supplemental budget passed in February 2013 waned, which negatively
impacted public investment.

‰

Exports grew slowly during the fiscal year ended March 31, 2014. In the quarter ended December 31,
2013, exports of electronics, communications devices and semiconductor manufacturing equipment
contributed to the increase in exports. This trend continued in the quarter ended March 31, 2014. In
addition, exports of automobiles also grew in the quarter ended March 31, 2014. Imports showed
consistent growth during the fiscal year ended March 31, 2014. In the quarter ended December 31, 2013,
imports of crude oil, natural gas and petroleum products contributed to the positive growth of imports.
Oil and natural gas imports continued to grow in the quarter ended March 31, 2014, and the growth inimports was further supported by increased imports of electronics and communications devices such as
cellular phones and personal computers.

The following table sets forth the growth rates of Japan’s nationwide consumer price indices on a year-onyear basis for the periods indicated:
Calendar Year
Jun.

Jul.

2013
Aug.

Consumer Price
Index . . . . . . . . . . . (0.7) (0.3) 0.2

0.7

0.9

Apr.

May

(Unit: %)

Sep.

Oct.

Nov.

Dec.

Jan.

1.1

1.1

1.5

1.6

1.4

Source: Ministry of Internal Affairs and Communications of Japan

67

Feb.

2014
Mar. Apr.

May

1.5

1.6

3.7

3.4

The following table sets forth Japan’s nationwide unemployment rates for the periods indicated:

Unemployment Rate . . . . .

2Q

2011
3Q

4Q

4.7

4.4

4.3

1Q

Calendar Year
2012
2Q
3Q
4Q

1Q

2Q

3Q

4Q

(Unit: %)
2014
1Q

4.5

4.6

4.3

4.2

4.0

3.7

3.7

4.3

4.0

2013

Source: Ministry of Internal Affairs and Communications of Japan

Japan’s nationwide unemployment rate for May 2014 was 3.5%.
The Bank of Japan has sought to keep short-term interest rates low by maintaining its “quantitative andqualitative monetary easing” policy. Euro-yen-3-month Tokyo Interbank Offered Rate, or TIBOR, declined from
0.22800% on October 1, 2013 to 0.21200% on March 31, 2014, and further declined to around 0.21% as ofJuly 7, 2014, the lowest level since 2006. Long term interest rates have fluctuated during the fiscal year ended
March 31, 2014. The yield on newly issued ten-year Japanese government bonds fell to the historical low ofapproximately 0.325% shortly after the introduction of the “Abenomics” measures, but rose to around 1% by
May 2013 partly reflecting concerns over increased market volatility and a general shift in investors’ allocationof capital from the debt markets to the improving stock markets as well as increased bonds being sold off inreaction to the discussion surrounding the FRB’s possible tapering of the quantitative monetary easing program.
Since late May 2013, the yield on newly-issued ten-year Japanese government bonds has fluctuated between
approximately 0.6% and 0.8%, influenced by events such as the drop of the Chinese Purchasing Managers’
Index, or PMI, to below 50 for the first time in seven months, indicating a contraction in the manufacturingsector, the FRB’s decision to taper the quantitative easing program, and the fiscal cliff and government
shut-down in the United States. The fluctuations in interest rates also reflected investor sentiment of risk aversion
in response to signs of deteriorating economic conditions in developing countries and concerns over geopoliticalrisks, particularly in countries such as Iraq, Syria and Ukraine.
The following chart shows the interest rate trends in Japan since April 2012:
1.2

%

1.0
0.8
0.6
0.4
0.2

Ap
r
M -12
ay
Ju -12
nJu 12l
Au -12g
Se -12
p
O -12
ct
N -12
ov
D -12
ec
Ja -12n
Fe -13b
M -13
ar
Ap -13r
M -13
ay
Ju -13nJu 13l
Au -13
gSe 13
p
O -13
ct
N -13
ov
D -13
ec
Ja -13n
Fe -14b
M -14
ar
Ap -14
M r-14ay
Ju -14n14

0.0

Newly Issued Japanese Government Bonds Yield (10 years) (End of Month)Uncollateralized Overnight Call Rates (End of Month)

Source: Bank of Japan

With regards to the Japanese stock market, the closing price of the Nikkei Stock Average, or Nikkei 225,
which is the average of 225 blue chip stocks listed on the Tokyo Stock Exchange, increased from ¥12,397.91 on
March 29, 2013 to ¥14,827.83 on March 31, 2014. The depreciation of the Japanese yen, together with improved
U.S. economic statistics, contributed to the rise in stock indices in Japan. The Nikkei 225 recorded an intra-day
high of ¥15,942.60 on May 23, 2013. However, the Nikkei 225 started to decline rapidly on the same day after68

the announcement of weak Chinese statistics, and the downward trend continued for approximately one month
until late June 2013, when the price was at a similar level to what it had been at the end of March 2013. The
downward trend reflected investors’ reactions to a rapid increase in stock prices and to the congressional
testimony of Mr. Ben Bernanke, the Chair of the FRB at the time, suggesting the possibility of tapering thequantitative monetary easing program. Subsequent to the one-month long downward trend, the Nikkei 225
remained generally between ¥13,100 and ¥14,800 until the end of October 2013. As interest rates in the
United States rose, the Japanese yen depreciated against the U.S. dollar, and Japanese stock prices rose. On
December 30, 2013, the Nikkei 225 was at ¥16,320.22, the high of the fiscal year ended March 31, 2014. The
upward trend ended in early 2014, partially influenced by risk aversion among investors following weak
U.S. economic statistics, the rapid depreciation of developing countries’ currencies, and increased political unrest
such as in Crimea. The Nikkei 225 generally remained between ¥14,000 and ¥16,000 from April to July 2014.
The Tokyo Stock Price Index, or TOPIX, a composite index of all stocks listed on the First Section of theTokyo Stock Exchange, similarly fluctuated due to the same reasons as those for the Nikkei 225. The TOPIX
increased from the beginning of April 2013 to an intra-day high of 1,289.77 on May 23, 2013. On the same day,the TOPIX began to decline rapidly, and the downward trend continued for approximately one month.
Subsequently, the stock market became more stable with the TOPIX remaining generally between 1,100 and
1,230 until the end of October 2013. Heightened expectations of tapering of the U.S. quantitative easing policy
after the announcement of improved U.S. labor statistics contributed to a rise in stock prices towards mid-January
2014, and the TOPIX recorded intra-day high of 1,308.08 on January 16, 2014. Subsequently, weaker
U.S. statistics and heightened geopolitical risks put downward pressure on stock prices, and as a result, theTOPIX remained between 1,140 and 1,300 for the rest of the fiscal year ended March 31, 2014. The TOPIX was
generally in a similar range from April to mid-June 2014, but has since showed some increase.
The following chart shows the daily closing price of the Nikkei Stock Average since April 2012:
Yen
17,00016,00015,00014,00013,00012,00011,00010,000
9,000
8,000

Ap
rM 12
ay
Ju 12
n1
Ju 2
lAu 12
gSe 12
pO 12
ct
-1
N 2
ov
D -12
ec
-1
Ja 2
nFe 13
b
M -13
ar
Ap 13
rM 13
ay
Ju 13
n1
Ju 3
lAu 13
gSe 13
pO 13
ct
-1
N 3
ov
D -13
ec
-1
Ja 3
nFe 14
b
M -14
ar
Ap 14
rM 14
ay
Ju 14
n1
Ju 4
l-1
4

7,000

Nikkei Stock Average

The Japanese yen depreciated against other major currencies, such as the U.S. dollar, from the closing priceof ¥94.22 to $1 on March 29, 2013 to an intra-day high of ¥103.74 to $1 on May 22, 2013, reflecting the
introduction of the “quantitative and qualitative monetary easing” policy by the Bank of Japan, and the stronger
U.S. dollar after the announcement of reductions in the policy interest rates of the European Central Bank, orECB, and the Reserve Bank of Australia. The Japanese yen appreciated against the U.S. dollar as U.S. statistics
worsened, reaching an intra-day low of ¥93.79 to the U.S. dollar on June 13, 2013, and the exchange rate
generally remained between ¥95 and ¥100 to the U.S. dollar until the end of October, 2013. In early November
2013, the United States reported improved labor statistics, and the FRB’s decision to taper the quantitative
monetary easing program was officially announced on December 18, 2013. Reflecting these events, the exchange
69rate reached the high for the fiscal year ended March 31, 2014 of ¥105.44 to the U.S. dollar on January 2, 2014.
The exchange rate has remained between ¥100.76 and ¥104.13 to the U.S. dollar for the five months since
February 2014.
The following chart shows the foreign exchange rates expressed in Japanese yen per U.S. dollar since April
2012:
Yen per US Dollar

Ap
rM 12
ay
Ju 12
n1
Ju 2
l-1
Au 2
g1
Se 2
pO 12
ct
-1
N 2
ov
D 12
ec
-1
Ja 2
n1
Fe 3
bM 13
ar
-1
Ap 3
r-1
M 3
ay
Ju 13
n1
Ju 3
l-1
Au 3
g1
Se 3
p1
O 3
ct
-1
N 3
ov
-1
D 3
ec
-1
Ja 3
n1
Fe 4
bM 14
ar
-1
Ap 4
rM 14
ay
Ju 14
n1
Ju 4
l-1
4

106
104
102
100
98
96
94
92
90
88
86
84
82
80
78
76
74
72
70

Yen/Dollar Spot Rate at 17:00 (Tokyo time)

Source: Bank of Japan

According to a land price survey conducted by the Japanese government, the average residential land pricein Japan declined by 0.6% between January 1, 2013 and January 1, 2014. The average commercial land price inJapan also declined 0.5% during the same period. In the three major metropolitan areas of Tokyo, Osaka andNagoya, the average residential land price increased 0.5% between January 1, 2013 and January 1, 2014, while
the average commercial land price in those areas also increased 1.6% during the same period. In the local regionsof Japan, which consist of regions other than the three major metropolitan areas, the average residential land
price declined 1.5% between January 1, 2013 and January 1, 2014, and the average commercial land pricedeclined 2.1% during the same period. Of the five areas with the greatest increases in land prices over the fiscal
year ended March 31, 2014, three were in the Tohoku region, which was the region most heavily affected by theGreat East Japan Earthquake in March of 2011.
According to Teikoku Databank, a Japanese research institution, the number of companies that filed forlegal bankruptcies in Japan from April 2013 to March 2014 was approximately 10,100, a decrease of 5.7% fromthe same period of the previous year. The decrease in the number of companies that filed for legal bankruptcy
was mainly due to the positive effects of the Japanese government’s economic stimulus measures under the“Abenomics” policy and increased demand before the increase of the consumption tax in April 2014. The
number of companies that filed for legal bankruptcy with debt exceeding ¥10 billion was 19 in the fiscal year
ended March 31, 2014, the lowest recorded in 10 years. As a percentage of the total number of legal bankruptcy
filings made in the same fiscal year, the number of such filings made by businesses that are either unincorporated
or capitalized at less than ¥10 million constituted 57.4%. The aggregate amount of liabilities subject tobankruptcy filings, excluding financial institutions’ bankruptcy filings, from April 2013 to March 2014 wasapproximately ¥2.75 trillion, a decrease of ¥0.18 trillion , or 6.2%, compared to the same period of the previous
year.
International Financial Markets
U.S. Economy
The U.S. economy demonstrated signs of continued improvement during the fiscal year ended March 31,
2014, mainly driven by stronger personal consumption, which reflected improved stock prices. In addition, U.S.
70

labor statistics generally improved during the fiscal year ended March 31, 2014. However, uncertainty remains as
to whether the improving trends would continue if, for example, the FRB further tapers or discontinues its
economic stimulus measures. The FRB maintained its zero-interest rate policy during the six months ended
September 30, 2013. On December 18, 2013, however, the FRB announced its decision to taper the quantitative
monetary easing policy by decreasing by $5.0 billion the monthly purchase amounts for each of mortgage-backed
securities and U.S. treasury bonds starting in January 2014. Thereafter, the monthly purchase amounts were again
decreased by $5.0 billion each, once in March, and again in April 2014.
The following table sets forth the growth rates of U.S. real gross domestic product and its components on aquarter-on-quarter basis for the periods indicated:

Gross Domestic Product . . . . . . . . .
Personal Consumption
Expenditures . . . . . . . . . . . . . .
Gross Private Domestic
Investment . . . . . . . . . . . . . . . .
Fixed Investment . . . . . . . . .
Non-residential . . . . . . .
Residential . . . . . . . . . .
Government Consumption
Expenditures and Gross
Investment . . . . . . . . . . . . . . . .
Exports . . . . . . . . . . . . . . . . . . . . .
Imports . . . . . . . . . . . . . . . . . . . . .

1Q

Calendar Year
2012
2Q
3Q
4Q

4.9

3.7

1.2

2.8

2.1

2.4

2.9

1.9

1.7

2.5
14.8
16.7
6.1

31.9
10.0
9.5
12.2

10.5
8.6
5.8
23.0

2Q

2011
3Q

4Q

3.2

1.4

1.5
14.2
8.6
9.9
2.7

(1.3) (2.5) (1.5) (1.4)
4.9
7.0
2.7
4.2
0.7
4.9
5.9
0.7

1Q

2013
2Q
3Q

4Q

(Unit: %)
2014
1Q

0.1

1.1

2.5

4.1

2.6

(2.9)

1.7

2.3

1.8

2.0

3.3

1.0

(1.6) 6.5
4.7
2.7
4.5
0.3
5.7 14.1(2.4) 4.7
9.2
11.6 (1.5) 6.5
9.8 (4.6) 4.7
19.8 12.5 14.2

17.2
5.9
4.8
10.3

2.5
2.8
5.7
(7.9)

(11.7)
(1.8)
(1.2)
(4.2)

0.3
3.8
2.5

(6.5) (4.2) (0.4)
1.1 (1.3) 8.0(3.1) 0.6
6.9

0.4
3.9
2.4

(5.2)
9.5
1.5

(0.8)
(8.9)
1.8

3.5
0.4
0.5

Source: U.S. Department of Commerce Bureau of Economic Analysis

The U.S. real GDP grew for the first three quarters of the fiscal year ended March 31, 2014. Private
consumption, which accounted for approximately 68% of the U.S. GDP, demonstrated consistent growth during
the fiscal year ended March 31, 2014, mainly due to increased purchasing activities.
Government consumption generally decreased during the fiscal year ended March 31, 2014, largely due todecreased expenditures on national defense. Federal government non-defense expenditures also decreased
through the calendar year 2013 but increased in the quarter ended March 31, 2014, while consumption by stateand local governments increased through the calendar year 2013 but subsequently declined.
The Consumer Price Index for All Urban Consumers, or CPI-U, increased 1.5% before seasonal adjustment
over the 12 months ended March 31, 2014. Although CPI-U decreased 0.4% in April 2013 on a seasonallyadjusted month-on-month basis, it has since shown growth of 0.0% to 0.4% on the same basis.
Housing prices showed signs of improvement during the fiscal year ended March 31, 2014. As of March
2014, the Federal Housing Finance Agency’s U.S. house price index exhibited an eleventh consecutive quarterly
price increase in the purchase-only, seasonally adjusted index. This also marked the ninth consecutive quarter
where the house price index showed an increase compared to the same quarter of the previous year.
Interest rates on U.S. Treasury bonds decreased in April 2013 to 1.6120% on May 1, 2013, and weregenerally on an upward trend partly in reaction to the discussions surrounding the possible tapering of the FRB’s
quantitative monetary easing program and improved U.S. statistics including labor figures were released,reaching approximately 3.0% in September 2013. Following the FRB’s decided not to taper their monetaryeasing policy in September and the U.S. federal government shut-down in early October 2013, interest rates
fluctuated, dropping to just below 2.5% at the end of October 2013. U.S. Treasury bond rates reached 3.0516%
on January 2, 2014, following the announcement of the FRB’s decision to taper the quantitative monetary easing
program. Interest rates have generally remained between 2.4% and 2.8% since February 2014.
71

Stock prices in the United States were on a generally improving trend during the fiscal year ended
March 31, 2014, with the Dow Jones Industrial Average generally fluctuating between $14,434.43 and$16,588.25. During the same period, the NASDAQ composite index was also on an upward trend, rising from
3,154.96 on April 18, 2013 to 4,371.71 on March 6, 2014. Subsequently, stock prices reached historical highlevels as the U.S. economy showed signs of gradual growth, reflecting improved economic conditions supported
by increased private consumption and lower unemployment rates. Since April 1, 2014, the Dow Jones Industrial
Average has increased to an intra-day high of $17,074.65 on July 3, 2014, and the NASDAQ composite index
increased to an intra-day high of 4,485.93 on the same day.
The following table sets forth U.S. unemployment rates on a month-on-month basis for the periods indicated:
Calendar Year
Apr.

May

Jun.

Jul.

2013
Aug.

Unemployment
Rate . . . . . . . . 7.5

7.5

7.5

7.3

7.2

(Unit: %)

Sep.

Oct.

Nov.

Dec.

Jan.

7.2

7.2

7.0

6.7

6.6

Feb.

2014
Mar. Apr.

May

Jun.

6.7

6.7

6.3

6.1

6.3

Source: United States Department of Labor, Bureau of Labor Statistics, BLS Information

Eurozone Economy
The Eurozone economy showed signs of recovery in the fiscal year ended March 31, 2014, but the growth
remained weak. GDP grew in the quarter ended June 30, 2013 for the first time in seven quarters, and maintained
positive growth for the following three quarters through the quarter ended March 31, 2014. The growth in GDP
was mainly supported by increases in exports. The ECB has maintained its low interest rate policy, reducing its
policy interest rate to 0.5% on May 2, 2013. On July 4, 2013, the ECB introduced “forward guidance,” indicatingthat short-term interest rates would remain low for an “extended period” of time. On November 7, 2013, the ECB
further reduced its policy interest rate to a historical low of 0.25% to support the economy in response to low
inflation rates in the Eurozone countries. On January 25, 2014, the ECB reaffirmed the “forward guidance” andits commitment to monetary easing, and also stated that it was willing and able to act further if needed. On
June 5, 2014, the ECB took steps to further monetary easing by introducing a negative deposit facility interest
rate of negative 0.1%. This new measure aims to stop the appreciation of the Euro against other currencies, which
contributed to low inflation rates in the region, and also to increase the volume of loans especially to medium andsmall-sized enterprises in European peripheral countries.
The following table sets forth the growth rates of Eurozone real gross domestic product and its main
expenditure components on a quarter-on-quarter basis for the periods indicated:

Gross Domestic Product . . . . . . .
Private Final
Consumption . . . . . . . . . .
Gross Fixed Capital
Formation . . . . . . . . . . . .
Government Final
Consumption . . . . . . . . . .
Exports . . . . . . . . . . . . . . . .
Imports . . . . . . . . . . . . . . . .

Calendar Year
2012
2Q
3Q
4Q

4Q

(Unit: %)
2014
1Q

0.1

0.3

0.2

(0.7) (0.3) (0.6) (0.1) (0.5) (0.2) 0.2

0.1

0.0

0.1

(0.6) (0.4) (0.7) (1.0) (1.8) (0.6) (1.4) (1.6) 0.2

0.5

0.9

0.3

0.1 (0.3) 0.2 (0.3) (0.2) (0.2) 0.1 0.2 0.0 0.2
0.4 1.3 0.3 0.9 0.9 0.8 (0.6) (0.8) 2.4 0.0(0.1) 0.5 (1.1) 0.1 (0.2) 0.3 (1.0) (0.8) 1.6 0.9

(0.4)
1.4
0.7

0.3
0.3
0.8

2Q

2011
3Q

4Q

0.1

0.0

(0.2) (0.1) (0.3) (0.2) (0.5) (0.2) 0.3

(0.5)

0.3

1Q

Source: European Central Bank – Eurosystem

72

1Q

2013
2Q
3Q

Eurozone real GDP growth turned positive in the quarter ended June 30, 2013 for the first time since thebeginning of the financial crisis in the peripheral countries of the Eurozone in the quarter ended December 31,
2011. Eurozone real GDP growth showed a positive growth of 0.3%, 0.1%, 0.3% and 0.2% for the quarters ended
June 30, 2013, September 30, 2013, December 31, 2013 and March 31, 2014, respectively. Although all of theexpenditure components recorded positive growths in the quarter ended March 31, 2014, the growth rate
remained very limited.
The following table sets forth Eurozone unemployment rates on a month-on-month basis for the periods
indicated:
Calendar Year
Apr.

May

Jun.

Jul.

2013
Aug.

Unemployment
Rate . . . . . . . . . . 12.0

12.0

12.0

11.9

12.0

(Unit: %)

Sep.

Oct.

Nov.

Dec.

Jan.

12.0

11.9

11.9

11.8

11.8

Feb.

2014
Mar.

Apr.

May

11.8

11.7

11.7

11.6

Source: European Central Bank—Eurosystem

The unemployment rate gradually recovered during the fiscal year ended March 31, 2014. The
unemployment rate for May 2014 was 11.6%, the lowest in the last twelve months.
Recent Developments
We continued to pursue global growth opportunities, including opportunities to expand our business inSoutheast Asia and the operations of MUB in the United States and strengthen our alliance with Morgan Stanley
during the fiscal year ended March 31, 2014. We plan to continue to selectively review and consider growth
opportunities that will enhance our global competitiveness. We will monitor regulatory developments and pursue
prudent transactions that will create a strong capital structure to enable us to contribute to the real economy, both
domestically and globally, as a provider of a stable source of funds and high quality financial services. In order to
respond to the increasingly complex market and legal risks, we continue to endeavor to enhance our complianceand internal control frameworks.
Integration of BTMU’s Operations in the Americas with UNBC’s Operations
Effective July 1, 2014, we integrated BTMU’s operations in the Americas region with the operations ofUnionBanCal Corporation, or UNBC, which is a wholly owned subsidiary of BTMU, and changed UNBC’s
corporate name to “MUFG Americas Holdings Corporation,” or MUAH. Union Bank, N.A., which is MUAH’s
principal subsidiary and our primary operating subsidiary in the United States, was also renamed “MUFG Union
Bank, N.A.,” or MUB, effective the same day. MUAH currently oversees BTMU’s operations in the Americas
region as well as the operations of MUB.
Issuance of Basel III-Compliant Domestic Subordinated Bonds
On June 26, 2014, we issued in Japan two tranches of Basel III-compliant Japanese yen-denominatedsubordinated bonds due 2024 in an aggregate principal amount of ¥50 billion. The terms and conditions of thesebonds contain a clause that requires the bonds to be written off upon the occurrence of certain events, including
when the Japanese banking regulator deems us to be at risk of becoming non-viable. The issuance of these bonds
was our first issuance of Basel III-compliant subordinated bonds.
Acquisition of Outstanding Classes of Preferred StockOn April 1, 2014, we acquired all of the 156,000,000 outstanding shares of First Series of Class 5 Preferred
Stock for ¥390 billion and cancelled all of the acquired shares. In addition, we expect to acquire all of the 1,000
73

outstanding shares of Class 11 Preferred Stock on August 1, 2014 as required under the terms of the preferredstock or prior to that date at the request of the holder of the shares in exchange for up to 1,245 shares of ourcommon stock. We plan to use shares of our common stock held in treasury for this acquisition. Upon ouracquisition of the shares of Class 11 Preferred Stock, we will have no outstanding shares of any class of preferredstock.
Acquisition of Bank of Ayudhya Shares through Voluntary Tender Offer
On December 18, 2013, BTMU acquired an aggregate of 4,373,714,120 shares, representing 72.01%, of thetotal outstanding shares of Krungsri in Thailand through a Voluntary Tender Offer, or VTO, for 39 Thai Baht per
share. The total purchase price was paid in cash, and was approximately ¥545.8 billion based on the currency
exchange rate between the Thai Baht and the Japanese yen as of December 18, 2013. As a result of thetransaction, Krungsri has become a consolidated subsidiary of BTMU. Krungsri has remained listed on the Stock
Exchange of Thailand since the transaction.
In connection with the transaction, we recorded ¥217.4 billion of goodwill and ¥214.6 billion of intangible
assets. We also recorded ¥202.2 billion of noncontrolling interests at fair value determined by a quoted market
price as of the acquisition date. During the fiscal year ended March 31, 2014, we incurred ¥2.3 billion of
acquisition-related costs. These expenses are included in Other non-interest expenses in our consolidated
statements of income for the fiscal year ended March 31, 2014. The results of operations of Krungsri and its
subsidiaries since the acquisition date were not material to us for the fiscal year ended March 31, 2014.
Under a Conditional Branch Purchase Agreement between BTMU and Krungsri, or the BPA, dated
September 18, 2013, BTMU’s Bangkok Branch will be integrated with Krungsri through a contribution in kindof the BTMU Bangkok Branch business to Krungsri within one year from the date of the acquisition of Krungsri
shares through the VTO. The effective date of the integration, however, is subject to change in accordance withan agreement between the parties and regulatory approval. In exchange for the contribution in kind, Krungsri will
issue 1,143,221,782 additional common shares to BTMU, which would increase BTMU’s ownership in Krungsri
to 76.44%. The number of shares to be issued by Krungsri in exchange for BTMU’s contribution in kind issubject to a price adjustment under the BPA such that the total shares to be issued can increase up to a maximumof 1,500,000,000 shares or decrease without a specified minimum. For more information on Krungsri, see “Item4.B. Information on the Company—Business Overview—Acquisition of Bank of Ayudhya Shares throughVoluntary Tender Offer.
Changes in Shareholdings of Mitsubishi UFJ Merrill Lynch PB Securities Co., Ltd.
We completed transactions to transfer shares of Mitsubishi UFJ Merrill Lynch PB Securities Co., Ltd.
among our consolidated subsidiaries in March 2014. Upon completion of the transactions, MUMSS holds 75%,
and BTMU holds the remaining 25%, of the voting rights in the company. Prior to the transactions, MUSHD held
51%, and BTMU held the remaining 49%, of the voting rights in the company. Concurrent with the completionof the transactions, the company changed its name to “Mitsubishi UFJ Morgan Stanley PB Securities Co., Ltd.”
MUB’s Acquisition of First Bank Association Bank Services
In November 2013, MUB completed the acquisition of First Bank Association Bank Services, a unit of First
Bank, which provided a full range of banking services to homeowners associations and community managementcompanies. MUB acquired approximately $570 million in deposits in this transaction.
MUTB’s Acquisition of Butterfield Fulcrum GroupIn September 2013, MUTB completed the acquisition of Butterfield Fulcrum Group for ¥30.2 billion in cash
and recorded goodwill of ¥20.3 billion. Post-acquisition, Butterfield Fulcrum Group changed its name to74

Mitsubishi UFJ Fund Services Holdings Limited. During the fiscal year ended March 31, 2014, we applied
measurement period adjustments to the acquisition date fair values, which decreased the goodwill by ¥5.8 billion,
and recorded intangible assets of ¥21.6 billion.
For more information on Mitsubishi UFJ Fund Services Holdings, see “Item 4.B. Business Overview—Integrated Trust Assets Business Group.”
Recent Regulatory Developments in the United States
In December 2012, BTMU agreed to make an approximately $8.6 million payment to the Office of Foreign
Assets Control, or OFAC, of the U.S. Department of the Treasury to settle potential civil liability for apparent
violations of certain U.S. sanctions regulations from 2006 to 2007. In June 2013, BTMU entered into a consent
agreement with the New York State Department of Financial Services, or DFS, to resolve issues relating tocertain U.S. dollar payments that were routed through New York from 2002 to 2007. Under the terms of theagreement with DFS, BTMU made a civil monetary payment of $250 million to DFS and retained an
independent consultant to conduct a compliance review of the relevant controls and related matters in BTMU’scurrent operations. BTMU continues to cooperate closely with all relevant regulators and is undertaking
necessary actions.
For a detailed description of these and other recent regulatory and legal developments, see “Item 3.D. Key
Information—Risk Factors—Risks Related to Our Business—We may become subject to regulatory actions orother legal proceedings relating to our transactions or other aspects of our operations, which could result insignificant financial losses, restrictions on our operations and damage to our reputation.”
MUB’s Acquisition of PB Capital Corporation’s Institutional Commercial Lending Portfolio
In June 2013, MUB acquired PB Capital Corporation’s institutional commercial real estate lending divisionfor ¥358.0 billion in cash and recorded goodwill of ¥22.0 billion. Headquartered in New York, the institutionalcommercial real estate lending division of PB Capital had approximately ¥341.8 billion in loans outstanding on
properties in various U.S. major metropolitan areas as of June 14, 2013. During the fiscal year ended March 31,
2014, we applied measurement period adjustments to the acquisition date fair values, which increased the
goodwill by ¥1.0 billion.
Agreement to Invest in VietinBank
In May 2013, BTMU acquired approximately 20% of the ordinary shares of Vietnam Joint Stock
Commercial Bank for Industry and Trade, or VietinBank. VietinBank is one of the major Vietnamese statecontrolled commercial banks by asset size with the Vietnamese government owning approximately 64% of theoutstanding ordinary shares as of December 31, 2013. BTMU’s acquisition of newly issued shares forapproximately 15.5 trillion Vietnamese Dong (equivalent to approximately ¥75.1 billion based on the currency
exchange rate of ¥0.005 to the Vietnamese Dong) resulted in BTMU becoming the second largest shareholder ofVietinBank. In addition, BTMU has appointed two directors to the VietinBank board. As a result, VietinBank is
accounted for under the equity method beginning in the fiscal year ended March 31, 2014.
Exposures to Selected European Countries
Several European countries, including Italy, Spain, Portugal, Ireland and Greece, have been experiencing
weaknesses in their economic and fiscal situations in varying degrees of severity. We are closely monitoring our
exposures in these countries.
The following table sets forth information about our aggregate exposure to selected European countries of
BTMU, MUTB and MUSHD, which were the subsidiaries holding the exposure, as of March 31, 2014. The
75

information in the table is categorized by counterparties, consisting of sovereign, non-sovereign financial
institutions and non-sovereign non-financial institutions, and by type of financial instruments, which include
loans, securities, derivatives and credit default swap, or CDS, protection (sold and bought). The securities
exposure includes available-for-sale, held-to-maturity and trading securities. The information included in thetable below is based on information compiled for internal risk management purposes only, and not for financial
accounting purposes. The exposures are determined based on the country in which the borrower’s head office islocated. However, in case of a subsidiary located in a country different from that in which its parent company islocated, the country exposure is determined based on the country in which the subsidiary is located.
As of March 31, 2014
Gross
exposure(funded &unfunded)

CDS
protection
bought(3)Net
exposure(4)

$0.0
—

$ 8.6
1.6

$0.3
—

$ 8.3
1.6

0.0
1.3
0.0
—

0.0
0.0
0.0
—

0.1
6.9
4.5
0.1

—
0.3
0.0
—

0.1
6.6
4.5
0.1

0.1
0.0
0.0
0.0

—
0.0
0.0
—

0.0
0.0
—
—

0.1
4.3
0.4
0.0

0.0
0.0
0.2
—

0.1
4.3
0.2
0.0

—
0.4
0.2
—

0.0
0.0
0.0
—

—
0.0
0.0
—

—
—
—
—

0.0
0.4
0.2
—

—
0.2
—
—

0.0
0.2
0.2
—

—
0.2
0.0
—

0.0
0.0
—
—

0.0
0.0
—
—

—
—
—
—

0.0
0.2
0.0
—

—
—
—
—

0.0
0.2
0.0
—

—
0.0

—
—

—
—

—
—

—
0.0

—
—

—
0.0

$10.5
—

$1.6
1.4

$1.6
0.3

$0.0
—

$13.7
1.7

$0.5
—

$13.2
1.7

0.0
10.5

0.2
0.0

0.0
1.3

0.0
0.0

0.2
11.8

0.0
0.5

0.2
11.3

Loans
(funded &unfunded)

CDS
protection
Derivatives(2)sold(3)(in billions)

Securities(1)Italy . . . . . . . . . . . . . . . . . . .
Sovereign . . . . . . . . . .
Financial
Institutions . . . . . . .
Others . . . . . . . . . . . . .
Spain . . . . . . . . . . . . . . . . . .
Sovereign . . . . . . . . . .
Financial
Institutions . . . . . . .
Others . . . . . . . . . . . . .
Portugal . . . . . . . . . . . . . . . .
Sovereign . . . . . . . . . .
Financial
Institutions . . . . . . .
Others . . . . . . . . . . . . .
Ireland . . . . . . . . . . . . . . . . .
Sovereign . . . . . . . . . .
Financial
Institutions . . . . . . .
Others . . . . . . . . . . . . .
Greece . . . . . . . . . . . . . . . . .
Sovereign . . . . . . . . . .
Financial
Institutions . . . . . . .
Others . . . . . . . . . . . . .

$ 5.6
—

$1.4
1.3

$1.6
0.3

0.0
5.6
4.3
—

0.1
0.0
0.2
0.1

0.0
4.3
0.4
—

Total . . . . . . . . . . . . . . . . . .
Sovereign . . . . . . . . . .
Financial
Institutions . . . . . . .
Others . . . . . . . . . . . . .

Notes:(1) Securities include securities being held to maturity, securities available for sale, and trading securities. Securities being held to maturity
are shown at amortized cost, and securities available for sale and trading securities are shown at fair value.
(2) Derivatives amounts represent current exposures, taking into consideration legally enforceable master netting agreements.
(3) CDS protection amounts represent notional amounts.
(4) Net exposure represents gross exposure (funded & unfunded), net of CDS protection bought.
(5) To the extent financial instruments are originally denominated in currencies other than U.S. dollars, the exposure amounts have beentranslated into U.S. dollars at an internal exchange rate used for our internal risk management purposes as of March 31, 2014.

76

Based on information collected for internal risk management purposes as of March 31, 2014, theconsolidated exposure of BTMU, MUTB and MUSHD listed above to Italy, Spain, Portugal, Ireland and Greece
represented less than 1% of our total assets.
As of March 31, 2014, other than BTMU, MUFG group companies had limited exposures to those European
countries, except such other group companies’ exposures to sovereign bonds issued by those countries as
discussed below. As of the same date, BTMU held no sovereign bonds issued by those European countries.
As of March 31, 2014, we had a total balance of $1.7 billion of sovereign bonds of the European
peripheral countries identified in the table above on a consolidated basis. Among these countries, we had no Irish
or Greek government bonds as of March 31, 2014. All of our Italian and Spanish government bonds were held in
our trading accounts as of March 31, 2014.
As of March 31, 2014, excluding sovereign bonds, we had a total of $11.5 billion of exposures relating to
the European peripheral countries identified in the table above. These exposures mainly consisted of commercial
loan exposures to corporations and structured finance transactions. Our exposures to Italy and Spain mainly
related to the infrastructure sector, such as electricity, gas and telecommunications. Our loan-related exposures tofinancial institutions in those countries were limited and not material.
In addition to these exposures, we also have indirect exposures. Examples of indirect exposures include
country risk exposures related to the collateral received on secured financing transactions. These indirect
exposures are managed in the normal course of business through our credit, market and operational risk
management framework.
Critical Accounting Estimates
Our consolidated financial statements included elsewhere in this Annual Report are prepared in accordancewith U.S. GAAP. Many of the accounting policies require management to make difficult, complex or subjective
judgments regarding the valuation of assets and liabilities. The accounting policies are fundamental tounderstanding our operating and financial review and prospects. The notes to our consolidated financial
statements included elsewhere in this Annual Report provide a summary of our significant accounting policies.
The following is a summary of the critical accounting estimates:
Allowance for Credit Losses
The allowance for credit losses represents management’s best estimate of probable losses in our loan
portfolio. The evaluation process, including credit-ratings and self-assessments, involves a number of estimatesand judgments. The allowance is based on two principles of accounting guidance: (1) the guidance oncontingencies requires that losses be accrued when they are probable of occurring and can be estimated, and(2) the guidance on accounting by creditors for impairment of a loan requires that losses be accrued based on the
difference between the loan balance, on the one hand, and the present value of expected future cash flows
discounted at the loan’s original effective interest rate, the fair value of collateral or the loan’s observable market
value, on the other hand.
We divide our loan portfolio into the following segments—Commercial, Residential, Card, MUAH and
Krungsri based on the segments used to determine the allowance for credit losses. We further divide theCommercial segment into classes based on initial measurement attributes, risk characteristics, and our approach
to monitoring and assessing credit risk. We determine the appropriate level of the allowance for credit losses foreach of our loan portfolios by evaluating various factors and assumptions, such as the borrower’s credit rating,collateral value, historical loss experience, and probability of insolvency based on the number of actual
delinquencies as well as existing economic conditions. We update these factors and assumptions on a regularbasis and upon the occurrence of unexpected changes in the economic environment.
77For the Commercial, MUAH and Krungsri segments, our allowance for credit losses primarily consists ofallocated allowances. The allocated allowance comprises (1) an allowance for individual loans specifically
identified for evaluation, (2) an allowance for large groups of smaller-balance homogeneous loans, and (3) aformula allowance. The allocated allowance within the Commercial segment also includes an allowance forcountry risk exposure. The allowance for country risk exposure within the Commercial segment covers transfer
risk which is not specifically covered by other types of allowance. Both the allowance for country risk exposureand the formula allowance are provided for performing loans that are not subject to either the allowance forindividual loans specifically identified for evaluation or the allowance for large groups of smaller-balancehomogeneous loans.
The allowance for credit losses within the MUAH segment also includes an unallocated allowance which
captures losses that are attributable to economic events in various industry or geographic sectors whose impact
on our loan portfolio in this segment have occurred but have yet to be recognized in the allocated allowance.
For the Residential and Card segments, the loans are smaller-balance homogeneous loans that are pooled by
the risk ratings based on the number of delinquencies. We principally determine the allowance for credit losses
based on the probability of insolvency, the number of actual delinquencies and historical loss experience.
For all portfolio segments, key elements relating to the policies and discipline used in determining theallowance for credit losses are our credit classification and the related borrower categorization process. Each ofthese components is determined based on estimates subject to change when actual events occur. The
categorization is based on conditions that may affect the ability of borrowers to service their debt, taking into
consideration current financial information, historical payment experience, credit documentation, public
information, analyses of relevant industry segments and current trends. In determining the appropriate level ofallowance, we evaluate the probable loss by category of loan based on its type and characteristics.
In addition to the allowance for credit losses on our loan portfolio, we maintain an allowance for credit
losses on off-balance sheet credit instruments, including commitments to extend credit, a variety of guarantees
and standby letters of credit and other financial instruments. This allowance is included in other liabilities.
Determining the adequacy of the allowance for credit losses requires the exercise of considerable judgment
and the use of estimates, such as those discussed above. Our actual losses could be more or less than theestimates. To the extent that actual losses differ from management’s estimates, additional provisions for credit
losses may be required that would adversely impact our operating results and financial condition in future
periods. For further information regarding our methodologies used in establishing the allowance for credit losses
by portfolio segments and allowance for credit losses policies, see Note 1 to our consolidated financial
statements included elsewhere in this Annual Report and “—B. Liquidity and Capital Resources—Financial
Condition—Loan Portfolio.”
For more information on our credit and borrower ratings, see “Item 11. Quantitative and Qualitative
Disclosures about Credit, Market and Other Risk—Credit Risk Management.”
Impairment of Investment Securities
U.S. GAAP requires the recognition in earnings of an impairment loss on investment securities for a decline
in fair value that is other than temporary. Determination of whether a decline is other than temporary often
involves estimating the outcome of future events. Management judgment is required in determining whether
factors exist that indicate that an impairment loss has been incurred at the balance sheet date. These judgments
are based on subjective as well as objective factors. We conduct a review semi-annually to identify and evaluate
investment securities that have indications of possible impairment. The assessment of other-than-temporary
impairment requires judgment and therefore can have an impact on the results of operations. Impairment isevaluated considering various factors, and their significance varies from case to case.
78

Debt and marketable equity securities. In determining whether a decline in fair value below cost is otherthan temporary for a particular equity security, we generally consider factors such as the ability and positive
intent to hold the investments for a period of time sufficient to allow for any anticipated recovery in fair value. In
addition, an other-than-temporary impairment is recognized in earnings for marketable equity securities when
one of the following criteria is met:‰

the fair value of investments is 20% or more below cost as of the end of the reporting period,‰

due to the financial condition and near-term prospects of the issuer, the issuer is categorized as “Likely
to become Bankrupt,” “Virtually Bankrupt” or “Bankrupt or de facto Bankrupt” status under theJapanese banking regulations,‰the fair value of the investment has been below cost for six months or longer, or‰

the fair value of the securities is below cost and a decision has been made to sell the securities.

For debt securities, an other-than-temporary impairment is recognized in earnings if we have an intent tosell a debt security or if it is more likely than not we will be required to sell the debt security before recovery of
its amortized cost basis. When we do not intend to sell a debt security and if it is more likely than not that we will
not be required to sell the debt security before recovery of its amortized cost basis, the credit component of another-than-temporary impairment of the debt security is recognized in earnings, but the noncredit component isrecognized in accumulated other comprehensive income.
Certain securities held by BTMU, MUTB and certain other subsidiaries, which primarily consist of debt
securities issued by the Japanese national government and generally considered to be of minimal credit risk, aredetermined not to be impaired as the respective subsidiaries do not have an intention to sell the securities, or
those subsidiaries are not more likely than not required to sell before recovery of their amortized cost basis.
The determination of other-than-temporary impairment for certain debt securities held by MUAH, whichprimarily consist of residential mortgage-backed securities and certain asset-backed securities, is made on thebasis of a cash flow analysis and monitoring of performance of such securities, as well as whether MUAH
intends to sell, or is more likely than not required to sell, the securities before recovery of their amortized costbasis.
Nonmarketable equity securities. Nonmarketable equity securities include unlisted preferred securities
mainly issued by public companies as well as equity securities of companies that are not publicly traded or are
thinly traded. The securities consist of cost-method investments, which are primarily carried at cost because theirfair values are not readily determinable. For nonmarketable equity securities issued by public companies, such aspreferred stock convertible to marketable common stock in the future, we estimate fair value using commonly
accepted valuation models, such as option pricing models based on a number of factors, including the quoted
market price of the underlying marketable common stock, volatility and dividend repayments as appropriate, todetermine if the investment is impaired in each reporting period. If the fair value of the investment is less thanthe cost of the investment, we proceed to evaluate whether the impairment is other than temporary. When the
decline is other than temporary, those nonmarketable equity securities issued by public companies are written
down to fair value estimated by commonly accepted valuation models.
With respect to the other nonmarketable equity securities, we perform a test to determine whether any
impairment indicator exists with respect to each cost-method investment in each reporting period. The primarymethod we use to identify impairment indicators is a comparison of our share in an investee’s net assets to thecarrying amount of our investment in the investee. We also consider whether significant adverse changes in theregulatory, economic or technological environment have occurred with respect to the investee. We periodicallymonitor the status of each investee including the credit ratings, which are generally updated once a year based on
the annual financial statements of issuers. In addition, if an event that could impact the credit rating of an issuer
occurs, we reassess the appropriateness of the credit rating assigned to the issuer in order to maintain an updated
79

credit rating. If an impairment indicator exists, we estimate the fair value of the cost-method investment. If thefair value of the investment is less than the cost of the investment, we proceed to conduct the other-thantemporary impairment evaluation. When we determine that the decline is other than temporary, such remaining
nonmarketable equity securities are written down to the estimated fair value, determined based on such factors as
the ratio of our investment in the issuer to the issuer’s net assets and the latest transaction price, if applicable.
Equity method investees. We determine whether loss on investments is other than temporary, throughconsideration of various factors, such as the length of time and the extent to which the fair value has been lessthan cost, the financial condition and near-term prospects of the investees, and the intent and ability to retain its
investment in the investees for a period of time sufficient to allow for any anticipated recovery in the fair value.
We also evaluate additional factors, such as the condition and trend of the economic cycle, and trends in thegeneral market.
Our assessment of potential impairment involves risks and uncertainties depending on market conditions
that are global or regional in nature and the condition of specific issuers or industries, as well as management’s
subjective assessment of the estimated future performance of investments. If we later conclude that a decline isother than temporary, the impairment loss may significantly affect our operating results and financial condition in
future periods.
For further information on the amount of the impairment losses and the aggregate amount of unrealized
gross losses on investment securities, see Note 3 to our consolidated financial statements included elsewhere inthis Annual Report.
Allowance for Repayment of Excess Interest
We maintain an allowance for repayment of excess interest based on our estimate of the potential liability
exposure. Our estimate of the potential liability exposure represents the estimated amount of claims for
repayment of excess interest to be received in the future. We expect that any such claim will be made on the basisof a 2006 ruling of the Japanese Supreme Court, or the Ruling. Under the Ruling, lenders are generally required
to reimburse borrowers for interest payments made in excess of the limits stipulated by the Interest Rate
Restriction Act upon receiving claims for reimbursement, despite the then-effective provisions of the Law
Concerning Lending Business that exempted a lender from this requirement if the lender provided required
notices to the borrower and met other specified requirements, and the borrower voluntarily made the interest
payment.
While we have not entered into any consumer loan agreement after April 2007 that imposes an interest rate
exceeding the limits stipulated by the Interest Rate Restriction Act, we need to estimate the number of possible
claims for reimbursement of excess interest payments. To determine the allowance for repayment of excessinterest, we analyze the historical number of repayment claims we have received, the amount of such claims,
borrowers’ profiles, the actual amount of reimbursements we have made, management’s future forecasts, andother events that are expected to possibly affect the repayment claim trends in order to arrive at our best estimateof the potential liability. We believe that the provision for repayment of excess interest is adequate and theallowance is at the appropriate amount to absorb probable losses, so that the impact of future claims forreimbursement of excess interest will not have a material adverse effect on our financial position and results ofoperations. The allowance is recorded as a liability in Other liabilities.
For further information, see Note 26 to our consolidated financial statements included elsewhere in thisAnnual Report and “Item 3.D. Key Information—Risk Factors—Risks Related to Our Business—Because of ourloans to consumers and our shareholdings in companies engaged in consumer lending, changes in the business orregulatory environment for consumer finance companies in Japan may further adversely affect our financial
results.”80

Income Taxes
Valuation of deferred tax assets. A valuation allowance for deferred tax assets is recognized if, based on
the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will
not be realized. All available evidence, both positive and negative, is considered to determine whether, based on
the weight of that evidence, a valuation allowance is needed. Future realization of the tax benefit of existing
deductible temporary differences or carryforwards ultimately depends on the existence of sufficient taxable
income and the applicable income tax rates in future periods.
In determining a valuation allowance, we perform a review of future reversals of existing taxable temporary
differences, and future taxable income exclusive of reversing temporary differences. Future taxable income isdeveloped from forecasted operating results, based on recent historical trends and approved business plans, theeligible carryforward periods and other relevant factors. For certain subsidiaries where strong negative evidence
exists, such as the existence of significant amounts of operating loss carryforwards, cumulative losses and theexpiration of unused operating loss carryforwards in recent years, a valuation allowance is recognized against thedeferred tax assets to the extent that it is more likely than not that they will not be realized.
Forecasted operating results, which serve as the basis of our estimation of future taxable income, have asignificant effect on the amount of the valuation allowance. In developing forecasted operating results, we
assume that our operating performance is stable for certain entities where strong positive evidence exists,
including core earnings based on past performance over a certain period of time. The actual results may be
adversely affected by unexpected or sudden changes in interest rates as well as an increase in credit-related
expenses due to the deterioration of economic conditions in Japan and material declines in the Japanese stock
market to the extent that such impacts exceed our original forecast. In addition, near-term taxable income andassumptions on future income tax rates are also influential on the amount of the expiration of unused operating
loss carryforwards since the Japanese corporate tax law permits operating losses to be deducted for apredetermined period generally no longer than seven years for losses generated prior to April 1, 2008 and nine
years for losses generated in fiscal years ending after April 1, 2008. For further information on the amount ofoperating loss carryforwards and the expiration dates, see Note 7 to our consolidated financial statements
included elsewhere in this Annual Report.
Because the establishment of the valuation allowance is an inherently uncertain process involving estimatesas discussed above, the currently established valuation allowance may not be sufficient. If the estimatedvaluation allowance is not sufficient, we will incur additional deferred tax expenses, which could materiallyaffect our operating results and financial condition in future periods.
Recognition and Measurement of Uncertain Tax Positions. We provide reserves for unrecognized tax
benefits as required under the guidance on accounting for uncertainty in income taxes. In applying the guidance,
we consider the relative risks and merits of positions taken in tax returns filed and to be filed, considering
statutory, judicial, and regulatory guidance applicable to those positions. The guidance requires us to makeassumptions and judgments about potential outcomes that lie outside of management’s control. To the extent thatthe tax authorities disagree with our conclusions, and depending on the final resolution of those disagreements,
our effective tax rate may be materially affected in the period of final settlement with tax authorities.
Accounting for Goodwill and Intangible Assets
Accounting for Goodwill. U.S. GAAP requires us to test goodwill for impairment at least annually, or
more frequently if events or changes in circumstances indicate that goodwill may be impaired, using a two-stepprocess that begins with an estimation of the fair value of a reporting unit of our business, which is to becompared with the carrying amount of the unit, to identify potential impairment of goodwill. A reporting unit isan operating segment or component of an operating segment that constitutes a business for which discrete
financial information is available and is regularly reviewed by management. The fair value of a reporting unit is81

defined as the amount at which the unit as a whole could be bought or sold in a current transaction between
willing parties. For a reporting unit for which an observable quoted price is not available, the fair value isdetermined using an income approach. In the income approach, the present value of expected future cash flows is
calculated by taking the net present value based on each reporting unit’s internal forecasts. A control premium
factor is also considered in relation to market capitalization.
If the carrying amount of a reporting unit exceeds its estimated fair value, the second step of the goodwill
impairment test is performed to measure the amount of impairment loss recorded in our consolidated statements
of income. This test requires comparison of the implied fair value of the unit’s goodwill with the carrying amountof that goodwill. The estimate of the implied fair value of the reporting unit’s goodwill requires us to allocate thefair value of a reporting unit to all of the assets and liabilities of that reporting unit, including unrecognizedintangible assets, if any, since the implied fair value is determined as the excess of the fair value of a reporting
unit over the net amounts assigned to its assets and liabilities in the allocation. Accordingly, the second step of
the impairment test also requires an estimate of the fair value of individual assets and liabilities, including any
unrecognized intangible assets that belong to that unit. A change in the estimation could have an impact on
impairment recognition since it is driven by hypothetical assumptions, such as customer behavior and interest
rate forecasts. The estimation is based on information available to management at the time the estimation is
made.
Accounting for Intangible Assets. Intangible assets are amortized over their estimated useful lives unlessthey have indefinite useful lives. Amortization for intangible assets is computed in a manner that best reflects the
economic benefits of the intangible assets. Intangible assets having indefinite useful lives are subject to annual
impairment tests. An impairment exists if the carrying value of an indefinite lived asset exceeds its fair value. For
other intangible assets subject to amortization, an impairment is recognized if the carrying amount exceeds thefair value of the intangible asset. Each reporting period, we evaluate the remaining useful life of an intangible
asset to determine whether events and circumstances warrant a revision to the remaining useful life. When theuseful life of intangible assets that were previously not subject to amortization is determined to no longer be
indefinite, for example, when unanticipated competition enters the market, the intangible asset becomes subject
to amortization over the remaining period that it is expected to contribute to positive cash flows.
Accrued Severance Indemnities and Pension Liabilities
We have defined retirement benefit plans, including lump-sum severance indemnities and pension plans,
which cover substantially all of our employees. Severance indemnities and pension costs are calculated based
upon a number of actuarial assumptions, including discount rates, expected long-term rates of return on our plan
assets and rates of increase in future compensation levels. In accordance with U.S. GAAP, actual results thatdiffer from the assumptions are accumulated and amortized over future periods, and affect our recognized net
periodic pension costs and accrued severance indemnities and pension obligations in future periods. Differencesin actual experience or changes in assumptions may affect our financial condition and operating results in future
periods.
The discount rates for the domestic plans are set to reflect the interest rates of high-quality fixed-rate
instruments with maturities that correspond to the timing of future benefit payments.
In developing our assumptions for expected long-term rates of return, we refer to the historical average
returns earned by the plan assets and the rates of return expected to be available for reinvestment of existing plan
assets, which reflect recent changes in trends and economic conditions, including market prices. We also evaluate
input from our actuaries, as well as their reviews of asset class return expectations.
Valuation of Financial Instruments
We measure certain financial assets and liabilities at fair value. The majority of such assets and liabilities
are measured at fair value on a recurring basis, including trading securities, trading derivatives and investment82

securities. In addition, certain other assets and liabilities are measured at fair value on a non-recurring basis,including held for sale loans which are carried at the lower of cost or fair value, collateral dependent loans andnonmarketable equity securities subject to impairment.
We have elected the fair value option for certain foreign securities classified as available for sale, whose
unrealized gains and losses are reported in income.
The guidance on the measurement of fair value defines fair value as the price that would be received to sellan asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. We have an established and documented process for determining fair value in accordance with theguidance. To determine fair value, we use quoted prices which include those provided from pricing vendors,
where available. We generally obtain one price or quote per instrument and do not adjust it to determine fairvalue of the instrument. Certain asset-backed securities are valued based on non-binding quotes provided byindependent broker-dealers where no or few observable inputs are available to measure fair value. We do not
adjust such broker-dealer quotes to the extent that there is no evidence that would indicate that the quotes are notindicative of the fair values of the securities. We perform internal price verification procedures to ensure that thequotes provided from the independent broker-dealers are reasonable. Such verification procedures include
analytical review of periodic price changes, comparison analysis between periodic price changes and changes ofindices such as a credit default swap index, or inquiries regarding the underlying inputs and assumptions used by
the broker-dealers such as probability of default, prepayment rate and discount margin. These verification
procedures are periodically performed by independent risk management departments. For collateralized loan
obligations, or CLOs, backed by general corporate loans, the fair value is determined by weighting the internal
model valuation and the non-binding broker-dealer quotes. If quoted prices are not available to determine fairvalue of derivatives, the fair value is based upon valuation techniques that use, where possible, current marketbased or independently sourced parameters, such as interest rates, yield curves, foreign exchange rates,
volatilities and credit curves. The fair values of trading liabilities are determined by discounting future cash flows
at a rate which incorporates our own creditworthiness. In addition, valuation adjustments may be made to ensurethat the financial instruments are recorded at fair value. These adjustments include, but are not limited to,amounts that reflect counterparty credit quality, liquidity risk, and model risk. Our financial models are validated
and periodically reviewed by risk management departments independent of divisions that created the models.
For a further discussion of the valuation techniques applied to the material assets or liabilities, see Note 31
to our consolidated financial statements included elsewhere in this Annual Report.
Accounting Changes and Recently Issued Accounting Pronouncements
See “Accounting Changes” and “Recently Issued Accounting Pronouncements” in Note 1 to ourconsolidated financial statements included elsewhere in this Annual Report.

83

A.

Operating Results

Results of Operations
The following table sets forth a summary of our results of operations for the fiscal years ended March 31,
2012, 2013 and 2014:
Fiscal years ended March 31,
2012
2013
2014
(in billions)Interest income(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,595.9
640.1¥2,427.5
556.4¥2,522.3
561.0

Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,955.8

1,871.1

1,961.3

Provision (credit) for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest income(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

223.8
1,440.6
2,322.7

144.5
2,068.0
2,378.7(106.4)
1,821.0
2,468.3

Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

849.9
429.2

1,415.9296.0

1,420.4
337.9

Net income before attribution of noncontrolling interests . . . . . . . . . . . . . . . . . . ¥ 420.7 ¥1,119.9 ¥1,082.5
Net income attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . .
4.5
50.8
67.1
Net income attributable to Mitsubishi UFJ Financial Group . . . . . . . . . . . . . . . .

¥ 416.2¥1,069.1¥1,015.4

Notes:(1) Interest income for the fiscal year ended March 31, 2012 includes a gain of ¥139.3 billion on the conversion rate adjustment of Morgan
Stanley’s convertible preferred stock. For more information, see Note 2 to our consolidated financial statements included elsewhere inthis Annual Report.
(2) Non-interest income for the fiscal year ended March 31, 2012 reflects an impairment loss of ¥579.5 billion on our investment in Morgan
Stanley’s common stock resulting from a decline in the quoted price of Morgan Stanley’s common stock that we determined to be otherthan temporary in light of the increasingly stringent regulatory environment and the existing adverse economic events in Europe. For
more information, see Note 2 to our consolidated financial statements included elsewhere in this Annual Report.

We reported net income attributable to Mitsubishi UFJ Financial Group of ¥1,015.4 billion for the fiscal
year ended March 31, 2014, a decrease of ¥53.7 billion from ¥1,069.1 billion for the fiscal year ended March 31,
2013. Domestic net income attributable to Mitsubishi UFJ Financial Group was ¥859.8 billion, and foreign net
income attributable to Mitsubishi UFJ Financial Group was ¥155.6 billion, for the fiscal year ended March 31,
2014. Asia and Oceania excluding Japan, Europe, and other areas including Canada, Latin America, theCaribbean and the Middle East contributed ¥149.4 billion, ¥6.5 billion and ¥131.2 billion, respectively, to theforeign net income which were partly offset by net loss of ¥131.5 billion in the United States. Our diluted
earnings per common share (earnings applicable to common shareholders of Mitsubishi UFJ Financial Group) for
the fiscal year ended March 31, 2014 was ¥69.98, a decrease of ¥4.18 from ¥74.16 for the fiscal year ended
March 31, 2013. Income before income tax expense for the fiscal year ended March 31, 2014 was ¥1,420.4
billion, an increase of ¥4.5 billion from ¥1,415.9 billion for the fiscal year ended March 31, 2013.

84

Net Interest Income
The following table is a summary of the interest rate spread for the fiscal years ended March 31, 2012, 2013
and 2014:
Fiscal years ended March 31,
2012
2013
2014
Average
Average
Average
Average
Average
Averagebalanceratebalanceratebalancerate(in billions, except percentages)

Interest-earning assets:
Domestic . . . . . . . . . . . . . . . . . . . . . . .
Foreign(1) . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . .

¥130,856.7
53,322.4¥184,179.1

1.07% ¥134,759.6
2.24
59,064.7
1.41% ¥193,824.3

0.95% ¥135,087.3
1.95
77,089.0
1.25% ¥212,176.3

0.87%
1.75
1.19%

Financed by:Interest-bearing liabilities:
Domestic . . . . . . . . . . . . . . . . . . . . . . . ¥130,916.6
Foreign . . . . . . . . . . . . . . . . . . . . . . . .
34,504.0
Total . . . . . . . . . . . . . . . . . . . . . . 165,420.6
Non-interest-bearing liabilities . . . . . . . . . .
18,758.5
Total . . . . . . . . . . . . . . . . . . . . . . . . . . ¥184,179.1

0.26% ¥135,974.9
0.88
37,424.6
0.39
173,399.5—
20,424.8
0.35% ¥193,824.3

0.21% ¥141,878.0
0.73
47,535.3
0.32
189,413.3—
22,763.0
0.29% ¥212,176.3

0.18%
0.64
0.30
—
0.26%

1.02%

0.93%

0.89%

1.06%

0.97%

0.92%

Interest rate spread . . . . . . . . . . . . . . . . . . .
Net interest income as a percentage of totalinterest-earning assets . . . . . . . . . . . . . . .

Note:(1) Interest income on foreign activities for the fiscal year ended March 31, 2012 includes a gain of ¥139.3 billion on the conversion rateadjustment of Morgan Stanley’s convertible preferred stock. For more information, see Note 2 to our consolidated financial statements
included elsewhere in this Annual Report.

We use interest rate and other derivative contracts to manage the risks affecting the values of our financial
assets and liabilities. Although these contracts are generally entered into for risk management purposes, amajority of them do not meet the specific conditions to qualify for hedge accounting under U.S. GAAP and thus
are accounted for as trading assets or liabilities. Any gains or losses resulting from such derivative instruments
are recorded as part of Trading account profits—net. Therefore, our net interest income for each of the fiscal
years ended March 31, 2012, 2013 and 2014 was not materially affected by gains or losses resulting from suchderivative instruments. For a detailed discussion of our risk management activities, see “—A. Operating
Results—Results of Operations—Non-Interest Income” and “Item 11. Quantitative and Qualitative Disclosuresabout Credit, Market and Other Risk.”
Fiscal Year Ended March 31, 2014 Compared to Fiscal Year Ended March 31, 2013
Net interest income for the fiscal year ended March 31, 2014 was ¥1,961.3 billion, an increase of¥90.2 billion from ¥1,871.1 billion for the fiscal year ended March 31, 2013.
Interest income increased ¥94.8 billion to ¥2,522.3 billion for the fiscal year ended March 31, 2014 from
¥2,427.5 billion for the previous fiscal year. Of the ¥94.8 billion of increase in interest income, ¥85.9 billion was
attributable to interest income from loans, including fees, especially from foreign branches and subsidiaries
reflecting a higher volume of loans, while interest income from the domestic loan business decreased due todownward pressure on interest rates. Interest income from deposits in other banks increased ¥19.8 billion mainly
due to a higher balance of deposits in central banks including the Bank of Japan and the FRB, and interest
income from trading account assets increased ¥12.6 billion due to a higher volume of foreign currency
denominated bonds which were held by our banking subsidiaries and which were accounted for as trading
securities. These increases were partially offset by a decrease of ¥28.5 billion in interest income from investment
securities due to lower interest rates and a decrease in the balance of debt securities held as investment securities.
85Interest expense also increased ¥4.6 billion to ¥561.0 billion for the fiscal year ended March 31, 2014 from¥556.4 billion for the previous fiscal year. For the fiscal year ended March 31, 2014, compared to the previous
fiscal year, interest expense on activities in Japan decreased ¥29.0 billion and interest expense on foreign
activities increased ¥33.5 billion. The decrease in interest expense on domestic activities was mainly due todecreases in expenses on interest-bearing deposits and long-term debt, reflecting downward pressure on interest
rates in Japan despite an increase in the balance of these liabilities. The increase in interest expense on foreign
activities was mainly due to a higher volume of deposits in our banking subsidiaries, an increase in long-term
debt, reflecting an increase in the balance of borrowings with longer maturities, and higher long-term interest
rates, which were partially offset by a decrease in interest expense on payables under repurchase agreements andsecurities lending transactions mainly due to lower short-term interest rates, such as Euro Overnight Index
Average, or EONIA, rates used for repurchase transactions.
The average interest rate spread (the average interest rate for interest-earning assets minus the averageinterest rate for interest-bearing liabilities) decreased 0.04 percentage points to 0.89% for the fiscal year ended
March 31, 2014 from 0.93% for the previous fiscal year. For the fiscal year ended March 31, 2014, compared tothe previous fiscal year, the average interest rate on interest-earning assets decreased 0.06 percentage points to
1.19% from 1.25%, while the average interest rate on interest-bearing liabilities decreased 0.02 percentage points
to 0.30% from 0.32%, which resulted in the overall decrease in the average interest rate spread. The averageinterest rate spread on domestic activities decreased 0.05 percentage points to 0.69% from 0.74%, and theaverage interest rate spread on foreign activities decreased 0.11 percentage points to 1.11% from 1.22%. The
lower interest rates and intensified competitive environment caused the interest rates on both domestic andforeign activities in both assets and liabilities to decline. As the interest rates on domestic interest-bearing
liabilities remained at near-zero level, the decreases in the interest rates on domestic interest-earning assets
exceeded the decreases in the interest rates on domestic interest-bearing liabilities.
In Japan, the Bank of Japan sought to keep short-term interest rates low by maintaining its “quantitative andqualitative monetary easing” policy throughout the reporting period. As a result, the average interest rate on
domestic interest-earning assets continued to decline, while the average interest rate on domestic interest-bearing
liabilities reached and remained at historically low levels. If the Bank of Japan continues to maintain its current
policy on its short-term policy interest rate as well as other monetary easing policies, our interest rate spread on
domestic activities will likely continue to be under severe pressure. Moreover, monetary easing policies adopted
in foreign markets in the Americas, Europe, Asia and other regions have negatively affected our interest rate
spread on foreign activities in recent periods. In addition, our interest rate spread may be affected by changes inlong-term interest rates, which, for example, have been fluctuating to an increasing degree in Japan in recent
periods due to wider fluctuations in long-term Japanese government bond prices. For further information on the
Bank of Japan’s monetary policy and recent interest rate fluctuations in Japan, see “Business Environment —Economic Environment in Japan.”
Average interest-earning assets for the fiscal year ended March 31, 2014 were ¥212,176.3 billion, an
increase of ¥18,352.0 billion from ¥193,824.3 billion for the fiscal year ended March 31, 2013. Average
domestic interest-earning assets for the fiscal year ended March 31, 2014 were ¥135,087.3 billion, an increase of¥327.7 billion from ¥134,759.6 billion for the previous fiscal year, mainly due to increases in interest-earning
deposits in other banks, particularly the Bank of Japan, and loans mainly to the national government of Japan.
Average foreign interest-earning assets for the fiscal year ended March 31, 2014 were ¥77,089.0 billion, an
increase of ¥18,024.3 billion from ¥59,064.7 billion for the previous fiscal year, mainly due to increases in loans
and trading account assets. The increase in foreign loans was mainly due to an increase in loans at the overseas
branches of BTMU, especially the New York branch, and MUB through the acquisition of a local bank. The
increase in foreign trading account assets was primarily due to an increase in the value of foreign debt securities
translated into Japanese yen resulting from the depreciation of the Japanese yen against other major currencies asof March 31, 2014 compared to March 31, 2013.

86

Average interest-bearing liabilities for the fiscal year ended March 31, 2014 were ¥189,413.3 billion, an
increase of ¥16,013.8 billion from ¥173,399.5 billion for the fiscal year ended March 31, 2013. Average
domestic interest-bearing liabilities for the fiscal year ended March 31, 2014 were ¥141,878.0 billion, an increaseof ¥5,903.1 billion from ¥135,974.9 billion for the previous fiscal year, mainly due to increases in deposits, andcall money, funds purchased, and payables under repurchase agreements and securities lending transactions. The
increase in deposits was mainly due to increases in the ordinary deposits in our commercial and trust banking
subsidiaries, while the increase in call money, funds purchased and payables under repurchase agreements andsecurities lending transactions was mainly due to increases in payables under repurchase agreements in ourcommercial and trust banking subsidiaries, as well as increases in payables under securities lending transactions
in our trust banking subsidiaries. Average foreign interest-bearing liabilities for the fiscal year ended March 31,
2014 were ¥47,535.3 billion, an increase of ¥10,110.7 billion from ¥37,424.6 billion for the previous fiscal year,
mainly due to increases in deposits in foreign branches of BTMU and MUB, as well as increases in call money,
funds purchased, and payables under repurchase agreements and securities lending transactions reflecting higher
payables under securities lending transactions in foreign branches and subsidiaries of our securities subsidiaries.
Fiscal Year Ended March 31, 2013 Compared to Fiscal Year Ended March 31, 2012
Net interest income for the fiscal year ended March 31, 2013 was ¥1,871.1 billion, a decrease of¥84.7 billion from ¥1,955.8 billion for the fiscal year ended March 31, 2012. The higher interest income for the
fiscal year ended March 31, 2012 reflected the one-time gain of ¥139.3 billion on the conversion rate adjustmentof convertible preferred stock of Morgan Stanley. Exclusive of the one-time gain, net interest income for the
fiscal year ended March 31, 2013 was ¥1,871.1 billion, an increase of ¥54.6 billion compared to the previous
fiscal year, primarily due to a decrease in interest expense on deposits, short-term borrowings, and long-term
debt reflecting the lower interest rate environment in the fiscal year ended March 31, 2013, and redemption ofsome of our subordinated bonds.
Interest income decreased ¥168.4 billion to ¥2,427.5 billion for the fiscal year ended March 31, 2013 from
¥2,595.9 billion for the previous fiscal year. For the fiscal year ended March 31, 2013, compared to the previous
fiscal year, interest income on activities in Japan decreased ¥124.7 billion and interest income on foreign
activities decreased ¥43.8 billion. The decrease in interest income on activities in Japan was primarily due tolower interest rates. The higher interest income on foreign activities for the fiscal year ended March 31, 2012
compared to the fiscal year ended March 31, 2013 reflected the one-time gain of ¥139.3 billion on the conversion
rate adjustment of convertible preferred stock of Morgan Stanley.
Interest expense also decreased ¥83.7 billion to ¥556.4 billion for the fiscal year ended March 31, 2013 from
¥640.1 billion for the previous fiscal year. For the fiscal year ended March 31, 2013, compared to the previous
fiscal year, interest expense on activities in Japan decreased ¥50.8 billion and interest expense on foreign
activities decreased ¥32.9 billion. The lower interest expense on activities in Japan was mainly due to lower
interest rates and redemption of some of our subordinated bonds. The lower interest expense on foreign activities
was mainly due to lower interest rates.
The average interest rate spread (the average interest rate for interest-earning assets minus the averageinterest rate for interest-bearing liabilities) decreased 0.09 percentage points to 0.93% for the fiscal year ended
March 31, 2013 from 1.02% for the previous fiscal year. For the fiscal year ended March 31, 2013 compared tothe previous fiscal year, the average interest rate on interest-earning assets decreased 0.16 percentage points to
1.25% from 1.41%, while the average interest rate on interest-bearing liabilities decreased 0.07 percentage points
to 0.32% from 0.39%, which resulted in the overall decrease in the average interest rate spread. The averageinterest rate spread on domestic activities decreased 0.07 percentage points to 0.74% for the fiscal year ended
March 31, 2013 from 0.81% for the previous fiscal year as interest rates on interest-earning assets decreased at
steeper rates than interest-bearing liabilities in the current near-zero interest rate environment. The averageinterest rate spread on foreign activities decreased 0.14 percentage points to 1.22% for the fiscal year ended
March 31, 2013 from 1.36% for the previous fiscal year. Excluding the one-time gain on the conversion rate87

adjustment of Morgan Stanley’s convertible preferred stock, our average foreign interest rate spread would have
improved primarily because we were able to effectively manage the yields on our interest-earning assets whileinterest rates on our interest-bearing liabilities decreased as market interest rates declined.
In Japan, the Bank of Japan sought to keep short-term interest rates low by maintaining its “quantitative andqualitative monetary easing” policy throughout the reporting period. As a result, the average interest rate on
domestic interest-earning assets continued to decline, while the average interest rate on domestic interest-bearing
liabilities reached and remained at historically low levels. If the Bank of Japan continues to maintain its current
policy on its short-term policy interest rate as well as other monetary easing policies, our interest rate spread on
domestic activities will likely continue to be under severe pressure. Moreover, monetary easing policies adopted
in foreign markets in the Americas, Europe, Asia and other regions have negatively affected our interest rate
spread on foreign activities in recent periods. In addition, our interest rate spread may be affected by changes inlong-term interest rates, which, for example, have been fluctuating to an increasing degree in Japan in recent
periods due to wider fluctuations in long-term Japanese government bond prices. For further information on the
Bank of Japan’s monetary policy and recent interest rate fluctuations in Japan, see “Business Environment—
Economic Environment in Japan.”
Average interest-earning assets for the fiscal year ended March 31, 2013 were ¥193,824.3 billion, an
increase of ¥9,645.2 billion from ¥184,179.1 billion for the fiscal year ended March 31, 2012. Average domestic
interest-earning assets for the fiscal year ended March 31, 2013 were ¥134,759.6 billion, an increase of ¥3,902.9
billion from ¥130,856.7 billion for the previous fiscal year, mainly due to increases in loans, trading accountassets and investment securities. The increase in domestic loans was mainly due to an increase in loans to thenational government and large corporations in the manufacturing industry. Average foreign interest-earning
assets for the fiscal year ended March 31, 2013 were ¥59,064.7 billion, an increase of ¥5,742.3 billion from¥53,322.4 billion for the previous fiscal year, mainly due to increases in loans and trading account assets. The
increase in foreign loans was mainly due to an increase in loans at overseas branches of BTMU due to stronger
demand, partially reflecting the improving general market conditions globally, and BTMU’s improved overseas
market presence. The increase in foreign trading account assets was primarily due to an increase in the value of
foreign bonds translated into Japanese yen resulting from the depreciation of the Japanese yen against othercurrencies towards the end of the fiscal year ended March 31, 2013, as well as an increase in trading derivative
assets reflecting an increase in interest rate derivatives assets in foreign branches of our banking subsidiaries andan increase in interest rate swap trading in our securities subsidiaries outside of Japan. Despite the increase in the
average balance of interest-earning assets, the smaller average interest rate spread resulted in the decrease in ourinterest income for the fiscal year ended March 31, 2013 compared to the previous fiscal year.
Average interest-bearing liabilities for the fiscal year ended March 31, 2013 were ¥173,399.5 billion, an
increase of ¥7,978.9 billion from ¥165,420.6 billion for the fiscal year ended March 31, 2012. Average domestic
interest-bearing liabilities for the fiscal year ended March 31, 2013 were ¥135,974.9 billion, an increase of¥5,058.3 billion from ¥130,916.6 billion for the previous fiscal year, mainly due to increases in call money, funds
purchased, and payables under repurchase agreements and securities lending transactions as well as deposits. The
increase in domestic call money, funds purchased, and payables under repurchase agreements and securities
lending transactions was mainly due to an increase in the volume of payables under repurchase agreement in ourbanking and securities subsidiaries. Average foreign interest-bearing liabilities for the fiscal year ended
March 31, 2013 were ¥37,424.6 billion, an increase of ¥2,920.6 billion from ¥34,504.0 billion for the previous
fiscal year, mainly due to an increase in the value of foreign currency-denominated deposits, reflecting thedepreciation of the Japanese yen against other currencies towards the end of the fiscal year ended March 31,
2013. Despite the increase in the average balance of interest-bearing liabilities, the smaller average interest rate
spread resulted in the decrease in our interest expense for the fiscal year ended March 31, 2013 compared to theprevious fiscal year.

88

Provision (credit) for credit losses
Provision (credit) for credit losses is charged to operations to maintain the allowance for credit losses at alevel deemed appropriate by management. For more information on our provision for credit losses and a
description of the approach and methodology used to establish the allowance for credit losses, see “—B.
Liquidity and Capital Resources—Financial Condition—Loan Portfolio—Allowance policy.”Fiscal Year Ended March 31, 2014 Compared to Fiscal Year Ended March 31, 2013
We recorded ¥106.4 billion of credit for credit losses for the fiscal year ended March 31, 2014 compared toprovision for credit losses of ¥144.5 billion for the fiscal year ended March 31, 2013. By segment, ¥70.1 billion,¥36.0 billion and ¥5.9 billion of credit for credit losses were recorded in the Commercial, Residential and MUAH
segments, respectively, and ¥5.6 billion of provision for credit losses was recorded in the Card segment for the
fiscal year ended March 31, 2014, compared to ¥127.9 billion, ¥1.3 billion, ¥12.4 billion and ¥2.9 billion ofprovision for credit losses in the Commercial, Residential, Card and MUAH segments, respectively, for theprevious fiscal year.
The improvement in the Commercial segment was mainly due to the upgrades of the internal borrower
ratings of a substantial portion of large borrowers in the segment whose financial performance and prospects
improved in light of favorable economic conditions in Japan, including a depreciating Japanese yen and risingstock prices. The improvement in the Residential segment was mainly due to an overall improvement in thecredit quality of the loan portfolio of the segment, including a decrease in the number of civil rehabilitation
filings made by individual borrowers, as economic conditions were generally favorable in Japan. The
improvement in the Card segment primarily reflected an overall improvement in the credit quality of the loan
portfolio of the segment partially as a result of our implementation of stricter borrower screening underregulatory reforms in the consumer finance industry.
The credit for credit losses in our domestic loan portfolio was ¥81.4 billion for the fiscal year ended
March 31, 2014, compared to provision for credit losses of ¥115.7 billion for the fiscal year ended March 31,
2013. The credit for credit losses in our foreign portfolio for the fiscal year ended March 31, 2014 was¥25.0 billion, compared to provision for credit losses of ¥28.8 billion for the previous fiscal year. MUAH had
reversal of allowance for credit losses of ¥5.9 billion for the fiscal year ended March 31, 2014 primarily due toimproved credit quality of its loan portfolio.
Fiscal Year Ended March 31, 2013 Compared to Fiscal Year Ended March 31, 2012
Provision for credit losses for the fiscal year ended March 31, 2013 was ¥144.5 billion, a decrease of¥79.3 billion from ¥223.8 billion for the fiscal year ended March 31, 2012. The provision for credit losses
decreased ¥53.5 billion, ¥28.2 billion and ¥15.5 billion in our Commercial segment, Residential segment andCard segment, respectively. On the other hand, the provision for credit losses increased ¥17.9 billion in our
MUAH segment.
The decrease in the provision in the Commercial segment was mainly due to a reduction of provision forloans to smaller enterprises for the fiscal year ended March 31, 2013 compared to the fiscal year ended
March 31, 2012, when the operating environment and outlook for such enterprises were more negative. The
decrease in the provision in the Residential segment was mainly due to the decrease of provision rate as ourcollection and default rates improved in this segment.
The provision for credit losses in our domestic loan portfolio was ¥115.7 billion, a decrease of¥104.0 billion from ¥219.7 billion for the fiscal year ended March 31, 2012. The provision for credit losses in ourforeign loan portfolio for the fiscal year ended March 31, 2013 was ¥28.8 billion, an increase of ¥24.7 billion
compared to the provision for credit losses of ¥4.1 billion for the previous fiscal year. Although the significant
improvement in the credit quality of MUAH’s loan portfolio resulted in a reversal of provision in the MUAH
segment in the fiscal year ended March 31, 2012, the pace of improvement slowed in the fiscal year ended
March 31, 2013, resulting in a provision for credit losses of ¥2.9 billion.
89Non-Interest Income
The following table is a summary of our non-interest income for the fiscal years ended March 31, 2012,2013 and 2014:
Fiscal years ended March 31,
2012
2013
2014
(in billions)

Fees and commissions income:
Trust fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 95.0 ¥ 92.5 ¥ 105.7
Fees on funds transfer and service charges for collections . . . . . . . . . . . . . .
139.8
137.3
140.0
Fees and commissions on international business . . . . . . . . . . . . . . . . . . . . .
57.7
58.9
68.3
Fees and commissions on credit card business . . . . . . . . . . . . . . . . . . . . . . .
149.9
149.7
157.2
Service charges on deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18.2
16.7
20.5
Fees and commissions on securities business . . . . . . . . . . . . . . . . . . . . . . . .
128.4
156.0
221.8
Fees on real estate business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23.6
28.0
34.7
Insurance commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33.7
33.6
39.7
Fees and commissions on stock transfer agency services . . . . . . . . . . . . . . .
49.3
49.1
49.4
Guarantee fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58.4
55.4
52.6
Fees on investment funds business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
126.6
130.0
155.6
Other fees and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
219.4
253.7
248.6
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,100.0
1,160.9
1,294.1
Foreign exchange gains (losses)—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34.3(39.0)(61.8)
Trading account profits (losses)—net:
Net profits (losses) on interest rate and other derivative contracts . . . . . . . .
Net profits on trading account securities, excluding derivatives . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

77.7
589.6
667.3

(82.7)
653.0
570.3(84.4)
50.5(33.9)

Investment securities gains—net:
Net gains on sales of securities available for sale:
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
142.9
185.9
128.8
Marketable equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34.1
64.8
77.7
Impairment losses on securities available for sale:
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(13.8)(8.3)(2.6)
Marketable equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(176.1)(113.5)(0.3)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32.3
27.1
99.9
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19.4
156.0
303.5
Equity in earnings (losses) of equity method investees—net . . . . . . . . . . . . . . . .
(499.4)
60.2
110.5
Gains on sales of loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15.6
14.8
17.7
Government grant for transfer of substitutional portion of Employees’ Pension
Fund Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
115.2
Other non-interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
103.4
144.8
75.7
Total non-interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,440.6 ¥2,068.0 ¥1,821.0

Fees and commissions income
Fees and commissions income consist of income from fees and commissions listed in the above table. Trust
fees consist primarily of fees earned on fiduciary asset management and administration services for corporate
pension plans, investment funds and other clients. Fees on funds transfer and service charges for collection arefees earned by providing settlement services such as domestic fund remittances and domestic collection services.
Fees and commissions on international business primarily consist of fees from international fund transfer andcollection services, and trade-related financing services. Fees and commissions on credit card business arecomposed of interchange income, annual fees, royalty and other service charges from franchisees. Service
charges on deposits are fees charged for withdrawal and other services relating to deposits such as checking
account deposits. Fees and commissions on securities business include those on underwriting, brokerage and90

advisory services and arrangement fees on securitizations. Fees on real estate business primarily consist of feesfrom real estate agent services. Insurance commissions are commissions earned by acting as agent for insurancecompanies to sell insurance products. Fees and commissions on stock transfer agency services consist of fees
earned primarily on stock title transfers and agency services for the calculation and payment of dividends.
Guarantee fees are fees earned by providing guarantees on residential mortgage loans. Fees on investment funds
business primarily consist of management fees for investment funds. Other fees and commissions include various
arrangement fees and agent fees excluding the fees and commissions mentioned above.
Net foreign exchange gains (losses)
Net foreign exchange gains (losses) consist of foreign exchange gains (losses) on derivative contracts,
foreign exchange gains (losses) on other than derivative contracts and foreign exchange gains (losses) related to
the fair value option.
Foreign exchange gains (losses) related to derivative contracts are net gains (losses) primarily on currency
derivative instruments entered into for trading purposes. For the details of derivative contracts, see Note 23 to ourconsolidated financial statements included elsewhere in this Annual Report. Foreign exchange gains (losses) onother than derivative contracts include foreign exchange trading gains (losses) as well as transaction gains(losses) on the translation into Japanese yen of monetary assets and liabilities denominated in foreign currencies.
The transaction gains (losses) on the translation into Japanese yen fluctuate from period to period depending
upon the spot rates at the end of each fiscal year. In principle, all transaction gains (losses) on translation ofmonetary assets and liabilities denominated in foreign currencies are included in current earnings. Foreignexchange gains (losses) related to the fair value option include transaction gains (losses) on translation into
Japanese yen of securities under the fair value option. For the details of the fair value option, see Note 31 to ourconsolidated financial statements included elsewhere in this Annual Report.
Net trading account profits (losses)
Trading account assets or liabilities are carried at fair value and changes in the value of trading accountassets or liabilities are recorded in net trading account profits (losses). Activities reported in our net trading
account profits (losses) can generally be classified into two categories:‰

trading purpose activities, which are conducted mainly for the purpose of generating profits either
through transaction fees or arbitrage gains and involve frequent and short-term selling and buying of
securities, commodities or others; and‰trading account assets relating to application of certain accounting rules, which are generally not related
to trading purpose activities, but simply classified as trading accounts due to application of certain
accounting rules.

Of the two categories, trading purpose activities represent a smaller portion of our trading account profits.
We generally do not separate for financial reporting purposes customer originated trading activities fromthose with non-customer related, proprietary trading activities. When an order for a financial product is placed bya customer, a dealer offers a price which includes certain transaction fees, often referred to as the “margin” to themarket price. The margin is determined by considering factors such as administrative costs, transaction amountand liquidity of the applicable currency. Once the customer agrees to the offered price, the deal is completed andthe position is recorded in our ledger as a single entry without any separation of components. To manage the risk
relating to the customer side position, we often enter into an offsetting transaction with the market. Unrealized
gains and losses as of the period-end for both the customer side position and the market side position arerecorded within the same trading account profits and losses.
Net trading account profits (losses) consist of net profits (losses) on interest rate and other derivative
contracts and net profits (losses) on trading account securities, excluding derivatives.
91Net profits (losses) on interest rate and other derivative contracts are reported for net profits (losses) on
derivative instruments which primarily relate to trading purpose activities and include:‰

Interest rate contracts: Interest rate contracts are mainly utilized to manage interest rate risks which
could arise from mismatches between assets and liabilities resulting from customer originated trading
activities;‰

Equity contracts: Equity contracts are mainly utilized to manage the risk that would arise from pricefluctuations of stocks held in connection with customer transactions;‰Credit derivatives:
management; and‰Commodity contracts: Commodity contracts are mainly utilized to meet customers’ demand forhedging the risks relating to their transactions, and to diversify our portfolio.

Credit derivatives are mainly utilized as a part of our credit portfolio risk

Derivative instruments for trading purposes also include those used as hedges of net exposures rather thanfor specifically identified assets or liabilities, which do not meet the specific criteria for hedge accounting.
Net profits (losses) on trading account securities, excluding derivatives, consist of net profits (losses) on
trading account securities and net profits (losses) on trading account securities under the fair value option. Net
profits (losses) on trading account securities primarily consist of gains and losses on trading and valuation of
trading securities which relate to trading purpose activities. Net profits (losses) on investment securities held bycertain consolidated variable interest entities are included in accordance with the applicable accounting rules. Net
profits (losses) on securities under the fair value option are classified into trading accounts profits (losses) inaccordance with certain accounting rules. For the details of the fair value option, see Note 31 to our consolidated
financial statements included elsewhere in this Annual Report.
Net investment securities gains (losses)
Net investment securities gains (losses) primarily include net gains (losses) on sales of marketablesecurities, particularly debt securities and marketable equity securities that are classified as securities available
for sale. In addition, impairment losses are recognized as an offset of net investment securities gains (losses)
when management concludes that declines in fair value of investment securities are other than temporary.
Fiscal Year Ended March 31, 2014 Compared to Fiscal Year Ended March 31, 2013
Non-interest income for the fiscal year ended March 31, 2014 was ¥1,821.0 billion, a decrease of¥247.0 billion from ¥2,068.0 billion for the fiscal year ended March 31, 2013. This decrease was mainly attributable
to a ¥602.5 billion decrease in net profits on trading account securities, excluding derivatives, to ¥50.5 billion for
the fiscal year ended March 31, 2014 from ¥653.0 billion for the fiscal year ended March 31, 2013. This decrease
was partially offset by a ¥133.2 billion increase in fees and commissions income, primarily due to higher fees andcommissions on securities business and investment funds business, and by a ¥147.5 billion increase in investment
securities gains mainly attributable to a ¥113.2 billion improvement in impairment losses on marketable equity
securities available for sale, and by a one-time adjustment of ¥115.2 billion in connection with the transfer of thesubstitutional portion of MUTB’s benefit obligations relating to employee benefit funds to the Japanese
government.
Fees and commissions income
Fees and commissions income for the fiscal year ended March 31, 2014 was ¥1,294.1 billion, an increase of¥133.2 billion from ¥1,160.9 billion for the fiscal year ended March 31, 2013. This increase was partly due to anincrease of ¥65.8 billion in fees and commissions from our securities business, particularly commissions from92

brokerage and underwriting activities. Fees on investment funds business increased ¥25.6 billion due to a larger
amount of mutual funds in our trust banking and commercial banking subsidiaries, while trust fees increased¥13.2 billion reflecting increases in pension assets and mutual fund assets partly due to higher prices of financial
products such as equity securities. Fees on international business also increased ¥9.4 billion mainly in ourcommercial banking subsidiaries due to increases in fees on foreign exchange transactions in foreign branches.
Net foreign exchange losses
The following table sets forth the details of our foreign exchange gains and losses for the fiscal years ended
March 31, 2013 and 2014:
Fiscal years ended March 31,
2013
2014
(in billions)

Foreign exchange losses—net:
Net foreign exchange losses on derivative contracts . . . . . . . . . . . . . . . . . . . . . . .
Net foreign exchange losses on other than derivative contracts . . . . . . . . . . . . . . .
Net foreign exchange gains related to the fair value option . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(94.2)(2,130.7)
2,185.9¥ (39.0)¥(52.7)(2,026.4)
2,017.3¥ (61.8)

Net foreign exchange losses for the fiscal year ended March 31, 2014 were ¥61.8 billion, compared to¥39.0 billion of net foreign exchange losses for the fiscal year ended March 31, 2013. This was mainly due to adecrease of ¥168.6 billion in net foreign exchange gains related to the fair value option. This decrease wasprimarily because the Japanese yen depreciated to smaller degrees against other major currencies during the
fiscal year ended March 31, 2014, compared to the previous fiscal year. This was partially offset by an
improvement of ¥104.3 billion in foreign exchange losses on other than derivative contracts mainly due to lower
foreign exchange translation losses on monetary liabilities denominated in foreign currencies in our commercial
banking subsidiaries, reflecting the gradual depreciation of the Japanese yen against other major currencies, andby an improvement of ¥41.5 billion in foreign exchange losses on derivative contracts mainly in our trust
banking and securities subsidiaries.
Net trading account profits (losses)
The following table sets forth details of our trading account profits and losses for the fiscal years ended
March 31, 2013 and 2014:
Fiscal years ended March 31,
2013
2014
(in billions)

Trading account profits (losses)—net:
Net losses on interest rate and other derivative contracts
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 121.4(137.6)
3.8(10.9)(59.4)¥ 29.9(104.7)
2.9
(6.4)
(6.1)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (82.7)¥ (84.4)

Net profits on trading account securities, excluding derivatives
Trading account securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account securities under the fair value option . . . . . . . . . . . . . . . . . .

¥ 341.2
311.8¥ 276.5(226.0)Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 653.0¥ 50.5

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 570.3¥ (33.9)93

We recorded net trading account losses of ¥33.9 billion for the fiscal year ended March 31, 2014 comparedto net trading account profits of ¥570.3 billion for the fiscal year ended March 31, 2013. This was mainly due toa decrease of ¥602.5 billion in net profits on trading account securities, excluding derivatives, which primarily
consisted of a decrease of ¥393.3 billion in our commercial banking subsidiaries and a decrease of ¥239.9 billion
in our trust banking subsidiaries. Due to the increases in interest rates in the United States reflecting the taperingof the quantitative monetary easing program by the FRB, the fair values of foreign bonds, including U.S.
Treasury bonds, decreased significantly. In addition, we also incurred losses on transactions in mutual funds
investing in debt securities executed in the trading account.
Net investment securities gains
Net investment securities gains for the fiscal year ended March 31, 2014 were ¥303.5 billion, an increase of¥147.5 billion from ¥156.0 billion for the fiscal year ended March 31, 2013. This increase was mainly due to an
improvement of ¥113.2 billion in impairment losses on marketable equity securities, an increase of ¥12.9 billion
in gains on sales of marketable equity securities, and an improvement of ¥5.7 billion in impairment losses on
debt securities, due to higher stock prices reflecting an overall improvement in financial performance of thecorporate sector in Japan, which benefited from the depreciation of the Japanese yen against other major
currencies and increased private consumption. The increase in net investment securities gains was also
attributable to higher gains on sales of unlisted preferred securities of other companies held by our banking
subsidiaries. However, this was partially offset by a ¥57.1 billion decrease in net gains on sales of debt securities
due to a lower volume of debt securities, including Japanese government bonds, sold.
Net equity in earnings of equity method investees
Net equity in earnings of equity method investees for the fiscal year ended March 31, 2014 was¥110.5 billion, compared to net equity in earnings of equity method investees of ¥60.2 billion for the previous
fiscal year, mainly due to higher earnings from the equity method investees such as Morgan Stanley.
Government grant for transfer of substitutional portion of Employees’ Pension Fund Plans
We recorded a one-time adjustment of ¥115.2 billion for the fiscal year ended March 31, 2014, inconnection with the transfer to the Japanese government of the substitutional portion of MUTB’s benefit
obligations relating to employee benefit funds.
In December 2011, in accordance with the Defined Benefit Corporate Pension Plan Act, which permits each
employer and employees’ pension fund plan to separate the substitutional portion of the employees’ pension fundfrom the rest of the fund and transfer the related obligation and assets to the Japanese government, MUTB obtained
an approval from the Minister of Health, Labor and Welfare for an exemption from the obligation to pay benefits
for future employee services related to the substitutional portion of the governmental welfare pension program. In
January 2013, MUTB also obtained an approval for an exemption from the obligation to pay benefits for past
employee services related to the substitutional portion. To complete the separation process, the substitutional
obligation and the related plan assets were transferred to the Japanese government on February 17, 2014. In
accordance with the guidance, which addresses the accounting for the transfer to the Japanese government of a
substitutional portion of employee pension fund liabilities, MUTB accounted for the entire separation process, uponcompletion of transfer of the plan assets to the government, as a single settlement transaction. For the fiscal year
ended March 31, 2014, MUTB recognized the difference of ¥115.2 billion between the accumulated benefit
obligations settled and the assets transferred to the Japanese government as a government subsidy.
Fiscal Year Ended March 31, 2013 Compared to Fiscal Year Ended March 31, 2012
Non-interest income for the fiscal year ended March 31, 2013 was ¥2,068.0 billion, an increase of¥627.4 billion from ¥1,440.6 billion for the fiscal year ended March 31, 2012. This increase was mainly
94attributable to net equity in earnings of equity method investees of ¥60.2 billion for the fiscal year ended
March 31, 2013, compared to net equity in losses of equity method investees of ¥499.4 billion for the previous
fiscal year, which included an other-than-temporary impairment loss on our investment in the common stock ofMorgan Stanley. Other factors which contributed to the increase in non-interest income included a ¥136.6 billion
increase in investment securities gains resulting from an increase in net gains on sales of securities available forsale and a decrease in impairment losses on securities available for sale. These increases were partially offset bya ¥97.0 billion decrease in trading account profits and ¥39.0 billion of net foreign exchange losses compared to
net foreign exchange gains of ¥34.3 billion in the previous fiscal year.
Fees and commissions income
Fees and commissions income for the fiscal year ended March 31, 2013 was ¥1,160.9 billion, an increase of¥60.9 billion from ¥1,100.0 billion for the fiscal year ended March 31, 2012. This increase was partly due to anincrease of ¥27.6 billion in fees and commissions from our securities business as a result of increased crossselling, customer referral and other coordinated efforts between our banking and securities subsidiaries and anincrease in our underwriting activity. Other fees and commissions also increased ¥34.3 billion mainly due to anincrease in brokerage fees at our banking subsidiaries both in Japan and overseas.
Net foreign exchange gains (losses)
The following table sets forth the details of our foreign exchange gains and losses for the fiscal years ended
March 31, 2012 and 2013:
Fiscal years ended March 31,
2012
2013
(in billions)

Foreign exchange gains (losses)—net:
Net foreign exchange losses on derivative contracts . . . . . . . . . . . . . . . . . . . . . .
Net foreign exchange gains (losses) on other than derivative contracts . . . . . . .
Net foreign exchange gains related to the fair value option . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(94.9)72.1
57.1¥ 34.3¥(94.2)(2,130.7)
2,185.9¥ (39.0)

Net foreign exchange losses for the fiscal year ended March 31, 2013 were ¥39.0 billion, compared to¥34.3 billion of net foreign exchange gains for the fiscal year ended March 31, 2012. The Japanese yen
depreciated rapidly against other major foreign currencies, including the U.S. dollar, towards the end of the fiscal
year ended March 31, 2013 and thus contributed to an increase in yen-denominated foreign exchange gains
related to the fair value option. However, this increase was more than offset by an increase in foreign exchange
losses on other than derivative contracts resulting from an increase in foreign exchange trading losses and higher
foreign exchange translation losses on monetary liabilities denominated in foreign currencies, which we assumed
when the Japanese yen was higher.

95

Net trading account profits
The following table sets forth the details of our trading account profits and losses for the fiscal years ended
March 31, 2012 and 2013:
Fiscal years ended March 31,
2012
2013
(in billions)

Trading account profits—net:
Net profits (losses) on interest rate and other derivative contracts
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥160.4(46.8)(1.3)
1.6(36.2)¥ 121.4(137.6)
3.8(10.9)(59.4)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 77.7¥ (82.7)

Net profits on trading account securities, excluding derivatives
Trading account securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account securities under the fair value option . . . . . . . . . . . . . . . .

¥149.7439.9¥ 341.2
311.8

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥589.6¥ 653.0

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥667.3¥ 570.3

Net trading account profits for the fiscal year ended March 31, 2013 were ¥570.3 billion, a decrease of¥97.0 billion from ¥667.3 billion for the fiscal year ended March 31, 2012. The decrease in net trading accountprofits was largely due to a ¥160.4 billion decrease in net profits on interest rate and other derivative contracts,
which in turn was primarily due to a ¥90.8 billion increase in net losses on equity contracts as a result of anincrease in losses at our securities subsidiaries on short positions in equity index futures and to a ¥39.0 billion
decrease in net profits on interest rate contracts as a result of losses on revaluation of interest rate swap contracts.
These decreases were partially offset by a ¥63.4 billion increase in net profits on trading account securities,
excluding derivatives, as a result of an increase in volume on trading transactions, reflecting an improvement ingeneral market conditions. In particular, despite a decrease in net profits on trading account securities under thefair value option of ¥128.1 billion mainly due to a smaller increase in the value of foreign debt securities
reflecting a smaller decrease in applicable interest rates, net profits on trading account securities, excluding
derivatives, increased due to a ¥191.5 billion increase in net profits on trading account securities other than thoseunder the fair value option, reflecting an increase in the volume of our securities trading activity.
Net investment securities gains
Net investment securities gains for the fiscal year ended March 31, 2013 were ¥156.0 billion, an increase of¥136.6 billion from ¥19.4 billion for the fiscal year ended March 31, 2012. This increase was mainly due to adecrease of ¥62.6 billion in impairment losses on marketable equity securities, an increase of ¥43.0 billion in
gains on sales of debt securities as a result of an increase in gains on sales of Japanese government bonds in thelower interest rate environment, and ¥30.7 billion of gains on sales of marketable equity securities as a result of
an increase in gains on sales of domestic equity securities mainly due to an improvement in the domestic equity
market.
Net equity in earnings (losses) of equity method investees
Net equity in earnings of equity method investees for the fiscal year ended March 31, 2013 was ¥60.2
billion, compared to net equity in losses of equity method investees of ¥499.4 billion for the previous fiscal year,
which included an other-than-temporary impairment loss of ¥579.5 billion on our investment in Morgan
Stanley’s common stock. For further information, see Note 2 to our consolidated financial statements included
elsewhere in this Annual Report.
96Non-Interest Expense
The following table shows a summary of our non-interest expense for the fiscal years ended March 31,
2012, 2013 and 2014:
Fiscal years ended March 31,
2012
2013
2014
(in billions)

Salaries and employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 900.1 ¥ 932.4 ¥1,029.6
Occupancy expenses—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
150.8
151.1
158.4
Fees and commissions expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
204.7
209.8
222.0
Outsourcing expenses, including data processing . . . . . . . . . . . . . . . . . . . . . . . . .
191.1
198.1
216.7
Depreciation of premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94.8
94.0
103.7
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
212.2
207.6
198.1
Impairment of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31.0
3.4
0.3
Insurance premiums, including deposit insurance . . . . . . . . . . . . . . . . . . . . . . . .
115.4
98.7
101.1
Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49.3
47.1
50.9
Taxes and public charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
65.6
66.9
69.5
Other non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
307.7
369.6
318.0
Total non-interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,322.7¥2,378.7¥2,468.3

Fiscal Year Ended March 31, 2014 Compared to Fiscal Year Ended March 31, 2013
Non-interest expense for the fiscal year ended March 31, 2014 was ¥2,468.3 billion, an increase of¥89.6 billion from ¥2,378.7 billion for the previous fiscal year. This increase was mainly due to a ¥97.2 billion
increase in salaries and employee benefits expenses reflecting an increase in the number of employees in ourcommercial banking subsidiaries and higher performance-based compensation in our securities subsidiaries, a¥18.6 billion increase in outsourcing expenses, including data processing, and a ¥12.2 billion increase in fees andcommissions expenses. These increases were partially offset by a ¥51.6 billion decrease in other non-interest
expenses.
Salaries and employee benefits
Salaries and employee benefits for the fiscal year ended March 31, 2014 were ¥1,029.6 billion, an increaseof ¥97.2 billion from ¥932.4 billion for the previous fiscal year. This increase was due to a one-time loss of¥40.7 billion in connection with the transfer to the Japanese government of the substitutional portion of MUTB’s
benefit obligations relating to employee benefit funds, an increase in the number of employees in foreign
branches, especially in New York, of our commercial banking subsidiaries, MUAH’s acquisition of local banks,larger bonus payments under a performance-based bonus plan in our securities subsidiaries, and the depreciationof Japanese yen against other major currencies.
Fees and commissions expenses
Fees and commissions expenses for the fiscal year ended March 31, 2014 was ¥222.0 billion, an increase of¥12.2 billion from ¥209.8 billion for the fiscal year ended March 31, 2013. This increase was mainly due to anincrease in fees and commissions expenses recorded in our consumer finance subsidiaries reflecting an increased
volume of transactions. The fees and commissions expenses in our commercial banking, trust banking andsecurities subsidiaries also increased during the fiscal year due to higher transaction volumes as the subsidiaries
took advantage of improvements in the business environment after the introduction of “Abenomics” in December
2012.
Outsourcing expenses, including data processing
Outsourcing expenses, including data processing, for the fiscal year ended March 31, 2014 was ¥216.7
billion, an increase of ¥18.6 billion from ¥198.1 billion for the fiscal year ended March 31, 2013. A substantial
97portion of this increase was recorded in our commercial banking subsidiaries due to higher maintenance fees
related to system software in foreign branches and subsidiaries, including MUAH. The increase in outsourcing
expenses was also attributable to higher outsourcing fees incurred by our securities subsidiaries, and an increasein the number of temporary employees obtained from temporary staffing agencies.
Other non-interest expenses
Other non-interest expenses for the fiscal year ended March 31, 2014 were ¥318.0 billion, a decrease of¥51.6 billion from ¥369.6 billion for the fiscal year ended March 31, 2013, when other non-interest expenses
included the realization of losses which were previously recorded in foreign currency translation included inaccumulated other comprehensive income, resulting from the deconsolidation of several overseas variableinterest entities, or VIEs. There were no such non-interest expenses recorded for the fiscal year ended March 31,
2014.
Fiscal Year Ended March 31, 2013 Compared to Fiscal Year Ended March 31, 2012
Non-interest expense for the fiscal year ended March 31, 2013 was ¥2,378.7 billion, an increase of¥56.0 billion from ¥2,322.7 billion for the previous fiscal year. This increase was mainly due to a ¥32.3 billion
increase in salaries and employee benefits expenses reflecting an increase in the number of employees and larger
employee retirement benefits at BTMU and a ¥61.9 billion increase in other non-interest expenses mainly due torealization of losses, which were previously recorded in foreign currency translation included in accumulated
other comprehensive income, resulting from the deconsolidation of several overseas VIEs, and a ¥24.5 billion ofcivil monetary payment to DFS. These increases were partially offset by a ¥27.6 billion decrease in impairmentof intangible assets and a ¥16.7 billion decrease in insurance premiums, including deposit insurance.
Salaries and employee benefits
Salaries and employee benefits for the fiscal year ended March 31, 2013 were ¥932.4 billion, an increase of¥32.3 billion from ¥900.1 billion for the previous fiscal year. This increase was mainly due to an increase in thenumber of employees, larger retirement benefit expenses at BTMU, an increase in bonuses at MUMSS reflecting
improved business performance and an increase in retirement benefit expenses at our trust banking subsidiaries.
Impairment of intangible assets
Impairment of intangible assets for the fiscal year ended March 31, 2013 was ¥3.4 billion, a decrease of¥27.6 billion from ¥31.0 billion for the fiscal year ended March 31, 2012. This decrease mainly reflected
impairment losses on intangible assets related to our trust banking and securities subsidiaries’ customer
relationships from fund contracts for the fiscal year ended March 31, 2012, while we did not recognize
significant impairment losses for the fiscal year ended March 31, 2013.
Other non-interest expenses
Other non-interest expenses for the fiscal year ended March 31, 2013 were ¥369.6 billion, an increase of¥61.9 billion from ¥307.7 billion for the fiscal year ended March 31, 2012. This increase was mainly due torealization of losses, which were previously recorded in foreign currency translation included in accumulated
other comprehensive income, resulting from the deconsolidation of several overseas VIEs, and a ¥24.5 billion, or
U.S.$250.0 million, civil monetary payment to DFS. For more information on the civil monetary payment,
see “—Recent Developments.”98Income Tax Expense
The following table shows a summary of our income tax expense for the fiscal years ended March 31, 2012,2013 and 2014:
Fiscal years ended March 31,
2012
2013
2014
(in billions, except percentages)

Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Combined normal effective statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥849.9 ¥1,415.9 ¥1,420.4
429.2
296.0
337.9
50.5%
20.9%
23.8%
40.6%
38.0%
38.0%

Reconciling items between the combined normal effective statutory tax rates and the effective income tax
rates for the fiscal years ended March 31, 2012, 2013 and 2014 are summarized as follows:
Fiscal years ended March 31,
2012
2013
2014

Combined normal effective statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in taxes resulting from:
Nondeductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends from foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign tax credits and payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lower tax rates applicable to income of subsidiaries . . . . . . . . . . . . . . . . . .
Change in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Realization of previously unrecognized tax effects of subsidiaries . . . . . . .
Nontaxable dividends received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Undistributed earnings of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax and interest expense for uncertainty in income taxes . . . . . . . . . . . . . .
Expiration of loss carryforward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in tax laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40.6%

38.0%

38.0%

0.2
0.1
(2.1)
(0.5)
2.3
0.0
(3.4)
0.2
0.1
4.8
9.1
(0.9)

0.1
0.0
(0.8)
(0.5)
(7.3)
(10.7)
(2.3)
1.5
(0.1)
2.1
—
0.9

0.2
0.0
(0.6)
(0.4)
(12.4)
(0.1)
(3.3)
0.5
—
—
1.2
0.7

Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

50.5%

20.9%

23.8%

The effective income tax rate for the fiscal year ended March 31, 2014 was 23.8%, 14.2 percentage points
lower than the combined normal effective statutory tax rate of 38.0%. This lower effective income tax rate
primarily reflected a decrease in the valuation allowance against deferred tax assets which accounted for12.4 percentage points of the difference between the combined normal effective statutory tax rate and theeffective income tax rate. For the fiscal year ended March 31, 2014, we recorded a valuation allowance releaseon the basis of management’s reassessment of the amount of our deferred tax assets that were more likely than
not to be realized. As of March 31, 2014, management considered new evidence, both positive and negative, that
could impact management’s view with regard to future realization of deferred tax assets. Among others,‰a release of valuation allowance of ¥91.1 billion was due to the application of the consolidated
corporate-tax system beginning with the fiscal year ending March 31, 2015. This is because MUFG
would be able to utilize income in more profitable subsidiaries to realize the benefit of net operating loss
carryforwards and existing deductible temporary differences recorded at MUFG. A consolidated basis
for corporate income taxes results in the reporting of taxable income or loss based upon the combined
profits or losses of the parent company and its wholly owned domestic subsidiaries. Management
believes that the net operating loss carryforwards related to corporate taxes will be fully utilized by theapplication of the consolidated corporate-tax system; and‰a release of valuation allowance of ¥45.9 billion was due to the profitability improvement of a certain
subsidiary. Management considered various factors, including the improved operating performance and99

cumulative operating results over the prior several years of the subsidiary as well as the outlook
regarding prospective operating performance of the subsidiary, and determined that sufficient positive
evidence exists as of March 31, 2014, to conclude that it is more likely than not that additional deferred
tax assets would be realizable.
The effective income tax rate of 20.9% for the fiscal year ended March 31, 2013 was 17.1 percentage points
lower than the combined normal effective statutory tax rate of 38.0%. This lower effective income tax rate
primarily reflected the liquidation of a subsidiary, whose assets and operations we took over after the liquidation,and the realization of tax benefits from the temporary differences not previously recognized as part of deferred
tax assets. The lower effective tax rate also reflected a ¥161.7 billion decrease in valuation allowance to¥483.0 billion as of March 31, 2013 from ¥644.7 billion as of March 31, 2012. The valuation allowance was
reduced to the extent that it was more likely than not that the deferred tax assets would be realized primarily
because certain subsidiaries were considered to have returned to sustained profitability.
The effective income tax rate of 50.5% for the fiscal year ended March 31, 2012 was 9.9 percentage points
higher than the combined normal effective statutory tax rate of 40.6%. This higher effective income tax rate
primarily caused by changes in tax laws that mainly include an approximately 5% reduction in the effective
statutory rate of corporate tax from 40.6% to 35.6%, which accounted for 9.1% of the difference between the
combined normal effective statutory tax rate and the effective income tax rate.
On November 30, 2011, the Japanese Diet enacted two tax related laws, namely “Amendment to the 2011
Tax Reform” and “Special Measures to Secure the Financial Resources to Implement the Restoration form The
Great East Japan Earthquake.” The changes under the new laws include a limitation on the use of net operating
loss carryforwards to 80% of taxable income, a two-year increase in the carryforward period of certain net
operating loss carryforwards to a nine-year period, and an approximately 5% reduction in the effective statutory
rate of corporate income tax from 40.6% to 35.6%. While the reduction in the effective statutory rate is effective
for the fiscal year beginning on or after April 1, 2012, a temporary surtax levied on corporate income taxes tofund the earthquake recovery efforts caused the effective statutory rate of corporate income tax to beapproximately 38.0% for the three year period between April 1, 2012 and March 31, 2015.
On March 20, 2014, the Japanese Diet enacted the “2014 Tax Reform” which terminated the temporary
surtax levied on corporate income taxes one year earlier than the change in tax law on November 30, 2011 as
described above. As a result, the effective statutory rate of corporate income tax for the fiscal year ending
March 31, 2015 was set at approximately 35.6%. The change in tax law resulted in an increase of ¥16.7 billion inincome tax expense for the fiscal year ended March 31, 2014.
Net income attributable to noncontrolling interests
Fiscal Year Ended March 31, 2014 Compared to Fiscal Year Ended March 31, 2013
We recorded net income attributable to noncontrolling interests of ¥67.1 billion for the fiscal year ended
March 31, 2014, compared to net income attributable to noncontrolling interests of ¥50.7 billion for the previous
fiscal year. This increase was mainly due to an increase in net income recorded at MUMSS, in which MUFG has
a 60% economic interest, in the fiscal year ended March 31, 2014.
Fiscal Year Ended March 31, 2013 Compared to Fiscal Year Ended March 31, 2012
We recorded net income attributable to noncontrolling interests of ¥50.7 billion for the fiscal year ended
March 31, 2013, compared to net income attributable to noncontrolling interests of ¥4.5 billion for the previous
fiscal year. This increase was mainly due to an increase in net income recorded at MUMSS, in which MUFG has
a 60% economic interest, in the fiscal year ended March 31, 2013.

100

Business Segment Analysis
We measure the performance of each of our business segments primarily in terms of “operating profit.”
Operating profit and other segment information in this Annual Report are based on the financial information
prepared in accordance with Japanese GAAP as adjusted in accordance with internal management accounting
rules and practices. Accordingly, the format and information are not consistent with our consolidated financial
statements prepared on the basis of U.S. GAAP. For example, operating profit does not reflect items such as apart of the provision for credit losses (primarily equivalent to the formula allowance under U.S. GAAP), foreignexchange gains (losses) and investment securities gains (losses). For information on a reconciliation of operating
profit under the internal management reporting system to income before income tax expense shown on the
consolidated statements of income, see Note 29 to our consolidated financial statements included elsewhere inthis Annual Report. We do not use information on the segments’ total assets to allocate our resources and assess
performance. Accordingly, business segment information on total assets is not presented.
We operate our main businesses under an integrated business group system, which integrates the operationsof BTMU, MUTB, MUMSS (through MUSHD), Mitsubishi UFJ NICOS and other subsidiaries in the following
five areas—Retail, Corporate, Trust Assets, Global, and Global Markets. Operations that are not covered by the
integrated business group system are classified under Other.
The following is a brief explanation of our business segments:
Integrated Retail Banking Business Group—Covers all domestic retail businesses, including commercial
banking, trust banking and securities businesses. This business group integrates the retail businesses of BTMU,
MUTB, MUMSS, Mitsubishi UFJ NICOS and other subsidiaries as well as retail product development,
promotion and marketing in a single management structure. At the same time, this business group has developedand implemented MUFG Plaza, a one-stop, comprehensive financial services concept that provides integratedbanking, trust and securities services.
Integrated Corporate Banking Business Group—Covers all domestic corporate businesses, includingcommercial banking, investment banking, trust banking and securities businesses. Through the integration ofthese business lines, diverse financial products and services are provided to our corporate clients. This businessgroup has clarified strategic domains, sales channels and methods to match the different growth stages andfinancial needs of our corporate clients.
Integrated Trust Assets Business Group—Covers asset management and administration services for
products such as pension trusts and security trusts by integrating the trust banking expertise of MUTB and theglobal network of BTMU. This business group provides a full range of services to corporate and other pension
funds, including stable and secure pension fund management and administration, advice on pension schemes andpayment of benefits to scheme members.
Integrated Global Business Group—Covers businesses outside Japan, including commercial banking suchas loans, deposits and cash management services, investment banking, retail banking, trust banking and securities
businesses (with the retail banking and trust assets businesses being conducted through MUB), through a global
network of more than 500 offices outside Japan to provide customers with financial products and services thatmeet their increasingly diverse and sophisticated financing needs. MUB is one of the largest commercial banks in
California by both total assets and total deposits. MUB provides a wide range of financial services to consumers,
small businesses, middle market companies and major corporations, primarily in California, Oregon andWashington but also nationally and internationally. MUB’s parent company is MUAH, which is a bank holding
company in the United States.
Global Markets—Covers asset and liability management and strategic investments of BTMU and MUTB,
and sales and trading of financial products of BTMU, MUTB and MUSHD.
101

Other—Consists mainly of the corporate centers of MUFG, BTMU, MUTB and MUMSS. The eliminationof duplicated amounts of net revenue among business segments is also reflected in Other.
Effective April 1, 2013 and October 1, 2013, in order to further streamline and integrate our managerial
accounting methodologies on a group-wide basis, we made modifications to such methodologies, which mainly
affected the Integrated Retail Banking Business Group and the Corporate Banking Business Group. These
modifications had no impact on our total operating profit for the fiscal years ended March 31, 2012 and 2013, but
affected net revenue and operating expense allocations among business segments. Prior period business segment
information has been reclassified to enable comparisons between the relevant amounts for the fiscal years ended
March 31, 2012, 2013 and 2014, respectively.
For further information, see Note 29 to our consolidated financial statements included elsewhere in thisAnnual Report.
The following table set forth our business segment information for the fiscal years ended March 31, 2012,2013 and 2014:
Integrated Integrated Integrated Integrated Global Business Group
Retail Corporate
Trust
Banking Banking
AssetsOther
Business Business Business
than
Global
Group
Group
Group
MUAH
MUAH
Total Markets Other

Total(in billions)Fiscal year ended March 31, 2012:
Net revenue: . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . .

¥1,227.1
915.8¥870.7440.5¥140.1
87.3¥364.6196.5¥252.0173.0¥616.6369.5¥727.9 ¥ (1.3) ¥3,581.1
128.1
161.4 2,102.6

Operating profit (loss) . . . . . . . . . . . . .

¥ 311.3¥430.2¥ 52.8¥168.1¥ 79.0¥247.1¥599.8 ¥(162.7) ¥1,478.5

Fiscal year ended March 31, 2013:
Net revenue: . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . .

¥1,207.8
917.3¥864.0434.4¥138.888.3¥465.4246.8¥288.5205.4¥753.9452.2¥763.0 ¥ (10.8) ¥3,716.7
142.5
174.4 2,209.1

Operating profit (loss) . . . . . . . . . . . . .

¥ 290.5¥429.6¥ 50.5¥218.6¥ 83.1¥301.7¥620.5 ¥(185.2) ¥1,507.6

Fiscal year ended March 31, 2014:
Net revenue: . . . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . .

¥1,290.6
961.9¥924.5438.4¥159.2
94.4¥567.9299.5¥375.9266.9¥943.8566.4¥568.6 ¥ (13.6) ¥3,873.1
176.5
172.4 2,410.0

Operating profit (loss) . . . . . . . . . . . . .

¥ 328.7¥486.1¥ 64.8¥268.4¥109.0¥377.4¥392.1 ¥(186.0) ¥1,463.1

Fiscal Year Ended March 31, 2014 Compared to Fiscal Year Ended March 31, 2013
Integrated Retail Banking Business GroupNet revenue of the Integrated Retail Banking Business Group increased ¥82.8 billion to ¥1,290.6 billion for
the fiscal year ended March 31, 2014 from ¥1,207.8 billion for the fiscal year ended March 31, 2013. Net
revenue of the Integrated Retail Banking Business Group mainly consists of domestic revenues from commercial
banking operations, such as deposits and lending operations, and fees related to sales of investment products toretail customers, as well as fees received by subsidiaries within the Integrated Retail Banking Business Group.
The increase in net revenue was mainly due to increases in volumes of sales of financial products such as mutual
funds, debt securities and equity securities, reflecting improved market conditions since the introduction of“Abenomics” despite the negative impact of lower interest income from loans due to lower interest rates.
Operating expenses of the Integrated Retail Banking Business Group increased ¥44.6 billion to¥961.9 billion for the fiscal year ended March 31, 2014 from ¥917.3 billion for the fiscal year ended March 31,
2013.

102

Operating profit of the Integrated Retail Banking Business Group increased ¥38.2 billion to ¥328.7 billion
for the fiscal year ended March 31, 2014 from ¥290.5 billion for the fiscal year ended March 31, 2013.
Integrated Corporate Banking Business GroupNet revenue of the Integrated Corporate Banking Business Group increased ¥60.5 billion to ¥924.5 billion
for the fiscal year ended March 31, 2014 from ¥864.0 billion for the fiscal year ended March 31, 2013. Net
revenue of the Integrated Corporate Banking Business Group mainly consists of domestic revenues from
corporate lending and other commercial banking operations, investment banking and trust banking businesses inrelation to corporate clients, as well as fees received by subsidiaries within the Integrated Corporate Banking
Business Group. The increase in net revenue was mainly from investment banking businesses such as derivative
sales and structured financing in our banking subsidiaries and from primary and secondary businesses in our
securities subsidiaries, reflecting improved market conditions in Japan.
Operating expenses of the Integrated Corporate Banking Business Group were ¥438.4 billion for the fiscal
year ended March 31, 2014, an increase of ¥4.0 billion from ¥434.4 billion for the fiscal year ended March 31,
2013.
Operating profit of the Integrated Corporate Banking Business Group increased ¥56.5 billion to¥486.1 billion for the fiscal year ended March 31, 2014 from ¥429.6 billion for the fiscal year ended March 31,
2013.
Integrated Trust Assets Business GroupNet revenue of the Integrated Trust Assets Business Group increased ¥20.4 billion to ¥159.2 billion for the
fiscal year ended March 31, 2014 from ¥138.8 billion for the fiscal year ended March 31, 2013. Net revenue of theIntegrated Trust Assets Business Group mainly consists of fees from asset management and administration services
for products such as pension trusts and investment trusts. Improvements in market conditions since the introductionof “Abenomics” had a positive impact on the businesses of the Integrated Trust Assets Business Group.
Operating expenses of the Integrated Trust Assets Business Group increased by ¥6.1 billion to ¥94.4 billion
for the fiscal year ended March 31, 2014 from ¥88.3 billion for the fiscal year ended March 31, 2013.
Operating profit of the Integrated Trust Assets Business Group increased ¥14.3 billion to ¥64.8 billion for
the fiscal year ended March 31, 2014 from ¥50.5 billion for the fiscal year ended March 31, 2013.
Integrated Global Business GroupNet revenue of the Integrated Global Business Group increased ¥189.9 billion to ¥943.8 billion for the fiscal
year ended March 31, 2014 from ¥753.9 billion for the fiscal year ended March 31, 2013. Net revenue of theIntegrated Global Business Group mainly consists of revenues from commercial banking businesses outside ofJapan, including loan, deposit and cash management, investment banking, retail banking, trust banking andsecurities businesses. The increase in net revenue mainly came from increases in fees and commissions income
in Asia and interest income from loans to both Japanese and non-Japanese companies in the Americas. The
depreciation of the Japanese yen against other major currencies also contributed to the increase in net revenue ofthe business group.
Operating expenses of the Integrated Global Business Group increased ¥114.2 billion to ¥566.4 billion for
the fiscal year ended March 31, 2014 from ¥452.2 billion for the fiscal year ended March 31, 2013, mainly due toincreases in salaries in foreign branches of our commercial banking and securities subsidiaries, and thedepreciation of the Japanese yen against other major currencies.
Operating profit of the Integrated Global Business Group increased ¥75.7 billion to ¥377.4 billion for the
fiscal year ended March 31, 2014 from ¥301.7 billion for the fiscal year ended March 31, 2013.
103

Global Markets
Net revenue of Global Markets decreased ¥194.4 billion to ¥568.6 billion for the fiscal year ended
March 31, 2014 from ¥763.0 billion for the fiscal year ended March 31, 2013. This decrease was mainly due tolower gains in sales of debt securities, particularly Japanese government bonds held as investment securities, inour commercial and trust banking subsidiaries, reflecting lower volumes of debt securities sold, despite increases
in gains from the equity and debt securities trading in our securities subsidiaries.
Operating expenses of Global Markets increased ¥34.0 billion to ¥176.5 billion for the fiscal year ended
March 31, 2014 from ¥142.5 billion for the fiscal year ended March 31, 2013, primarily due to an increase insalaries, including performance-based bonuses in our securities subsidiaries, reflecting increased market
activities.
Operating profit of the Global Markets decreased ¥228.4 billion to ¥392.1 billion for the fiscal year ended
March 31, 2014 from ¥620.5 billion for the fiscal year ended March 31, 2013.
Fiscal Year Ended March 31, 2013 Compared to Fiscal Year Ended March 31, 2012
Integrated Retail Banking Business GroupNet revenue of the Integrated Retail Banking Business Group decreased ¥19.3 billion to ¥1,207.8 billion for
the fiscal year ended March 31, 2013 from ¥1,227.1 billion for the fiscal year ended March 31, 2012. Net
revenue of the Integrated Retail Banking Business Group mainly consists of domestic revenues from commercial
banking operations, such as deposits and lending operations, and fees related to sales of investment products toretail customers, as well as fees of subsidiaries within the Integrated Retail Banking Business Group. The
decrease in net revenue reflected a decrease in income generated from funds deposited with us due to the impactof the declining interest rate environment that continued throughout the fiscal year ended March 31, 2013, and adecrease in income related to our group companies engaged in the consumer finance business reflecting adecrease in volume of consumer loans, partially offset by an increase in fees from sales of insurance and otherinvestment products.
Operating expenses of the Integrated Retail Banking Business Group increased ¥1.5 billion to ¥917.3 billion
for the fiscal year ended March 31, 2013 from ¥915.8 billion for the fiscal year ended March 31, 2012.
Operating profit of the Integrated Retail Banking Business Group decreased ¥20.8 billion to ¥290.5 billion
for the fiscal year ended March 31, 2013 from ¥311.3 billion for the fiscal year ended March 31, 2012.
Integrated Corporate Banking Business GroupNet revenue of the Integrated Corporate Banking Business Group decreased ¥6.7 billion to ¥864.0 billion
for the fiscal year ended March 31, 2013 from ¥870.7 billion for the fiscal year ended March 31, 2012. Net
revenue of the Integrated Corporate Banking Business Group mainly consists of domestic revenues from
corporate lending and other commercial banking operations, investment banking and trust banking businesses inrelation to corporate clients, as well as fees received by subsidiaries within the Integrated Corporate Banking
Business Group. The decrease in net revenue was mainly due to a decrease in net interest income from deposits
reflecting the low interest rate environment and the generally stagnant demand for loans from customers except
for a few large corporate borrowers, partially offset by increases in investment banking business related tostructured financing and asset finance business primarily due to increased cross-selling, customer referral andother coordinated efforts between our banking and securities subsidiaries.
Operating expenses of the Integrated Corporate Banking Business Group were ¥434.4 billion for the fiscal year
ended March 31, 2013, a decrease of ¥6.1 billion from ¥440.5 billion for the fiscal year ended March 31, 2012.
Operating profit of the Integrated Corporate Banking Business Group decreased ¥0.6 billion to¥429.6 billion for the fiscal year ended March 31, 2013 from ¥430.2 billion for the fiscal year ended March 31,
2012.
104

Integrated Trust Assets Business GroupNet revenue of the Integrated Trust Assets Business Group decreased ¥1.3 billion to ¥138.8 billion for the
fiscal year ended March 31, 2013 from ¥140.1 billion for the fiscal year ended March 31, 2012. Net revenue ofthe Integrated Trust Assets Business Group mainly consists of fees from asset management and administration
services for products such as pension trusts and investment trusts. The decrease in net revenue was mainly due toa decrease in the volume of our investment trust business affected by the market slowdown in the first half of the
fiscal year ended March 31, 2013, partially offset by an increase in the volume of our global custody business.
Operating expenses of the Integrated Trust Assets Business Group increased ¥1.0 billion to ¥88.3 billion for
the fiscal year ended March 31, 2013 from ¥87.3 billion for the fiscal year ended March 31, 2012.
Operating profit of the Integrated Trust Assets Business Group decreased ¥2.3 billion to ¥50.5 billion for the
fiscal year ended March 31, 2013 from ¥52.8 billion for the fiscal year ended March 31, 2012.
Integrated Global Business GroupNet revenue of the Integrated Global Business Group increased ¥137.3 billion to ¥753.9 billion for the fiscal
year ended March 31, 2013 from ¥616.6 billion for the fiscal year ended March 31, 2012. Net revenue of theIntegrated Global Business Group mainly consists of revenues from commercial banking businesses outside ofJapan, including loan, deposit and cash management, investment banking, retail banking, trust banking andsecurities businesses. The increase in net revenue was mainly due to increases in interest income attribute to nonJapanese customers mainly in Asia and income from investment banking business especially in Europe and theUnited States.
Operating expenses of the Integrated Global Business Group increased ¥82.7 billion to ¥452.2 billion for the
fiscal year ended March 31, 2013 from ¥369.5 billion for the fiscal year ended March 31, 2012, reflecting thegeographic expansion of our operations and an increase in regulatory costs for our banking business.
Operating profit of the Integrated Global Business Group increased ¥54.6 billion to ¥301.7 billion for the
fiscal year ended March 31, 2013 from ¥247.1 billion for the fiscal year ended March 31, 2012.
Global Markets
Net revenue of Global Markets increased ¥35.1 billion to ¥763.0 billion for the fiscal year ended March 31,
2013 from ¥727.9 billion for the fiscal year ended March 31, 2012. This increase was mainly due to gains from
our asset and liability management business, gains attributable to the sales and trading business, and profits fromthe overseas fixed income businesses of MUMSS.
Operating expenses of Global Markets increased ¥14.4 billion to ¥142.5 billion for the fiscal year ended
March 31, 2013 from ¥128.1 billion for the fiscal year ended March 31, 2012.
Operating profit of the Global Markets increased ¥20.7 billion to ¥620.5 billion for the fiscal year ended
March 31, 2013 from ¥599.8 billion for the fiscal year ended March 31, 2012. This increase was mainly due tothe gains from our asset and liability management business.

105Geographic Segment Analysis
The table below sets forth our total revenue, income before income tax expense and net income (loss)
attributable to Mitsubishi UFJ Financial Group on a geographic basis for the fiscal years ended March 31, 2012,2013 and 2014. Assets, income and expenses attributable to foreign operations are allocated to geographical areas
based on the domicile of the debtors and customers. For further information, see Note 30 to our consolidated
financial statements included elsewhere in this Annual Report.
Fiscal years ended March 31,
2012
2013
2014
(in billions)

Total revenue (interest income and non-interest income):
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,936.9¥3,016.0¥3,110.1

Foreign:
United States of America(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other areas(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

192.8
290.5
450.6
165.7

426.4
256.5
585.5
211.1

219.0
155.0
569.0
290.3

Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,099.6

1,479.5

1,233.3

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥4,036.5¥4,495.5¥4,343.3

Income (loss) before income tax expense (benefit) :Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 498.1¥ 767.2¥1,157.8

Foreign:
United States of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other areas(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(91.8)
139.4
227.4
76.8

98.8
96.5
317.1
136.3

(207.1)
11.6
253.8
204.3

Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

351.8

648.7

262.6

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 849.9¥1,415.9¥1,420.4

Net income (loss) attributable to Mitsubishi UFJ Financial Group
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 163.3¥ 499.1¥ 859.8

Foreign:
United States of America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other areas(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(119.8)
113.6
192.8
66.3

95.6
78.4
275.0
121.0

(131.5)
6.5
149.4
131.2

Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

252.9

570.0

155.6

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 416.2¥1,069.1¥1,015.4

Notes:(1) For the fiscal year ended March 31, 2012, Total revenue of United States of America includes an other-than-temporary impairment lossof Morgan Stanley’s common stock. See Note 2 to our consolidated financial statements included elsewhere in this Annual Report for
further details of an other-than-temporary impairment loss on Morgan Stanley’s common stock.
(2) Other areas primarily include Canada, Latin America, the Caribbean and the Middle East.

Fiscal Year Ended March 31, 2014 Compared to Fiscal Year Ended March 31, 2013
Domestic net income attributable to Mitsubishi UFJ Financial Group for the fiscal year ended March 31,
2014 was ¥859.8 billion, compared to net income of ¥499.1 billion for the fiscal year ended March 31, 2013.
106

This was mainly due to an increase in non-interest income, particularly fees and commissions on securities
business, investment fund business and trust business, as our commercial banking, trust banking and securities
subsidiaries took advantage of increased market activities in Japan.
Foreign net income attributable to Mitsubishi UFJ Financial Group for the fiscal year ended March 31, 2014was ¥155.6 billion, a decrease of ¥414.4 billion from ¥570.0 billion for the fiscal year ended March 31, 2013.
The decrease in foreign net income was mainly due to a decrease in net income in the U.S. region reflecting
lower fair values of foreign currency denominated bonds related to the fair value option, including U.S. Treasury
bonds, as interest rates rose in the United States where the FRB began tapering its quantitative monetary easing
program.
Fiscal Year Ended March 31, 2013 Compared to Fiscal Year Ended March 31, 2012
Domestic net income attributable to Mitsubishi UFJ Financial Group for the fiscal year ended March 31,
2013 was ¥499.1 billion, compared to net income of ¥163.3 billion for the fiscal year ended March 31, 2012.
This was mainly due to a decrease in tax expenses resulting from a change in valuation allowance and therealization of previously unrecognized tax benefits of subsidiaries, as well as a decrease in expenses relating toprovision for credit losses recorded in our banking subsidiaries.
Foreign net income attributable to Mitsubishi UFJ Financial Group for the fiscal year ended March 31, 2013was ¥570.0 billion, an increase of ¥317.1 billion from ¥252.9 billion for the fiscal year ended March 31, 2012.
This increase reflected a ¥579.5 billion other-than-temporary impairment loss on our investment in Morgan
Stanley’s common stock recorded in the fiscal year ended March 31, 2012. Exclusive of this item, foreign net
income attributable to Mitsubishi UFJ Financial Group for the fiscal year ended March 31, 2013 would havedecreased ¥262.4 billion mainly due to a decrease in interest income from U.S. government bonds reflecting adecrease in the average balance during the fiscal year ended March 31, 2013.
Effect of Change in Exchange Rates on Foreign Currency Translation
Fiscal Year Ended March 31, 2014 Compared to Fiscal Year Ended March 31, 2013
The average exchange rate for the fiscal year ended March 31, 2014 was ¥100.24 per U.S.$1.00, comparedto the average exchange rate of ¥83.10 per U.S.$1.00 for the previous fiscal year. The average exchange rate forthe conversion of the U.S. dollar financial statements of some of our foreign subsidiaries for the fiscal year ended
December 31, 2013 was ¥97.65 per U.S.$1.00, compared to the average exchange rate for the fiscal year ended
December 31, 2012 of ¥79.82 per U.S.$1.00.
The change in the average exchange rate of the Japanese yen against the U.S. dollar and other foreign
currencies had the effect of increasing total revenue by ¥285.2 billion, net interest income by ¥171.0 billion andincome before income tax expense by ¥115.4 billion, respectively, for the fiscal year ended March 31, 2014.
Fiscal Year Ended March 31, 2013 Compared to Fiscal Year Ended March 31, 2012
The average exchange rate for the fiscal year ended March 31, 2013 was ¥83.10 per U.S.$1.00, compared tothe average exchange rate of ¥79.08 per U.S.$1.00 for the previous fiscal year. The average exchange rate for theconversion of the U.S. dollar financial statements of some of our foreign subsidiaries for the fiscal year ended
December 31, 2012 was ¥79.82 per U.S.$1.00, compared to the average exchange rate for the fiscal year ended
December 31, 2011 of ¥79.84 per U.S.$1.00.
The change in the average exchange rate of the Japanese yen against the U.S. dollar and other foreign
currencies had the effect of increasing total revenue by ¥39.9 billion, net interest income by ¥22.3 billion andincome before income tax expense by ¥26.6 billion, respectively, for the fiscal year ended March 31, 2013.
107

B.

Liquidity and Capital Resources

Financial Condition
Total Assets
Our total assets as of March 31, 2014 were ¥253.66 trillion, an increase of ¥23.10 trillion from¥230.56 trillion as of March 31, 2013. The increase in total assets mainly reflected increases in interest-earning
deposits in other banks of ¥12.39 trillion, net loans of ¥11.93 trillion, trading securities of ¥2.66 trillion, whichwere partially offset by decreases in securities available for sale of ¥6.95 trillion and trading derivative assets of¥2.84 trillion.
We have allocated a substantial portion of our assets to international activities. As a result, reported amounts
are affected by changes in the exchange rate of the Japanese yen against the U.S. dollar and other foreign
currencies. Foreign assets are denominated primarily in U.S. dollars. The following table shows our total assets
as of March 31, 2013 and 2014 by geographic region based principally on the domicile of the obligors:
As of March 31,
2013
2014
(in trillions)Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign:
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other areas(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥152.00¥158.81

30.73
23.22
15.94
8.67
78.56
¥230.56

40.63
22.35
22.31
9.56
94.85
¥253.66

Note:(1) Other areas primarily include Canada, Latin America, the Caribbean and the Middle East.

The Japanese yen amount of foreign currency-denominated assets increased as the relevant foreignexchange rates appreciated against the Japanese yen. For example, as of March 31, 2014 the exchange rate was¥102.92 per U.S.$1.00, as compared with ¥94.05 as of March 31, 2013. This depreciation of the Japanese yen
against the U.S. dollar and other foreign currencies between March 31, 2013 and March 31, 2014 resulted in a
¥9.66 trillion increase in the Japanese yen amount of our total assets as of March 31, 2014.

108

Loan Portfolio
The following table sets forth our loans outstanding, before deduction of allowance for credit losses, as ofMarch 31, 2013 and 2014, based on the industry segment loan classifications as defined by the Bank of Japan forregulatory reporting purposes, which is not necessarily based on the use of proceeds:
As of March 31,
2013
2014
(in billions)

Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Communication and information services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign:
Governments and official institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial and industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unearned income, unamortized premium—net and deferred loan fees—net . . . . . . . . . .
Total(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,767.4
1,056.3
11,143.8
2,881.7
8,330.6
3,622.0
1,314.5
12,191.5
17,132.3
69,440.1¥11,540.8
980.9
10,989.6
2,693.6
8,475.1
3,985.1
1,443.5
13,496.7
16,921.3
70,526.6

673.5
811.5
7,259.0
9,792.2
18,738.8
24,533.8
2,601.3
4,872.4
29,272.6
40,009.9(122.5)(260.1)¥98,590.2 ¥110,276.4

Notes:(1) Loans to the so-called “non-bank finance companies” are generally included in the “Banks and other financial institutions” category.
Non-bank finance companies are primarily engaged in consumer lending, factoring and credit card businesses.
(2) The above table includes loans held for sale of ¥35.3 billion and ¥46.6 billion as of March 31, 2013 and 2014, respectively, which arecarried at the lower of cost or estimated fair value.

Loans are our primary use of funds. The average loan balance accounted for 48.0% of total interest-earning
assets for the fiscal year ended March 31, 2013 and 48.4% for the fiscal year ended March 31, 2014.
As of March 31, 2014, our total loans were ¥110.28 trillion, an increase of ¥11.69 trillion from ¥98.59
trillion as of March 31, 2013. Before unearned income, net unamortized premiums and net deferred loan fees, ourloan balance as of March 31, 2014 consisted of ¥70.53 trillion of domestic loans and ¥40.01 trillion of foreignloans, while the loan balance as of March 31, 2013 consisted of ¥69.44 trillion of domestic loans and¥29.27 trillion of foreign loans.
The domestic loan balance increased 2% between March 31, 2013 and March 31, 2014. The increase wasmainly due to an increase in loans to government institutions, which are included in the other industries category.
The loan demand from government institutions continued to increase because of the expanding government
expenditures and reducing tax revenue. Although loans to the private sector also increased, there is less certainty
in the loan demand in the domestic private sector as a result of the continuing negative effect of the regulatory
reforms in the consumer finance sector that limits lending to consumers and severe competition among lenders in
the residential mortgage loan market in Japan. Loans to construction businesses decreased mainly reflecting
weakened demand for loans for apartment building construction projects. In addition, loans to borrowers in theservices category declined mainly as a result of our sale of Nippon Business Lease Co., Ltd., a leasing subsidiaryin Japan, to Hitachi Capital Corporation in April 2013.
109Foreign loans increased 37% between March 31, 2013 and March 31, 2014, mainly due to favorable
economic fundamentals in the United States and an appreciation of the relevant foreign currencies against theJapanese yen. Foreign loans increased in all of the industry segments. By region, larger increases in the balancesof outstanding loans were recorded in the Americas and in Asia, where Krungsri was newly consolidated in
December 2013, compared to other regions, where uncertainty still remains over trends in loan demand.
Changes in the allowance for credit losses and provision (credit) for credit losses
The following table shows a summary of the changes in the allowance for credit losses by portfolio segment
for the fiscal years ended March 31, 2013 and 2014:
Fiscal year ended March 31, 2013:

Commercial

Residential
Card(in billions)

MUAH

Total

Allowance for credit losses:
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . .
Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 984.3
127.9
80.5
23.4

¥171.8
1.3
16.3
0.4

¥68.9
12.4
32.1
2.7

¥60.5
2.9
15.6
5.2

¥1,285.5
144.5
144.5
31.7

Net charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57.1
13.4

15.9
—

29.4
—

10.4
5.4

112.8
18.8

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,068.5¥157.2

¥51.9

¥58.4

¥1,336.0

Fiscal year ended March 31, 2014:

Commercial

Residential

Card
MUAH
(in billions)

Allowance for credit losses:
Balance at beginning of fiscal year . . . . . . . . . . .
Provision (credit) for credit losses . . . . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,068.5(70.1)
158.9
29.5¥157.2(36.0)
4.6
0.3

¥51.9
5.6
20.1
3.2

Net charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . .
Others(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

129.4
7.9

4.3
0.0

Balance at end of fiscal year . . . . . . . . . . . . . . . .

¥ 876.9¥116.9Krungsri(2)

Total

¥58.4
(5.9)
7.5
4.4

¥—
—
—
—

¥1,336.0(106.4)
191.1
37.4

16.9
—

3.1
10.6

—
—

153.7
18.5

¥40.6

¥60.0

¥—

¥1,094.4

Notes:(1) Others are principally comprised of gains or losses from foreign exchange translation.
(2) For the Krungsri segment, which is a new portfolio segment added following our acquisition of Krungsri in December 2013, the acquiredloans were recorded at their fair values as of the acquisition date, and there have been no indications that allowance for credit loss isnecessary for these loans since then. Therefore, no allowance for credit loss is stated in the above table.

We recorded credit for credit losses of ¥106.4 billion for the fiscal year ended March 31, 2014, compared toprovision for credit losses of ¥144.5 billion for the fiscal year ended March 31, 2013.
For the Commercial segment, ¥70.1 billion of credit for credit losses was recorded for the fiscal year ended
March 31, 2014, compared to ¥127.9 billion of provision for credit losses for the previous fiscal year. This
mainly reflected the upgrades of the internal borrower ratings of a substantial portion of large borrowers in thesegment whose financial performance and prospects improved in light of favorable economic conditions inJapan, including a depreciating Japanese yen and rising stock prices.
For the Residential segment, ¥36.0 billion of credit for credit losses was recorded for the fiscal year ended
March 31, 2014, compared to ¥1.3 billion of provision for credit losses for the previous fiscal year. This110

primarily reflected an overall improvement in the credit quality of the loan portfolio of the segment, including adecrease in the number of civil rehabilitation filings made by individual borrowers, as economic conditions weregenerally favorable in Japan.
For the Card segment, ¥5.6 billion of provision for credit losses was recorded for the fiscal year ended
March 31, 2014, an improvement of ¥6.8 billion compared to the previous fiscal year. This primarily reflected an
overall improvement in the credit quality of the loan portfolio of the segment, partly due to our implementationof stricter borrower screening under regulatory reforms in the consumer finance industry.
For the MUAH segment, ¥5.9 billion of credit for credit losses was recorded for the fiscal year ended
March 31, 2014, compared to ¥2.9 billion of provision for credit losses for the previous fiscal year. This was due
to a general improvement in the credit quality of MUAH’s borrowers, reflecting improvements in U.S. economic
conditions, including higher stock and real estate prices.
Charge-offs for the fiscal year ended March 31, 2014 were ¥191.1 billion, an increase of ¥46.6 billion from¥144.5 billion for the fiscal year ended March 31, 2013. Charge-offs increased ¥78.4 billion in the Commercial
segment, primarily reflecting specific borrower conditions, despite an overall improvement in the credit qualityof borrowers in the segment. Among other factors, the increase in charge-offs in the Commercial segment
reflected a charge-off of a portion of the loan outstanding to a large borrower in the manufacturing category toassist the borrower in improving its financial performance and repayment ability. In addition, we charged offloans to a larger number of small and medium-sized borrowers that continued to face challenging financial
conditions and were considered unable to repay their loans. On the other hand, charge-offs decreased in each of
the Residential, Card and MUAH segments primarily due to improved customer credit quality.
Charge-offs for the fiscal years ended March 31, 2013 and 2014 in the Commercial segment also reflectedsales of nonperforming loans amounting to ¥0.4 billion and ¥16.2 billion, respectively. BTMU and MUTB
actively disposed of nonperforming loans in recent periods in order to improve the credit quality of theirrespective loan portfolios. See Note 4 to our consolidated financial statements included elsewhere in this Annual
Report.
The total allowance for credit losses as of March 31, 2014 was ¥1,094.4 billion, a decrease of ¥241.6 billion
from ¥1,336.0 billion as of March 31, 2013, as we recorded credit for credit losses of ¥106.4 billion and net
charge-offs of ¥153.7 billion for the fiscal year ended March 31, 2014. For further information on our allowancefor credit losses, see “—Allowance for credit losses” below.
Allowance policy
Our credit rating system is closely linked to the risk grading standards set by the Japanese regulatory
authorities for asset evaluation and assessment, and is used as a basis for establishing the allowance for credit
losses and charge-offs. The categorization is based on conditions that may affect the ability of borrowers toservice their debt, such as current financial condition and results of operations, historical payment experience,credit documentation, other public information and current trends.
We have divided our allowance for loan losses into five portfolio segments—Commercial, Residential,
Card, MUAH and Krungsri.
For the Commercial, MUAH and Krungsri segments, our allowance for credit losses primarily consists ofallocated allowances. The allocated allowances consist of (1) an allowance for individual loans specifically
identified for evaluation, (2) an allowance for large groups of smaller-balance homogeneous loans, and (3) aformula allowance. The allocated allowance within the Commercial segment also includes an allowance forcountry risk exposure. The allowance for country risk exposure within the Commercial segment covers transfer
risk which is not specifically covered by other types of allowances. Both the allowance for country risk exposure111and the formula allowance are provided for performing loans that are not subject to either the allowance forindividual loans specifically identified for evaluation or the allowance for large groups of smaller-balancehomogeneous loans. The allowance for credit losses within the MUAH segment also includes an unallocatedallowance which captures losses that are attributable to economic events in various industry or geographic
sectors whose impact on our loan portfolios in these segments have occurred but have yet to be recognized in the
allocated allowance. For the Residential and Card segments, the loans are smaller-balance homogeneous loansthat are pooled by the risk ratings based on the number of delinquencies. For all portfolio segments, key elements
relating to the policies and discipline used in determining the allowance for credit losses are our credit
classification and related borrower categorization process. Each of these components is determined based on
estimates subject to change when actual events occur.
For more information on our credit and borrower ratings, see “Item 11. Quantitative and Qualitative
Disclosures about Credit, Market and Other Risk—Credit Risk Management.”
For more information on our methodologies used to estimate the allowance for each portfolio segment, see“Summary of Significant Accounting Policies” in Note 1 to our consolidated financial statements included
elsewhere in this Annual Report, and “—Critical Accounting Estimates—Allowance for Credit Losses” above.
During the fiscal year ended March 31, 2014, there was no significant change in our general allowance
policy, which affected our allowance for credit losses for the period, resulting from directives, advice or counsel
from governmental or regulatory bodies.
Allowance for credit losses
Allowance for credit losses and recorded investment in loans by portfolio segment as of March 31, 2013 and2014 are shown below:
As of March 31, 2013:

Commercial

Residential

¥

784.8
248.8
34.9

¥

117.6 ¥ 37.9 ¥
37.4
13.8
2.2
0.2

3.6 ¥
54.7
0.1

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 1,068.5

¥

157.2

58.4

Loans:
Individually evaluated for impairment . . . . . . . . .
Collectively evaluated for impairment . . . . . . . . .
Loans acquired with deteriorated credit quality . .

¥ 1,677.2
75,771.9
101.3¥

Total(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥77,550.4¥15,201.2

Allowance for credit losses:
Individually evaluated for impairment . . . . . . . . .
Collectively evaluated for impairment . . . . . . . . .
Loans acquired with deteriorated credit quality . .

112

Card
(in billions)¥ 51.9

MUAH

¥

Total

943.9
354.7
37.4

¥ 1,336.0

309.4 ¥123.5 ¥ 54.2 ¥ 2,164.3
14,874.6
534.9
5,099.4
96,280.8
17.2
13.2
100.6
232.3
¥671.6¥5,254.2¥98,677.4

As of March 31, 2014:

Allowance for credit losses:
Individually evaluated for
impairment . . . . . . . . . . . . . . . .
Collectively evaluated for
impairment . . . . . . . . . . . . . . . .
Loans acquired with deteriorated
credit quality . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans:
Individually evaluated for
impairment . . . . . . . . . . . . . . . .
Collectively evaluated for
impairment . . . . . . . . . . . . . . . .
Loans acquired with deteriorated
credit quality . . . . . . . . . . . . . . .
Total(1) . . . . . . . . . . . . . . . . . . . . . .

Commercial

Residential

Card
MUAH
(in billions)

Krungsri(2)

¥

¥

69.6

¥ 29.2

¥

209.1

45.4

11.3

55.8

—

321.6

27.3

1.9

0.1

0.1

—

29.4

¥

640.5

¥

4.1

—

Total

¥

743.4

876.9

¥

116.9

¥ 40.6

¥

60.0

¥

—

¥

1,094.4¥ 1,459.3

¥

211.8

¥102.9

¥

64.0

¥

—

¥

1,838.0

83,052.5

14,751.2

493.0

7,060.6

3,025.2

108,382.5

75.7

15.3

12.7

115.0

50.7

269.4

¥84,587.5¥14,978.3¥608.6¥7,239.6¥3,075.9¥110,489.9

Notes:(1) Total loans in the above table do not include loans held for sale and represent balances without adjustments in relation to unearned
income, unamortized premiums and deferred loan fees.
(2) For the Krungsri segment, acquired loans were recorded at their fair values as of the acquisition date, and there have been no indications
that allowance for credit loss is necessary for these loans since then. Therefore, no allowance for credit loss is stated in the above table.

The total allowance for credit losses as of March 31, 2014 was ¥1,094.4 billion, a decrease of ¥241.6 billion
from ¥1,336.0 billion as of March 31, 2013. This decrease mainly reflected charge-offs, and reversal of
allowance for credit losses due to an overall improvement in the credit quality of our loan portfolio. In theCommercial segment, allowance for credit losses decreased ¥191.6 billion to ¥876.9 billion, reflecting the
upgrades of the internal borrower ratings of a substantial portion of large borrowers in the segment whose
financial performance and prospects improved, and the charge-offs as discussed above. In the Residential
segment, allowance for credit losses decreased ¥40.3 billion to ¥116.9 billion primarily due to a decrease inallowance for individually-evaluated impaired loans in the Residential segment as the improved borrower
financial conditions allowed us to reset the terms of a substantial portion of housing loans so that the terms ofsuch loans were equivalent to their respective terms prior to the modifications of the original loan terms. In theCard segment, allowance for credit losses decreased ¥11.3 billion to ¥40.6 billion due to a general improvementin customer credit quality. In the MUAH segment, allowance for credit losses increased ¥1.6 billion to ¥60.0
billion due to an increase in newly extended loans, partially offset by an overall improvement in the credit qualityof its loan portfolio. For more information, see “—Nonaccrual loans and trouble debt restructurings,”“—Impaired loans and impairment allowance” and “—Credit quality indicator” below.
The total allowance for credit losses represented 0.99% of our total loan portfolio as of March 31, 2014, a
decrease of 0.37 percentage points from 1.36% as of March 31, 2013. By segment, the ratio of total allowance tothe total loan balance as of March 31, 2014 was 1.04% in the Commercial segment, 0.78% in the Residential
segment, 6.68% in the Card segment and 0 .83% in the MUAH segment, representing a decrease of 0.34, 0.25,
1.04 and 0.28 percentage points in the Commercial, Residential, Card and MUAH segments, respectively,
compared to the ratio as of March 31, 2013. The decreases in the Commercial, Residential and Card segments
reflected the decreases in allowance for credit losses, and the decrease in the MUAH segment reflected theincrease in the loan balance.

113

Allowance for off-balance sheet credit instruments
In addition to the allowance for credit losses in the loan portfolio, we maintain an allowance for credit losses
on off-balance sheet credit instruments, including credit commitments, guarantees and standby letters of credit.
This allowance is included in other liabilities. With regards to the specific allocated allowance for specifically
identified credit exposures and the allocated formula allowance, we apply the same methodology that we use indetermining the allowance for loan credit losses. The allowance for credit losses on off-balance sheet credit
instruments was ¥69.9 billion as of March 31, 2014, an increase of ¥14.0 billion from ¥55.9 billion as ofMarch 31, 2013.
Sales of loans
The following table presents comparative data relating to the principal amount of nonperforming loans sold
and reversal of allowance for credit losses:
Principal
amount ofloans(1)For the fiscal year ended March 31, 2013 . . . . . . . . . . . . . . . . . . . .
For the fiscal year ended March 31, 2014 . . . . . . . . . . . . . . . . . . . .

¥37.9
¥38.7

Allowance
Loans,
for credit
net of(2)
lossesallowance(in billions)

¥ 3.5
¥22.0

¥34.4
¥16.7

Reversal of
allowance
for credit
losses¥(3.1)¥(5.8)

Notes:(1) Represents principal amount after the deduction of charge-offs made before the sales of nonperforming loans.
(2) Represents allowance for credit losses at the latest balance-sheet date.

Through the sale of nonperforming loans to third parties, additional provisions or gains may arise fromfactors such as a change in the credit quality of the borrowers or the value of the underlying collateral subsequent
to the prior reporting date, and the risk appetite and investment policy of the purchasers.
Due to the inherent uncertainty of factors that may affect negotiated prices, which reflect the borrowers’
financial condition and the value of underlying collateral, the fact that we recorded no additional cost during areported period is not necessarily indicative of the results that we may record in the future.
In connection with the sale of loans, including performing loans, we recorded net gains of ¥14.3 billion andnet gains of ¥19.0 billion for the fiscal years ended March 31, 2013 and 2014, respectively.
Nonaccrual loans and troubled debt restructurings
We consider a loan to be a nonaccrual loan when substantial doubt exists as to the full and timely payment
of interest on, or repayment of, the principal of the loan, which is a borrower condition that generally
corresponds to borrowers in categories 13 and below in our internal rating system (which corresponds to “Likely
to become Bankrupt,” “Virtually Bankrupt” and “Bankrupt or de facto Bankrupt” status under Japanese banking
regulations). Substantially all nonaccrual loans are also impaired loans. Loans are also placed in nonaccrual
status when principal or interest is contractually past due one month or more with respect to loans within allclasses of the Commercial segment, three months or more with respect to loans within the Card, MUAH and
Krungsri segments, and six months or more with respect to loans within the Residential segment.
We modify certain loans in conjunction with our loss-mitigation activities. Through these modifications,concessions are granted to a borrower who is experiencing financial difficulty, generally in order to minimize
economic loss, to avoid foreclosure or repossession of collateral, and to ultimately maximize payments received
from the borrower. The concessions granted vary by portfolio segment, by program, and by borrower-specificcharacteristics, and may include interest rate reductions, term extensions, payment deferrals, and partial principal
forgiveness. Loan modifications that represent concessions made to borrowers who are experiencing financial
difficulties are identified as troubled debt restructurings, or TDRs.
114

Generally, accruing loans that are modified in a TDR remain as accruing loans subsequent to themodification, and nonaccrual loans remain as nonaccrual. However, if a nonaccrual loan has been restructured asa TDR and the borrower is not delinquent under the restructured terms, and demonstrates that its financial
condition has improved, we may reclassify the loan to accrual status. This determination is generally performedat least once a year through a detailed internal credit rating review process. Although we have not defined any
minimum period to qualify for an upgrade, it is not common for a borrower to be able to demonstrate that its
business problems have been resolved or can soon be resolved within a short period of time following a
restructuring. If the borrower is upgraded to category 12 or higher in our internal rating system (whichcorresponds to “Normal” and “Close Watch” status under the Japanese banking regulations), a TDR would bereclassified to accrual status. Once a restructured nonaccrual loan is deemed to be a TDR, we will continue todesignate the loan as a TDR even if the loan is reclassified to accrual status.
A loan that has been modified into a TDR is considered to be impaired until it matures, is repaid, or isotherwise liquidated, regardless of whether the borrower performs under the modified terms. Because loans
modified as TDRs are considered to be impaired, these loans are measured for impairment using our establishedasset-specific allowance methodology, which considers the expected default rates for the modified loans.
For more information on our credit and borrower ratings, see “Item 11. Quantitative and Qualitative
Disclosures about Credit, Market and Other Risk—Credit Risk Management.”
For a more information on our TDRs, see Note 4 to our consolidated financial statements included
elsewhere in this Annual Report.
The following table shows information about the nonaccrual status of loans by class as of March 31, 2013
and 2014:
As of March 31,
2013
2014
(in billions)

Commercial
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 911.7 ¥ 737.9
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
212.0
167.8
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37.4
30.1
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
185.6
142.0
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
86.0
72.1
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
249.2
211.8
Banks and other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14.0
7.2
Communication and information services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31.9
24.9
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
42.5
36.0
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53.1
46.0
Foreign-excluding MUAH and Krungsri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
98.1
82.6
Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
130.8
111.2
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
88.0
72.5
MUAH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
43.7
46.6
Krungsri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—26.0
Total(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,272.3¥1,076.8

Note:(1) The above table does not include loans held for sale of ¥0.8 billion and nil as of March 31, 2013 and 2014, respectively, and loans
acquired with deteriorated credit quality of ¥22.0 billion and ¥38.7 billion as of March 31, 2013 and 2014, respectively.

Total nonaccrual loans were ¥1,076.8 billion as of March 31, 2014, a decrease of ¥195.5 billion from
¥1,272.3 billion as of March 31, 2013. Domestic nonaccrual loans in the Commercial segment decreased ¥173.8
billion between March 31, 2013 and March 31, 2014, reflecting a ¥44.2 billion decrease mainly resulting from115

the reclassification from nonaccrual to accrual loan of the loan outstanding to a large borrower in the
manufacturing category after a portion of the loan outstanding to the borrower was written off to assist theborrower in improving its financial performance and repayment ability, and a payment was received from theborrower. Additionally, the loans outstanding to a substantial portion of large borrowers in the manufacturingcategory became current, and the internal borrower ratings of such borrowers were thus upgraded. Nonaccrualloans to borrowers in the real estate category in the domestic Commercial segment decreased ¥43.6 billion as wewere able to collect on the loans to some large borrowers. Nonaccrual loans to borrowers in the wholesale andretail category in the domestic Commercial segment also decreased ¥37.4 billion as the loans outstanding to a
substantial portion of medium and small-sized borrowers became current, and the internal borrower ratings ofsuch borrowers were thus upgraded, and as we had charge-offs of loans to a larger number of small borrowersthat continued to face challenging financial conditions and were considered unable to repay their loans. Foreign
nonaccrual loans in the Commercial segment excluding MUAH and Krungsri decreased ¥15.5 billion between
March 31, 2013 and March 31, 2014 mainly due to sales of assets by a leasing subsidiary of BTMU. Nonaccrualloans in the Residential segment decreased ¥19.6 billion primarily because the improved borrower financial
conditions allowed us to reset the terms of a substantial portion of housing loans so that the terms of such loans
were equivalent to their respective terms prior to the modifications of the original loan terms. Nonaccrual loans
in the Card segment decreased ¥15.5 billion mainly due to our implementation of stricter borrower screening
under regulatory reforms in the consumer finance industry. Nonaccrual loans in the MUAH segment increased¥2.9 billion primarily due to MUAH’s acquisition of PB Capital Corporation’s commercial mortgage loan
portfolio.
The following table shows information about outstanding recorded investment balances of TDRs by class asof March 31, 2013 and 2014:
As of March 31,
2013
2014
(in billions)

Commercial(1)Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Communication and information services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign-excluding MUAH and Krungsri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Residential(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Card(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUAH(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Krungsri(2)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 567.9
247.1
15.1
54.2
74.8
123.0
1.3
21.3
10.3
20.8
103.2
178.6
124.4
52.8
—
¥1,026.9¥528.1
257.0
13.7
64.0
57.5
95.8
1.2
12.0
10.5
16.4
114.3
99.3
103.6
62.4
—
¥907.7

Notes:(1) TDRs for the Commercial and Residential segments include accruing loans with concessions granted, and do not include nonaccrualloans with concessions granted.
(2) TDRs for the Card, MUAH and Krungsri segments include accrual and nonaccrual loans. Included in the outstanding recorded
investment balances as of March 31, 2013 and 2014 are nonaccrual TDRs as follows: ¥63.2 billion and ¥51.8 billion—Card; ¥18.1
billion and ¥23.7 billion—MUAH, respectively.
(3) For the Krungsri segment, acquired loans were recorded at their fair values as of the acquisition date, and there have been no indications
that allowance for credit loss is necessary for these loans since then. Therefore, no TDRs are stated in the above table.

Total TDRs were ¥907.7 billion as of March 31, 2014, a decrease of ¥119.2 billion from ¥1,026.9 billion asof March 31, 2013. For the fiscal years ended March 31, 2013 and 2014, extensions of the stated maturity dates
116were the primary type of concessions made to loans in the Commercial and Residential segments, whereas
reductions in the stated interest rates and payment deferrals were the primary type of concessions made to loans
in the Card and MUAH segments.
In the above table, TDRs for the Commercial and Residential segments include accruing loans withconcessions granted, and do not include nonaccrual loans with concessions granted, whereas TDRs for the Card,
MUAH and Krungsri segments include accrual and nonaccrual loans.
TDRs in the domestic Commercial segment decreased ¥39.8 billion primarily attributable to decreases in TDRs in
the services and wholesale and retail categories mainly because a portion of the loans outstanding to small andmedium-sized borrowers were repaid as their financial condition improved or as their loans matured. Because TDRs
for the domestic Commercial segment do not include nonaccrual loans with concessions granted, these decreases werepartially offset by the addition to the amount of TDRs disclosed for the manufacturing category primarily resulting
from the reclassification from nonaccrual loan to accrual TDR of the loan outstanding to a large borrower as the loan
became current. The decreases in TDRs were also offset in part by an increase in TDRs in the real estate category
primarily resulting from modifications made to the loans to some large borrowers.
TDRs in the Residential segment decreased ¥79.3 billion as the improved borrower financial conditions
allowed us to reset the terms of a substantial portion of housing loans so that the terms of such loans wereequivalent to their respective terms prior to the modifications of the original loan terms. TDRs in the Card
segment decreased ¥20.8 billion mainly due to our implementation of stricter borrower screening underregulatory reforms in the consumer finance industry. TDRs in the MUAH segment increased ¥9.6 billion as theloan balance increased.
Impaired loans and impairment allowance
Impaired loans primarily include nonaccrual loans and TDRs. We consider a loan to be impaired when,based on current information and events, it is probable that we will be unable to collect all of the scheduled
payments of interest on, and repayment of, the principal of the loan when due according to the contractual termsof the loan agreement.

117

The following table shows information about impaired loans by class as of March 31, 2013 and 2014:
As of March 31, 2013
Recorded Loan Balance
Requiring
Not Requiring
an Impairment an Impairment
Allowance
Allowance(1)Total(2)(in billions)

Commercial
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . .
Banks and other financial
institutions . . . . . . . . . . . . . . . . . . . .
Communication and information
services . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . .
Foreign-excluding MUAH . . . . . . . . . . . . . .
Loans acquired with deteriorated credit
quality . . . . . . . . . . . . . . . . . . . . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUAH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

UnpaidPrincipal
Balance

RelatedAllowance¥1,476.9 ¥1,537.2
456.7
475.9
52.5
59.4
239.8
247.7
160.6
166.5
372.2
380.3

¥662.4
221.1
22.6
55.3
67.2
209.7

¥1,158.9
400.9
35.6
139.2
122.8
309.9

¥318.0
55.8
16.9
100.6
37.8
62.3

15.2

0.1

15.3

17.4

8.0

40.2
43.0
52.1
199.9

13.0
9.8
21.7
0.3

53.2
52.8
73.8
200.2

55.0
53.8
81.2
200.5

23.7
33.5
21.3
122.4

30.9
300.2
123.6
31.3
¥1,844.8

0.1
13.8
0.8
23.0
¥356.0

31.0
47.9
314.0
363.5
124.4
139.2
54.3
60.7
¥2,200.8 ¥2,349.0

9.9
118.8
37.9
3.6
¥955.0

As of March 31, 2014
Recorded Loan Balance
Requiring
Not Requiring
an Impairment an Impairment
Allowance
Allowance(1)Total(2)(in billions)

Commercial
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . .
Banks and other financial
institutions . . . . . . . . . . . . . . . . . . . .
Communication and information
services . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . .
Foreign-excluding MUAH and Krungsri . . .
Loans acquired with deteriorated credit
quality . . . . . . . . . . . . . . . . . . . . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUAH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Krungsri(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

UnpaidPrincipal
Balance

RelatedAllowance¥1,263.5 ¥1,312.3
423.9
431.7
43.8
45.3
204.9
212.4
129.3
139.3
307.6
317.6

¥544.3
181.4
18.7
52.8
54.5
169.5

¥1,006.3
368.9
30.5
141.2
102.0
249.0

¥257.2
55.0
13.3
63.7
27.3
58.6

8.3

0.1

8.4

8.4

7.0

25.4
36.8
44.2
193.3

11.5
9.6
18.1
2.4

36.9
46.4
62.3
195.7

39.3
47.9
70.4
195.9

16.5
26.9
17.0
96.2

18.8
203.6
102.9
39.6
—
¥1,564.5

0.2
11.6
0.7
24.4
—
¥296.5

19.0
32.1
215.2
255.7
103.6
115.8
64.0
71.2
—
—
¥1,861.0 ¥1,983.0

6.1
70.4
29.2
4.1
—
¥750.3118

Notes:(1) These loans do not require an allowance for credit losses because the fair values of the impaired loans equal or exceed the recorded
investments in the loans.
(2) Included in impaired loans as of March 31, 2013 and 2014 are accrual TDRs as follows: ¥671.1 billion and ¥642.4 billion—Commercial;¥178.6 billion and ¥99.4 billion—Residential; ¥61.2 billion and ¥51.8 billion—Card; and ¥34.8 billion and ¥38.7 billion—MUAH,
respectively.
(3) In addition to impaired loans presented in the above table, there were loans held for sale that were impaired of ¥0.8 billion and nil as ofMarch 31, 2013 and 2014, respectively.
(4) For the Krungsri segment, which is a new portfolio segment added following our acquisition of Krungsri in December 2013, the acquiredloans were recorded at their fair values as of the acquisition date, and there have been no indications that allowance for credit loss isnecessary for these loans since then. Therefore, no impaired loans were stated in the above table.

The following table shows information regarding the average recorded loan balance and recognized interest
income on impaired loans for the fiscal years ended March 31, 2013 and 2014:
Fiscal years ended March 31,
2013
2014
Average
Recognized
Average
Recognized
Recorded Loan Interest Recorded Loan Interest
Balance
IncomeBalance
Income(in billions)

Commercial
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . .
Communication and information services . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign-excluding MUAH and Krungsri . . . . . . . . . . . . . .
Loans acquired with deteriorated credit quality . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUAH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Krungsri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

119¥1,414.3
418.4
54.7
198.1
170.0
376.0
11.5
51.9
58.1
75.6
172.5
33.0
320.2
135.6
46.9
—
¥2,122.5

¥24.0
7.0
1.2
2.7
3.2
6.2
0.2
1.0
1.3
1.2
2.5
2.0
6.0
6.5
1.8
—
¥42.8

¥1,359.6
430.4
47.8
228.1
140.6
339.6
10.7
44.4
49.6
68.4
187.7
30.1
264.3
114.0
60.9
—
¥2,016.6

¥23.3
7.0
0.9
3.5
2.8
5.9
0.2
0.9
1.0
1.1
2.8
1.7
5.1
5.2
3.5
—
¥41.6

Credit quality indicator
The following table sets forth credit quality indicators of loans by class as of March 31, 2013 and 2014:
As of March 31, 2013:

Likely to become
Bankrupt orLegally/
Close
Virtually
Watch
Bankrupt(in billions)

NormalCommercial
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥48,099.4 ¥4,476.8
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,062.4
1,481.4
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
797.5
220.5
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,570.1
898.6
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,417.7
362.7
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . .
7,297.2
748.0
Banks and other financial institutions . . . . . . . . . .
3,239.7
367.2
Communication and information services . . . . . . .
1,183.3
98.7
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,951.4
192.3
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,580.1
107.4
Foreign-excluding MUAH . . . . . . . . . . . . . . . . . . . . . . .
22,341.0
1,530.2
Loans acquired with deteriorated credit quality . . . . . . .
31.0
52.0
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥70,471.4 ¥6,059.0

Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit Quality Based on
the Number of Delinquencies

MUAH . . . . . . . . . . . . . . . . . . . . . . . . .

AccrualNonaccrual¥2,260.8¥31.3

As of March 31, 2014:
NormalCommercial
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 50,608.9
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . .
10,032.9
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . .
786.6
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,747.1
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,279.4
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . .
7,582.6
Banks and other financial institutions . . . . . . . .
3,959.3
Communication and information services . . . . .
1,349.2
Other industries . . . . . . . . . . . . . . . . . . . . . . . . .
13,274.0
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,597.8
Foreign-excluding MUAH and Krungsri . . . . . . . . . .
28,399.2
Loans acquired with deteriorated credit quality . . . . .
32.4
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 79,040.5

120¥ 911.9
212.0
37.4
185.7
86.0
249.3
14.0
31.9
42.6
53.0
89.8
18.3
¥1,020.0

Total(1)¥53,488.1
11,755.8
1,055.4
10,654.4
2,866.4
8,294.5
3,620.9
1,313.9
12,186.3
1,740.5
23,961.0
101.3¥77,550.4

AccrualNonaccrual(in billions)

Total(1)¥15,067.8¥ 582.5¥133.4¥ 89.1¥15,201.2¥ 671.6

Credit Quality Based on
Internal Credit RatingsSpecialPass
Mention Classified(in billions)¥2,745.4

¥69.5

¥80.4

Likely to become
Bankrupt or
Close
Legally/Virtually
Watch
Bankrupt(in billions)¥ 3,549.1
1,329.4
163.3
716.3
328.1
651.7
18.5
68.8
182.7
90.3
1,132.1
33.1¥ 4,714.3¥ 737.7
167.8
30.1
141.8
72.1
211.7
7.2
25.0
36.1
45.9
84.8
10.2
¥ 832.7

Total(1)(2)¥5,187.4

Total(1)¥ 54,895.7
11,530.1
980.0
10,605.2
2,679.6
8,446.0
3,985.0
1,443.0
13,492.8
1,734.0
29,616.1
75.7¥ 84,587.5

Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit Quality Based on
the Number of Delinquencies

MUAH . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AccrualNonaccrual¥3,003.8¥35.0

Krungsri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AccrualNonaccrual(in billions)

Total(1)¥14,864.9¥ 535.5¥113.4¥ 73.1¥14,978.3¥ 608.6

Credit Quality Based on
Internal Credit RatingsSpecialPass
Mention Classified(in billions)¥3,947.0

¥98.6

¥95.2

Total(1)(2)¥7,179.6

NormalSpecialMentionSubstandard or Doubtful
or Doubtful of Loss(in billions)Total¥2,923.1¥101.2¥51.6¥3,075.9

Notes:(1) Total loans in the above table do not include loans held for sale.
(2) Total loans of MUAH do not include FDIC covered loans and small business loans which are not individually rated totaling ¥66.9 billionand ¥60.0 billion as of March 31, 2013 and 2014, respectively. We will be reimbursed for a substantial portion of any future losses on
FDIC covered loans under the terms of the FDIC loss share agreements.

We classify loans into risk categories based on relevant information about the ability of borrowers to service
their debt, including, but not limited to, historical and current financial information, historical and current
payment experience, credit documentation, public and non-public information about borrowers and current
economic trends as deemed appropriate to each segment.
The primary credit quality indicator for loans within all classes of the Commercial segment is the internal
credit rating assigned to each borrower based on our internal borrower ratings of 1 through 15 with the rating of
1 assigned to a borrower with the highest quality of credit. When assigning a credit rating to a borrower, weevaluate the borrower’s expected debt-service capability based on various information, including financial andoperating information of the borrower as well as information on the industry in which the borrower operates, andthe borrower’s business profile, management and compliance system. In evaluating a borrower’s debt-service
capability, we also conduct an assessment of the level of earnings and an analysis of the borrower’s net worth.
Based on the internal borrower rating, loans within the Commercial segment are categorized as Normal (internalborrower ratings of 1 through 9), Close Watch (internal borrower ratings of 10 through 12), and Likely to
become Bankrupt or Legally/Virtually Bankrupt (internal borrower ratings of 13 through 15). Loans to borrowers
categorized as Normal represent those that are not deemed to have collectibility issues. Loans to borrowers
categorized as Close Watch represent those that require close monitoring as the borrower has begun to exhibit
elements of potential concern with respect to its business performance and financial condition, the borrower has
begun to exhibit elements of serious concern with respect to its business performance and financial condition,
including business problems requiring long-term solutions, or the borrower’s loans are TDRs or loans
contractually past due 90 days or more for special reasons. Loans to borrowers categorized as Likely to become
Bankrupt or Legally/Virtually Bankrupt represent those that have a higher probability of default than thosecategorized as Close Watch due to serious debt repayment problems with poor progress in achieving
restructuring plans, the borrower being considered virtually bankrupt with no prospects for an improvement inbusiness operations, or the borrower being legally bankrupt with no prospects for continued business operations
because of non-payment, suspension of business, voluntary liquidation or filing for legal liquidation.
For more information on our credit and borrower ratings, see “Item 11. Quantitative and Qualitative
Disclosures about Credit, Market and Other Risk—Credit Risk Management.”
The accrual status is a primary credit quality indicator for loans within the Residential segment, the Card
segment, and consumer loans within the MUAH segment. The accrual status of these loans is determined basedon the number of delinquent payments.
121

Commercial loans within the MUAH segment are categorized as either pass or criticized based on theinternal credit rating assigned to each borrower. Criticized credits are those that are internally risk graded as
special mention, substandard or doubtful. Special mention credits are potentially weak, as the borrower has
begun to exhibit deteriorating trends, which, if not corrected, may jeopardize repayment of the loan and result infurther downgrade. Adversely classified credits are those that are internally risk graded as substandard or
doubtful. Substandard credits have well-defined weaknesses, which, if not corrected, could jeopardize the fullsatisfaction of the debt. A credit classified as doubtful has critical weaknesses that make full collection
improbable on the basis of currently existing facts and conditions.
Loans within the Krungsri segment are categorized as Normal, Special Mention, and Substandard, which isfurther divided into Substandard, Doubtful and Doubtful of Loss, primarily based on their delinquency status.
Loans categorized as Special Mention generally represent those that have overdue principal or interest payments
for a cumulative period exceeding one month commencing from the contractual due date. Loans categorized as
Substandard, Doubtful or Doubtful of Loss generally represent those that have overdue principal or interest
payments for a cumulative period exceeding three months, commencing from the contractual due date.
For the Commercial, Residential and Card segments, credit quality indicators are based on information as ofMarch 31. For the MUAH and Krungsri segments, credit quality indicators are generally based on information asof December 31.
The ratio of loans classified as Close Watch or below in the Commercial segment decreased 2.5 percentage
points to 6.6% as of March 31, 2014 from 9.1% as of March 31, 2013. The decrease in loans rated Close Watchor below was mainly due to an overall decrease in such loans, including a decrease of ¥355.5 billion in suchloans to borrowers in the banks and other financial institutions category, including two large consumer financecompanies and a large securities firm, primarily resulting from the upgrades of the internal borrower ratings ofthese and other large borrowers as their financial performance improved. The increase in total loans in theCommercial segment was mainly due to an increase in foreign loans.
The ratio of loans classified as Nonaccrual status in the Residential segment decreased 0.1 percentage points
to 0.8% as of March 31, 2014 from 0.9% as of March 31, 2013. Loans in the Nonaccrual status in the Residential
segment decreased ¥20.0 billion to ¥113.4 billion as of March 31, 2014, primarily due to a decrease in thenumber of civil rehabilitation filings made by individual borrowers.
The ratio of loans classified as Nonaccrual status in the Card segment decreased 1.3 percentage points to
12.0% as of March 31, 2014 from 13.3% as of March 31, 2013. This was primarily due to an overall
improvement in the credit quality of the loan portfolio, and our implementation of stricter borrower screening
under regulatory reforms in the consumer finance industry.
The ratio of loans classified as Special mention or below and Nonaccrual in the MUAH segment decreased
0.3 percentage points to 3.2% as of March 31, 2014 from 3.5% as of March 31, 2013. The decrease reflectedgradually improving economic conditions in the United States.

122

Past due analysis
Aging of past due loans by class as of March 31, 2013 and 2014 are shown below:

As of March 31, 2013:

Commercial
Domestic . . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . . .
Construction . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . .
Banks and other financial
institutions . . . . . . . . . . . . .
Communication andinformation services . . . . .
Other industries . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . .
Foreign-excluding MUAH . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUAH . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . .

As of March 31, 2014:

Commercial
Domestic . . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . . .
Construction . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . .
Banks and other financial
institutions . . . . . . . . . . . . .
Communication andinformation services . . . . .
Other industries . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . .
Foreign-excluding MUAH and
Krungsri . . . . . . . . . . . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUAH . . . . . . . . . . . . . . . . . . . . . . . . .
Krungsri . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . .

1-3 months
Past DueGreaterThan
3 months

¥

¥

45.9
7.0
2.1
5.3
12.2
10.1

84.8
15.3
1.9
15.1
7.5
24.0

Total
Past Due

0.1

2.3
1.6
5.3
19.8
91.2
23.7
30.7
¥ 211.3

2.8
6.8
11.3
17.7
55.1
39.8
18.0
¥ 215.4

1-3 months
Past DueGreaterThan
3 months

Total
Past Due

¥

¥

¥

53.6
7.2
0.6
9.6
2.8
22.8

Total
Loans(1)(2)¥ 130.7 ¥ 53,357.4 ¥ 53,488.1
22.3
11,733.5
11,755.8
4.0
1,051.4
1,055.4
20.4
10,634.0
10,654.4
19.7
2,846.7
2,866.4
34.1
8,260.4
8,294.5

—

26.2
5.3
0.7
4.9
4.3
4.7

Current(in billions)

0.1

3,620.8

Recorded
Investment>
90 Days andAccruing

¥

7.5
0.0
0.0
2.3
0.1
0.1

3,620.9

0.0

5.1
1,308.8
1,313.9
8.4
12,177.9
12,186.3
16.6
1,723.9
1,740.5
37.5
23,923.5
23,961.0
146.3
15,037.7
15,184.0
63.5
594.9
658.4
48.7
5,102.9
5,151.6¥ 426.7 ¥ 98,016.4 ¥ 98,443.1

0.0
0.0
5.0
0.2
32.9
—
0.1
¥ 40.7

Current(in billions)

Total
Loans(1)(2)

79.8 ¥ 54,815.9 ¥ 54,895.7
12.5
11,517.6
11,530.1
1.3
978.7
980.0
14.5
10,590.7
10,605.2
7.1
2,672.5
2,679.6
27.5
8,418.5
8,446.0

Recorded
Investment>
90 Days andAccruing

¥

6.5
—
0.0
2.2
0.0
0.0

0.0

0.1

0.1

3,984.9

3,985.0

—

0.7
0.6
5.0

1.4
1.6
7.5

2.1
2.2
12.5

1,440.9
13,490.6
1,721.5

1,443.0
13,492.8
1,734.0

—
—
4.3

3.3
85.5
21.6
30.1
66.9
¥233.6

7.1
54.5
33.4
14.3
22.1
¥185.0

10.4
140.0
55.0
44.4
89.0
¥418.6

29,605.7
14,823.0
540.9
7,078.6
2,936.2¥109,800.3

29,616.1
14,963.0
595.9
7,123.0
3,025.2¥110,218.9

0.4
40.5
—
0.5
—
¥47.9

Notes:(1) Total loans in the above table do not include loans held for sale and loans acquired with deteriorated credit quality.
(2) Total loans of MUAH do not include ¥2.0 billion and ¥1.6 billion of FDIC covered loans as of March 31, 2013 and 2014, respectively,
which are not subject to the guidance on loans and debt securities acquired with deteriorated credit quality.

123Total past due loans as of March 31, 2014 were ¥418.6 billion, a decrease of ¥8.1 billion from ¥426.7 billion
as of March 31, 2013. This reflected an overall improvement in the credit quality of all of the segments, morethan offsetting the impact of the consolidation of Krungsri.
Investment Portfolio
Our investment securities primarily consist of Japanese government bonds, corporate bonds and marketable
equity securities. Japanese government bonds are mostly classified as securities available for sale. Ourinvestment in Japanese government bonds is a part of our asset and liability management policy with respect toinvesting the amount of yen-dominated funds exceeding our net loans. The percentage of our holding of Japanese
government bonds available for sale to the total investment securities decreased to 75.2% as of March 31, 2014
from 80.0% as of March 31, 2013. We also hold Japanese government bonds that are classified as securities
being held to maturity, which accounted for 0.4% of our investment portfolio as of March 31, 2014.
Historically, we have held equity securities of some of our customers primarily for strategic purposes, inparticular, to maintain long-term relationships with these customers. We continue to focus on reducing ourinvestment in equity securities for such purposes in order to reduce the price fluctuation risk in our equity
portfolio from a risk management perspective and to respond to applicable regulatory requirements as well as
increasing market expectation for us to reduce our equity portfolio. As of March 31, 2014, however, ourinvestment in marketable equity securities increased due to a higher fair value of our equity portfolio reflecting
increased stock prices in Japan. As of March 31, 2013 and March 31, 2014, the aggregate book value of ourmarketable equity securities under Japanese GAAP satisfied the requirements of the legislation prohibiting banksfrom holding equity securities in excess of their Tier 1 capital.
Investment securities decreased ¥6.54 trillion to ¥55.33 trillion as of March 31, 2014 from ¥61.87 trillion asof March 31, 2013, primarily due to a decrease in our holding of Japanese government bonds primarily inresponse to the Bank of Japan’s monetary policy and measure to purchase such bonds in the market to stimulate
the economy by increasing liquidity and also as part of our asset and liability management. The decrease in ourholding of Japanese government bonds was partially offset by an increase in foreign bonds held by ourcommercial banking subsidiaries to maintain buffer assets for liquidity management purposes, an increase inforeign bonds as a result of our acquisition of Krungsri and an increase in the fair values of marketable equity
securities reflecting higher stock prices.
Investment securities other than securities available for sale or being held to maturity, which arenonmarketable equity securities presented on our consolidated balance sheet as other investment securities, wereprimarily carried at cost of ¥0.74 trillion as of March 31, 2014 and ¥0.89 trillion as of March 31, 2013,
respectively, because their fair values were not readily determinable.
For the fiscal year ended March 31, 2014, losses resulting from impairment of investment securities were
¥6.5 billion, compared to ¥124.2 billion for the fiscal year ended March 31, 2013.

124

The following table shows information regarding the amortized cost, net unrealized gains (losses), and fairvalue of our investment securities available for sale and being held to maturity as of March 31, 2013 and 2014.
As of March 31,
2013
Amortized
cost

Fair value

2014
Net
unrealized Amortized
gains (losses)
cost(in billions)

Fair valueNet
unrealized
gains (losses)¥41,388.6 ¥41,589.0¥200.4

Securities available for sale:
Debt securities:
Japanese government andJapanese government agency
bonds . . . . . . . . . . . . . . . . . . . ¥49,159.8 ¥49,480.0
Japanese prefectural andmunicipal bonds . . . . . . . . . . .
207.2
217.1
Foreign governments andofficial institutions bonds . . .
701.5
716.3
Corporate bonds . . . . . . . . . . . . .
1,868.6
1,922.9
Mortgage-backed securities . . . .
1,464.3
1,493.0
Asset-backed securities(1) . . . . .
813.3
810.7
Other debt securities . . . . . . . . .
109.4
106.7
Marketable equity securities . . . . . . .
2,224.1
4,097.4

9.9

195.1

203.1

8.0

14.8
54.3
28.7
(2.6)
(2.7)
1,873.3

1,272.2
1,523.0
1,220.4
1,060.8
184.5
2,457.0

1,271.4
1,561.2
1,180.8
1,058.0
184.9
4,837.3(0.8)
38.2(39.6)(2.8)
0.4
2,380.3

Total securities available for sale . . . . . . . ¥56,548.2 ¥58,844.1¥2,295.9¥49,301.6 ¥51,885.7¥2,584.1¥56.9¥2,707.0 ¥ 2,735.1¥28.1

Debt securities being held to maturity(2) . .

¥2,131.2¥2,188.1¥320.2

Notes:(1) AAA and AA-rated products account for approximately two-thirds of our asset-backed securities.
(2) See Note 3 to our consolidated financial statements included elsewhere in this Annual Report for more details.

Net unrealized gains on securities available for sale increased ¥288.2 billion to ¥2,584.1 billion as ofMarch 31, 2014 from ¥2,295.9 billion as of March 31, 2013. This increase primarily consisted of a ¥507.0 billion
increase in net unrealized gains on marketable equity securities reflecting improved equity market conditions inJapan following the introduction of “Abenomics” and the implementation of measures under the Bank of Japan’s“quantitative and qualitative monetary easing” policy, which was partially offset by a decrease of ¥119.8 billion
in net unrealized gains on Japanese government and Japanese government agency bonds, reflecting the reductionin our holding of domestic debt securities primarily in response to the Bank of Japan’s monetary policy andmarket bond purchase operations and also as part of our asset and liability management.
The amortized cost of securities being held to maturity increased ¥575.8 billion between March 31, 2013
and March 31, 2014 mainly due to the transfer of ¥411.5 billion of mortgage-backed securities from securities
available for sale to securities being held to maturity to reduce the impact of price volatility on accumulated othercomprehensive income and in response to changes in the regulatory capital requirements in the United States,and purchases of foreign currency dominated asset-backed securities by our commercial banking subsidiaries.
These increases were partially offset by the redemption of foreign bonds held by our trust banking subsidiaries.

125

The following table shows information relating to our investment securities other than investment securities
available for sale or being held to maturity as of March 31, 2013 and 2014:
As of March 31,
2013
2014
(in billions)

Other investment securities:
Nonmarketable equity securities
Unlisted preferred securities(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities held by investment companies and brokers and dealers(3) . . . . . . . . .

¥727.8136.3
25.9¥583.2
128.2
26.2

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥890.0¥737.6

Notes:(1) These securities are mainly issued by public companies, including preferred stocks issued by Morgan Stanley, preferred securities issued
by our non-consolidated funding vehicles, and other unlisted preferred securities issued by several Japanese public companies. Those
securities are primarily carried at cost. The decrease of ¥144.6 billion in unlisted preferred securities was mainly due to the sales by ourcommercial and trust banking subsidiaries of such preferred securities issued by some Japanese companies.
(2) These securities are equity securities issued by unlisted companies other than unlisted preferred securities. Those securities are primarily
carried at cost.
(3) These investment securities are held by certain subsidiaries subject to specialized industry accounting principles for investmentcompanies and brokers and dealers, and are measured at fair value.

Cash and Due from Banks
Cash and due from banks fluctuate significantly from day to day depending upon financial market
conditions. Cash and due from banks as of March 31, 2014 were ¥3.69 trillion, an increase of ¥0.07 trillion from¥3.62 trillion as of March 31, 2013.
Interest-earning Deposits in Other Banks
A significant portion of the cash received as a result of our sale of Japanese government bonds in responseto the Bank of Japan’s monetary policy and as part of our asset and liability management was placed in interestearning deposits in other banks. Interest-earning deposits in other banks as of March 31, 2014 were ¥20.50
trillion, an increase of ¥12.39 trillion compared to ¥8.11 trillion as of March 31, 2013 mainly due to increased
interest-earning deposits with the Bank of Japan and the FRB. The average interest-earning deposits in otherbanks by our domestic offices for the fiscal year ended March 31, 2014 increased ¥7.46 trillion reflecting an
increase in interest-earning deposits with the Bank of Japan, while the average interest-earning deposits in otherbanks by our overseas offices increased ¥2.76 trillion for the same period.
Trading Account Assets
Trading account assets as of March 31, 2014 were ¥40.65 trillion, compared to ¥40.83 trillion as ofMarch 31, 2013. Trading account assets consist of trading securities and trading derivative assets. Trading
securities increased ¥2.66 trillion to ¥28.84 trillion as of March 31, 2014 from ¥26.18 trillion as of March 31,
2013. The increase of trading securities was mainly due to increases in the fair values of foreign currencydenominated bonds held by our commercial and trust banking subsidiaries. Although the fair values of suchbonds held by our commercial and trust banking subsidiaries in their respective original currencies, particularly
U.S. dollars, declined due to increased interest rates reflecting the tapering of the quantitative monetary easing
program by the FRB, the fair values of such bond as translated into Japanese yen increased as the Japanese yen
depreciated against the U.S. dollar and other major currencies. Trading derivative assets decreased ¥2.84 trillion
to ¥11.81 trillion as of March 31, 2014 from ¥14.65 trillion as of March 31, 2013. This decrease was mainly
attributable to decreases in the fair values of interest rate-related derivatives in our securities subsidiaries.
126

Deferred Tax Assets
Deferred tax assets decreased ¥0.15 trillion to ¥0.36 trillion as of March 31, 2014 from ¥0.51 trillion as ofMarch 31, 2013. This decrease was primarily attributable to a decrease in allowance for credit losses resulting
from an overall improvement in the credit quality of our loan portfolio, and a decrease in accrued severance
indemnities and pension plans mainly due to an increase in plan assets reflecting higher Japanese stock prices, aswell as a decrease in projected benefit obligations as a result of the transfer of the substitutional portion of
MUTB’s benefit obligations to the Japanese government. These decreases were partially offset by an increase indeferred tax assets resulting from a decrease in valuation allowance mainly due to the effect of the application of
the consolidated corporate-tax system as well as the profitability improvement of a certain subsidiary.
Fore more information, see Note 7 to our consolidated financial statements included elsewhere in thisAnnual Report.
Accounts Receivable
Accounts receivable, which are included in other assets, increased ¥1.04 trillion to ¥3.21 trillion as ofMarch 31, 2014 from ¥2.17 trillion as of March 31, 2013, reflecting increases in account receivables related tothe sales of debt securities toward the end of the fiscal year ended March 31, 2014 in our commercial banking,trust banking and securities subsidiaries.
Investment in Equity Method Investees
Investment in equity method investees, which is included in other assets, increased ¥0.35 trillion to¥1.62 trillion as of March 31, 2014 from ¥1.27 trillion as of March 31, 2013. The increase was mainly due to our
new investments in Asian banks, including VietinBank, and the impact of the depreciation of the Japanese yen
against the U.S. dollar on our investment in Morgan Stanley.
For more information, see Note 14 to our consolidated financial statements included elsewhere in thisAnnual Report.
Total Liabilities
As of March 31, 2014, total liabilities were ¥240.91 trillion, an increase of ¥21.29 trillion from¥219.62 trillion as of March 31, 2013. The total balance of deposits was ¥162.52 trillion as of March 31, 2014, anincrease of ¥14.31 trillion from ¥148.21 trillion as of March 31, 2013. Payables under repurchase agreements
were ¥21.27 trillion as of March 31, 2014, an increase of ¥5.57 trillion from ¥15.70 trillion as of March 31, 2013.
Long-term debt as of March 31, 2014 was ¥14.50 trillion, an increase of ¥2.32 trillion from ¥12.18 trillion as ofMarch 31, 2013. Trading account liabilities were ¥11.98 trillion as of March 31, 2014, a decrease of ¥2.99 trillion
from ¥14.97 trillion as of March 31, 2013.
The depreciation of the Japanese yen against the U.S. dollar and other foreign currencies between March 31,
2013 and March 31, 2014 resulted in an increase of ¥8.85 trillion in the Japanese yen equivalent amount offoreign currency-denominated liabilities as of March 31, 2014.
Deposits
Deposits are our primary source of funds. The total average balance of deposits increased ¥11.65 trillion to¥151.95 trillion for the fiscal year ended March 31, 2014 from ¥140.30 trillion for the fiscal year ended
March 31, 2013.
The balance of domestic deposits increased ¥3.18 trillion to ¥121.51 trillion as of March 31, 2014 from
¥118.33 trillion as of March 31, 2013, and the balance of foreign deposits increased ¥11.13 trillion to¥41.01 trillion as of March 31, 2014 from ¥29.88 trillion as of March 31, 2013. The increases in domestic
127

deposits were mainly due to an increase in ordinary deposits in the domestic offices of our commercial banking
subsidiaries and an increase in certificates of deposit in our trust banking subsidiaries. The increases in foreigndeposits were mainly due to an increase in interest-bearing deposits in overseas offices, particularly the New
York branch of our commercial banking subsidiaries as well as our trust banking subsidiaries, an increase in noninterest bearing deposits in MUB, the depreciation of the Japanese yen against other major currencies, and thedeposits we assumed in connection with our acquisition of Krungsri.
Short-term Borrowings
We use short-term borrowings as a funding source and in our management of interest rate risk. For
management of interest rate risk, short-term borrowings are used in asset and liability management operations tomatch interest rate risk exposure resulting from loans and other interest-earning assets and to manage funding
costs of various financial instruments at an appropriate level, based on our forecast of future interest rate levels.
Short-term borrowings consist of call money, funds purchased, payables under repurchase agreements, payables
under securities lending transactions, due to trust accounts, and other short-term borrowings.
Short-term borrowings increased ¥6.11 trillion to ¥42.06 trillion as of March 31, 2014 from ¥35.95 trillion
as of March 31, 2013. This increase was primarily attributable to an increase of ¥5.57 trillion in payables under
repurchase agreements, and an increase of ¥1.53 trillion in payables under securities lending transactions. The
increase in payables under repurchase agreements was primarily due to an increase in the volume of transactionsin the headquarters of our commercial banking subsidiaries, foreign branches and subsidiaries of our securities
subsidiaries, and domestic branches of our trust banking subsidiaries. The increase in payables under securities
lending transactions was primarily because our trust banking and securities subsidiaries diversified their shortterm funding sources as short-term interest rates remained stable at historical low levels.
Trading Account Liabilities
Trading account liabilities as of March 31, 2014 were ¥11.98 trillion, compared to ¥14.97 trillion as ofMarch 31, 2013. Trading account liabilities mainly consist of trading derivative liabilities. The decrease in
trading derivative liabilities was mainly attributable to decreases in the fair values of interest rate-related
derivatives in our securities subsidiaries.
Long-term Debt
Long-term debt as of March 31, 2014 was ¥14.50 trillion, an increase of ¥2.32 trillion from ¥12.18 trillion
as of March 31, 2013. This increase was mainly due to an increase in long-term borrowings by our commercial
banking subsidiaries in Japan. Our trust banking subsidiaries also increased long-term borrowings in Japan andissued long-term bonds in Japan. Our securities subsidiaries issued a higher volume of bonds outside of Japanthrough their medium term note programs and obtained additional loans from banks.
Other Liabilities
Other liabilities increased ¥0.56 trillion to ¥5.61 trillion as of March 31, 2014 from ¥5.05 trillion as ofMarch 31, 2013. This increase was mainly due to increases in accrued and other liabilities and deferred tax
liabilities. The increase in accrued and other liabilities was due to our acquisition of Krungsri and an increase inmoney deposited in our securities subsidiaries.

128

Shareholders’ Equity
The following table presents the key MUFG shareholders’ equity balances figures:
As of March 31,
2013
2014
(in trillions)Shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrealized gains on investment securities, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥10.61 ¥12.21
1.60
2.40
1.11
1.27
(0.21)
0.29

Shareholders’ equity as of March 31, 2014 was ¥12.21 trillion, an increase of ¥1.60 trillion from
¥10.61 trillion as of March 31, 2013.
Retained earnings as of March 31, 2014 were ¥2.40 trillion, an increase of ¥0.80 trillion from ¥1.60 trillion
as of March 31, 2013, reflecting higher net income of our commercial and trust banking subsidiaries for the fiscal
year ended March 31, 2014 compared to the previous fiscal year. We raised our annual dividend to ¥16 per sharefor the fiscal year ended March 31, 2014 from ¥13 per share for the previous fiscal year.
Unrealized gains on investment securities, net of tax, as of March 31, 2014 were ¥1.27 trillion, an increaseof ¥0.16 trillion from ¥1.11 trillion as of March 31, 2013. The increase was mainly due to an increase of ¥450.3
billion in unrealized gains on marketable equity securities in our commercial and trust banking subsidiaries
reflecting higher stock prices in Japan, which was partially offset by a decrease of ¥83.5 billion in unrealized
gains on Japanese government bonds also held by our commercial and trust banking subsidiaries. In addition,
unrealized gains on investment securities decreased ¥188.8 billion as a result of the reduction in our holding ofinvestment securities.
Foreign currency translation adjustments, net of taxes, as of March 31, 2014 were a positive adjustment of¥0.29 trillion, compared to a negative adjustment of ¥0.21 trillion as of March 31, 2013. This improvement wasrecorded largely in MUAH, Morgan Stanley and other foreign subsidiaries, including BTMU Liquidity Reserve
Investment Limited, a Cayman subsidiary set up to purchase and hold U.S. Treasury bonds, reflecting thedepreciation of the Japanese yen against the U.S. dollar.
Sources of Funding and Liquidity
Our primary source of liquidity is from a large balance of deposits, mainly ordinary deposits, certificates ofdeposit and time deposits. Time deposits have historically shown a high rollover rate among our corporate
customers and individual depositors. Due to our broad customer base in Japan and the depositors’ recent
preference to seek the safety of deposits at large financial institutions, the balance of our deposits increased to¥162.52 trillion as of March 31, 2014 from ¥148.21 trillion as of March 31, 2013. As of March 31, 2014, ourdeposits exceeded our loans, net of allowance for credit losses of ¥109.18 trillion, by ¥53.34 trillion. These
deposits provide us with a sizable source of stable and low-cost funds. Our average deposits, combined withaverage total equity of ¥10.68 trillion, funded 65.6% of our average total assets of ¥247.73 trillion during the
fiscal year ended March 31, 2014.
The remaining funding was primarily provided by short-term borrowings and long-term senior andsubordinated debt. Short-term borrowings consist of call money and funds purchased, payables under repurchaseagreements, payables under securities lending transactions, due to trust account, and other short-term borrowings.
From time to time, we have issued long-term instruments such as straight bonds with maturities between three toten years. The balance of our short-term borrowings as of March 31, 2014 was ¥42.06 trillion, and the averagebalance of our short-term borrowings for the fiscal year ended March 31, 2014 was ¥40.85 trillion. The balanceof our long-term debt as of March 31, 2014 was ¥14.50 trillion, and the average balance of our long-term debt for129

the fiscal year ended March 31, 2014 was ¥12.64 trillion. Liquidity may also be provided by the sale of financial
assets, including securities available for sale, trading account securities and loans. Additional liquidity may beprovided by the maturity of loans.
We manage liquidity separately at certain of our foreign and domestic non-bank and bank subsidiaries
because they are subject to separate regulatory requirements, pursue different business models and havedistinctive liquidity risk profiles. We manage our group-wide liquidity on a consolidated basis based on the tests
and analyses conducted at the subsidiary level. Liquidity risk management measures at the subsidiary level
include the following:‰

Domestic Bank Subsidiaries—Our major domestic bank subsidiaries, BTMU and MUTB, set liquidityand funding limits designed to maintain their respective requirements for funding from market sources
below pre-determined levels for certain periods (e.g., one-day, two-week and one-month). The majordomestic bank subsidiaries also monitor the balance of buffer assets they respectively hold, including
Japanese government bonds and U.S. Treasury bonds, which can be used for cash funding even inperiods of stress. In addition, the major domestic bank subsidiaries regularly perform liquidity stresstesting designed to evaluate the impact of systemic market stress conditions and institution-specificstress events, including credit rating downgrades, on their liquidity positions;‰

Foreign Bank Subsidiaries—Our major foreign bank subsidiaries, MUAH and Krungsri, monitors
various liquidity metrics, including total available liquidity, the net non-core funding dependence ratio,
and minimum liquidity assets, as a tool to maintain a sufficient amount of liquidity and diversity offunding sources to allow the major foreign bank subsidiaries to meet expected obligations in both stable
and adverse conditions. In addition, the major foreign bank subsidiaries regularly conduct stress testing,which incorporates both bank-specific and systemic market scenarios that would adversely affect its
liquidity position, to facilitate the identification of appropriate remedial measures to help ensure that it
maintains adequate liquidity in adverse conditions;‰

Securities Subsidiaries—Our securities subsidiaries implement liquidity and funding limits designed tomaintain their requirements for funding from market sources below pre-determined levels for specified
periods. In addition, the securities subsidiaries regularly conduct analyses designed to assess the period
for which they can continue to meet their respective liquidity requirements by selling or pledging assets
they respectively hold under scenarios where they are unable to access any additional sources offinancing in the market; and‰Non-Bank Subsidiaries—Our non-bank subsidiaries, including Mitsubishi UFJ NICOS, regularly
conduct cash flow analyses designed to assess their ability to generate sufficient liquidity for specified
periods, considering the cash and cash equivalents as well as deposits they respectively hold, and theirrespective operating income and expenses under scenarios where they are no longer able to obtainfunding from markets through issuance of commercial paper, bonds or other instruments. The non-banksubsidiaries also conduct analyses to ensure sufficient liquidity and funding are available from our banksubsidiaries and other financial institutions outside of our group of companies.

We collect and evaluate the results of the stress tests individually performed by our major subsidiaries toensure our ability to meet our liquidity requirements on a consolidated basis in stress scenarios.
We manage our funding sources using buffer assets, primarily Japanese government bonds, for cash
funding. As of March 31, 2014, we held ¥41.59 trillion of Japanese national government and Japanese
government agency bonds as available for sale. Our major domestic commercial banking subsidiaries use
liquidity-supplying assets, primarily commitment lines for minor currencies funding. In addition, the major banksubsidiaries use a liquidity gap, or the excess of cash inflows over cash outflows, for cash funding.
See “Item 3.D. Key Information—Risk Factors—Risks Related to Our Business—A further downgrade ofour credit ratings could trigger additional collateral obligations under our derivative contracts and increase ourfunding costs.”130

Total Equity
The following table presents a summary of our total equity as of March 31, 2013 and 2014:
As of March 31,
2013
2014
(in billions, except percentages)

Preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings appropriated for legal reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unappropriated retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income, net of taxes . . . . . . . . . . . . . . . . . . . . . . .
Treasury stock, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥Total Mitsubishi UFJ Financial Group shareholders’ equity . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥10,608.8
333.2¥12,205.0
546.4

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥10,942.0¥12,751.4

Ratio of total equity to total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

442.1
1,646.0
6,348.1
239.6
1,361.7
574.3
(3.0)

4.75%

¥

442.1
1,647.1
6,363.4
239.6
2,157.6
1,357.7
(2.5)

5.03%

Total equity increased ¥1,809.4 billion to ¥12,751.4 billion as of March 31, 2014 from ¥10,942.0 billion asof March 31, 2013. The ratio of total equity to total assets improved 0.28 percentage points to 5.03% as ofMarch 31, 2014 from 4.75% as of March 31, 2013. Although total assets increased between March 31, 2013 andMarch 31, 2014, the ratio of total equity to total assets also increased between those dates mainly due to anincrease in unappropriated retained earnings which can be roughly calculated by subtracting the amount ofdividends from net profits, and an increase in accumulated other comprehensive income, net of tax, reflecting
larger net unrealized holding gains on investment securities and positive foreign currency translation
adjustments.
Due to our holdings of a large amount of marketable equity securities and the volatility of the equity
markets in Japan, changes in the fair value of marketable equity securities have significantly affected our total
equity in recent years. The following table presents information relating to the accumulated net unrealized gains,
net of taxes, in respect of investment securities classified as available for sale as of March 31, 2014:
As of March 31,
2013
2014
(in billions, except percentages)

Accumulated net unrealized gains on investment securities . . . . . . . . . . . . . . . . . . . .
Accumulated net unrealized gains to total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,106.3
10.11%¥1,272.7
9.98%

Capital Adequacy
We are subject to various regulatory capital requirements promulgated by the regulatory authorities of thecountries in which we operate. Failure to meet minimum capital requirements can result in mandatory actions
being taken by regulators that could have a direct material effect on our consolidated financial statements.
Moreover, if our capital ratios are perceived to be low, our counterparties may avoid entering into transactions
with us, which in turn could negatively affect our business and operations. For further information, see“Item 3.D. Key Information—Risk Factors—Risks Related to Our Business—We may not be able to maintainour capital ratios above minimum required levels, which could result in the suspension of some or all of ouroperations.”
We continually monitor our risk-adjusted capital ratio closely and manage our operations in consideration of
the capital ratio requirements. These ratios are affected not only by fluctuations in the value of our assets,
131

including our credit risk assets such as loans and equity securities, the risk weights of which depend on the
borrowers’ or issuers’ internal ratings, marketable securities and deferred tax assets, but also by fluctuations in
the value of the Japanese yen against the U.S. dollar and other foreign currencies and by general price levels ofJapanese equity securities.
Capital Requirements for Banking Institutions in Japan
Certain provisions of Basel III were adopted by the FSA effective March 31, 2013 for Japanese banking
institutions with international operations conducted by their foreign offices. Under Basel III, Common Equity
Tier 1, Tier 1 and total capital ratios are used to assess capital adequacy, which ratios are determined by dividing
applicable capital components by risk-weighted assets. Total capital is defined as the sum of Tier 1 and Tier 2
capital.
Under Basel III, Tier 1 capital includes Common Equity Tier 1 and Additional Tier 1 capital. Common
Equity Tier 1 capital is a new category of capital primarily consisting of:‰common stock,‰capital surplus,‰

retained earnings, and‰accumulated other comprehensive income (progressively phased into the capital ratio calculation over
several years).

Regulatory adjustments including certain intangible fixed assets, such as goodwill, defined benefit pension
fund net assets (prepaid pension costs), and other adjustments will be deducted from Common Equity Tier 1
capital. The amount of adjustments to be deducted will increase progressively over time.
Additional Tier 1 capital generally consists of Basel III compliant preferred securities and, during thetransition period, other capital that meets Tier I requirements under the former Basel II standards, net of
regulatory adjustments. Subject to transitional measures, adjustments are made to Additional Tier 1 capital for
items including intangible fixed assets, such as goodwill, and foreign currency translation adjustments, with theamounts of such adjustments to Additional Tier 1 capital progressively decreasing over time.
Tier 2 capital generally consists of:‰Basel III compliant deferred obligations,‰

during the transition period, capital that meet Tier II requirements under the former Basel II standards,‰

allowances for credit losses, and‰non-controlling interests in subsidiaries’ Tier 2 capital instruments.

Subject to transitional measures, certain items including 45% of unrealized profit on securities available forsale and revaluation of land are reflected in Tier 2 capital with the amounts progressively decreasing over time.
In determining capital ratios under the FSA guidelines reflecting Basel III, we and our banking subsidiaries
used the Advanced Internal Ratings-Based approach, or the AIRB approach, to calculate capital requirements for
credit risk as of March 31, 2014. The Standardized Approach is used for some subsidiaries that are considered to
be immaterial to the overall MUFG capital requirements, and MUAH has adopted a phased rollout of the internalratings-based approach. Market risk is reflected in the risk-weighted assets by applying the Internal Models
Approach to calculate general market risk and the Standardized Measurement Method to calculate specific risk.
Under the Internal Models Approach, we principally use a historical simulation model to calculate value-at-risk,
or VaR, amounts by estimating the profit and loss on our portfolio by applying actual fluctuations in historical132

market rates and prices over a fixed period. Under the FSA guidelines reflecting Basel III, we reflect operationalrisk in the risk-weighted assets by applying the Standardized Approach as of March 31, 2011 and the Advanced
Measurement Approach from March 31, 2012. The Basel Committee on Banking Supervision has issued
proposals to revise the current market risk framework, including stricter measures relating to some of ourinvestment securities portfolio. Under the current proposals, certain financial instruments that we hold, including
investment securities, could become subject to stricter trading book capital requirements. For more information,
see “Item 11. Quantitative and Qualitative Disclosures about Credit, Market and Other Risk—Operational Risk
Management.”
We have been granted approval by the FSA to exclude the majority of our investment in Morgan Stanleyfrom being subject to double gearing adjustments. The approval was granted for a 10-year period, but theapproval amount will be phased out by 20% each year starting from March 31, 2019. As of March 31, 2014, afull application of double gearing adjustments with respect to our investment in Morgan Stanley would have
reduced our Common Equity Tier 1 capital ratio by approximately 0.7%.
Under Japanese regulatory capital requirements, our consolidated capital components, including Common
Equity Tier 1, Tier 1, and Tier 2 capital and risk-weighted assets, are calculated based on our consolidated
financial statements prepared under Japanese GAAP. Each of the consolidated and stand-alone capitalcomponents and risk-weighted assets of our banking subsidiaries in Japan is also calculated based on
consolidated and non-consolidated financial statements prepared under Japanese GAAP.
Certain Basel III provisions were adopted by the FSA with transitional measures and became effective
March 31, 2013. Various Basel III measures are being phased in from the calendar year 2013, including those
designed to raise the level of minimum capital requirements and to establish an internationally harmonized
leverage ratio and a global minimum liquidity standard. In addition, the Basel Committee on Banking
Supervision has proposed additional loss absorbency requirements to supplement the Common Equity Tier 1
capital requirement ranging from 1% to 3.5% for global systemically important banks, or G-SIBs, depending on
the bank’s systemic importance. The Financial Stability Board identified us as a G-SIB in its most recent annual
report published in November 2013, and indicated that, as a G-SIB, we would be required to hold an additional
1.5% of Tier 1 common equity. The group of banks identified as G-SIBs is expected to be updated annually, andthe first group of G-SIBs to which the stricter capital requirements will initially be applied is expected to be
identified in 2014. The stricter capital requirements are expected to be implemented in phases between January 1,
2016 and December 31, 2018 and will become fully effective on January 1, 2019.
In September 2013, the Basel Committee on Banking Supervision and the International Organization of
Securities Commissions released the final framework for margin requirements for non-centrally cleared
derivatives. The new framework will require high quality liquid assets to be posted as margin on non-centrally
cleared derivative trades, and is expected, among other things, to adversely affect our liquidity position. The
margin requirement will be phased in over a four-year period, beginning in December 2015 with the largest, mostactive and most systemically important derivatives market participants, including us.
For additional discussion of the calculation of our capital ratios, see Note 21 to our consolidated financial
statements included elsewhere in this Annual Report.
For more information, see “Item 4.B. Information on the Company—Business Overview—Supervision andRegulation—Japan—Capital adequacy.”133

Mitsubishi UFJ Financial Group Ratios
The table below presents our consolidated total capital components, risk-weighted assets and risk-adjusted
capital ratios in accordance with Basel III as of March 31, 2013 and 2014. Underlying figures are calculated inaccordance with Japanese banking regulations based on information derived from our consolidated financial
statements prepared in accordance with Japanese GAAP, as required by the FSA. The percentages in the tablebelow are rounded down. For further information, see Note 21 to our consolidated financial statements included
elsewhere in this Annual Report.
As of March 31, Minimum capital
2013
ratios required(in billions, except percentages)

Capital components:
Common Equity Tier 1 . . . . . . . . . . .
Additional Tier 1 . . . . . . . . . . . . . . .
Tier 1 capital . . . . . . . . . . . . . . . . . . . . . .
Tier 2 capital . . . . . . . . . . . . . . . . . . . . . .
Total capital . . . . . . . . . . . . . . . . . . . . . . .
Risk-weighted assets . . . . . . . . . . . . . . . . . . . .
Capital ratios:
Common Equity Tier 1 . . . . . . . . . . . . . . .
Tier 1 capital . . . . . . . . . . . . . . . . . . . . . .
Total capital . . . . . . . . . . . . . . . . . . . . . . .

¥10,300.6
914.2
11,214.8
3,459.1¥14,674.0¥87,968.6
11.70%
12.74
16.68

As of March 31, Minimum capital
2014
ratios required(in billions, except percentages)¥11,153.0
1,188.8
12,341.9
3,052.5¥15,394.3¥99,084.3
3.50%
4.50
8.00

11.25%
12.45
15.53

4.00%
5.50
8.00

As of March 31, 2014, management believed that we were in compliance with all capital adequacy
requirements to which we were subject.
Our Common Equity Tier 1 ratio, Tier 1 capital ratio and Total capital ratio as of March 31, 2014 weregenerally decreased from the ratios as of March 31, 2013 due to an increase in our risk-weighted assets, despite
increases in our regulatory capital amounts. The increase in our risk-weighted assets was due to an increase in
our loan balance reflecting the impact of our acquisition of Krungsri and the depreciation of the Japanese yen
against other major currencies. The increases in our consolidated regulatory capital amounts, including Common
Equity Tier 1 capital, were due to an increase in retained earnings, reflecting higher net income.

134

Capital Ratios of Our Major Banking Subsidiaries in JapanThe table below presents the risk-adjusted capital ratios of BTMU and MUTB in accordance with Basel III
as of March 31, 2013 and 2014. Underlying figures are calculated in accordance with Japanese banking
regulations based on information derived from each bank’s consolidated and non-consolidated financial
statements prepared in accordance with Japanese GAAP, as required by the FSA. The percentages in the tablebelow are rounded down. For further information, see Note 21 to our consolidated financial statements included
elsewhere in this Annual Report.

Consolidated capital ratios:
BTMU
Common Equity Tier 1 capital . . . . . . . . . . . . .
Tier 1 capital . . . . . . . . . . . . . . . . . . . . . . . . . .
Total capital . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTBCommon Equity Tier 1 capital . . . . . . . . . . . . .
Tier 1 capital . . . . . . . . . . . . . . . . . . . . . . . . . .
Total capital . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stand-alone capital ratios:
BTMU
Common Equity Tier 1 capital . . . . . . . . . . . . .
Tier 1 capital . . . . . . . . . . . . . . . . . . . . . . . . . .
Total capital . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTBCommon Equity Tier 1 capital . . . . . . . . . . . . .
Tier 1 capital . . . . . . . . . . . . . . . . . . . . . . . . . .
Total capital . . . . . . . . . . . . . . . . . . . . . . . . . . .

As ofMarch 31,2013

Minimum capitalratios required

As ofMarch 31,2014

Minimum capitalratios required

11.71%
13.11
17.51

3.50%
4.50
8.00

11.05%
12.21
15.57

4.00%
5.50
8.00

13.12
13.77
17.79

3.50
4.50
8.00

14.21
14.76
18.38

4.00
5.50
8.00

11.76
13.99
18.52

3.50
4.50
8.00

11.88
13.74
17.52

4.00
5.50
8.00

12.49
13.22
17.94

3.50
4.50
8.00

13.72
14.37
18.51

4.00
5.50
8.00

As of March 31, 2014, management believes that our banking subsidiaries were in compliance with all
capital adequacy requirements to which they were subject.
Capital Requirements for Banking Institutions in the United States
In the United States, MUAH and its banking subsidiary, MUB, our largest subsidiaries operating outside
Japan, are subject to various regulatory capital requirements administered by U.S. Federal banking agencies,
including minimum capital requirements. Under capital adequacy guidelines and the regulatory framework forprompt corrective action, they must meet specific capital guidelines that involve quantitative measures of theirassets, liabilities and certain off-balance sheet items as calculated under U.S. regulatory and accounting practices.
Their capital amounts and prompt corrective action classification are also subject to qualitative judgments by theregulators about components, risk weightings and other factors.
In addition, as foreign banking organizations that have U.S. branches and agencies and also as entities thatare controlled by MUFG, which is a financial holding company, BTMU and MUTB are subject to the FRB’s
requirements.
In July 2013, the FRB and the other U.S. federal banking agencies adopted final rules making significant
changes to the U.S. regulatory capital framework for U.S. banking organizations to conform it to the Basel III
global regulatory capital framework. The final rules establish more restrictive capital definitions, create
additional categories and higher risk weightings for certain asset classes and off-balance sheet exposures, higher
minimum capital and leverage ratios and capital conservation buffers that will be added to the minimum capitalrequirements. The final rules began to apply to UNBC (now MUAH) and Union Bank (now MUB) on January 1,
2014, subject to certain transition provisions.
135

For a detailed discussion of the capital adequacy guidelines applicable to us in the United States, see“Item 4.B. Information on the Company—Business Overview—Supervision and Regulation—United States—
Bank capital requirements and capital distributions.”
Capital Ratios of Banking Subsidiaries in the United States
The table below presents the risk-adjusted capital ratios of MUAH and MUB, both subsidiaries of BTMU,
calculated in accordance with applicable U.S. banking regulations as of December 31, 2012 and 2013:

MUAH:
Tier I capital (to risk-weighted assets) . . . . . . . . . . . .
Tier I capital (to quarterly average assets)(1) . . . . . . .
Total capital (to risk-weighted assets) . . . . . . . . . . . .
MUB:
Tier I capital (to risk-weighted assets) . . . . . . . . . . . .
Tier I capital (to quarterly average assets)(1) . . . . . . .
Total capital (to risk-weighted assets) . . . . . . . . . . . .

Ratio OCC
requires to be“well capitalized”

As of December 31,
2012
2013

Minimum capitalratios required

11.91% 12.41%
11.18
11.27
13.34
14.61

4.00%
4.00
8.00

—
—
—

11.68% 12.94%
10.51
11.13
13.17
14.91

4.00%
4.00
8.00

6.00%
5.00
10.00

Note:
(1) Excludes certain intangible assets.

Management believes that, as of December 31, 2013, MUAH and MUB were in compliance with all capital
adequacy requirements to which they were subject.
As of December 31, 2012 and 2013, the Office of the Comptroller of the Currency, or OCC, categorized
MUB as “well-capitalized.” To be categorized as “well-capitalized,” MUB must maintain minimum ratios of
Total and Tier I capital to risk-weighted assets and of Tier I capital to quarterly average assets (leverage ratio) as
set forth in the table. There are no conditions or events since December 31, 2013 that would cause management
to believe that MUB’s category has changed.
For further information, see Note 21 to our consolidated financial statements included elsewhere in thisAnnual Report.
Capital Requirements for Securities Firms in Japan and Overseas
We have securities subsidiaries in Japan and overseas, which are also subject to regulatory capitalrequirements. In Japan, the Financial Instruments and Exchange Law of Japan and related ordinances require
financial instruments firms to maintain a minimum capital ratio of 120% calculated as a percentage of capital
accounts less certain fixed assets, as determined in accordance with Japanese GAAP, against amounts equivalent
to market, counterparty credit and operations risks. Specific guidelines are issued as a ministerial ordinancewhich details the definition of essential components of the capital ratios, including capital, deductible fixed asset
items and risks, and related measures. Failure to maintain a minimum capital ratio will trigger mandatory
regulatory actions. A capital ratio of less than 140% will call for regulatory reporting and a capital ratio of lessthan 100% may lead to a suspension of all or part of the business for a period of time and cancellation ofregistration. Overseas securities subsidiaries are subject to the relevant regulatory capital requirements of thecountries or jurisdictions in which they operate.
Capital Adequacy Ratio of MUMSSAs of March 31, 2014, MUMSS’ capital accounts less certain fixed assets of ¥377.3 billion on a stand-alone
basis and ¥400.6 billion on a consolidated basis represented 292.9% and 295.0% of the total amounts equivalent136

to market, counterparty credit and operations risks, respectively, as calculated pursuant to the Financial
Instruments and Exchange Law of Japan. As of March 31, 2013, MUMSS’ capital accounts less certain fixed
assets of ¥388.2 billion on a stand-alone basis represented 315.9% of the total amounts equivalent to market,
counterparty credit and operations risks as calculated pursuant to the applicable law.
For further information, see Note 21 to our consolidated financial statements included elsewhere in thisAnnual Report.
Non-exchange Traded Contracts Accounted for at Fair Value
The use of non-exchange traded or over-the-counter contracts provides us with the ability to adapt to thevaried requirements of a wide customer base while mitigating market risks. Non-exchange traded contracts areaccounted for at fair value, which is generally based on pricing models or quoted prices for instruments withsimilar characteristics. Gains or losses on non-exchange traded contracts are included in “Trading account profits(losses)—net” in our consolidated statements of operations included elsewhere in this Annual Report. The
following table summarizes the changes in fair value of non-exchange traded contracts for the fiscal years ended
March 31, 2013 and 2014:
Fiscal years ended March 31,
2013
2014
(in millions)

Net fair value of contracts outstanding at beginning of fiscal year . . . . . . . . . . . . . .
Changes attributable to contracts realized or otherwise settled during the fiscal
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of new contracts entered into during the fiscal year . . . . . . . . . . . . . . . . .
Other changes in fair value, principally revaluation at end of fiscal year . . . . . . . . .

¥19,776¥12,968(3,280)3,375(6,903)(1,319)(2,042)
7,132

Net fair value of contracts outstanding at end of fiscal year . . . . . . . . . . . . . . . . . . . .

¥12,968¥16,739

During the fiscal year ended March 31, 2014, the fair value of non-exchange traded contracts increased
mainly due to an increase in the fair value resulting from fluctuations in foreign exchange rates and fluctuationsin the value of credit default swaps embedded in collateralized debt obligations.
The following table summarizes the maturities of non-exchange traded contracts as of March 31, 2014:
Net fair value of contracts—unrealized gains
Prices provided byPrices based on models andother external sources
other valuation methods(in millions)

Maturity less than 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maturity less than 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maturity less than 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maturity 5 years or more . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 899
579
553
—

¥ 9,290
4,353
1,301
(236)

Total fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,031¥14,708

C.

Research and Development, Patents and Licenses, etc.
Not applicable.

D.

Trend Information

See the discussions in “—Business Environment,” “—Recent Developments,” “—A. Operating Results”
and “—B. Liquidity and Capital Resources.”
137

E.

Off-Balance Sheet Arrangements

In the normal course of business, we engage in several types of off-balance sheet arrangements to meet thefinancing needs of customers, including various types of guarantees, credit commitments and commercial lettersof credit. The following table summarizes these commitments as of March 31, 2014:
Amount of commitment by expiration period
1 year
1-5
Overor lessyears
5 years
Total(in billions)

Guarantees:
Standby letters of credit and financial guarantees . . . . . . . . . . . . .
Performance guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities of trust account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,082
1,766
33,281
6,580¥ 1,116727
26,432
343¥

Total guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

43,70928,618

10,58082,907

Other off-balance sheet instruments:
Commitments to extend credit . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial letters of credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments to make investments . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

49,203760
38
121,386
95
25
8

1,651
—
18
12

72,240855
8121Total other off-balance sheet instruments . . . . . . . . . . . . . . .

50,002

21,514

1,681

73,197

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥93,711¥50,132¥12,261¥156,104

576
78
9,098
828

¥

3,774
2,571
68,811
7,751

See Note 24 to our consolidated financial statements included elsewhere in this Annual Report for a
description of the nature of our guarantees and other off-balance sheet instruments.
The contractual amounts of these guarantees and other off-balance sheet instruments represent the amounts at
risk if the contracts were to be fully drawn upon as a result of a subsequent default by our customer and a decline in
the value of the underlying collateral. Since many of these commitments expire without being drawn upon, the total
contractual or notional amounts of these commitments do not necessarily represent our future cash requirements. Asof March 31, 2014, approximately 60% of these commitments have an expiration date within one year, 32% have an
expiration date from one year to five years, and 8% have an expiration date after five years. Such risks aremonitored and managed as a part of our risk management system as set forth in “Item 11. Quantitative andQualitative Disclosures about Credit, Market and Other Risk.” We evaluate off-balance sheet arrangements in themanner described in Note 1 to our consolidated financial statements included elsewhere in this Annual Report.
The fees generated specifically from off-balance sheet arrangements are not a dominant source of ouroverall fees and commissions.
Some of our off-balance sheet arrangements are related to activities of special purpose entities, most ofwhich are variable interest entities, or VIEs. For further information, see Note 25 to our consolidated financial
statements included elsewhere in this Annual Report.

138

F.

Tabular Disclosure of Contractual Obligations
The following table shows a summary of our contractual cash obligations outstanding as of March 31, 2014:
Less than
1 year

Payments due by period
1-3
3-5
Over
years
years
5 years(in billions)

Total

Contractual cash obligations:Time deposit obligations . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt obligations . . . . . . . . . . . . . . . . . . . . . . . .
Capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease obligations . . . . . . . . . . . . . . . . . . . . . . . .
Purchase obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥61,474
1,680
7
86
50

¥ 9,689
4,452
7
136
24

¥1,671
2,317
2
112
28

¥ 488
6,030
4
390
13

¥73,322
14,47920724
115

Total(1)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥63,297¥14,308¥4,130¥6,925¥88,660

Notes:(1) The total amount of expected future pension payments is not included in the above table or the total amount of commitments outstanding
as of March 31, 2014 as such amount is not currently determinable. We expect to contribute approximately ¥56.0 billion for pension andother benefits for our employees for the fiscal year ending March 31, 2015. For further information, see Note 13 to our consolidated
financial statements included elsewhere in this Annual Report.
(2) The above table does not include unrecognized tax benefits and interest and penalties related to income tax associated with the guidanceon accounting for uncertainty in income taxes as we cannot estimate reasonably the timing of cash settlement of the liabilities forunrecognized tax benefit. The total amount of the liabilities for unrecognized tax benefits is ¥14.0 billion as of March 31, 2014. Amongthe liabilities for unrecognized tax benefits, it is reasonably possible that approximately ¥3.0 billion will decrease during the next twelve
months. For further information, see Note 7 to our consolidated financial statements included elsewhere in this Annual Report.

Purchase obligations include any legally binding contractual obligations that require us to spend more than¥100 million annually under the contract. Purchase obligations in the table primarily include commitments tomake investments into corporate recovery or private equity investment funds.
G. Safe Harbor
See the discussion under “Forward-Looking Statements.”
Item 6. Directors, Senior Management and Employees.
A.

Directors and Senior Management

The following table sets forth the members of our board of directors as of July 1, 2014, together with theirrespective dates of birth, positions and experience:
Name(Date of Birth)

Kiyoshi Sono
(April 18, 1953)

Position in MUFG

ChairmanBusiness Experience

April 1976
May 2004
January 2006
May 2006
May 2010
May 2012
June 2012
May 2014
June 2014

139

Joined Sanwa Bank
Executive Officer of UFJ Bank
Executive Officer of BTMUManaging Executive Officer of BTMU
Senior Managing Executive Officer of BTMUManaging Officer of MUFG
Deputy President of BTMU
Deputy Chairman of BTMU (incumbent)
Retired from Managing Officer of MUFG
Chairman of MUFG (incumbent)
Director of Mitsubishi UFJ NICOS Co., Ltd.
(incumbent)

Name(Date of Birth)

Position in MUFG

Business Experience

Tatsuo Wakabayashi
Deputy Chairman and April 1977
(September 29, 1952)
Chief Audit Officer June 2004

Joined Mitsubishi Trust Bank
Director (Non-Board Member Director) of
Mitsubishi Trust Bank
October 2005
Executive Officer of MUTB
June 2006
Managing Executive Officer of MUTB
June 2008
Managing Director of MUTB
June 2009
Senior Managing Director of MUTB
June 2010
Managing Officer of MUFG
June 2011
Director of MUFG
April 2012
President of MUTB
April 2013
Deputy Chairman of MUFG (incumbent)
December 2013 President and Chairman of MUTB
(incumbent)

Nobuyuki Hirano(October 23, 1951)

President & CEO

April 1974
June 2001
July 2004
May 2005
June 2005

October 2005
January 2006
October 2008
June 2009
June 2010
October 2010
April 2012
April 2013
Masaaki Tanaka(April 1, 1953)

Deputy President

April 1977
June 2004

May 2005
January 2006
April 2007
May 2007June 2010
May 2011
May 2012
June 2012

140

Joined Mitsubishi Bank
Non-Board Member Director of Bank ofTokyo-Mitsubishi
Executive Officer of MTFG
Non-Board Member Managing Director of
Bank of Tokyo-Mitsubishi
Managing Director of Bank of TokyoMitsubishi
Director of MTFG
Director of MUFG
Managing Director of BTMU
Senior Managing Director of BTMU
Deputy President of BTMUManaging Officer of MUFG
Director of MUFG
Deputy President of MUFG
President of BTMU (incumbent)
Director of MUFG
President & CEO of MUFG (incumbent)
Joined Mitsubishi Bank
Non-Board Member Director of Bank ofTokyo-Mitsubishi
Executive Officer of MTFG
Retired from Executive Officer of MTFG
Executive Officer of BTMU
Executive Officer of MUFG
Retired from Executive Officer of MUFG
Managing Executive Officer of BTMU
President and Chief Executive Officer ofUnion Bank of California
Managing Officer of MUFG
Senior Managing Executive Officer of BTMU
Director of Morgan Stanley (incumbent)
Retired from Managing Officer of MUFG
Retired from Senior Managing Executive
Officer of BTMU
Deputy President of MUFG (incumbent)

Name(Date of Birth)

Taihei Yuki
(October 3, 1952)

Position in MUFG

Business Experience

Senior Managing
April 1977
Director and Chief June 2004
Financial Officer
July 2004
October 2005
June 2006
June 2007
June 2008
June 2009
June 2010
June 2011

Akihiko Kagawa(October 6, 1955)

Senior Managing
Director and Chief
Compliance andRisk Officer

April 1980
June 2006
May 2010
May 2012
June 2012

May 2014
Tadashi Kuroda(June 7, 1958)

April 1981
Managing Director
and Chief Planning April 2008
Officer
May 2011
June 2011

May 2013

May 2014

June 2014

141

Joined Mitsubishi Trust Bank
Director (Non-Board Member Director) of
Mitsubishi Trust Bank
Executive Officer of MTFG
Executive Officer of MUTBManaging Executive Officer of MUTBManaging Director of MUTB
Director of MUFG
Managing Officer of MUFG
Senior Managing Director of MUTB
Retired from Managing Officer of MUFG
Retired from Senior Managing Director of
MUTB
Director of BTMU (incumbent)
Senior Managing Director of MUFG
(incumbent)
Joined Bank of Tokyo
Executive Officer of BTMU
Executive Officer of MUFG
Retired from Executive Officer of BTMUManaging Officer of MUFG
Director of kabu.com Securities Co., Ltd.
(incumbent)
Director of MUSHD (incumbent)
Managing Director of MUFG
Senior Managing Director of MUFG
(incumbent)
Joined Sanwa Bank
Executive Officer of BTMU
Retired from Executive Officer of BTMU
Senior Managing Executive Officer of
Mitsubishi UFJ Research and Consulting Co.,
Ltd. (MURC)
Director and Senior Managing Executive
Officer of MURCManaging Executive Officer of BTMU
Retired from Director and Senior Managing
Executive Officer of MURC
Retired from Managing Executive Officer of
BTMUManaging Officer of MUFG
Director of MUTB (incumbent)
Managing Director of MUFG (incumbent)

Name(Date of Birth)

Takashi Nagaoka(March 3, 1954)

Position in MUFG

Director

Business Experience

April 1976
June 2003
January 2006
May 2006
April 2008
June 2008
May 2010
April 2011
June 2011
May 2012
May 2014
June 2014

Junichi Okamoto(November 9, 1957)

Director and Group
Head, Integrated
Trust Assets
Business Group

April 1980
June 2008
June 2010
June 2012
June 2013

Hiroyuki Noguchi(May 7, 1958)

Director

April 1981
June 2009
May 2011
June 2011

142

Joined Mitsubishi Bank
Non-Board Member Director of Bank ofTokyo-Mitsubishi
Executive Officer of BTMUManaging Executive Officer of BTMUManaging Officer of MUFG
Managing Director of BTMU
Senior Managing Executive Officer of BTMU
Retired from Managing Officer of MUFG
Managing Officer of MUFG
Deputy President of BTMU
Retired from Managing Officer of MUFG
Retired from Deputy President of BTMU
Advisor of MUSHD
Advisor of MUMSS
President & CEO of MUMSS (incumbent)
President & CEO of MUSHD (incumbent)
Director of MUFG (incumbent)
Joined Toyo Trust Bank
Executive Officer of MUTBManaging Executive Officer of MUTB
Executive Officer of MUFG
Senior Managing Executive Officer of MUTB
Deputy President of MUTB (incumbent)
Director of MUFG (incumbent)
Joined Tokai Bank
Executive Officer of BTMU
Retired from Executive Officer of BTMU
Senior Executive Officer of MUSHD
Senior Executive Officer of MUMSSManaging Director of MUMSS (incumbent)
Managing Director of MUSHD (incumbent)
Director of MUFG (incumbent)

Name(Date of Birth)

Position in MUFG

Business Experience

Ryuji Araki(January 29, 1940)

Director(Outside Officer)

April 1962
Joined the Toyota Motor Co., Ltd.
September 1992 Director, Member of the Board of TOYOTA
MOTOR CORPORATION (TOYOTA)
June 1997
Managing Director, Member of the Board of
TOYOTA
June 1999
Senior Managing Director, Member of theBoard of TOYOTA
June 2001
Vice President, Member of the Board andRepresentative Director of TOYOTA
June 2002
Auditor of Aioi Insurance Company Limited.
(Aioi Insurance)
June 2005
Senior Advisor to the Board of TOYOTA
Chairman of Aioi Insurance
Chairman of TOYOTA FINANCIALSERVICES CORPORATION. (TFS)
June 2007
Advisor of TFS
June 2008
Advisor of TOYOTA (incumbent)
Senior Advisor of Aioi Insurance
June 2009Retired from Advisor of TFS
Director of MUFG (incumbent)
October 2010
Senior Advisor of Aioi Nissay Dowa
Insurance Co., Ltd. (Aioi Nissay Dowa
Insurance)
June 2012
Advisor of Aioi Nissay Dowa Insurance
June 2014
Retired from Advisor of Aioi Nissay Dowa
Insurance

Yuko Kawamoto(May 31, 1958)

Director

April 1982
Joined Bank of Tokyo
April 1986
Left Bank of Tokyo
September 1988 Joined McKinsey & Company, Inc.
July 2001
Senior Expert of McKinsey & Company, Inc.,Tokyo office
March 2004
Left McKinsey & Company, Inc.
April 2004
Professor at Waseda Graduate School ofFinance, Accounting and Law (incumbent)
June 2006
Audit & Supervisory Board Member of Tokio
Marine Holdings, Inc. (incumbent)
January 2013
Director of Japan Exchange Group, Inc.
June 2013
Director of MUFG (incumbent)
June 2014
Retired from Director of Japan ExchangeGroup, Inc.

143

Name
(Date of Birth)

Tsutomu Okuda(October 14, 1939)

Position in MUFG

Director(Outside Officer)

Business Experience

April 1964

Joined Daimaru, Inc.

September 1991 Managing Director of Daimaru Australia Pty.
Ltd.
May 1995
Director of Daimaru, Inc.
May 1996
Managing Director of Daimaru, Inc.
March 1997
President of Daimaru, Inc.
May 2003
Chairman and Chief Executive Officer of
Daimaru, Inc.
September 2007 Chairman of Daimaru, Inc.
President and Chief Executive Officer of
J. Front Retailing Co., Ltd.
March 2010
Chairman and Chief Executive Officer of
J. Front Retailing Co., Ltd.
January 2013
Director of Japan Exchange Group, Inc.
(incumbent)
April 2013
Director and Senior Advisor of J. Front
Retailing Co., Ltd.
May 2014
Senior Advisor of J. Front Retailing Co., Ltd.
(incumbent)
June 2014
Director of MUFG (incumbent)
Kunie Okamoto
Director(September 11, 1944)(Outside Officer)

June 1969
July 1995
March 1999
March 2002
April 2005
June 2005
October 2005
June 2010
April 2011
June 2014

Haruka Matsuyama(August 22, 1967)

Director(Outside Officer)

April 1995
July 2000
January 2002
June 2012
June 2013
June 2014

144

Joined Nippon Life Insurance Company(Nippon Life)
Director of Nippon LifeManaging Director of Nippon Life
Senior Managing Director of Nippon Life
President of Nippon Life
Corporate Auditor of UFJ Holdings, Inc.
Corporate Auditor of TOKYUCORPORATION (incumbent)
Corporate Auditor of MUFG
Director of Kintetsu Corporation (incumbent)
Corporate Auditor of Daicel Corporation(incumbent)
Chairman of Nippon Life (incumbent)
Director of MUFG (incumbent)
Assistant Judge, Tokyo District Court
Attorney at law, Hibiya Park Law Offices
Member, the Daini Tokyo Bar Association
Partner, Hibiya Park Law Offices (incumbent)
Corporate Auditor, Vitec Co., Ltd.
(incumbent)
Director, T&D Holdings, Inc. (incumbent)
Corporate Auditor, MITSUI & CO., LTD.
(incumbent)
Director of MUFG (incumbent)

The following table sets forth our corporate auditors as of July 1, 2014, together with their respective datesof birth, positions and experience:Name(date of birth)

Takehiko Nemoto(August 20, 1953)

Position in MUFG

Corporate Auditor(Full-Time)Business experience

April 1976
June 2004
October 2005
January 2006
October 2008
May 2009
June 2009
October 2010
May 2011
June 2011

June 2013
Takashi Mikumo(September 8, 1957)

Corporate Auditor(Full-Time)

April 1980
June 2007
June 2009
June 2012
June 2013

Yasushi Ikeda(April 18, 1946)

Corporate Auditor(Outside Officer)

April 1972
April 1977
June 2009

145

Joined Mitsubishi Bank
Non-Board Member Director of Bank ofTokyo-Mitsubishi
Executive Officer of MUFG
Executive Officer of BTMUManaging Executive Officer of BTMUManaging Officer of MUFG
Managing Director of BTMU
Senior Managing Director of BTMU
Retired from Managing Officer of MUFG
Retired from Senior Managing Director of
BTMU
Corporate Auditor (Full-Time) of MUFG
(incumbent)
Corporate Auditor of MUMSS (incumbent)
Corporate Auditor of MUSHD (incumbent)
Joined Toyo Trust Bank
Executive Officer of MUTB
Executive Officer of MUFG
Managing Director of MUTB
Retired from Executive Officer of MUFG
Senior Managing Director of MUTB
Retired from Senior Managing Director of
MUTB
Corporate Auditor (Full-Time) of MUFG
(incumbent)
Admitted to the Bar
Joined the Tokyo Bar Association
Partner of the law firm Miyake Imai & Ikeda(incumbent)
Corporate Auditor of MUFG (incumbent)Name(date of birth)

Position in MUFG

Business experience

Hideo Kojima
Corporate Auditor(November 30, 1948)(Outside Officer)

March 1980

Yukihiro Sato
(March 12, 1947)

April 1969
June 2001

Corporate Auditor(Outside Officer)

Became a member of the Japanese Instituteof Certified Public Accountants
May 1995
Representative Partner of Showa Ota & Co.
May 2000
Executive Director of Century Ota Showa &Co.
July 2001
Executive Director of Shin Nihon & Co.
May 2006
Deputy Chief Executive Officer of Shin
Nihon & Co.
July 2008
Deputy Chief Executive Officer of Ernst &Young ShinNihon LLC.
September 2010 Senior Advisor of Ernst & Young
ShinNihon LLC.
June 2011Retired from Ernst & Young ShinNihon
LLC.
Certified Public Accountant of Hideo
Kojima CPA Office (incumbent)
Corporate Auditor of Sumitomo Heavy
Industries, Ltd. (incumbent)
Auditor of Alpine Electronics, Inc.
(incumbent)
June 2013
Corporate Auditor of MUFG (incumbent)

April 2003

June 2003

April 2005
April 2007

April 2009
June 2009
June 2013
June 2014
July 2014

Joined Mitsubishi Electric Corporation
Director and General Manager, Corporate
Accounting Division of Mitsubishi
Electric Corporation
Managing Director and General Manager,
Corporate Accounting Division of
Mitsubishi Electric Corporation
Director, Senior Executive Officer andGeneral Manager, Corporate Accounting
Division of Mitsubishi Electric
Corporation
Director and Senior Vice President of
Mitsubishi Electric Corporation
Director, Representative Executive Officer
and Executive Vice President of
Mitsubishi Electric Corporation
Director of Mitsubishi Electric Corporation
Senior Corporate Adviser of Mitsubishi
Electric Corporation
Adviser of Mitsubishi Electric Corporation
Corporate Auditor of MUFG (incumbent)
Adviser of Mitsubishi Electric Corporation(incumbent)

The board of directors and corporate auditors may be contacted through our headquarters at Mitsubishi
UFJ Financial Group, Inc., 7-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo 100-8330, Japan.
All directors and corporate auditors were elected at a general meeting of shareholders. The regular term ofoffice of a director is one year from the date of election, and the regular term of office of a corporate auditor isfour years from the date of election. Directors and corporate auditors may serve their terms until the close of the146annual general meeting of shareholders held in the last year of their terms. Directors and corporate auditors may
serve any number of consecutive terms. No family relationship exists among any of our directors or corporate
auditors. None of our directors is party to a service contract with MUFG or any of its subsidiaries that provides
for benefits upon termination of employment.
Ms. Yuko Kawamoto has, in the past, worked at The Bank of Tokyo, Ltd. (currently The Bank of TokyoMitsubishi UFJ, Ltd.) and thus does not satisfy the requirements for Outside Director provided in Article 2,
Item 15 of the Company Law. However, she has experience and knowledge derived from having served as amanagement consultant and graduate school professor for more than 25 years after her career at The Bank ofTokyo. Therefore, her conditions are believed to be the same as those of Outside Director, in terms of
independence from the Company. The Company expects her to reflect such experience and knowledge in duties
as a Director, including supervising business operations, from the perspective from outside the Company.
B.

Compensation

The aggregate amount of compensation paid, including benefits in kind granted and any contingent anddeferred compensation by MUFG and its subsidiaries during the fiscal year ended March 31, 2014 to ourdirectors (excluding outside directors), to corporate auditors (excluding outside auditors) and to outside directors
and auditors, was ¥1,216 million, ¥114 million and ¥119 million, respectively.
The compensation paid by MUFG and its subsidiaries during the fiscal year ended March 31, 2014 to ourdirectors and corporate auditors consists of annual base salaries, stock acquisition rights, bonuses and otherbenefits. The maximum aggregate amount of each type of compensation for our directors and corporate auditors
is approved at a general meeting of our shareholders. The amount and allocation of compensation for eachdirector are then proposed to, and voted upon by, the board of directors. The amount and allocation ofcompensation for each corporate auditor are determined through discussions and agreement among the corporate
auditors. The nomination and compensation committee deliberates and makes proposals to the board of directors
regarding matters relating to, among other things, the compensation of our directors. For more information on thenomination and compensation committee, see “—C. Board Practices.”
The following table sets forth details of the aggregate compensation paid by MUFG and its subsidiaries
during the fiscal year ended March 31, 2014 to our directors (excluding outside directors) and corporate auditors(excluding outside corporate auditors):

Number of Directors andCorporate Auditors(1)19 . . . . . . . . . . . . . . . . .

Aggregate
Compensation¥1,330

Non-Adjustable Compensation
Stock
Adjustable
Base
Acquisition
Compensation
SalaryRights(Cash Bonuses)(in millions)

¥780

¥265

¥240

Retirement
Allowances(2)

Other

¥45

¥0

Notes:(1) Includes current directors and corporate auditors as well as those who retired during the fiscal year ended March 31, 2014 but excludes
outside directors and corporate auditors.
(2) Represents the aggregate amount of retirement allowances paid in cash during the fiscal year ended March 31, 2014, pursuant to a onetime shareholders’ approval in June 2007 for the retirement allowances to be paid to the directors and corporate auditors who were
elected prior to that date at the time of their retirement. A reserve in the total amount of such retirement allowances was set aside as of
September 30, 2007. For more information, see “—Retirement Allowances” below.

147

The following table sets forth the details of individual compensation paid, including benefits in kind granted
but excluding retirement allowances paid, by MUFG and its subsidiaries in an amount equal to or exceeding¥100 million during the fiscal year ended March 31, 2014:
Aggregate
amountDirectors

Takamune Okihara . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥122

Tatsuo Wakabayashi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥103

Nobuyuki Hirano . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥126

Masaaki Tanaka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥112

Compensation paid
AnnualStock
Paid bysalaryoptions Bonus(in millions)

MUFG
BTMU
MUFG
MUTB
MUFG
BTMU
MUFG

¥15
55
¥15
51
¥15
59
¥60

¥ 7
17
¥ 6
11
¥ 6
18
¥33

¥ 6
22
¥ 5
15
¥ 5
23
¥19

Annual Base Salary
Annual base salaries are paid to our directors (including outside directors) and corporate auditors (including
outside corporate auditors) in the form of monthly cash installment payments. The aggregate annual base salarypaid to our directors (excluding outside corporate directors) and corporate auditors (excluding outside corporate
auditors) for the fiscal year ended March 31, 2014 was ¥780 million. The aggregate annual base salary paid toour outside directors and outside corporate auditors for the same period was ¥81 million.
Stock-based Compensation Plans
We issue stock acquisition rights to further motivate our directors (excluding outside directors) to contributeto the improvement of our stock prices and profits. The number of options granted to each director is determinedby comprehensively taking into account each grantee’s seniority of the position held at MUFG or its subsidiaries,
experience and contribution to our performance throughout the period of the grantee’s service within the
maximum aggregate number of options approved by our shareholders. On June 27, 2013, our shareholders
approved modifications to the previous shareholder authorization for granting stock acquisition rights to ourdirectors, corporate auditors and certain of our officers so that no outside directors or corporate auditors(including outside corporate auditors) are eligible for any stock-based compensation plan adopted by the board of
directors on or after that date.
As part of our compensation structure, on June 28, 2007, our shareholders approved the creation of a stockbased compensation plan for our directors, corporate auditors and certain of our officers. On November 21, 2007,
the board of directors adopted a plan entitled “First Series of Stock Acquisition Rights of Mitsubishi UFJ
Financial Group, Inc.” for our directors, corporate auditors and certain of our officers. Under the stock-based
compensation plan, on December 6, 2007, we allotted an aggregate of 3,224 stock acquisition rights to ourdirectors and an aggregate of 493 stock acquisition rights to our corporate auditors for their respective services to
MUFG and its subsidiaries. Each stock acquisition right represents a right to purchase 100 shares of MUFG
common stock at ¥1 per share of common stock. The stock acquisition rights were subject to a one-year vesting
period. The rights are exercisable until December 5, 2037, but only after the date on which a grantee’s service asa director and an officer or as a corporate auditor of each of MUFG and the relevant subsidiaries terminates. The
fair value of each stock acquisition right was ¥103,200.
As part of our compensation structure, on June 27, 2008, the board of directors adopted another stock-based
compensation plan entitled “Second Series of Stock Acquisition Rights of Mitsubishi UFJ Financial Group, Inc.”for our directors, corporate auditors and certain of our officers. Under the stock-based compensation plan, on
July 15, 2008, we allotted an aggregate of 4,690 stock acquisition rights to our directors and an aggregate of 495
stock acquisition rights to our corporate auditors for their respective services to MUFG and its subsidiaries. Each148

stock acquisition right represents a right to purchase 100 shares of MUFG common stock at ¥1 per share ofcommon stock. The stock acquisition rights were subject to a one-year vesting period. The rights are exercisable
until July 14, 2038, but only after the date on which a grantee’s service as a director and an officer or as acorporate auditor of each of MUFG and the relevant subsidiaries terminates. The fair value of each stockacquisition right was ¥92,300.
As part of our compensation structure, on June 26, 2009, the board of directors adopted another stock-based
compensation plan entitled “Third Series of Stock Acquisition Rights of Mitsubishi UFJ Financial Group, Inc.”for our directors, corporate auditors and certain of our officers. Under the stock-based compensation plan, on
July 14, 2009, we allotted an aggregate of 6,466 stock acquisition rights to our directors and an aggregate of
872 stock acquisition rights to our corporate auditors for their respective services to MUFG and its subsidiaries.
Each stock acquisition right represents a right to purchase 100 shares of MUFG common stock at ¥1 per share ofcommon stock. The stock acquisition rights were subject to a one-year vesting period. The rights are exercisable
until July 13, 2039, but only after the date on which a grantee’s service as a director and an officer or as acorporate auditor of each of MUFG and the relevant subsidiaries terminates. The fair value of each stockacquisition right was ¥48,700.
As part of our compensation structure, on June 29, 2010, the board of directors adopted another stock-based
compensation plan entitled “Fourth Series of Stock Acquisition Rights of Mitsubishi UFJ Financial Group, Inc.”for our directors, corporate auditors and certain of our officers. Under the stock-based compensation plan, on
July 16, 2010, we allotted an aggregate of 8,014 stock acquisition rights to our directors and an aggregate of
1,149 stock acquisition rights to our corporate auditors for their respective services to MUFG and its subsidiaries.
Each stock acquisition right represents a right to purchase 100 shares of MUFG common stock at ¥1 per share ofcommon stock. The stock acquisition rights are subject to a one-year vesting period. The rights are exercisable
until July 15, 2040, but only after the date on which a grantee’s service as a director and an officer or as acorporate auditor of each of MUFG and the relevant subsidiaries terminates. The fair value of each stockacquisition right was ¥36,600.
As part of our compensation structure, on June 29, 2011, the board of directors adopted another stock-based
compensation plan entitled “Fifth Series of Stock Acquisition Rights of Mitsubishi UFJ Financial Group, Inc.”for our directors, corporate auditors and certain of our officers. Under the stock-based compensation plan, on
July 20, 2011, we allotted an aggregate of 7,740 stock acquisition rights to our directors and an aggregate of
1,160 stock acquisition rights to our corporate auditors for their respective services to MUFG and its subsidiaries.
Each stock acquisition right represents a right to purchase 100 shares of MUFG common stock at ¥1 per share ofcommon stock. The stock acquisition rights are subject to a one-year vesting period. The rights are exercisable
until July 19, 2041, but only after the date on which a grantee’s service as a director and an officer or as acorporate auditor of each of MUFG and the relevant subsidiaries terminates. The fair value of each stockacquisition right was ¥33,700.
As part of our compensation structure, on June 28, 2012, the board of directors adopted another stock-based
compensation plan entitled “Sixth Series of Stock Acquisition Rights of Mitsubishi UFJ Financial Group, Inc.”for our directors, corporate auditors and certain of our officers. Under the stock-based compensation plan, on
July 18, 2012, we allotted an aggregate of 10,002 stock acquisition rights to our directors and an aggregate of
1,161 stock acquisition rights to our corporate auditors for their respective services to MUFG and its subsidiaries.
Each stock acquisition right represents a right to purchase 100 shares of MUFG common stock at ¥1 per share ofcommon stock. The stock acquisition rights are subject to a one-year vesting period. The rights are exercisable
until July 17, 2042, but only after the date on which a grantee’s service as a director and an officer or as acorporate auditor of each of MUFG and the relevant subsidiaries terminates. The fair value of each stockacquisition right was ¥33,100.
As part of our compensation structure, on June 27, 2013, the board of directors adopted a stock-based
compensation plan entitled “Seventh Series of Stock Acquisition Rights of Mitsubishi UFJ Financial Group,149

Inc.” for our directors (excluding outside directors) and certain of our officers. Under the stock-based
compensation plan, on July 17, 2013, we allotted an aggregate of 4,103 stock acquisition rights to our directors(excluding outside directors) for their respective services to MUFG and its subsidiaries. Each stock acquisitionright represents a right to purchase 100 shares of MUFG common stock at ¥1 per share of common stock. The
stock acquisition rights are subject to a one-year vesting period. The rights are exercisable until July 16, 2043,
but only after the date on which a grantee’s service as a director and an officer of each of MUFG and the relevant
subsidiaries terminates. The fair value of each stock acquisition right was ¥61,100.
As part of our compensation structure, on June 27, 2014, the board of directors adopted a stock-based
compensation plan entitled “Eighth Series of Stock Acquisition Rights of Mitsubishi UFJ Financial Group, Inc.”for our directors (excluding outside directors) and certain of our officers. Under the stock-based compensation
plan, on July 15, 2014, we allotted an aggregate of 3,315 stock acquisition rights to our directors (excluding
outside directors) for their respective services to MUFG and its subsidiaries. Each stock acquisition right
represents a right to purchase 100 shares of MUFG common stock at ¥1 per share of common stock. The stockacquisition rights are subject to a one-year vesting period. The rights are exercisable until July 14, 2044, but only
after the date on which a grantee’s service as a director and an officer of each of MUFG and the relevant
subsidiaries terminates. The fair value of each stock acquisition right was ¥53,900.
Bonuses
We from time to time pay cash bonuses to our directors to further motivate them to contribute to theimprovement of our stock prices and profits if such bonuses are deemed appropriate based on a balanced
scorecard approach taking into account the results of operations of the MUFG Group and each director’s
individual performance of his duties as a director in light of both quantitative and qualitative criteria, including
our medium-term strategy for improving our corporate value. None of the outside directors and corporate
auditors (including outside corporate auditors) is eligible to receive a cash bonus. The nomination andcompensation committee evaluates the amount of cash bonuses annually to determine the reasonableness of theamount in proportion to the aggregate compensation approved by our shareholders. The aggregate cash bonus
paid to our directors for the fiscal year ended March 31, 2014 was ¥240 million.
Retirement Allowances
Prior to June 28, 2007, in accordance with customary Japanese practice, when a director or corporate auditor
retired, a proposal to pay a retirement allowance was submitted at the annual ordinary general meeting ofshareholders for approval. The retirement allowance consisted of a one-time payment of a portion of theallowance paid at the time of retirement and periodic payments of the remaining amount for a prescribed numberof years. After the shareholders’ approval was obtained, the retirement allowance for a director or corporate
auditor was fixed by the board of directors or by consultation among the corporate auditors in accordance with
our internal regulations and practice and generally reflected the position of the director or corporate auditor at thetime of retirement, the length of his service as a director or corporate auditor and his contribution to our
performance. Historically, MUFG did not set aside reserves for any retirement payments for directors andcorporate auditors made under this practice.
Pursuant to a one-time shareholders’ approval in June 2007, retirement allowances are paid in cash to thedirectors and corporate auditors who were elected prior to that date at the time of their retirement. A reserve inthe total amount of such retirement allowances was set aside as of September 30, 2007. The aggregate amount of
retirement allowances paid in cash by MUFG and its subsidiaries pursuant to the one-time shareholder approval
during the fiscal year ended March 31, 2014 to our directors (excluding outside directors), to corporate auditors(excluding outside auditors) and to outside directors and auditors, who have retired from their respective
positions held at MUFG or, if such directors and corporate auditors concurrently held positions at MUFG’s
subsidiaries, who have retired from such positions, was ¥45 million, nil and ¥32 million, respectively.

150

UNBC Stock Bonus Plan
UNBC (now MUAH) has a discretionary stock bonus plan under which selected employees of UNBC andits subsidiaries are paid some or a portion of annual bonuses in the form of Restricted Share Units representing aright to receive American Depositary Receipts, or ADRs, evidencing American Depositary Shares, or ADSs,
each exchangeable for one share of MUFG common stock, from an independent trust established to administerthe plan grants upon the satisfaction of vesting conditions as determined by the Executive Compensation and
Benefits Committee of UNBC’s board of directors, consistent with the plan and pursuant to a Restricted Share
Unit Agreement between UNBC and the grantees.
Unless otherwise provided in the relevant Restricted Share Unit Agreement, Restricted Share Units will
become vested and nonforfeitable as follows: one-third (33 1/3%) of a grantee’s Restricted Share Units would vest
on each one year anniversary of the date of the award such that all of the Restricted Share Units would be fully
vested after three years from the date of the award so long as the grantee remains an employee of UNBC or its
subsidiaries.
The ADSs to be delivered to grantees will be purchased on the open market by the trustee of the
independent trust pursuant to a trust agreement between UNBC and the trustee.
For more information on the MUAH stock bonus plan, see Note 32 to our consolidated financial statements
included elsewhere in this Annual Report. See also “Item 16E. Purchases of Equity Securities by the Issuer andAffiliated Purchasers.”
BTMU Headquarters for the Americas Stock Bonus Plan
Effective August 27, 2012, BTMU Headquarters for the Americas, or BTMU HQA (now MUAH), adopted
a stock bonus plan. Under the plan, qualified key employees of BTMU HQA are granted Restricted Stock Units,
or RSUs, representing a right to receive American Depositary Receipts, or ADRs, evidencing American
Depositary Shares, or ADSs, each exchangeable for one share of MUFG common stock, from an independent
trust established to administer the plan grants, upon the satisfaction of vesting conditions. The RSUs vest pro-rata
on each anniversary of the grant date and become fully vested three years from the grant date so long as the
grantee satisfies the specified continuous service requirement and any other conditions under the plan documents.
The ADSs to be delivered to grantees will be purchased on the open market by the trustee of the
independent trust. As of June 1, 2014, 3,686,849 RSUs have been granted under the plan.
See “Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.”

151

Share Ownership
As of June 30, 2014, our directors and corporate auditors held the following numbers of shares of ourcommon stock:
Number of Shares
RegisteredDirectors

Kiyoshi Sono . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tatsuo Wakabayashi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nobuyuki Hirano . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Masaaki Tanaka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taihei Yuki . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Akihiko Kagawa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tadashi Kuroda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Takashi Nagaoka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Junichi Okamoto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hiroyuki Noguchi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ryuji Araki . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yuko Kawamoto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tsutomu Okuda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kunie Okamoto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Haruka Matsuyama . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of Shares
Registered

Corporate Auditors

Takehiko Nemoto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Takashi Mikumo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yasushi Ikeda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hideo Kojima . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yukihiro Sato . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C.

43,62020,50034,00014,200140,330
153,400
94,900386,940
9,120
95,80063,300
4,200
—
536
—

145,800
251,100——
9,500

Board Practices

Our articles of incorporation provide for a board of directors of not more than twenty members and not morethan seven corporate auditors. Our corporate officers are responsible for executing our business operations, andour directors oversee these officers and set our fundamental strategies.
We currently have fifteen directors. Our board of directors has ultimate responsibility for the administrationof our affairs. By resolution, our board of directors shall appoint, from the directors, representative directors who
may represent us severally. Our board of directors shall appoint a president and may also appoint a chairman,
deputy chairmen, deputy presidents, senior managing directors and managing directors from their members by
resolution. Deputy presidents assist the president, and senior managing directors and managing directors assist
the president and deputy presidents, if any, in the management of our day-by-day operations.
We currently have four outside directors as members of our board of directors. Under the Company Law, an
outside director is defined as a person who has never been an executive director (gyomu shikko torishimariyaku),
executive officer (shikkoyaku), manager (shihainin) or any other type of employee of the company or any of its
subsidiaries prior to his or her appointment.
In June 2014, the Japanese Diet passed amendments to the Company Law, among other things, to exclude
from the definition of “outside director” a person who has a certain relationship with the relevant company or anindividual who controls the management of the company. The amendments also include provisions that aredesigned to encourage large companies to have an “outside director” by requiring large companies which do nothave any “outside directors” to explain the reason at annual shareholders meetings. These amendments will
become effective on a date within eighteen months from June 27, 2014.
152

Under the Company Law, a resolution of the board of directors is required if any director wishes to engage
in any business that is in competition with us or any transaction with us. Additionally, no director may vote on a
proposal, arrangement or contract in which that director is deemed to be particularly interested.
Neither the Company Law nor our articles of incorporation contain special provisions as to the borrowing
power exercisable by a director, the retirement age of our directors and corporate auditors or a requirement of ourdirectors and corporate auditors to hold any shares of our capital stock.
The Company Law requires a resolution of the board of directors for a company to determine the executionof important businesses, to acquire or dispose of material assets, to borrow substantial amounts of money, toemploy or discharge managers (shihainin) and other important employees, and to establish, change or abolishbranch offices or other material corporate organizations, to float bonds, to establish internal control systems, andto exempt a director from liability to the company in accordance with applicable laws and regulations.
We currently have five corporate auditors, including three outside corporate auditors. An outside corporate
auditor is defined under the Company Law as a person who has not served as a director, account assistant,executive officer (shikkoyaku), manager (shihainin) or any other type of employee of the company or any of its
subsidiaries prior to his or her appointment.
Our corporate auditors, who are not required to be certified public accountants, have various statutory
duties, including principally:‰

the examination of the financial statements, business reports, proposals and other documents which ourboard of directors prepares and submits to a general meeting of shareholders;‰the examination of our directors’ administration of our affairs; and‰the preparation and submission of a report on their examination to a general meeting of shareholders.

Our corporate auditors are obligated to attend meetings of our board of directors, and to make statements at
the meetings if they deem necessary, although they are not entitled to vote at the meetings. Our corporate
auditors comprise the board of corporate auditors, which determines matters relating to the performance ofaudits. The Company Law provides that a company that has or is required to have a board of corporate auditors
must have three or more corporate auditors, and at least half of the corporate auditors must be outside corporate
auditors. In a company that has or is required to have a board of corporate auditors, one or more of the corporate
auditors must be designated by the board of corporate auditors to serve on a full-time basis.
Under the Company Law and our articles of incorporation, we may exempt, by resolution of the board of
directors, our directors and corporate auditors from liabilities to the company arising in connection with theirfailure to execute their duties without gross negligence, within the limits stipulated by applicable laws andregulations. In addition, we have entered into a liability limitation agreement with each outside director andoutside corporate auditor which limits the maximum amount of their liability to the company arising inconnection with a failure to execute their duties without gross negligence to the greater of either ¥10 million or
the aggregate sum of the amounts prescribed in paragraph 1 of Article 425 of the Company Law and Articles 113
and 114 of the Company Law Enforcement Regulations.
The Company Law permits two types of governance systems for large companies, including MUFG. The
first system is for companies with audit, nomination and compensation committees, and the other is forcompanies with corporate auditors. We have elected to adopt a corporate governance system based on corporate
auditors.
Under the Company Law, if a company has corporate auditors, the company is not obligated to have any
outside directors or to have any audit, nomination or compensation committees. Although we have adopted aboard of corporate auditors, we have four outside directors as part of our efforts to further enhance corporate
153

governance. In an effort to further enhance our corporate governance, we have also voluntarily established anomination and compensation committee, a risk committee, an internal audit and compliance committee, and agovernance committee to support our board of directors.
Nomination and Compensation Committee. The nomination and compensation committee, a majority ofwhich is comprised of outside directors, deliberates matters relating to the appointment and dismissal of ourdirectors and the directors of our subsidiaries, the compensation framework of our directors and the directors of
our subsidiaries, as well as the compensation of our top management and the top management of our subsidiaries.
The nomination and compensation committee makes reports and proposals to the board of directors about
important matters for deliberation and necessary improvement measures. The chairman of the nomination andcompensation committee is Tsutomu Okuda, an outside director. The other members of this committee are Ryuji
Araki, an outside director, Yuko Kawamoto, a director, Kunie Okamoto and Haruka Matsuyama, outside
directors, and Nobuyuki Hirano, President & CEO. The nomination and compensation committee met eight times
between April 2013 and March 2014.
Risk Committee. The risk committee, a majority of which is comprised of outside directors and specialists,
deliberates important matters related to the status, control and management of various risks that we face, reports
the results of its deliberation and makes recommendations to the board of directors on a regular basis. The
chairman of the risk committee is Yuko Kawamoto, who is a director. The other members of this committee are
Tsutomu Okuda, an outside director, Akira Ariyoshi and Kenzo Yamamoto, outside specialists who have no prioremployment relationships with any MUFG Group company, and Akihiko Kagawa, a senior managing director.
The risk committee met four times between April 2013 and March 2014.
Internal Audit and Compliance Committee. The internal audit and compliance committee, a majority ofwhich is comprised of outside directors and specialists, deliberates important matters relating to internal audits,internal control of financial information, financial audits, compliance, corporate risk management, and otherinternal control systems. This committee makes reports and proposals to the board of directors about importantmatters for deliberation and necessary improvement measures. We aim to enhance the effectiveness of internal
audit functions by utilizing the external view points provided by the internal audit and compliance committee
members. The chairman of the internal audit and compliance committee is Ryuji Araki, who is an outside
director. The other members of this committee are Haruka Matsuyama, an outside director, Shin Kikuchi, an
attorney-at-law, Akira Yamate, a certified public accountant, and Tatsuo Wakabayashi, Deputy Chairman andChief Audit Officer. The internal audit and compliance committee met twelve times between April 2013 andMarch 2014.
Governance Committee. We aim to maintain a transparent and impartial corporate governance frameworkthat takes into account external perspectives. On June 27, 2014, we formed a governance committee to support
our board of directors in an additional effort to improve the Group’s corporate governance. The chairman of theGovernance Committee is Kunie Okamoto, who is an outside director. Currently, the other members of thiscommittee are Ryuji Araki, an outside director, Yuko Kawamoto, a director, Tsutomu Okuda and Haruka
Matsuyama, outside directors, Shinsaku Iwahara, who has no prior employment relationship with any MUFG
Group company, and Nobuyuki Hirano, President & CEO. Mr. Iwahara is a professor of Waseda University andhas expertise in commercial law, company law and financial law. The governance committee deliberates matterspertaining to the state of the Group’s corporate governance, relevant policies and approaches, reports the resultsof its deliberation and makes recommendations to the Board of Directors on a semi-annually basis.
For additional information on our board practices and the significant differences in corporate governancepractices between MUFG and U.S. companies listed on the New York Stock Exchange, see “—A. Directors andSenior Management” and “Item 16G. Corporate Governance.”

154

D.

Employees

As of March 31, 2014, we had approximately 100,500 employees, an increase of approximately 19,600
employees compared with the number of employees as of March 31, 2013 primarily as a result of our acquisitionof Bank of Ayudhya Public Company Limited, or Krungsri in December 2013. As of March 31, 2014, we also
had approximately 34,800 part-time and temporary employees. The following tables show the percentages of ouremployees across our different business units and in different locations as of March 31, 2014:
Business unit
Bank of Tokyo-Mitsubishi UFJ:
Retail Banking Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate Banking Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bank of Ayudhya Public Company Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global Markets Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate Center/Independent Divisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ Trust and Banking Corporation:
Trust-Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trust Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Administration and subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ Securities Holdings:
Sales Marketing Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global Investment Banking Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global Markets Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International Business Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate Center and Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ NICOS:
Business Marketing Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit Risk Management & Risk Assets Administration Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Merchant Business Management Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operations Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Systems Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15%
10
23
19
1
8
2
4
3
1
1
2
3
1
0
1
2
1
1
0
1
0
0
1
100%

155

Location
Bank of Tokyo-Mitsubishi UFJ:
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bank of Ayudhya Public Company Limited(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ Trust and Banking Corporation:
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ Securities Holdings:
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mitsubishi UFJ NICOS:
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania excluding Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35%
13
2
8
19
1
10
0
0
0
6
0
1
0
4
0
0
0
1
100%

Note:
(1) Bank of Ayudhya Public Company Limited is located in Thailand.

Most of our employees are members of an employees’ union, which negotiates on behalf of employees inrelation to remuneration and working conditions. We believe our labor relations to be good.
E.

Share Ownership
The information required by this item is set forth in “—B. Compensation.”

156

Item 7.
A.

Major Shareholders and Related Party Transactions.

Major Shareholders

Common Stock
As of March 31, 2014, we had 743,933 registered shareholders of our common stock. The ten largest
holders of our common stock appearing on the register of shareholders as of March 31, 2014, and the number andthe percentage of such shares held by each of them, were as follows:
Number of shares
held

Name

Percentage of
total shares in issue

Japan Trustee Services Bank, Ltd. (Trust account)(1) . . . . . . . . . . . . . . . . . . .
The Master Trust Bank of Japan, Ltd. (Trust account)(1) . . . . . . . . . . . . . . . .
The Bank of New York Mellon SA/NV 10 . . . . . . . . . . . . . . . . . . . . . . . . . . .
State Street Bank and Trust Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nippon Life Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Bank of New York Mellon as Depositary Bank for DR Holders(2) . . . . .
Meiji Yasuda Life Insurance Company(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan Trustee Services Bank, Ltd. (Trust account 1)(1) . . . . . . . . . . . . . . . . . .
Japan Trustee Services Bank, Ltd. (Trust account 2)(1) . . . . . . . . . . . . . . . . . .
State Street Bank and Trust Company 505225 . . . . . . . . . . . . . . . . . . . . . . . .

687,872,700
589,568,800
313,508,710
223,166,446
198,137,853
186,466,730
175,000,000
172,662,600
157,029,900
156,934,894

4.85%
4.16
2.21
1.57
1.39
1.31
1.23
1.21
1.10
1.10

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,860,348,633

20.19%

Notes:(1) Includes the shares held in trust accounts, which do not disclose the names of beneficiaries.
(2) An owner of record for our American depositary shares.
(3) These shares are those held in a pension trust account with The Master Trust Bank of Japan, Ltd. for the benefit of retirement plans withvoting rights retained by Meiji Yasuda Life Insurance Company.

As of March 31, 2014, 1,393,786 shares, representing less than 0.01% of our outstanding common stock,were held by our directors and corporate auditors. Our major shareholders do not have different voting rights.
As of March 31, 2014, 2,081,091,190 shares, representing 14.69% of our outstanding common stock, were
owned by 347 U.S. shareholders of record who are resident in the United States, one of whom is the ADR
depository’s nominee holding 186,466,730 shares, or 1.31%, of our issued common stock.
Preferred Stock
No holder of our preferred stock has the right to vote at a general meeting of shareholders, except:‰

from the commencement of our ordinary general meeting of shareholders if an agenda for approval todeclare a preferred dividend is not submitted to such meeting; or‰from the close of any ordinary general meeting of shareholders if a proposed resolution to declare apreferred dividend is not approved at such meeting;in each case, unless and until such time as a resolution of an ordinary general meeting of shareholders
declaring a preferred dividend is passed.
Holders of our preferred stock are entitled to vote at a meeting separately held for their respective classes ofpreferred stock in accordance with the Company Law. A resolution of a separate meeting of class shareholders is
required for the following actions, but only if the action is likely to prejudice the interests of the relevant classshareholders:‰

an amendment to our articles of incorporation to (a) create a new class of shares, (b) change the terms ofshares, or (c) increase the total number of authorized shares or the total number of authorized shares of a
157

‰
‰
‰
‰
‰

class of stock, except in some cases, such as an amendment to change a class of stock to callable stock,
the resolution of, or the unanimous consent from, relevant class shareholders is required, regardless ofwhether the action is likely to prejudice their interests;
a consolidation of shares;
a share split;
an allotment of shares to our existing shareholders;an allotment of stock acquisition rights to our existing shareholders; anda merger, corporate split, stock for stock exchange, or stock for stock transfer.

Class 11 preferred stock is convertible into shares of our common stock as described in“Item 10.B. Additional Information—Memorandum and Articles of Association.”
The shareholders of class 11 preferred stock, appearing on the register of shareholders as of March 31, 2014,
and the number and the percentage of such shares held by each of them, were as follows:
Name

UFJ Trustee Services PVT. (Bermuda) Limited as the trustee of
UFJ International Finance (Bermuda) Trust . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of shares
held

Percentage of
total shares in issue

1,000
1,000

100%
100%

We expect to acquire all of the outstanding shares of class 11 preferred stock on August 1, 2014 as required
under the terms of the preferred stock or prior to that date at the request of the holder of the shares in exchange
for up to 1,245 shares of our common stock. We plan to use shares of our common stock held in treasury for thisacquisition. In addition, on April 1, 2014, MUFG acquired all of the 156,000,000 outstanding shares of firstseries of class 5 preferred stock for ¥390 billion and cancelled all the acquired shares. Upon our acquisition of theshares of class 11 preferred stock, we will have no outstanding shares of any class of preferred stock.
B.

Related Party Transactions
As of March 31, 2014, we held approximately 21.9% of the voting rights in Morgan Stanley and Series C
Preferred Stock with a face value of approximately $521.4 million, or ¥53.6 billion, and 10% dividend. We also
have two representatives appointed to Morgan Stanley’s board of directors. We adopted the equity method of
accounting for our investment in Morgan Stanley beginning with the fiscal year ended March 31, 2012.
We and Morgan Stanley have two securities joint venture companies, namely, MUMSS and MSMS, inJapan. We hold a 60% economic interest in MUMSS and MSMS, and Morgan Stanley holds a 40% economic
interest in MUMSS and MSMS. We hold a 60% voting interest and Morgan Stanley holds a 40% voting interest
in MUMSS, and we hold a 49% voting interest and Morgan Stanley holds a 51% voting interest in MSMS.
We and Morgan Stanley continue to pursue a variety of business opportunities in Japan and abroad in
accordance with the global strategic alliance. For a detailed discussion of our global alliance with Morgan
Stanley, see “Item 4.B. Information on the Company—Business Overview—Global Strategic Alliance with
Morgan Stanley.”
We and our banking subsidiaries had, and expect to have in the future, banking transactions and othertransactions in the ordinary course of business with our related parties. Although for the fiscal year ended
March 31, 2014, such transactions included, but were not limited to, call money, loans, electronic dataprocessing, leases and management of properties, those transactions were immaterial and were made atprevailing market rates, terms and conditions and do not involve more than the normal risk of collectibility orpresent other unfavorable features.
None of our directors or corporate auditors, nor any of the close members of their respective families, has
had any transactions or has any presently proposed transactions that are material or any transactions that are
unusual in their nature or conditions, involving goods, services or tangible or intangible assets, to which we were,are or will be a party.
158

No loans have been made to our directors or corporate auditors other than in the normal course of business,on normal commercial terms and conditions, involving the normal risk of collectibility, and presenting normalfeatures. In addition, no loans have been made to our directors or executive officers or corporate auditors otherthan as permitted under Section 13(k) of the U.S. Securities Exchange Act and Rule 13k-1 promulgatedthereunder.
No family relationship exists among any of our directors or corporate auditors. No arrangement or
understanding exists between any of our directors or corporate auditors and any other person pursuant to which
any director or corporate auditor was elected to their position at MUFG.
As part of our compensation structure, we have granted stock acquisition rights to our directors andcorporate auditors. For a detailed discussion of the stock acquisition rights, see “Item 6.B. Directors, Senior
Management and Employees—Compensation.”
C.

Interests of Experts and Counsel
Not applicable.

Item 8.
A.

Financial Information.

Consolidated Statements and Other Financial Information

The information required by this item is set forth in our consolidated financial statements starting on pageF-1 of this Annual Report and in “Selected Statistical Data” starting on page A-1 of this Annual Report.
Legal Proceedings
From time to time, we are involved in various litigation matters and other legal proceedings, including
regulatory actions. Although the final resolution of any such matters and proceedings could have a material effecton our consolidated operating results for a particular reporting period, based on our current knowledge andconsultation with legal counsel, we believe the current litigation matters and other legal proceedings, whenultimately determined, will not materially affect our results of operations or financial position. For more
information, see “Item 3.D. Key Information—Risk Factors—Risks Related to Our Business—We may become
subject to regulatory actions or other legal proceedings relating to our transactions or other aspects of ouroperations, which could result in significant financial losses, restrictions on our operations and damage to our
reputation.”
Distributions
Our board of directors submits a recommendation for a year-end dividend for our shareholders’ approval at
the ordinary general meeting of shareholders customarily held in June of each year. The year-end dividend isusually distributed immediately following shareholders’ approval to holders of record at the end of the preceding
fiscal year. In addition to year-end dividends, we may make cash distributions by way of interim dividends toshareholders of record as of September 30 of each year as distribution of surplus by resolution of our board of
directors. Year-end dividends in the amount of ¥16 per share of our common stock for the fiscal year ended
March 31, 2014 were approved by shareholders at the ordinary general meeting of shareholders held on June 27,
2014.
See “Item 10.B. Additional Information—Memorandum and Articles of Association” for additional
information on our dividends policy.
Under the Japanese foreign exchange regulations currently in effect, dividends paid on shares held by nonresidents of Japan may be converted into any foreign currency and repatriated abroad. Under the terms of the159

deposit agreement pursuant to which ADSs are issued, the depositary is required, to the extent that in its
judgment it can convert Japanese yen on a reasonable basis into U.S. dollars and transfer the resulting
U.S. dollars to the United States, to convert all cash dividends that it receives in respect of deposited shares into
U.S. dollars and to distribute the amount received, after deduction of any applicable withholding taxes, to theholders of ADSs. See “Item 10.D. Additional Information—Exchange Controls” and “Item 12.D. Description of
Securities Other than Equity Securities—American Depositary Shares.”
B.

Significant Changes

Other than as described in this Annual Report, no significant changes have occurred since the date of ourconsolidated financial statements included in this Annual Report.

160

Item 9.
A.

The Offer and Listing.

Offer and Listing Details

Market Price Information
The following table shows, for the periods indicated, the reported intra-day high and low trade prices forshares of our common stock on the Tokyo Stock Exchange, or the TSE, and of the ADSs on the New York Stock
Exchange, or the NYSE:
Price per share on the TSE
High
Low
(yen)

Fiscal year ended March 31, 2010 . . . . . . . . . . . . . . . . . . . . .
Fiscal year ended March 31, 2011 . . . . . . . . . . . . . . . . . . . . .
Fiscal year ended March 31, 2012 . . . . . . . . . . . . . . . . . . . . .
Fiscal year ended March 31, 2013
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fiscal year ended March 31, 2014
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fiscal year ending March 31, 2015
April . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
June . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
July (through July 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B.

Price per ADS on the NYSE
High
Low
(U.S.$)

699
520
448

437
321
318

6.84
5.68
5.36

4.79
4.44
4.01

427
398
462
592

328
349
345
449

5.16
4.97
5.42
6.10

4.16
4.44
4.24
5.19

750
677
696
697
632
610

515
575
598
519
581
519

7.31
6.81
6.74
6.64
6.15
5.96

5.52
5.82
6.13
5.19
5.77
5.19

587
586
642
638

523
542
578
620

5.63
5.73
6.27
6.31

5.21
5.33
5.69
6.08

Plan of Distribution
Not applicable.

C.

Markets

The primary market for our common stock is the TSE. Our common stock is also listed on the Nagoya Stock
Exchange in Japan. ADSs, each representing one share of common stock, are quoted on the NYSE under thesymbol, “MTU.”
D.

Selling Shareholders
Not applicable.

E.

Dilution
Not applicable.

F.

Expenses of the Issue
Not applicable.
161

Item 10. Additional Information.
A.

Share Capital
Not applicable.

B.

Memorandum and Articles of Association

Our Corporate Purpose
Article 2 of our Articles of Incorporation provides that our corporate purpose is to carry on the following
businesses:‰

administration of management of banks, trust banks, specialized securities companies, insurancecompanies or other companies which we may own as our subsidiaries under the Banking Law; and‰any other businesses incidental to the foregoing businesses mentioned in the preceding clause.

Board of Directors
For discussion of the provisions of our Articles of Incorporation as they apply to our directors, see“Item 6.C. Directors, Senior Management and Employees—Board Practices.”
Common Stock
We summarize below the material provisions of our Articles of Incorporation, our share handlingregulations and the Company Law as they relate to a type of joint stock company known as kabushiki kaisha,within which we fall. Because it is a summary, this discussion should be read together with our Articles ofIncorporation and share handling regulations, which have been filed as exhibits to this Annual Report.
GeneralA joint stock company is a legal entity incorporated under the Company Law. The investment and rights ofthe shareholders of a joint stock company are represented by shares of stock in the company and shareholders’liability is limited to the amount of the subscription for the shares.
As of June 27, 2014, our authorized common share capital was comprised of 33,000,000,000 shares ofcommon stock with no par value.
As of March 31, 2014, a total of 14,164,026,420 shares of common stock (including 3,389,416 shares ofcommon stock held by us and our consolidated subsidiaries as treasury stock) had been issued. Each of the sharesissued and outstanding was fully paid and non-assessable.
As of June 27, 2014, we were authorized to issue 800,001,000 shares of preferred stock, including
400,000,000 shares of each of the first to fourth series of class 5 preferred stock (provided the aggregate numberof shares authorized to be issued with respect to the four series of class 5 preferred stock does not exceed
400,000,000 shares), 200,000,000 shares of each of the first to fourth series of class 6 preferred stock (provided
the aggregate number of shares authorized to be issued with respect to the four series of class 6 preferred stock
does not exceed 200,000,000 shares), 200,000,000 shares of each of the first to fourth series of class 7 preferredstock (provided the aggregate number of shares authorized to be issued with respect to the four series of class 7
preferred stock does not exceed 200,000,000 shares), and 1,000 shares of class 11 preferred stock. As of
March 31, 2014, we had 156,000,000 shares of first series of class 5 preferred stock and 1,000 shares of class 11
preferred stock issued and outstanding.
162

We may issue shares from our authorized but unissued share capital following a resolution to that effect byour board of directors. An increase in our authorized share capital is only possible by amendment of our Articles
of Incorporation, which generally requires shareholders’ special approval.
In order to assert shareholder rights against us, a shareholder must have its name and address registered on
our register of shareholders, in accordance with the Company Law and our share handling regulations. The
registered holder of deposited shares underlying the ADSs is the depositary for the ADSs, or its nominee.
Accordingly, holders of ADSs will not be able to assert shareholder rights other than as provided in theagreement among us, the depositary and the holders of the ADSs.
Under the Act on Book-Entry Transfer of Company Bonds, Shares, etc., the shares of all Japanesecompanies listed on any Japanese stock exchange, including our shares, are traded without share certificatesthrough entry in the books maintained under a central clearing system.
Dividends
Dividends are distributed in proportion to the number of shares owned by each shareholder on the record
date for the dividend. Dividends for each financial period may be distributed following shareholders’ approval ata general meeting of shareholders.
Payment of dividends on common stock is subject to the preferential dividend rights of holders of preferredstock.
Under the Banking Law and our Articles of Incorporation, our financial accounts are closed on March 31 ofeach year, and dividends, if any, are paid to shareholders of record as of March 31 following shareholders’approval at a general meeting of shareholders. In addition to year-end dividends, our board of directors may by
resolution declare an interim cash dividend to shareholders of record as of September 30 of each year. Under theCompany Law, distribution of dividends will take the form of distribution of surplus (as defined below). We will
be permitted to make distributions of surplus to our shareholders any number of times per fiscal year pursuant toresolutions of our general meetings of shareholders, subject to certain limitations described below. Distributionsof surplus are in principle required to be authorized by a resolution of a general meeting of shareholders.
Distributions of surplus would, however, be permitted to be made pursuant to a resolution of our board of
directors if:(a) our Articles of Incorporation so provide (our Articles of Incorporation currently contain no suchprovisions);(b) the normal term of office of our directors is one year; and(c) certain conditions concerning our non-consolidated annual financial statements and certain documents
for the latest fiscal year as required by an ordinance of the Ministry of Justice are satisfied.
In an exception to the above rule, even if the requirements described in (a) through (c) are not met, we are
permitted to make distributions of surplus in cash to our shareholders by resolutions of the board of directors
once per fiscal year as mentioned above concerning interim cash dividend.
Under the Company Law, distributions of surplus may be made in cash or in kind in proportion to thenumber of shares of common stock held by each shareholder. A resolution of a general meeting of shareholders
or our board of directors authorizing a distribution of surplus must specify the kind and aggregate book value ofthe assets to be distributed, the manner of allocation of such assets to shareholders, and the effective date of the
distribution. If a distribution of surplus is to be made in kind, we may, pursuant to a resolution of a general
meeting of shareholders or (as the case may be) our board of directors, grant to our shareholders the right torequire us to make such distribution in cash instead of in kind. If no such right is granted to shareholders, therelevant distribution of surplus must be approved by a special resolution of a general meeting of shareholders.
See “—B. Memorandum and Articles of Association—Common Stock—Voting Rights.”
163

Under the Company Law, we may make distributions of surplus to the extent that the aggregate book valueof the assets to be distributed to shareholders does not exceed the distributable amount (as defined below) as ofthe effective date of such distributions of surplus. The amount of surplus (the “surplus”) at any given time shallbe the amount of our assets and the book value of our treasury stock after subtracting the amounts of items (1)through (5) below as they appear on our non-consolidated balance sheet as of the end of our last fiscal year, andafter reflecting the changes in our surplus after the end of our last fiscal year, by adding the amounts of items (6),(7) and (8) below and/or subtracting the amounts of items (9), (10) and (11) below:(1) our liabilities;(2) our stated capital;(3) our additional paid-in capital;(4) our accumulated legal reserve;(5) other amounts as are set out in an ordinance of the Ministry of Justice;(6) (if we transferred our treasury stock after the end of the last fiscal year) the transfer price of ourtreasury stock after subtracting the book value thereof;(7) (if we decreased our stated capital after the end of the last fiscal year) the amount of decrease in ourstated capital (excluding the amount transferred to additional paid-in capital or legal reserve);(8) (if we decreased our additional paid-in capital or legal reserve after the end of the last fiscal year) theamount of decrease in our additional paid-in capital or legal reserve (excluding the amount transferred
to stated capital);(9) (if we cancelled our treasury stock after the end of the last fiscal year) the book value of the cancelledtreasury stock;(10) (if we distributed surplus to shareholders after the end of the last fiscal year) the amount of the assets
distributed to shareholders by way of such distribution of surplus; and(11) other amounts as are set out in an ordinance of the Ministry of Justice.
A distributable amount (the “distributable amount”) at any given time shall be the aggregate amount of(a) the surplus, (b) the amount of profit as recorded for the period after the end of our last fiscal year until thedate of an extraordinary settlement of account (if any) as is set out in an ordinance of the Ministry of Justice and(c) the transfer price of our treasury stock in the same period, after subtracting the amounts of the following
items:(1) the book value of our treasury stock;(2) (if we transferred our treasury stock after the end of the last fiscal year) the transfer price of ourtreasury stock;(3) the losses recorded for the period after the end of our last fiscal year until the date of an extraordinary
settlement of account (if any) as set out in an ordinance of the Ministry of Justice; and(4) other amounts as set out in an ordinance of the Ministry of Justice.
In Japan, the “ex-dividend” date and the record date for any dividends precede the date of determination of
the amount of the dividend to be paid. The market price of shares generally becomes ex-dividend on the third
business day prior to the record date. Under our Articles of Incorporation, we are not obligated to pay any
dividends which are left unclaimed for a period of five years after the date on which they first became payable.
Capital and Reserves
Under the Company Law, we may reduce our additional paid-in capital or legal reserve (without limitation
as to the amount of such reduction) as mentioned previously, generally by resolution of a general meeting of164

shareholders and, if so resolved in the same resolution, may account for the whole or any part of the amount ofsuch reduction as stated capital. We may also reduce our stated capital generally by special resolution of ageneral meeting of shareholders and, if so resolved in the same resolution, such reduction may account for thewhole or any part of the amount of such reduction as additional paid-in capital or legal reserve. Conversely, we
may reduce our surplus and increase either (i) stated capital or (ii) additional paid-in capital and/or legal reserveby the same amount, in either case by resolution of a general meeting of shareholders.
Stock Splits
Stock splits of our outstanding stock may be effected at any time by resolution of the board of directors.
When a stock split is to be effected, we may increase the authorized share capital to cover the number of shares
to be increased by the stock split by amending our Articles of Incorporation by resolution of the board of
directors without approval by special resolution of the general meeting of shareholders, unless more than one
class of stock is issued and outstanding. We must give public notice of the stock split, specifying a record date atleast two weeks prior to the record date.
We conducted a stock split pursuant to which each of our shares of common and preferred stock were split
into 1,000 shares of the respective classes of securities, effective as of September 30, 2007. Our Articles ofIncorporation were amended to increase the authorized share capital to cover the number of shares increased by
the stock split, which amendment became effective simultaneously with the effectiveness of the stock split.
Unit Share (tan-gen kabu) System
We have adopted a unit share system, where 100 shares of either common or preferred stock shall eachconstitute a unit, as the amendment of our Articles of Incorporation to provide for such system was approved at
the shareholders’ meetings on June 27 and 28, 2007.
Under the unit share system, each unit is entitled to one voting right. A holder of less than one unit has no
voting right. Our Articles of Incorporation provide that the holders of shares constituting less than a full unit will
not have shareholder rights except for those specified in the Company Law or an ordinance of the Ministry ofJustice, including rights (i) to receive dividends, (ii) to receive cash or other assets in case of consolidation or
split of shares, stock-for-stock exchange or stock-for-stock transfer, corporate split or merger or (iii) to be
allotted rights to subscribe for free for new shares and stock acquisition rights when such rights are granted toshareholders. Shareholders may require us to purchase shares constituting less than a unit at the current market
price. In addition, holders of shares constituting less than a unit may require us to sell them such number ofshares, which, when combined with the number of shares already held by such holder, shall constitute a wholeunit of share; provided that we will be obliged to comply with such request only when we own a sufficientnumber of shares to accommodate the desired sale and purchase. The board of directors may reduce the numberof shares constituting a unit or cease to use the unit share system by amendments to the Articles of Incorporation
without shareholders’ approval even though amendments to the Articles of Incorporation generally require a
special resolution of the general meeting of shareholders.
General Meeting of Shareholders
The ordinary general meeting of our shareholders is usually held in June of each year in Tokyo. In addition,
we may hold an extraordinary general meeting of shareholders whenever necessary by giving at least two weeks’advance notice to shareholders who are entitled to vote at the relevant general meeting of shareholders. The
record date for ordinary general meetings of our shareholders is March 31.
Any shareholder holding at least 300 voting rights or 1% of the total number of voting rights for six
consecutive months or longer may propose a matter to be considered at a general meeting of shareholders bysubmitting a written request to a director at least eight weeks prior to the date of the meeting. The number of165

minimum voting rights, minimum percentage and time period necessary for exercising the minority shareholder
rights described above may be decreased or shortened if our Articles of Incorporation so provide. Our Articles ofIncorporation currently contain no such provisions.
Voting Rights
A holder of shares of our common stock is generally entitled to one voting right for each unit of common
stock held. The following shares of common stock are not entitled to voting rights even when such sharesconstitute a whole unit, and such shares of common stock are not considered when determining whether aquorum exists for a shareholders’ meeting:‰treasury stock;‰shares held by a company in which we and/or our subsidiaries own 25% or more of the total voting
rights; and‰shares issued after the record date as a result of conversion of convertible stock, exercise of stockacquisition rights, and fractional shareholders becoming a shareholder of a whole unit share.

On the other hand, holders of certain class of preferred stock shall be entitled to a voting right for each unitof preferred stock held under certain conditions provided for by relevant laws or regulations and our Articles ofIncorporation, for example, when a proposal to pay the full amount of preferential dividends on any class ofpreferred stock in compliance with the terms of such preferred stock is not included in the agenda of the relevant
shareholders meeting. See “—Preferred Stock.”
Under our Articles of Incorporation, except as otherwise provided by law or by other provisions of our
Articles of Incorporation, a resolution can be adopted at a shareholders’ meeting by the holders of a majority ofthe voting rights represented at the meeting. The Company Law and our Articles of Incorporation require aquorum of not less than one-third of the total number of voting rights for election of our directors and corporate
auditors.
The Company Law and our Articles of Incorporation provide that a quorum of not less than one-third ofoutstanding voting rights, excluding those owned by our subsidiaries and affiliates of which we own, directly or
indirectly, 25 percent or more, must be present at a shareholders’ meeting to approve specified corporate actions,such as:‰the amendment of our Articles of Incorporation, except in some limited cases;‰

the repurchase of our own stock from a specific shareholder other than our subsidiary;‰

the consolidation of shares;‰

the offering to persons other than shareholders of stock at a specially favorable price, or of stockacquisition rights or bonds or notes with stock acquisition rights with specially favorable conditions;‰the removal of a corporate auditor;‰

the exemption from liability of a director or corporate auditor, with certain exceptions;‰a reduction in stated capital with certain exceptions in which a shareholders’ resolution is not required;‰a distribution of in-kind dividends which meets certain requirements;‰

the transfer of the whole or an important part of our business, except in some limited circumstances;‰

the acquisition of the whole business of another company, except in some limited circumstances;‰a dissolution, merger or consolidation, except for certain types of mergers;

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‰

a stock-for-stock exchange (kabushiki-kokan) or stock-for-stock transfer (kabushiki-iten), except insome limited circumstances; and‰a corporate split, except in some limited circumstances.

A special resolution representing at least two-thirds of the voting rights represented at the meeting isrequired to approve these actions.
Our Articles of Incorporation do not include any provision that grants shareholders cumulative voting rights
at elections of directors or corporate auditors.
Subscription Rights
Holders of our shares have no preemptive rights under our Articles of Incorporation. Under the Company
Law, however, our board of directors may determine that shareholders be given subscription rights in connection
with a particular issue of new shares. In this case, these subscription rights must be given on uniform terms to allshareholders, and if a specified record date is set, it must be announced in a public notice at least two weeks prior
to the record date. A notification to each individual shareholder must also be given at least two weeks prior to thesubscription date.
Under the Company Law, rights to subscribe for new shares may not be transferred; however, we may allot
stock acquisition rights to shareholders without consideration, and such rights will be transferable.
Stock Acquisition Rights
We may issue stock acquisition rights (shinkabu yoyakuken), which in the United States are often in theform of warrants, or bonds with stock acquisition rights that cannot be detached (shinkabu yoyakuken-tsuki
shasai), which in the United States are often in the form of convertible bonds or bonds with non-detachable
warrants. Except where the issuance would be on “specially favorable” conditions, the issuance of stockacquisition rights or bonds with stock acquisition rights may be authorized by a resolution of our board of
directors. Upon exercise of the stock acquisition rights, the holder of such rights may acquire shares by paying
the applicable exercise price or, if so determined by a resolution of our board of directors, by making a substitute
payment, such as having the convertible bonds redeemed for no cash in lieu of the exercise price.
Liquidation Rights
Upon our liquidation, the assets remaining after payment of all debts, liquidation expenses, taxes andpreferred distributions to holders of shares of our preferred stock will be distributed among the holders of sharesof our common stock in proportion to the number of shares they own.
Transfer Agent
MUTB is the transfer agent for our common stock. The office of MUTB for this purpose is located at 4-5,
Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8212, Japan. MUTB maintains our register of shareholders.
Reports to Shareholders
We furnish to our shareholders notices, in Japanese, of shareholders’ meetings, annual business reports,
including our financial statements, and notices of resolutions adopted at our shareholders’ meetings.
Record Dates
As stated above, March 31 is the record date for the payment of annual dividends (if any), the determinationof shareholders entitled to vote at ordinary general meetings of our shareholders, and the determination of class167

shareholders entitled to vote at meetings of our class shareholders if any matter to be resolved at an ordinary
general meeting of our shareholders requires a resolution by our class shareholders in addition to a resolution by
our shareholders. September 30 is the record date for the payment of interim dividends, if any. In addition, by aresolution of our board of directors and after giving at least two weeks’ prior public notice, we may at any time
set a record date in order to determine the shareholders who are entitled to the rights pertaining to our shares.
Repurchase of Our Shares
We may repurchase our own shares:‰

through the Tokyo Stock Exchange or other stock exchanges on which our shares are listed, if
authorized by a resolution of a general meeting of shareholders or our board of directors;‰

by way of a tender offer, if authorized by a resolution of a general meeting of shareholders or our boardof directors;‰

from a specific party, if authorized by a special resolution of a general meeting of shareholders and wegive notice thereof to shareholders prior to such general meeting, in general;‰from all shareholders of a specific class of shares offering to sell their shares, if authorized by aresolution of a general meeting of shareholders or our board of directors and we give a public notice ornotice thereof to all of the shareholders (if we repurchase any class of preferred stock, notices to allshareholders of the relevant class of preferred stock); or‰from our subsidiaries, if authorized by a resolution of the board of directors.

When the repurchase is made by us from a specific party, as authorized by a special resolution of a general
meeting of shareholders, any shareholder may make a demand to a director, five days or more prior to therelevant shareholders’ meeting, that we also repurchase the shares held by that shareholder. However, no suchright will be available if the shares have a market price, and if the purchase price does not exceed the then market
price calculated in a manner set forth in an ordinance of the Ministry of Justice.
Repurchase of our own shares described above must satisfy various specified requirements. In general, thesame restrictions on the distributable amount as described in the seventh paragraph under “—Common Stock—
Dividends.” are applicable to the repurchase of our own shares, so the total amount of the repurchase price may
not exceed the distributable amount.
We may hold our own shares so repurchased without restrictions. In addition, we may cancel or dispose of
our repurchased shares by a resolution of our board of directors. As of March 31, 2014, we (excluding our
subsidiaries) owned 212,200 shares of treasury stock.
Preferred Stock
The following is a summary of information concerning the shares of our preferred stock, including briefsummaries of the relevant provisions of our Articles of Incorporation, the share handling regulations and theCompany Law as currently in effect. The detailed rights of our preferred stock are set out in our Articles ofIncorporation and the resolutions of our board of directors relating to the issuance of the relevant stock.
General
As of March 31, 2014, we were authorized under our Articles of Incorporation to issue four classes ofpreferred stock totaling 800,001,000 shares of preferred stock, including 400,000,000 shares of each of the first
to fourth series of class 5 preferred stock (provided the aggregate number of shares authorized to be issued withrespect to the four series of class 5 preferred stock does not exceed 400,000,000 shares), 200,000,000 shares of168

each of the first to fourth series of class 6 preferred stock (provided the aggregate number of shares authorized to
be issued with respect to the four series of class 6 preferred stock does not exceed 200,000,000 shares),200,000,000 shares of each of the first to fourth series of class 7 preferred stock (provided the aggregate numberof shares authorized to be issued with respect to the four series of class 7 preferred stock does not exceed
200,000,000 shares) and 1,000 shares of class 11 preferred stock. Our preferred stock has equal preference over
our shares of common stock with respect to dividend entitlements and distribution of assets upon our liquidation.
However, holders of shares of our preferred stock are not entitled to vote at general meetings of shareholders,subject to the exceptions provided under our Articles of Incorporation. On April 1, 2014, MUFG acquired all of
the 156,000,000 outstanding shares of first series of class 5 preferred stock for ¥390.0 billion and cancelled all
the acquired shares. In addition, MUFG expects to acquire all of the 1,000 outstanding shares of class 11
preferred stock on August 1, 2014 as required under the terms of the preferred stock or prior to that date at therequest of the holder of the shares in exchange for up to 1,245 shares of our common stock. We plan to use
shares of our common stock held in treasury for this acquisition. Upon our acquisition of the shares of class 11
preferred stock, we will have no outstanding shares of any class of preferred stock.
We may acquire shares of first to fourth series of class 5 and first to fourth series of class 6 preferred stockat our discretion pursuant to the terms and conditions provided by our Articles of Incorporation and theresolution of our board of directors. The provisions for acquisition of shares of first to fourth series of class 5 andfirst to fourth series of class 6 preferred stock will be determined by the board of directors at the time of issuanceof such preferred stock. When issued, any holder of shares of first to fourth series of class 6 preferred stock or
first to fourth series of class 7 preferred stock may request acquisition of shares of such preferred stock in
exchange for shares of our common stock during the period determined by resolution of the board of directors
adopted at the time of issuance of such shares of preferred stock. Any shares of first to fourth series of class 6
preferred stock or first to fourth series of class 7 preferred stock for which no request for acquisition in exchange
for shares of our common stock is made during such period will be mandatorily acquired on the day immediately
following the last day of such period (the “Mandatory Acquisition Date”) in the number obtained by dividing anamount equivalent to the subscription price per each relevant share of preferred stock by the average daily
closing price of our common stock as reported by the Tokyo Stock Exchange for the 30 trading days
commencing on the 45th trading day prior to the Mandatory Acquisition Date. Any holder of shares of class 11
preferred stock may request acquisition of shares of the relevant preferred stock in exchange for shares of ourcommon stock during the period as provided for in the attachment to our Articles of Incorporation. Any shares ofclass 11 preferred stock for which no request for acquisition in exchange for shares of our common stock is madeduring such period will be mandatorily acquired on the Mandatory Acquisition Date in the number obtained by
dividing an amount equivalent to the subscription price per each relevant share of preferred stock by the average
daily closing price of our common stock as reported by the Tokyo Stock Exchange for the 30 trading days
commencing on the 45th trading day prior to the Mandatory Acquisition Date.
Additionally, in order to enable the relevant preferred stock to meet the criteria for Additional Tier 1 capital
under Basel III requirements as adopted by the FSA and became effective on March 31, 2013, the terms of thesecond to fourth series of class 5 as well as all the series of class 6 and class 7 preferred stock were amended inJune 2013 to have mandatory acquisition provisions. When newly issuing these preferred stock, the board of
directors will determine events that will require us to acquire the relevant preferred stock pursuant to the capital
adequacy requirements applicable to us. Upon the occurrence of such events, we will acquire all the relevant
preferred stock on an acquisition date, which is a date determined by the board of directors either at the time of
the issuance or after the occurrence of such event. We shall acquire the relevant preferred stock in exchange forcommon stock or for no consideration as determined by the board of directors at the time of the issuance,
considering certain factors including the market conditions. The formula to be used in exchanging the preferredstock for common stock will also be determined by the board of directors at the time of the issuance. For more
information, see “Item 4.B. Information on the Company—Business Overview—Supervision and Regulation—
Japan—Capital adequacy.”

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Preferred Dividends
In priority to the payment of dividends to holders of our common stock, the amount of preferred dividends
payable each fiscal year for each class of our preferred stock is set forth below:‰

first series of class 5 preferred stock: ¥115.00 per share;‰

second to fourth series of class 5 preferred stock: to be set by resolution of our board of directors at thetime of issuance, up to a maximum of ¥250.00 per share;‰first to fourth series of class 6 preferred stock: to be set by resolution of our board of directors at thetime of issuance, up to a maximum of ¥125.00 per share;‰first to fourth series of class 7 preferred stock: to be set by resolution of our board of directors at thetime of issuance, up to a maximum of ¥125.00 per share; and‰class 11 preferred stock: ¥5.30 per share.

In the event that our board of directors decides to pay an interim dividend to holders of record of ourcommon stock as of September 30 of any year, we will, in priority to the payment of that interim dividend, pay a
preferred interim dividend in the amount specified in our Articles of Incorporation to holders of record of ourpreferred stock as of September 30 of the same year. The amount of any preferred interim dividend will be
deducted from the preferred dividend payable on the relevant class of our preferred stock for the same fiscal year.
No preferred dividend will be paid on any of our preferred stock converted into our common stock for theperiod from the date following the record date for the preferred dividend or preferred interim dividend last
preceding the relevant conversion date to the relevant conversion date, but the common stock issued upon
conversion will be entitled to receive any dividend payable to holders of record of common stock upon the next
succeeding record date for common stock dividends.
No payment of dividends on our preferred stock or any other shares can be made unless we have a sufficient
distributable amount and a resolution to distribute such distributable amount is obtained at the relevant ordinary
general meeting of shareholders, in the case of annual preferred dividends, or at the board of directors, in the caseof preferred interim dividends.
Dividends on our preferred stock are non-cumulative. If the full amount of any dividend is not declared on
our preferred stock in respect of any fiscal year, holders of our preferred stock do not have any right to receive
dividends in respect of the deficiency in any subsequent fiscal year, and we will have no obligation to pay the
deficiency or to pay any interest regardless of whether or not dividends are paid in respect of any subsequentfiscal year. The holders of our preferred stock are not entitled to any further dividends or other participation in or
distribution of our profits.
Liquidation Rights
In the event of our voluntary or involuntary liquidation, record holders of our preferred stock are entitled,equally in rank as among themselves, to receive before any distribution out of our residual assets is made toholders of our common stock, a distribution out of our residual assets of:‰¥2,500 per share of first to fourth series of class 5 preferred stock;‰¥2,500 per share of first to fourth series of class 6 preferred stock;‰¥2,500 per share of first to fourth series of class 7 preferred stock; and‰¥1,000 per share of class 11 preferred stock.

The holders of our preferred stock are not entitled to any further dividends or other participation in or
distribution of our residual assets upon our liquidation.
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Voting Rights
No holder of our preferred stock has the right to receive notice of, or to vote at, a general meeting ofshareholders, except as otherwise specifically provided under our Articles of Incorporation or other applicablelaw. Under our Articles of Incorporation, holders of our preferred stock will be entitled to receive notice of, andhave one voting right per unit of preferred stock at, our general meetings of shareholders:‰from the commencement of our ordinary general meeting of shareholders if an agenda for approval todeclare a preferred dividend is not submitted to such meeting; or‰from the close of any ordinary general meeting of shareholders if a proposed resolution to declare apreferred dividend is not approved at such meeting.

In each case, holders of our preferred stock will be entitled to receive notice of and vote at the relevant
general meetings of shareholders unless and until such time as a resolution of an ordinary general meeting ofshareholders declaring a preferred dividend is passed.
For more information, see “Item 7.A. Major Shareholders and Related Party Transactions—Major
Shareholders—Preferred Stock.”
American Depositary Shares
The Bank of New York Mellon will issue American depositary receipts, or ADRs. Each ADR will represent
ownership interests in American depositary shares, or ADSs. Each ADS represents one share of our common
stock. Each ADS is held by BTMU, acting as custodian, at its principal office in Tokyo, on behalf of The Bank of
New York Mellon, acting as depositary. Each ADS will also represent securities, cash or other property deposited
with The Bank of New York Mellon but not distributed to ADS holders. The Bank of New York Mellon’s
corporate trust office is located at 101 Barclay Street, New York, New York 10286 and its principal executive
office is located at One Wall Street, New York, New York 10286.
You may hold ADSs either directly or indirectly through your broker or other financial institution. If you
hold ADSs directly, you are an ADS holder. This description assumes you hold your ADSs directly. If you holdthe ADSs indirectly, you must rely on the procedures of your broker or other financial institution to assert therights of ADS holders described in this section. You should consult with your broker or financial institution tofind out what those procedures are.
The Bank of New York Mellon will actually be the registered holder of the common stock, so you will haveto rely on it to exercise your rights as a shareholder. Our obligations and the obligations of The Bank of
New York Mellon are set out in a deposit agreement among us, The Bank of New York Mellon and you, as an
ADS holder. The deposit agreement and the ADSs are governed by New York law.
The following is a summary of the material terms of the deposit agreement. Because it is a summary, it does
not contain all the information that may be important to you. For more complete information, you should read theentire deposit agreement and the form of ADR.
Share Dividends and Other Distributions
The Bank of New York Mellon has agreed to pay to you the cash dividends or other distributions it or thecustodian receives on shares of common stock or other deposited securities, after deducting its fees and expenses.
You will receive these distributions in proportion to the number of shares your ADSs represent.
Cash. The Bank of New York Mellon will convert any cash dividend or other cash distribution we pay on
our common stock into U.S. dollars, if it can do so on a reasonable basis and can transfer the U.S. dollars to theUnited States. If that is not possible or if any approval from the Japanese government is needed and cannot be
obtained, the deposit agreement allows The Bank of New York Mellon to distribute the Japanese yen only to171those ADS holders to whom it is possible to do so. The Bank of New York Mellon will hold the Japanese yen it
cannot convert for the account of the ADS holders who have not been paid. It will not invest the Japanese yen
and it will not be liable for any interest.
Before making a distribution, any withholding taxes that must be paid under Japanese law will be deducted.
See “—E. Taxation—Japanese Taxation.” The Bank of New York Mellon will distribute only whole U.S. dollars
and cents and will round fractional cents to the nearest whole cent. If the relevant exchange rates fluctuate during
a time when The Bank of New York Mellon cannot convert the Japanese currency, you may lose some or all of
the value of the distribution.
Shares. The Bank of New York Mellon may distribute new ADSs representing any shares we may
distribute as a dividend or free distribution, if we furnish The Bank of New York Mellon promptly withsatisfactory evidence that it is legal to do so. The Bank of New York Mellon will only distribute whole ADSs. It
will sell shares which would require it to issue a fractional ADS and distribute the net proceeds in the same way
as it distributes cash dividends. If The Bank of New York Mellon does not distribute additional ADSs, each ADS
will also represent the new shares.
Rights to receive additional shares. If we offer holders of our common stock any rights to subscribe for
additional shares of common stock or any other rights, The Bank of New York Mellon may, after consultation
with us, make those rights available to you. We must first instruct The Bank of New York Mellon to do so andfurnish it with satisfactory evidence that it is legal to do so. If we do not furnish this evidence and/or do not givethese instructions, and The Bank of New York Mellon decides that it is practical to sell the rights, The Bank of
New York Mellon will sell the rights and distribute the proceeds in the same way as it distributes cash dividends.
The Bank of New York Mellon may allow rights that are not distributed or sold to lapse. In that case, you will
receive no value for them.
If The Bank of New York Mellon makes rights available to you, upon instruction from you it will exercise
the rights and purchase the shares on your behalf. The Bank of New York Mellon will then deposit the shares andissue ADSs to you. It will only exercise the rights if you pay it the exercise price and any other charges the rights
require you to pay.
U.S. securities laws may restrict the sale, deposit, cancellation and transfer of the ADSs issued after the
exercise of the rights. For example, you may not be able to trade the ADSs freely in the United States. In thiscase, The Bank of New York Mellon may issue the ADSs under a separate restricted deposit agreement which
will contain the same provisions as the deposit agreement, except for changes needed to put the restrictions inplace. The Bank of New York Mellon will not offer you rights unless those rights and the securities to which therights relate are either exempt from registration or have been registered under the U.S. Securities Act withrespect to a distribution to you. We will have no obligation to register under the Securities Act those rights or the
securities to which they relate.
Other distributions. The Bank of New York Mellon will send to you anything else we distribute on
deposited securities by any means it thinks is legal, fair and practical. If it cannot make the distribution in thatway, The Bank of New York Mellon has a choice. It may decide to sell what we distributed and distribute the net
proceeds, in the same way as it does with cash. Or, it may decide to hold what we distributed, in which case
ADSs will also represent the newly distributed property.
The Bank of New York Mellon is not responsible if it decides that it is unlawful or impractical to make a
distribution available to any ADS holders. We have no obligation to register ADSs, shares, rights or othersecurities under the Securities Act. We also have no obligation to take any other action to permit the distributionof ADSs, shares, rights or anything else to ADS holders. This means that you may not receive the distributions
we make on our shares or any value for them if it is illegal or impractical for us or The Bank of New York
Mellon to make them available to you.
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Deposit, Withdrawal and Cancellation
The Bank of New York Mellon will issue ADSs if you or your broker deposits shares or evidence of rights
to receive shares with the custodian. Upon payment of its fees and expenses and of any taxes or charges, such as
stamp taxes or stock transfer taxes or fees, The Bank of New York Mellon will register the appropriate number of
ADSs in the names you request and will deliver the ADSs at its corporate trust office to the persons you request.
In certain circumstances, subject to the provisions of the deposit agreement, The Bank of New York Mellon
may issue ADSs before the deposit of the underlying shares. This is called a pre-release of ADSs. A pre-releaseis closed out as soon as the underlying shares are delivered to the depositary. The depositary may receive ADSs
instead of the shares to close out a pre-release. The depositary may pre-release ADSs only under the following
conditions:‰

Before or at the time of the pre-release, the person to whom the pre-release is made must represent to
the depositary in writing that it or its customer, as the case may be, owns the shares to be deposited;‰

The pre-release must be fully collateralized with cash or collateral that the depositary considers
appropriate; and‰The depositary must be able to close out the pre-release on not more than five business days’ notice.

The pre-release will be subject to whatever indemnities and credit regulations that the depositary considers
appropriate. In addition, the depositary will limit the number of ADSs that may be outstanding at any time as aresult of a pre-release.
You may turn in your ADSs at the Corporate Trust Office of The Bank of New York Mellon’s office. Upon
payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees,
The Bank of New York Mellon will deliver (1) the underlying shares to an account designated by you and(2) any other deposited securities underlying the ADS at the office of the custodian. Or, at your request, risk andexpense, The Bank of New York Mellon will deliver the deposited securities at its Corporate Trust Office.
The ADSs may only be presented for cancellation and release of the underlying shares of common stock orother deposited securities in multiples of 100 ADSs. Holders of ADRs evidencing less than 100 ADSs are notentitled to delivery of any underlying shares or other deposited securities unless ADRs, together with other ADRs
presented by the same holder at the same time, represent in the aggregate at least 100 ADSs. If any ADSs are
surrendered but not cancelled pursuant to the preceding sentence, The Bank of New York Mellon will executeand deliver an ADR or ADRs evidencing the balance of ADSs not so cancelled to the person or persons
surrendering the same.
Voting Rights
If you are an ADS holder on a record date fixed by The Bank of New York Mellon, you may instruct The
Bank of New York Mellon to vote the shares underlying your ADSs at a meeting of our shareholders inaccordance with the procedures set forth in the deposit agreement.
The Bank of New York Mellon will notify you of the upcoming meeting and arrange to deliver our voting
materials to you. The notice shall contain (a) such information as is contained in such notice of meeting, (b) astatement that as of the close of business on a specified record date you will be entitled, subject to any applicableprovision of Japanese law and our Articles of Incorporation, to instruct The Bank of New York Mellon as to theexercise of the voting rights, if any, pertaining to the amount of shares or other deposited securities represented
by your ADSs, and (c) a brief statement as to the manner in which such instructions may be given, including an
express indication that instructions may be given to The Bank of New York Mellon to give a discretionary proxy
to a person designated by us. Upon your written request, received on or before the date established by The Bankof New York Mellon for such purpose, The Bank of New York Mellon shall endeavor in so far as practicable tovote or cause to be voted the amount of shares or other deposited securities represented by your ADSs in
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accordance with the instructions set forth in your request. So long as Japanese law provides that votes may only
be cast with respect to one or more whole shares or other deposited securities, The Bank of New York Mellon
will aggregate voting instructions to the extent such instructions are the same and vote such whole shares or otherdeposited securities in accordance with your instructions. If, after aggregation of all instructions to vote received
by The Bank of New York Mellon, any portion of the aggregated instructions constitutes instructions withrespect to less than a whole share or other deposited securities, The Bank of New York Mellon will not vote orcause to be voted the shares or other deposited securities to which such portion of the instructions apply. The
Bank of New York Mellon will not vote or attempt to exercise the right to vote that attaches to the shares or otherdeposited securities, other than in accordance with the instructions of the ADS holders. If no instructions arereceived by The Bank of New York Mellon from you with respect to any of the deposited securities represented
by your ADSs on or before the date established by The Bank of New York Mellon for such purpose, The Bank of
New York Mellon shall deem you to have instructed The Bank of New York Mellon to give a discretionary
proxy to a person designated by us with respect to such deposited securities and The Bank of New York Mellon
shall give a discretionary proxy to a person designated by us to vote such deposited securities, provided that nosuch instruction shall be given with respect to any matter as to which we inform The Bank of New York Mellon(and we have agreed to provide such information as promptly as practicable in writing) that (1) we do not wish
such proxy given, (2) substantial opposition exists or (3) such matter materially and adversely affects the rights
of holders of shares.
We cannot assure you that you will receive the voting materials in time to ensure that you can instruct The
Bank of New York Mellon to vote your shares. In addition, The Bank of New York Mellon is not responsible for
failing to carry out voting instructions or for the manner of carrying out voting instructions as long as it has acted
in good faith. This means that you may not be able to exercise your right to vote and there may be nothing you
can do if your shares are not voted as you requested.
Fees and Expenses
See “Item 12.D. Description of Securities Other than Equity Securities—American Depositary Shares.”
Payment of Taxes
You will be responsible for any taxes or other governmental charges payable on your ADSs or on thedeposited securities underlying your ADSs. The Bank of New York Mellon may refuse to transfer your ADSs or
allow you to withdraw the deposited securities underlying your ADSs until those taxes or other charges are paid.
It may apply payments owed to you or sell deposited securities underlying your ADSs to pay any taxes owed andyou will remain liable for any deficiency. If it sells deposited securities, it will, if appropriate, reduce the numberof ADSs to reflect the sale and pay to you any property remaining after it has paid the taxes.
Reclassifications, Recapitalizations and Mergers
If we:‰

reclassify, split up or consolidate any of our shares or the deposited securities;‰

recapitalize, reorganize, merge, liquidate, consolidate or sell all or substantially all of our assets or takeany similar action; or‰

distribute securities on the shares that are not distributed to you, then,(1) the cash, shares or other securities received by The Bank of New York Mellon will become deposited
securities and each ADS will automatically represent its equal share of the new deposited securities
unless additional ADSs are issued; and(2) The Bank of New York Mellon may, and will if we request, issue new ADSs or ask you to surrender
your outstanding ADSs in exchange for new ADSs, identifying the new deposited securities.
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Amendment and Termination
We may agree with The Bank of New York Mellon to amend the deposit agreement and the ADSs without
your consent for any reason. If the amendment adds or increases fees or charges, except for taxes and othergovernmental charges, registration fees, cable, telex or facsimile transmission costs, delivery costs or other such
expenses, or prejudices an important right of ADS holders, it will only become effective three months after The
Bank of New York Mellon notifies you of the amendment. At the time an amendment becomes effective, you areconsidered, by continuing to hold your ADS, to agree to the amendment and to be bound by the ADSs and thedeposit agreement as amended. However, no amendment will impair your right to receive the deposited securities
in exchange for your ADSs.
The Bank of New York Mellon will terminate the deposit agreement if we ask it to do so, in which case it
must notify you at least 30 days before termination. The Bank of New York Mellon may also terminate thedeposit agreement if The Bank of New York Mellon has told us that it would like to resign and we have notappointed a new depositary bank within 60 days.
If any ADSs remain outstanding after termination, The Bank of New York Mellon will stop registering thetransfers of ADSs, will stop distributing dividends to ADS holders and will not give any further notices or doanything else under the deposit agreement other than:(1) collect dividends and distributions on the deposited securities;(2) sell rights and other property offered to holders of deposited securities; and(3) deliver shares and other deposited securities in exchange for ADSs surrendered to The Bank of
New York Mellon.
At any time after one year following termination, The Bank of New York Mellon may sell any remaining
deposited securities. After that, The Bank of New York Mellon will hold the money it received on the sale, as
well as any other cash it is holding under the deposit agreement for the pro rata benefit of the ADS holders thathave not surrendered their ADSs. It will not invest the money and has no liability for interest. The Bank of
New York Mellon’s only obligations will be to account for the money and other cash and with respect toindemnification and to retain depositary documents. After termination, our only obligations will be with respect
to indemnification and to pay certain amounts to The Bank of New York Mellon.
Limitations on Obligations and Liability to ADS Holders
The deposit agreement expressly limits our obligations and the obligations of The Bank of New York
Mellon. It also limits our liability and the liability of The Bank of New York Mellon. We and The Bank of
New York Mellon:‰

are only obligated to take the actions specifically set forth in the deposit agreement without negligenceor bad faith;‰

are not liable if either is prevented or delayed by law, any provision of our Articles of Incorporation or
circumstances beyond their control from performing their obligations under the deposit agreement;‰

are not liable if either exercises or fails to exercise discretion permitted under the deposit agreement;‰

have no obligation to become involved in a lawsuit or other proceeding related to the ADSs or thedeposit agreement on your behalf or on behalf of any other party unless indemnified to their satisfaction;and‰may rely upon any advice of or information from legal counsel, accountants, any person depositing
shares, any ADS holder or any other person believed in good faith to be competent to give them that
advice or information.

In the deposit agreement, we and The Bank of New York Mellon agree to indemnify each other for
liabilities arising out of acts performed or omitted by the other party in accordance with the deposit agreement.
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Requirements for Depositary Actions
Before The Bank of New York Mellon will issue or register transfer of an ADS, make a distribution on an
ADS, or permit withdrawal of shares, it may require:‰

payment of stock transfer or other taxes or other governmental charges and transfer or registration fees
charged by third parties for the transfer of any shares or other deposited securities;‰

production of satisfactory proof of the identity and genuineness of any signature or other information it
deems necessary; and‰compliance with regulations it may establish, from time to time, consistent with the deposit agreement,
including presentation of transfer documents.

The Bank of New York Mellon may refuse to deliver, transfer, or register transfers of ADSs generally when its
transfer books are closed, when our transfer books are closed or at any time if it or we think it advisable to do so.
You have the right to cancel your ADSs and withdraw the underlying shares at any time except:‰

when temporary delays arise because: (1) The Bank of New York Mellon has closed its transfer books
or we have closed our transfer books; (2) the transfer of shares is blocked to permit voting at ashareholders’ meeting; or (3) we are paying a dividend on the shares;‰

when you or other ADS holders seeking to withdraw shares owe money to pay fees, taxes and similar
charges; or‰when it is necessary to prohibit withdrawals in order to comply with any laws or governmental
regulations that apply to ADSs or to the withdrawal of shares or other deposited securities.

This right of withdrawal may not be limited by any other provision of the deposit agreement.
Reports and Other Communications
The Bank of New York Mellon will make available for your inspection at its corporate trust office any
reports and communications, including any proxy soliciting material, that it receives from us, if those reports andcommunications are both (a) received by The Bank of New York Mellon as the holder of the deposited securitiesand (b) made generally available by us to the holders of the deposited securities. If we ask it to, The Bank of
New York Mellon will also send you copies of those reports it receives from us.
Inspection of Transfer Books
The Bank of New York Mellon will keep books for the registration and transfer of ADSs, which will be
open for your inspection at all reasonable times. You will only have the right to inspect those books if theinspection is for the purpose of communicating with other owners of ADSs in connection with our business or amatter related to the deposit agreement or the ADSs.
C.

Material Contracts

Except as described elsewhere in this Annual Report, all material contracts entered into by us in the past two
years preceding the filing of this Annual Report were entered into in the ordinary course of business.
D.

Exchange Controls

Foreign Exchange and Foreign Trade Law
The Foreign Exchange and Foreign Trade Law of Japan and the cabinet orders and ministerial ordinances
incidental thereto, collectively known as the Foreign Exchange Law, set forth, among other matters, regulations
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relating to the receipt by non-residents of Japan of payment with respect to shares to be issued by us and theacquisition and holding of shares by non-residents of Japan and foreign investors, both as defined below. It also
applies in some cases to the acquisition and holding of ADSs representing such shares acquired and held by nonresidents of Japan and by foreign investors. Generally, the Foreign Exchange Law currently in effect does notaffect the right of a non-resident of Japan to purchase or sell an ADS outside Japan for non-Japanese currency.
“Non-residents of Japan” are defined as individuals who are not resident in Japan and corporations whose
principal offices are located outside Japan. Generally, the branches and offices of non-resident corporations
which are located in Japan are regarded as residents of Japan while the branches and offices of Japanese
corporations located outside Japan are regarded as non-residents of Japan.
“Foreign investors” are defined as:‰

non resident individuals;‰

corporations which are organized under the laws of foreign countries or whose principal offices arelocated outside Japan;‰

corporations of which 50% or more of the shares are directly or indirectly held by individuals notresident of Japan and corporations which are organized under the laws of foreign countries or whose
principal offices are located outside Japan; and‰corporations, a majority of officers (or a majority of officers having the power of representation) of
which are non-resident individuals.

Dividends and Proceeds of Sales
Under the Foreign Exchange Law, dividends paid on, and the proceeds of sales in Japan of, shares held by
non-residents of Japan may in general be converted into any foreign currency and repatriated abroad. The
acquisition of our shares by non-residents by way of a stock split is not subject to any notification or reporting
requirements.
Acquisition of Shares
In general, a non-resident who acquires shares from a resident of Japan is not subject to any prior filing
requirement, although the Foreign Exchange Law empowers the Minister of Finance of Japan to require a priorapproval for any such acquisition in certain limited circumstances.
If a foreign investor acquires our shares, and, together with parties who have a special relationship with that
foreign investor, holds 10% or more of our issued shares as a result of such acquisition, the foreign investor mustfile a report of such acquisition with the Minister of Finance and any other competent Minister by the fifteenth
day of the month immediately following the month to which the date of such acquisition belongs. In certain
limited circumstances, however, a prior notification of such acquisition must be filed with the Minister ofFinance and any other competent Minister, who may modify or prohibit the proposed acquisition.
Deposit and Withdrawal under American Depositary Facility
The deposit of shares with us, in our capacity as custodian and agent for the depositary, in Tokyo, theissuance of ADSs by the depositary to a non-resident of Japan in respect of the deposit and the withdrawal of theunderlying shares upon the surrender of the ADSs are not subject to any of the formalities or restrictions referred
to above. However, where as a result of a deposit or withdrawal the aggregate number of shares held by thedepositary, including shares deposited with us as custodian for the depositary, or the holder surrendering ADSs,
as the case may be, would be 10% or more of the total outstanding shares, a report will be required, and inspecified circumstances, a prior notification may be required, as noted above.
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Reporting of Substantial Shareholdings
The Financial Instruments and Exchange Law of Japan requires any person who has become, beneficiallyand solely or jointly, a holder of more than 5% of the total issued shares of capital stock of a company listed on
any Japanese financial instruments exchange or whose shares are traded on the over-the-counter market in Japanto file with the director of a competent finance bureau within 5 business days a report concerning suchshareholdings.
A similar report must also be filed in respect of any subsequent change of 1% or more in any such holding
ratio or any change in material matters set out in reports previously filed, with certain exceptions. For thispurpose, shares issuable to such person upon exchange of exchangeable securities, conversion of convertible
securities or exercise of share subscription warrants or stock acquisition rights (including those incorporated inbonds with stock acquisition rights) are taken into account in determining both the number of shares held by suchholder and the issuer’s total issued shares of capital stock. Copies of such report must also be furnished to theissuer of such shares and all Japanese financial instruments exchanges on which the shares are listed or (in thecase of shares traded over-the-counter) the Japan Securities Dealers Association.
E.

Taxation

Japanese Taxation
The following sets forth the material Japanese tax consequences to owners of shares of our common stock or
ADSs who are non-resident individuals or non-Japanese corporations without a permanent establishment in Japanto which the relevant income is attributable, which we refer to as “non-resident holders” in this section. The
statements regarding Japanese tax laws below are based on the laws in force and as interpreted by the Japanesetaxation authorities as at the date of this Annual Report and are subject to changes in the applicable Japaneselaws, double taxation treaties, conventions or agreements or interpretations thereof occurring after that date. Thissummary is not exhaustive of all possible tax considerations that may apply to a particular investor, and potential
investors are advised to satisfy themselves as to the overall tax consequences of the acquisition, ownership anddisposition of shares of our common stock or ADSs, including specifically the tax consequences under Japaneselaw, the laws of the jurisdiction of which they are resident and any tax treaty between Japan and their country ofresidence, by consulting their own tax advisers.
For the purpose of Japanese tax law and the Convention between the Government of the United States ofAmerica and Japan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect toTaxes on Income, or the Tax Convention, a U.S. holder of ADSs will be treated as the owner of the shares of ourcommon stock underlying the ADSs evidenced by the ADRs.
Generally, a non-resident holder of shares of our common stock or ADSs is subject to Japanese withholding
tax on dividends paid by us. In the absence of any applicable tax treaty, convention or agreement reducing therate of withholding tax, the rate of Japanese withholding tax applicable to dividends paid by us to non-resident
holders is (i) 15.315% for dividends to be paid on or before December 31, 2037 and (ii) 15% for dividends to be
paid thereafter, except for dividends paid to any individual non-resident holder who holds 3% or more of ourissued shares for which the applicable rate is (a) 20.42% for dividends to be paid on or before December 31,
2037 and (b) 20% for dividends to be paid thereafter, pursuant to Japanese tax law.
The Tax Convention establishes the maximum rate of Japanese withholding tax which may be imposed on
dividends paid to a U.S. resident not having a permanent establishment in Japan. Under the Tax Convention, themaximum withholding rate for U.S. holders (as defined below) is generally set at 10% of the gross amount
distributed. However, the maximum rate is 5% of the gross amount distributed if the recipient is a corporationand owns directly or indirectly, on the date on which entitlement to the dividends is determined, at least 10% of
the voting shares of the paying corporation. Furthermore, the amount distributed shall not be taxed if therecipient is (i) a pension fund which is a U.S. resident, provided that such dividends are not derived from the178carrying on of a business, directly or indirectly, by such pension fund or (ii) a parent company with a controllinginterest in the paying company and satisfies certain other requirements. U.S. holders (as defined below) are urged
to consult their own tax advisors with respect to their eligibility for benefits under the Tax Convention.
Japanese tax law provides in general that if the Japanese statutory rate is lower than the maximum rateapplicable under tax treaties, conventions or agreements, the Japanese statutory rate as stated above shall beapplicable.
Non-resident holders of shares who are entitled to a reduced rate of Japanese withholding tax on paymentsof dividends on the shares of our common stock or ADSs by us are required to submit an Application Form for
the Income Tax Convention regarding Relief from Japanese Income Tax on Dividends, or an Application Formfor the Income Tax Convention, in advance through a paying handling agent to the relevant tax authority before
the payment of dividends. A standing proxy for non-resident holders may provide this application service for thenon-resident holders. In this regard, a certain simplified special filing procedure is available for non-resident
holders to claim treaty benefits of exemption from or reduction of Japanese withholding tax with respect todividends to be paid on or after January 1, 2014, by submitting a Special Application Form for Income Tax
Convention regarding Relief from Japanese Income Tax and Special Income Tax for Reconstruction on
Dividends of Listed Stocks (together with any other required forms and documents). Non-resident holders whoare entitled, under any applicable tax treaty, to a reduced rate of Japanese withholding tax below the rateotherwise applicable under Japanese tax law, or exemption therefrom, as the case may be, but fail to submit therequired application in advance may nevertheless be entitled to claim a refund from the relevant Japanese tax
authority of withholding taxes withheld in excess of the rate under an applicable tax treaty (if such non-resident
holders are entitled to a reduced treaty rate under the applicable tax treaty) or the full amount of tax withheld (ifsuch non-resident holders are entitled to an exemption under the applicable tax treaty), as the case may be, bycomplying with a certain subsequent filing procedure. We do not assume any responsibility to ensurewithholding at the reduced rate, or exemption therefrom, for non-resident holders who would be so eligible under
an applicable tax treaty but where the required procedures as stated above are not followed.
Gains derived from the sale or other disposition of shares of our common stock or ADSs by a non-resident
holder are not, in general, subject to Japanese income or corporation taxes or other Japanese taxes.
Any deposits or withdrawals of shares of our common stock by a non-resident holder in exchange for ADSs
are not subject to Japanese income or corporation tax.
Japanese inheritance and gift taxes, at progressive rates, may be payable by an individual who has acquired
shares of our common stock or ADSs as legatee, heir or donee, even if none of the individual, the decedent or thedonor is a Japanese resident.
U.S. Taxation
The following sets forth the material U.S. federal income tax consequences of the ownership of shares and
ADSs by a U.S. holder, as defined below. This summary is based on U.S. federal income tax laws, including the
U.S. Internal Revenue Code of 1986, or the Code, its legislative history, existing and proposed Treasury
regulations thereunder, published rulings and court decisions, and the Tax Convention (as defined above), all ofwhich are subject to change, possibly with retroactive effect.
The following summary is not a complete analysis or description of all potential U.S. federal income tax
consequences to a particular U.S. holder. It does not address all U.S. federal income tax considerations that may
be relevant to all categories of potential purchasers, certain of which (such as banks or other financial
institutions, insurance companies, dealers in securities, tax-exempt entities, non-U.S. persons, persons holding ashare or an ADS as part of a “straddle,” “hedge,” conversion or integrated transaction, holders whose “functional
179

currency” is not the U.S. dollar, holders liable for alternative minimum tax and holders of 10% or more of ourvoting shares) are subject to special tax treatment. This summary does not address any foreign, state, local orother tax consequences of investments in our shares or ADSs.
This summary addresses only shares or ADSs that are held as capital assets within the meaning ofSection 1221 of the Code.
As used herein, a “U.S. holder” is a beneficial owner of shares or ADSs, as the case may be, that is:‰a citizen or resident of the United States as determined for U.S. federal income tax purposes;‰a corporation or other entity taxable as a corporation created or organized under the laws of the UnitedStates, any state thereof or the District of Columbia;‰

an estate, the income of which is subject to U.S. federal income tax regardless of its source; or‰a trust‰the administration of which is subject to (1) the supervision of a court within the United States and(2) the control of one or more U.S. persons as described in Section 7701(a)(30) of the Code; or‰that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S.
person.

A “Non-U.S. holder” is any beneficial holder of shares or ADSs that is not a U.S. holder.
If a partnership holds shares or ADSs, the tax treatment of a partner will generally depend on the status of
the partner and the activities of the partnership. If you are a partner of a partnership holding shares or ADSs, you
should consult your tax advisor.
We urge U.S. holders to consult their own tax advisors concerning the U.S. federal, state and local andother tax consequences to them of the purchase, ownership and disposition of shares or ADSs.
This summary is based in part on the assumption that each obligation under the deposit agreement and any
related agreement will be performed in accordance with its respective terms. Subject to the discussion in the next
paragraph, for U.S. federal income tax purposes, holders of ADSs will be treated as the owners of the shares
represented by the ADSs. Accordingly, withdrawals or deposits of shares in exchange for ADSs generally will
not be subject to U.S. federal income tax.
The U.S. Treasury has expressed concerns that intermediaries in the chain of ownership between the holder
of an ADS and the issuer of the security underlying the ADS may be taking actions that are inconsistent with thebeneficial ownership of the underlying shares (for example, pre-releasing ADSs to persons who do not havebeneficial ownership of the securities underlying the ADSs). Accordingly, the discussion on the creditability ofJapanese taxes and the availability of the reduced rate of tax for dividends received by certain non-corporate U.S.
holders, each as described below, could be affected by actions taken by intermediaries in the chain of ownership
between the holder of ADSs and us if, as a result of such actions, the holders of ADSs are not properly treated as
beneficial owners of the underlying shares. We are not aware of any intention to take any such actions, andaccordingly, the remainder of this discussion assumes that holders of ADSs will be properly treated as beneficial
owners of the underlying shares.
Special adverse U.S. federal income tax rules apply if a U.S. holder holds shares or ADSs of a company thatis treated as a “passive foreign investment company” (a “PFIC”) for any taxable year during which the
U.S. holder held shares or ADSs, as discussed in more detail below. U.S. holders should consult their own tax
advisors as to the potential application of the PFIC rules to their ownership and disposition of shares or ADSs.

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Taxation of Dividends
Subject to the application of the PFIC rules discussed below, U.S. holders will include the gross amount ofany distribution received with respect to shares or ADSs (before reduction for Japanese withholding taxes), to theextent paid out of our current or accumulated earnings and profits (as determined for U.S. federal income tax
purposes), as ordinary income in their gross income. As discussed below, for certain U.S. holders, dividends may
be eligible for a reduced rate of taxation. The amount of distribution of property other than cash will be the fairmarket value of such property on the date of the distribution. Dividends received by a U.S. holder will not be
eligible for the “dividends-received deduction” allowed to U.S. corporations in respect of dividends received
from other U.S. corporations. To the extent that an amount received by a U.S. holder exceeds such holder’sallocable share of our current earnings and profits, such excess will be applied first to reduce such holder’s tax
basis in its shares or ADSs, thereby increasing the amount of gain or decreasing the amount of loss recognized ona subsequent disposition of the shares or ADSs. Then, to the extent such distribution exceeds such U.S. holder’stax basis, such excess will be treated as capital gain. However, we do not maintain calculations of our earnings
and profits in accordance with U.S. federal income tax principles, and U.S. holders should therefore assume thatany distribution by us with respect to shares or ADSs will constitute ordinary dividend income. The amount of
the dividend will be the U.S. dollar value of the Japanese yen payments received. This value will be determinedat the spot Japanese yen/U.S. dollar rate on the date the dividend is received by the depositary in the case of U.S.
holders of ADSs, or by the shareholder in the case of U.S. holders of shares, regardless of whether the dividend
payment is in fact converted into U.S. dollars at that time. If the Japanese yen received as a dividend are notconverted into U.S. dollars on the date of receipt, a U.S. holder will have basis in such Japanese yen equal totheir U.S. dollar value on the date of receipt, and any foreign currency gains or losses resulting from theconversion of the Japanese yen will generally be treated as U.S. source ordinary income or loss. If the Japanese
yen received as a dividend are converted into U.S. dollars on the date of receipt, a U.S. holder will generally not
be required to recognize foreign currency gain or loss in respect of the dividend income.
If a U.S. holder is eligible for benefits under the Tax Convention, the holder may be able to claim a reduced
rate of Japanese withholding tax. All U.S. holders should consult their tax advisors about their eligibility for
reduction of Japanese withholding tax. A U.S. holder may claim a deduction or a foreign tax credit, subject toother applicable limitations, only for tax withheld at the appropriate rate. A U.S. holder would be allowed aforeign tax credit for withholding tax for any portion of the tax that could have been avoided by claiming benefits
under the Tax Convention. For foreign tax credit limitation purposes, the dividend will be income from sources
outside the United States. The limitation on foreign taxes eligible for credit is calculated separately with respect
to specific classes of income. For this purpose, dividends we pay will constitute “passive income” or, in the caseof certain U.S. holders, “financial services income.” The rules governing U.S. foreign tax credits are very
complex and U.S. holders should consult their tax advisors regarding the availability of foreign tax credits under
their particular circumstances.
Subject to applicable exceptions with respect to short-term and hedged positions, qualified dividends
received by non-corporate U.S. holders from a qualified corporation may be eligible for reduced rates of taxation.
Qualified corporations include those foreign corporations eligible for the benefits of a comprehensive income tax
treaty with the United States that the U.S. Treasury Department determines to be satisfactory for these purposes
and that includes an exchange of information provision. The Tax Convention meets these requirements. We
believe that we are a qualified foreign corporation and that dividends received by U.S. investors with respect toour shares or ADSs will be qualified dividends. Dividends received by U.S. investors from a foreign corporationthat was a PFIC in either the taxable year of the distribution or the preceding taxable year are not qualified
dividends.
Passive Foreign Investment Company Considerations
Special adverse U.S. federal income tax rules apply if a U.S. holder holds shares or ADSs of a company thatis treated as a PFIC, for any taxable year during which the U.S. holder held shares or ADSs. A foreign181

corporation will be considered a PFIC for any taxable year in which (i) 75% or more of its gross income ispassive income (the “income test”), or (ii) 50% or more of the average fair market value of its assets (determined
quarterly) is attributable to assets that produce or are held for the production of passive income (the “asset test”).
For this purpose, passive income generally includes dividends, interest, royalties, rents and certain gains from thesale of stock and securities. If a foreign corporation owns at least 25% (by value) of the stock of anothercorporation, the corporation will be treated, for purposes of the PFIC tests, as owning a proportionate share of theother corporation’s assets and receiving its proportionate share of the other corporation’s income. The
determination of whether a foreign corporation is a PFIC is made annually.
Proposed Treasury regulations convert what would otherwise be passive income into non-passive income
when such income is banking income earned by an active bank. Based upon these proposed Treasury regulations
and certain IRS guidance relating to the treatment of certain qualifying government bonds, and upon certain
management estimates and assumptions, we do not believe that we were a PFIC for the year ended March 31,
2014 because we did not meet either the income test or the asset test. The determination of whether we are a
PFIC must be made annually and involves a fact-intensive analysis based upon, among other things, thecomposition of our income and assets and the value of our assets from time to time. It is possible that we may
become a PFIC in the fiscal year ending March 31, 2015 or any future taxable year due to changes in our income
or asset composition. In addition, a decrease in the price of our shares may also result in our becoming a PFIC.
Furthermore, there can be no assurance that the above-described proposed Treasury regulations will be finalized
in their current form or that the above IRS guidance which is scheduled to expire for taxable years beginning
after 2016 will continue to apply. Moreover, the application of the proposed Treasury regulations is not clear. If
we were classified as a PFIC in any year during which a U.S. holder owns shares or ADSs and the U.S. holder
does not make a “mark-to-market” election, as discussed below, we generally would continue to be treated as a
PFIC as to such U.S. holder in all succeeding years, regardless of whether we continue to meet the income orasset test discussed above. U.S. Holders are urged to consult their own tax advisors with respect to the tax
consequences to them if we were to become a PFIC for any taxable year in which they own our shares or ADSs.
If we were classified as a PFIC for any taxable year during which a U.S. holder holds our shares or ADSs,
the U.S. holder would generally not receive capital gains treatment upon the sale of the shares or ADSs andwould be subject to increased tax liability (generally including an interest charge) upon the sale or otherdisposition of the shares or ADSs or upon the receipt of certain distributions treated as “excess distributions,”
unless the U.S. holder makes the mark-to-market election described below. An excess distribution generally
would be any distribution to a U.S. holder with respect to shares or ADSs during a single taxable year that isgreater than 125% of the average annual distributions received by a U.S. holder with respect to shares or ADSs
during the three preceding taxable years or, if shorter, during the U.S. holder’s holding period for the shares or
ADSs.
Mark-to-Market Election. If the shares or ADSs are regularly traded on a registered national securities
exchange or certain other exchanges or markets, then such shares or ADSs would constitute “marketable stock”
for purposes of the PFIC rules, and a U.S. holder would not be subject to the foregoing PFIC rules if such holder
made a mark-to-market election. After making such an election, the U.S. holder generally would include as
ordinary income each year during which the election is in effect and during which we are a PFIC the excess, ifany, of the fair market value of our shares or ADSs at the end of the taxable year over such holder’s adjusted
basis in such shares or ADSs. These amounts of ordinary income would not be eligible for the favorable tax rates
applicable to qualified dividend income or long-term capital gains. A U.S. holder also would be allowed to takean ordinary loss in respect of the excess, if any, of the holder’s adjusted basis in our shares or ADSs over theirfair market value at the end of the taxable year (but only to the extent of the net amount of income that waspreviously included as a result of the mark-to-market election). A U.S. holder’s tax basis in our shares or ADSs
would be adjusted to reflect any income or loss amounts resulting from a mark-to-market election. If made, amark-to-market election would be effective for the taxable year for which the election was made and for all
subsequent taxable years unless the shares or ADSs cease to qualify as “marketable stock” for purposes of the

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PFIC rules or the Internal Revenue Service consented to the revocation of the election. In the event that we areclassified as a PFIC, U.S. holders are urged to consult their tax advisors regarding the availability of the mark-tomarket election, and whether the election would be advisable in the holder’s particular circumstances.
QEF Election. The PFIC rules outlined above also would not apply to a U.S. holder if such holder
alternatively elected to treat us as a “qualified electing fund” or “QEF.” An election to treat us as a QEF will not
be available, however, if we do not provide the information necessary to make such an election. We will notprovide U.S. holders with the information necessary to make a QEF election, and thus, the QEF election will not
be available with respect to our shares.
Notwithstanding any election made with respect to our shares, dividends received with respect to our shares
will not constitute “qualified dividend income” if we are a PFIC in either the year of the distribution or thepreceding taxable year. Dividends that do not constitute qualified dividend income are not eligible for taxation at
the reduced tax rate described above in “—Taxation of Dividends.” Instead, such dividends would be subject totax at ordinary income rates.
If a U.S. holder owns shares or ADSs during any year in which we are a PFIC, the U.S. holder must also file
IRS Form 8621 regarding distributions received on the shares or ADSs, any gain realized on the shares or ADSs,
and any “reportable election” in accordance with the instructions to such form. In addition, each U.S. holder isrequired to file a separate IRS Form 8621 if such U.S. holder owns shares or ADSs during any year in which weare a PFIC whether or not such U.S. holder received distributions on the shares or ADSs, realized a gain on theshares or ADSs or made a “reportable election” during such year. U.S. holders are urged to consult their own tax
advisors concerning the U.S. federal income tax consequences of holding shares or ADSs if the Company wereconsidered a PFIC in any taxable year.
Taxation of Capital Gains
Subject to the application of the PFIC rules discussed above, upon a sale or other disposition of shares or
ADSs, a U.S. holder will recognize a gain or loss in an amount equal to the difference between the U.S. dollar
value of the amount realized and the U.S. holder’s tax basis, determined in U.S. dollars, in such shares or ADSs.
Such gains or losses will be capital gains or losses and will be long-term capital gains or losses if the U.S.
holder’s holding period for such shares or ADSs exceeds one year. Long-term capital gains of non-corporate U.S.
holders (including individuals) are generally eligible for reduced rates of taxation. A U.S. holder’s adjusted tax
basis in its shares or ADSs will generally be the cost to the holder of such shares or ADSs. Any such gains orlosses realized by a U.S. holder upon disposal of the shares or ADSs will generally be income or loss fromsources within the United States for foreign tax credit limitation purposes. The deductibility of capital losses issubject to limitations under the Code.
Information Reporting and Backup Withholding
Dividends paid on shares or ADSs to a U.S. holder, or proceeds from a U.S. holder’s sale or otherdisposition of shares or ADSs, may be subject to information reporting requirements. Those dividends orproceeds from sale or disposition may also be subject to backup withholding unless the U.S. holder:‰

is a corporation or other exempt recipient, and, when required, demonstrates this fact; or‰provides a correct taxpayer identification number on a properly completed U.S. Internal Revenue
Service Form W-9 or other appropriate form which certifies that the U.S. holder is not subject to backup
withholding and otherwise complies with applicable requirements of the backup withholding rules.

Backup withholding is not an additional tax. Any amount withheld under these rules will be creditableagainst the U.S. holder’s U.S. federal income tax liability or refundable to the extent that it exceeds such liability
if the U.S. holder provides the required information to the Internal Revenue Service. If a U.S. holder is required183to and does not provide a correct taxpayer identification number, the U.S. holder may be subject to penalties
imposed by the Internal Revenue Service. All holders should consult their tax advisors as to their qualification
for the exemption from backup withholding and the procedure for obtaining an exemption.
In addition, certain U.S. holders who are individuals that hold certain foreign financial assets (which may
include our shares or ADSs) are required to report information relating to such assets, subject to certain
exceptions. U.S. Holders should consult their tax advisors regarding the effect, if any, of this requirement on theirownership and disposition of our shares and ADSs.
Additional Tax on Investment Income
U.S. Holders that are individuals, estates or trusts and whose income exceeds certain thresholds will be
subject to an additional 3.8% tax on unearned income, including, among other things, dividends on, and capitalgains from the sale or other taxable disposition of, shares or ADSs, subject to certain limitations and exceptions.
F.

Dividends and Paying Agents
Not applicable.

G. Statement by Experts
Not applicable.
H. Documents on Display
We file periodic reports and other information with the SEC. You may read and copy any document that wefile with the SEC at the SEC’s public reference room at 100 F Street, NE, Washington, DC 20549. Please call the
SEC at 1-800-SEC-0330 for further information on the operation of its public reference rooms. The SEC also
maintains a web site that contains reports, proxy and information statements and other information regarding
registrants that file electronically with the SEC (http://www.sec.gov). Some of this information may also befound on our website at http://www.mufg.jp.
I.

Subsidiary Information
Please refer to discussion under “Item 4.C. Information on the Company—Organizational Structure.”

Item 11. Quantitative and Qualitative Disclosures about Credit, Market and Other Risk.
Numerous changes in our business environment have occurred as a result of globalization of the financial
industry, the advancement of information technology, and changes in economic conditions. We aim to be a
global and comprehensive financial group encompassing leading commercial and trust banks, and securities
firms. Risk management plays an increasingly important role as the risks faced by financial groups such as us
increase in scope and variety.
We identify various risks arising from businesses based on uniform criteria, and implement integrated risk
management to ensure a stronger financial condition and to maximize shareholder value. Based on this policy,
we identify, measure, control and monitor a wide variety of risks so as to achieve a stable balance between
earnings and risks. We undertake risk management to create an appropriate capital structure and to achieve
optimal allocation of resources.
184

Risk Classification
At the holding company level, we broadly classify and define risk categories faced by the Group including
those that are summarized below. Group companies perform more detailed risk management based on theirrespective operations.
Type of Risk

Definition

Credit Risk

The risk of financial loss in credit assets (including off-balance sheet
instruments) caused by deterioration in the credit conditions of counterparties.
This category includes country risk.
Market risk is the risk of financial loss where the value of our assets andliabilities could be adversely affected by changes in market variables such as
interest rates, securities prices and foreign exchange rates. Market liquidity
risk is the risk of financial loss caused by the inability to secure market
transactions at the required volume or price levels as a result of market
turbulence or lack of trading liquidity.
The risk of incurring loss if a poor financial position at a group company
hampers the ability to meet funding requirements or necessitates fundprocurement at interest rates markedly higher than normal.
The risk of loss resulting from inadequate or failed internal processes, people
or systems, or from external events.
The risk of incurring loss that might be caused by negligence of correct
operational processing, or by incidents or misconduct by either officers or
staff, as well as other similar risks.
The risk of loss caused by loss, alteration, falsification or leakage of
information, or by destruction, disruption, errors or misuse of information
systems, as well as other similar risks.
The risk of loss due to failure to comply with applicable laws and regulations,adequately evaluate contractual rights and obligations, or appropriately deal
with disputes, as well as other similar risks.
The risk of loss due to deterioration in reputation as a consequence of the spreadof rumors among customers or in the market, or as a consequence of inadequate
response to a particular circumstance by MUFG, as well as other similar risks.

Market Risk

Liquidity Risk

Operational Risk‰

Operations Risk‰

Information Asset Risk‰

Legal Risk‰

Reputation Risk

Risk Management System
We have adopted an integrated risk management system to promote close cooperation among the holding
company and group companies. The holding company and the major subsidiaries (which include BTMU, MUTB
and MUSHD) each appoint a chief risk officer and establish an independent risk management division. The boardof directors of the holding company determines risk management policies for various type of risk based on thediscussions at, and reports and recommendations from, committees established specially for risk management
purposes. The holding company has established committees to assist management in managing risks relevant to
the Group. Following the fundamental risk management policies determined by the board of directors, eachgroup company establishes its own systems and procedures for identifying, analyzing and managing various
types of risks from both quantitative and qualitative perspectives. The holding company seeks to enhance groupwide risk identification, to integrate and improve the Group’s risk management system and related methods, tomaintain asset quality, and to eliminate concentrations of specific risks.

185

The following diagram summarizes our integrated risk management framework:
Holding company (Mitsubishi UFJ Financial Group)
Risk Committee

Board of Directors

Corporate Risk Management
Committee(including crisis management)

Executive Committee

Management Planning
Committee(including ALM)

Group-wide Credit Committee

Corporate Risk Management
Division(coordinates risk management)

Market Risk, Liquidity Risk,
Operational Risk,
Operations Risk

Credit & Investment
Management Division

Credit Risk

Corporate Risk Management
Division, Operations &Systems Planning Division

Information Asset Risk

Compliance Division,
Legal Division

Legal Risk

Public Relations Division

Reputation Risk

Establish fundamental policy andprovide guidance and advice

Discuss and report

Discuss and report

Group Companies
Mitsubishi UFJ Trust and Banking

Board of Directors

Board of Directors

Risk Management
Committee(including crisis management)

Executive Committee

ALM Committee

Credit and Investment
Council

Credit & Investment
Management Committee

Corporate Risk Management
Division(coordinates risk management)

Market Risk,
Liquidity Risk,
Operational Risk

Capital Management
Committee

Credit Committee

Credit Policy & Planning
Division

Credit Risk

Operational Risk
Management Committee

Transaction Services
Division

Settlement Risk

Operations Services
Planning Division

Operations Risk

Compliance Division,
Systems Division

Information Security
Management Committee

ALM Council

Corporate Risk Management
Division(coordinates risk management)

Credit Risk, Market Risk,
Liquidity Risk,
Operational Risk,
Information Asset Risk

Operations Planning
Division

Operations Risk

Corporate Administration
Division

Tangible Asset Risk

Information Asset Risk

Corporate Administration
Division

Tangible Asset Risk

Personnel Division

Personnel Risk

Human Resources Division

Personnel Risk

Compliance Division,
Legal Division

Compliance & Legal Division

Legal Risk

Legal Risk

Public Relations Division

Reputation Risk

Corporate Planning Division

Reputation Risk

Crisis Management
Committee

Other Subsidiaries

Executive Committee

Mitsubishi UFJ Securities Holdings

Bank of Tokyo-Mitsubishi UFJ

Crisis Management Framework
In order to have a clear critical response rationale and associated decision-making criteria, we havedeveloped systems designed to ensure that our operations are not interrupted or can be restored to normal quickly
in the event of a natural disaster or system failure so as to minimize any disruption to customers and markets. A
crisis management team within the holding company is the central coordinating body in the event of any
emergency. Based on information collected from crisis management personnel at the major subsidiaries, thiscentral body would assess the overall impact of a crisis on the Group’s business and establish task forces that
could implement all countermeasures to restore full operations. We have business continuity plans to maintaincontinuous operational viability in the event of natural disasters, system failures and other types of emergencies.
Regular training drills are conducted to upgrade the practical effectiveness of these systems.
Recognizing that our operations particularly in Japan are subject to the risk of earthquakes and other natural
disasters as well as accidents resulting from such disasters, including a sudden massive blackout in major
metropolitan areas in Japan, and that our contingency plans may not address all eventualities that may occur inthe event of a material disruption to our operations, we have been conducting a comprehensive review of ourexisting business continuity plan to more effectively respond to such extreme scenarios, and continue to186contemplate and implement measures to augment our current business continuity management framework,
including enhancing our off-site back-up data storage and other information technology systems.
Implementation of Basel Standards
Basel II, as adopted by the FSA, has been applied to Japanese banks since March 31, 2007. Certain provisionsof Basel III were adopted by the FSA effective March 31, 2013 for Japanese banking institutions with international
operations conducted by their foreign offices. Basel III is based on Basel II’s comprehensive regulatory framework
which is built on “three pillars”: (1) minimum capital requirements, (2) the self-regulation of financial institutions
based on supervisory review process, and (3) market discipline through the disclosure of information. Based on the
Basel principles, MUFG has adopted the Advanced Internal Ratings-Based Approach to calculate its capitalrequirements for credit risk since March 31, 2009. The Standardized Approach is used for some subsidiaries that areconsidered to be immaterial to our overall capital requirements, and MUFG Americas Holding Corporation, or
MUAH, has adopted a phased rollout of the Internal Ratings-Based Approach. MUFG has adopted the Advanced
Measurement Approach since March 31, 2012 to calculate its capital requirements for operational risk, except that
we use the Basic Indicator Approach for entities that are deemed to be less important in the calculation of theoperational risk equivalent amount and for entities that are still preparing to implement the Advanced Measurement
Approach. As for market risk, MUFG has adopted the Internal Models Approach mainly to calculate general market
risk and adopted the Standardized Measurement Method to calculate specific risk.
In response to the recent financial crisis, the Group of Central Bank Governors and Heads of Supervision
has made a series of announcements regarding the new global regulatory framework, which has been referred toas “Basel III,” to strengthen the regulation, supervision and risk management of the banking sector. Various
Basel III measures are being phased in from the calendar year 2013, including those designed to raise the level ofminimum capital requirements and to establish an internationally harmonized leverage ratio and a global
minimum liquidity standard. In addition, the Basel Committee on Banking Supervision has proposed additionalloss absorbency requirements to supplement the Common Equity Tier 1 capital requirement ranging from 1% to3.5% for global systemically important banks, or G-SIBs, depending on the bank’s systemic importance. The
Financial Stability Board identified us as a G-SIB in its most recent annual report published in November 2013,
and indicated that, as a G-SIB, we would be required to hold an additional 1.5% of Tier 1 common equity. The
group of banks identified as G-SIBs is expected to be updated annually, and the first group of G-SIBs to which
the stricter capital requirements will initially be applied is expected to be identified in 2014. The stricter capitalrequirements are expected to be implemented in phases between January 1, 2016 and December 31, 2018 andwill become fully effective on January 1, 2019.
Based on the Basel III framework, the Japanese capital ratio framework has been revised to implement themore stringent requirements, which are being implemented in phases beginning on March 31, 2013. Likewise,
local banking regulators outside of Japan, such as those in the United States, have revised or are expected torevise the capital and liquidity requirements imposed on our subsidiaries and operations in those countries toimplement the more stringent requirements of Basel III as adopted in those countries. We intend to carefully
monitor further developments with an aim to enhance our corporate value and maximize shareholder value by
integrating the various strengths within the MUFG Group. For more information on the Basel regulatory
framework and requirements, see “Item 4.B. Information on the Company—Business Overview—Supervision
and Regulation.”
Credit Risk Management
Credit risk is the risk of losses due to deterioration in the financial condition of a borrower. We haveestablished risk management systems to maintain asset quality, manage credit risk exposure and achieve earnings
commensurate with risk.
Our major banking subsidiaries (which include BTMU and MUTB) apply a uniform credit rating system for
asset evaluation and assessment, loan pricing, and quantitative measurement of credit risk. This system also
underpins the calculation of capital requirements and management of credit portfolios. We continually seek to187

upgrade credit portfolio management, or CPM, expertise to achieve an improved risk-adjusted return based on
the Group’s credit portfolio status and flexible response capability to economic and other external changes.
Credit Risk Management System
The credit portfolios of our major banking subsidiaries are monitored and assessed on a regular basis by theholding company to maintain and improve asset quality. A uniform credit rating and asset evaluation andassessment system is used to ensure timely and proper evaluation of all credit risks.
Under our credit risk management system, each of our subsidiaries in the banking, securities, consumer
finance, and leasing businesses, manages its respective credit risk on a consolidated basis based on the attributesof the risk, while the holding company oversees and manages credit risk on an overall group-wide basis. The
holding company also convenes regular committee meetings to monitor credit risk management at banking
subsidiaries and to issue guidance where necessary.
Each major banking subsidiary has in place a system of checks and balances in which a credit administration
section that is independent of the business promotion sections screens individual transactions and manages theextension of credit. At the management level, regular meetings of the Credit & Investment Management
Committee and related deliberative bodies ensure full discussion of important matters related to credit risk
management. Besides such checks and balances and internal oversight systems, credit examination sections also
undertake credit testing and evaluation to ensure appropriate credit risk management.
The following diagram summarizes the credit risk management framework for our major banking
subsidiaries:
Board of Directors/Executive Committee
Credit & Investment Management Committee/
related deliberative bodies•Decisions regarding important matters•Delegation of authority

Monitoring by MUFG
Credit Management
Committee
Regular report•Discussion of important matters•Transaction report
Credit administration
sections
Credit screening
and management
Business promotion
sections

Credit risk management
sections

Quantitative risk
monitoring

Credit testing and evaluation
Credit examination sections

Credit Rating System
MUFG and its major banking subsidiaries use an integrated credit rating system to evaluate credit risk. The
credit rating system consists primarily of borrower rating, facility risk rating, structured finance rating and asset
securitization rating.
Country risk is also rated on a uniform group-wide basis. Our country risk rating is reviewed periodically totake into account relevant political and economic factors, including foreign currency availability.
Risk exposure for small retail loans, such as residential mortgage loans, is managed by grouping loans into
various pools and assigning ratings at the pool level.
Borrower rating
Our borrower rating classifies borrowers into 15 grades based on evaluations of their expected debt-service
capability over the next three to five years.
188The following table sets forth our borrower grades:
Definition of MUFG Borrower Rating
MUFG
Borrower
Rating

1
2
3
4
5
6
7
8
9

10 through 12

10

11

12

13

14

15

MUFG Borrower Rating Definition

The capacity to meet financial commitments is extremely certain, and the borrower has thehighest level of creditworthiness.
The capacity to meet financial commitments is highly certain, but there are some elementsthat may result in lower creditworthiness in the future.
The capacity to meet financial commitments is sufficiently certain, but there is the possibility
that creditworthiness may fall in the long run.
There are no problems concerning the capacity to meet financial commitments, but there is
the possibility that creditworthiness may fall in the long run.
There are no problems concerning the capacity to meet financial commitments, andcreditworthiness is in the middle range.
There are no problems concerning the capacity to meet financial commitments presently, butthere are elements that require attention if the situation changes.
There are no problems concerning the capacity to meet financial commitments presently, but
long-term stability is poor.
There are no problems concerning the capacity to meet financial commitments presently, but
long-term stability is poor, and creditworthiness is relatively low.
The capacity to meet financial commitments is somewhat poor, and creditworthiness is thelowest among “Normal” customers.
Borrowers who must be closely monitored because of the following business performanceand financial conditions:(1) Borrowers who have problematic business performance, such as virtually delinquent
principal repayment or interest payment;(2) Borrowers whose business performance is unsteady, or who have unfavorable financial
conditions;(3) Borrowers who have problems with loan conditions, for whom interest rates have been
reduced or shelved.
Although business problems are not serious or their improvement is seen to be remarkable,
there are elements of potential concern with respect to the borrower’s management, and closemonitoring is required.
Business problems are serious, or require long-term solutions. Serious elements concerningbusiness administration of the borrower have emerged, and subsequent debt repayment needs
to be monitored closely.
Borrowers who fall under the criteria of Rating 10 or 11 and have a loan concession granted.
Borrowers who have “Loans contractually past due 90 days or more.” (As a rule, delinquentborrowers are categorized as “Likely to Become Bankrupt,” but the definition here applies toborrowers delinquent for 90 days or more because of inheritance and other special reasons.)
Borrowers who pose a serious risk with respect to debt repayment, loss is likely to occur inthe course of transactions. While still not bankrupt, these borrowers are in financial
difficulty, with poor progress in achieving restructuring plans, and are likely to becomebankrupt in the future.
While not legally bankrupt, borrowers who are considered to be virtually bankrupt because
they are in serious financial difficulty and have no prospects for an improvement in theirbusiness operations.
Borrowers who are legally bankrupt (i.e., who have no prospects for continued business
operations because of non-payment, suspension of business, voluntary liquidation, or filingfor legal liquidation).
189

The Japanese regulatory authorities require Japanese banks to categorize borrowers as follows:‰

Normal borrowers (generally corresponding to borrowers in categories 1 through 9 in our ratings),
which are borrowers that are performing well, with no significant financial concerns,‰

Borrowers requiring close watch (generally corresponding to borrowers in categories 10 through 12 inour ratings), which include loans that have been amended to allow for delays or forgiveness of interest
payments, borrowers experiencing difficulty in complying with loan terms and conditions and borrowersthat are recording losses or performing badly,‰

Borrowers likely to become bankrupt (generally corresponding to borrowers in category 13 in ourratings), which relate to borrowers who pose a serious risk with respect to debt repayment, loss is likely
to occur in the course of transactions. While still not bankrupt, these borrowers are in financial
difficulty, with poor progress in achieving restructuring plans, and are likely to become bankrupt in the
future,‰Virtually bankrupt borrowers (generally corresponding to borrowers in category 14 in our ratings),
which are not legally bankrupt, but borrowers who are considered to be virtually bankrupt because they
are in serious financial difficulty and have no prospects for an improvement in their business operations,and‰Bankrupt borrowers or de facto bankrupt borrowers (generally corresponding to borrowers in
category 15 in our ratings), which are borrowers who are legally bankrupt (i.e., who have no prospects
for continued business operations because of non-payment, suspension of business, voluntaryliquidation, or filing for legal liquidation) proceedings.

The primary data utilized in our assessment of borrowers include the borrower’s financial statements andnotes thereto as well as other public disclosure made by the borrower. In addition, when appropriate and possible,
we obtain non-public financial and operating information from borrowers, such as the borrower’s business plan,borrower’s self-evaluation of its operating assets and other borrower information about its business and products.
Based on the borrower and industry information, we assign borrower ratings mainly by applying financial
scoring models—either developed internally or by third party vendors, depending on the borrower’s attributes,
whether the borrower is domestic or foreign, whether the borrower is a large corporation or small and mediumsized corporation, and whether the borrower is corporate entity or another type of legal entity (such as a school,
hospital or fund).
For example, for domestic small and medium-sized corporations, which constitute the largest borrower
attribute in our current loan portfolio in terms of number of borrowers, we have adopted an internally developed
financial scoring model, exclusively designed and developed for such attribute. We have selected various
financial ratios that we believe to be useful and meaningful to quantitatively measure and assess the borrowers’
financial standings and repayment capability. Such financial ratios represent, among other things, borrowers’
growth, profitability, stability, cash flow, company size and capital efficiency. The model is periodically tested
against historical results. The following is an illustration of some of the financial ratio we utilize as part of our
financial scoring model:‰

To measure growth: Sales growth, and growth in total assets,‰

To measure profitability: Current profit to sales, and profit before tax to sales, and‰To measure stability: Equity ratio and current ratio.

The financial score obtained through the models is reviewed and, when necessary, adjusted downward toreflect our qualitative assessment of the borrower’s financial strength and other factors that could affect theborrower’s ability to service the debt. For example, we take into account: capability of turning around thebusiness (in case of borrowers with losses) or recovering positive net worth (in case of borrowers with negative
net worth), industry risk, management risk, legal risk, as well as our assessment of the probability of receiving
support from parent companies (if the borrower is a subsidiary of a large listed company).
190

When adjusting the results of primary financial scoring assigned to borrowers with losses, we consider theseverity of losses and the possibility of improving operating results. We analyze and assess whether the loss is
temporary, the trend in operating results is improving, or the loss is expected to continue for an extended period.
When adjusting the results of primary financial scoring assigned to borrowers with losses or borrowers withnegative net worth, we also analyze whether the borrower can return to a positive net worth, and the time period
needed to achieve such recovery (one to two years, three to five years, or five years or more).
In addition, adjustments based on industry risk are based on future prospects, applicable laws andregulations, and other factors surrounding the industry. Adjustments for management risk reflect our assessmentof management’s track record, the composition of the management team including the board of directors, any
management succession plan as well as the risk management and compliance framework of the borrower.
Adjustments for legal risk are made when the borrower is facing a lawsuit and when there is a possibility of asignificant claim payment related to product liability, intellectual property, environmental problems, building
standard law, and other legal issues.
When assessing the probability of receiving support from parent companies, various factors are examined,
such as the parent company’s credit standings, whether key management personnel are sent by the parent,
whether the borrower is consolidated by the parent, and the proportion of the borrower in consolidated sales andprofits of the parent.
In addition, we consider outside ratings, and its internal borrower ratings may be adjusted when deemed
appropriate.
Facility risk rating
Facility risk rating is used to evaluate and classify the quality of individual credit facilities, including
guarantees and collateral. Ratings are assigned by quantitatively measuring the estimated loss rate of a facility inthe event of a default.
Structured finance rating and asset securitization rating
Structured finance rating and asset securitization rating are used to evaluate and classify the quality of
individual credit facilities, including guarantees and collateral, and focus on the structure, including theapplicable credit period, of each credit facility. In evaluating the debt service potential of a credit facility, we
scrutinize its underlying structure to determine the likelihood of the planned future cash flows being achieved.
Pool assignment
Each major banking subsidiary has its own system for pooling and rating small retail loans designed toreflect the risk profile of its loan portfolios.
Asset Evaluation and Assessment System
The asset evaluation and assessment system is used to classify assets held by us according to the probabilityof collection and the risk of any impairment in value based on borrower classifications consistent with theborrower ratings and the status of collateral, guarantees, and other factors.
The system is used to conduct write-offs and allocate allowances against credit risk in a timely and adequate
manner.
Quantitative Analysis of Credit Risk
MUFG and its major banking subsidiaries manage credit risk by monitoring credit amount and expected
losses, and run simulations based on internal models to estimate the maximum amount of credit risk. Thesemodels are used for internal management purposes, including loan pricing and measuring economic capital.
191

When quantifying credit risk amounts using the internal models, MUFG and its major banking subsidiaries
consider various parameters, including probability of default, or PD, loss given default, or LGD, and exposure atdefault, or EAD, used in their borrower ratings, facility risk ratings and pool assignments as well as any credit
concentration risk in particular borrower groups or industry sectors. MUFG and its major banking subsidiaries
also share credit portfolio data in appropriate cases.
Loan Portfolio Management
We aim to achieve and maintain levels of earnings commensurate with credit risk exposure. Products are
priced to take into account expected losses, based on the internal credit ratings.
We assess and monitor loan amounts and credit exposure by credit rating, industry and region. Portfolios aremanaged to limit concentrations of risk in specific categories in accordance with our Large Credit Guidelines.
To manage country risk, we have established specific credit ceilings by country. These ceilings are reviewed
when there is a material change in a country’s credit standing, in addition to being subject to a regular periodic
review.
Continuous CPM Improvement
With the prevalence of securitized products and credit derivatives in global markets, we seek to supplement
conventional CPM techniques with advanced methods based on the use of such market-based instruments.
Through credit risk quantification and portfolio management, we aim to improve the risk return profile of
the Group’s credit portfolio, using financial markets to rebalance credit portfolios in a dynamic and active
manner based on an accurate assessment of credit risk. The following diagram summarizes our CPM framework:
Credit Portfolio Management (CPM) Framework

Implementation of Basel Standards

Objective credit rating system

Market-based advanced CPM
Risk quantification
Risk-based earnings management

Risk-based pricing management

Appropriate write-offs andallowance

Asset evaluation and assessment

Risk Management of Strategic Equity Portfolio
Strategic equity investment risk is the risk of loss caused by a decline in the prices of our equity
investments.

192

Execute business strategies

Quantitative monitoring of credit risk
Portfolio risk concentration checksWe hold shares of various corporate clients for strategic purposes, in particular to maintain long-term
relationships with these clients. These investments have the potential to increase business revenue and appreciate
in value. At the same time, we are exposed to the risk of price fluctuation in the Japanese stock market. For thatreason, in recent years, it has been a high priority for us to reduce our equity portfolio to limit the risks associatedwith holding a large equity portfolio, but also to respond to applicable regulatory requirements as well as
increasing market expectation and demands for us to reduce our equity portfolio. We are required to comply witha regulatory framework that prohibits Japanese banks from holding an amount of shares in excess of theiradjusted Tier 1 capital after September 2006.
We use quantitative analysis to manage the risks associated with the portfolio of equities held for strategic
purposes. According to internal calculations, the market value of our strategically held (Tokyo Stock Exchangelisted) stocks (excluding foreign stock exchange-listed stocks) as of March 31, 2014 was subject to a variation of
approximately ¥3.66 billion when TOPIX index moves one point in either direction.
We seek to manage and reduce strategic equity portfolio risk based on such types of simulation. The aim is
to keep this risk at appropriate levels compared with Tier 1 capital while generating returns commensurate withthe degree of risk exposure.
Market Risk Management
Market risk is the risk that the value of our assets and liabilities could be adversely affected by changes inmarket variables such as interest rates, securities prices, or foreign exchange rates.
Management of market risk at MUFG aims to control related risk exposure across the Group while ensuringthat earnings are commensurate with levels of risk.
Market Risk Management System
We have adopted an integrated system to manage market risk from our trading and non-trading activities.
The holding company monitors group-wide market risk, while each of the major subsidiaries manages its market
risks on a consolidated and global basis.
At each of the major subsidiaries, checks and balances are maintained through a system in which back andmiddle offices operate independently from front offices. In addition, separate Asset-Liability Management, or
ALM, Committee, ALM Council and Risk Management Meetings are held at each of the major subsidiaries
every month to deliberate important matters related to market risk and control.

193

The holding company and the major subsidiaries allocate economic capital commensurate with levels ofmarket risk and determined within the scope of their capital bases. The major subsidiaries have establishedquantitative limits relating to market risk based on their allocated economic capital. In addition, in order to keep
losses within predetermined limits, the major subsidiaries have also set limits for the maximum amount of losses
arising from market activities. The following diagram summarizes the market risk management system of eachmajor subsidiary:Market Risk Management System of Our Major Subsidiaries
Board of Directors / Executive Committee
ALM Committee / ALM Council / Risk Management Meeting
Delegation of
authority
Front Office

Trading result report
Quantitative risk monitoring

Confirmation of contracts and agreements

ReportMiddle Office(Market risk management
departments)

Back OfficeMarket Risk Management and Control
At the holding company and the major subsidiaries, market risk exposure is reported to the Chief Risk
Management Officers on a daily basis. At the holding company, the Chief Risk Management Officer monitors
market risk exposure across the Group as well as the major subsidiaries’ control over their quantitative limits formarket risk and losses. Meanwhile, the Chief Risk Management Officers at the major subsidiaries monitor theirown market risk exposure and their control over their quantitative limits for market risk and losses. In addition,
various analyses on risk profiles, including stress testing, are conducted and reported to the Executive
Committees and the Corporate Risk Management Committees on a regular basis. At the business unit levels in
the major subsidiaries, the market risks on their marketable assets and liabilities, such as interest rate risk andforeign exchange rate risk, are controlled by entering into various hedging transactions using marketablesecurities and derivatives.
As part of our market risk management activities, we use certain derivative financial instruments to manage
our interest rate and currency exposures. We maintain an overall interest rate risk management strategy thatincorporates the use of interest rate contracts to minimize significant unplanned fluctuations in earnings that arecaused by interest rate volatility. We enter into interest rate swaps and other contracts as part of our interest raterisk management strategy primarily to alter the interest rate sensitivity of our loans, investment securities anddeposit liabilities. Our principal objectives in risk management include asset and liability management. Asset andliability management is viewed as one of the methods for us to manage our interest rate exposures on interestearning assets and interest-bearing liabilities. Interest rate contracts, which are generally non-leveraged genericinterest rate and basis swaps, options and futures, allow us to effectively manage our interest rate risk position.
Option contracts primarily consist of caps, floors, swaptions and options on index futures. Futures contracts used
for asset and liability management activities are primarily index futures providing for cash payments based upon
the movement of an underlying rate index. We enter into forward exchange contracts, currency swaps and othercontracts in response to currency exposures resulting from on-balance sheet assets and liabilities denominated inforeign currencies in order to limit the net foreign exchange position by currency to an appropriate level.
These market risk management activities are performed in accordance with the predetermined rules andprocedures. The internal auditors regularly verify the appropriateness of the management controls over these
activities and the risk evaluation models adopted.
194Market Risk Measurement Model
Market risks consist of general risks and specific risks. General market risks result from changes in entire
markets, while specific risks relate to changes in the prices of individual stocks and bonds which are independentof the overall direction of the market.
To measure market risks, MUFG uses the VaR method which estimates changes in the market value of
portfolios within a certain period by statistically analyzing past market data. Since the daily variation in market
risk is significantly greater than that in other types of risk, MUFG measures and manages market risk using VaR
on a daily basis.
Market risk for trading and non-trading activities is measured using a uniform market risk measurement
model. The principal model used for these activities is historical simulation, or HS, model (holding period, 10
business days; confidence interval, 99%; and observation period, 701 business days). The HS model calculates
VaR amounts by estimating the profit and loss on the current portfolio by applying actual fluctuations in market
rates and prices over a fixed period in the past. This method is designed to capture certain statistically infrequent
movements, such as a fat tail, and accounts for the characteristics of financial instruments with non-linear
behavior. The holding company and banking subsidiaries also use the HS model to calculate as part of thecalculation of their Basel III regulatory capital adequacy ratios.
In calculating VaR using the HS method, we have implemented an integrated market risk measurement
system throughout the Group. Our major subsidiaries calculate their VaR based on the risk and market dataprepared by the information systems of their front offices and other departments. The major subsidiaries provide
this risk data to the holding company, which calculates overall VaR, taking into account the diversification effectamong all portfolios of the major subsidiaries.
For the purpose of internally evaluating capital adequacy on an economic capital basis in terms of market
risk, we use this market risk measurement model to calculate risk amounts based on a holding period of one year
and a confidence interval of 99.9%.
Monitoring and managing our sensitivity to interest rate fluctuations is the key to managing market risk in
MUFG’s non-trading activities. The major banking subsidiaries take the following approach to measuring risks
concerning core deposits, loan prepayments and early deposit withdrawals.
To measure interest rate risk relating to deposits without contract-based fixed maturities, the amount of“core deposits” is calculated through a statistical analysis based on deposit balance trend data and the outlook forinterest rates on deposits, business decisions, and other factors. The amount of “core deposit” is categorized into
various groups of maturity terms of up to ten years (4.5 years on average) to recognize interest rate risk. The
calculation assumptions and methods to determine the amount of core deposits and maturity term categorization
are regularly reviewed.
Meanwhile, deposits and loans with contract-based maturities are sometimes cancelled or repaid before theirmaturity dates. To measure interest rate risk for these deposits and loans, we reflect these early termination
events mainly by applying early termination rates calculated based on a statistical analysis of historical
repayment and cancellation data together with historical market interest rate data.
Summaries of Market Risks (Fiscal Year Ended March 31, 2014)
Trading activities
The aggregate VaR for our total trading activities as of March 31, 2014 was ¥18.09 billion, comprisinginterest rate risk exposure of ¥14.98 billion, foreign exchange risk exposure of ¥3.46 billion, and equity-related
risk exposure of ¥2.90 billion. Compared with the VaR as of March 31, 2013, we experienced an increase inmarket risk during the fiscal year ended March 31, 2014, primarily due to an increase in yen interest rate risk.
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Our average daily VaR for the fiscal year ended March 31, 2014 was ¥20.79 billion. Based on a simple sumof figures across market risk categories, interest rate risk accounted for approximately 63%, foreign exchange
risk for approximately 25% and equity-related risk for approximately 7%, of our total trading activity market
risks.
Due to the nature of trading operations which involves frequent changes in trading positions, market risk
varied substantially during the fiscal year, depending on our trading positions.
The following tables set forth the VaR related to our trading activities by risk category for the periods
indicated:
April 1, 2012—March 31, 2013

Average

MUFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less diversification effect . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 9.86
8.44
4.37
3.34
3.40
0.79
0.48
(3.25)

April 1, 2013—March 31, 2014

Average

MUFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less diversification effect . . . . . . . . . . . . . . . . . . . . . . . . .

¥20.79
17.33
8.59
6.66
6.93
2.07
0.74
(6.28)

Maximum(1) Minimum(1)(in billions)¥15.32
12.38
8.35
6.98
7.72
3.50
1.06
—

¥6.55
6.42
2.55
1.89
0.34
0.12
0.15
—

¥12.94
12.38
8.35
2.69
3.19
1.17
0.51
(4.31)

Maximum(1) Minimum(1)(in billions)¥29.50
21.93
14.07
11.12
15.30
7.35
1.39
—

¥15.34
14.02
5.36
3.95
3.46
0.79
0.31
—

March 31, 2013

March 31, 2014¥18.09
14.98
6.16
5.05
3.46
2.90
1.25
(4.50)

Assumptions for VaR calculations:

Historical simulation method
Holding period: 10 business days
Confidence interval: 99%
Observation period: 701 business days
Note:(1) The maximum and minimum VaR overall and for various risk categories were taken from different days. A simple summation of VaR byrisk category is not equal to total VaR due to the effect of diversification.

The average daily VaR by quarter in the fiscal year ended March 31, 2014 was as follows:
Quarter

Daily average VaR(in billions)

April—June 2013
July—September 2013
October—December 2013
January—March 2014¥22.80
21.72
19.22
19.39

The quantitative market risk figures from trading activities tend to fluctuate widely due to the market
sensitive nature of the trading business. During the fiscal year ended March 31, 2014, the revenue from our196

trading activities has been relatively stable, keeping positive numbers in 234 days out of 260 trading days in the
period. During the same period, there were 106 days with positive revenue exceeding ¥1 billion and 9 days withnegative revenue exceeding minus ¥1 billion.
Non-trading Activities
The aggregate VaR for our total non-trading activities as of March 31, 2014, excluding market risks related
to our strategic equity portfolio and measured using the same standards as trading activities, was ¥332.1 billion.
Market risks related to interest rates equaled ¥304.2 billion and equities-related risks equaled ¥172.9 billion.
Compared with the VaR for MUFG as of March 31, 2013, the decrease in the overall market risk was¥80.9 billion. Market risks related to interest rates decreased ¥118.1 billion. Equity related risks increased¥64.4 billion.
Based on a simple sum of figures across market risk categories, interest rate risks accounted forapproximately 71% of our total non-trading activity market risks. Looking at a breakdown of interest rate related
risk by currency, as of March 31, 2014, the yen accounted for approximately 49% while the U.S. dollar
accounted for approximately 36%, and the Euro approximately 15%.
The following table shows the VaR related to our non-trading activities by risk category for the fiscal year
ended March 31, 2014:
April 1, 2013—March 31, 2014

Average

Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥400.8
223.8
183.8
1.3
161.3
410.7

Maximum(1) Minimum(1)(in billions)¥459.8
276.5
230.2
3.0
202.4
462.1

¥304.2
183.3
135.8
0.8
100.6
332.1

March 31, 2014

¥304.2
190.4
140.8
0.9
172.9
332.1

Assumptions for VaR calculations:

Historical simulation method
Holding period: 10 business days
Confidence interval: 99%
Observation period: 701 business days
Note:(1) The maximum and minimum VaR overall for each category and in total were taken from different days. The equities-related risk figures
do not include market risk exposure from our strategic equity portfolio. A simple summation of VaR by risk category is not equal to total
VaR due to the effect of diversification.

The average daily interest rate VaR by quarter in the fiscal year ended March 31, 2014 was as follows.
Quarter

Daily average VaR(in billions)

April—June 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
July—September 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
October—December 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January—March 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥419.88384.29425.98372.11Comparing the proportion of each currency’s interest rate VaR to the total interest rate VaR as of March 31,
2014 against that as of March 31, 2013, there were a five percentage point increase in Japanese yen from 44% to49%, a one percentage point decrease in Euro from 16% to 15%, and a four percentage point decrease in U.S.
dollar from 40% to 36%.
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Backtesting
We conduct backtesting in which a VaR is compared with hypothetical profits and losses on a daily basis toverify the accuracy of our VaR measurement model. We also conduct additional backtesting using othermethods, including testing VaR against actual realized and unrealized losses and testing VaR by various
changing parameters such as confidence intervals and observation periods used in the model.
Hypothetical losses never exceeded VaR in the fiscal year ended March 31, 2014. This means that our VaR
model provided reasonably accurate measurements of market risk during the fiscal year.
The following graph shows daily VaR of trading activities and the distribution of corresponding
hypothetical profits and losses for the fiscal year ended March 31, 2014:
daily PL(billion yen)

12
10
8
6
4
2
0
-2 0
-4
-6
-8
- 10
- 12

excess: 0 time

2

4

6

8

10

12

VaR (billion yen)

The following graph shows VaR of trading activities and hypothetical profits and losses on a daily basis forthe fiscal year ended March 31, 2014:(billion yen)

12
10
8
6
4
2
0
-2
-4
-6
-8
-10
-12

daily PL
VaR

Apr 2013

Mar 2014

Stress Testing
We have adopted an HS-VaR model, which calculates potential changes in the market value of our portfolio
as a statistically possible amount of losses that could be incurred due to market fluctuations within a certain
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period (or holding period, of 10 business days) based on historical market volatility for a certain period (orobservation period, of 701 business days, or approximately three years). Actual losses may exceed the value atrisk obtained by the application of the model in the event, for example, that the market fluctuates to a degree notaccounted for in the observation period, or that the correlations among various risk factors, including interest
rates and foreign currency exchange rates, deviate from those assumed in the model.
In order to complement these weaknesses of the HS-VaR model and measure potential losses that the model
is not designed to capture, we conduct stress testing. For example, we measure on a quarterly basis potential
losses that could be incurred in our portfolio by applying various stress scenarios, including the 10-year mostextreme movement in each of the risk factors as well as actual past market movement observed beyond the
10 year historical observation period. In addition, the holding company and major subsidiaries conduct stresstesting, as appropriate, by applying various stress scenarios, including those which take into account estimates
regarding future market volatility, in order to better identify risks and manage our portfolio in a more stable andappropriate manner. Since October 2011, the holding company and major subsidiaries have also been measuring
stressed VaR relating to their trading activities based on a one-year observation period with the highest VaR atleast in the immediately preceding ten years.
Liquidity Risk Management
Liquidity risk is the risk of incurring losses if a poor financial position hampers the ability to meet funding
requirements, or necessitates fund procurement at interest rates markedly higher than normal.
Our major subsidiaries maintain appropriate liquidity in both Japanese yen and foreign currencies bymanaging their funding sources and mechanism, such as liquidity gap, liquidity-supplying products such ascommitment lines, and buffer assets.
We have established a group-wide system for managing liquidity risk by categorizing the risk in thefollowing three stages: Normal, With-Concern, and Critical. The front offices and risk management offices of the
major subsidiaries and the holding company exchange information and data on liquidity risk even at the Normal
stage. At higher alert stages, we centralize information about liquidity risk and discuss issues relating togroup-wide liquidity control actions among group companies, if necessary. We have also established a system forliaison and consultation on funding in preparation for contingency, such as natural disasters, wars and terrorist
attacks. The holding company and the major subsidiaries conduct group-wide contingency preparedness drills ona regular basis to ensure smooth implementation in the event of an emergency.
For more information, see “Item 5.B. Operating and Financial Review and Prospects—Liquidity and Capital
Resources—Financial Condition—Sources of Funding and Liquidity.”
Operational Risk Management
Operational risk refers to the risk of loss caused by either internal control issues, such as inadequate
operational processes or misconduct, system failures, or external factors such as serious political instability,
major terrorist activity, health epidemics and natural disasters. The term includes a broad range of risks that
could lead to losses, including operations risk, information asset risk, legal risk, reputation risk, personnel risk
and tangible asset risk. These risks that comprise operational risk are referred to as sub-category risks.
MUFG’s board of directors has approved the MUFG Operational Risk Management Policy as a group-wide
policy for managing operational risk. This policy sets forth the core principles regarding operational risk
management, including the definition of operational risk, and the risk management system and processes. The
policy also requires the board of directors and the Executive Committee to formulate fundamental principles ofoperational risk management and establish and maintain an appropriate risk management system. The Chief Risk
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Management Officer is responsible for recognizing, evaluating, and appropriately managing operational risk inaccordance with the fundamental principles formulated by the board of directors and the Executive Committee. A
division in charge of operational risk management must be established that is independent of business promotion
sections to manage overall operational risk in a comprehensive manner. These fundamental principles have also
been approved by the boards of directors of the major subsidiaries, providing a consistent framework for
operational risk management of the Group. The diagram below sets forth the operational risk management
system of each major banking subsidiary:
Operational Risk Management System of Our Major Banking Subsidiaries
Board of Directors/Executive Committee
committees regarding risk management
Reporting on risk profile

Instruction

Division in charge of Operational Risk
Management

Instruction
Head Office andBranches

Coordination
Reporting

Divisions in charge of Sub-category Risk
Management

As set forth in the following diagram, we have established a risk management framework for loss datacollection, control self assessment, or CSA, and measurement of operational risk in order to appropriately
identify, recognize, evaluate, measure, control, monitor and report operational risk.
We have also established group-wide reporting guidelines with respect to loss data collection and its
monitoring. We focus our efforts on ensuring accurate assessment of the status of operational risk losses and theimplementation of appropriate countermeasures, while maintaining databases of internal and external loss events.

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The following diagram summarizes our operational risk management framework:
Operational Risk Management Framework
evaluate and measure

identify and recognize

causalanalysiscausal analysis

incident
occuredrecordcontrol

implement
implement preventive
preventive
measuresmeasuresmonitor and reportmonitoring
prompt reporting tomanagement andrelevant supervisers

major incidents and misconduct
create potential loss
scenario

internal loss
data

external
external
loss
data
allocate economic
capital tobusiness units/subsidiaries

risk measurementmonitoring ofmonitoring of
economic capitalrisk evaluation and management through Control Self-Assessment

Operations Risk Management
Operations risk refers to the risk of loss that is attributable to the actions of executives or employees,
whether accidental or the result of neglect or deliberate misconduct. The Group companies offer a wide range offinancial services, ranging from commercial banking products such as deposits, exchange services and loans totrust and related services covering pensions, securities, real estate and securitization, as well as transfer agent
services. Cognizant of the potentially significant impact that operations risk-related events could have in terms ofboth economic losses and damage to our reputation, our banking subsidiaries continue to improve their
management systems to create and apply appropriate operations risk-related controls.
Specific ongoing measures to reduce operations risk include the development of databases to manage,
analyze and prevent the recurrence of related loss events; efforts to tighten controls over administrative
procedures and related operating authority, while striving to improve human resources management; investments
in systems to improve the efficiency of administrative operations; and programs to expand and upgrade internal
auditing and operational guidance systems.
Senior management receives regular reports on the status of our businesses from an operations risk
management perspective. We work to promote the sharing within the Group of information and expertise
concerning any operational incidents and the measures implemented to prevent any recurrence.
Efforts to upgrade the management of operations risk continue with the aim of providing our customers witha variety of high-quality services.

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Information Asset Risk Management
Information asset risk refers to the risk of loss caused by loss, alteration, falsification or leakage of
information, or by destruction, disruption, errors or misuse of information systems, as well as risks similar to thisrisk. In order to ensure proper handling of information and prevent loss or leakage of information, our majorbanking subsidiaries strive to better manage and reduce such risks through the appointment of managers withspecific responsibilities for information security issues, the establishment of internal procedures, training courses
designed for all staff, and the implementation of measures to ensure stable IT systems control. We have also
formulated the Personal Information Protection Policy as the basis for ongoing programs to protect theconfidentiality of personal information.
Systems planning, development and operations include appropriate design and extensive testing phases toensure that systems are designed to help prevent failures while providing sufficient safeguards for the security of
personal information. The status of the development of any mission-critical IT systems is reported regularly tosenior management. We have developed disaster countermeasures systems and have also been investing in
duplication of the Group’s IT infrastructure to minimize damage in the event of any system failure. Emergency
drills are conducted to help increase staff preparedness.
With the aim of preventing any recurrence, we also work to promote sharing of information within theGroup related to the causes of any loss or leakage of information, or system failure.
Legal Risk Management
Legal risk refers to the risk of loss due to failure to comply with applicable laws and regulations, adequately
evaluate contractual rights and obligations, or appropriately deal with disputes, as well as other similar risks. We
recognize the potentially significant impact legal risk-related events can have on the management and executionof the Group’s businesses, which in turn can result in economic, reputation and other losses to, or diminishedmarket confidence in, the Group. Accordingly, we continue to improve our risk control framework designed toappropriately manage such risk.
Specifically, in order to promote compliance, we have established our Principles of Ethics and Conduct as
the basic legal compliance policy for the Group’s directors and employees. In addition, a compliancemanagement division has been established at each of the holding company and the major subsidiaries. See “—Compliance” below. Moreover, the legal division at each of the holding company and the major subsidiaries
centrally and uniformly evaluates legal issues prior to entering into contracts, deals with disputes and manages
other legal matters. Through these and other measures, we endeavor to effectively manage our legal risk.
Reputation Risk Management
Reputation risk refers to the risk of loss due to deterioration in reputation as a consequence of the spread ofrumors among customers or in the market, or as a consequence of our inadequate response to particularsituations, as well as risks similar to this risk.
We recognize the potentially significant impact reputation risk-related events can have on the management
and execution of the Group’s businesses, which in turn can result in economic losses to, or diminished market
confidence in, the Group. Accordingly, we continue to improve our risk control framework designed toappropriately manage such risk.
Specifically, in order to manage our reputation risk effectively on a group-wide basis, we have established arisk management system designed to ensure mutual consultation and reporting if a reputation risk-related event
occurs or is anticipated and, through this system, share relevant information within the Group.
Through the risk control framework and risk management system, we seek to minimize damage to thereputation and credibility of, and the market confidence in, the Group by promptly obtaining an accurate
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understanding of relevant facts relating to reputation risk-related events and disclosing information concerning
the events and the measures we take in response to such events in an appropriate and timely manner.
Risk Management for Other Risks
In addition to the risks discussed above, the MUFG Group companies define and manage sub-category risks
as appropriate, including tangible asset risk and personnel risk as set forth in the “Operational Risk Management
System of Our Major Banking Subsidiaries” diagram above.
Regulatory Capital Requirements for Operational Risk
(1) Adoption of the Advanced Measurement Approach (AMA)
We have employed the AMA since March 31, 2012, in place of the Standardized Approach that we had beenusing previously, for calculation of the operational risk equivalent amount in connection with measuring capital
adequacy ratios based on the Basel Standards. On the other hand, we use the Basic Indicator Approach, or BIA,
for entities that are deemed to be less important in the calculation of the operational risk equivalent amount andfor entities that are still preparing to implement the AMA.
(2) Outline of AMA
We have established a measurement model designed to account for four data elements—internal loss data,
external loss data, scenario analysis, and business environment and internal control factors, or BEICFs—andcalculate the operational risk equivalent amount by estimating the maximum loss using a 99.9th percentile onetailed confidence interval and a one-year holding period.
In calculating the operational risk equivalent amount, we exclude expected losses relating to the amount ofallowance for repayment of excess interest associated with the consumer finance business of a subsidiary. We do
not exclude any other expected losses and do not reflect the risk mitigating impact of insurance. In addition, we
take into account credit risk-related events that are not reflected in the measurement of the credit risk equivalentamount.
(3) Outline of Measurement Model
Our operational risk equivalent amount measured under the AMA is a simple sum of the amounts calculated
separately for BTMU on a consolidated basis, MUTB on a consolidated basis, and the total amount for otherGroup companies (including the holding company, MUSHD and Mitsubishi UFJ NICOS). For each of BTMU
and MUTB on consolidated basis, the operational risk equivalent amount is a simple sum of the amounts
calculated based on the seven loss event types defined by the Basel Standards. For other Group companies, theoperational risk equivalent amount is a simple sum of the amounts calculated based on eight loss event types
consisting of the seven loss event types defined by the Basel Standards and an additional loss event type
representing losses relating to repayment of excess interest associated with the consumer finance business of a
subsidiary. We do not reflect the correlation effects among the loss event types in the calculation of ouroperational risk equivalent amount.

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Outline of Measurement Model
Internal Loss Data

Litigation Data

Business Environment andInternal Control Factors

External Loss Data

Basel Loss Event Types
Internal Fraud
Risk Equivalent Amount

Scenario Analysis

External Fraud
Risk Equivalent AmountFrequency Distribution

Scenario Data

Occurrence
Frequiency

Occurrence
Frequiency
Loss Severity Distribution

Loss Amount

Loss AmountMonte Carlo Simulation

Employment Practices and Workplace Safety
Risk Equivalent AmountInternal Loss Data

Loss Distribution

Clients, Products, and Business Pracitces
Risk Equivalent Amount
Damage to Physical Assets
Risk Equivalent Amount
Business Disruption and System Failures
Risk Equivalent Amount
Execution, Delivery, and Process Management
Risk Equivalent Amount

Repayment of Excess Interest
Risk Equivalent AmountThe risk equivalent amount for each loss event type represents the amount of maximum loss estimated witha 99.9th percentile one-tailed confidence interval and a one-year holding period based on the distribution oflosses arising from all relevant risk events for a one-year period (Loss Distribution). A Loss Distribution
combines a Frequency Distribution (through which the frequency of occurrence of risk events is expressed) and a
Loss Severity Distribution (through which the amounts of losses resulting from risk events are expressed)
through Monte Carlo simulations. The data used for this purpose include internal loss data and scenario data.
Scenario data are generated through a scenario analysis. External data and BEICFs are taken into account in the
scenario analysis and reflected in scenario data. The Frequency Distribution is derived from the occurrence
frequency information in internal loss data and scenario data expressed through a Poisson Distribution. The Loss
Severity Distribution is derived from the amount information in internal loss data and scenario data expressed ina non-parametric manner (where no underlying distribution is assumed).
With respect to the risk of losses relating to repayment of excess interest associated with the consumer
finance business of a subsidiary, the risk equivalent amount represents the amount of maximum loss estimatedwith a 99.9th percentile one–tailed confidence interval and a one-year holding period based on a normal
distribution assumed by applying data on losses that arose in a given period, excluding any related expected
losses.
We confirm the appropriateness of the measurement models by periodic verification and back testing.
(4) Outline of Scenario Analysis
As an initial step of our scenario analysis, we identify potential severe loss events that we have notexperienced but may potentially experience in the future. In this identification process, we seek to ensure
exhaustive coverage of potential severe loss events by comprehensively examining our experience relating to loss
events and legal proceedings, external loss data, the control self-assessment results and other relevant
information.
In the next step, we prepare scenario data for each identified severe loss event by quantifying the values
depending on its occurrence frequency and loss severity, taking into account relevant transaction amounts andrestructuring costs as well as BEICFs. In preparing scenario data, we apply an analysis method we deem
appropriate for the type and nature of the operational risk involved.
In order to obtain an operational risk equivalent amount that is commensurate with, and appropriate for, ourrisk profile, we assess the need for an additional scenario or modification to our existing scenarios semi-annually.
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We then reflect, as necessary, new risks arising as a result of changes in the business environment and the resultsof the implementation of measures to enhance our internal controls in response to newly identified risks in our
scenario data.
Compliance
Basic Policy
We have clarified our mission, our vision and our values in the Corporate Vision and have expressed ourcommitment to meeting the expectations of customers and society as a whole. Furthermore, we have establishedPrinciples of Ethics and Conduct as the guidelines for how the Group’s directors and employees act to realize the
Corporate Vision, in which we have expressed our commitment to complying with laws and regulations, toacting with honesty and integrity, and to behaving in a manner that supports and strengthens the trust andconfidence of society.
In addition, as we expand the geographic scope of our business globally, we are committed to keeping
abreast with developments in laws and regulations of the jurisdictions in which we operate including anti-money
laundering and anti-bribery, as well as paying attention to trends in financial crimes.
See “Item 3.D. Key Information—Risk Factors—Risks Related to Our Business—Legal and regulatorychanges could have a negative impact on our business, financial condition and results of operations.” and“Item 3.D. Key Information—Risk Factors—Risks Related to Our Business—We may become subject toregulatory actions or other legal proceedings relating to our transactions or other aspects of our operations, which
could result in significant financial losses, restrictions on our operations and damage to our reputation.” See also
“Item 4.B. Information on the Company—Business Overview—Supervision and Regulation.”
Principles of Ethics and Conduct
Introduction
These Principles of Ethics and Conduct establish clear and consistent standards for all MUFG employees toguide decisions and actions. They reflect and support the MUFG Corporate Vision. The principles are organizedin three sections. Chapter 1 presents the attitude that we adopt with our customers, to act with honesty andintegrity and pursue their best interests, which is a core component of our business practices. Chapter 2 presents a
set of standards to help us fulfill our responsibilities as a good corporate citizen. MUFG’s reputation depends
upon the trust and confidence of our customers and other stakeholders, including local communities, and we areresponsible to society on a global level. Chapter 3 describes the actions and mindset that will create a stimulating
and supportive working environment as MUFG continues to grow. Our success depends on building andmaintaining a dynamic workplace where all employees can reach their full potential in ways that support ourcustomers and contribute to society as a whole.
Outline / Overview
Chapter 1 Customer Focus
We place our diverse customers at the center of all our activities and always act in their best interests.
MUFG is able to thrive today because of the trust and confidence that customers have placed in us—the result ofyears of fair, transparent, and honorable dealings. Our business culture is not driven by the prospect of shortterm, immediate gains. Instead, we place a premium on supporting long-term, sustainable relationships with ourcustomers to help them meet their goals.

2051-1. Acting with Honesty and Integrity
We always place our diverse customers at the center of all activities and act with honesty and integrity in allof our dealings with them. We protect customer assets, including their personal information, and strive at all
times not to damage their interests.
1-2. Controlling Quality
In order to earn the lasting trust and confidence of our customers, we maintain thorough quality control of
our products and services in all aspects from product design and development to delivery, and continually
improve our processes to provide accurate and secure transactions.
1-3. Exceeding Customer Expectations
We strive to satisfy the diverse needs of our customers worldwide and to exceed their expectations throughthe highest standards of professionalism and by effectively leveraging our global network and consolidated
strength.
Chapter 2 Responsibility as a Corporate Citizen
As a member of MUFG with global operations, we act honorably, with honesty and integrity, and comply at
all times with laws, regulations, rules, and internal policies globally. We strive to maintain stability andconfidence in the global financial system and to contribute to the sound growth and development of society. We
behave in a manner that supports and strengthens the trust and confidence that MUFG has built up over the years.
2-1. Adherence to Laws and Regulations
We always judge and act with honesty and integrity, do what is right, and comply with both the letter andthe spirit of the laws, regulations, and rules that apply to us. We avoid insider trading, do not engage in anticompetitive conduct or any form of corrupt activity, and publicly disclose corporate information in an
appropriate manner.
2-2. Combating Criminal Activity
We do not conduct business with criminal elements. We do not allow our financial products and services tobe used for illegal or improper activities such as money laundering, fraud, or financing terrorist activities.
2-3. Commitment to Social Sustainability
We respect the history, culture, and customs of local communities and strive to contribute to theirdevelopment and the protection of the environment through our corporate activities and employee volunteer
efforts.
Chapter 3 Ethical and Dynamic Workplace
We are committed to creating a working environment that fosters mutual respect among MUFG employees,
supports the full expression of our individuality as professionals, promotes the power of teamwork, honors
diversity, transcends differences, and embraces new challenges.
3-1. Stimulating Workplace
We strive to enhance our knowledge and expertise, focus on maximizing the value of teamwork, and view
changes in the business environment as opportunities to launch new initiatives.
206

3-2. Ethical Workplace
We respect the diversity and human rights of all MUFG employees. We do not engage in or tolerate
discrimination, harassment, intimidation, or any other behavior or activity that is inconsistent with thesecore beliefs. We report any violations of laws and rules, and we manage corporate assets appropriately.
Compliance Framework
Management and coordination of compliance-related matters are the responsibility of separate compliancemanagement divisions established at the holding company and the major subsidiaries. Each compliancemanagement division formulates compliance programs and organizes training courses to promote compliance,and regularly reports to each company’s board of directors and Executive Committee on the status of complianceactivities.
The holding company and each major subsidiary have also established voluntary committees, such as an
Internal Audit and Compliance Committee, where members with no prior employment relationship with theGroup account for a majority, and a Group Compliance Committee. Through these measures, we haveestablished a structure for deliberating key issues related to compliance. Additionally, the holding company has
the Group Chief Compliance Officer, or CCO, Committee which deliberates important matters related tocompliance and compliance-related issues for which the Group should share a common understanding.
CCO of Holding Company
Directors responsible for compliance at the holding company and the major subsidiaries have been named
the CCOs of their respective companies. The CCOs of the major subsidiaries have also been appointed as thedeputy CCOs of the holding company to assist the CCO of the holding company. This system promotes theprompt reporting of group-wide compliance-related information to the holding company and also allows the
CCO of the holding company to effectively provide compliance-related guidance, advice, and instructions to
MUFG Group companies.
Group CCO Committee
The Group CCO Committee consists of the CCO of the holding company as the committee chairman and
the CCOs of the major subsidiaries.
By timely holding meetings, the Group CCO Committee seeks to promote greater sharing of compliancerelated information among the MUFG Group companies and works to strengthen the Group’s incident prevention
controls and to help the Group companies respond to unforeseen problems. The Committee also continues tostrive to improve compliance systems throughout the Group.

207

The following diagram summarizes our compliance framework:
Compliance Framework

Holding Company (MUFG)

Board of Corporate Auditors

Internal Audit and Compliance
Committee

Board of Directors

Executive Committee

Group Compliance Committee

Group CCO Committee
CCO (Chief Compliance Officer)

Compliance Division(Coordinates compliance issues )Consultation
and report

Bank of Tokyo-Mitsubishi UFJ

Guidance, advice
and instruction

Mitsubishi UFJ Trust and Banking

Mitsubishi UFJ Securities
Holdings

Other Subsidiaries

Group Companies

Internal Reporting System and Accounting Auditing Hotline
The major subsidiaries have established internal reporting systems that aim to identify compliance issues
early so that any problems can be quickly rectified. This system includes an independent external compliancehotline. Furthermore, the holding company has set up an MUFG Group Compliance Helpline that acts in parallelwith group-company internal reporting systems and provides a reporting channel for directors and employees ofgroup companies.
In addition to these internal reporting systems, the holding company has also established an accounting
auditing hotline that provides a means to report any problems related to MUFG accounting.
MUFG Accounting Auditing Hotline
MUFG has set up an accounting auditing hotline to be used to make reports related to instances of improper
practices (violations of laws and regulations) and inappropriate practices, or of practices raising questions aboutsuch impropriety or inappropriateness, regarding accounting and internal control or audits related to accounting
in Group companies. The reporting process works as follows, and may be carried out via letter or e-mail:Hokusei Law Office, P.C.
Address: Kojimachi 4-3-4, Chiyoda-ku, Tokyoe-mail: MUFG-accounting-audit-hotline@hokusei-law.com
208

When reporting information please pay attention to the following:‰

Matters subject to reporting are limited to instances regarding MUFG Group companies.

‰

Please provide detailed information with respect to the matter. Without detailed factual information
there is a limit to how much our investigations can achieve.

‰

Anonymous information will be accepted.

‰

No information regarding the identity of the informant will be passed on to third parties without theapproval of the informant him- or herself. However, this excludes instances where disclosure is legally
mandated, or to the extent that the information is necessary for surveys or reports, when data may bepassed on following the removal of the informant’s name.

‰

Please submit reports in either Japanese or English.

‰

If the informant wishes, we will endeavor to report back to the informant on the response taken within areasonable period of time following the receipt of specific information, but cannot promise to do so in
all instances.

Internal Audit
Role of Internal Audit
Internal audit functions within MUFG seek to provide independent verification of the adequacy andeffectiveness of internal control systems. This includes monitoring the status of risk management and compliancesystems, which are critical to the maintenance of sound and appropriate business operations. Internal audit results
are reported to senior management. An additional role of internal audit is to make suggestions to help improve or
rectify any issues or specific problems that are identified.
Group Internal Audit Framework
The board of directors at the holding company level has instituted MUFG’s internal audit policy to define
the policy, function and organizational position of internal audits. Separate internal audit divisions have beencreated within the holding company and certain subsidiaries. Through close cooperation and collaboration among
the internal audit divisions in each of these subsidiaries, these internal audit divisions provide coverage for theGroup and also support the board of directors in monitoring and overseeing all MUFG operations.
In addition to having primary responsibility for initiating and preparing plans and proposals related tointernal audits of the Group, the Internal Audit Division at the holding company monitors and, as necessary,guides, advises and administers the internal audit divisions of subsidiaries and affiliated companies. The internal
audit divisions within the major subsidiaries conduct audits of the respective head office and branch operations ofthese companies. In addition, each of these internal audit divisions undertakes direct audits of their respective
subsidiaries, and monitors and oversees the separate internal audit functions established within them. This helps
to evaluate and verify the adequacy and effectiveness of internal controls within MUFG on a consolidated basis.
Implementing Effective and Efficient Internal Audits
To ensure that internal audit processes use available resources with optimal effectiveness and efficiency, theinternal audit divisions implement risk-focused internal audits in which the nature and magnitude of theassociated risks are considered in determining audit priorities and the frequency and depth of internal audit
activities. The internal audit divisions ensure that audit personnel attend key meetings, collect important internal
control documents and access databases to facilitate efficient off-site monitoring.

209

Reports to and from Internal Audit and Compliance Committees
To strengthen the respective boards of directors’ monitoring and supervision of operational execution status
and to ensure the independence of the internal audit divisions, the holding company and the major subsidiaries
have voluntarily established internal audit and compliance committees. These committees receive reports fromthe internal audit divisions on important matters, including the results of the internal audits and basic policies forplanning internal audits. The deliberations of the internal audit and compliance committees concerning suchmatters are then reported to the respective boards of directors.
Item 12. Description of Securities Other than Equity Securities.
A.

Debt Securities
Not applicable.

B.

Warrants and Rights
Not applicable.

C.

Other Securities
Not applicable.

210

D.

American Depositary SharesFees, charges and other payments relating to ADSs
As a holder of our ADSs, you will be required to pay to The Bank of New York Mellon, as depositary for
the ADRs, or the “Depositary,” either directly or indirectly, the following fees or charges. The Depositarycollects its fees for delivery and surrender of ADRs directly from investors depositing shares or surrendering
ADRs for the purpose of withdrawal or from intermediaries acting for them. The Depositary collects fees formaking distributions to investors by deducting those fees from the amounts distributed or by selling a portion of
distributable property to pay the fees.
ADS holders must pay:For:

$5.00 (or less) per 100 ADSs (or portion thereof)

Each issuance of an ADR, including as a result of a
distribution of shares or rights or other property
Each cancellation of an ADR, including if theagreement terminates$0.02 (or less) per ADS

Any cash distribution, to the extent permitted by any
securities exchange on which the ADSs may be listed
for trading

A fee equivalent to the fee that would be payable if
securities distributed to the ADS holder had been sharesand the shares had been deposited for issuance of ADRs

Distribution of securities distributed to holders ofdeposited securities which are distributed by the
Depositary to ADS registered holders

Registration or transfer fees

Transfer and registration of shares on the shareregister from your name to the name of The Bank of
New York Mellon or its agent and vice versa when
you deposit or withdraw shares

Expenses of The Bank of New York Mellon

Conversion of foreign currency to U.S. dollars, aswell as cable, telex and facsimile transmission
expenses

Taxes and other governmental charges The Bank of
New York Mellon or BTMU, as custodian, have to pay
on any ADS or share underlying an ADS, for example,
stock transfer taxes, stamp duty or withholding taxes

As necessary

Fees Waived or Paid by the Depositary
The Depositary has agreed to waive the standard out-of-pocket administrative, maintenance and otherexpenses for providing services to the registered holders of our ADSs, which consisted of the expenses of
postage and envelopes for mailing annual reports, printing and distributing dividend checks, stationery, postage,facsimile, and telephone calls. For the fiscal year ended March 31, 2014, the Depositary waived $132,655.85 ofstandard out-of-pocket expenses.
The Depositary has also agreed to reimburse us for expenses related to the administration and maintenanceof the ADS program, including investor relations expenses, the annual New York Stock Exchange listing feesand other program-related expenses. There is a limit on the amount of expenses for which the Depositary will
reimburse us based on the number of outstanding ADSs. For the fiscal year ended March 31, 2014, theDepositary reimbursed us $1.0 million for such expenses.

211

PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies.
None.
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds.
None.
Item 15. Controls and Procedures.
Disclosure Controls and Procedures
An evaluation was carried out under the supervision and with the participation of our management,
including the Chief Executive Officer, or CEO, and the Chief Financial Officer, or CFO, of the effectiveness ofour disclosure controls and procedures, as defined in Rule 13a-15(e) under the U.S. Securities Exchange Act of1934, as of the end of the period covered by this Annual Report.
Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures wereeffective as of March 31, 2014.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting, as defined in Rule 13a-15(f) under the U.S. Securities Exchange Act of 1934. Our internal control overfinancial reporting is a process designed by, or under the supervision of, MUFG’s principal executive andprincipal financial officers, and effected by MUFG’s board of directors, management, and other personnel, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that:(i)pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransactions and dispositions of the assets of MUFG,(ii)

provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles, and that receipts andexpenditures of MUFG are being made only in accordance with authorizations of management anddirectors of MUFG, and(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use
or disposition of MUFG’s assets that could have a material effect on the financial statements.
Because of inherent limitations, internal control over financial reporting, no matter how well designed, may
not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions, or that the degree ofcompliance with the policies or procedures may deteriorate.
Our management excluded from its assessment of the effectiveness of our internal control over financial
reporting as of March 31, 2014, an assessment of internal control over financial reporting of Bank of Ayudhya
Public Company Limited, or Krungsri, and its subsidiaries. Krungsri and its subsidiaries became our subsidiaryon December 18, 2013, when the acquisition of a majority stake in Krungsri was completed by BTMU. The total
assets represented 1.6 % of MUFG’s consolidated total assets as of March 31, 2014. The results of operations ofKrungsri and its subsidiaries since the acquisition date were not material to MUFG for the fiscal year ended
March 31, 2014.
212

Our management evaluated the effectiveness of our internal control over financial reporting as of March 31,
2014 based on the criteria established in “Internal Control—Integrated Framework (1992)” issued by theCommittee of Sponsoring Organizations of the Treadway Commission. Based on the evaluation, management
has concluded that MUFG maintained effective internal control over financial reporting as of March 31, 2014.
The effectiveness of our internal control over financial reporting as of March 31, 2014 has been audited by
Deloitte Touche Tohmatsu LLC, an independent registered public accounting firm, as stated in its report,
presented on page 214.
Changes in Internal Control Over Financial Reporting
During the period covered by this Annual Report, there has been no change in our internal control overfinancial reporting that has materially affected or is reasonably likely to materially affect our internal control
over financial reporting.

213

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Mitsubishi UFJ Financial Group, Inc.
(Kabushiki Kaisha Mitsubishi UFJ Financial Group):
We have audited the internal control over financial reporting of Mitsubishi UFJ Financial Group, Inc.
(Kabushiki Kaisha Mitsubishi UFJ Financial Group) (“MUFG”) and subsidiaries (together, the “MUFG Group”)
as of March 31, 2014 based on the criteria established in Internal Control—Integrated Framework (1992) issued
by the Committee of Sponsoring Organizations of the Treadway Commission. As described in Management’s
Annual Report on Internal Control Over Financial Reporting, management excluded from its assessment theinternal control over financial reporting at Bank of Ayudhya Public Company Limited. (“Krungsri”) and its
subsidiaries, which were acquired on December 18, 2013 and whose financial statements constitute 1.6% of total
assets of the consolidated financial amounts as of March 31, 2014. The results of operations of Krungsri and its
subsidiaries since the acquisition date were not material to the MUFG Group for the year ended March 31, 2014.
Accordingly, our audit did not include the internal control over financial reporting at Krungsri and its
subsidiaries. The MUFG Group’s management is responsible for maintaining effective internal control overfinancial reporting and for its assessment of the effectiveness of internal control over financial reporting,included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our
responsibility is to express an opinion on the MUFG Group’s internal control over financial reporting based on
our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether effective internal control over financial reporting was maintained in all material respects. Our
audit included obtaining an understanding of internal control over financial reporting, assessing the risk that amaterial weakness exists, testing and evaluating the design and operating effectiveness of internal control basedon the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed by, or under the supervision of,
the company’s principal executive and principal financial officers, or persons performing similar functions, andeffected by the company’s board of directors, management, and other personnel to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financial statements in accordancewith generally accepted accounting principles, and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of thecompany’s assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including the possibility ofcollusion or improper management override of controls, material misstatements due to error or fraud may not be
prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal
control over financial reporting to future periods are subject to the risk that the controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
In our opinion, the MUFG Group maintained, in all material respects, effective internal control overfinancial reporting as of March 31, 2014, based on the criteria established in Internal Control—Integrated
Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
214

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board(United States), the accompanying consolidated balance sheets of the MUFG Group as of March 31, 2014, andthe related consolidated statements of income, comprehensive income, equity, and cash flows for the year ended
March 31, 2014 (all expressed in Japanese Yen) and our report dated July 18, 2014 expressed an unqualified
opinion on those financial statements.
/s/ Deloitte Touche Tohmatsu LLC
Tokyo, Japan
July 18, 2014

215

Item 16A. Audit Committee Financial Expert.
Our board of corporate auditors has determined that Mr. Hideo Kojima, a corporate auditor, is an “audit
committee financial expert” as defined in Item 16A. of Form 20-F and is “independent” as defined in the listing
standards of the New York Stock Exchange. Mr. Kojima has spent most of his professional career as a certified
public accountant in Japan, auditing Japanese corporations, including those registered with the U.S. Securities
and Exchange Commission. Mr. Kojima is an “outside corporate auditor” under Japanese law.
Item 16B. Code of Ethics.
We have adopted a code of ethics, which consists of internal rules named Principles of Ethics and Conduct,
compliance rules, compliance manual and rules of employment. Each of these rules applies to our principal
executive officer, principal financial officer, principal accounting officer and persons performing similarfunctions. A copy of the Principles of Ethics and Conduct and the sections of our compliance rules, compliancemanual and rules of employment relating to the “code of ethics” (as defined in paragraph (b) of Item 16B ofForm 20-F) is attached as Exhibit 11 to this Annual Report. For a detailed discussion of our current compliancestructure, see “Item 11. Quantitative and Qualitative Disclosures about Credit, Market and Other Risk—
Compliance.” No waivers of the Principles of Ethics and Conduct or the ethical framework and code of conduct,
as applicable, or the relevant sections of our compliance rules, compliance manual and rules of employment were
granted to our principal executive officer, principal financial officer, principal accounting officer, directors or
corporate auditors during the fiscal year ended March 31, 2014.
Item 16C. Principal Accountant Fees and Services.
Fees and Services of Deloitte Touche Tohmatsu LLC
The aggregate fees billed by Deloitte Touche Tohmatsu LLC, our independent registered public accounting
firm and its affiliates, for the fiscal years ended March 31, 2013 and 2014 are presented in the following table:
2013
2014
(in millions)Audit fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit-related fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥5,604426
308—¥6,029499
309
14

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥6,338¥6,851The description of our fees billed for each category described above is as follows:
Audit fees—Audit fees are primarily for annual audit of our financial statements, review of our semi-annual
condensed financial statements, statutory audit of our financial statements and audits of our subsidiary financial
statements and attestation services relating to the internal controls over financial reporting under Section 404 of
the Sarbanes-Oxley Act.
Audit-related fees—Audit-related fees primarily include accounting consultations, agreed upon procedures
on internal controls, employee benefit plan audit, and advisory services relating to the internal control reviews.
Tax fees—Tax fees relate primarily to tax compliance, including assistance with preparation of tax return
filings, tax advisory and tax planning services.
All other fees—All other fees primarily include fees for risk management and compliance advisory services.

216

Pre-Approval Policies and Procedures for Services by Deloitte Touche Tohmatsu LLC
Our board of corporate auditors performs the pre-approval function required by applicable SEC rules andregulations. Our board of corporate auditors has established pre-approval policies and procedures that MUFG and
its subsidiaries must follow before engaging Deloitte Touche Tohmatsu LLC to perform audit and permitted nonaudit services.
When MUFG or a subsidiary intends to engage Deloitte Touche Tohmatsu LLC to perform audit andpermitted non-audit services, it must make an application for pre-approval on either a periodic or case-by-casebasis.
‰

Periodic application is an application for pre-approval made each fiscal year for services that are
expected to be provided by Deloitte Touche Tohmatsu LLC during the next fiscal year.

‰

Case-by-case application is an application for pre-approval made on a case-by-case basis for services tobe provided by Deloitte Touche Tohmatsu LLC that are not covered by the periodic application.

Pre-approval is resolved in principle by our board of corporate auditors prior to engagement, although ifnecessary a full-time corporate auditor may consider any case-by-case application for pre-approval on behalf ofthe board of corporate auditors prior to the next scheduled board of corporate auditors meeting. Such decisions
made individually by a full-time corporate auditor are reported to and ratified by the board of corporate auditors
as appropriate at the next scheduled board of corporate auditors meeting.
Fees approved pursuant to the procedures described in paragraph 2-01(c)(7)(i)(C) of Regulation S-X, which
provides for an exception to the general requirement for pre-approval in certain circumstances, wereapproximately 0.2% for the fiscal year ended March 31, 2013 and less than 0.1% for the fiscal year ended
March 31, 2014.
Item 16D. Exemptions from the Listing Standards for Audit Committees.
In reliance upon the general exemption contained in Rule 10A-3(c)(3) under the U.S. Securities Exchange
Act of 1934, MUFG does not have an audit committee. Rule 10A-3 provides an exemption from the listing
standards of the New York Stock Exchange, or the NYSE, relating to audit committees for foreign companies
like MUFG that have a board of corporate auditors established pursuant to applicable Japanese law and Articles
of Incorporation. MUFG’s reliance on Rule 10A-3(c)(3) does not, in its opinion, materially adversely affect theability of its board of corporate auditors to act independently and to satisfy the other requirements of Rule 10A-3.

217

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.
Issuer Purchases of Common Stock

Total
Number of
SharesPurchased(1)Average Price
Paid per Share

Total
Number of
SharesPurchased
as Part of
Publicly
Announced
Plans or
Programs

April 1 to April 30, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May 1 to May 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
June 1 to June 30, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
July 1 to July 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
August 1 to August 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . .
September 1 to September 30, 2013 . . . . . . . . . . . . . . . . . . .
October 1 to October 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . .
November 1 to November 30, 2013 . . . . . . . . . . . . . . . . . . . .
December 1 to December 31, 2013 . . . . . . . . . . . . . . . . . . . .
January 1 to January 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . .
February 1 to February 28, 2014 . . . . . . . . . . . . . . . . . . . . . .
March 1 to March 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . .

5,429
6,606
3,637
7,590
4,838
4,577
5,030
5,627
11,586
6,601
4,928
6,068

¥623.35
679.24585.74652.03607.93617.23625.37636.10648.81
674.34607.82578.20

—
—
—
—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—
—
—
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

72,517633.15——

Maximum
Number of
Shares thatMay Yet Be
Purchased
Under thePlans or
Programs

Note:(1) All of the purchased shares were shares constituting less than one unit (100 shares) purchased from registered holders of such shares atthe current market price of those shares.

We did not make any purchases of our shares other than the above for the fiscal year ended March 31, 2014.
In connection with the UNBC’s stock bonus plan, 2,598,862 ADSs were purchased by the trustee of the
independent trust between April 1, 2013 and March 31, 2014. In the same period, 280,509 ADSs were purchasedby the trustee of the independent trust in connection with the BTMU Headquarters for the Americas stock bonus
plan. For descriptions of the UNBC’s stock bonus plan and the BTMU Headquarters for the Americas’ stockbonus plan, see “Item 6.B. Directors, Senior Management and Employees—Compensation.”
Item 16F. Change in Registrant’s Certifying Accountant.
None.
Item 16G. Corporate Governance.
The New York Stock Exchange, or the NYSE, allows NYSE-listed companies that are foreign private
issuers, such as MUFG, with certain exceptions, to follow home-country practices in lieu of the corporate
governance practices followed by U.S. companies pursuant to the NYSE’s Listed Company Manual. The
following sections summarize the significant differences between MUFG’s corporate governance practices andthose followed by U.S. listed companies under the NYSE’s Listed Company Manual.
1. A NYSE-listed U.S. company must have a majority of directors that meet the independence
requirements under Section 303A of the NYSE’s Listed Company Manual.
As of June 30, 2014, MUFG has four outside directors as members of its board of directors. Under theCompany Law of Japan, an “outside director” is defined as a director who has not served as an executive director(gyomu shikko torishimariyaku), executive officer (shikkoyaku), manager (shihainin) or any other type of
employee of the relevant company or any of its subsidiaries prior to his or her appointment.
218

For MUFG and other large Japanese companies employing a corporate governance system based on a boardof corporate auditors, the Company Law has no requirement for independent directors or similar requirementwith respect to directors. Tokyo Stock Exchange rules require listed companies, including MUFG, to identify atleast one individual who the company believes will unlikely have a conflict of interests with general shareholders
and have such individual serve as an independent director or corporate auditor.
For companies employing the corporate auditor system such as MUFG, the task of overseeing themanagement of the company is assigned to the corporate auditors as well as the board of directors. At least halfof the corporate auditors are required to be an “outside corporate auditor.”

2. A NYSE-listed U.S. company must have an audit committee composed entirely of independent
directors.
Under the Company Law, MUFG and other Japanese companies (excluding companies with committees
established pursuant to the Company Law) are not obliged to establish an audit committee.
As discussed above, MUFG employs a corporate auditor system as stipulated by the Company Law.
Accordingly, MUFG has established a board of corporate auditors consisting of corporate auditors with astatutory duty to audit MUFG directors’ performance of their professional duties and to review and report on themanner and results of the audit of MUFG’s financial statements, for the benefit of MUFG’s shareholders.
The Company Law requires companies having a board of corporate auditors, including MUFG, to elect atleast three corporate auditors through a resolution adopted at a general meeting of shareholders. At least half ofthe corporate auditors must be an “outside corporate auditor,” which is defined as a corporate auditor who has notserved as a director, account assistant, executive officer (shikkoyaku), manager (shihainin), or any other
employee of the relevant company or any of its subsidiaries.
As of June 30, 2014, MUFG had five corporate auditors, three of whom are outside corporate auditors.

3. A NYSE-listed U.S. company must have a compensation committee composed entirely of independent
directors.
Under the Company Law, MUFG and other Japanese companies (excluding companies with committees
established pursuant to the Company Law) are not obliged to establish a compensation committee.
MUFG has voluntarily established a nomination and compensation committee to support MUFG’s board of
directors. The nomination and compensation committee, a majority of which is comprised of outside directors,
deliberates matters relating to the appointment and dismissal of MUFG’s directors and the directors of MUFG’s
subsidiaries, the compensation framework of MUFG’s directors and the directors of MUFG’s subsidiaries, aswell as the compensation of MUFG’s top management and the top management of MUFG’s subsidiaries. The
nomination and compensation committee makes reports and proposals to the board of directors about importantmatters for deliberation and necessary improvement measures.
The maximum aggregate amounts of compensation for MUFG’s directors and corporate auditors areapproved at MUFG’s general meeting of shareholders. The amount and allocation of compensation for each
MUFG director are then proposed to, and voted upon by, the board of directors. The amount and allocation ofcompensation for each MUFG corporate auditor are determined through discussions and agreement among
MUFG’s corporate auditors.
219

4. A NYSE-listed U.S. company must have a nominating or corporate governance committee composed
entirely of independent directors.
Under the Company Law, MUFG and other Japanese companies (excluding companies with committees
established pursuant to the Company Law) are not obliged to establish a nominating or corporate governancecommittee.
MUFG’s directors are elected or dismissed at MUFG’s general meeting of shareholders in accordance withthe relevant provisions of the Company Law and MUFG’s articles of incorporation. MUFG’s corporate auditors
are also elected or dismissed at MUFG’s general meeting of shareholders. A proposal by MUFG’s board of
directors to elect a corporate auditor needs the consent of its board of corporate auditors. MUFG’s board ofcorporate auditors is empowered to adopt a resolution requesting that MUFG’s directors submit a proposal forelection of a corporate auditor to MUFG’s general meeting of shareholders.
The corporate auditors have the right to state their opinion concerning the election or dismissal of acorporate auditor at MUFG’s general meeting of shareholders.
5. A NYSE-listed U.S. company must obtain shareholder approval with respect to any equity
compensation plan.
Under the Company Law, a public company seeking to issue “stock acquisition rights” (granting the holder
thereof the right to acquire from the issuer shares of its stock at a prescribed price) must obtain the approval of its
board of directors, not its shareholders.
When stock acquisition rights are issued under terms and conditions that are especially favorable to therecipients thereof, such issuance must be approved by a “special resolution” of a general meeting of shareholders.
Under MUFG’s articles of incorporation, the quorum for a special resolution is at least one-third of the total
outstanding voting rights, and the approval of at least two-thirds of the voting rights represented at the relevant
general meeting of shareholders of MUFG is required to pass a special resolution.
6. A NYSE-listed U.S. company must adopt and disclose Corporate Governance Guidelines and a Code ofBusiness Conduct and Ethics, and it must also disclose any exemptions granted to directors or executives.
Under the Company Law, the Financial Instruments and Exchange Law of Japan and applicable stock
exchange rules, Japanese companies, including MUFG, are not obliged to adopt and disclose corporate
governance guidelines or a code of business conduct and ethics for directors, officers and employees. In order tofurther enhance its disclosure, however, MUFG has decided to disclose the details of its corporate governance inits periodic reports and other disclosure documents.
MUFG has also adopted a code of ethics, compliance rules and a compliance manual which it believes arecompliant with the requirements for a Code of Ethics as set forth under Section 406 of the U.S. Sarbanes-Oxley
Act. MUFG has disclosed the relevant sections of its code of ethics, compliance rules and compliance manual as
an exhibit to this Annual Report. No exemptions from MUFG’s code of ethics, compliance rules or compliancemanual were granted to its directors or executives during the fiscal year ended March 31, 2014.
7. A NYSE-listed U.S. company must hold regularly scheduled executive sessions where participants arelimited to non-management directors.
Under the Company Law, Japanese corporations are not obliged to hold executive sessions whereparticipants are limited to non-management directors. Such executive sessions are also not required under
MUFG’s internal corporate governance rules.
Item 16H. Mine Safety Disclosure.
Not applicable.
220

PART III
Item 17. Financial Statements.
In lieu of responding to this item, we have responded to Item 18 of this Annual Report.
Item 18. Financial Statements.
The information required by this item is set forth in our consolidated financial statements starting on
page F-1 of this Annual Report.
Item 19. Exhibits.
ExhibitDescription

1(a)Articles of Incorporation of Mitsubishi UFJ Financial Group, Inc., as amended on June 27,
2013. (English translation)*1(b)Board of Directors Regulations of Mitsubishi UFJ Financial Group, Inc., as amended on
December 24, 2010. (English translation)**1(c)Corporation Meetings Regulations of Mitsubishi UFJ Financial Group, Inc., as amended on
December 24, 2010. (English translation)**1(d)Share Handling Regulations of Mitsubishi UFJ Financial Group, Inc., as amended on June 26,
2009. (English Translation)***2(a)Form of American Depositary Receipt.****

2(b)Form of Deposit Agreement, amended and restated as of December 22, 2004, among Mitsubishi
Tokyo Financial Group, Inc. (subsequently renamed Mitsubishi UFJ Financial Group, Inc.), The
Bank of New York Mellon and the holders from time to time of American Depositary Receipts
issued thereunder.****

8

Subsidiaries of the Company—see “Item 4.C. Information on the Company—Organizational
Structure.”11

Principles of Ethics and Conduct, Compliance Rules, Compliance Manual, and Rules of
Employment of Mitsubishi UFJ Financial Group, Inc. applicable to its principal executive
officer, principal financial officer, principal accounting officer and persons performing similarfunctions. (English translation of relevant sections)*

12

Certifications required by Rule 13a-14(a) (17 CFR 240.13a-14(a)) or Rule 15d-14(a)(17 CFR 240.15d-14(a)).

13

Certifications required by Rule 13a-14(b) (17 CFR 240.13a-14(b)) or Rule 15d-14(b)(17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code
(18 U.S.C. 1350).

101.INSXBRL Instance Document

101.SCHXBRL Schema Document

101.CALXBRL Calculation Linkbase Document

101.DEFXBRL Definition Linkbase Document

101.LABXBRL Label Linkbase Document

101.PREXBRL Presentation Linkbase Document

Notes:*
Incorporated by reference to our annual report on Form 20-F (File No. 000-54189) field on July 22, 2013.
** Incorporated by reference to our annual report on Form 20-F (File No. 000-54189) field on July 28, 2011.
*** Incorporated by reference to our annual report on Form 20-F (File No. 333-98061-99) filed on September 2, 2009.
**** Incorporated by reference to our annual report on Form 20-F (File No. 000-54189) field on July 23, 2012.

221

SELECTED STATISTICAL DATA
Due to close integration of our foreign and domestic activities, it is difficult to make a precise determinationof the assets, liabilities, income and expenses of our foreign operations. The foreign operations as presented
include the business conducted by overseas subsidiaries and branches, and the international business principally
conducted by the several international banking-related divisions headquartered in Japan. Our management
believes that the results appropriately represent our domestic and foreign activities.

A-1

I.

Distribution of Assets, Liabilities and Equity; Interest Rates and Interest Differential

Average Balance Sheets, Interest and Average Rates
The following table shows our average balances, interest and average interest rates for the fiscal years ended
March 31, 2012, 2013 and 2014. Average balances are generally based on a daily average while a month-end
average is used for certain average balances when it is not practicable to obtain applicable daily averages. The
average balances determined by such methods are considered to be representative of our operations.

Averagebalance
Assets:Interest-earning assets:
Interest-earning deposits inother banks:
Domestic . . . . . . . . . . . . ¥Foreign . . . . . . . . . . . . .

2012
Interest Average
incomerate

Fiscal years ended March 31,
2013
Average
Interest Averagebalance
incomerate(in millions, except percentages)

Averagebalance

2014
Interest Average
incomerate

1,866,249 ¥
4,976,720

2,412
37,551

0.13% ¥
0.75

2,855,051 ¥
3,763,476

3,964
23,3400.14% ¥ 10,321,128 ¥
0.62
6,520,619

10,99036,066

0.11%
0.55

Total . . . . . . . . . . .

6,842,969

39,963

0.58

6,618,527

27,3040.41

16,841,747

47,0560.28

Call loans, funds sold, andreceivables under resaleagreements and securities
borrowing transactions:
Domestic . . . . . . . . . . . .
Foreign . . . . . . . . . . . . .

3,409,929
8,221,074

5,299
88,0890.16
1.07

3,133,225
6,972,640

3,456
53,3760.11
0.77

958,054
9,421,311

2,506
59,2270.26
0.63

Total . . . . . . . . . . .

11,631,003

93,3880.80

10,105,865

56,8320.56

10,379,365

61,7330.59

Trading account assets:
Domestic . . . . . . . . . . . .
Foreign . . . . . . . . . . . . .

5,317,152
14,985,875

44,358271,384

0.83
1.81

5,780,004
18,504,836

45,367349,4210.78
1.89

5,211,819
22,827,441

40,044367,371

0.77
1.61

Total . . . . . . . . . . .

20,303,027

315,742

1.56

24,284,840

394,788

1.63

28,039,260

407,415

1.45

Investment securities(1):Domestic . . . . . . . . . . . .
Foreign(2) . . . . . . . . . . . .

54,336,768
3,838,534

306,903244,863

0.56
6.38

55,159,363
4,617,964

259,420
111,4070.47
2.41

49,152,403
5,166,347

222,644
119,693

0.45
2.32

Total . . . . . . . . . . .

58,175,302

551,766

0.95

59,777,327

370,8270.62

54,318,750

342,337

0.63

Loans(3):Domestic . . . . . . . . . . . .
Foreign . . . . . . . . . . . . .

65,926,637 1,041,921
21,300,209
553,176

1.58
2.60

67,831,943
25,205,754

964,031
613,739

1.42
2.43

69,443,921
33,153,305

900,085763,657

1.30
2.30

Total . . . . . . . . . . .

87,226,846 1,595,097

1.83

93,037,697 1,577,770

1.70

102,597,226 1,663,742

1.62

Total interest-earning assets:
Domestic . . . . . . . . . . . . 130,856,735 1,400,893
Foreign . . . . . . . . . . . . . 53,322,412 1,195,063

1.07
2.24

134,759,586 1,276,238
59,064,670 1,151,283

0.95
1.95

135,087,325 1,176,269
77,089,023 1,346,014

0.87
1.75

Total . . . . . . . . . . . 184,179,147 2,595,956

1.41

193,824,256 2,427,521

1.25

212,176,348 2,522,283

1.19

Non-interest-earning assets:
Cash and due from banks . . .
Other non-interest-earning
assets . . . . . . . . . . . . . . . . .
Allowance for credit
losses . . . . . . . . . . . . . . . . .
Total non-interestearning assets . .

2,651,846

3,131,561

3,441,312

26,235,174

30,016,918

33,369,623(1,230,778)(1,289,950)(1,257,539)

27,656,242

31,858,529

35,553,396

Total assets . . . . . . . . . . . . . . . . . ¥211,835,389¥225,682,785¥247,729,744

Notes:(1) Tax-exempt income of tax-exempt investment securities has not been calculated on a tax equivalent basis because the effect of suchcalculation would not be material.
(2) Interest income on foreign activities for the fiscal year ended March 31, 2012 includes a gain of ¥139,320 million on conversion rateadjustment of Morgan Stanley’s convertible preferred stock. Exclusive of the gain associated with the conversion, the average rate would
have been lower at 2.90% rather than 6.38% for the fiscal year ended March 31, 2012.
(3) Average balances on loans outstanding include all nonaccrual and restructured loans. See “III. Loan Portfolio.” The amortized portion of
net loan origination fees (costs) is included in interest income on loans, which accounts for an insignificant amount of an adjustment to
the yields.

A-2

Averagebalance

2012
Interest
expenseLiabilities and equity:
Interest-bearing liabilities:
Deposits:
Domestic . . . . . . . . ¥ 97,953,258 ¥ 101,673
Foreign . . . . . . . . .
19,678,674
127,185

Fiscal years ended March 31,
2013
Average Average
Interest Averageratebalanceexpenserate(in millions, except percentages)

2014Interest
expenseAveragerate

0.10% ¥ 99,884,032 ¥ 77,708
0.65
23,436,714
134,359

0.08% ¥102,854,486 ¥ 65,358
0.57
30,453,791
161,297

0.06%
0.53

Averagebalance

Total . . . . . . .

117,631,932

228,858

0.19

123,320,746

212,067

0.17

133,308,277

226,655

0.17

Call money, funds
purchased, andpayables under
repurchaseagreements andsecurities lendingtransactions:
Domestic . . . . . . . .
Foreign . . . . . . . . .

12,456,171
9,055,602

34,14860,9560.27
0.67

16,284,255
7,948,167

35,03028,7930.22
0.36

18,576,215
9,871,891

28,703
17,4670.15
0.18

Total . . . . . . .

21,511,773

95,1040.44

24,232,422

63,8230.26

28,448,106

46,1700.16

Due to trust account—
Domestic . . . . . . . . . .

608,061647

0.11

590,150665

0.11

506,466

519

0.10

Other short-termborrowings andtrading accountliabilities:
Domestic . . . . . . . .
Foreign . . . . . . . . .

10,558,305
2,552,810

39,42522,2320.37
0.87

10,247,601
3,153,184

35,92816,4140.35
0.52

10,177,337
4,332,788

34,37923,1220.34
0.53

Total . . . . . . .

13,111,115

61,6570.47

13,400,785

52,3420.39

14,510,125

57,501

0.40

Long-term debt:
Domestic . . . . . . . .
Foreign . . . . . . . . .

9,340,803
3,216,885

159,553
94,3201.71
2.93

8,968,836
2,886,502

135,295
92,226

1.51
3.20

9,763,504
2,876,831

126,686
103,441

1.30
3.60

Total . . . . . . .

12,557,688

253,873

2.02

11,855,338

227,521

1.92

12,640,335

230,127

1.82

Total interest-bearing
liabilities:
Domestic . . . . . . . . 130,916,598
Foreign . . . . . . . . .
34,503,971

335,446
304,693

0.26
0.88

135,974,874
37,424,567

284,626
271,792

0.21
0.73

141,878,008
47,535,301

255,645
305,3270.18
0.64

640,1390.39

173,399,441

556,418

0.32

189,413,309

560,9720.30¥1,961,311

0.89%

Total . . . . . . .

165,420,569

Non-interest-bearing
liabilities . . . . . . . . . . . . .

37,820,510

43,038,814

47,633,337

Total equity . . . . . . . . . . . . .

8,594,310

9,244,530

10,683,098

Total liabilities andequity . . . . . . . . . . . . . . . . ¥211,835,389¥225,682,785¥247,729,744

Net interest income andinterest rate spread . . . . .
Net interest income as apercentage of totalinterest-earning
assets . . . . . . . . . . . . . . . .

¥1,955,817

1.02%¥1,871,103

1.06%

0.93%

0.97%

0.92%

The percentage of total average assets attributable to foreign activities was 29.5%, 31.5% and 36.5%,
respectively, for the fiscal years ended March 31, 2012, 2013 and 2014.
The percentage of total average liabilities attributable to foreign activities was 30.1%, 32.1% and 37.2%,
respectively, for the fiscal years ended March 31, 2012, 2013 and 2014.

A-3

Analysis of Net Interest Income
The following table shows changes in our net interest income by changes in volume and by changes in rate
for the fiscal year ended March 31, 2013 compared to the fiscal year ended March 31, 2012, and the fiscal year
ended March 31, 2014 compared to the fiscal year ended March 31, 2013.
Fiscal year ended March 31, 2012
Fiscal year ended March 31, 2013
versusversusfiscal year ended March 31, 2013
fiscal year ended March 31, 2014
Increase (decrease)
Increase (decrease)
due to changes indue to changes inVolume(1)Rate(1)
Net change
Volume(1)Rate(1)
Net change(in millions)Interest income:Interest-earning deposits in otherbanks:
Domestic . . . . . . . . . . . . . . . . . . . . ¥ 1,361 ¥191 ¥ 1,552 ¥ 8,148
Foreign . . . . . . . . . . . . . . . . . . . . .
(8,212)(5,999)(14,211)
15,488¥(1,122) ¥ 7,026(2,762)
12,726

Total . . . . . . . . . . . . . . . . . . .

(6,851)(5,808)(12,659)

23,636(3,884)19,752

Call loans, funds sold, and receivables
under resale agreements andsecurities borrowing transactions:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . .

(403)(12,051)(1,440)(22,662)(1,843)(34,713)(3,505)
16,524

2,555(10,673)

(950)
5,851

Total . . . . . . . . . . . . . . . . . . .

(12,454)(24,102)(36,556)

13,019(8,118)

4,901

Trading account assets:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . .

3,725
66,029(2,716)
12,0081,009
78,037(4,382)
74,236(941)(56,286)(5,323)
17,950Total . . . . . . . . . . . . . . . . . . .

69,754

9,292

79,04669,854(57,227)

12,627

Domestic . . . . . . . . . . . . . . . . . . . .
Foreign(3) . . . . . . . . . . . . . . . . . . . .

4,582
42,110(52,065)(175,566)(47,483)(133,456)(27,473)
12,836(9,303)(4,550)(36,776)
8,286

Total . . . . . . . . . . . . . . . . . . .

46,692(227,631)(180,939)(14,637)(13,853)(28,490)

Loans:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . .

29,436
96,705(107,326)(36,142)(77,890)
60,56322,481
184,593(86,427)(34,675)(63,946)
149,918

Total . . . . . . . . . . . . . . . . . . .

126,141(143,468)(17,327)

207,074(121,102)

85,972

Total interest income:Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . .

38,701
184,581(163,356)(228,361)(124,655)(43,780)(4,731)
303,677(95,238)(108,946)(99,969)
194,731

Total . . . . . . . . . . . . . . . . . . .

¥223,282¥(391,717) ¥(168,435) ¥298,946

Investment securities(2):¥(204,184) ¥ 94,762

Notes:(1) Volume/rate variance is allocated based on the percentage relationship of changes in volume and changes in rate to the total “netchange.”(2) Tax-exempt income of tax-exempt investment securities has not been calculated on a tax equivalent basis because the effect of suchcalculation would not be material.
(3) Interest income on foreign activities includes a gain of ¥139,320 million on conversion rate adjustment of Morgan Stanley’s convertible
preferred stock for the fiscal year ended March 31, 2012. Exclusive of the effect of the conversion, the increase due to changes in volume
was ¥25,432 million and the decrease due to changes in rate was ¥19,568 million for the fiscal year ended March 31, 2013 compared to
the fiscal year ended March 31, 2012.

A-4

Fiscal year ended March 31, 2012
Fiscal year ended March 31, 2013
versusversusfiscal year ended March 31, 2013
fiscal year ended March 31, 2014
Increase (decrease)
Increase (decrease)
due to changes indue to changes inVolume(1)Rate(1)
Net change
Volume(1)Rate(1)
Net change(in millions)Interest expense:
Deposits:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

¥ 1,967
22,564

Total . . . . . . . . . . . . . . . . . . . .

24,531(41,322)(16,791)

40,038(25,450)

14,588Call money, funds purchased, andpayables under repurchaseagreements and securities lendingtransactions:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

9,166(6,734)(8,284)(25,429)882(32,163)

4,468
5,824

(10,795)(17,150)(6,327)(11,326)

Total . . . . . . . . . . . . . . . . . . . .

2,432(33,713)(31,281)

10,292(27,945)(17,653)

Due to trust account—Domestic . . . . . .

(19)

37

18

(89)

(57)

(146)

Other short-term borrowings and trading
account liabilities:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

(1,137)4,453(2,360)(10,271)(3,497)(5,818)

(245)
6,285

(1,304)423(1,549)6,708

Total . . . . . . . . . . . . . . . . . . . .

3,316(12,631)(9,315)

6,040

(881)

5,159

Long-term debt:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

(6,165)(10,151)(18,093)
8,057(24,258)(2,094)

11,337(310)(19,946)
11,525(8,609)
11,215

Total . . . . . . . . . . . . . . . . . . . .

(16,316)(10,036)(26,352)

11,027(8,421)

2,606

Total interest expense:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

3,812
10,132(54,632)(43,033)(50,820)(32,901)

17,72349,585(46,704)(16,050)(28,981)
33,535

Total . . . . . . . . . . . . . . . . . . . .

¥ 13,944¥ (97,665) ¥(83,721) ¥ 67,308¥ (62,754) ¥4,554

Net interest income:Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

¥ 34,889
174,449¥(108,724) ¥(73,835) ¥ (22,455) ¥ (48,533) ¥ (70,988)(185,328) (10,879) 254,092(92,896) 161,196

Total . . . . . . . . . . . . . . . . . . . .

¥209,338¥(294,052) ¥(84,714) ¥231,637¥ (25,932) ¥(23,965) ¥ 2,252 ¥ (14,602) ¥ (12,350)(15,390)
7,174
37,786(10,848)
26,938¥(141,429) ¥ 90,208

Note:(1) Volume/rate variance is allocated based on the percentage relationship of changes in volume and changes in rate to the total “netchange.”A-5

II. Investment Portfolio
The following table shows information as to the value of our investment securities available-for-sale andbeing held-to-maturity at March 31, 2012, 2013 and 2014:
At March 31,
2012

Amortized
cost

Fair value

2013
Net
unrealized
gains(losses)

Amortized
cost

Fair value

2014
Net
unrealized
gains(losses)

Amortized
cost

Fair valueNet
unrealized
gains(losses)(in millions)

Securities available-forsale:
Domestic:
Japanese national
government andJapanese government
agency bonds . . . . . . ¥48,736,276 ¥48,882,662 ¥ 146,386 ¥49,159,827 ¥49,479,954 ¥ 320,127 ¥41,388,592 ¥41,589,009 ¥ 200,417
Corporate bonds . . . . . 2,227,855 2,294,537
66,682
1,644,555 1,696,529
51,974 1,229,167 1,264,960
35,793Marketable equity
securities . . . . . . . . . 2,305,916 3,427,722 1,121,806
2,220,507 4,092,121 1,871,614 2,434,946 4,812,596 2,377,650
Other securities . . . . . .
494,185
500,4546,269
551,447
561,082
9,635
592,682
600,471
7,789
Total domestic . . . . . 53,764,232 55,105,375 1,341,143
Foreign:
U.S. Treasury and other
U.S. government
agencies bonds . . . .
Other governments andofficial institutions
bonds . . . . . . . . . . . .
Mortgage-backed
securities . . . . . . . . .
Other securities . . . . . .
Total foreign . . . . . .

53,576,336 55,829,686 2,253,350 45,645,387 48,267,036 2,621,649

546,813551,825

5,012

204,330

207,871

3,541

485,565

480,470(5,095)406,551

419,40312,852

497,174

508,425

11,251

786,616

790,951

4,335

1,182,554
468,580

1,193,627
470,171

11,073
1,591

1,426,238
844,092

1,455,246
842,841

29,008 1,205,344(1,251) 1,178,728

1,165,948
1,181,247(39,396)
2,519

2,604,498

2,635,026

30,5282,971,834

3,014,383

42,5493,618,616(37,637)

3,656,253

Total . . . . . . . . . . ¥56,368,730 ¥57,740,401 ¥1,371,671 ¥56,548,170 ¥58,844,069 ¥2,295,899 ¥49,301,640 ¥51,885,652 ¥2,584,012
Securities being held-tomaturity:
Domestic:
Japanese national
government andJapanese government
agency bonds . . . . . . ¥Other securities . . . . . .
Total domestic . . . . .

590,147 ¥
43,709594,517 ¥
43,7894,370 ¥
80

232,881 ¥600

234,764 ¥600

1,883 ¥—

214,968 ¥400

215,838 ¥
400

870
—

633,856

638,306

4,450

233,481

235,364

1,883

215,368

216,238

870

Foreign:
U.S. Treasury and other
U.S. government
agencies bonds . . . .
Other governments andofficial institutions
bonds . . . . . . . . . . . .
Other securities . . . . . .

141,810

142,740930

40,41441,808

1,394

3,166

4,265

1,099

485,061
1,124,641

487,653
1,161,990

2,592
37,349243,901
1,613,368

244,916
1,665,982

1,015
52,61418,9252,469,523

18,9252,495,699—
26,176

Total foreign . . . . . .

1,751,512

1,792,383

40,871

1,897,683

1,952,706

55,0232,491,614

2,518,889

Total . . . . . . . . . . ¥ 2,385,368 ¥ 2,430,689 ¥

45,321 ¥ 2,131,164 ¥ 2,188,070 ¥

56,906 ¥ 2,706,982 ¥ 2,735,127 ¥

27,27528,145

Nonmarketable equity securities presented in Other investment securities in the accompanying consolidated
financial statements were primarily carried at cost of ¥876,333 million, ¥864,052 million and ¥711,416 million,
at March 31, 2012, 2013 and 2014, respectively. The corresponding fair values at those dates were not readily
determinable. Investment securities held by certain subsidiaries subject to specialized industry accounting
principles for investment companies and brokers and dealers presented in Other investment securities werecarried at fair value of ¥33,432 million, ¥25,900 million and ¥26,201 million, at March 31, 2012, 2013 and 2014,
respectively.

A-6

The following table presents the book values, maturities and weighted average yields of investment
securities available-for-sale and being held-to-maturity, excluding equity securities, at March 31, 2014. Weighted
average yields are calculated based on amortized cost. Yields on tax-exempt obligations have not been calculated
on a tax equivalent basis because the effect of such calculation would not be material:
Maturities within
one yearAmountYield
Securities available-for-sale:
Domestic:
Japanese national government
and Japanese government
agency bonds . . . . . . . . . . . ¥14,937,054
Corporate bonds . . . . . . . . . .
230,318
Other securities . . . . . . . . . . .
288,018

Total foreign . . . . . . . . .

0.43% ¥5,505,150
0.83
200,849
1.01
71,743

0.69% ¥1,567,526
0.63
29,7920.65
22,353

1.78% ¥41,589,009
2.13
1,264,960
1.38
600,471

0.39%
0.92
0.72

0.10

20,601,637

0.45

5,777,742

0.69

1,619,671

1.78

43,454,440

0.41

30,3132.13

304,1111.23

146,046

1.64

—

—

480,470

1.41

213,086

1.41

338,017

2.44

234,535

2.71

5,313

4.82

790,9512.26

215
200,118

4.30
1.58

4,502
529,324

2.50
1.99

67,592
189,079

1.95
1.76

1,093,639
238,091

2.46
2.04

1,165,948
1,156,612

2.43
1.89

443,732

1.53

1,175,954

1.93

637,252

2.09

1,337,043

2.39

3,593,981

2.08

Total . . . . . . . . . . . . . . ¥15,899,122
Securities being held-tomaturity:
Domestic:
Japanese national government
and Japanese government
agency bonds . . . . . . . . . . . ¥Other securities . . . . . . . . . . .
Total domestic . . . . . . . .
Foreign:
U.S. Treasury and other U.S.
government agencies
bonds . . . . . . . . . . . . . . . . .
Other governments andofficial institutions
bonds . . . . . . . . . . . . . . . . .
Other securities . . . . . . . . . . .
Total foreign . . . . . . . . .
Total . . . . . . . . . . . . . . ¥Total
AmountYield

0.08% ¥19,579,279
1.32
804,001
0.47
218,357

Total domestic . . . . . . . . 15,455,390
Foreign:
U.S. Treasury and other U.S.
government agencies
bonds . . . . . . . . . . . . . . . . .
Other governments andofficial institutions
bonds . . . . . . . . . . . . . . . . .
Mortgage-backed
securities . . . . . . . . . . . . . .
Other securities . . . . . . . . . . .

Maturities after
Maturities after
one year but
five years but
Maturities after
within five years
within ten years
ten years
AmountYield Amount Yield Amount Yield(in millions, except percentages)

0.14% ¥21,777,591

0.53% ¥6,414,994

0.83% ¥2,956,714

190,011—

0.49% ¥—

24,957400

0.49% ¥
0.75

—
—

—% ¥
—

—
—

—% ¥
—

214,968
400

0.49%
0.75

190,0110.49

25,357

0.49

—

—

—

—

215,368

0.49

—

—

—

—

3,166

8.31

—

—

3,166

8.31

18,925
5,148

6.72
1.22

—
51,760—1.48—
1,400,596

—
1.11

—
1,012,019—
2.04

18,9252,469,523

6.72
1.50

24,073

5.54

51,7601.48

1,403,762

1.13

1,012,019

2.04

2,491,614

214,084

1.06% ¥

77,117

1.15% ¥1,403,762

1.13% ¥1,012,019

2.07% ¥47,048,421

2.04% ¥ 2,706,982

Excluding U.S. Treasury and other U.S. government agencies bonds and Japanese national government
bonds, none of the individual issuers held in our investment securities portfolio exceeded 10% of theconsolidated total Mitsubishi UFJ Financial Group shareholders’ equity at March 31, 2014.

A-7

0.54%

1.55
1.47%

III. Loan Portfolio
The following table shows our loans outstanding, before deduction of allowance for credit losses, bydomicile and industry of the borrower at March 31 of each of the five fiscal years ended March 31, 2014.
Classification of loans by industry is based on the industry segment loan classification as defined by the Bank ofJapan for regulatory reporting purposes and is not necessarily based on the use of proceeds:
2010

2011

At March 31,
2012(in millions)

2013

2014

Domestic:
Manufacturing . . . . . . . . . . . . . . ¥12,027,795 ¥11,248,033 ¥11,451,720 ¥11,767,352 ¥ 11,540,753
Construction . . . . . . . . . . . . . . .
1,427,933
1,280,899
1,155,926
1,056,276
980,877
Real estate . . . . . . . . . . . . . . . . .
12,261,588
11,660,798
11,035,029
11,143,777
10,989,562
Services . . . . . . . . . . . . . . . . . . .
3,714,148
3,417,689
3,239,688
2,881,666
2,693,561
Wholesale and retail . . . . . . . . .
8,597,192
8,443,580
8,492,234
8,330,553
8,475,143
Banks and other financial
institutions(1) . . . . . . . . . . . . .
4,159,603
3,421,419
3,511,055
3,622,021
3,985,106
Communication andinformation services . . . . . . .
1,339,753
1,249,272
1,284,585
1,314,505
1,443,466
Other industries . . . . . . . . . . . . .
9,393,031
8,410,092
10,390,191
12,191,566
13,496,763
Consumer . . . . . . . . . . . . . . . . . 19,096,832
18,420,864
17,636,553
17,132,396
16,921,352
Total domestic . . . . . . . . . .
72,017,875
67,552,646
68,196,981
69,440,112
70,526,583
Foreign:
Governments and official
institutions . . . . . . . . . . . . . . .
490,376
516,637
554,933
673,548
811,475
Banks and other financial
institutions(1) . . . . . . . . . . . . .
3,900,267
4,466,126
5,871,731
7,258,9789,792,255
Commercial and industrial . . . .
13,794,584
13,134,725
15,693,487
18,738,731
24,533,816
Other . . . . . . . . . . . . . . . . . . . . .
2,082,532
1,934,712
2,072,194
2,601,338
4,872,372
Total foreign . . . . . . . . . . .
20,267,759
20,052,200
24,192,345
29,272,595
40,009,918
Total . . . . . . . . . . . . .
92,285,634
87,604,846
92,389,326
98,712,707
110,536,501
Unearned income, unamortizedpremiums—net and deferred loan
fees—net . . . . . . . . . . . . . . . . . . . .
(99,724)(102,871)(91,083)(122,478)(260,090)
Total(2) . . . . . . . . . . . . ¥92,185,910 ¥87,501,975 ¥92,298,243 ¥98,590,229 ¥110,276,411
Notes:(1) Loans to the so-called non-bank finance companies are generally included in “Banks and other financial institutions.” Non-bank financecompanies are primarily engaged in consumer lending, factoring and credit card businesses.
(2) The above table includes loans held for sale of ¥102,268 million, ¥65,162 million, ¥46,634 million, ¥35,261 million and ¥46,635 million
at March 31, 2010, 2011, 2012, 2013 and 2014, respectively, which are carried at the lower of cost or fair value.

A-8

Maturities and Sensitivities of Loans to Changes in Interest Rates
The following table shows the maturities of our loan portfolio at March 31, 2014:
One year or lessMaturity
One to five years Over five years(in millions)¥ 7,011,961
676,176
2,471,744
1,221,450
5,852,693
2,422,036¥ 3,571,732
264,227
4,260,429
1,067,701
2,074,391
1,388,374

437,430
9,933,598
2,206,736

Total Domestic . . . . . . . . . . . . . . . . . .

Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . .
Communication and information
services . . . . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

Total

957,060
40,474
4,257,389
404,410548,059
174,696¥ 11,540,753
980,877
10,989,562
2,693,561
8,475,143
3,985,106

539,569
2,003,841
3,554,048

466,467
1,559,324
11,160,568

1,443,466
13,496,763
16,921,352

32,233,824

18,724,312

19,568,447

70,526,583

Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,112,594

15,930,407

8,966,917

40,009,918

Total . . . . . . . . . . . . . . . . . . . . . .

¥47,346,418¥34,654,719¥28,535,364¥110,536,501

The above loans due after one year which had predetermined interest rates and floating or adjustable interest
rates at March 31, 2014 are shown below:
Domestic

Foreign(in millions)

Total

Predetermined rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating or adjustable rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,634,415
26,658,344¥ 3,176,182
21,721,142¥14,810,597
48,379,486

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥38,292,759¥24,897,324¥63,190,083

Nonaccrual, Past Due and Restructured Loans
We generally discontinue the accrual of interest income on loans when substantial doubt exists as to the fulland timely collection of either principal or interest, when principal or interest is contractually past due one monthor more with respect to loans within all classes of the Commercial segment, three months or more with respect toloans within the Card, MUAH, and Krungsri segments, and six months or more with respect to loans within the
Residential segment.
Generally, accruing loans that are modified in a troubled debt restructuring (“TDR”) remain as accruingloans subsequent to the modification, and nonaccrual loans remain as nonaccrual. However, if a nonaccrual loan
has been restructured as a TDR, the borrower is not delinquent under the restructured terms, and demonstrates
that its financial condition has improved, we may reclassify the loan to accrual status. This determination is
generally performed at least once a year through a detailed internal credit rating review process. Once a
restructured nonaccrual loan is deemed to be a TDR, we will continue to designate the loan as a TDR even if theloan is reclassified to accrual status.

A-9

The following table shows the distribution of our nonaccrual loans, restructured loans and accruing loans
which are contractually past due 90 days or more as to principal or interest payments at March 31 of each of thefive fiscal years ended March 31, 2014, based on the domicile and type of industry of the borrowers:
2010

2011

At March 31,
2012(in millions)

2013

2014

Nonaccrual loans:
Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 111,235 ¥ 137,987 ¥ 200,074 ¥ 213,181 ¥ 167,962
Construction . . . . . . . . . . . . . . . . . . . . . . . . . .
33,44948,47940,09837,53030,202
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . .
214,367
152,317
127,824
205,959
154,766
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
79,51776,59786,015
87,10372,851Wholesale and retail . . . . . . . . . . . . . . . . . . . .
135,523
172,712
237,977
250,241
212,356
Banks and other financial institutions . . . . . . .
2,322
7,238
7,802
13,993
7,234
Communication and information services . . .
73,61533,19833,41832,125
24,956
Other industries . . . . . . . . . . . . . . . . . . . . . . . .
116,741
37,33549,212
43,58536,861
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . .
355,040
321,823
288,402269,641
227,476
Total domestic . . . . . . . . . . . . . . . . . . . . . 1,121,809
987,686 1,070,822 1,153,358
934,664
Foreign:
Governments and official institutions . . . . . . .
70,52962,68393
66
43
Banks and other financial institutions . . . . . . .
19,88021,452
20,18821,81424,091
Commercial and industrial . . . . . . . . . . . . . . .
135,62273,70772,75087,62887,808Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21,16923,651
25,982
32,247
68,840Total foreign . . . . . . . . . . . . . . . . . . . . . .
247,200
181,493
119,013
141,755
180,782
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,369,009 ¥1,169,179 ¥1,189,835 ¥1,295,113 ¥1,115,446
Restructured loans:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 565,008 ¥ 800,620 ¥ 830,853 ¥ 847,728 ¥ 718,027
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
47,18438,93092,276138,119
153,204
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 612,192 ¥ 839,550 ¥ 923,129 ¥ 985,847 ¥ 871,231
Accruing loans contractually past due 90 days ormore:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥Foreign(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥25,871 ¥547
26,418 ¥55,549 ¥199
55,748 ¥

65,446 ¥131
65,577 ¥41,216 ¥328
41,544 ¥47,759961
48,720Total(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,007,619 ¥2,064,477 ¥2,178,541 ¥2,322,504 ¥2,035,397
Notes:(1) Foreign accruing loans contractually past due 90 days or more do not include ¥25,425 million, ¥12,827 million, ¥10,736 million and¥13,068 million of FDIC covered loans held by MUAH which are subject to the guidance on loans and debt securities acquired withdeteriorated credit quality at March 31, 2011, 2012, 2013 and 2014, respectively.
(2) The sum of nonaccrual and restructured loans and accruing loans contractually past due 90 days or more includes large groups ofsmaller-balance homogenous loans that have not been modified and are collectively evaluated for impairment, and accruing loans
contractually past due 90 days or more. However, these loans are excluded from the impaired loan balances of ¥2,200,766 million and¥1,861,027 million, at March 31, 2013 and 2014, respectively, disclosed in Note 4 to our consolidated financial statements included
elsewhere in this Annual Report.

Gross interest income which would have been accrued at the original terms on domestic nonaccrual andrestructured loans outstanding during the fiscal year ended March 31, 2014 was approximately ¥67.1 billion, of
which ¥33.4 billion was included in the results of operations for the fiscal year. Gross interest income which
would have been accrued at the original terms on foreign nonaccrual and restructured loans outstanding for the
fiscal year ended March 31, 2014 was approximately ¥27.3 billion, of which ¥16.4 billion was included in the
results of operations for the fiscal year.
A-10

Potential Problem Loans
We do not have potential problem loans where known information about possible credit problems ofborrowers causes management to have serious doubts as to the borrowers’ ability to comply with the present loan
repayment terms that are not disclosed as nonaccrual, restructured loans and accruing loans past due 90 days or
more.
Foreign Loans Outstanding
We had no cross-border outstandings to borrowers in any foreign country which in total exceeded 0.75% ofconsolidated total assets at March 31, 2012, 2013 and 2014. Cross-border outstandings are defined, for thispurpose, as loans (including accrued interest), acceptances, interest-earning deposits with other banks, otherinterest-earning investments and any other monetary assets denominated in Japanese yen or other non-local
currencies. Material local currency loans outstanding which are neither hedged nor funded by local currency
borrowings are included in cross-border outstandings.
Guarantees of outstandings to borrowers domiciled in other countries are considered to be outstandings ofthe guarantor. Loans made to, or deposits placed with, a branch of a foreign bank located outside the foreignbank’s home country are considered to be loans to, or deposits with, the foreign bank. Outstandings of a country
do not include principal or interest amounts of which are supported by written, legally enforceable guarantees by
guarantors of other countries or the amounts of outstandings to the extent that they are secured by tangible, liquid
collateral held and realizable by BTMU, MUTB and their subsidiaries outside the country in which they operate.
In addition to credit risk, cross-border outstandings are subject to country risk that as a result of political or
economic conditions in a country, borrowers may be unable or unwilling to pay principal and interest according
to contractual terms. Other risks related to cross-border outstandings include the possibility of insufficientforeign exchange and restrictions on its availability.
In order to manage country risk, we establish various risk management measures internally. Among otherthings, we regularly monitor economic conditions and other factors globally and assess country risk in eachcountry where we have cross-border exposure. For purposes of monitoring and controlling the amount of credit
exposed to country risk, we set a country limit, the maximum amount of credit exposure for an individual
country, in consideration of the level of country risk and our ability to bear such potential risk. We also
determine our credit policy for each country in accordance with our country risk level and our business plan withregard to the country. Assessment of country risk, establishment of country limits, and determination of country
credit policies are subject to review and approval by our senior management and are updated periodically.
Loan Concentrations
At March 31, 2014, there were no concentrations of loans to a single industry group of borrowers, as definedby the Bank of Japan industry segment loan classifications, which exceeded 10% of our consolidated total loans,
except for loans in a category disclosed in the table of loans outstanding above.
Credit Risk Management
We have a credit rating system, under which borrowers and transactions are graded on a worldwide basis.
We calculate probability of default by statistical means and manage our credit portfolio based on this credit
rating system. For a detailed description of this system and other elements of our risk management structure, see“Item 11. Quantitative and Qualitative Disclosures about Credit, Market and Other Risk—Credit Risk
Management.”

A-11

IV. Summary of Loan Loss Experience
The following table shows an analysis of our loan loss experience by industry of the borrower for each of
the five fiscal years ended March 31, 2014:2010

Allowance for credit losses at beginning of fiscal
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision (credit) for credit losses . . . . . . . . . . . . . . . . . .
Charge-offs:
Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . .
Communication and information services . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fiscal years ended March 31,
2011
2012
2013
(in millions, except percentages)

2014¥1,156,638
647,793¥1,315,615
292,035¥1,240,456
223,809¥1,285,507
144,542¥1,335,987(106,371)

41,93322,70775,44629,26476,407542
23,5407,225
124,792

32,162
7,414
14,453
22,11254,498608
36,871
62,711
107,473

35,577
11,034
7,001
10,526
39,676
377
8,754
1,778
67,96921,510
7,378
4,413
5,404
28,902
160
3,100
2,984
49,94752,5792,985
17,124
13,555
39,218
243
5,061
3,312
27,888

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . .
Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . .

401,856
118,916

338,30247,468

182,692
34,107

123,798
20,739161,965
29,133

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

520,772

385,770

216,799

144,537

191,098

Recoveries:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48,2694,103

34,6539,017

37,002
6,427

23,3108,36527,105
10,245

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52,372

43,67043,42931,67537,350Net charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

468,400(20,416)

342,100(25,094)

173,370(5,388)112,862
18,800153,748
18,552

Allowance for credit losses at end of fiscal year . . . . . . .

¥1,315,615¥1,240,456¥1,285,507¥1,335,987¥1,094,420

Allowance for credit losses applicable to foreign
activities:
Balance at beginning of fiscal year . . . . . . . . . . . . .

¥ 307,343¥ 327,568¥ 185,871¥ 170,812¥ 207,111

Balance at end of fiscal year . . . . . . . . . . . . . . . . . .

¥ 327,568¥ 185,871¥ 170,812¥ 207,111¥ 184,460

Provision (credit) for credit losses . . . . . . . . . . . . . .

¥ 134,966¥ (86,674) ¥¥¥ (21,727)

Ratio of net charge-offs during the fiscal year to
average loans outstanding during the fiscal year . . . . .

0.49%

0.39%

17,1080.20%

30,859
0.12%

0.15%

Note:
(1) Others principally include losses (gains) from foreign exchange translation. In addition, for the fiscal year ended March 31, 2010, others
include adjustments related to restructuring of business operations.

A-12

The following table shows an allocation of our allowance for credit losses at March 31 of each of the fivefiscal years ended March 31, 2014:
At March 31,
2012
2013
2014
% of
% of
% of
% of
% of
loans inloans inloans inloans inloans in
each
each
each
each
each
category
category
category
category
category
to total
to total
to total
to total
to total
Amountloans
Amountloans
Amountloans
Amountloans
Amountloans(in millions, except percentages)
2010

Domestic:
Manufacturing . . . . . . .¥Construction . . . . . . . .
Real estate . . . . . . . . . .
Services . . . . . . . . . . . .
Wholesale andretail . . . . . . . . . . . .
Banks and otherfinancial
institutions . . . . . . . .
Communication andinformation
services . . . . . . . . . .
Other industries . . . . . .
Consumer . . . . . . . . . .
Foreign:
Governments andofficial
institutions . . . . . . . .
Banks and otherfinancial
institutions . . . . . . . .
Commercial andindustrial . . . . . . . . .
Other . . . . . . . . . . . . . .
Unallocated . . . . . . . . . . . . .

2011

177,753
31,764112,154
88,43513.03% ¥ 202,505
1.55
41,012
13.29
98,873
4.02
92,33612.84% ¥ 252,397
1.46
29,66313.31
91,195
3.90
92,92112.40% ¥ 296,798
1.25
32,396
11.92
91,046
3.51
82,22011.92% ¥ 239,461
1.07
25,44711.29
81,685
2.92
69,511

10.44%
0.89
9.94
2.44

148,637

9.32

197,2969.64

245,101

9.19

258,1618.44

207,281

7.67

20,0154.51

26,505

3.91

23,928

3.83

28,895

3.67

21,1103.61

67,273
110,545
213,889

1.45
10.18
20.69

32,57058,539280,665

1.43
9.60
21.02

28,795
70,112270,088

1.39
11.25
19.08

27,77568,530233,531

1.33
12.35
17.36

20,196
59,770177,384

1.31
12.20
15.30

70,0170.53

28,4060.59

26,8000.60

30,3770.68

28,5990.73

29,0304.23

26,853

5.10

24,454

6.36

26,8697.35

26,921

8.86

203,61124,91017,582

14.94
2.26
—

114,352
16,26024,284

14.99
2.21
—

107,899
11,65910,495

16.98
2.24
—

137,780
12,085
9,524

18.98
2.64
—

119,204
9,736
8,115

22.20
4.41
—

Total . . . . . . . . . .¥1,315,615 100.00% ¥1,240,456 100.00% ¥1,285,507 100.00% ¥1,335,987 100.00% ¥1,094,420 100.00%
Allowance as a percentage
of loans . . . . . . . . . . . . . .
Allowance as a percentage
of nonaccrual andrestructured loans andaccruing loans
contractually past due
90 days or more . . . . . . .

1.43%

1.42%

1.39%

1.36%

0.99%

65.53%

60.09%

59.01%

57.52%

53.77%

While the allowance for credit losses contains amounts allocated to components of specifically identified
loans as well as a group on a portfolio of loans, the allowance for credit losses covers the credit losses of theentire loan portfolio and the allocations shown above are not intended to be restricted to the specific loan
category. Accordingly, as the evaluation of credit risks changes, allocations of the allowance will be adjusted toreflect current conditions and various other factors.

A-13

V.

Deposits

The following table shows the average amount of, and the average rate paid on, the following deposit
categories for the fiscal years ended March 31, 2012, 2013 and 2014:
2012
AverageamountDomestic offices:
Non-interest-bearing demand
deposits . . . . . . . . . . . . . . . . ¥ 13,787,387
Interest-bearing demand
deposits . . . . . . . . . . . . . . . .
49,780,056
Deposits at notice . . . . . . . . . .
1,360,019
Time deposits . . . . . . . . . . . . .
41,594,652
Certificates of deposit . . . . . . .
5,218,531
Foreign offices:
Non-interest-bearing demand
deposits . . . . . . . . . . . . . . . .
2,505,338
Interest-bearing deposits,
principally time deposits
and certificates ofdeposit . . . . . . . . . . . . . . . . .
19,678,674
Total . . . . . . . . . . . . . . . . ¥133,924,657

Fiscal years ended March 31,
2013
Average
Average
Averagerate
amountrate(in millions, except percentages)—% ¥ 14,184,561

2014
AverageamountAveragerate—% ¥ 14,806,715

—%

0.02
0.06
0.20
0.13

51,319,383
1,224,245
41,664,771
5,675,633

0.02
0.02
0.14
0.13

54,341,944
1,165,323
41,571,358
5,775,861

0.02
0.03
0.12
0.10

—

2,794,262—

3,832,932—

0.65

23,436,714¥140,299,569

0.57

30,453,791¥151,947,924

0.53

Deposits at notice represent interest-bearing demand deposits which require the depositor to give two or
more days notice in advance of withdrawal.
The average amounts of total deposits by foreign depositors included in domestic offices for the fiscal years
ended March 31, 2012, 2013 and 2014 were ¥457,525 million, ¥785,562 million and ¥558,229 million,
respectively.
At March 31, 2014, the balances and remaining maturities of time deposits and certificates of deposit issued
by domestic offices in amounts of ¥10 million (approximately U.S.$97 thousand at the Federal Reserve Bank of
New York’s noon buying rate on March 31, 2014) or more and total foreign deposits issued in amounts of
U.S.$100,000 or more are shown in the following table:

Domestic offices:
Three months or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Over three months through six months . . . . . . . . . . . . . . . . . . . .
Over six months through twelve months . . . . . . . . . . . . . . . . . . .
Over twelve months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A-14

Time
deposits

Certificates ofdeposit(in millions)Total¥ 8,079,015
5,659,091
4,493,860
3,710,866¥21,942,832¥4,384,075
792,729
289,469
146,282¥5,612,555¥12,463,090
6,451,820
4,783,329
3,857,148¥27,555,387¥26,026,728

VI. Short-Term Borrowings
The following table shows certain additional information with respect to our short-term borrowings for the
fiscal years ended March 31, 2012, 2013 and 2014:
Fiscal years ended March 31,
2012
2013
2014
(in millions, except percentages)

Call money, funds purchased, and payables under repurchaseagreements and securities lending transactions:Average balance outstanding during the fiscal year . . . . . . . . . .
Maximum balance outstanding at any month-end during the
fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average interest rate during the fiscal year . . . . . . . . .
Weighted average interest rate on balance at end of fiscal
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due to trust account:
Average balance outstanding during the fiscal year . . . . . . . . . .
Maximum balance outstanding at any month-end during the
fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average interest rate during the fiscal year . . . . . . . . .
Weighted average interest rate on balance at end of fiscal
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings:
Average balance outstanding during the fiscal year . . . . . . . . . .
Maximum balance outstanding at any month-end during the
fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average interest rate during the fiscal year . . . . . . . . .
Weighted average interest rate on balance at end of fiscal
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A-15¥21,511,773¥24,232,422¥28,448,106

22,618,035
25,868,941
33,513,317
21,347,850
23,703,926
30,206,245
0.44%
0.26%
0.16%
0.30%
¥

608,0610.18%¥

590,1500.11%¥

506,466

1,117,699
627,3310.11%

661,633
633,0290.11%

750,210750,210
0.10%

0.08%

0.09%

0.08%

¥10,059,100¥10,540,612¥11,897,255

12,103,569
11,608,598
12,264,988
10,881,525
11,608,598
11,106,071
0.28%
0.21%
0.19%
0.23%

0.20%

0.25%

CONSOLIDATED FINANCIAL STATEMENTS
INDEX
Page

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets as of March 31, 2013 and 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Income for the Fiscal Years ended March 31, 2012, 2013 and 2014 . . . . . . . .
Consolidated Statements of Comprehensive Income for the Fiscal Years ended March 31, 2012, 2013
and 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Equity for the Fiscal Years ended March 31, 2012, 2013 and 2014 . . . . . . . .
Consolidated Statements of Cash Flows for the Fiscal Years ended March 31, 2012, 2013 and 2014 . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Basis of Financial Statements and Summary of Significant Accounting Policies . . . . . . . . . . . . . .
2. Business Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Investment Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. Loans and Allowance for Credit Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5. Premises and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6. Goodwill and Other Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7. Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8. Pledged Assets and Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9. Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10. Call Money and Funds Purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11. Due to Trust Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12. Short-term Borrowings and Long-term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13. Severance Indemnities and Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14. Other Assets and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15. Offsetting of Derivatives, Repurchase Agreements, and Securities Lending Transactions . . . . . .
16. Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17. Common Stock and Capital Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18. Retained Earnings, Legal Reserve and Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19. Accumulated Other Comprehensive Income (Loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20. Noncontrolling Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21. Regulatory Capital Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22. Earnings per Common Share Applicable to Common Shareholders of MUFG . . . . . . . . . . . . . . .
23. Derivative Financial Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24. Obligations Under Guarantees and Other Off-balance Sheet Instruments . . . . . . . . . . . . . . . . . . .
25. Variable Interest Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26. Commitments and Contingent Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27. Fees and Commissions Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28. Trading Account Profits and Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29. Business Segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30. Foreign Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31. Fair Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32. Stock-based Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33. Parent Company Only Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34. SEC Registered Funding Vehicles Issuing Non-dilutive Preferred Securities . . . . . . . . . . . . . . . .
35. Subsequent Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-1

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F-59
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F-69
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F-70
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F-86
F-88
F-89
F-91
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F-98
F-98
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(This page is intentionally left blank)

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Mitsubishi UFJ Financial Group, Inc.
(Kabushiki Kaisha Mitsubishi UFJ Financial Group):
We have audited the accompanying consolidated balance sheets of Mitsubishi UFJ Financial Group, Inc.
(Kabushiki Kaisha Mitsubishi UFJ Financial Group) (“MUFG”) and subsidiaries (together, the “MUFG Group”)
as of March 31, 2013 and 2014, and the related consolidated statements of income, comprehensive income,equity and cash flows for each of the three years in the period ended March 31, 2014 (all expressed in Japanese
Yen). These financial statements are the responsibility of the MUFG Group’s management. Our responsibility is
to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial
position of MUFG and subsidiaries as of March 31, 2013 and 2014, and the results of their operations and their
cash flows for each of the three years in the period ended March 31, 2014, in conformity with accounting
principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board(United States), the MUFG Group’s internal control over financial reporting as of March 31, 2014, based on thecriteria established in Internal Control—Integrated Framework (1992) issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated July 18, 2014 expressed an unqualified opinion
on the MUFG Group’s internal control over financial reporting.
/s/ Deloitte Touche Tohmatsu LLC
Tokyo, Japan
July 18, 2014

F-3

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSMARCH 31, 2013 AND 2014
(in millions)

2013

ASSETSCash and due from banks (Note 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 3,619,253
Interest-earning deposits in other banks (Notes 8 and 31) . . . . . . . . . . . . . . . . . . .
8,111,887
Call loans and funds sold (Note 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
618,596
Receivables under resale agreements (Notes 15 and 31) . . . . . . . . . . . . . . . . . . . .
5,659,512
Receivables under securities borrowing transactions (Note 15) . . . . . . . . . . . . . . .
2,615,172
Trading account assets (including assets pledged that secured parties are
permitted to sell or repledge of ¥11,847,846 and ¥12,984,404 in 2013 and2014) (including ¥16,290,536 and ¥18,251,847 measured at fair value underfair value option in 2013 and 2014) (Notes 8, 15, 23 and 31) . . . . . . . . . . . . . .
40,826,384
Investment securities (Notes 3, 8 and 31):
Securities available-for-sale—carried at fair value (including assets pledgedthat secured parties are permitted to sell or repledge of ¥1,974,928 and¥3,053,872 in 2013 and 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58,844,069
Securities being held-to-maturity—carried at amortized cost (including assets
pledged that secured parties are permitted to sell or repledge of ¥300,821
and ¥110,100 in 2013 and 2014) (fair value of ¥2,188,070 and ¥2,735,127
in 2013 and 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,131,164
Other investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
889,952

2014¥

3,689,228
20,500,676
919,132
7,300,037
4,210,057

40,646,275

51,885,652

2,706,982
737,617

Total investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

61,865,185

55,330,251

Loans, net of unearned income, unamortized premiums and deferred loan fees(including assets pledged that secured parties are permitted to sell or repledgeof ¥1,952,868 and ¥1,608,498 in 2013 and 2014) (Notes 4 and 8) . . . . . . . . . . .
Allowance for credit losses (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

98,590,229(1,335,987)

110,276,411(1,094,420)

Net loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

97,254,242

109,181,991

Premises and equipment—net (Note 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customers’ acceptance liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets—net (Notes 2 and 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill (Notes 2 and 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets (Notes 7 and 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets (including ¥3,006 and ¥2,000 measured at fair value under fairvalue option in 2013 and 2014) (Notes 8, 13, 14 and 31) . . . . . . . . . . . . . . . . . .

1,059,054
255,192
90,216866,153
417,956
514,679

1,236,648
277,222
126,838
1,133,354
728,515362,267

6,785,795

8,018,586

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥230,559,276¥253,661,077

Assets of consolidated VIEs included in total assets above that can be used
only to settle obligations of consolidated VIEs (Note 25)
Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥Interest-earning deposits in other banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets of consolidated VIEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-4

2,692 ¥
26,087
2,376,590
701,873
6,814,877
254,978¥ 10,177,097

3,167
33,1582,219,754
867,779
7,019,653
236,131¥ 10,379,642

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS—(Continued)
MARCH 31, 2013 AND 2014
(in millions, except shares)

2013

2014

LIABILITIES AND EQUITY
Deposits (Notes 8 and 9):
Domestic offices:
Non-interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 15,327,957 ¥ 16,644,469
Interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
103,003,820
104,860,603
Overseas offices:
Non-interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,481,750
4,478,271
Interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26,396,212
36,534,443
Total deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
148,209,739
162,517,786
Call money and funds purchased (Notes 8 and 10) . . . . . . . . . . . . . . . . . . . . . . . . . .
4,010,582
3,417,455
Payables under repurchase agreements (Notes 8 and 15) . . . . . . . . . . . . . . . . . . . . . .
15,700,394
21,268,072
Payables under securities lending transactions (Notes 8 and 15) . . . . . . . . . . . . . . . .
3,992,950
5,520,718
Due to trust account (Note 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
633,029
750,210
Other short-term borrowings (including ¥5,041 and ¥28,875 measured at fair value
under fair value option in 2013 and 2014) (Notes 8, 12 and 31) . . . . . . . . . . . . . .
11,608,598
11,106,071
Trading account liabilities (Notes 15, 23 and 31) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,969,482
11,981,978
Obligations to return securities received as collateral (Notes 15 and 31) . . . . . . . . . .
3,034,547
3,971,454
Bank acceptances outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
90,216
126,838
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
136,712143,362
Long-term debt (including ¥564,845 and ¥687,927 measured at fair value
under fair value option in 2013 and 2014) (Notes 8, 12 and 31) . . . . . . . . . . . . . .
12,182,358
14,498,678
Other liabilities (Notes 1, 7, 8, 13, 14 and 26) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,048,689
5,607,011
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
219,617,296
240,909,633
Commitments and contingent liabilities (Notes 24 and 26)
Mitsubishi UFJ Financial Group shareholders’ equity (Note 21):
Capital stock (Notes 16 and 17):
Preferred stock—aggregate liquidation preference of ¥390,001 in 2013 and2014, with no stated value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
442,100
442,100
Common stock—authorized, 33,000,000,000 shares; issued, 14,158,585,720
shares and 14,164,026,420 shares in 2013 and 2014, with no stated value . . . .
1,646,035
1,647,145
Capital surplus (Note 17) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,348,133
6,363,413
Retained earnings (Notes 18 and 35):
Appropriated for legal reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
239,571239,571
Unappropriated retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,361,620
2,157,639
Accumulated other comprehensive income, net of taxes (Note 19) . . . . . . . . . . . .
574,347
1,357,682
Treasury stock, at cost—4,374,857 common shares and 3,389,416 commonshares in 2013 and 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3,011)(2,510)Total Mitsubishi UFJ Financial Group shareholders’ equity . . . . . . . . . . .
10,608,795
12,205,040
Noncontrolling interests (Note 20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
333,185
546,404
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,941,980
12,751,444
Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥230,559,276 ¥253,661,077
Liabilities of consolidated VIEs for which creditors or beneficial interest
holders do not have recourse to the general credit of Mitsubishi UFJ
Financial Group (Note 25)
Other short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities of consolidated VIEs . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥¥39,773
1,166,694
378,679
1,585,146

See the accompanying notes to Consolidated Financial Statements.
F-5

¥

¥

44,221
966,838
259,404
1,270,463

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME
FOR THE FISCAL YEARS ENDED MARCH 31, 2012, 2013 AND 2014
(in millions)Interest income:Loans, including fees (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits in other banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on conversion rate adjustment of convertible preferred stock(Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call loans and funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables under resale agreements and securities borrowing
transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense:
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call money and funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under repurchase agreements and securities lendingtransactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due to trust account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings and trading account liabilities . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision (credit) for credit losses (Note 4) . . . . . . . . . . . . . . . . . . . . . . . .
Net interest income after provision (credit) for credit losses . . . . . . . . .
Non-interest income:Fees and commissions income (Note 27) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange gains (losses)—net (Note 28) . . . . . . . . . . . . . . . . . . . . .
Trading account profits (losses)—net (Note 28) . . . . . . . . . . . . . . . . . . . . .
Investment securities gains—net (Note 3)(1) . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings (losses) of equity method investees—net (Notes 2
and 26) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on sales of loans (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Government grant for transfer of substitutional portion of Employees’
Pension Fund Plans (Note 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-interest income (Note 20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expense:
Salaries and employee benefits (Note 13) . . . . . . . . . . . . . . . . . . . . . . . . . .
Occupancy expenses—net (Notes 5 and 26) . . . . . . . . . . . . . . . . . . . . . . . .
Fees and commission expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outsourcing expenses, including data processing . . . . . . . . . . . . . . . . . . . .
Depreciation of premises and equipment (Note 5) . . . . . . . . . . . . . . . . . . . .
Amortization of intangible assets (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of intangible assets (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Insurance premiums, including deposit insurance . . . . . . . . . . . . . . . . . . . .
Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxes and public charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-interest expenses (Notes 2, 4, 5, 6, 20 and 26) . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-6

2012

2013

2014

¥1,595,097
39,963¥1,577,770
27,304¥1,663,742
47,056

307,812
104,634

266,640
104,187

229,732
112,605

139,320
315,7426,918—
394,788
7,046—
407,415
10,07486,4702,595,956

49,7862,427,521

51,6592,522,283

228,858
8,157

212,067
6,961

226,655
6,841

86,947647
61,657
253,873
640,139
1,955,817
223,809
1,732,008

56,862665
52,342
227,521556,418
1,871,103
144,542
1,726,561

39,329519
57,501
230,127
560,972
1,961,311(106,371)
2,067,682

1,099,963
34,302
667,285
19,384

1,160,874(38,955)
570,276
155,957

1,294,116(61,755)(33,886)
303,520(499,427)
15,64560,21014,773

110,520
17,680—103,424
1,440,576—
144,774
2,067,909

115,21075,676
1,821,081

900,144
150,808
204,734
191,089
94,777212,229
30,986
115,376
49,276
65,641
307,582
2,322,642

932,399
151,138
209,782
198,134
94,035
207,568
3,378
98,71147,09566,862369,497
2,378,599

1,029,580
158,393
222,038
216,737
103,714198,147
312
101,135
50,86869,457
317,9392,468,320

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME—(Continued)
FOR THE FISCAL YEARS ENDED MARCH 31, 2012, 2013 AND 2014
(in millions, except per share amount)

Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense (Note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income before attribution of noncontrolling interests . . . . . . . . . . . . .
Net income attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . .
Net income attributable to Mitsubishi UFJ Financial Group . . . . . . . . . .
Income allocated to preferred shareholders:Cash dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in a foreign affiliated company’s interests in its subsidiary . . . .
Earnings applicable to common shareholders of Mitsubishi UFJ
Financial Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings per common share applicable to common shareholders of
Mitsubishi UFJ Financial Group (Notes 18 and 22):
Basic earnings per common share—Earnings applicable to commonshareholders of Mitsubishi UFJ Financial Group . . . . . . . . . . . . . . . . . . . .
Diluted earnings per common share—Earnings applicable to commonshareholders of Mitsubishi UFJ Financial Group . . . . . . . . . . . . . . . . . . . .

2012

2013

2014

849,942429,191
420,751
4,520¥416,231

1,415,871
296,020
1,119,851
50,727¥1,069,124

1,420,443
337,917
1,082,526
67,133¥1,015,393¥ 17,940—¥¥¥398,291¥1,051,184¥ 994,152

¥

¥

¥

28.17
28.09

17,940
—

74.30
74.16

17,940
3,301

70.21
69.98

(1) The following credit losses are included in Investment securities gains—net:(in millions)

2012

2013

2014

Decline in fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,704
2,078

¥

7,457
872

¥

2,321
284

Total credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥13,782

¥

8,329

¥

2,605

See the accompanying notes to Consolidated Financial Statements.
F-7

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE FISCAL YEARS ENDED MARCH 31, 2012, 2013 AND 2014
(in millions)

2012

2013

2014

Net income before attribution of noncontrolling interests . . . . . . . . . . . ¥420,751 ¥1,119,851 ¥1,082,526
Other comprehensive income (loss), net of tax (Note 19):
Net unrealized gains on investment securities(1) . . . . . . . . . . . . . . . . .
174,839
628,470
141,519
Net unrealized gains (losses) on derivatives qualifying for cash flow
hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
437
3,423
(361)
Defined benefit plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(94,215)
79,997
117,648
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . .
(49,543)467,259
508,130
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31,5181,179,149

766,936

Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling interests . . . . . . . . . . . . . . .
Other comprehensive income (loss) attributable to noncontrollinginterests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

452,2694,520

2,299,000
50,727

1,849,462
67,133

(743)

8,402

(16,399)¥448,492¥2,239,871¥1,798,728

Comprehensive income attributable to Mitsubishi UFJ Financial
Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1) Includes unrealized gains of ¥1,234 million, ¥555 million and ¥183 million, net of tax, related to debt securities with credit component
realized in earnings for the fiscal years ended March 31, 2012, 2013 and 2014, respectively.

See the accompanying notes to Consolidated Financial Statements.
F-8

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF EQUITY
FOR THE FISCAL YEARS ENDED MARCH 31, 2012, 2013 AND 2014
(in millions, except per share amount)

2012

2013

2014

Preferred stock (Note 16):
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 442,100¥ 442,100¥ 442,100

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 442,100¥ 442,100¥ 442,100¥1,644,132¥1,645,144¥1,646,035

1,012

891

1,110

¥1,645,144¥1,646,035¥1,647,145

Common stock (Note 17):
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of new shares of common stock by way of exercise of stockacquisition rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Capital surplus (Note 17):
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥6,395,705 ¥6,378,619 ¥6,348,133
Stock-based compensation expense (Note 32) . . . . . . . . . . . . . . . . . . . . .
1,370
1,233
129
Issuance of new shares of common stock by way of exercise of stockacquisition rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,010
889
1,108
Issuance of new shares of Mitsubishi UFJ Morgan Stanley Securities
Co., Ltd. (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(20,000)——
Purchase of shares of Mitsubishi UFJ Merrill Lynch PB Securities
Co., Ltd. from noncontrolling interest shareholders (Note 2) . . . . . . . .
—(30,655)—
Changes in a foreign affiliated company’s interests in its subsidiary . . . .
—(1,816)—
Reorganization of Mitsubishi UFJ Morgan Stanley PB Securities
Co., Ltd. (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
——13,839Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
534
(137)
204
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥6,378,619¥6,348,133¥6,363,413

Retained earnings appropriated for legal reserve (Note 18):
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 239,571¥ 239,571¥ 239,571

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 239,571¥ 239,571¥ 239,571¥ 254,103
416,231¥ 482,535
1,069,124¥1,361,620
1,015,393(169,776)(169,819)(198,191)(17,940)(218)(17,940)(2,280)(17,940)
58

135
—

—
—

—
(3,301)¥ 482,535¥1,361,620¥2,157,639

Unappropriated retained earnings (Note 18):
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to Mitsubishi UFJ Financial Group . . . . . . . . . .
Cash dividends:
Common stock—¥12.00 in 2012 and 2013, and ¥14.00 in 2014 pershare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preferred stock (Class 5)—¥115.00 in 2012, 2013, and 2014 pershare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains (losses) on sales of shares of treasury stock . . . . . . . . . . . . . . . . . .
Effect of adopting new guidance on embedded credit derivatives(Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in a foreign affiliated company’s interests in its subsidiary . . . .
Balance at end of fiscal year (Note 35) . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-9

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF EQUITY—(Continued)
FOR THE FISCAL YEARS ENDED MARCH 31, 2012, 2013 AND 2014
(in millions)

2012

2013

2014

Accumulated other comprehensive income (loss), net of taxes:
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ (628,661) ¥ (596,400) ¥Net change during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32,261
1,170,747
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ (596,400) ¥Treasury stock:
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ (11,251) ¥Purchases of shares of treasury stock (Note 17) . . . . . . . . . . . . . . . . . . .
(18)
Sales of shares of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
849
Net decrease (increase) resulting from changes in interests inconsolidated subsidiaries, consolidated variable interest entities, andaffiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,009
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥(8,411) ¥574,347
783,335

574,347 ¥ 1,357,682(8,411) ¥
(19)
4,888

(3,011)
(74)
753

531

(178)

(3,011) ¥(2,510)Total Mitsubishi UFJ Financial Group shareholders’ equity . . . . . . ¥8,583,158 ¥10,608,795 ¥12,205,040
Noncontrolling interests:
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 327,213 ¥Initial subscriptions of noncontrolling interests (Note 2) . . . . . . . . . . . .
9,991
Transactions between the consolidated subsidiaries and the related
noncontrolling interest shareholders . . . . . . . . . . . . . . . . . . . . . . . . . .
(7,440)Decrease in noncontrolling interests related to deconsolidation ofsubsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(67,276)
Decrease in noncontrolling interests related to disposition ofsubsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4,609)Purchase of shares of Mitsubishi UFJ Merrill Lynch PB Securities
Co., Ltd. from noncontrolling interest shareholders (Note 2) . . . . . . .
—Issuance of new shares of Mitsubishi UFJ Morgan Stanley Securities
Co., Ltd. (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30,000Net income attributable to noncontrolling interests . . . . . . . . . . . . . . . .
4,520
Dividends paid to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . .
(16,487)
Reorganization of Mitsubishi UFJ Morgan Stanley PB Securities Co.,
Ltd. (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—Other comprehensive income (loss), net of taxes . . . . . . . . . . . . . . . . . .
(743)
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
120
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 275,289 ¥

275,289 ¥
30,009333,185
237,307(3,262)

2,117(8,090)(48,524)(2,327)(139)(8,345)——50,727(9,243)—
67,133(14,347)

—
8,402
25

(13,839)(16,399)(90)

333,185 ¥546,404

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥8,858,447 ¥10,941,980 ¥12,751,444

See the accompanying notes to Consolidated Financial Statements.

F-10

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE FISCAL YEARS ENDED MARCH 31, 2012, 2013 AND 2014
(in millions)

Cash flows from operating activities:
Net income before attribution of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥Adjustments to reconcile net income before attribution of noncontrolling interests to net
cash provided by (used in) operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of intangible assets (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision (credit) for credit losses (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee benefit cost for severance indemnities and pension plans (Note 13) . . . . . .
Government grant for transfer of substitutional portion of Employees’ Pension Fund
Plans (Note 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities gains—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of premiums on investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in financial instruments measured at fair value under fair value option,
excluding trading account securities—net (Note 31) . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange losses (gains)—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in losses (earnings) of equity method investees—net (Note 2) . . . . . . . . . . . . .
Provision (credit) for deferred income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on conversion rate adjustment of convertible preferred stock (Note 2) . . . . . . . . .
Decrease (increase) in trading account assets, excluding foreign exchange
contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in trading account liabilities, excluding foreign exchange
contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in unearned income, unamortized premiums and deferred loan
fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in accrued interest receivable and other receivables . . . . . . . . . . . . . . . . . . . .
Increase in accrued interest payable and other payables . . . . . . . . . . . . . . . . . . . . . . . .
Net increase (decrease) in accrued income taxes and decrease (increase) in income
tax receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease in allowance for repayment of excess interest . . . . . . . . . . . . . . . . . . . . . . . .
Net decrease (increase) in collateral for derivative transactions . . . . . . . . . . . . . . . . . .
Partial withdrawal of assets from employee retirement benefit trusts (Note 13) . . . . . .
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) operating activities . . . . . . . . . . . . . . . . . . . . . . . .

2012

2013

2014

420,751 ¥

1,119,851 ¥

1,082,526

307,006
30,986
223,80948,823

301,603
3,378
144,54264,970301,861312(106,371)
79,036—(19,384)
81,384—(155,957)
91,252(115,210)(303,520)
115,980

35,297
280,997499,427
193,114(139,320)(21,734)(1,059,276)(60,210)133,054—(91,410)(1,090,193)(110,520)(8,047)—(3,188,559)(3,269,053)

2,894,475

2,326,503

796,656(2,622,957)

10,754(110,209)
36,425(13)(82,575)
4,162

5,214
(95,966)
100,760

116,180(37,452)(618,295)—
94,642(125,309)(21,777)(179,028)
44,851
105,703

158,268(23,503)528,901—
209,812592,879(2,164,910)

909,448

Cash flows from investing activities:
Proceeds from sales of investment securities available-for-sale (including proceedsfrom securities under fair value option) (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172,325,724 149,910,832 105,488,089
Proceeds from maturities of investment securities available-for-sale (including
proceeds from securities under fair value option) (Note 3) . . . . . . . . . . . . . . . . . . . .
12,863,545
15,343,140
33,894,330
Purchases of investment securities available-for-sale (including purchases of
securities under fair value option) (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (192,356,659) (163,273,113) (132,922,207)
Proceeds from maturities of investment securities being held-to-maturity . . . . . . . . . .
835,356
811,024
626,109
Purchases of investment securities being held-to-maturity . . . . . . . . . . . . . . . . . . . . . .
(263,300)(442,016)(473,345)
Proceeds from sales of other investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37,39731,094228,983
MUB’s acquisition of PB Capital Corporation’s institutional commercial real estate
lending division (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
——(358,040)
Purchase of common stock investment in VietinBank, an affiliated company of
BTMU (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
——(75,136)
Acquisition of Mitsubishi UFJ Fund Services Holdings Limited (formerly Butterfield
Fulcrum Group), a subsidiary of MUTB (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . .
——(30,191)
Acquisition of Krungsri, a subsidiary of BTMU, net of cash acquired (Note 2) . . . . . .
——(398,841)
Purchases of other investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(46,861)(8,034)(18,767)
Net increase in loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5,609,261)(2,543,816)(4,426,839)
Net decrease (increase) in interest-earning deposits in other banks . . . . . . . . . . . . . . . .
1,344,430(1,706,642) (11,738,061)
Net decrease (increase) in call loans, funds sold, and receivables under resaleagreements and securities borrowing transactions . . . . . . . . . . . . . . . . . . . . . . . . . . .
471,372
106,337(2,062,236)
Proceeds from sales of premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,61836,01530,420Capital expenditures for premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(131,187)(139,756)(158,492)
Purchases of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(155,308)(161,090)(211,942)
Proceeds from sales and dispositions of investments in equity method investees . . . . .
125,690
78,98334,424
Proceeds from sales of consolidated VIEs and subsidiaries—net . . . . . . . . . . . . . . . . .
1,297
20,951
164,674
Proceeds from a repayment of deposits with Government-led Loan Restructuring
Program (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
161,435
204,956—
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,462(69,120)
5,241
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-11(10,364,250)(1,800,255)(12,401,827)

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS—(Continued)
FOR THE FISCAL YEARS ENDED MARCH 31, 2012, 2013 AND 2014
(in millions)
2012
2013
2014
Cash flows from financing activities:
Net increase in deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,242,703 4,491,412 7,056,761
Net increase in call money, funds purchased, and payables under repurchase agreements andsecurities lending transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,745,245
448,370 4,074,607
Net increase (decrease) in due to trust account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6,210)
5,698
117,181Net increase (decrease) in other short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,409,172
429,163 (1,031,642)
Proceeds from issuance of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,875,591 2,187,511 4,036,415
Repayment of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,263,232) (3,025,310) (2,540,895)
Proceeds from sales of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
130
22
845
Payments to acquire treasury stock (Note 17) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(18)
(19)
(74)
Payments for purchase of shares of Mitsubishi UFJ Merrill Lynch PB Securities Co., Ltd. fromnoncontrolling interest shareholders (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—(39,000)—
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(187,561) (187,720) (216,054)
Dividends paid to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(16,445)(9,243)(14,347)
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(11,523)(9,351)(7,702)

Net cash provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,787,852

Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(16,876)

4,291,533 11,475,095
62,476

Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(395)

388,844

69,975

Cash and cash equivalents at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,230,804

3,230,409

3,619,253

87,259Cash and cash equivalents at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 3,230,409 ¥ 3,619,253 ¥ 3,689,228
Supplemental disclosure of cash flow information:
Cash paid during the fiscal year for:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥Income taxes, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash investing and financing activities:
Obtaining assets by entering into capital lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUB’s acquisitions (Note 2):
Fair value of assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of Krungsri, a subsidiary of BTMU (Note 2):
Fair value of assets acquired, excluding cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Conversion of Morgan Stanley’s convertible preferred stock (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer to investment securities being held to maturity from investment securities available for sale(Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

683,034 ¥
119,897605,608 ¥288,275

601,626
187,696

16,198

7,584

4,211

—
—

626,921502,437

416,059
58,019———808,266————

3,997,518
3,396,454
202,223——

12,356

411,535

See the accompanying notes to Consolidated Financial Statements.
F-12

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.

BASIS OF FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES

Description of Business
Mitsubishi UFJ Financial Group, Inc. (“MUFG”) is a holding company for The Bank of Tokyo-Mitsubishi
UFJ, Ltd. (“BTMU”), Mitsubishi UFJ Trust and Banking Corporation (“MUTB”), Mitsubishi UFJ Securities
Holdings Co., Ltd. (“MUSHD”), Mitsubishi UFJ NICOS Co., Ltd. (“Mitsubishi UFJ NICOS”), and othersubsidiaries. MUSHD is an intermediate holding company for Mitsubishi UFJ Morgan Stanley Securities
Co., Ltd. (“MUMSS”). See Note 2 for more information on the securities joint venture with Morgan Stanley.
Through its subsidiaries and affiliated companies, MUFG engages in a broad range of financial operations,
including commercial banking, investment banking, trust banking and asset management services, securities
businesses, and credit card businesses, and it provides related services to individual and corporate customers. See
Note 29 for more information by business segment.
Effective July 1, 2014, BTMU operations in the Americas region were integrated with UnionBanCal
Corporation (“UNBC”), an indirect wholly-owned subsidiary in the United States, and UNBC was renamed
MUFG Americas Holdings Corporation (“MUAH”). Also effective July 1, 2014, the principal subsidiary of
UNBC, Union Bank, N.A. (“Union Bank”) was renamed MUFG Union Bank, N.A. (“MUB”). Throughout thesefinancial statements, the new corporate names, MUAH and MUB are used in place of UNBC and Union Bank,
respectively.
Basis of Financial Statements
The accompanying consolidated financial statements are presented in Japanese yen, the currency of thecountry in which MUFG is incorporated and principally operates. The accompanying consolidated financial
statements have been prepared on the basis of accounting principles generally accepted in the United States ofAmerica (“U.S. GAAP”). In certain respects, the accompanying consolidated financial statements reflect
adjustments which are not included in the consolidated financial statements issued by MUFG and certain of its
subsidiaries in accordance with applicable statutory requirements and accounting practices in their respective
countries of incorporation. The major adjustments include those relating to (1) investment securities,(2) derivative financial instruments, (3) allowance for credit losses, (4) income taxes, (5) consolidation,(6) premises and equipment, (7) transfer of financial assets, (8) accrued severance indemnities and pension
liabilities, (9) goodwill and other intangible assets and (10) lease transactions.
Fiscal years of certain subsidiaries, which end on December 31, and MUFG’s fiscal year, which ends on
March 31, have been treated as coterminous. For the fiscal years ended March 31, 2012, 2013 and 2014, theeffect of recording intervening events for the three-month periods ended March 31 on MUFG’s proportionate
equity in net income of subsidiaries with fiscal years ended on December 31, would have resulted in a decreaseof ¥1.56 billion, an increase of ¥1.48 billion, and an increase of ¥6.79 billion to net income attributable to
Mitsubishi UFJ Financial Group, respectively. No intervening events occurred during each of the three-month
periods ended March 31, 2012, 2013 and 2014 which, if recorded, would have had material effects on
consolidated total assets, loans, total liabilities, deposits or total equity as of March 31, 2012, 2013 and 2014.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures ofcontingent assets and liabilities at the date of the consolidated financial statements and the reported amounts ofrevenues and expenses during the reporting period. Actual results could differ from those estimates. Material
estimates that are particularly susceptible to management judgment primarily relate to the allowance for credit
F-13

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
losses, the valuation allowances of deferred tax assets, recognition and measurement of uncertain tax positions,the valuation of financial instruments, the accounting for goodwill and intangible assets, impairment ofinvestment securities, the allowances for repayment of excess interest and accrued severance indemnities andpension liabilities.
Summary of Significant Accounting Policies
Significant accounting policies applied in the accompanying consolidated financial statements are
summarized below:
Consolidation—The accompanying consolidated financial statements include the accounts of MUFG, its
subsidiaries and certain variable interest entities (“VIE”s) (together, the “MUFG Group”). In situations in which
the MUFG Group has a controlling financial interest in other entities, including certain VIEs, such entities areconsolidated and noncontrolling interests are recorded in Total equity. Intercompany items have been eliminated.
Investments in affiliated companies (companies over which the MUFG Group has the ability to exercise
significant influence) are accounted for by the equity method of accounting and are reported in Other assets. The
MUFG Group’s equity interest in the earnings (losses) of these equity investees and other-than-temporary
impairment are reported in Equity in earnings (losses) of equity method investees-net. The MUFG Group
recognizes an impairment loss on investments in equity method investees that is other-than-temporary. The
MUFG Group determines whether loss on investments is other-than-temporary, through consideration of various
factors, such as the length of time and the extent to which the fair value has been less than cost, the financial
condition and near-term prospects of the investees, and the intent and ability to retain its investment in theinvestees for a period of time sufficient to allow for any anticipated recovery in the fair value. The MUFG Groupalso evaluates additional factors, such as the condition and trend of the economic cycle, and trends in the generalmarket.
The MUFG Group consolidates VIEs if it has the power to direct the activities of a VIE which mostsignificantly impact the VIE’s economic performance and has the obligation to absorb losses or the right toreceive benefits that could potentially be significant to the entity, except certain VIEs that are deemed as
investment companies. For VIEs that are considered investment companies, the MUFG Group determines
whether it is the primary beneficiary by evaluation of whether it absorbs a majority of expected losses, receives amajority of expected residual returns or both.
Assets that the MUFG Group holds in an agency, fiduciary or trust capacity are not assets of the MUFG
Group and, accordingly, are not included in the accompanying consolidated balance sheets.
Cash Flows—For the purposes of reporting cash flows, cash and cash equivalents are defined as thoseamounts included in the accompanying consolidated balance sheets under the caption Cash and due from bankswith original maturities of 90 days or less. Cash flows from qualified hedging activities are classified in the same
category as the items being hedged.
Translation of Foreign Currency Financial Statements and Foreign Currency Transactions—Financial
statements of overseas entities are translated into Japanese yen using the respective fiscal year-end exchange
rates for assets and liabilities. Income and expense items are translated at average rates of exchange for therespective fiscal years.
Foreign currency translation gains and losses related to the financial statements of overseas entities of the
MUFG Group, net of related income tax effects, are credited or charged directly to Foreign currency translation
adjustments, a component of Accumulated other comprehensive income (loss) (“Accumulated OCI”). Tax effectsof gains and losses on foreign currency translation of the financial statements of overseas entities are notrecognized unless it is apparent that the temporary differences will reverse in the foreseeable future.
F-14

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Foreign currency-denominated assets and liabilities are translated into the functional currencies of theindividual entities included in consolidation at the respective fiscal year-end foreign exchange rates. Foreign
currency-denominated income and expenses are translated using average rates of exchange for the respective
fiscal years. Gains and losses from such translation are included in Foreign exchange gains (losses)—net, as
appropriate.
Repurchase Agreements, Securities Lending and Other Secured Financing Transactions—Securities soldwith agreements to repurchase (“repurchase agreements”), securities purchased with agreements to resell (“resaleagreements”) and securities lending and borrowing transactions are accounted for as secured financing or lendingtransactions, if the transferor has not surrendered control over the securities. If they meet the relevant conditions
for the surrender of control, they are accounted for as sales of securities with related off-balance sheet forward
repurchase commitments or purchases of securities with related off-balance sheet forward resale commitments.
For the fiscal years ended March 31, 2012, 2013 and 2014, there were no such transactions accounted for as
sales.
Collateral— For secured lending transactions, including resale agreements, securities borrowing
transactions, commercial lending and derivative transactions, the MUFG Group, as a secured party, generally has
the right to require the counterparties to provide collateral, including letters of credit, cash, securities and otherfinancial assets. For most securities lending transactions, the MUFG Group maintains strict levels of
collateralization governed by a daily mark-to-market analysis. Financial assets pledged as collateral are generally
negotiable financial instruments and are permitted to be sold or repledged by secured parties. If the
MUFG Group sells these financial assets received as collateral, it recognizes the proceeds from the sale and its
obligation to return the collateral. For secured borrowing transactions, principally repurchase agreements andsecurities lending transactions and derivative transactions, where the secured party has the right to sell or
repledge financial assets pledged as collateral, the MUFG Group separately discloses those financial assets
pledged as collateral in the accompanying consolidated balance sheets.
Trading Account Securities—Securities and money market instruments held in anticipation of short-term
market movements and for resale to customers are included in Trading account assets, and short trading positionsof these instruments are included in Trading account liabilities. Trading positions are carried at fair value in theaccompanying consolidated balance sheets and recorded on a trade date basis. Changes in the fair value of
trading positions are recognized currently in Trading account profits—net, as appropriate. The MUFG Group has
elected the fair value option for certain foreign securities. See Note 31 for a further discussion of fair value
option.
Investment Securities—Debt securities for which the MUFG Group has both the ability and positive intent tohold to maturity are classified as Securities being held-to-maturity and are carried at amortized cost. Debt
securities that the MUFG Group may not hold to maturity and marketable equity securities, other than thoseclassified as Trading account securities, are classified as Securities available-for-sale, and are carried at their fairvalues, with unrealized gains and losses reported on a net-of-tax basis within Accumulated OCI, net of taxes,
which is a component of equity. Other investment securities include nonmarketable equity securities carried attheir acquisition cost and investment securities held by subsidiaries that are investment companies or brokers anddealers. Such securities held by those subsidiaries are subject to the specialized industry accounting principles forinvestment companies and brokers and dealers applicable for those subsidiaries. Securities of those subsidiaries
are carried at their fair values.
For marketable equity securities, an other-than-temporary impairment is recognized in earnings when adecline in fair value below the cost is deemed other than temporary. For debt securities, an other-than-temporary
impairment is recognized in earnings for a security if the MUFG Group has intent to sell such a debt security or
if it is more likely than not the MUFG Group will be required to sell such a debt security before recovery of its
F-15

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
amortized cost basis. If not, the credit component of an other-than-temporary impairment is recognized inearnings, but the noncredit component is recognized in Accumulated OCI. In determining other-than-temporary
declines in fair value to be recognized as an impairment loss on investment securities, the MUFG Groupgenerally considers factors such as the ability and positive intent to hold the investments for a period of time
sufficient to allow for anticipated recovery in fair value, the financial condition of the issuer, the extent of decline
in fair value, and the length of time that the decline in fair value below cost has existed. Interest and dividends on
investment securities are reported in Interest income. Dividends are recognized when the shareholder right toreceive the dividend is established. Gains and losses on disposition of investment securities are computed using
the average cost method and are recognized on the trade date.
Derivative Financial Instruments—The MUFG Group engages in derivative activities involving swaps,
forwards, futures, options, and other types of derivative contracts. Derivatives are used in trading activities togenerate trading revenues and fee income for its own account and to respond to the customers’ financial needs.
Derivatives are also used to manage counterparty credit risk and market risk exposures to fluctuations in interestand foreign exchange rates, equity and commodity prices.
Derivatives entered into for trading purposes are carried at fair value and are reported as Trading accountassets or Trading account liabilities, as appropriate. The fair values of derivative contracts executed with thesame counterparty under legally enforceable master netting agreements are presented on a gross basis. Changes
in the fair value of such contracts are recognized currently in Foreign exchange gains (losses)—net with respect
to foreign exchange contracts and in Trading account profits—net with respect to interest rate contracts and othertypes of contracts.
Embedded features that are not clearly and closely related to the host contracts and meet the definition ofderivatives are separated from the host contracts and measured at fair value unless the contracts embedding thederivatives are measured at fair value in their entirety.
Derivatives are also used to manage exposures to fluctuations in interest and foreign exchange rates arisingfrom mismatches of asset and liability positions. Certain of those derivatives are designated as hedging
instruments and qualify for hedge accounting. The MUFG Group designates a derivative as a hedging instrument
at the inception of each such hedge relationship, and it documents, for such individual hedging relationships, therisk management objective and strategy, including the item being hedged, the specific risk being hedged and themethod used to assess the hedge effectiveness. In order for a hedging relationship to qualify for hedge
accounting, the changes in the fair value of the derivative instruments must be highly effective in achieving
offsetting changes in fair values or variable cash flows of the hedged items attributable to the risk being hedged.
Any ineffectiveness, which arises during the hedging relationship, is recognized in Non-interest income or
expense in the period in which it arises. All qualifying hedging derivatives are valued at fair value and includedin Other assets or Other liabilities, as appropriate. For cash flow hedges, the unrealized changes in fair value tothe extent effective are recognized in Accumulated OCI. Amounts realized on cash flow hedges related tovariable rate loans are recognized in Net interest income in the period when the cash flow from the hedged item
is realized. The fair value of cash flow hedges related to forecasted transactions, if any, is recognized in Noninterest income or expense in the period when the forecasted transaction occurs. Any difference that arises fromgains or losses on hedging derivatives offsetting corresponding gains or losses on the hedged items, and gains
and losses on derivatives attributable to the risks excluded from the assessment of hedge effectiveness arerecognized in Non-interest income or expense.
Loans—Loans originated by the MUFG Group (“originated loans”) are carried at the principal amountoutstanding, adjusted for unearned income and deferred net nonrefundable loan fees and costs. Originated loans
held and intended for dispositions or sales in secondary markets are transferred to the held-for-sale classificationand carried at the lower of cost or estimated fair value generally on an individual loan basis. Loan origination
F-16

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
fees, net of certain direct origination costs, are deferred and recognized over the contractual life of the loan as an
adjustment to yield using a method that approximates the interest method. Interest income on loans that are not
impaired is accrued and credited to interest income as it is earned. Unearned income and discounts or premiums
on purchased loans are deferred and recognized over the remaining contractual terms of the loans using a methodthat approximates the interest method when such purchased loans are outside the scope of the guidance on loans
and debt securities acquired with deteriorated credit quality as described below.
The MUFG Group classifies its loan portfolio into the following portfolio segments—Commercial,
Residential, Card, MUAH, and Bank of Ayudhya Public Company Limited (“Krungsri”) based on the grouping
used by the MUFG Group to determine the allowance for credit losses. The MUFG Group further classifies theCommercial segment into classes based on initial measurement attributes, risk characteristics, and its method ofmonitoring and assessing credit risk.
Originated loans are considered impaired when, based on current information and events, it is probable that
the MUFG Group will be unable to collect all the scheduled payments of principal or interest when due
according to the contractual terms of the loan agreement. Past due status is determined based on the contractual
terms of the loan and the actual number of days since the last payment date, and is considered in determining
impairment. Originated loans that experience insignificant payment delays and payment shortfalls generally are
not classified as impaired. Management determines the significance of payment delays and payment shortfalls on
a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower,
including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amountof the shortfall in relation to the principal and interest owed. Impairment is generally evaluated on a loan-by-loanbasis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, theloan’s observable market price, or the fair value of the collateral if the loan is collateral dependent.
Originated loans are generally placed on nonaccrual status when substantial doubt exists as to the full andtimely collection of either principal or interest, specifically when principal or interest is contractually past due
one month or more with respect to loans within all classes of the Commercial segment, three months or morewith respect to loans within the Card, MUAH, and Krungsri segments, and six months or more with respect toloans within the Residential segment. A nonaccrual loan may be restored to an accrual status when interest andprincipal payments become current and management expects that the borrower will make future contractual
payments as scheduled. When a loan is placed on nonaccrual status, interest accrued but not received is generally
reversed against interest income. Cash receipts on nonaccrual loans, for which the ultimate collectibility ofprincipal is uncertain, are applied as principal reductions; otherwise, such collections are credited to income.
The MUFG Group modifies certain loans in conjunction with its loss-mitigation activities. Through thesemodifications, concessions are granted to a borrower who is experiencing financial difficulty, generally in orderto minimize economic loss, to avoid foreclosure or repossession of collateral, and to ultimately maximize
payments received from the borrower. The concessions granted vary by portfolio segment, by program, and byborrower-specific characteristics, and may include interest rate reductions, term extensions, payment deferrals,
and partial principal forgiveness. Loan modifications that represent concessions made to borrowers who areexperiencing financial difficulties are identified as troubled debt restructurings (“TDRs”).
Generally, accruing loans that are modified in a TDR remain as accruing loans subsequent to themodification, and nonaccrual loans remain as nonaccrual. However, if a nonaccrual loan has been restructured asa TDR, the borrower is not delinquent under the restructured terms, and demonstrates that its financial condition
has improved, the MUFG Group may reclassify the loan to accrual status. This determination is generally
performed at least once a year through a detailed internal credit rating review process. Once a restructured
nonaccrual loan is deemed to be a TDR, the MUFG Group will continue to designate the loan as a TDR even if
the loan is reclassified to accrual status.
F-17

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
A loan that has been modified into a TDR is considered to be impaired until it matures, is repaid, or isotherwise liquidated, regardless of whether the borrower performs under the modified terms. Because loans
modified in TDRs are considered to be impaired, these loans are measured for impairment using the MUFG
Group’s established asset-specific allowance methodology, which considers the expected default rates for themodified loans. See “Allowance for Credit Losses” for a discussion for each portfolio segment.
In accordance with the guidance on loans and debt securities acquired with deteriorated credit quality,
impaired loans acquired for which it is probable that the MUFG Group will be unable to collect all contractual
receivables are initially recorded at the present value of amounts expected to be received. For these impairedloans, the related valuation allowances are not carried over or created initially. Accretable yield is limited to theexcess of the investor’s estimate of undiscounted cash flows over the investor’s initial investment in the loan.
Subsequent increases in cash flows expected to be collected are recognized prospectively through adjustment of
the loan’s yield over its remaining life after reduction of any remaining allowance for credit losses for the loanestablished after its acquisition, if any, while any decrease in such cash flows below those initially expected atacquisition plus additional cash flows expected to be collected arising from changes in estimate after acquisition
is recognized as an impairment.
Loan Securitization—The MUFG Group securitizes and services commercial, industrial, and residential
loans in the normal course of business. The MUFG Group accounts for a transfer of loans in a securitizationtransaction as a sale if it meets relevant conditions for the surrender of control. Otherwise, the transfer isaccounted for as a collateralized borrowing transaction. When a securitization is accounted for as a sale, theproceeds from a sale of financial assets consist of the cash and any other assets obtained, including beneficial
interests and separately recognized servicing assets, in the transfer less any liabilities incurred, including
separately recognized servicing liabilities. All proceeds and reductions of proceeds from a sale shall be initiallymeasured at fair value.
Allowance for Credit Losses—The MUFG Group maintains an allowance for credit losses to absorb
probable losses inherent in the loan portfolio. Actual credit losses (amounts deemed uncollectible, in whole or inpart), net of recoveries, are generally determined based on detailed loan reviews and a credit assessment bymanagement at each balance sheet date, and are deducted from the allowance for credit losses as net charge-offs.
The MUFG Group generally applies its charge-off policy to all loans in its portfolio regardless of the type ofborrower. Management believes that the provision for credit losses is adequate and the allowance is at theappropriate amount to absorb probable losses inherent in the loan portfolio. During the fiscal year ended
March 31, 2014, the MUFG Group did not make any significant changes to the methodologies or policies used todetermine its allowance for credit losses.
Key elements relating to the policies and discipline used in determining the allowance for credit losses are
credit classification and the related borrower categorization process. The categorization is based on conditions
that may affect the ability of borrowers to service their debt, taking into consideration current financial
information, historical payment experience, credit documentation, public information, analyses of relevant
industry segments or existing economic conditions. In determining the appropriate level of the allowance, the
MUFG Group evaluates the probable loss by collateral value, historical loss experience, probability of insolvency
and category of loan based on its type and characteristics. The MUFG Group updates these conditions andprobable loss on a regular basis and upon the occurrence of unexpected change in the economic environment.

F-18

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The methodologies used to estimate the allowance and the charge-off policy for each portfolio segment are
as follows:
Commercial segment
In the Commercial segment, the methodology for assessing the appropriateness of the allowance consists ofseveral key elements, which include the allocated allowance for individual loans specifically identified forevaluation, the formula allowance, the allocated allowance for country risk exposure, and the allocated allowance
for large groups of smaller-balance homogeneous loans.
The allocated allowance for individual loans specifically identified for evaluation represents the impairment
allowance determined in accordance with the guidance on accounting by creditors for impairment of a loan. The
factors considered by management in determining impairment are the internal credit rating assigned to eachborrower which represents the borrower’s creditworthiness determined based on payment status, number ofdelinquencies, and the probability of collecting principal and interest payments when due. The impairment of aloan is measured based on the present value of expected future cash flows discounted at the loan’s effective
interest rate, or on the loan’s observable market price, or based on the fair value of the collateral if the loan iscollateral dependent.
The formula allowance is applied to loans that are categorized as Normal or Close Watch, excluding loans
identified as a TDR, based on the internal credit rating and historical loss factors which are based on the loss
experience. See Note 4 for the information on loans to borrowers categorized based on the internal borrower
rating. Estimated losses inherent in the loans at the balance sheet date are calculated by multiplying the default
ratio by the nonrecoverable ratio (determined as a complement of the recovery ratio). The default ratio is
determined by each internal credit rating, taking into account the historical number of defaults of borrowers
within each internal credit rating divided by the total number of borrowers. The recovery ratio is mainly
determined by the historical experience of collections against loans in default. The default ratio, the recovery
ratio and other indicators are continually reviewed to determine the appropriate level of the allowance. Because
the evaluation of inherent loss for these loans involves a high degree of uncertainty, subjectivity and judgment,
the estimation of the formula allowance is back-tested by comparing the allowance with the actual results
subsequent to the balance sheet date. The results of such back-testing are evaluated by management to determine
whether the manner and level of formula allowance needs to be changed in subsequent years.
The allocated allowance for country risk exposure is a country-specific allowance for Normal and Close
Watch loans, excluding loans identified as a TDR. The allowance is established to supplement the formula
allowance for these loans, based on an estimate of probable losses relating to the exposure to countries that are
identified by management to have a high degree of transfer risk. The measurement is based on a function ofdefault probability and the recovery ratio with reference to external credit ratings. For the allowance forindividual cross-border loans specifically identified for evaluation, the MUFG Group incorporates transfer risk in
its determination of the related allowance.
The allocated allowance for large groups of smaller-balance homogeneous loans is established through aprocess that begins with estimates of probable losses inherent in the portfolio. These estimates are based uponvarious analyses, including historical delinquency and historical loss experience.
Loans that have been modified into a TDR are treated as impaired loans. For nonaccrual TDRs, theallowance for credit losses is provided for these loans using the discounted cash flow method, or based on the fairvalue of the collateral. For TDRs accounted for as accruing loans, the allowance for credit losses is determinedby discounting the estimated future cash flows using the effective interest rate of the loans prior to modification.
F-19

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In relation to loans categorized as Legally/Virtually Bankrupt, the amount of loans less estimated value ofthe collateral and guaranteed amount is generally considered uncollectible, and is charged off.
Residential segment
In the Residential segment, the loans are comprised of smaller-balance homogeneous loans that are pooledby their internal credit ratings based on the number of delinquencies. The loans in this segment are generally
secured by collateral. Collateral values are based on internal valuation sources, and the allowance is determined
for unsecured amounts. The allowance for the nondelinquent group of loans is determined based on historicalloss experience. For delinquent groups of loans, the MUFG Group determines the allowance based on theprobability of insolvency by the number of actual delinquencies and historical loss experience.
Loans that have been modified into a TDR are treated as impaired loans. For nonaccrual TDRs, theallowance for credit losses is provided for these loans using the discounted cash flow method, or based on the fairvalue of the collateral. For TDRs accounted for as accruing loans, the allowance for credit losses is determinedby discounting the estimated future cash flows using the effective interest rate of the loans prior to modification.
In relation to loans that are in past due status over a certain period of time and deemed uncollectible, theamount of loans less estimated value of the collateral and guaranteed amount is generally considered
uncollectible and charged off.
Card segment
In the Card segment, the loans are smaller-balance homogeneous loans that are pooled by their internal
credit rating based on the number of delinquencies. The allowance for loans in this segment is generally
determined based on the probability of insolvency by the number of actual delinquencies and historical loss
experience. For calculating the allocated allowance for loans specifically identified for evaluation, impaired loans
are aggregated for the purpose of measuring impairment using historical loss factors.
Loans that have been modified into a TDR are treated as impaired loans, and the allowance for credit losses
is determined using the discounted cash flow method whereby the estimated future cash flows are discounted
using the effective interest rate of the loans prior to modification.
In relation to loans that are in past due status over a certain period of time and deemed uncollectible, theamount of loans is generally fully charged off.
MUAH segment
In the MUAH segment, the methodology for assessing the appropriateness of the allowance consists ofseveral key elements, which include the allocated allowance for individual loans specifically identified forevaluation, the formula allowance, the allocated allowance for large groups of smaller-balance homogeneousloans, and the unallocated allowance.
The allocated allowance for individual loans specifically identified for evaluation is established for loans
when management determines that the MUFG Group will be unable to collect all amounts due according to thecontractual terms of the loan agreement, including interest payments. Impaired loans are carried at the lower ofthe recorded investment in the loan, the present value of expected future cash flows discounted at the loan’s
effective rate, the loan’s observable market price, or the fair value of the collateral, if the loan is collateraldependent.
F-20

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The formula allowance is calculated by applying historical loss factors to outstanding loans. Historical loss
factors are based on the historical loss experience and may be adjusted for significant factors that, inmanagement’s judgment, affect the collectibility of the portfolio as of the balance sheet date.
The allocated allowance for large groups of smaller-balance homogeneous loans is established for consumer
loans as well as for smaller balance commercial loans. These loans are managed by a pool basis, and loss factors
are based on expected net charge-off ranges.
The unallocated allowance represents an estimate of additional losses inherent in the loan portfolio and iscomposed of attribution factors, which are based upon management’s evaluation of various conditions that are
not directly measured in the determination of the allocated allowance. The conditions used for consideration of
the unallocated allowance at each balance sheet date include factors such as, existing general economic andbusiness conditions affecting the key lending areas and products of the MUFG Group, credit quality trends andrisk identification, collateral values, loan volumes, underwriting standards and concentrations, specific industry
conditions, recent loss experience and the duration of the current business cycle. The MUFG Group reviews
these conditions and has an internal discussion with senior credit officers on a quarterly basis.
Loans that have been modified into a TDR are treated as impaired loans. For nonaccrual TDRs, theallowance for credit losses is provided for these loans using the discounted cash flow method, or based on the fairvalue of the collateral. For TDRs accounted for as accruing loans, the allowance for credit losses is determinedby using the discounted cash flow method whereby the estimated future cash flows are discounted using theeffective interest rate of the loans prior to modification.
Commercial loans are generally considered uncollectible based on an evaluation of the financial conditionof a borrower as well as the value of any collateral and, when considered to be uncollectible, loans are charged
off in whole or in part. Consumer loans are generally considered uncollectible based on past due status and thevalue of any collateral and, when considered to be uncollectible, loans are charged off in whole or in part.
Krungsri segment
In the Krungsri segment, the methodology for assessing the appropriateness of the allowance consists ofseveral key elements, which include the allocated allowance for individual loans specifically identified forevaluation, the formula allowance, and the allocated allowance for large groups of smaller-balance homogeneousloans.
The allocated allowance for individual loans specifically identified for evaluation is established for loans
when management determines that the MUFG Group will be unable to collect all amounts due according to thecontractual terms of the loan agreement, including interest payments. Impaired loans are carried at the lower ofthe recorded investment in the loan, the present value of expected future cash flows discounted at the loan’s
effective rate, the loan’s observable market price, or the fair value of the collateral, if the loan is collateraldependent.
The formula allowance is calculated by applying historical loss factors to outstanding loans. Historical loss
factors are based on the historical loss experience and may be adjusted for significant factors that, inmanagement’s judgment, affect the collectibility of the portfolio as of the balance sheet date.
The allocated allowance for large groups of smaller-balance homogeneous loans is established for smaller
balance loans such as housing loans, credit card loans, and personal loans. These loans are managed by a poolbasis, and loss factors are based on expected net charge-off ranges.
F-21

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Loans that have been modified into a TDR are treated as impaired loans. For nonaccrual TDRs, theallowance for credit losses is provided for these loans using the discounted cash flow method, or based on the fairvalue of the collateral. For TDRs accounted for as accruing loans, the allowance for credit losses is determinedby using the discounted cash flow method whereby the estimated future cash flows are discounted using theeffective interest rate of the loans prior to modification.
Loans to customers are charged off in the year that they are determined to be uncollectible considering thefinancial condition of a borrower.
Allowance for Off-Balance Sheet Credit Instruments—The MUFG Group maintains an allowance for credit
losses on off-balance sheet credit instruments, including commitments to extend credit, guarantees, standby
letters of credit and other financial instruments. The allowance is recorded as a liability in Other liabilities. The
MUFG Group adopts the same methodology used in determining the allowance for credit losses on loans.
Potential credit losses related to derivatives are considered in the fair value of the derivatives.
Net changes in the allowance for off-balance sheet credit instruments are accounted for as Other noninterest expenses.
Premises and Equipment—Premises and equipment are stated at cost less accumulated depreciation andamortization. Depreciation is charged to operations over the estimated useful lives of the related assets.
Leasehold improvements are depreciated over the terms of the respective leases or the estimated useful lives of
the improvements, whichever is shorter. MUFG, BTMU and MUTB apply the declining-balance method in
depreciating their premises and equipment, while other subsidiaries mainly apply the straight-line method, at
rates principally based on the following estimated useful lives:
Years

Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 to 50
Equipment and furniture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2 to 20
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 to 39
Maintenance, repairs and minor improvements are charged to operations as incurred. Major improvements
are capitalized. Net gains or losses on dispositions of premises and equipment are included in Other non-interest
income or expense, as appropriate.
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate thatthe carrying amount of an asset may not be recoverable. Recoverability of an asset to be held and used ismeasured by a comparison of the carrying amount to future undiscounted net cash flows expected to be generated
by the asset. If an asset is considered to be impaired, the impairment to be recognized is measured by the amountby which the carrying amount of the asset exceeds the fair value. For purposes of recognition and measurementof an impairment loss, a long-lived asset or assets are grouped with other assets and liabilities at the lowest levelwith independent and identifiable cash flows. Assets to be disposed of by sale are reported at the lower of thecarrying amount or fair value less estimated cost to sell.
Asset retirement obligations related to restoration of certain leased properties upon lease termination arerecorded in Other liabilities with a corresponding increase in leasehold improvements. The amounts represent thepresent value of expected future cash flows associated with returning such leased properties to their original
condition. The difference between the gross and present value of expected future cash flows is accreted over thelife of the related leases as a non-interest expense.
F-22

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Goodwill —The MUFG Group recognizes goodwill, as of the acquisition date, measured as the excess ofthe purchase price over the fair value of the net assets acquired. Goodwill related to investments in equity method
investees is included in Other assets as a part of the carrying amount of investments in equity method investees.
Goodwill arising from a business combination is not amortized but is tested at least annually for
impairment. Goodwill is recorded at a designated reporting unit level for the purpose of assessing impairment. A
reporting unit is an operating segment, or an identified business unit one level below an operating segment. An
impairment loss is recognized to the extent that the carrying amount of goodwill exceeds its implied fair value.
Intangible assets—Intangible assets consist of software, core deposit intangibles, customer relationships,
trade names and other intangible assets. These are amortized over their estimated useful lives unless they haveindefinite useful lives. Amortization of intangible assets is computed in a manner that best reflects the economic
benefits of the intangible assets as follows:
Useful lives(years)Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Core deposit intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2 to 104 to 19
7 to 27
2 to 40

Amortization method

Straight-line
Declining-balance
Straight-line, Declining-balance
Straight-line

Intangible assets having indefinite useful lives are not amortized but are subject to annual impairment tests.
An impairment exists if the carrying value of an indefinite-lived intangible asset exceeds its fair value. For otherintangible assets subject to amortization, an impairment is recognized if the carrying amount is not recoverable
and the carrying amount exceeds the fair value of the intangible asset.
The MUFG Group capitalizes certain costs associated with the acquisition or development of internal-use
software. Costs subject to capitalization are salaries and employee benefits for employees who are directly
associated with and who devote time to the internal-use computer software project, to the extent of time spent
directly on the project. Once the software is ready for its intended use, the MUFG Group begins to amortize
capitalized costs on a straight-line basis.
Accrued Severance and Pension Liabilities—The MUFG Group has defined benefit pension plans and otherpostretirement benefit plans, including severance indemnities plans. The liabilities related to these plans arecomputed and recognized based on actuarial computations. Net actuarial gains and losses that arise fromdifferences between actual experience and assumptions are generally amortized over the average remaining
service period of participating employees if it exceeds the corridor, which is defined as the greater of 10% of plan
assets or the projected benefit obligation. Under the guidance related to employers’ accounting for defined
benefit pension and other postretirement plans, the MUFG Group recognizes a net liability or asset to report thefunded status of its defined benefit pension and other postretirement plans in the accompanying consolidatedbalance sheets and recognizes changes in the funded status of defined benefit pension and other postretirement
plans in the year in which the changes occur in Accumulated OCI. The costs of the plans, based on actuarial
computations of current and future employee benefits, were charged to Salaries and employee benefits. The
MUFG Group measures plan assets and benefit obligations as of the date of the consolidated balance sheets.
Long-Term Debt —Premiums, discounts and issuance costs of long-term debt are amortized based on themethod that approximates the interest method over the terms of the long-term debt.
F-23

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Obligations under Guarantees—The MUFG Group provides customers with a variety of guarantees andsimilar arrangements, including standby letters of credit, financial and performance guarantees, credit protection,and liquidity facilities. The MUFG Group recognizes guarantee fee income over the guarantee period based on
the contractual terms of the guarantee contracts. It is the MUFG Group’s business practice to receive a guarantee
fee at the inception of the guarantee, which approximates market value of the guarantee and is initially recorded
as a liability, which is then recognized as guarantee fee income ratably over the guarantee period.
Allowance for Repayment of Excess Interest—The MUFG Group maintains an allowance for repayment ofexcess interest based on an analysis of past experience of reimbursement of excess interest, borrowers’ profile,recent trend of borrowers’ claims for reimbursement, and management’s future forecasts. The allowance isrecorded as a liability in Other liabilities.
Fees and Commissions—Revenue recognition of major components of fees and commissions is as follows:‰

Fees on funds transfer and collection services, service charges on deposit accounts, fees andcommissions on securities business, fees on real estate business, insurance commissions, fees andcommissions on stock transfer agency services, fees on investment funds business, and fees andcommissions from other services are generally recognized as revenue when the related services are
performed or recognized over the period that the service is provided.

‰

Fees from trade-related financing services are recognized over the period of the financing.

‰

Trust fees are recognized on an accrual basis, generally based on the volume of trust assets undermanagement and/or the operating performance for the accounting period of each trust account. With
respect to the trust accounts with guarantee of trust principal, trust fees are determined based on the
profits earned by individual trust account during the trust accounting period, less deductions, including
provision for reserve, impairment for individual investments and dividends paid to beneficiary
certificate holders. The trust fees for these trust accounts are accrued based on the amounts expected tobe earned during the accounting period of each trust account.

‰

Annual fees and royalty and other service charges related to credit card business are recorded on astraight-line basis as services are provided.

‰Interchange income from the credit card business is recognized as billed.

‰

Fees on guarantees are generally recognized over the contractual periods of the respective guarantees.
Amounts initially recorded as a liability corresponding to the obligations at fair value are generally
recognized as revenue over the terms of the guarantees as the MUFG Group is deemed to be released
from the risk under guarantees.

Income Taxes—The MUFG Group accounts for income taxes under the asset and liability method, which
requires the recognition of deferred tax assets and deferred tax liabilities for the expected future tax consequencesof events that have been included in the accompanying consolidated financial statements. Under this method,deferred tax assets and deferred tax liabilities are determined based on the differences between the financial
statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which thedifferences are expected to reverse. The effect of a change in tax rates on deferred tax assets and deferred tax
liabilities is recognized in income in the period that includes the enactment date.
The MUFG Group records net deferred tax assets to the extent these assets will more likely than not berealized. In making such determination, all available positive and negative evidence is considered, including
future reversals of existing taxable temporary differences, projected future taxable income, tax planning
F-24

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
strategies and recent financial operations. In the event the MUFG Group were to determine that it would be able
to realize deferred tax assets in the future in excess of their net recorded amount, the MUFG Group would makean adjustment to the valuation allowance, which would reduce the provision for income taxes.
Uncertain tax positions are recorded on the basis of a two-step process whereby (1) it is determined whether
it is more likely than not that the tax position will be sustained on the basis of its technical merits, and (2) for
those tax positions that meet the more-likely-than-not recognition threshold, the MUFG Group recognizes thelargest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related
tax authority. The MUFG Group recognizes interest and penalties related to unrecognized tax benefits within theincome tax expense. Accrued interest and penalties are included within Other liabilities.
Free Distributions of Common Shares—As permitted by the Company Law of Japan (the “Company Law”),
Japanese companies, upon approval by the Board of Directors, may make a free distribution of shares, in theform of a “stock split” as defined, to shareholders. In accordance with generally accepted accounting practice inJapan, such distribution does not give rise to any change in capital stock or capital surplus accounts. Commonshares distributed are recorded as shares issued on the distribution date. See Note 17 for further information.
Earnings per Common Share—Basic earnings per share (“EPS”) excludes dilutive effects of potential
common shares and is computed by dividing earnings applicable to common stock shareholders by the weighted
average number of common shares outstanding for the period, while diluted EPS gives effect to all dilutive
potential common shares that were outstanding during the period. See Note 22 for the computation of basic anddiluted EPS.
Treasury Stock—The MUFG Group presents its treasury stock, including shares of MUFG owned by its
subsidiaries and affiliated companies, as a reduction of equity on the accompanying consolidated balance sheetsat cost and accounts for treasury stock transactions under an average cost method. Gains (losses) on sales oftreasury stock are charged to capital surplus and unappropriated retained earnings.
Comprehensive Income (Loss)—Comprehensive income (loss) includes net income (loss) before attribution
to noncontrolling interests and other comprehensive income (“OCI”). All changes in unrealized gains and losses
on investment securities, unrealized gains and losses on derivatives qualifying for cash flow hedges, defined
benefit plans and foreign currency translation adjustments constitute OCI and are presented, with related income
tax effects, in the accompanying consolidated statements of comprehensive income.
Stock-Based Compensation—MUFG and certain of its subsidiaries have stock-based compensation plans.
Stock-based compensation expenses are recognized based on the grant date fair value of share based
compensation over the period during which an employee is required to provide service in accordance with theterms of the plans. See Note 32 for further discussion of stock-based compensation plans.
Reclassifications
Certain reclassifications and format changes have been made to the consolidated financial statements for the fiscal
years ended March 31, 2012 and 2013 to conform to the presentation for the fiscal year ended March 31, 2014.
These reclassifications and format changes include the integration of “Provision (reversal) for repayment ofexcess interest” into “Other non-interest expenses” which had previously been presented as a separate line itemin non-interest expense in the accompanying consolidated statements of income for the fiscal years ended
March 31, 2012 and 2013.
These reclassifications and format changes did not result in a change to previously reported financial
positions and results of operations.
F-25

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Accounting Changes
Amendments to Accounting Scope of Embedded Credit Derivatives—In March 2010, the FASB issued new
guidance which clarifies the scope exception related to embedded credit derivatives. This guidance addresses
how to determine which embedded credit derivative features, including those in collateralized debt obligations(“CDOs”) and synthetic CDOs, are considered to be embedded derivatives that are exempt from potential
bifurcation and separate accounting requirement. This guidance is effective for the first interim reporting period
beginning after June 15, 2010 with early application permitted at the beginning of the first interim reporting
period beginning after the issuance of this new guidance. In initially adopting this new guidance, an entity may
elect the fair value option for any investment in a beneficial interest in a securitized financial asset. The electionof the fair value option is irrevocable and should be determined on an instrument-by-instrument basis at the
beginning of the reporting period of initial adoption. The MUFG Group adopted this guidance on April 1, 2011,
and recorded a ¥135 million increase to retained earnings as a cumulative effect adjustment.
Amendments to the Presentation of Comprehensive Income—In February 2013, the FASB issued new guidance
which requires an entity to present separately for each component of OCI, current period reclassifications out of
Accumulated OCI and other amounts of current period OCI. In addition, the guidance requires an entity to report theeffect of significant reclassifications out of Accumulated OCI on the respective line items in net income if the amountbeing reclassified is required under U.S. GAAP to be reclassified in its entirety to net income. For other amounts thatare not required under U.S. GAAP to be reclassified in their entirety to net income in the same reporting period, an
entity is required to cross-reference other disclosures required under U.S. GAAP that provide additional detail about
those amounts. The amendments in this guidance are effective for fiscal years, and interim periods within those years,
beginning after December 15, 2012. Early adoption is permitted. The MUFG Group adopted this guidance on April 1,
2013. As a result of the adoption of this guidance, the presentation of the MUFG Group’s consolidated statements ofcomprehensive income and consolidated statements of equity were changed, while disclosures related to Accumulated
OCI were added. This guidance had no impact on its financial position and result of operations. See Note 19 for further
details of the required disclosures.
Disclosures about Offsetting Assets and Liabilities—In December 2011, the FASB issued new guidance
which requires that entities disclose both gross information and net information about both instruments andtransactions eligible for offset in the statement of financial position and instruments and transactions subject toan agreement similar to a master netting arrangement. In January 2013, the FASB issued further guidance which
provides clarification that the scope of the guidance on disclosures about offsetting assets and liabilities applies
to derivatives, including bifurcated embedded derivatives, repurchase agreements and reverse repurchaseagreements, and securities borrowing and securities lending transactions that are either offset in accordance withexisting guidance or subject to an enforceable master netting arrangement or similar agreement. An entity should
provide the disclosures required by those amendments retrospectively for all comparative periods presented. The
MUFG Group adopted this guidance on April 1, 2013, which had no impact on its financial position and resultsof operations. See Note 15 for further details of the required disclosures.
Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of aGovernment-Assisted Acquisition of a Financial Institution—In October 2012, the FASB issued new guidance,
which clarifies the accounting guidance for subsequently measuring an indemnification asset recognized as aresult of a government-assisted acquisition of a financial institution when a change in cash flows expected to becollected occurs. This guidance specifies that an entity shall subsequently account for the change in measurementof the indemnification asset on the same basis as the change in assets subject to the indemnification and limit any
amortization of changes in value to the lesser of the contractual term of the indemnification agreement or theremaining life of the indemnified assets. This guidance is effective for fiscal years, and interim periods withinthose years, beginning on or after December 15, 2012. Early adoption is permitted. The MUFG Group adopted
this guidance on April 1, 2013, which had no impact on its financial position and results of operations.
F-26

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Recently Issued Accounting Pronouncements
Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the
Obligation Is Fixed at the Reporting Date—In February 2013, the FASB issued new guidance for therecognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements
for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date,
except for obligations addressed within existing guidance in U.S. GAAP. This guidance is effective for fiscal
years, and interim periods within those years, beginning after December 15, 2013. The MUFG Group does notexpect that the adoption of the guidance will have a material impact on its financial position and results ofoperations.
Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries
or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity—In March 2013, the FASB
issued new guidance which requires the release of an entity’s cumulative translation adjustment into net income
only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity inwhich the subsidiary or group of assets had resided. This guidance is effective for fiscal years, and interim
periods within those years, beginning after December 15, 2013. The MUFG Group does not expect that the
adoption of the guidance will have a material impact on its financial position and results of operations.
Amendments to the Scope, Measurement, and Disclosure Requirements for Investment Companies—In
June 2013, the FASB issued guidance that changed the approach for determining whether an entity is aninvestment company under U.S. GAAP, and set forth certain measurement and disclosure requirements. This
guidance changes the approach to the investment company assessment, clarifies the characteristics of aninvestment company, and provides comprehensive guidance for assessing whether an entity is an investmentcompany. In addition, this guidance requires an investment company to measure noncontrolling ownershipinterests in other investment companies at fair value rather than using the equity method of accounting. Also, thisguidance requires additional disclosures about an entity’s status as an investment company and financial support
provided or contractually required to be provided by an investment company to its investees. This guidance iseffective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early
adoption of this guidance is prohibited. The MUFG Group does not expect that the adoption of the guidance will
have a material impact on its financial position and results of operations.
Accounting for Investments in Qualified Affordable Housing Projects—In January 2014, the FASB issued
guidance on accounting for investments by a reporting entity in flow-through limited liability entities thatmanage or invest in affordable housing projects that qualify for the low-income housing tax credit. The guidance
permit reporting entities to make an accounting policy election to account for their investments in qualified
affordable housing projects using the proportional amortization method if certain conditions are met. Under the
proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax
credits and other tax benefits received and recognizes the net investment performance in the income statement as
a component of income tax expense (benefit). For those investments in qualified affordable housing projects notaccounted for using the proportional amortization method, the investment should be accounted for as an equity
method investment or a cost method investment. This guidance is effective for fiscal years, and interim periods
within those years, beginning after December 15, 2014 and should be applied retrospectively to all periods
presented. The MUFG Group has not completed the study of what effect this guidance will have on its financial
position and results of operations.
Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure—In
January 2014, the FASB issued guidance that clarifies that an in substance repossession or foreclosure occurs,
and a creditor is considered to have received physical possession of residential real estate property collateralizing
F-27

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property
upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property
to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal
agreement. Additionally, the amendments require interim and annual disclosures of both the amount offoreclosed residential real estate property held by the creditor and the recorded investment in consumer mortgage
loans collateralized by residential real estate property that are in the process of foreclosure according to local
requirements of the applicable jurisdiction. This guidance is effective for fiscal years, and interim periods withinthose years, beginning after December 15, 2014. Early adoption of this guidance is permitted. The MUFG Group
has not completed the study of what effect this guidance will have on its financial position and results ofoperations.
Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity—In April
2014, the FASB issued new guidance that changes the requirements for reporting discontinued operations. A
disposal of a component of an entity or a group of components of an entity is required to be reported indiscontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an
entity’s operations and financial results when the component of an entity or group of components of an entity
meets certain criteria to be classified as held for sale or disposed. This guidance requires an entity to present, foreach comparative period, the assets and liabilities of a disposal group that includes a discontinued operation
separately in the asset and liability sections, respectively, of the statement of financial position and additional
disclosures. Also, this guidance requires an entity to provide disclosures about a disposal of an individuallysignificant component of an entity that does not qualify for discontinued operations presentation in the financial
statements. This guidance is effective for all disposals (or classifications as held for sale) of components of anentity that occur within annual periods beginning on or after December 15, 2014, and interim periods withinthose years and all businesses that, on acquisition, are classified as held for sale that occur within annual periods
beginning on or after December 15, 2014, and interim periods within those years. The MUFG Group does notexpect that the adoption of the guidance will have a material impact on its financial position and results ofoperations. In case there will be discontinued operations, the MUFG Group should provide related disclosures as
required in this guidance.
Revenue from Contracts with Customers—In May 2014, the FASB issued new guidance which supersedes
the current revenue recognition requirements, including most industry-specific guidance. The core principle of
the guidance is that an entity should recognize revenue to depict the transfers of promised goods or services tocustomers in an amount that reflects the consideration to which the entity expects to be entitled in exchange forthose goods or services. The guidance also requires additional disclosures about the nature, amount, timing anduncertainty of revenue and cash flows arising from contracts with customers, including significant judgments andchanges in judgments, and assets recognized from the costs incurred to obtain or fulfill a contract. This guidanceis effective for annual reporting periods beginning after December 15, 2016, including interim periods within thatreporting period. Early application is not permitted. The MUFG Group has not completed the study of what
effect this guidance will have on its financial position and results of operations.
Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures—In June 2014, the FASB
issued new guidance which changes the accounting for both repurchase-to-maturity transactions and repurchasefinancing arrangements. The guidance also requires an entity to disclose information about certain transactions
accounted for as a sale in which the transferor retains substantially all of the exposure to the economic return on
the transferred financial assets through an agreement with the same counterparty, and information about
repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions that are
accounted for as secured borrowings. This guidance is effective for interim and annual periods beginning after
December 15, 2014, except for the disclosure requirement about repurchase agreements, securities lending
F-28

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
transactions, and repurchase-to-maturity transactions accounted for as secured borrowings, that is effective forannual periods beginning after December 15, 2014, and for interim periods beginning after March 15, 2015. The
MUFG Group has not completed the study of what effect this guidance will have on its financial position andresults of operations.
2.

BUSINESS DEVELOPMENTS

MUFG Americas Holdings Corporation
On December 1, 2012, MUB, a subsidiary of MUAH, acquired certain assets and assumed certain liabilities ofPacific Capital Bancorp, a bank holding company headquartered in Santa Barbara, California, for ¥124,484 million in
cash, and thereby recorded goodwill of ¥33,875 million and intangible assets of ¥6,093 million.
On June 24, 2013, MUB acquired PB Capital Corporation’s institutional commercial real estate (“CRE”)
lending division for ¥358,040 million in cash, and thereby recorded goodwill of ¥22,077 million. The purpose ofthis transaction is to expand the MUAH’s CRE presence in the U.S., and provide geographic and asset classdiversification. The assets acquired and liabilities assumed were recorded at their estimated fair values on theacquisition date. These fair value estimates are considered provisional and are subject to change pending thereceipt of additional information relative to closing date fair values, but not to exceed a period of one year after
the closing date of the acquisition. During the year ended March 31, 2014, measurement period adjustments wereapplied to the acquisition date fair values, which increased goodwill by ¥1,038 million.
Investment in Morgan Stanley
On September 29, 2008, the MUFG Group and Morgan Stanley completed a final agreement to enter into a
strategic capital alliance aiming to build a global strategic alliance primarily in the corporate and investmentbank fields. On October 13, 2008, the MUFG Group purchased shares of preferred stock issued by Morgan
Stanley. The investment in Morgan Stanley’s preferred stock consisted of Series B Non-cumulative Non-voting
Perpetual Convertible Preferred Stock (“Series B Preferred Stock”) and Series C Non-cumulative Non-voting
Perpetual Preferred Stock. On April 21, 2011, the MUFG Group and Morgan Stanley entered into an agreement
to convert the Series B Preferred Stock with a face value of ¥808,266 million, into Morgan Stanley’s common
stock. On June 30, 2011, the MUFG Group converted the Series B Preferred Stock for approximately 385 million
shares of Morgan Stanley’s common stock, including approximately 75 million additional shares resulting fromthe adjustment to the conversion rate pursuant to the agreement. The adjustment to the conversion rate wasrecognized as a gain of ¥139,320 million, which was included in Gain on conversion rate adjustment of
convertible preferred stock in Interest income on investment securities in the accompanying consolidated
statement of income for the fiscal year ended March 31, 2012.
Prior to the conversion, the MUFG Group held approximately 3.0% of Morgan Stanley’s common stock and theinvestment was included in Investment securities available-for-sale. As a result of the conversion, the MUFG Group
held approximately 22.4% of Morgan Stanley’s common stock, giving the MUFG Group the ability to exercise
significant influence over the operations of Morgan Stanley. Accordingly, the MUFG Group has adopted the equity
method of accounting for its investment in Morgan Stanley from June 30, 2011. The MUFG Group’s investments,
results of operations and retained earnings were adjusted retroactively on a step-by-step basis as if the equity method of
accounting had been in effect during all previous periods. The MUFG Group’s retroactive adjustment was applied tothe existing approximately 3.0% investment in Morgan Stanley’s common stock through June 30, 2011. Following theconversion, the MUFG Group began recognizing its approximately 22.4% interest in Morgan Stanley’s common stock
as an investment in an equity method investee included in Other assets.
F-29

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Upon qualifying for the equity method of accounting on June 30, 2011, the MUFG Group performed avaluation of its Morgan Stanley investment. As a result of the valuation, the carrying amount of the MUFG
Group’s investment in common stock exceeded the underlying equity in net assets of Morgan Stanley and theexcess was recognized as goodwill.
At September 30, 2011, the quoted market price of Morgan Stanley’s common stock had declined 41% fromthe quoted market price at June 30, 2011. The quoted market price at September 30, 2011 represented less thanhalf of the MUFG Group’s carrying amount on a per share basis. The MUFG Group evaluated this stock pricedecline to determine whether the investment in Morgan Stanley was other than temporarily impaired. The MUFG
Group determined that the decline in the stock price was other than temporary in light of the increasingly
stringent regulatory environment and the existing adverse economic events in Europe. More specifically, newand pending regulations, such as the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act (“theDodd-Frank Act”) and the global regulatory framework often referred to as “Basel III,” were expected to impose
significant constraints on the business activities of financial institutions, including the prohibition on certaintransactions, the enhancement of risk management frameworks, and the increase in capital adequacy
requirements. Rules designed to further regulate the business operations of financial institutions were being
adopted, or were at the time scheduled soon to be adopted, by government agencies, including the rules relating
to resolution plans and rules generally referred to as the Volcker Rule under the Dodd-Frank Act. Furthermore,
the impact of the prolonged European economic crisis had resulted in negative long-term prospects for the global
financial market. The events in Europe had an immediate effect on financial institutions holding sovereign
securities and were also expected to have long-term consequences for financial institutions with operations in
Europe. Given these uncertain economic environment and increasing regulatory challenges, and the significant
excess of the carrying amount per share over the quoted market price of Morgan Stanley’s common stock, the
MUFG Group recorded an other-than-temporary impairment loss of ¥579,468 million at September 30, 2011.
The MUFG Group’s investment in Morgan Stanley’s common stock was adjusted to the quoted market price ofMorgan Stanley’s common stock as of September 30, 2011, and the impairment loss was reflected in Equity inearnings (losses) of equity method investees-net in the accompanying consolidated statement of income for the
fiscal year ended March 31, 2012. The MUFG Group recorded no additional other-than-temporary impairment
loss during the fiscal year ended March 31, 2013 and 2014. See Note 14 for more information.
Reorganization of Mitsubishi UFJ Morgan Stanley PB Securities Co., Ltd.
On December 26, 2012, MUSHD and BTMU acquired the remaining 49% ownership of Mitsubishi UFJ
Merrill Lynch PB Securities Co., Ltd., which had been 51% owned subsidiary of the MUFG Group. As a result,it became a wholly-owned subsidiary of MUFG. The acquisition was accounted for as an equity transaction, andthe excess of the cash consideration paid over the Noncontrolling interest was recognized as a reduction of
Capital surplus. The purpose of making Mitsubishi UFJ Merrill Lynch PB Securities Co., Ltd. a wholly-owned
subsidiary is to further strengthen private banking services for high-net-worth customers.
On March 20, 2014, MUMSS acquired 75% ownership of Mitsubishi UFJ Merrill Lynch PB Securities Co.,
Ltd., of which 51% ownership and 24% ownership were from MUSHD and BTMU, respectively, resulting in
BTMU holding the remaining 25% ownership. 40% of the difference between the cash paid by MUMSS and thecost basis of assets and liabilities was ¥13,839 million, which was allocated as a reduction in Noncontrollinginterests with a corresponding increase in Capital surplus. The purpose of the reorganization are to leverage
MUFG’s broad customer base, utilize Morgan Stanley’s global and high quality insight, and further its
collaborations with other group companies by strengthening its coordination with MUMSS. In connection withthe reorganization, Mitsubishi UFJ Merrill Lynch PB Securities Co., Ltd. entered into a new service agreementwith Morgan Stanley, and changed its name to Mitsubishi UFJ Morgan Stanley PB Securities Co., Ltd.
F-30

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Securities Joint Venture with Morgan Stanley
On March 30, 2010, the MUFG Group and Morgan Stanley entered into a securities joint venture agreement
to integrate their securities business. The purpose of the joint venture is to collaborate in providing capital
markets services to investment banking clients of the MUFG Group and Morgan Stanley and in offering a wide
range of products and services, including Morgan Stanley’s global products and services, to the MUFG Group’s
retail and middle market customers in Japan as well as to investment banking clients of both parties. The two
joint venture companies will continue to offer products and services in sales and trading and research areas
separately.
In relation to the integration of the securities companies in Japan, the former Mitsubishi UFJ Securities
Co., Ltd. (“MUS”) was restructured into an intermediate holding company, MUSHD, and a securities businesssubsidiary, MUS. On May 1, 2010, MUS changed its name to MUMSS and the MUFG Group’s ownershipinterest in MUMSS also changed from 100% to 60%, with Morgan Stanley holding the remaining 40% voting
and economic interest. Since the MUFG Group has retained control of MUMSS, the change in the MUFG
Group’s ownership interest has been accounted for as an equity transaction and the MUFG Group has recorded¥127 billion and ¥21 billion of noncontrolling interests and capital surplus, respectively. MUMSS continues theexisting Japan based retail, middle markets, capital markets and sales and trading businesses of the former MUS
while integrating the investment banking team of the former Morgan Stanley Japan Securities Co., Ltd.
(“MSJS”).
Also, on May 1, 2010, MSJS was renamed to Morgan Stanley MUFG Securities Co., Ltd. (“MSMS”).
MSMS continues to provide the existing sales and trading and capital markets operations of the former MSJS.
The MUFG Group holds a 49% voting interest and a 60% economic interest in MSMS while Morgan Stanley
holds the remaining 51% voting interest and 40% economic interest. The MUFG Group applies the equity
method of accounting to MSMS due to its significant influence.
Per the shareholders’ agreement between the MUFG Group and Morgan Stanley, to the extent that losses
incurred by MUMSS or MSMS result in a requirement to restore its capital, the controlling shareholder is solely
responsible for providing additional capital to a minimum level and the noncontrolling shareholder is not
obligated to contribute additional capital.
On April 22, 2011, due to losses incurred by MUMSS in the fiscal year ended March 31, 2011, the MUFG
Group contributed ¥30 billion of new capital to MUMSS by acquiring newly issued shares of MUMSS. In
October 2011, MUMSS implemented an early retirement program to reduce expenditures and improve operating
performance. MUMSS recorded employee termination expenses of ¥20 billion in the second half of the fiscal
year ended March 31, 2012. On November 24, 2011, the MUFG Group contributed ¥20 billion of new capital to
MUMSS by acquiring newly issued shares of MUMSS in order to restore its capital adversely affected by the
expenses during the fiscal year ended March 31, 2012. The additional capital in MUMSS improves andstrengthens its capital base and restores its capital adequacy level. The new MUMSS shares have no voting rights
and do not change the proportion of voting interests in MUMSS or change the right to participate in MUMSS’earnings. In order to reflect the existing 60% economic interest in MUMSS after the MUFG Group’s capital
contribution, 40% of the new share issuance on April 2011 and November 2011, or ¥12 billion and ¥8 billion,
respectively, was recognized as an increase in noncontrolling interest and a reduction of capital surplus, giventhat the rights to participate in the residual assets of MUMSS will be distributed to the MUFG Group and Morgan
Stanley in proportion to their percentage ownership interests.
To the extent that MUMSS is required to increase its capital level due to factors other than losses, such as
future regulatory capital changes, both the MUFG Group and Morgan Stanley are required to contribute thenecessary capital based upon their economic interests as set forth above. In this context, to meet an anticipated
F-31

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
change in regulatory capital requirements for MUMSS, the MUFG Group contributed ¥15 billion and Morgan
Stanley contributed ¥10 billion of additional proportionate capital investments on November 24, 2011, and thecontribution by Morgan Stanley was recognized as an increase of noncontrolling interest.
MUTB’s Acquisition of Butterfield Fulcrum GroupOn September 20, 2013, MUTB acquired 100% ownership of FGL Lux Holdings, S.a r.l., a holding
company of Butterfield Fulcrum Group headquartered in Bermuda for ¥30,191 million in cash, and thereby
recorded goodwill of ¥20,274 million. Butterfield Fulcrum Group is a global alternative fund administrator.
MUTB has focused on strengthening its global trust banking business based on its medium-term management
plan, and conducted several strategic investments in overseas asset managers. The purpose of this transaction,
through the investment in a fund administration company, is to expand MUTB’s overseas asset administration
capabilities. The assets acquired and liabilities assumed were recorded at their estimated fair values on theacquisition date. During the year ended March 31, 2014, measurement period adjustments were applied to theacquisition date fair values, which decreased goodwill by ¥5,831 million and recorded intangible assets of¥21,646 million. After this transaction, Butterfield Fulcrum Group was renamed Mitsubishi UFJ Fund Services
Holdings Limited.
BTMU’s Acquisition of Vietnam Joint Stock Commercial Bank for Industry and Trade
In May 2013, BTMU acquired approximately 20% of the ordinary shares of Vietnam Joint Stock
Commercial Bank for Industry and Trade (“VietinBank”) for ¥75,136 million. VietinBank is one of the major
Vietnamese state-owned commercial banks in terms of assets. Considering both BTMU’s ownership of thecommon stock and representation on the board of directors, the MUFG Group has determined that BTMU has theability to exercise significant influence over the operating and financial policies of VietinBank and applied theequity method of accounting for its investment.
BTMU’s Acquisition of Bank of Ayudhya Public Company Limited
On December 18, 2013, BTMU completed a Voluntary Tender Offer (“VTO”) for Krungsri shares at Thaibaht 39 per share. Upon the completion of VTO, BTMU purchased 72.01% of Krungsri’s total outstanding sharesfor ¥545,840 million in cash. As a result of the acquisition of a majority stake in Krungsri by BTMU, Krungsri
has become a subsidiary of BTMU. The MUFG Group recorded goodwill of ¥217,386 million and intangible
assets of ¥214,607 million. The MUFG Group also recorded noncontrolling interests of ¥202,223 million at fairvalue determined by a quoted market price as of the acquisition date. During the fiscal year ended March 31,
2014, the MUFG Group incurred ¥2,267 million of acquisition-related costs. These expenses are included in
Other non-interest expenses in the accompanying consolidated statements of income for the fiscal year ended
March 31, 2014. The results of operations of Krungsri and its subsidiaries since the acquisition date were notmaterial to the MUFG Group for the fiscal year ended March 31, 2014.
Krungsri is a commercial bank in Thailand offering diversified financial services while holding wide rangeof client base and market knowledge. As a part of a strategy designed to further develop BTMU’s businesses in
Asia, the investment in Krungsri aims to establish a full-fledged commercial banking platform in Asia. The
purpose of the acquisition is to strengthen the business foundation in Asia with BTMU’s existing branch in
Thailand by providing comprehensive financial services for various local customers and multinational corporate
customers.

F-32

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed of
Krungsri and its subsidiaries as of the acquisition date:(in millions)

Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,934,656
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
217,386
Intangible assets(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
214,607
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,144,517
Deposits—Total deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,488,862
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,396,454
Note:(1) Intangible assets primarily include ¥124,290 million of customer relationships and ¥59,891 million of core deposit intangibles withweighted average amortization periods of 11 years.

Included in the table above are loans with fair values totaling ¥2,883,981 million, which were not subject tothe guidance on loans and debt securities acquired with deteriorated credit quality. As of the acquisition date, thegross contractual amounts receivable for these loans totaled ¥2,945,857 million, of which ¥91,404 million is notexpected to be collected.
Pro forma statements of income
The following unaudited pro forma statements of income present the result of operations as if the acquisitionof Krungsri had occurred on April 1, 2012:
Fiscal years ended March 31,
2013
2014
(in millions)

Statement of income data:
Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest income—Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to Mitsubishi UFJ Financial Group . . . . . . . . . . . . . . . . . . . . .

¥1,967,113
2,127,990
1,084,373¥2,102,038
1,903,620
1,035,502

The unaudited pro forma statements of income include the pro forma adjustments to reflect the impact ofamortizing certain acquisition accounting adjustments such as intangible assets subject to amortization of¥12,871 million and ¥16,060 million for the fiscal years ended March 31, 2013 and 2014, respectively.

F-33

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
3.

INVESTMENT SECURITIESThe table below presents the amortized cost, gross unrealized gains and losses and fair value of investment
securities available-for-sale and being held-to-maturity at March 31, 2013 and 2014:
Amortized
cost

At March 31, 2013:

Securities available-for-sale:
Debt securities:
Japanese national government and Japanese
government agency bonds . . . . . . . . . . . . . . . ¥49,159,827
Japanese prefectural and municipal bonds . . . . .
207,227
Foreign governments and official institutions
bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
701,504
Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . .
1,868,599
Residential mortgage-backed securities . . . . . . .
1,204,219
Commercial mortgage-backed securities . . . . . .
260,057
Asset-backed securities . . . . . . . . . . . . . . . . . . . .
813,312
Other debt securities(1) . . . . . . . . . . . . . . . . . . . .
109,365
Marketable equity securities . . . . . . . . . . . . . . . . . . . .
2,224,060
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥56,548,170

Gross
Gross
unrealized
unrealized
gains
losses(in millions)¥ 323,725
9,852¥ 3,5984¥49,479,954
217,075

17,81455,04420,902
9,895
1,132
2,247
1,874,159

3,022
697
1,501
570
3,766
4,898
815

716,296
1,922,946
1,223,620
269,382810,678
106,714
4,097,404¥2,314,770¥18,871¥58,844,069¥¥

Securities being held-to-maturity:
Debt securities:
Japanese national government and Japanese
government agency bonds . . . . . . . . . . . . . . . ¥ 232,881 ¥Foreign governments and official institutions
bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
284,315
Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . .
23,555Residential mortgage-backed securities . . . . . . .
86,722
Asset-backed securities . . . . . . . . . . . . . . . . . . . .
1,503,691
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,131,164

Fair value

¥

1,883
2,409
173
1,056(2)51,39656,917¥—

234,764

—
—
11
—(3)

286,724
23,72887,767
1,555,087

11¥ 2,188,070

Notes:(1) Other debt securities in the table above include ¥106,699 million of private placement debt conduit bonds.
(2) The MUFG Group reclassified residential mortgage-backed securities, which totaled ¥12,356 million at fair value, from Securities
available-for-sale to Securities being held-to-maturity during the fiscal year ended March 31, 2013. As a result of the reclassification, theunrealized gains before taxes at the date of reclassification remaining in Accumulated OCI in the accompanying consolidated balance
sheets was ¥395 million at March 31, 2013 and not included in the table above.
(3) MUAH reclassified collateralized loan obligations (“CLOs”), which totaled ¥111,895 million at fair value, from Securities available-forsale to Securities being held-to-maturity during the fiscal year ended March 31, 2010. As a result of the reclassification, the unrealized
losses before taxes at the date of reclassification remaining in Accumulated OCI in the accompanying consolidated balance sheets was¥1,460 million at March 31, 2013 and not included in the table above.

F-34

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Amortized
cost

At March 31, 2014:

Securities available-for-sale:
Debt securities:
Japanese national government and Japanese
government agency bonds . . . . . . . . . . . . . . . ¥41,388,592
Japanese prefectural and municipal bonds . . . . .
195,176
Foreign governments and official institutions
bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,272,181
Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . .
1,523,026
Residential mortgage-backed securities . . . . . . .
1,011,644
Commercial mortgage-backed securities . . . . . .
208,690
Asset-backed securities . . . . . . . . . . . . . . . . . . .
1,060,844
184,495
Other debt securities(1) . . . . . . . . . . . . . . . . . . . .
Marketable equity securities . . . . . . . . . . . . . . . . . . .
2,456,992
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥49,301,640

Gross
Gross
unrealized
unrealized
gains
losses(in millions)¥ 201,539
7,979¥ 1,12224¥41,589,009
203,131

13,46038,920
665
826
2,747
3,650
2,384,949

14,220817
31,714
9,370
5,547
3,199
4,710

1,271,421
1,561,129
980,595
200,146
1,058,044
184,946
4,837,231¥2,654,735¥70,723¥51,885,652¥¥

Securities being held-to-maturity:
Debt securities:
Japanese national government and Japanese
government agency bonds . . . . . . . . . . . . . . . ¥ 214,968 ¥Foreign governments and official institutions
bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22,091
Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . .
5,548
Residential mortgage-backed securities . . . . . . .
526,431
Commercial mortgage-backed securities . . . . . .
159,532
Asset-backed securities . . . . . . . . . . . . . . . . . . .
1,778,412
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,706,982

Fair value

¥

870
1,099
7
883(2)
343
35,908
39,110———7,304(3)1,282(3)2,379¥10,965

215,838
23,1905,555
520,010
158,593
1,811,941¥ 2,735,127

Notes:(1) Other debt securities in the table above include ¥182,613 million of private placement debt conduit bonds.
(2) As a result of the reclassification during the fiscal year ended March 31, 2013, the unrealized gains before taxes at the date ofreclassification remaining in Accumulated OCI in the accompanying consolidated balance sheets were ¥355 million at March 31, 2014
and not included in the table above.
(3) MUAH reclassified residential mortgage-backed securities and commercial mortgage-backed securities, which were carried at fair valueof ¥273,195 million and ¥138,340 million, respectively, from Securities available-for-sale to Securities being held-to-maturity during the
fiscal year ended March 31, 2014. As a result of the reclassification, the unrealized losses before taxes at the date of reclassification
remaining in Accumulated OCI in the accompanying consolidated balance sheets were ¥7,702 million and ¥9,663 million, respectively,
at March 31, 2014 and not included in the table above.

Other Securities
Investment securities other than Securities available-for-sale or being held-to-maturity (i.e., nonmarketable
equity securities presented in Other investment securities) were primarily carried at cost of ¥864,052 million and¥711,416 million at March 31, 2013 and 2014, respectively, because their fair values were not readily
determinable.
The remaining balances were investment securities held by certain subsidiaries subject to specialized
industry accounting principles for investment companies and brokers and dealers and carried at fair valueof ¥25,900 million and ¥26,201 million at March 31, 2013 and 2014, respectively. See Note 31 for the valuation
techniques and inputs used to estimate the fair values.
F-35

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
With respect to cost-method investments of ¥357,805 million and ¥159,556 million at March 31, 2013 and2014, respectively, the MUFG Group has estimated a fair value using commonly accepted valuation techniques
to determine whether the investment is impaired in each reporting period. See Note 31 for the details of thesecommonly accepted valuation techniques. If the fair value of the investment is less than the cost of theinvestment, the MUFG Group proceeds to evaluate whether the impairment is other-than-temporary.
With respect to cost-method investments of ¥506,247 million and ¥551,860 million at March 31, 2013 and2014, respectively, the MUFG Group performed a test to determine whether any impairment indicator existed foreach investment in each reporting period. If an impairment indicator exists, the MUFG Group estimates the fairvalue of the cost-method investment. If the fair value of the investment is less than the cost of the investment, the
MUFG Group performs evaluation of whether the impairment is other-than-temporary. The primary method the
MUFG Group uses to identify impairment indicators is a comparison of the MUFG Group’s share in an
investee’s net assets to the cost of the MUFG Group’s investment in the investee. The MUFG Group also
considers whether significant adverse changes in the regulatory, economic or technological environment haveoccurred with respect to the investee. The MUFG Group periodically monitors the status of each investee
including the credit rating, which is generally updated once a year based on the annual financial statements of theissuer. In addition, if an event that could impact the credit rating of an investee occurs, the MUFG Groupreassesses the appropriateness of the credit rating assigned to the issuer in order to maintain an updated credit
rating. The MUFG Group did not estimate the fair value of those cost-method investments, which had aggregatedcosts of ¥503,671 million and ¥548,679 million at March 31, 2013 and 2014, respectively, since it was notpractical and the MUFG Group identified no impairment indicators.
Based on the procedures described above, the MUFG Group recognized other-than-temporary impairment
losses on the cost-method investment of ¥5,829 million, ¥2,364 million and ¥3,628 million for the fiscal years
ended March 31, 2012, 2013 and 2014, respectively. Each impairment loss was recognized based on the specificcircumstances of each individual company. No impairment loss was individually material.
Contractual Maturities
The amortized cost and fair values of debt securities being held-to-maturity and the fair values of debt
securities available-for-sale at March 31, 2014 by contractual maturity are shown below. Expected maturities
may be shorter than contractual maturities because issuers of debt securities may have the right to call or prepay
obligations with or without penalties. Debt securities not due at a single maturity date and securities embeddedwith call or prepayment options, such as mortgage-backed securities, are included in the table below based on
their contractual maturities.
Held-to-maturity
Available-for-saleAmortized
cost
Fair value
Fair value(in millions)Due in one year or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due from one year to five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due from five years to ten years . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after ten years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 214,084
77,117
1,403,762
1,012,019¥ 214,812
77,455
1,436,763
1,006,097¥15,899,122
21,777,591
6,414,994
2,956,714

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,706,982¥2,735,127¥47,048,421

F-36

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Realized Gains and Losses and Transfers of Investment Securities
For the fiscal years ended March 31, 2012, 2013 and 2014, gross realized gains on sales of investment
securities available-for-sale were ¥233,253 million, ¥282,609 million and ¥261,384 million, respectively, andgross realized losses on sales of investment securities available-for-sale were ¥56,226 million, ¥31,906 millionand ¥54,921 million, respectively.
In the second half of the fiscal year ended March 31, 2012, the MUFG Group determined that it no longer
had the intent to hold a certain security, which had a carrying value of ¥7,856 million, to maturity in response toa significant deterioration in the issuer’s creditworthiness. As a result, the MUFG Group transferred fromSecurities being held-to-maturity to Securities available-for-sale. The MUFG Group sold all amount of suchsecurity by March 31, 2012. The realized losses resulting from the sale of the security recognized in thesecond half of the fiscal year ended March 31, 2012 were ¥691 million.
For the fiscal year ended March 31, 2013, the MUFG Group determined that it no longer had the intent tohold certain securities, which had a carrying value of ¥47,566 million, to maturity in response to a significant
deterioration in the issuers’ creditworthiness. As a result, the MUFG Group transferred these securities fromSecurities being held-to-maturity to Securities available-for-sale. These securities were sold and the MUFG
Group recorded a loss of ¥1,518 million for the fiscal year ended March 31, 2013.
On September 30, 2012, MUAH transferred certain CLOs with a carrying amount of ¥88,799 million fromSecurities being held-to-maturity to Securities available-for-sale, due to a significant increase in the risk weights
of debt securities used for regulatory capital purposes under rules proposed by the U.S. federal banking agencies
in June 2012. The Notices of Proposed Rulemaking (“NPRs”) would revise regulatory capital rules for
U.S. Banking organizations and align them with the Basel III capital framework issued by the Basel Committeeon Banking Supervision. Although the NPRs had not been formally adopted, MUAH was required to include inits 2013 annual capital plan certain capital projections pursuant to the NPRs that adversely affected the risk
weights of the transferred CLOs. These regulatory capital changes were not foreseeable when MUAH initiallytransferred the CLOs from Securities available-for-sale to Securities being held-to-maturity during the fiscal year
ended March 31, 2010. Accordingly, MUAH no longer intended to hold these securities to maturity. The carrying
amount of the CLOs immediately prior to the transfer on September 30, 2012, totaled ¥88,799 million, which
included ¥24,026 million of unrealized losses in unamortized OCI. Following the transfer, the securities wererecorded at fair value, with an unrealized loss of ¥4,949 million recorded in OCI.
The MUFG Group transferred Securities available-for-sale of ¥12,356 million to Securities being held-tomaturity during the fiscal year ended March 31, 2013. The MUFG Group has asserted the positive intent andability to hold these securities to maturity.
For the fiscal year ended March 31, 2014, MUAH transferred certain residential mortgage-backed securities
and commercial mortgage-backed securities of ¥411,535 million from Securities available-for-sale to Securities
being held-to-maturity to reduce the impact of price volatility on Accumulated OCI and in consideration ofchanges to regulatory capital requirements under U.S. Basel III rules.
Other-than-temporary Impairments of Securities Available-for-Sale and Being Held-to-Maturity
For the fiscal years ended March 31, 2012, 2013 and 2014, losses resulting from impairment of investment
securities to reflect the decline in value considered to be other-than-temporary were ¥195,684 million,¥124,172 million and ¥6,534 million, respectively, which were included in Investment securities gains—net in
the accompanying consolidated statements of income. The losses of ¥195,684 million for the fiscal year ended
F-37

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
March 31, 2012 included losses of ¥13,782 million from debt securities available-for-sale mainly classified ascorporate bonds and ¥176,073 million from marketable equity securities. The losses of ¥124,172 million for the
fiscal year ended March 31, 2013 included losses of ¥8,329 million from debt securities available-for-sale mainlyclassified as corporate bonds, and ¥113,479 million from marketable equity securities. The losses of¥6,534 million for the fiscal year ended March 31, 2014 included losses of ¥2,605 million from debt securities
available-for-sale mainly classified as corporate bonds, and ¥3,628 million from nonmarketable equity securities.
Gross Unrealized Losses and Fair Value
The following tables show the unrealized gross losses and fair values of investment securities available-forsale and being held-to-maturity at March 31, 2013 and 2014 by length of time that individual securities in eachcategory have been in a continuous loss position:

At March 31, 2013:

Less than 12 months
12 months or more
Total
Gross
Gross
Gross
unrealized
unrealized
unrealized Number ofFair value
lossesFair value
lossesFair value
lossessecurities(in millions, except number of securities)

Securities available-for-sale:
Debt securities:
Japanese national government andJapanese government agency
bonds . . . . . . . . . . . . . . . . . . . . ¥6,859,342 ¥ 672 ¥584,048
Japanese prefectural andmunicipal bonds . . . . . . . . . . . .
1,486
4
—
Foreign governments and official
institutions bonds . . . . . . . . . . .
157,287
2,867
11,332
Corporate bonds . . . . . . . . . . . . . .
76,521306
56,953
Residential mortgage-backed
securities . . . . . . . . . . . . . . . . . .
102,511276
25,766
Commercial mortgage-backed
securities . . . . . . . . . . . . . . . . . .
58,459530
12,134
Asset-backed securities . . . . . . . .
17,23937
85,069Other debt securities . . . . . . . . . . .
71,217
4,898—
Marketable equity securities . . . . . . . .
15,143694
870
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥7,359,205 ¥10,284 ¥776,172¥2,926¥7,443,390 ¥ 3,598

33

—

1,486

4

1

155
391

168,619
133,474

3,022
697

108
1,360

1,225

128,277

1,501

182

40
3,729
—
121

70,593102,308
71,217
16,013

570
3,766
4,898
815

24
131
49
23

¥8,587¥8,135,377 ¥18,871

1,911

Securities being held-to-maturity:
Debt securities:
Residential mortgage-backed
securities . . . . . . . . . . . . . . . . . . ¥3,370 ¥

11 ¥

—

¥

—

¥

3,370 ¥

11

10

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥3,370 ¥

11 ¥

—

¥

—

¥

3,370 ¥

11

10

F-38

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

At March 31, 2014:

Less than 12 months
12 months or more
Total
Gross
Gross
Gross
unrealized
unrealized
unrealized Number ofFair value
lossesFair value
lossesFair value
lossessecurities(in millions, except number of securities)

Securities available-for-sale:
Debt securities:
Japanese national government
and Japanese government
agency bonds . . . . . . . . . . . . ¥10,469,832 ¥ 1,122
Japanese prefectural andmunicipal bonds . . . . . . . . . .
12,55524
Foreign governments andofficial institutions bonds . . .
527,706
9,084
Corporate bonds . . . . . . . . . . . .
136,296709
Residential mortgage-backed
securities . . . . . . . . . . . . . . . .
904,239 31,094
Commercial mortgage-backed
securities . . . . . . . . . . . . . . . .
135,014
8,427
Asset-backed securities . . . . . .
213,683
5,518
Other debt securities . . . . . . . . .
46,835
1,203
Marketable equity securities . . . . . . .
175,884
4,692

—

—

—

—

12,55524

6110,015
29,242

5,136
108

637,721
165,538

14,220
817

150
815

28,406620

932,645

31,714

431

8,235
1,078
68,630
1

943
29
1,996
18

143,249
214,761
115,465
175,885

9,370
5,547
3,199
4,710

155
103
51
42

Total . . . . . . . . . . . . . . . . . . . . . . . . . ¥12,622,044 ¥61,873 ¥245,607¥8,850¥12,867,651 ¥70,723

1,802

¥

Securities being held-to-maturity:
Debt securities:
Residential mortgage-backed
securities . . . . . . . . . . . . . . . . ¥Commercial mortgage-backed
securities . . . . . . . . . . . . . . . .
Asset-backed securities . . . . . .

408,244 ¥ 7,187 ¥

5,681

¥ 117

107,048
500,695

51,545—249—

Total . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 1,015,987 ¥10,599 ¥ 57,226

¥ 366

1,033
2,379

¥10,469,832 ¥ 1,122

49

413,925 ¥ 7,304

198

158,593
500,695

1,282
2,379

28
22

¥ 1,073,213 ¥10,965

248

Evaluating Investment Securities for Other-than-temporary Impairments
The following describes the nature of the MUFG Group’s investments and the conclusions reached indetermining whether the unrealized losses were temporary or other-than-temporary.
Japanese national government and Japanese government agency bonds, Foreign governments and official
institutions bonds
As of March 31, 2014, unrealized losses associated with these securities were deemed to be attributable tochanges in market interest rates rather than a deterioration in the creditworthiness of the underlying obligor. The
MUFG Group expects to recover the entire amortized cost basis of these securities. Accordingly, such changes
are considered to be temporary and no impairment loss has been recorded.
Residential and commercial mortgage-backed securities
As of March 31, 2014, unrealized losses associated with these securities were deemed to be attributable tochanges in market interest rates rather than a deterioration in the creditworthiness of the underlying obligor.
Based on a consideration of factors, including cash flow analysis, the MUFG Group expects to recover the entire
amortized cost basis of these securities. Accordingly, such changes are considered to be temporary and no
impairment loss has been recorded.
F-39

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Asset-backed securities
As of March 31, 2014, unrealized losses on these securities are primarily driven by certain CLOs, highly
illiquid securities for which fair values are difficult to determine. Unrealized losses arise from widening credit
spreads, deterioration of the credit quality of the underlying collateral, uncertainty regarding the valuation ofsuch securities and the market’s view of the performance of the fund managers. When the fair value of a security
is lower than its amortized cost or when any security is subject to a deterioration in credit rating, the MUFG
Group undertakes a cash flow analysis of the underlying collateral to estimate the other-than-temporary
impairment. Based on the analysis performed no other-than-temporary impairment was identified as of March 31,
2014 and no impairment loss was therefore recorded.
Corporate bonds
As of March 31, 2014, the unrealized losses associated with corporate bonds are primarily related to private
placement bonds issued by Japanese non-public companies. The credit loss component recognized in earnings is
identified as the amount of principal cash flows not expected to be received over the remaining terms of thebonds as estimated using the MUFG Group’s cash flow projections. The key assumptions include probability ofdefault based on credit ratings of the bond issuers and a loss given default.
The following table presents a roll-forward of the credit loss component recognized in earnings. The balanceat the beginning of each fiscal year represents the credit loss component for which an other-than-temporary
impairment occurred on debt securities in prior periods. The additions represent the first time a debt security wascredit impaired or when subsequent credit impairment has occurred. The credit loss component is reduced when
the corporate bonds mature or are sold. Additionally, the credit loss component is reduced if the MUFG Group
receives or expects to receive cash flows in excess of what the MUFG Group previously expected to receive over
the remaining life of the credit impaired debt securities.
2012

2013
(in millions)2014

Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 35,458¥ 30,066¥ 24,525

Additions:
Initial credit impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subsequent credit impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,596
5,186

5,347
2,982

1,466
1,139

Reductions:
Securities sold or matured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19,174) (13,870) (14,574)
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 30,066 ¥ 24,525 ¥ 12,556
The cumulative decline in fair value of the credit impaired debt securities, which were mainly corporate
bonds, held at March 31, 2013 and 2014 was ¥13,047 million and ¥4,933 million, respectively. Of which, thecredit loss component recognized in earnings was ¥24,525 million and ¥12,556 million, and the remaining
amount related to all other factors recognized in Accumulated OCI before taxes was ¥11,479 million and¥7,625 million at March 31, 2013 and 2014, respectively.
Other debt securities
As of March 31, 2014, other debt securities primarily consist of private placement debt conduit bonds,
which are not rated by external credit rating agencies. The unrealized losses on these bonds resulted from ahigher return on capital expected by the secondary market compared with the return on capital required at thetime of origination when the bonds were purchased. The MUFG Group estimated loss projections for eachsecurity by assessing the underlying collateral of each security. The MUFG Group estimates the portion of loss
F-40

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
attributable to credit based on the expected cash flows of the underlying collateral using estimates of current key
assumptions such as probability of default and loss severity. Cash flow analysis of the underlying collateralprovides an estimate of other-than-temporary impairment, which is performed when the fair value of a security islower than its amortized cost and potential impairment is identified. Based on the analysis, no other-thantemporary impairment loss was recorded in the accompanying consolidated statements of income.
Marketable equity securities
The MUFG Group determines whether unrealized losses on marketable equity securities are temporary
based on its ability and positive intent to hold the investments for a period of time sufficient to allow for any
anticipated recovery and the results of its review conducted to identify and evaluate investments that haveindications of possible impairment. Impairment is evaluated considering various factors, and their relative
significance varies from case to case. The MUFG Group’s review includes, but is not limited to, consideration of
the following factors:
The length of time that fair value of the investment has been below cost—The MUFG Group generally
deems a continued decline of fair value below cost for six months or more to be other-than-temporary.
The extent to which the fair value of investments has been below cost as of the end of the reporting period—
The MUFG Group’s investment portfolio is exposed to volatile equity prices affected by many factors including
investors’ perspectives as to future economic prospects and the issuers’ performance. The MUFG Groupgenerally deems the decline in fair value below cost of 20% or more as an indicator of an other-than-temporary
decline in fair value.
The financial condition and near-term prospects of the issuer—The MUFG Group considers the financial
condition and near-term prospects of the issuer primarily based on the credit standing of the issuers as
determined by its credit rating system.
At March 31, 2014, unrealized losses on marketable equity securities which have been in a continuous loss
position are considered temporary based on the evaluation as described above, and the fact that the MUFG Group
primarily makes these investments for strategic purposes to maintain long-term relationships with its customers.

F-41

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
4.

LOANS AND ALLOWANCE FOR CREDIT LOSSES

Loans at March 31, 2013 and 2014 by domicile and industry of the borrower are summarized below.
Classification of loans by industry is based on the industry segment loan classifications as defined by the Bank ofJapan.
20132014(in millions)

Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Communication and information services . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,767,352
1,056,276
11,143,777
2,881,666
8,330,553
3,622,021
1,314,505
12,191,566
17,132,396¥ 11,540,753
980,877
10,989,562
2,693,561
8,475,143
3,985,106
1,443,466
13,496,763
16,921,352

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

69,440,112

70,526,583

Foreign:
Governments and official institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial and industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

673,548
7,258,97818,738,731
2,601,338

811,475
9,792,255
24,533,816
4,872,372

Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29,272,595

40,009,918

Unearned income, unamortized premiums—net and deferred loan fees—net . . . . .

(122,478)(260,090)

Total(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥98,590,229¥110,276,411

Notes:(1) Loans to the so-called non-bank finance companies are generally included in the “Banks and other financial institutions” category. Nonbank finance companies are primarily engaged in consumer lending, factoring and credit card businesses.
(2) The above table includes loans held for sale of ¥35,261 million and ¥46,635 million at March 31, 2013 and 2014, respectively, which arecarried at the lower of cost or estimated fair value.

Nonaccrual Loans
Originated loans are generally placed on nonaccrual status when substantial doubt exists as to the full andtimely collection of either principal or interest, when principal or interest is contractually past due one month ormore with respect to loans within all classes of the Commercial segment, three months or more with respect toloans within the Card, MUAH, and Krungsri segments, and six months or more with respect to loans within the
Residential segment. See Note 1 for further information.

F-42

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The nonaccrual status of loans by class at March 31, 2013 and 2014 is shown below:
2013
2014
(in millions)

Commercial
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Communication and information services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign-excluding MUAH and Krungsri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUAH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Krungsri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 911,700
211,975
37,381
185,597
85,987249,251
13,993
31,941
42,51353,062
98,085130,830
88,04543,670—¥1,272,330¥ 737,896
167,859
30,093141,974
72,059211,770
7,234
24,95635,95945,992
82,617111,252
72,483
46,57425,973¥1,076,795

Note:(1) The above table does not include loans held for sale of ¥818 million and nil at March 31, 2013 and 2014, respectively, and loans acquiredwith deteriorated credit quality of ¥21,965 million and ¥38,651 million at March 31, 2013 and 2014, respectively.

Impaired Loans
The MUFG Group’s impaired loans primarily include nonaccrual loans and TDRs. The following tableshows information about impaired loans by class at March 31, 2013 and 2014:

At March 31, 2013:

Commercial
Domestic . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . .
Construction . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . .
Banks and other financial
institutions . . . . . . . . . . . .
Communication andinformation services . . . . .
Other industries . . . . . . . . . .
Consumer . . . . . . . . . . . . . . .
Foreign-excluding MUAH . . . . . .
Loans acquired with deteriorated
credit quality . . . . . . . . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUAH . . . . . . . . . . . . . . . . . . . . . . . . .
Total(4) . . . . . . . . . . . . . . . . . . . . . . . . .

Recorded Loan Balance
Requiring
Not Requiring
an Allowance for an Allowance for
Credit Losses
Credit Losses(1)Total(2)(in millions)

UnpaidPrincipal
Balance

RelatedAllowance for
Credit Losses¥1,158,927
400,946
35,581
139,146
122,792
309,892¥318,028
55,81916,921
100,670
37,77462,274¥1,476,955
456,765
52,502
239,816
160,566
372,166¥1,537,180
475,946
59,411
247,657
166,510380,292¥662,347
221,124
22,57755,286
67,171
209,634

15,201

121

15,322

17,4258,040

40,23342,991
52,145
199,890

12,954
9,794
21,701299

53,18752,78573,846200,189

55,02153,754
81,164
200,517

23,71933,48521,311
122,371

30,927300,231
123,567
31,293¥1,844,835

76
13,756806
22,966¥355,931

31,003313,987
124,373
54,259¥2,200,766

47,916363,439
139,196
60,732¥2,348,980

9,944
118,753
37,901
3,645¥954,961

F-43

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

At March 31, 2014:

Commercial
Domestic . . . . . . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . .
Banks and other financial
institutions . . . . . . . . . . . . . . . .
Communication and information
services . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . .
Foreign-excluding MUAH and
Krungsri . . . . . . . . . . . . . . . . . . . . . .
Loans acquired with deteriorated credit
quality . . . . . . . . . . . . . . . . . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUAH . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Krungsri(3) . . . . . . . . . . . . . . . . . . . . . . . . . .
Total(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Recorded Loan Balance
Requiring
Not Requiring
an Allowance for an Allowance for
Credit Losses
Credit Losses(1)Total(2)(in millions)

UnpaidPrincipal
Balance

RelatedAllowance for
Credit Losses¥1,006,333
368,866
30,537141,225
101,969
248,932¥257,215
55,003
13,29863,62527,342
58,633¥1,263,548
423,869
43,835
204,850
129,311
307,565¥1,312,320
431,745
45,323
212,353
139,299
317,614¥544,224
181,389
18,731
52,81454,469169,523

8,295

94

8,389

8,403

6,954

25,44336,821
44,245

11,5099,634
18,07736,952
46,45562,32239,29247,86670,425

16,473
26,903
16,968

193,360

2,360

195,720

195,935

96,21818,787
203,600
102,852
39,552—¥1,564,484

186
11,563762
24,457—¥296,543

18,973215,163
103,61464,009—¥1,861,027

32,078
255,627
115,819
71,210—¥1,982,989

6,111
70,39329,2444,131—¥750,321

Notes:(1) These loans do not require an allowance for credit losses because the fair values of the impaired loans equal or exceed the recorded
investments in the loans.
(2) Included in impaired loans at March 31, 2013 and 2014 are accrual TDRs as follows: ¥671,083 million and ¥642,408 million—
Commercial; ¥ 178,576 million and ¥99,359 million—Residential; ¥61,195 million and ¥51,834 million—Card; and ¥34,769million and¥38,666 million—MUAH, respectively.
(3) For the Krungsri segment, acquired loans were recorded at their fair values as of the acquisition date, and there have been no indications
that allowance for credit loss is necessary for these loans since then. Therefore, no impaired loans were stated in the above table.
(4) In addition to impaired loans presented in the above table, there were loans held for sale that were impaired of ¥818 million and nil at
March 31, 2013 and 2014, respectively.

F-44

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table shows information regarding the average recorded loan balance and recognized interest
income on impaired loans for the fiscal years ended March 31, 2012, 2013 and 2014:
Fiscal years ended March 31,
2012
2013
2014
Average
Recognized
Average
Recognized
Average
Recognized
Recorded Loan
Interest
Recorded Loan
Interest
Recorded Loan
Interest
Balance
IncomeBalance
IncomeBalance
Income(in millions)

Commercial
Domestic . . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . . .
Construction . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . .
Banks and other financial
institutions . . . . . . . . . . . . .
Communication andinformation services . . . . .
Other industries . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . .
Foreign-excluding MUAH and
Krungsri . . . . . . . . . . . . . . . . . . .
Loans acquired with deteriorated
credit quality . . . . . . . . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUAH . . . . . . . . . . . . . . . . . . . . . . . . .
Krungsri . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,270,856
333,409
63,215
173,739
176,047
326,440¥21,356
5,656
1,370
2,476
3,203
5,239

¥1,414,309
418,40254,687
198,102
170,025
376,001¥24,051
7,017
1,174
2,747
3,214
6,215

¥1,359,635
430,415
47,818228,045
140,627
339,619¥23,283
6,954
982
3,472
2,806
5,857

9,812

85

11,506

162

10,719170

55,38757,61275,195

1,152
927
1,248

51,89758,08175,608

1,061
1,271
1,190

44,41749,612
68,363

945
985
1,112

138,900

1,016

172,471

2,487

187,656

2,848

35,307
318,512149,255
45,297
—

1,983
6,549
6,972
1,354
—

32,964
320,183
135,581
46,957
—

2,028
6,006
6,504
1,720
—

30,101
264,277
113,993
60,943
—

1,659
5,153
5,218
3,468
—

¥1,958,127¥39,230¥2,122,465¥42,796¥2,016,605¥41,629

Interest income on nonaccrual loans for all classes was recognized on a cash basis when ultimate
collectibility of principal was certain. Otherwise, cash receipts were applied as principal reductions. Interest
income on accruing impaired loans, including TDRs, was recognized on an accrual basis to the extent that thecollectibility of interest income was reasonably certain based on management’s assessment.

F-45

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table shows a rollforward of accrual TDRs and other impaired loans (including nonaccrualTDRs) for the fiscal years ended March 31, 2013 and 2014:
Fiscal years ended March 31,
2013
2014
(in millions)

Accrual TDRs:
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 892,823 ¥ 945,623
Additions (new accrual TDR status) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
302,267
231,063
Transfers to other impaired loans (including nonaccrual TDRs) . . . . . . . . . . . . . .
(56,064)(48,295)
Loans sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(49)(7,698)Principal payments and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(193,354)(288,426)
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 945,623¥ 832,267

Other impaired loans (including nonaccrual TDRs):
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,139,045 ¥1,255,143
Additions (new other impaired loans (including nonaccrual TDRs) status)(1) . . . .
500,063
313,086
Charge-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(46,835)(123,037)
Transfers to accrual TDRs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(28,474)(63,828)
Loans sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(18,618)(39,879)
Principal payments and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(290,038)(312,725)
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,255,143¥1,028,760

Note:(1) Included in additions of other impaired loans for the fiscal years ended March 31, 2013 and 2014 are nonaccrual TDRs as follows:¥16,903 million and ¥11,054 million—Card; and ¥17,513 million and ¥16,228 million—MUAH, respectively.

F-46

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Troubled Debt Restructurings
The following tables summarize the MUFG Group’s TDRs by class during the fiscal years ended March 31,
2013 and 2014 and outstanding recorded investment balances of TDRs by class at March 31, 2013 and 2014:
At March 31,
Fiscal year ended March 31, 2013
2013
Troubled Debt
Troubled Debt Restructurings Troubled Debt
Restructurings(4)That Subsequently Defaulted Restructurings
PrePostModification Modification
Outstanding
Outstanding Outstanding
recorded
Recorded
Recorded
Recorded
investment
Investment Investment
Investment
balances(2)(in millions)

Commercial(1)(3)
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥222,125
Manufacturing . . . . . . . . . . . . . . . . . . 131,105
Construction . . . . . . . . . . . . . . . . . . . .
3,921
Real estate . . . . . . . . . . . . . . . . . . . . .
17,409Services . . . . . . . . . . . . . . . . . . . . . . .
12,564Wholesale and retail . . . . . . . . . . . . . .
42,061Banks and other financial
institutions . . . . . . . . . . . . . . . . . . .
889Communication and information
services . . . . . . . . . . . . . . . . . . . . . .
8,442
Other industries . . . . . . . . . . . . . . . . .
1,927
Consumer . . . . . . . . . . . . . . . . . . . . . .
3,807
Foreign-excluding MUAH . . . . . . . . . . . . .
10,142Loans acquired with deteriorated credit
quality . . . . . . . . . . . . . . . . . . . . . . . . . . .
524
Residential(1)(3) . . . . . . . . . . . . . . . . . . . . . . . . . .
50,005Card(2)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26,409MUAH(2) (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30,091
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥339,296¥222,125
131,105
3,921
17,40912,56442,061¥ 6,741
2,729
—
1,444
295
1,024

¥

567,926
247,133
15,13054,221
74,777
122,986

889

330

1,329

8,442
1,927
3,807
10,142

434
415
70
419

21,246
10,321
20,783103,157524
50,00526,05527,832

509
349
4,507
2,155

—
178,576
124,373
52,848¥336,683¥14,680¥ 1,026,880

Notes:(1) TDRs for the Commercial and Residential segments include accruing loans with concessions granted, and do not include nonaccrualloans with concessions granted.
(2) TDRs for the Card and MUAH segments include accrual and nonaccrual loans. Included in the outstanding recorded investment balances
as of March 31, 2013 are nonaccrual TDRs as follows: ¥63,178 million—Card and ¥18,079 million—MUAH, respectively.
(3) For the fiscal year ended March 31, 2013, extension of the stated maturity date of loans was the primary concession type in theCommercial and Residential segments, whereas reduction in the stated rate and payment deferrals were the primary concession types in
the Card and MUAH segments, respectively.
(4) From the fiscal year ended March 31, 2014, the MUFG Group started to report the amounts of TDRs which include only the firstmodification for those which are modified more than once during the same period, in place of the previously reported amounts which
include accumulated loan modification activity, such as reduction in stated rate or extension of stated maturity date, that may occur on
multiple occasions during the same period. The amounts for the fiscal year ended March 31, 2013 were revised to conform to the current
year presentation and enable comparisons between the relevant amounts for the fiscal years ended March 31, 2013 and 2014,
respectively.

F-47

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
At March 31,
Fiscal year ended March 31, 2014
2014
Troubled Debt
Troubled Debt Restructurings Troubled Debt
Restructurings(4)That Subsequently Defaulted Restructurings
PrePostModification Modification
Outstanding
Outstanding Outstanding
recorded
Recorded
Recorded
Recorded
investment
Investment Investment
Investment
balances(2)(in millions)

Commercial(1)(3)
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 175,011 ¥ 151,505
Manufacturing . . . . . . . . . . . . . . . . . .
93,96870,462
Construction . . . . . . . . . . . . . . . . . . . .
3,435
3,435
Real estate . . . . . . . . . . . . . . . . . . . . .
21,977
21,977
Services . . . . . . . . . . . . . . . . . . . . . . .
13,14913,149Wholesale and retail . . . . . . . . . . . . . .
32,45832,458Banks and other financial
institutions . . . . . . . . . . . . . . . . . . .
1
1Communication and information
services . . . . . . . . . . . . . . . . . . . . . .
1,802
1,802
Other industries . . . . . . . . . . . . . . . . .
4,414
4,414
Consumer . . . . . . . . . . . . . . . . . . . . . .
3,807
3,807
Foreign-excluding MUAH and
Krungsri . . . . . . . . . . . . . . . . . . . . . . . . .
20,175
20,175Loans acquired with deteriorated credit
quality . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,616
7,616
Residential(1)(3) . . . . . . . . . . . . . . . . . . . . . . . . . .
32,777
32,777
Card(2)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17,141
16,869MUAH(2)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29,94529,403Krungsri(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
——Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 282,665 ¥ 258,345¥ 22,503
11,644
86
1,174
1,481
5,834

¥ 528,133
257,049
13,75164,02857,48095,809

—

1,156

1,639
152
493

11,996
10,496
16,368—114,275

—
474
4,015
2,912
—

—
99,359103,61462,363—¥ 29,904¥ 907,744

Notes:(1) TDRs for the Commercial and Residential segments include accruing loans with concessions granted, and do not include nonaccrualloans with concessions granted.
(2) TDRs for the Card, MUAH and Krungsri segments include accrual and nonaccrual loans. Included in the outstanding recorded
investment balances as of March 31, 2014 are nonaccrual TDRs as follows: ¥51,780 million—Card and ¥23,697 million—MUAH,
respectively.
(3) For the fiscal year ended March 31, 2014, extension of the stated maturity date of loans was the primary concession type in theCommercial and Residential segments, whereas reduction in the stated rate and payment deferrals were the primary concession types in
the Card and MUAH segments, respectively.
(4) From the fiscal year ended March 31, 2014, the MUFG Group started to report the amounts of TDRs which include only the firstmodification for those which are modified more than once during the same period, in place of the previously reported amounts which
include accumulated loan modification activity, such as reduction in stated rate or extension of stated maturity date, that may occur on
multiple occasions during the same period.

A modification of terms of a loan under a TDR mainly involves: (i) a reduction in the stated interest rateapplicable to the loan, (ii) an extension of the stated maturity date of the loan, (iii) a partial forgiveness of theprincipal of the loan, or (iv) a combination of all of these. Those loans are also considered impaired loans, andhence the allowance for credit losses is separately established for each loan. As a result, the amount of allowancefor credit losses increases in many cases upon classification as a TDR loan. The amount of pre-modification
outstanding recorded investment and post-modification outstanding recorded investment may differ due to writeF-48

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
offs made as part of the concession, and the impact of write-offs associated with TDRs on the MUFG Group’s
results of operations for the fiscal years ended March 31, 2013 and 2014 was not material.
TDRs for the Commercial and Residential segments in the above table include accruing loans withconcessions granted, and do not include nonaccrual loans with concessions granted. Once a loan is classified as anonaccrual loan, a modification would have little likelihood of resulting in the recovery of the loan in view of theseverity of the financial difficulty of the borrower. Therefore even if a nonaccrual loan is modified, the loancontinues to be classified as a nonaccrual loan. The vast majority of modifications to nonaccrual loans aretemporary extensions of the maturity dates, typically for periods up to 90 days, and continually made as theborrower is unable to repay or refinance the loan at the extended maturity. Accordingly, the impact of such TDRs
on the outstanding recorded investment is immaterial, and the vast majority of nonaccrual TDRs havesubsequently defaulted.
TDRs that subsequently defaulted in the Commercial and Residential segments of the above table includes
those accruing loans that became past due one month or more within the Commercial segment and six months ormore within the Residential segment, and those accruing loans reclassified to nonaccrual loans due to financial
difficulties even without delinquencies. This is because classification as nonaccrual loan is regarded as default
under the MUFG Group’s credit policy. Also, the MUFG Group defines default as payment default for the
purpose of the disclosure.
Regarding the Card, MUAH and Krungsri segments, the TDRs in the above table represent modified
nonaccrual and accruing loans, and the defaulted loans in the above table represent nonaccruing and accruingloans that became past due one month or more within the Card segment, 60 days or more within the MUAH
segment, and six months or more within the Krungsri segment.
Historical payment defaults are one of the factors considered when projecting future cash flows indetermining the allowance for credit losses for each segment.
The MUFG Group provided commitments to extend credit to customers with TDRs. The amounts of suchcommitments were ¥10,662 million and ¥44,116 million at March 31, 2013 and 2014, respectively. See Note 24
for further discussion of commitments to extend credit.

F-49

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Credit Quality Indicator
Credit quality indicators of loans by class at March 31, 2013 and 2014 are shown below:
At March 31, 2013:

Likely to become
Bankrupt or
Close
Legally/Virtually
Watch
Bankrupt(in millions)

NormalCommercial
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥48,099,471
Manufacturing . . . . . . . . . . . . . . . . . . . . . .
10,062,399
Construction . . . . . . . . . . . . . . . . . . . . . . . .
797,513
Real estate . . . . . . . . . . . . . . . . . . . . . . . . .
9,570,082
Services . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,417,737
Wholesale and retail . . . . . . . . . . . . . . . . . .
7,297,267
Banks and other financial institutions . . . .
3,239,735
Communication and information
services . . . . . . . . . . . . . . . . . . . . . . . . . .
1,183,208
Other industries . . . . . . . . . . . . . . . . . . . . .
11,951,463
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . .
1,580,067
Foreign-excluding MUAH . . . . . . . . . . . . . . . . .
22,340,927
Loans acquired with deteriorated credit
quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30,972
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥70,471,370¥4,476,760
1,481,403
220,465
898,619362,719
747,938
367,189¥ 911,868
211,975
37,381
185,678
85,987249,253
13,993¥53,488,099
11,755,777
1,055,359
10,654,379
2,866,443
8,294,458
3,620,917

98,722
192,291
107,4141,530,191

31,941
42,59253,06889,832

1,313,871
12,186,346
1,740,549
23,960,950

52,007

18,334

101,313¥6,058,958¥1,020,034¥77,550,362

Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit Quality Based on
the Number of Delinquencies

MUAH . . . . . . . . . . . . . . . . . . . . . . . .

AccrualNonaccrual¥2,260,777¥31,342

F-50

Total(1)AccrualNonaccrual(in millions)

Total(1)¥15,067,823¥ 582,510¥133,410¥ 89,095¥15,201,233¥ 671,605

Credit Quality Based on
Internal Credit RatingsSpecialPass
Mention Classified(in millions)¥2,745,365¥69,437¥80,433

Total(1)(2)¥5,187,354

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

At March 31, 2014:

Likely to become
Bankrupt orLegally/Virtually
Close Watch
Bankrupt(in millions)

NormalCommercial
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥50,608,911
Manufacturing . . . . . . . . . . . . . . . . . . . . . .
10,032,892
Construction . . . . . . . . . . . . . . . . . . . . . . . .
786,640
Real estate . . . . . . . . . . . . . . . . . . . . . . . . .
9,747,076
Services . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,279,379
Wholesale and retail . . . . . . . . . . . . . . . . . .
7,582,548
Banks and other financial institutions . . . .
3,959,266
Communication and information
services . . . . . . . . . . . . . . . . . . . . . . . . . .
1,349,217
Other industries . . . . . . . . . . . . . . . . . . . . .
13,274,021
Consumer . . . . . . . . . . . . . . . . . . . . . . . . . .
1,597,872
Foreign-excluding MUAH and Krungsri . . . . . .
28,399,163
Loans acquired with deteriorated credit
quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32,430Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥79,040,504¥3,549,135
1,329,356
163,313716,302328,142651,659
18,494¥737,692
167,859
30,093
141,774
72,059211,770
7,234¥54,895,738
11,530,107
980,046
10,605,152
2,679,580
8,445,977
3,984,994

68,863
182,727
90,2791,132,038

24,95636,05445,89384,8491,443,036
13,492,802
1,734,044
29,616,050

33,10010,21075,740¥4,714,273¥832,751¥84,587,528

Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit Quality Based on
the Number of Delinquencies
AccrualMUAH . . . . . . . . . . . . . . . . . . . . . . . . ¥3,003,826

Nonaccrual¥34,989

Total(1)AccrualNonaccrual(in millions)

Total(1)¥14,864,856¥ 535,511¥113,449¥ 73,110¥14,978,305¥ 608,621

Credit Quality Based on
Internal Credit RatingsSpecialPass
Mention Classified(in millions)¥3,946,961

Normal¥98,645¥95,167

Substandard or
Doubtful orSpecial
DoubtfulMentionof Loss(in millions)

Krungsri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,923,087 ¥101,184¥51,590

Total(1)(2)¥7,179,588

Total(1)¥3,075,861

Notes:(1) Total loans in the above table do not include loans held for sale.
(2) Total loans of MUAH do not include Federal Deposit Insurance Corporation (“FDIC”) covered loans and small business loans which are
not individually rated totaling ¥66,892 million and ¥59,963 million as of March 31, 2013 and 2014, respectively. The MUFG Group will
be reimbursed for a substantial portion of any future losses on FDIC covered loans under the terms of the FDIC loss share agreements.

The MUFG Group classifies loans into risk categories based on relevant information about the ability ofborrowers to service their debt, including, but not limited to, historical and current financial information,
historical and current payment experience, credit documentation, public and non-public information aboutborrowers and current economic trends as deemed appropriate to each segment.
The primary credit quality indicator for loans within all classes of the Commercial segment is the internal
credit rating assigned to each borrower based on the MUFG Group’s internal borrower ratings of 1 through 15,
F-51

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
with the rating of 1 assigned to a borrower with the highest quality of credit. When assigning a credit rating to aborrower, the MUFG Group evaluates the borrower’s expected debt-service capability based on various
information, including financial and operating information of the borrower as well as information on the industry
in which the borrower operates, and the borrower’s business profile, management and compliance system. In
evaluating a borrower’s debt-service capability, the MUFG Group also conducts an assessment of the level of
earnings and an analysis of the borrower’s net worth. Based on the internal borrower rating, loans within theCommercial segment are categorized as Normal (internal borrower ratings of 1 through 9), Close Watch (internalborrower ratings of 10 through 12), and Likely to become Bankrupt or Legally/Virtually Bankrupt (internalborrower ratings of 13 through 15).
Loans to borrowers categorized as Normal represent those that are not deemed to have collectibility issues.
Loans to borrowers categorized as Close Watch represent those that require close monitoring as theborrower has begun to exhibit elements of potential concern with respect to its business performance andfinancial condition, the borrower has begun to exhibit elements of serious concern with respect to its businessperformance and financial condition, including business problems requiring long-term solutions, or the
borrower’s loans are TDRs or loans contractually past due 90 days or more for special reasons.
Loans to borrowers categorized as Likely to become Bankrupt or Legally/Virtually Bankrupt represent thosethat have a higher probability of default than those categorized as Close Watch due to serious debt repayment
problems with poor progress in achieving restructuring plans, the borrower being considered virtually bankrupt
with no prospects for an improvement in business operations, or the borrower being legally bankrupt with noprospects for continued business operations because of non-payment, suspension of business, voluntaryliquidation or filing for legal liquidation.
The accrual status is a primary credit quality indicator for loans within the Residential segment, the Card
segment and consumer loans within the MUAH segment. The accrual status of these loans is determined basedon the number of delinquent payments. See Note 1 for further details of categorization of Accrual andNonaccrual.
Commercial loans within the MUAH segment are categorized as either pass or criticized based on theinternal credit rating assigned to each borrower. Criticized credits are those that are internally risk graded as
special mention, substandard or doubtful. Special mention credits are potentially weak, as the borrower has
begun to exhibit deteriorating trends, which, if not corrected, may jeopardize repayment of the loan and result infurther downgrade. Classified credits are those that are internally risk graded as substandard or doubtful.
Substandard credits have well-defined weaknesses, which, if not corrected, could jeopardize the full satisfactionof the debt. A credit classified as doubtful has critical weaknesses that make full collection improbable on thebasis of currently existing facts and conditions.
Loans within the Krungsri segment are categorized as Normal, Special mention, Substandard, Doubtful, andDoubtful of loss primarily based on their delinquency status. Loans categorized as Special mention generally
represent those that have the overdue principal or interest payments for a cumulative period exceeding one monthcommencing from the contractual due date. Loans categorized as Substandard, Doubtful or Doubtful of loss
generally represent those that have the overdue principal or interest payments for a cumulative period exceeding
three months commencing from the contractual due date.
For the Commercial, Residential and Card segments, credit quality indicators are based on information as ofMarch 31. For the MUAH and Krungsri segment, credit quality indicators are generally based on information asof December 31.
F-52

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Past Due Analysis
Ages of past due loans by class at March 31, 2013 and 2014 are shown below:

At March 31, 2013:

Commercial
Domestic . . . . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . .
Banks and other financial
institutions . . . . . . . . . . . . . . . . .
Communication and information
services . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . . . .
Foreign-excluding MUAH . . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUAH . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

At March 31, 2014:

Commercial
Domestic . . . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . . . . . .
Construction . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . .
Banks and other financial
institutions . . . . . . . . . . . . . . . .
Communication and information
services . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . .
Consumer . . . . . . . . . . . . . . . . . .
Foreign-excluding MUAH and
Krungsri . . . . . . . . . . . . . . . . . . .
Residential . . . . . . . . . . . . . . . . . . . . . . .
Card . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUAH . . . . . . . . . . . . . . . . . . . . . . . . . .
Krungsri . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total
Loans(1)(2)

Recorded
Investment>
90 Days andAccruing¥53,357,361
11,733,507
1,051,360
10,633,969
2,846,691
8,260,302¥53,488,099
11,755,777
1,055,359
10,654,379
2,866,443
8,294,458¥ 7,545
24
37
2,255
80
82

72

3,620,845

3,620,917

2

2,835
6,809
11,261
17,68655,132
39,796
17,922

5,121
8,401
16,55737,492
146,280
63,476
48,6581,308,750
12,177,945
1,723,992
23,923,458
15,037,723
594,896
5,102,991

1,313,871
12,186,346
1,740,549
23,960,950
15,184,003
658,372
5,151,649

12
11
5,042
206
32,918—69¥215,359¥426,644¥98,016,429¥98,443,073¥40,738

Total
Loans(1)(2)

Recorded
Investment>
90 Days andAccruing

1-3 months
Past DueGreaterThan
3 months

Total
Past Due¥ 45,915
6,963
2,118
5,339
12,215
10,106¥ 84,823
15,307
1,881
15,071
7,537
24,050¥130,738
22,2703,999
20,41019,752
34,156

—

72

2,286
1,592
5,296
19,806
91,14823,68030,736¥211,285

Current(in millions)

1-3 months
Past DueGreaterThan
3 months

Total
Past Due¥ 26,210
5,363
718
4,859
4,315
4,624

¥ 53,632
7,192
664
9,689
2,781
22,829¥ 79,842
12,555
1,382
14,548
7,096
27,453¥ 54,815,896
11,517,552
978,664
10,590,604
2,672,484
8,418,524¥ 54,895,738
11,530,107
980,046
10,605,152
2,679,580
8,445,977¥ 6,543
—
1
2,233
10
3

1

52

53

3,984,941

3,984,994

—

680
667
4,983

1,371
1,554
7,500

2,051
2,221
12,483

1,440,985
13,490,581
1,721,561

1,443,036
13,492,802
1,734,044

—
—
4,296

3,283
85,54921,65330,036
66,871

7,109
54,46233,381
14,33322,121

10,392140,01155,03444,36988,992

29,605,658
14,822,995
540,886
7,078,621
2,936,194

29,616,050
14,963,006
595,920
7,122,990
3,025,186

357
40,500—527—¥233,602¥185,038¥418,640¥109,800,250¥110,218,890¥47,927

Current(in millions)

Notes:(1) Total loans in the above table do not include loans held for sale and loans acquired with deteriorated credit quality.
(2) Total loans of MUAH do not include ¥2,039 million and ¥1,600 million of FDIC covered loans at March 31, 2013 and 2014,
respectively, which are not subject to the guidance on loans and debt securities acquired with deteriorated credit quality.

F-53

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Allowance for Credit Losses
Changes in the allowance for credit losses by portfolio segment for the fiscal years ended March 31, 2012,2013 and 2014 are shown below:
Fiscal year ended March 31, 2012:

Commercial

Residential

Card(in millions)

MUAH

Total

Allowance for credit losses:
Balance at beginning of fiscal year: . . . . . . .
Provision (credit) for credit losses . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . .
Recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 895,611
181,449
126,157
36,043¥165,215
29,481
23,075
216¥82,607
27,88343,073
1,486¥ 97,023(15,004)
24,494
5,684¥1,240,456
223,809
216,799
43,429Net charge-offs . . . . . . . . . . . . . . . . . . . . . . .
Others(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

90,114(2,638)22,859—41,587—

18,810(2,750)173,370(5,388)

Balance at end of fiscal year . . . . . . . . . . . . .

¥ 984,308¥171,837¥68,903¥ 60,459¥1,285,507

Fiscal year ended March 31, 2013:

Commercial

Residential

Card(in millions)

MUAH

Total

Allowance for credit losses:
Balance at beginning of fiscal year: . . . . . . .
Provision for credit losses . . . . . . . . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . .
Recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 984,308
127,874
80,534
23,410¥171,837
1,302
16,283353¥68,903
12,37932,1352,723¥ 60,459
2,987
15,585
5,189¥1,285,507
144,542
144,537
31,675

Net charge-offs . . . . . . . . . . . . . . . . . . . . . . .
Others(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57,124
13,405

15,930—29,412—

10,396
5,395

112,862
18,800

Balance at end of fiscal year . . . . . . . . . . . . .

¥1,068,463¥157,209¥51,870¥ 58,445¥1,335,987

Krungsri(2)

Total

¥—
—
—
—

¥1,335,987(106,371)
191,098
37,350Fiscal year ended March 31, 2014:

Commercial

Residential

Card
MUAH
(in millions)

Allowance for credit losses:
Balance at beginning of fiscal year: . . . .
Provision (credit) for credit losses . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . .
Recoveries . . . . . . . . . . . . . . . . . . . . . . . .

¥1,068,463 ¥157,209 ¥51,870 ¥58,445(70,091) (35,952)
5,617(5,945)
158,875
4,577
20,125
7,521
29,478
230
3,264
4,378

Net charge-offs . . . . . . . . . . . . . . . . . . . .
Others(1) . . . . . . . . . . . . . . . . . . . . . . . . . .

129,397
7,882

4,347
3

16,861—

3,143
10,667——

153,748
18,552

Balance at end of fiscal year . . . . . . . . . .

¥ 876,857¥116,913¥40,626¥60,024¥—¥1,094,420

Notes:(1) Others are principally comprised of gains or losses from foreign exchange translation.
(2) For the Krungsri segment, the acquired loans were recorded at their fair values as of the acquisition date, and there have been no
indications that allowance for credit loss is necessary for these loans since then. Therefore, no allowance for credit loss was stated in theabove table.

F-54

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Allowance for credit losses and recorded investment in loans by portfolio segment at March 31, 2013 and2014 are shown below:
At March 31, 2013:

Commercial

Allowance for credit losses:
Individually evaluated for impairment . . . .
Collectively evaluated for impairment . . . .
Loans acquired with deteriorated credit
quality . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans:
Individually evaluated for impairment . . . .
Collectively evaluated for impairment . . . .
Loans acquired with deteriorated credit
quality . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total(1)........................

At March 31, 2014:¥

784,718
248,798

Total . . . . . . . . . . . . . . . . . . . . ¥¥34,947¥ 1,068,463¥¥ 1,677,144
75,771,905¥

Card(in millions)

117,670
37,360¥ 37,901
13,8092,179

160

157,209¥ 51,870

309,408
14,874,595

MUAH

¥

¥

3,645
54,705

Total¥

943,934
354,672

95

37,38158,445¥ 1,335,987¥123,519 ¥ 54,259 ¥ 2,164,330
534,853
5,099,429
96,280,782

101,313

17,23013,233

100,558

232,334¥77,550,362¥15,201,233¥671,605¥5,254,246¥98,677,446

Card
MUAH
(in millions)

Krungsri(2)TotalCommercial

Allowance for credit losses:
Individually evaluated for
impairment . . . . . . . . . . . . . . . . . ¥Collectively evaluated for
impairment . . . . . . . . . . . . . . . . .
Loans acquired with deteriorated
credit quality . . . . . . . . . . . . . . . .

Residential

Residential

640,442 ¥

69,613 ¥ 29,244 ¥

4,131 ¥

— ¥743,430

209,11745,355

11,312

55,777—

321,561

27,298

1,945

70

116

—

29,42960,024 ¥— ¥1,094,420

876,857 ¥

116,913 ¥ 40,626 ¥Loans:
Individually evaluated for
impairment . . . . . . . . . . . . . . . . . ¥ 1,459,268 ¥ 211,802 ¥102,930 ¥ 64,009 ¥— ¥ 1,838,009
Collectively evaluated for
impairment . . . . . . . . . . . . . . . . . 83,052,520 14,751,204 492,990 7,060,581 3,025,186 108,382,481
Loans acquired with deteriorated
credit quality . . . . . . . . . . . . . . . .
75,74015,29912,701
114,961
50,675
269,376
Total(1) . . . . . . . . . . . . . . . . . . ¥84,587,528 ¥14,978,305 ¥608,621 ¥7,239,551 ¥3,075,861 ¥110,489,866
Notes:(1) Total loans in the above table do not include loans held for sale and represent balances without adjustments in relation to unearned
income, unamortized premiums and deferred loan fees.
(2) For the Krungsri segment, acquired loans were recorded at their fair values as of the acquisition date, and there have been no indications
that allowance for credit loss is necessary for these loans since then. Therefore, no allowance for credit loss was stated in the above table.

Nonperforming loans were actively disposed of by sales during recent years. The allocated allowance for
credit losses for such loans was removed from the allowance for credit losses and transferred to the valuation
allowance for loans held for sale upon a decision to sell. Net charge-offs in the above table include a decrease in
the allowance for credit losses due to loan disposal activity amounting to ¥1.2 billion, ¥0.4 billion and¥16.2 billion for the fiscal years ended March 31, 2012, 2013 and 2014, respectively.
F-55

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The MUFG Group sold ¥706 billion, ¥884 billion and ¥906 billion of loans within the Commercial segment
during the fiscal years ended March 31, 2012, 2013 and 2014, respectively.
The MUFG Group purchased ¥337 billion of loans within the MUAH segment during the fiscal year ended
March 31, 2014. See Note 2 for MUB’s acquisition of PB Capital Corporation’s institutional CRE lending
division.
Loans Acquired in a Transfer
In accordance with the guidance on loans and debt securities acquired with deteriorated credit quality, thefollowing table sets forth information regarding loans acquired in connection with mergers, for which it isprobable, at acquisition, that the MUFG Group will be unable to collect all contractually required payments
receivable.
2013
2014
(in millions)

Loans acquired during the fiscal year:
Contractually required payments receivable at acquisitions . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flows expected to be collected at acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of loans at acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accretable yield for loans within the scope of the guidance on loans and debt securities
acquired with deteriorated credit quality:
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accretion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassifications from nonaccretable difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥117,468
77,417
63,731¥186,268
116,218
93,845¥ 86,877 ¥ 95,178
13,686
22,373(39,981) (49,155)——
29,721
15,7604,875
9,465¥ 95,178¥ 93,621

Loans within the scope of the guidance on loans and debt securities acquired withdeteriorated credit quality:
Outstanding balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥493,111 ¥497,265
Outstanding balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
497,265
531,327
Carrying amount at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
212,702232,334
Carrying amount at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
232,334
269,376
Nonaccruing loans within the scope of the guidance on loans and debt securities acquiredwith deteriorated credit quality:
Carrying amount at acquisition date during fiscal year . . . . . . . . . . . . . . . . . . . . . . . . ¥826 ¥ 25,952
Carrying amount at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21,96538,651
Allowance for credit losses within the scope of the guidance on loans and debt securities
acquired with deteriorated credit quality:
Balance of allowance for credit losses at beginning of fiscal year . . . . . . . . . . . . . . . . ¥ 36,391 ¥ 37,381
Additional provisions during fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,784
4,982
Reductions of allowance during fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,066
1,129
Balance of allowance for credit losses at end of fiscal year . . . . . . . . . . . . . . . . . . . . .
37,381
29,429The MUFG Group considered prepayments in the determination of contractual cash flows and cash flows
expected to be collected based on historical results.
F-56

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Lease Receivables
As part of its financing activities, the MUFG Group enters into leasing arrangements with customers. The
MUFG Group’s leasing operations are conducted through leasing subsidiaries and consist principally of direct
financing leases involving various types of data processing equipment, office equipment and transportationequipment. As a result of the acquisition of Krungsri, the MUFG Group’s lease receivables increased by¥912,366 million.
As of March 31, 2013 and 2014, the components of the investment in direct financing leases were as
follows:
2013
2014(in millions)

Minimum lease payments receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥677,959 ¥1,498,755
Estimated residual values of leased property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22,384
18,261
Less—unearned income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(69,196)(202,755)
Net investment in direct financing leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥631,147¥1,314,261

Future minimum lease payment receivables under noncancelable leasing agreements as of March 31, 2014
were as follows:
DirectFinancing
Leases(in millions)Fiscal year ending March 31:
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 440,086
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
337,0442017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
267,3062018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
191,1122019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
106,3852020 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
156,822
Total minimum lease payment receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,498,755

Government-led Loan Restructuring Program
Under the legislation enacted by the Japanese Diet in June 1996, which incorporates the restructuring
program for the loans of seven failed housing-loan companies (the “Jusen”), the Deposit Insurance Corporation(“DIC”) established a Housing Loan Administration Corporation (“HLAC”) to collect and dispose of the loans of
the liquidated Jusen. In 1999, HLAC merged with the Resolution and Collection Bank Limited to create the
Resolution and Collection Corporation (“RCC”), which is wholly owned by the DIC.
Financial institutions, including the MUFG Group, waived the repayment of substantial amounts of theloans to the Jusen and transferred the remaining balances to HLAC. Financial institutions were requested to makeloans to HLAC to finance its collection activities, and in the fiscal year ended March 31, 1997, the MUFG Groupmade loans of ¥407,078 million with an original maturity term of 15 years. The 15-year term loans to HLAC,
which were guaranteed by the DIC under the legislation and the loan agreements, matured in 2011 and earned
interest at TIBOR (Tokyo Interbank Offered Rate) plus 0.125%. On October 1, 2005, the MUFG Group acquired,at fair value, loans of the UFJ Holdings Group to HLAC in connection with the merger with UFJ Holdings.
F-57

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Under this restructuring program, a Financial Stabilization Fund (the “Special Fund”) was establishedwithin the DIC, and the Bank of Japan and other financial institutions established another fund (the “NewFund”). These funds were principally invested in Japanese government bonds. The MUFG Group made noninterest-earning deposits of ¥176,089 million with the Special Fund and the New Fund in the fiscal year ended
March 31, 1997, and expected all collection activities to be completed by December 2011, after 15 years ofcollection activities of the Jusen loans by RCC.
As the end of RCC’s operations was approaching, the amount of the loss (so-called “stage two loss”), whichmight have ultimately been incurred through the collection activities, became clearer. In May 2011, the JapaneseDiet enacted a law to partially revise the Deposit Insurance Act. Although it had already been decided that theloss should be shared equally between the Japanese government and private financial institutions, the revised law
clarified the details of how the Japanese government would absorb its half of the loss. On the other hand, thesecond half of the loss, which had to be absorbed by private financial institutions, would be covered by theinvestment income earned by the Special Fund during the 15 years.
In September 2011, the deposits of ¥161,435 million with the New Fund were fully collected according totheir terms. In June 2012, the entire deposits of ¥204,956 million with the Special Fund were fully collected as
well.
Sales of Loans
The MUFG Group originates various types of loans to corporate and individual borrowers in Japan andoverseas in the normal course of business. In order to improve its loan quality, BTMU and MUTB actively
disposed of nonperforming loans. Most of such nonperforming loans were disposed of by sales to third parties
without any continuing involvement. Management of BTMU and MUTB generally approves disposals after
significant sales terms, including prices, are negotiated. As such, loans are disposed of by sales shortly after theloans are transferred to the held-for-sale classification. The net gains on the sales of loans were ¥16,256 million,¥14,274 million and ¥18,984 million for the fiscal years ended March 31, 2012, 2013 and 2014, respectively.
Related Party Loans
In some cases, the banking subsidiaries of MUFG make loans to related parties, including their directors andexecutive officers, in the course of their normal commercial banking business. At March 31, 2013 and 2014,
outstanding loans to such related parties were not material.
In the opinion of management, these related party loans were made on substantially the same terms,
including interest rates and collateral requirements, as those terms prevailing at the date these loans were made.
For the fiscal years ended March 31, 2012, 2013 and 2014, there were no loans to related parties that werecharged-off. Additionally, at March 31, 2012, 2013, and 2014, there were no loans to related parties that wereimpaired.

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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
5.

PREMISES AND EQUIPMENT
Premises and equipment at March 31, 2013 and 2014 consisted of the following:
2013
2014
(in millions)Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 379,943 ¥ 403,184
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
723,902
747,998
Equipment and furniture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
767,733
929,939
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
236,353
251,875
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17,976
27,606
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,125,907
1,066,853

2,360,602
1,123,954

Premises and equipment-net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,059,054¥1,236,648

Premises and equipment include capitalized leases, principally related to data processing equipment, whichamounted to ¥43,222 million and ¥41,907 million at March 31, 2013 and 2014, respectively. Accumulated
depreciation on such capitalized leases at March 31, 2013 and 2014 amounted to ¥29,385 million and¥29,769 million, respectively.
BTMU has entered into sales agreements to sell its buildings and land and, under separate agreements,
leased those properties back for its business operations, including bank branches. BTMU either provided
nonrecourse financings to the buyers for the sales proceeds or invested in the equities of the buyers. As a result,
BTMU was considered to have continuing involvement with the properties. For accounting and reporting
purposes, these transactions were accounted for under the financing method with the sales proceeds recognized
as a financing obligation. The properties were reported on the accompanying consolidated balance sheets anddepreciated. The financing obligation at March 31, 2013 and 2014 was ¥47,435 million and ¥46,339 million,
respectively.
For the fiscal years ended March 31, 2012, 2013 and 2014, the MUFG Group recognized ¥10,913 million,¥3,975 million and ¥13,850 million, respectively, of impairment losses for long-lived assets, primarily real estate
which was either formerly used for its banking operations and is no longer used or real estate that is being used
where recovery of the carrying amount is doubtful. In addition, ¥5,209 million, ¥1,932 million and ¥226 millionof impairment losses were recognized for real estate held for sale for the fiscal years ended March 31, 2012, 2013
and 2014, respectively. These losses are included in Other non-interest expenses. In computing the amount of
impairment losses, fair value was determined primarily based on market prices, if available, or the estimatedprice based on an appraisal.

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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
6.

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill
The table below presents the movement in the carrying amount of goodwill by business segment during the
fiscal years ended March 31, 2013 and 2014:
Integrated Integrated Integrated Integrated Global Business
Retail Corporate
Trust
Group
Banking Banking
AssetsBusiness Business Business Other than
Group
Group
Group
MUAH
MUAH
Total
(in millions)GlobalKrungsri Markets

Balance at March 31, 2012:
Goodwill . . . . . . . . . . . . . . . . . . . ¥ 840,055 ¥ 885,234 ¥ 22,527 ¥152,203 ¥192,520 ¥344,723 ¥Accumulated impairment
losses . . . . . . . . . . . . . . . . . . . . (840,055) (885,234) (14,735)
(532)
—
(532)
Goodwill acquired during the
fiscal year(2) . . . . . . . . . . . . . . . .
Foreign currency translation
adjustments and other . . . . . . .

—

—

7,792

151,671

—

—

—

—

39,68339,683————23,99022,527

152,203

Balance at March 31, 2013:
Goodwill . . . . . . . . . . . . . . . . . . . 840,055 885,234
Accumulated impairment
losses . . . . . . . . . . . . . . . . . . . . (840,055) (885,234)
Goodwill acquired during the
fiscal year(2) . . . . . . . . . . . . . . . .
Impairment loss . . . . . . . . . . . . . . .
Foreign currency translation
adjustments and other . . . . . . .

(14,735)

(532)

—

—

7,792

151,671————

14,443(7,792)

—
—

—

—

825

—

37,795

152,203

Balance at March 31, 2014:
Goodwill . . . . . . . . . . . . . . . . . . . 840,055 885,234
Accumulated impairment
losses . . . . . . . . . . . . . . . . . . . . (840,055) (885,234)¥— ¥(22,527)— ¥ 15,268

(532)

Total

— ¥2,300 ¥2,094,839—

192,520 344,191— (1,740,556)
2,300

354,283——

39,68323,990——23,990256,193 408,396

—

2,300

2,158,512

(532)

—

256,193 407,864

—

—

2,300

417,956

26,181—

26,181 217,386
—
—

—
—

258,010(7,792)59,51659,516——60,341

341,890 494,093 217,386

2,300

2,476,863

—

(532)

—

— (1,740,556)— (1,748,348)¥151,671 ¥341,890 ¥493,561 ¥217,386 ¥2,300 ¥ 728,515

Notes:(1) See Note 29 for the business segment information of the MUFG Group.
(2) See Note 2 for the goodwill acquired in connection with principal acquisitions.

There were no impairment losses recognized for the fiscal years ended March 31, 2012 and 2013.
For the fiscal year ended March 31, 2014, the MUFG Group recognized ¥7,792 million in impairment of
goodwill relating to the Integrated Trust Assets Business Group segment. The MUFG Group readjusted its future
projection of a reporting unit in this segment, considering a subsidiary’s recent business performance. As a result,the fair value of this reporting unit, which is based on discounted future cash flows, fell below the carrying
amount of the reporting unit, and the impairment loss was recognized on the related goodwill. The impairment
loss was included in Other non-interest expenses in the accompanying consolidated statements of income.

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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Other Intangible Assets
The table below presents the gross carrying amount, accumulated amortization and net carrying amount, in
total and by major class of intangible assets at March 31, 2013 and 2014:
2013
Gross
carrying
amountAccumulated
amortization

2014
Net
Gross
carrying
carrying
amountamount(in millions)

Accumulated
amortization

Intangible assets subject toamortization:
Software . . . . . . . . . . . . . . . . . . . . . ¥1,640,297 ¥1,105,783 ¥534,514 ¥1,858,371 ¥1,245,657
Core deposit intangibles . . . . . . . .
638,863456,339 182,524
712,188
497,219
Customer relationships . . . . . . . . .
233,360
136,603
96,757
380,674
147,774
Trade names . . . . . . . . . . . . . . . . . .
52,562
14,43038,132
72,78816,995
Other . . . . . . . . . . . . . . . . . . . . . . .
4,899
2,744
2,155
8,754
2,562
Total . . . . . . . . . . . . . . . . . . . . ¥2,569,981 ¥1,715,899

854,082 ¥3,032,775 ¥1,910,207

Net
carrying
amount¥612,714
214,969
232,900
55,793
6,192
1,122,568

Intangible assets not subject toamortization:
Indefinite-lived trade names . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . .

3,037
9,034

3,037
7,749

Total . . . . . . . . . . . . . . . . . . . .

12,071

10,786

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥866,153¥1,133,354

Intangible assets subject to amortization acquired during the fiscal year ended March 31, 2013 amounted to¥171,650 million, which primarily consisted of ¥163,748 million of software. The weighted average amortization
period for these assets is 5 years. There is no significant residual value estimated for these assets. Intangible
assets not subject to amortization acquired during the fiscal year ended March 31, 2013 amounted to ¥50 million.
Intangible assets subject to amortization acquired during the fiscal year ended March 31, 2014 amounted to¥455,843 million, which primarily consisted of ¥225,108 million of software, ¥61,629 million of core deposit
intangibles, ¥145,936 million of customer relationships and ¥18,083 million of trade names. The weighted
average amortization period for these assets are 5 years, 11 years, 13 years and 22 years, respectively. There is no
significant residual value estimated for these assets. Intangible assets not subject to amortization acquired during
the fiscal year ended March 31, 2014 amounted to ¥289 million. See Note 2 for further details of acquired
intangible assets.
For the fiscal years ended March 31, 2012, 2013 and 2014, the MUFG Group recognized ¥30,986 million,¥3,378 million and ¥312 million, respectively, of impairment losses for intangible assets whose carrying amounts
exceeded their fair value. In computing the amount of impairment losses, fair value was determined primarily
based on the present value of expected future cash flows, the estimated value based on appraisals, or market
prices.
The impairment loss for the fiscal year ended March 31, 2012 included a loss of ¥8,334 million relating to
the contractual rights of a business alliance reported under the Integrated Retail Banking Business Group, whichwere not subject to amortization, and a loss of ¥18,554 million relating to the customer relationships from fundcontracts under the Integrated Trust Assets Business Group, which were reclassified from intangible assets not
F-61

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
subject to amortization to those subject to amortization at September 30, 2011. The intangible assets were valued
based on discounted expected future cash flows. The MUFG Group reflected the business environment of thecredit card business, which has recently experienced further deterioration, in the future cash flows projection forthe contractual rights above. Also, the estimated future cash flows of the customer relationships above from fundcontracts were revised downward due to the recent global financial market instability and its adverse impact on
the expected growth prospects of trust assets. Accordingly, the MUFG Group reevaluated the intangible assets
and recognized impairment losses.
The estimated aggregate amortization expense for intangible assets for the next five fiscal years is asfollows:(in millions)Fiscal year ending March 31:
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.

¥231,427
198,788
170,098
135,245
95,218

INCOME TAXES

Income (loss) before Income Tax Expense
Income (loss) before income tax expense by jurisdiction for the fiscal years ended March 31, 2012, 2013
and 2014 was as follows:
2012

Domestic income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2013(in millions)2014¥1,037,891¥ 898,596(187,949)(1)
517,275¥1,012,551
407,892¥ 849,942¥1,420,443¥1,415,871

Note:(1) An other-than-temporary impairment loss of Morgan Stanley’s common stock was included in Foreign income (loss). See Note 2 forfurther details of an other-than-temporary impairment loss of Morgan Stanley’s common stock.

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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Income Tax Expense (Benefit)
The detail of current and deferred income tax expense for the fiscal years ended March 31, 2012, 2013 and2014 was as follows:
2012

2013
(in millions)2014

Current:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥156,764
79,313¥102,357
60,609¥243,648
102,316

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

236,077

162,966

345,964

Deferred:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

171,889
21,225

122,804
10,250(5,523)(2,524)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

193,114133,054(8,047)

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense (benefit) reported in Accumulated OCI relating to:Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives qualifying for cash flow hedges . . . . . . . . . . . . . . . . . . . . . . .
Defined benefit plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . .

429,191

296,020

337,917

116,997
235(66,573)
13,230336,5312,217
43,213
18,53796,422(235)
69,51551,414

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

63,889400,498

217,116

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥493,080¥696,518¥555,033

On November 30, 2011, the Japanese Diet enacted two tax related laws: “Amendment to the 2011 Tax
Reform” and “Special Measures to Secure the Financial Resources to Implement the Restoration from The Great
East Japan Earthquake.” The changes under the new laws include a limitation on the use of net operating loss
carryforwards to 80% of taxable income, a two-year increase in the carryforward period of certain net operating
loss carryforwards to a nine-year period, and an approximately 5% reduction in the effective statutory rate ofcorporate income tax from 40.6% to 35.6%. While the reduction in the effective statutory rate was effective forfiscal years beginning on or after April 1, 2012, a temporary surtax levied on corporate income taxes to fund theearthquake recovery efforts caused the effective statutory rate of corporate income tax to be approximately
38.0% for the three year period between April 1, 2012 and March 31, 2015. The change in tax laws resulted in an
increase of ¥77,997 million in income tax expense for the fiscal year ended March 31, 2012.
On March 20, 2014, the Japanese Diet enacted the “2014 Tax Reform” which terminated the temporary
surtax levied on corporate income taxes one year earlier than the change in tax law on November 30, 2011 as
described above. As a result, the effective statutory rate of corporate income tax for the fiscal year ending
March 31, 2015 was set at approximately 35.6%. The change in tax law resulted in an increase of¥16,687 million in income tax expense for the fiscal year ended March 31, 2014.
The MUFG Group has changed to filing on a consolidated basis for corporate income taxes within Japan
beginning with the fiscal year ending March 31, 2015. A consolidated basis for corporate income taxes results in
the reporting of taxable income or loss based upon the combined profits or losses of the parent company and its
wholly-owned domestic subsidiaries.

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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Reconciliation of Effective Income Tax Rate
Income taxes in Japan applicable to the MUFG Group are imposed by the national, prefectural andmunicipal governments, and in the aggregate resulted in a normal effective statutory rate of approximately
40.6% for the fiscal year ended March 31, 2012 and approximately 38.0% for the fiscal years ended March 31,
2013 and 2014. Foreign subsidiaries are subject to income taxes of the countries in which they operate.
A reconciliation of the effective income tax rates reflected in the accompanying consolidated statements ofincome to the combined normal effective statutory tax rates for the fiscal years ended March 31, 2012, 2013 and2014 is as follows:
2012

2013

2014

Combined normal effective statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nondeductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends from foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign tax credit and payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lower tax rates applicable to income of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . .
Change in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Realization of previously unrecognized tax effects of subsidiaries . . . . . . . . . . . . .
Nontaxable dividends received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Undistributed earnings of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax and interest expense for uncertainty in income taxes . . . . . . . . . . . . . . . . . . . . .
Expiration of loss carryforward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of changes in tax laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40.6% 38.0% 38.0%
0.2
0.1
0.2
0.1
0.0
0.0
(2.1)
(0.8)
(0.6)
(0.5)
(0.5)
(0.4)
2.3
(7.3) (12.4)
0.0(10.7)(1) (0.1)
(3.4)
(2.3)
(3.3)
0.2
1.5
0.5
0.1
(0.1)
—
4.8
2.1
—
9.1
—
1.2
(0.9)
0.9
0.7

Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

50.5%

20.9%

23.8%

Note:
(1) In April 2012, one of the wholly-owned subsidiaries of BTMU was liquidated. The liquidation resulted in the realization of tax benefits
that were not previously recognized as deferred tax assets, resulting in a ¥151,309 million reduction of income tax expense and a 10.7%
reduction in the effective tax rate for the fiscal year ended March 31, 2013.

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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are computed for each tax jurisdiction using currently enacted tax rates
applicable to periods when the temporary differences are expected to reverse. The tax effects of the items
comprising the MUFG Group’s net deferred tax assets at March 31, 2013 and 2014 were as follows:
2013
2014
(in millions)Deferred tax assets:
Allowance for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued liabilities and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premises and equipment, including sale-and-leaseback transactions . . . . . . . . . . . .
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued severance indemnities and pension plans . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 774,612 ¥ 650,069
106,856
102,260
14,3607,632
355,337
309,327
102,217
94,65264,583
94,514
164,797
44,810(483,006) (308,561)

Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,099,756

994,703

Deferred tax liabilities:
Investment securities (including trading account assets at fair value under fairvalue option) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

488,728
104,736
54,02564,806574,807
159,330
77,54274,471

Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

712,295

886,150

Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 387,461¥ 108,553

The valuation allowance was provided primarily against deferred tax assets recorded at MUFG and its
subsidiaries with operating loss carryforwards. The amount of valuation allowance is determined based on future
reversals of existing taxable temporary differences and future taxable income exclusive of reversing temporary
differences. Future taxable income is developed from forecasted operating results, based on recent historical
trends and approved business plans, the eligible carryforward periods and other relevant factors.
For the fiscal year ended March 31, 2014, the MUFG Group recorded a valuation allowance release, on thebasis of management’s reassessment of the amount of its deferred tax assets that were more likely than not to berealized. As of March 31, 2014, management considered new evidence, both positive and negative, that could
impact management’s view with regard to future realization of deferred tax assets.
Among others, a release of valuation allowance of ¥91,070 million was due to the application of theconsolidated corporate-tax system beginning with the fiscal year ending March 31, 2015. This is because MUFG
would be able to utilize income in more profitable subsidiaries to realize the benefit of net operating loss
carryforwards and existing deductible temporary differences recorded at MUFG. Management believes that the
net operating loss carryforwards related to corporate taxes will be fully utilized by the application of theconsolidated corporate-tax system.
Among others, a release of valuation allowance of ¥45,922 million was due to the profitability improvementof a certain subsidiary. Management considered various factors, including the improved operating performanceand cumulative operating results over the prior several years of the subsidiary as well as the outlook regarding
prospective operating performance of the subsidiary, and determined that sufficient positive evidence exists as ofMarch 31, 2014, to conclude that it is more likely than not that additional deferred tax assets would be realizable.
F-65

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For certain subsidiaries where strong negative evidence exists, such as the existence of significant amountsof operating loss carryforwards, cumulative losses and the expiration of unused operating loss carryforwards inrecent years, a valuation allowance was recognized against the deferred tax assets as of March 31, 2013 and 2014
to the extent that it is more likely than not that they will not be realized.
Income taxes are not provided on undistributed earnings of certain foreign subsidiaries that are considered
to be indefinitely reinvested in the operations of such subsidiaries. At March 31, 2013 and 2014, theundistributed earnings of such foreign subsidiaries amounted to approximately ¥28,644 million and¥37,498 million, respectively. Determination of the amount of unrecognized deferred tax liabilities with respect
to these undistributed earnings is not practicable because of the complexity associated with its hypothetical
calculation including foreign withholding taxes and foreign tax credits. MUFG has neither plans nor the intention
to dispose of investments in such foreign subsidiaries and, accordingly, does not expect to record capital gains orlosses, or otherwise monetize the undistributed earnings of such foreign subsidiaries.
Operating Loss and Tax Credit Carryforwards
At March 31, 2014, the MUFG Group had operating loss carryforwards for corporate tax of¥302,033 million and tax credit carryforwards of ¥6,442 million for tax purposes. Such carryforwards, if not
utilized, are scheduled to expire as follows:
Operating loss
Tax credit
carryforwards carryforwards(in millions)Fiscal year ending March 31:
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
No definite expiration date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

1,808
—
—
31,6196,412
34,370216,288
11,536

¥ 579
47
27
52
56
96
3,900
1,685

¥302,033¥6,442

Uncertainty in Income Tax
The following is a roll-forward of the MUFG Group’s unrecognized tax benefits for the fiscal years ended
March 31, 2012, 2013 and 2014:
2012

2013
(in millions)2014

Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross amount of increases for current year’s tax positions . . . . . . . . . . . . . .
Gross amount of decreases for current year’s tax positions . . . . . . . . . . . . .
Gross amount of increases for prior years’ tax positions . . . . . . . . . . . . . . .
Gross amount of decreases for prior years’ tax positions . . . . . . . . . . . . . . .
Net amount of changes relating to settlements with tax authorities . . . . . . .
Decreases due to lapse of applicable statutes of limitations . . . . . . . . . . . . .
Foreign exchange translation and others . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥61,297 ¥ 58,588 ¥ 30,956
455
366
439
(339)
(49)
—
2,887
2,765
333
(312) (35,119)(1) (25,318)(2)(2,515)760(244)(1,123)——(1,762)
3,645
7,827

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥58,588

F-66¥ 30,956¥ 13,993

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Notes:(1) The decrease was primarily because, during the fiscal year ended March 31, 2013, the MUFG Group closed an examination with U.S. tax
authorities on issues related to prior years’ tax positions.
(2) The decrease related to prior year tax positions is primarily from the resolution of uncertain tax positions in the U.S. for both federal
income taxes and California state tax.

The total amount of unrecognized tax benefits at March 31, 2012, 2013 and 2014 that, if recognized, would
affect the effective tax rate are ¥9,170 million, ¥9,632 million and ¥3,570 million, respectively. The remainder ofthe uncertain tax positions have offsetting amounts in other jurisdictions or are temporary differences.
The MUFG Group classifies interest and penalties, if applicable, related to income taxes as Income tax
expense. Accrued interest and penalties (not included in the “unrecognized tax benefits” above) are a component
of Other liabilities. The following is a roll-forward of the interest and penalties recognized in the accompanying
consolidated financial statements for the fiscal years ended March 31, 2012, 2013 and 2014:
2012

2013
(in millions)2014

Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total interest and penalties in the consolidated statements of income . . . . . . . . . . . . .
Total cash settlements, foreign exchange translation and others . . . . . . . . . . . . . . . . .

¥7,033 ¥ 6,934 ¥4,528
27(2,975)
(698)
(126)
569
2,116

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥6,934¥ 4,528¥5,946The MUFG Group is subject to ongoing tax examinations by the tax authorities of the various jurisdictions
in which it operates. The following are the major tax jurisdictions in which the MUFG Group operates and thestatus of years under audit or open to examination:
Jurisdiction

Tax years

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States—Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States—California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2013 and forward
2007 and forward
2009 and forward
2009 and forward

The MUFG Group is currently under continuous examinations by the tax authorities in various domestic andforeign jurisdictions and many of these examinations are resolved every year. It is reasonably possible that theunrecognized tax benefits will decrease by approximately ¥3.0 billion during the next twelve months, sinceresolved items will be removed from the balance whether their resolution results in payment or recognition.
8.

PLEDGED ASSETS AND COLLATERAL

Pledged Assets
At March 31, 2014, assets mortgaged, pledged, or otherwise subject to lien were as follows:2014(in millions)

Trading account securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥13,654,793
4,728,870
8,087,278
84,291

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥26,555,232

F-67

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The above pledged assets were classified by type of liabilities to which they related as follows:2014(in millions)

Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 552,503
Call money and funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
708,086
Payables under repurchase agreements and securities lending transactions . . . . . . . . . . . . . . . . . . . .
15,436,764
Other short-term borrowings and long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,657,563
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
200,316
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥26,555,232

In addition, at March 31, 2014, certain investment securities, principally Japanese national government andJapanese government agency bonds, loans, and other assets aggregating to ¥20,812,386 million were pledged ascollateral for acting as a collection agent of public funds, for settlement of exchange at the Bank of Japan and theTokyo Bankers Association, for derivative transactions and for certain other purposes.
The MUFG Group engages in on-balance sheet securitizations. These securitizations of mortgage andapartment loans, which do not qualify for sales treatment, are accounted for as secured borrowings. The amountof loans in the table above represents the carrying amount of these transactions with the carrying amount of theassociated liabilities included in Other short-term borrowings and Long-term debt.
Under Japanese law, Japanese banks are required to maintain certain reserves on deposit with the Bank ofJapan based on the amount of deposit balances and certain other factors. There are similar reserve deposit
requirements for foreign offices engaged in banking businesses in foreign countries. At March 31, 2013 and 2014
the reserve funds maintained by the MUFG Group, which are included in Cash and due from banks and Interestearning deposits in other banks, were ¥5,697,318 million and ¥13,007,902 million, respectively. Average
reserves during the fiscal years ended March 31, 2013 and 2014 were ¥4,566,092 million and¥12,313,722 million, respectively.
Collateral
The MUFG Group accepts and provides financial assets as collateral for transactions, principallycommercial loans, repurchase agreements and securities lending transactions, call money, and derivatives.
Financial assets eligible for such collateral include, among others, marketable equity securities, trade and notes
receivable and certificates of deposit.
Secured parties, including creditors and counterparties to certain transactions with the MUFG Group, may
sell or repledge financial assets provided as collateral. Certain contracts, however, may not be specific about the
secured party’s right to sell or repledge collateral under the applicable statutes and, therefore, whether or not the
secured party is permitted to sell or repledge collateral would differ depending on the interpretations of specificprovisions of the existing statutes, contract or certain market practices. If the MUFG Group determines, based on
available information, that a financial asset provided as collateral might not be sold or repledged by the secured
parties, such collateral is not separately reported in the accompanying consolidated balance sheets. If a secured
party is permitted to sell or repledge financial assets provided as collateral by contract or custom under the
existing statutes, the MUFG Group reports such pledged financial assets separately on the face of theaccompanying consolidated balance sheets. At March 31, 2014, the MUFG Group pledged ¥29,528 billion ofassets that may not be sold or repledged by the secured parties.
F-68

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Certain banking subsidiaries accept collateral for commercial loans and certain banking transactions under astandardized agreement with customers, which provides that these banking subsidiaries may require thecustomers to provide collateral or guarantees with respect to the loans and other banking transactions. Financial
assets pledged as collateral are generally negotiable and transferable instruments, and such negotiability andtransferability is authorized by applicable legislation. In principle, Japanese legislation permits these banking
subsidiaries to repledge financial assets accepted as collateral unless otherwise prohibited by contract or relevant
statutes. Nevertheless, the MUFG Group did not sell or repledge nor does it plan to sell or repledge suchcollateral accepted in connection with commercial loans before a debtor’s default or other credit events specified
in the agreements as it is not customary within the banking industry in Japan to dispose of collateral before adebtor’s default and other specified credit events. Derivative agreements commonly used in the marketplace do
not prohibit a secured party’s disposition of financial assets received as collateral, and in resale agreements andsecurities borrowing transactions, securities accepted as collateral may be sold or repledged by the secured
parties. At March 31, 2013 and 2014, the fair value of the collateral accepted by the MUFG Group that ispermitted to be sold or repledged was ¥11,873 billion and ¥18,637 billion, respectively, of which ¥8,190 billionand ¥14,011 billion, respectively, was sold or repledged.
At March 31, 2013 and 2014, the cash collateral pledged for derivative transactions, which is included in Other
assets, was ¥1,573,698 million and ¥1,045,851 million, respectively, and the cash collateral received for derivativetransactions, which is included in Other liabilities, was ¥366,544 million and ¥454,506 million, respectively.
9.

DEPOSITS

The balances of time deposits, including certificates of deposit (“CDs”), issued in amounts of ¥10 million(approximately U.S.$97 thousand at the Federal Reserve Bank of New York’s noon buying rate on March 31,2014) or more with respect to domestic deposits and issued in amounts of U.S.$100,000 or more with respect toforeign deposits were ¥28,267,100 million and ¥19,783,917 million, respectively, at March 31, 2013, and¥27,555,387 million and ¥26,026,728 million, respectively, at March 31, 2014.
The maturity information at March 31, 2014 for domestic and foreign time deposits, including CDs, issummarized as follows:
Domestic
Foreign(in millions)Due in one year or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥35,654,357
Due after one year through two years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,307,843
Due after two years through three years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,813,975
Due after three years through four years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
611,214
Due after four years through five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
807,890
Due after five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
464,856
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥46,660,135¥25,819,867
421,138
145,802
121,113130,491
23,225¥26,661,636

10. CALL MONEY AND FUNDS PURCHASED
A summary of funds transactions for the fiscal years ended March 31, 2013 and 2014 is as follows:
2013
2014
(in millions, except percentages and days)

Outstanding at end of fiscal year:
Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥4,010,582 ¥
3,417,455
Principal range of maturities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1 day to 30 days
1 day to 30 days
Weighted average interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.18%
0.18%
F-69

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
11. DUE TO TRUST ACCOUNTMUTB holds assets on behalf of its customers in an agent, fiduciary or trust capacity. Such trust accountassets are not the MUFG Group’s proprietary assets and are managed and accounted for separately.
However, excess cash funds of individual trust accounts are often placed with MUTB which manages thefunds together with its own funds in its proprietary account. Due to trust account reflects a temporary placementof the excess funds from individual trust accounts and, in view of the MUFG Group’s funding, due to trust
account is similar to short-term funding, including demand deposits and other overnight funds purchased. Thebalance changes in response to the day-to-day changes in the excess funds placed by the trust accounts. A
summary of due to trust account transactions for the fiscal years ended March 31, 2013 and 2014 is as follows:
2013
2014
(in millions, except percentages)

Amount outstanding at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average interest rate on outstanding balance at end of fiscal year . . . . . . .

¥633,029
0.09%¥750,210
0.08%

12. SHORT-TERM BORROWINGS AND LONG-TERM DEBTAt March 31, 2013 and 2014, the MUFG Group had unused lines of credit for short-term financing
amounting to ¥11,282,220 million and ¥10,750,175 million, respectively. The amounts principally consist of thelines of collateralized intraday overdrafts without interest charges and collateralized overnight loans on bills at
the official discount rate granted by the Bank of Japan, which are used to cover shortages in the Bank of Japanaccount and to meet liquidity needs. The MUFG Group may borrow from the Bank of Japan on demand up to thetotal amount of collateral eligible for credit extension.
Other short-term borrowings at March 31, 2013 and 2014 were comprised of the following:
2013
2014
(in millions, except percentages)

Domestic offices:
Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 1,358,067
Borrowings from the Bank of Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,466,717
Borrowings from other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . .
203,120
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49,500¥ 1,235,525
5,888,541
224,676
59,501

Total domestic offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,077,404

7,408,243

Foreign offices:
Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Borrowings from other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,125,851
386,068—
19,3893,091,977
333,116
119,837
153,074

Total foreign offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,531,308

3,698,004

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less unamortized discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11,608,712
114

11,106,247
176

Other short-term borrowings—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,608,598¥11,106,071

Weighted average interest rate on outstanding balance at end of fiscal year . . . . . . .

F-70

0.20%

0.25%

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Long-term debt (with original maturities of more than one year) at March 31, 2013 and 2014 was comprisedof the following:
2013
2014
(in millions)
MUFG:
Obligations under capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subordinated debt(1):Adjustable rate bonds, payable in Japanese yen, no stated maturity, principally 3.92%-4.42% . . . . . . . .
Adjustable rate borrowings, payable in Japanese yen, no stated maturity, principally 3.42%-4.78% . . . .
Adjustable rate borrowings, payable in US dollars, no stated maturity, principally 6.25% . . . . . . . . . . . .
Adjustable rate borrowings, payable in Euro, no stated maturity, principally 4.75%-5.17% . . . . . . . . . . .
Adjustable rate borrowings, payable in other currencies excluding Japanese yen, US dollars, Euro, nostated maturity, principally 6.20%(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

59

78

380,500
1,500
470
1,207

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU:Obligations under capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligation under sale-and-leaseback transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unsubordinated debt(1):Fixed rate bonds, payable in Japanese yen, due 2014-2027, principally 0.16%-2.69% . . . . . . . . . . . . . . .
Fixed rate bonds, payable in US dollars, due 2015-2044, principally 1.00%-4.70% . . . . . . . . . . . . . . . . .
Fixed rate bonds, payable in other currencies excluding Japanese yen, US dollars, due 2014-2017,
principally 4.05%-4.91%(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed rate borrowings, payable in Japanese yen, due 2014-2028, principally 0.10%-0.50% . . . . . . . . . .
Fixed rate borrowings, payable in US dollars, due 2018, principally 7.49% . . . . . . . . . . . . . . . . . . . . . . .
Fixed rate borrowings, payable in other currencies excluding Japanese yen, US dollars, due 2013-2014,
principally 2.13%-5.65%(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate bonds, payable in Japanese yen, due 2014, principally 1.57% . . . . . . . . . . . . . . . . . . . . .
Floating rate bonds, payable in US dollars, due 2016-2017, principally 0.65%-0.85% . . . . . . . . . . . . . . .
Floating rate bonds, payable in other currencies excluding Japanese yen, US dollars, due 2015-2017,
principally 3.77%-4.00%(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate borrowings, payable in US dollars, due 2014-2024, principally 0.33%-0.67% . . . . . . . . . .
Floating rate borrowings, payable in Euro, due 2014-2021, principally 0.45%-0.48%(2) . . . . . . . . . . . . .

¥¥380,500
1,500
515
1,416

430

514

384,166

384,523

15,29447,435¥

12,26046,3391,337,900
639,679

1,311,801
1,109,470

126,709
10,297383

71,4391,163,291
342

384
20,00093,667——
226,424

29,379780,410
7,839

90,431
942,215
7,497

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subordinated debt(1):Fixed rate bonds, payable in Japanese yen, due 2014-2031, principally 0.93%-2.91% . . . . . . . . . . . . . . .
Fixed rate borrowings, payable in Japanese yen, due 2016-2035, principally 0.56%-2.24% . . . . . . . . . .
Fixed rate borrowings, payable in US dollars, due 2013, principally 6.76% . . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate bonds, payable in Japanese yen, due 2019, principally 1.20% . . . . . . . . . . . . . . . . . . . . .
Adjustable rate borrowings, payable in Japanese yen, due 2017-2028, principally 0.25%-2.86% . . . . . .
Adjustable rate borrowings, payable in Japanese yen, no stated maturity, principally 0.97%-4.78% . . . .
Adjustable rate borrowings, payable in US dollars, no stated maturity, principally 6.25% . . . . . . . . . . . .
Adjustable rate borrowings, payable in Euro, no stated maturity, principally 4.75%-5.17% . . . . . . . . . . .
Adjustable rate borrowings, payable in other currencies excluding Japanese yen, US dollars, Euro, nostated maturity, principally 6.20%(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate borrowings, payable in Japanese yen, due 2020-2027, principally 0.36%-0.86% . . . . . . . .

3,046,647

4,922,910

1,579,037
233,419
118,177
93,700395,600
891,199
221,018
158,760

1,336,892
233,400—
31,000245,800
845,400
241,862
186,270

80,88541,90096,79041,900Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligations under loan securitization transaction accounted for as secured borrowings due 2014-2044,
principally 0.24%-5.90% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payable under repurchase agreements due 2016-2018, principally 0.63%-1.48% . . . . . . . . . . . . . . . . . . . . . . .

3,813,695

3,259,314

1,516,893
188,100

1,146,638
360,220

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,628,064

9,747,681

F-71

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2013
2014
(in millions)
Other subsidiaries:
Obligations under capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unsubordinated debt(1):Fixed rate borrowings, bonds and notes, payable in Japanese yen, due 2014-2044, principally
0.00%-16.00% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed rate borrowings, bonds and notes, payable in US dollars, due 2014-2038, principally
0.00%-13.10% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed rate bonds and notes, payable in Euro, due 2018, principally 4.21% . . . . . . . . . . . . . . . . . . . . . .
Fixed rate bonds and notes, payable in Thai baht, due 2014-2018, principally 0.00%-4.80% . . . . . . . .
Fixed rate borrowings, bonds and notes, payable in other currencies excluding Japanese yen,
US dollars, Euro, Thai baht, due 2014-2037, principally 0.50%-10.75%(2) . . . . . . . . . . . . . . . . . . . .
Floating/Adjustable rate borrowings, bonds and notes, payable in Japanese yen, due 2014-2044,
principally 0.00%-24.00% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating/Adjustable rate borrowings, bonds and notes, payable in US dollars, due 2014-2038,
principally 0.00%-7.30% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate bonds and notes, payable in Euro, due 2014-2018, principally 0.00%-1.76% . . . . . . . . .
Floating rate borrowings, bonds and notes, payable in other currencies excluding Japanese yen,
US dollars, Euro, due 2014-2037, principally 0.00%-1.10%(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥10,286¥

7,781

547,746915,357

46,849—1,437

396,704
6,514
269,219

8,952

35,011

1,199,685

1,426,933

403,80922,492

276,40234,281

2,006

2,055

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subordinated debt(1):Fixed rate borrowings, bonds and notes, payable in Japanese yen, due 2014-2030, principally
0.56%-2.98% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed rate bonds and notes, payable in US dollars, due 2014-2019, principally 5.38%-11.33% . . . . . .
Fixed rate bonds and notes, payable in Thai baht, due 2020-2022, principally 4.51%-4.70% . . . . . . . .
Adjustable rate borrowings, bonds and notes, payable in Japanese yen, due 2020, principally
1.76% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustable rate borrowings, bonds and notes, payable in Japanese yen, no stated maturity, principally
1.93%-3.50% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate borrowings, bonds and notes, payable in Japanese yen, due 2014-2021, principally
0.57%-1.52% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating rate borrowings, bonds and notes, payable in US dollars, due 2033-2036, principally
1.95%-3.50% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,232,976

3,362,476

435,544
105,096—484,194
77,330111,682

72,3005,000

105,744

105,667

192,391

204,926—

6,972

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligations under loan securitization transaction accounted for as secured borrowings due 2014-2018,
principally 0.95%-2.71% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

911,075

995,771

15,791

446

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,170,128

4,366,474

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥12,182,358¥14,498,678

Notes:(1) Adjustable rate debts are debts where interest rates are reset in accordance with the terms of the debt agreements, and floating rate debts
are debts where interest rates are repriced in accordance with movements of markets indices.
(2) Minor currencies, such as Australian dollar, British pound, Indonesian rupiah, Brazilian real, Russian ruble etc, have been summarized
into the “Other currencies” classification.

The MUFG Group uses derivative financial instruments to manage its interest rate and currency exposuresfor certain debts. The derivative financial instruments include swaps, forwards, options and other types ofderivatives. As a result of these derivative instruments, the effective rates reflected in the table above may differ
from the coupon rates. The interest rates for the adjustable and floating rate debt shown in the above table arethose in effect at March 31, 2013 and 2014.
Certain debt agreements permit the MUFG Group to redeem the related debt, in whole or in part, prior tomaturity at the option of the issuer on terms specified in the respective agreements.

F-72

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following is a summary of maturities of long-term debt subsequent to March 31, 2014:

Fiscal year ending March 31:
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Othersubsidiaries(in millions)

MUFG

BTMU

Total

¥

20
18
13
6
3
384,463¥1,111,236
931,1032,295,298
891,232
529,6413,989,171¥ 575,174
646,907585,917353,487
544,859
1,660,130¥ 1,686,430
1,578,028
2,881,228
1,244,725
1,074,503
6,033,764¥384,523¥9,747,681¥4,366,474¥14,498,678

13. SEVERANCE INDEMNITIES AND PENSION PLANS
Defined Benefit Pension Plans
The MUFG Group has funded contributory and non-contributory defined benefit pension plans (“pension
benefits”), which cover substantially all of its employees and provide for lifetime annuity payments commencing
at age 65 based on eligible compensation at the time of severance, rank, years of service and other factors.
BTMU and certain domestic subsidiaries, MUSHD, Mitsubishi UFJ NICOS and some subsidiaries of
MUFG have non-contributory Corporate Defined Benefit Pension plans (“CDBPs”) which provide benefits to all
their domestic employees. In addition, MUTB had a contributory CDBP similar to these non-contributory
CDBPs until a transfer of its remaining corporate portion into a non-contributory CDBP subsequent to theseparation process as described below.
In December 2011, in accordance with the Defined Benefit Corporate Pension Plan Act, which permits each
employer and employees’ pension fund plan to separate the substitutional portion of the employees’ pension fundfrom the rest of the fund and transfer the related obligation and assets to the Japanese government, MUTB
obtained an approval from the Minister of Health, Labor and Welfare for an exemption from the obligation to
pay benefits for future employee services related to the substitutional portion of the governmental welfare
pension program. In January 2013, MUTB also obtained an approval for an exemption from the obligation to pay
benefits for past employee services related to the substitutional portion. To complete the separation process, thesubstitutional obligation and the related plan assets were transferred to the Japanese government on February 17,
2014. In accordance with the guidance, which addresses the accounting for the transfer to the Japanese
government of a substitutional portion of employee pension fund liabilities, MUTB accounted for the entire
separation process, upon completion of transfer of the plan assets to the government, as a single settlementtransaction. During the fiscal year ended March 31, 2014, MUTB recognized (1) the difference of¥115,210 million between the accumulated benefit obligations settled and the assets transferred to the Japanese
Government as a government subsidy, which was recognized as a gain in the accompanying consolidated
statements of income, (2) the proportionate amount of the net unrealized loss of ¥42,435 million for thesubstitutional portion as settlement loss, and (3) the difference of ¥1,770 million between the projected benefit
obligations and the accumulated benefit obligations related to the substitutional portion, as gain on derecognitionof previously accrued salary progression. The settlement loss and gain on derecognition of previously accruedsalary progression were included in Salaries and employee benefits in the accompanying consolidated statements
of income. The remaining portion of the employees’ pension fund (that is, the corporate portion) continued toexist as a CDBP, although, from a legal regulatory perspective, it is deemed to have been dissolved and a CDBP
F-73

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
is deemed newly established when the separation process is completed. Subsequent to the separation process,
MUTB transferred the remaining corporate portion of the employees’ pension fund into a non-contributory
CDBP.
In addition to the CDBPs, BTMU and MUTB had non-contributory closed Tax-Qualified Pension Plans(“closed TQPPs”), which were defined benefit pension plans that provide benefits to certain retired employees,
excluding directors in Japan, based on eligible compensation at the time of severance, years of service and otherfactors. MUTB also had a contributory closed TQPP in addition to the non-contributory closed TQPPs. In March
2012, Tax-Qualified Pension Plans were abolished pursuant to the Amendment to the 2011 Tax Reform enacted
in 2011. Prior to the abolishment, the contributory and non-contributory closed TQPPs held by BTMU and
MUTB were integrated into their non-contributory CDBPs. The balances of projected benefit obligations andplan assets of the closed TQPPs were directly transferred with no impact on the MUFG Group’s financial
position and results of operations.
The MUFG Group also offers qualified and nonqualified defined benefit pension plans in foreign offices
and subsidiaries for their employees. The qualified plans are non-contributory defined pension plans, which
provide benefits upon retirement based on years of service and average compensation and cover substantially allof the employees of such foreign offices and subsidiaries. With respect to the offices and subsidiaries in the
United States of America, the qualified plans are funded on a current basis in compliance with the requirement of
the Employee Retirement Income Security Act of the United States of America. The nonqualified plans are noncontributory defined benefit pension plans, under which certain employees earn pay and interest credits oncompensation amounts above the maximum stipulated by applicable laws under the qualified plans.
Severance Indemnities Plans
The MUFG Group has severance indemnities plans (“SIPs”) under which their employees in Japan, otherthan those who are directors, are entitled, under most circumstances, upon mandatory retirement at normal
retirement age or earlier termination of employment, to lump-sum severance indemnities based on eligible
compensation at the time of severance, rank, years of service and other factors. Under SIPs, benefit payments inthe form of a lump-sum cash payment with no option to receive annuity payments, upon mandatory retirement at
normal retirement age or earlier termination of employment, are provided. When a benefit is paid in a single
payment to a benefit payee under the plans, the payment represents final relief of the obligation.
Other Postretirement Plans
The MUFG Group’s foreign offices and subsidiaries, primarily in the United States of America, provide
their employees with certain postretirement medical and life insurance benefits (“other benefits”).

F-74

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Net periodic cost of pension benefits and other benefits for the fiscal years ended March 31, 2012, 2013 and2014 includes the following components:
Domestic subsidiaries
2012
2013
2014
PensionPensionPensionbenefits
benefits
benefits
and SIPand SIP and SIP

2012

Foreign offices and subsidiaries
2013

PensionOther
benefits benefits(in millions)

Pensionbenefits

Other
benefits

2014

Pension Other
benefits benefits

Service cost—benefits
earned during the fiscal
year . . . . . . . . . . . . . . . . . . ¥ 39,709 ¥ 38,840 ¥ 39,309 ¥ 6,328 ¥ 968 ¥ 8,098 ¥1,114 ¥12,215 ¥1,526Interest cost on projected
benefit obligation . . . . . . . 31,509 26,648 22,464 10,649 1,192 10,716 1,135 13,467 1,352
Expected return on plan
assets . . . . . . . . . . . . . . . . . (55,336) (48,106) (54,222) (14,216) (1,106) (14,169) (1,030) (19,928) (1,423)
Amortization of net actuarial
loss . . . . . . . . . . . . . . . . . . 29,424 42,496 23,941
6,221
514
8,030
715
9,808
776
Amortization of prior service
cost . . . . . . . . . . . . . . . . . . (11,534) (12,309) (11,793)
35
(57)
54
(59)
157
(69)
Amortization of net
obligation at transition . . .
—
—
—
—
105
—
105
—
—
Loss (gain) on settlements
and curtailment . . . . . . . . .
4,378
2,600 41,456
40
—
95
(3)
—
—
Net periodic benefit cost . . . . ¥ 38,150 ¥ 50,169 ¥ 61,155 ¥ 9,057 ¥ 1,616 ¥ 12,824 ¥1,977 ¥15,719 ¥2,162
The following table summarizes the assumptions used in computing the present value of the projected
benefit obligations and the net periodic benefit cost:
Domestic subsidiaries
2012
2013
2014
PensionPension Pension
benefits
benefits benefits
and SIPand SIP and SIP

Weighted-average assumptions
used:
Discount rates indetermining expense . . . .
Discount rates indetermining benefit
obligation . . . . . . . . . . . . .
Rates of increase in futurecompensation level for
determining expense . . . .
Rates of increase in futurecompensation level for
determining benefit
obligation . . . . . . . . . . . . .
Expected rates of return onplan assets . . . . . . . . . . . . . .

2012Foreign offices and subsidiaries
2013

2014

Pensionbenefits

Other
benefits

Pensionbenefits

Other Pension Other
benefits benefits benefits

1.91%

1.55% 1.25% 5.67%

5.36%

4.73%

4.70% 4.25% 4.01%

1.55

1.25

1.23

4.73

4.70

4.25

4.01

4.87

4.63

3.23

3.31

3.07

4.67

—

4.60

—

4.58

—

3.31

3.07

3.36

4.60

—

4.58

—

4.64

—

3.11

2.78

2.83

7.49

8.00

6.92

7.50

6.98

7.50

F-75

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following tables present the assumed health care cost trend rates for foreign offices and subsidiaries,
which are used to measure the expected cost of benefits for the next year, and the effect of a one-percentagepoint change in the assumed health care cost trend rate:
MUAH
2013(1)

Initial trend rate . . . . . . . . . . . . . . . . . . . . . . . .
Ultimate trend rate . . . . . . . . . . . . . . . . . . . . . .
Year the rate reaches the ultimate trend rate . .

8.31%
4.50%
2021

2014(1)

7.71%
4.50%
2021

Other than MUAH
2013(1)
2014(1)

7.50%
4.50%
2017

8.00%
5.00%
2019

MUAH
Other than MUAH
One-percentage- One-percentage- One-percentage- One-percentagepoint increase
point decrease
point increase
point decrease(in millions)

Effect on total of service and interest cost
components . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect on postretirement benefit obligation . . .

¥422
3,478

¥ (422)(2,951)¥79
1,128¥ (61)(885)Note:(1) Fiscal years of MUAH and foreign subsidiaries end on December 31. Therefore, the above tables present the rates and amounts at
December 31, 2012 and 2013, respectively.

F-76

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table sets forth the combined funded status and amounts recognized in the accompanying
consolidated balance sheets at March 31, 2013 and 2014:
Domestic subsidiaries
2013

Foreign offices and subsidiaries
2014

2013

Non-contributory Contributory Non-contributory Contributory
pension benefits
pensionpension benefits
pensionand SIPbenefits
and SIPbenefits

Pensionbenefits

2014

Other
benefits

Pensionbenefits

Other
benefits(in millions)

Change in benefit obligation:
Benefit obligation at
beginning of fiscal year . . .
Service cost . . . . . . . . . . . .
Interest cost . . . . . . . . . . . .
Plan participants’contributions . . . . . . . . .
Acquisitions/
Divestitures . . . . . . . . . .
Amendments . . . . . . . . . . .
Actuarial loss (gain) . . . . . .
Benefits paid . . . . . . . . . . .
Lump-sum payment . . . . . .
Translation adjustments
and other . . . . . . . . . . . .
Benefit obligation at end of
fiscal year . . . . . . . . . . . . . .

¥1,383,933
34,182
20,510¥389,264
4,658
6,138

¥1,433,161
36,147
17,448¥ 404,427
3,162
5,016

—

—

—

—

14

8
—
65,369(55,396)(15,445)——
15,583(11,216)
—

(807)
(32)
26,417(55,608)(14,313)——(8,984)(11,202)——302
23,154(13,161)
(440)

—
9,359
—
—
980
—
975 (24,716) (2,966)(1,673) (9,851) (2,136)
—
(158)
—

—

—

224,238(2)(392,419)(2)

29,1803,300

61,3565,920

1,433,161

404,427

1,666,651—

283,224

30,002345,881

34,346

1,317,074

433,710

1,462,406

458,171

182,791

13,370233,081

18,185

174,467
26,31464,893
15,635

124,355
31,64034,472
12,84324,787
14,807

1,866
1,144

43,561
41,423

3,611
1,313

(53)

—

176

—

—

—

—

—

—
(55,396)—(11,216)—(55,608)—(11,202)

14(13,161)450(1,673)5648(9,851) (2,136)(44,851)(1)

441,360(2)(494,284)(2)

23,843

3,028

59,876

4,224—

233,081

18,185368,095

25,845

Change in plan assets:
Fair value of plan assets at
beginning of fiscal year . . .
Actual return (loss) on plan
assets . . . . . . . . . . . . . . .
Employer contributions . . .
Acquisitions/
Divestitures . . . . . . . . . .
Plan participants’contributions . . . . . . . . .
Benefits paid . . . . . . . . . . .
Translation adjustments
and other . . . . . . . . . . . .
Fair value of plan assets at
end of fiscal year . . . . . . . .
Amounts recognized in the
consolidated balance sheets:
Prepaid benefit cost . . . . . .
Accrued benefit cost . . . . .
Net amount recognized . . .

—¥225,361 ¥ 24,701 ¥283,224 ¥30,002
8,098
1,114
12,215
1,526
10,716
1,135
13,467
1,352
450

5

648

1,462,406

458,171

2,004,329¥

60,279(31,034)¥ 53,744—¥ 357,817(20,139)

¥

—
—

¥

¥

29,245¥ 53,744¥ 337,678¥—¥ (50,143) ¥(11,817) ¥ 22,214 ¥ (8,501)

3,850 ¥
— ¥ 54,600 ¥—(53,993) (11,817) (32,386) (8,501)

Notes:(1) MUTB partially withdrew assets from employee retirement benefit trusts, amount of ¥44,851 million, which were established for thepayment of employees’ pension benefits. The related plan remains in an overfunded status as of March 31, 2013. No gains or losses havebeen recognized as a consequence of this transaction.
(2) MUTB separated the substitutional portion of its contributory CDBP and transferred the related obligation and assets to the Japanese
government. The transferred obligation and assets to the Japanese government were ¥169,951 million and ¥52,971 million, respectively.
Subsequent to the separation process, MUTB transferred the remaining corporate portion of its contributory CDBP into a noncontributory CDBP. The transferred obligation and assets to the non-contributory CDBP were ¥224,238 million and ¥441,313 million,
respectively.

F-77

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The aggregated accumulated benefit obligations of these plans at March 31, 2013 and 2014 were as follows:
Domestic
Foreign offices
subsidiaries
and subsidiaries
2013
2014
2013
2014
(in millions)Aggregated accumulated benefit obligations . . . . . . . . . . . . . .

¥1,808,001¥1,639,563¥262,200¥318,971

The projected benefit obligations, accumulated benefit obligations and fair value of plan assets for the plans
with accumulated benefit obligations in excess of plan assets at March 31, 2013 and 2014 were as follows:
Domestic
Foreign offices
subsidiaries
and subsidiaries
2013
2014
2013
2014
(in millions)

Projected benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥96,622
89,16665,601¥55,684
52,57837,033¥264,204
243,268
210,793¥57,972
54,49925,812

BTMU, MUTB, MUSHD, Mitsubishi UFJ NICOS and other subsidiaries paid special lump-sum termination
benefits which are not a part of pension plans to certain early-terminated employees. The amounts charged tooperations for such early termination benefits for the fiscal years ended March 31, 2012, 2013 and 2014 were¥34,600 million, ¥11,234 million and ¥7,358 million, respectively. The ¥34,600 million charged to operations forthe fiscal year ended March 31, 2012 mainly consisted of ¥20,512 million related to MUSHD.
The following table presents the amounts recognized in Accumulated OCI of the MUFG Group at
March 31, 2013 and 2014:
Domestic subsidiaries
2013
2014
PensionPensionbenefits
benefits
and SIPand SIP

Foreign offices and subsidiaries
2013
2014
PensionOther
benefits
benefits(in millions)

Pensionbenefits

Other
benefits

Net actuarial loss . . . . . . . . . . . . . . . . . . . . . .
Prior service cost . . . . . . . . . . . . . . . . . . . . . .

¥ 488,936 ¥ 336,312 ¥ 98,654(46,580)(34,787)386¥ 8,314 ¥ 57,474
(100)
1,129

¥3,585(41)

Gross amount recognized in Accumulated
OCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

442,356(183,884)

301,525(133,606)

99,040(38,585)8,214(3,212)58,603(23,063)

3,544
(767)

Net amount recognized in Accumulated
OCI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 258,472¥ 167,919¥ 60,455¥ 5,002¥ 35,540¥2,777

F-78

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents OCI in the fiscal years ended March 31, 2013 and 2014:
Domestic subsidiaries
2013
2014
PensionPensionbenefits
benefits
and SIPand SIPNet actuarial loss (gain) arising during theyear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service cost arising during the year . . . . .
Losses (gains) due to amortization:
Net actuarial loss . . . . . . . . . . . . . . . . . . .
Prior service cost . . . . . . . . . . . . . . . . . . .
Net obligation at transition . . . . . . . . . . . .
Curtailment and settlement . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . .
Total changes in Accumulated OCI . . . . . . . . .

Foreign offices and subsidiaries
2013
2014
PensionOther
benefits
benefits(in millions)¥(110,303) ¥ (87,227) ¥11,326——
270(42,496)
12,309—(2,600)—(23,941)
11,793—(41,456)
—

¥ 141
—

(8,030)(54)—(95)
10,112

(715)
59
(105)
3
895

¥(143,090) ¥(140,831) ¥13,529¥ 278

Pensionbenefits

Other
benefits¥(47,687) ¥(5,130)862—(9,808)(157)——
16,353

(776)
69
—
—
1,167

¥(40,437) ¥(4,670)

The following table presents the expected amounts that will be amortized from Accumulated OCI as
components of net periodic benefit cost, before taxes, for the fiscal year ending March 31, 2015:
Domestic
Foreign offices
subsidiaries
and subsidiaries
Pensionbenefits
Pension
Other
and SIPbenefits benefits(in millions)

Net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥14,265(8,932)¥6,402
109

¥117
(24)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 5,333¥6,511¥ 93

Investment policies
MUFG’s investment policy for plan assets is based on an asset liability matching strategy which is intended
to maintain adequate liquidity for benefit payments and to achieve a stable increase in the plan assets in themedium and long term through proper risk control and return maximization. As a general rule, investment
policies for plan assets are reviewed periodically for some plans and in the following situations for all plans:(1) large fluctuations in pension plan liabilities caused by modifications to pension plans, or (2) changes in themarket environment. The plan assets allocation strategies are the principal determinant in achieving expected
investment returns on the plan assets. Actual asset allocations may fluctuate within acceptable ranges due tomarket value variability. Plan assets are managed by a combination of internal and external asset managementcompanies and are rebalanced when market fluctuations cause an asset category to fall outside of its strategic
asset allocation range. Performance of each plan asset category is compared against established indices andsimilar plan asset groups to evaluate whether the risk associated with the portfolio is appropriate for the level ofreturn.

F-79

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The weighted-average target asset allocation of plan assets for the pension benefits and other benefits at
March 31, 2014 was as follows:
Domestic
subsidiaries
Pensionbenefits
and SIP

Asset category

Foreign offices
and subsidiaries
Pensionbenefits

Other
benefits

Japanese equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-Japanese equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-Japanese debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37.4%
39.5
11.8
4.7
—
6.6

0.4%
—
57.9
27.9
9.7
4.1

—%
—
70.0
30.0
—
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100.0%

100.0%

100.0%

Basis and procedure for estimating long-term return of each asset category
MUFG’s expected long-term rate of return on plan assets for domestic defined benefit pension plans and
SIPs is based on a building-block methodology, which calculates the total long-term rate of return of the plan
assets by aggregating the weighted rate of return derived from both long-term historical performance andforward-looking return expectations from each asset category.
MUFG has determined the expected long-term rate of return for each asset category as below:‰

Japanese equity securities: the rate for Japanese debt securities plus a premium for the risk associatedwith Japanese equity securities‰

Japanese debt securities: economic growth rate of Japan‰

Non-Japanese equity securities: the rate for non-Japanese debt securities plus a premium for the risk
associated with non-Japanese equity securities‰

Non-Japanese debt securities: global economic growth rate

Foreign offices and subsidiaries periodically reconsider the expected long-term rate of return for their plan
assets. They evaluate the investment return volatility of different asset categories and compare the liability
structure of their pension and other benefits to those of other companies, while considering their funding policy
to maintain a funded status sufficient to meet participants’ benefit obligations, and reduce long-term funding
requirements and pension costs. Based on this information, foreign offices and subsidiaries update the expectedlong-term rate of return.
Cash flows
The MUFG Group expects to contribute to the plan assets for the fiscal year ending March 31, 2015 based
upon its current funded status and expected asset return assumptions as follows:
For the pension benefits of domestic subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
For the pension benefits of foreign offices and subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
For the other benefits of foreign offices and subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-80¥39.4 billion
14.3 billion
2.3 billion

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Estimated future benefit payments
The following table presents benefit payments expected to be paid, which include the effect of expected
future service for the fiscal years indicated:
Domestic
subsidiaries
Pensionbenefits
and SIPFiscal year ending March 31:
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter (2020-2024) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 79,808
81,641
82,59982,74082,608410,139

Foreign offices
and subsidiaries
Pensionbenefits(in millions)

Otherbenefits¥ 11,242
12,173
13,517
14,614
15,906
108,484¥ 1,819
1,935
2,036
2,160
2,255
12,778Fair value measurement of the plan assets
The following is a description of the valuation methodologies used for plan assets measured at fair value aswell as the classification of the plan assets pursuant to the fair value hierarchy described in Note 31:
Government bonds and other debt securities
When quoted prices are available in an active market, the MUFG Group adopts the quoted prices to measure
the fair value of securities and such securities are classified in Level 1 of the fair value hierarchy. Level 1
securities include Japanese government bonds, most of non-Japanese government bonds and certain corporate
bonds. When quoted prices are available but not traded actively, such securities are classified in Level 2 of thefair value hierarchy. When quoted prices are not available, the MUFG Group generally estimates fair values byusing non-binding prices obtained from independent pricing vendors. Such securities are generally classified in
Level 2 of the fair value hierarchy. Level 2 securities include certain non-Japanese government bonds, official
institutions bonds and corporate bonds. When there is lack of liquidity for securities or significant inputs adopted
to the fair value measurements are unobservable, such securities are classified in Level 3 of the fair value
hierarchy. Such Level 3 securities mainly consist of non-Japanese corporate bonds.
Marketable equity securities
When quoted prices are available in an active market, the MUFG Group adopts the quoted prices to measure
the fair value of marketable equity securities and such securities are classified in Level 1 of the fair value
hierarchy. When quoted prices are available but not traded actively, such securities are classified in Level 2 ofthe fair value hierarchy.
Japanese pooled funds
Japanese pooled funds are investment fund vehicles designed for Japanese pension plan investments underJapanese pension trust fund regulations. Based upon the nature of the funds’ investments, Japanese pooled funds
are categorized into four major fund types: Japanese marketable equity securities type, Japanese debt securities
F-81

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
type, Non-Japanese marketable equity securities type and Non-Japanese debt securities type. The other types offunds invest in short-term financial instruments or loans receivable. Japanese pooled funds are generally readily
redeemable at their net asset values. The fair values of Japanese pooled funds are measured at their net asset
values and generally classified in Level 2 of the fair value hierarchy. Japanese pooled funds classified in Level 3of the fair value hierarchy have underlying investments in non-Japanese debt securities and loans receivable
whose fair values are measured by using significant unobservable inputs and there is inherent lack of the funds’
liquidity.
Other investment funds
Other investment funds include mutual funds, private investments funds, common collective funds, private
equity funds and real estate funds. The listed investment funds or mutual funds are valued at quoted prices andclassified in Level 1 or Level 2 of the fair value hierarchy. When there is no available market quotation, the fairvalues are generally determined at net asset values. The funds for which the fair values are measured at their net
asset value are classified either in Level 2 or Level 3 depending on the nature of any restrictions on the investor’sability to redeem its investments at the measurement date or in the near future. Other investment funds classified
in Level 3 of the fair value hierarchy mainly consist of certain private investment funds and real estate funds
whose fair values are not measured at their net asset values but by using significant unobservable inputs and there
is inherent lack of the funds’ liquidity.
Japanese general accounts of life insurance companies
These instruments are contracts with life insurance companies that guarantee return of a certain level of
fixed income, which are mainly invested in assets with low market risk such as Japanese debt securities. They aremeasured at conversion value and classified in Level 2 in the fair value hierarchy.
Other investments
Other investments mainly consist of call loans and the rest consist of miscellaneous accounts such as
deposits with banks and short term investments. These instruments are generally classified in Level 1 or Level 2of the fair value hierarchy depending on observability of the inputs to measure their fair values.

F-82

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the fair value of each major category of plan assets as of March 31, 2013 and2014:
Pension benefits and SIP Investments:
At March 31, 2013
Assets category

Level 1

Domestic subsidiaries
Level 2
Level 3Foreign offices and subsidiaries
Total
Level 1
Level 2
Level 3Total
(in millions)Japanese government bonds . . ¥ 76,763 ¥—¥— ¥ 76,763 ¥—¥—¥Non-Japanese government
bonds . . . . . . . . . . . . . . . . . . 13,898
2,761—
16,659—
7,600
Other debt securities(1) . . . . . . .
151
18,517 6,134
24,802— 33,315
Japanese marketable equity
148—
661,980——
securities(2) . . . . . . . . . . . . . . 661,832
Non-Japanese marketable
equity securities . . . . . . . . . . 19,386
207—
19,593 13,720—
Japanese pooled funds:
Japanese marketable
equity securities(2) . . . .
—46,175—
46,175——
Japanese debt—
403,006—
403,006——
securities(1) . . . . . . . . . .
Non-Japanese marketable
equity securities . . . . . .
—190,367—
190,367——
Non-Japanese debt
securities . . . . . . . . . . .
—65,087 6,846
71,933——
Other . . . . . . . . . . . . . . . .
—17,623—
17,623——
Total pooled funds . . . . . .

—722,258

6,846

729,104—

Other investment funds . . . . . .
Japanese general account oflife insurancecompanies(3) . . . . . . . . . . . . .
Other investments . . . . . . . . . .

—98,520 48,631

147,151

91,582

163,503
79,386

163,503
81,022

—
839

—
1,636

—
—

—

—¥

—

—
—

7,600
33,315———

13,720

—

—

—

—

—

—

—
—

—
—

—

—

65,068 14,486 171,136(4)

—
4,488

—
1,983

—
7,310

Total . . . . . . . . . . . . . . . . . . . . . ¥773,666 ¥1,085,300 ¥61,611 ¥1,920,577 ¥106,141 ¥110,471 ¥16,469 ¥233,081

F-83

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
At March 31, 2014
Assets category

Level 1

Domestic subsidiaries
Level 2
Level 3Foreign offices and subsidiaries
Total
Level 1
Level 2 Level 3
Total(in millions)Japanese government bonds . . . . . . . . . . ¥ 65,309 ¥— ¥— ¥ 65,309 ¥— ¥— ¥Non-Japanese government bonds . . . . . . 19,799
2,041—
21,840— 13,443
Other debt securities(1) . . . . . . . . . . . . . . .
523
11,798 5,983
18,304— 52,463
Japanese marketable equity
securities(2) . . . . . . . . . . . . . . . . . . . . . . 713,152
127—
713,279——
Non-Japanese marketable equity
securities . . . . . . . . . . . . . . . . . . . . . . . 12,166
1,122—
13,288 24,515—
Japanese pooled funds:
Japanese marketable equity
securities(2) . . . . . . . . . . . . . . . . . .
—26,792—
26,792——
Japanese debt securities(1) . . . . . . . .
—400,132—
400,132——
Non-Japanese marketable equity
securities . . . . . . . . . . . . . . . . . . .
—176,710—
176,710——
Non-Japanese debt securities . . . . . .
—91,642 7,342
98,984——
Other . . . . . . . . . . . . . . . . . . . . . . . .
—13,026—
13,026————

24,515

—
—

—
—

—
—
—

—
—
—

—

—

708,302

Other investment funds . . . . . . . . . . . . . .
Japanese general account of life
insurance companies(3) . . . . . . . . . . . .
Other investments . . . . . . . . . . . . . . . . . .

—132,105 43,446

175,551 155,637

87,103 26,740 269,480(4)173,398
105,678

173,398
107,716

—
4,673

—
620

—

—

—

—
—

715,644—

Total pooled funds . . . . . . . . . . . . . .

—
2,038

7,342

— ¥
—
— 13,443— 52,463

—
2,901

—
8,194

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥812,987 ¥1,134,571 ¥56,771 ¥2,004,329 ¥180,772 ¥157,682 ¥29,641 ¥368,095
Notes:(1) These debt securities include debt securities issued by the MUFG Group in the amount of ¥471 million (0.02% of plan assets) and¥401 million (0.02% of plan assets) to the pension benefits and SIPs at March 31, 2013 and 2014, respectively.
(2) Japanese marketable equity securities include common stocks issued by the MUFG Group in the amount of ¥6,864 million (0.32% ofplan assets) and ¥7,354 million (0.31% of plan assets) to the pension benefits and SIPs at March 31, 2013 and 2014, respectively.
(3) “Japanese general accounts of life insurance companies” is a contract with life insurance companies that guarantees a return ofapproximately 1.17% from April 1, 2012 to March 31, 2013 and 1.24% from April 1, 2013 to March 31, 2014.
(4) Other investment funds of the foreign offices and subsidiaries are mainly comprised of ¥87,243 million of mutual funds and¥13,531 million of real estate funds, and of ¥148,360 million of mutual funds and ¥25,486 million of real estate funds, which were held
by MUAH at December 31, 2012 and 2013, respectively.

Other post retirement plan investments:
Foreign offices and subsidiaries
March 31, 2013
March 31, 2014
Level 2 Level 3
Total
Level 1
Level 2 Level 3(in millions)

Assets category

Level 1Other debt securities . . . . . . . . . . . . .
Other investment funds(1) . . . . . . . . . .
Other investments . . . . . . . . . . . . . . .

¥

—
8,901
—

¥3,619
—
5,665

¥—
—
—

¥ 3,619
8,901
5,665

¥
—
13,531—¥ 5,548 ¥— ¥ 5,548— — 13,531
6,766 —
6,766

Total . . . . . . . . . . . . . . . . . . . . . . . . . .

¥8,901¥9,284¥—¥18,185¥13,531¥12,314 ¥— ¥25,845

Note:(1) Other investment funds mainly consist of mutual funds and common collective funds.

F-84

Total

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following tables present a reconciliation of plan assets measured at fair value using significant
unobservable inputs (Level 3) during the fiscal years ended March 31, 2013 and 2014:
Pension benefits and SIP Investments:

Assets category

Domestic subsidiaries
Realized Unrealized Purchase, Transfer Transfer
March 31, gains
gains
sales andinto
out of March 31,
2012(losses)(losses)settlements Level 3 Level 3
2013(in millions)

Other debt securities . . . . . . . . . . . . . . . . . . . ¥ 5,995 ¥18 ¥ 409
Non-Japanese marketable equity
securities . . . . . . . . . . . . . . . . . . . . . . . . . .
87
30—Japanese pooled funds:
Non-Japanese debt securities . . . . . . . . .
5,807— 1,042
Other . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,501
—
—
Total pooled funds . . . . . . . . . . . . . . . . .
8,308— 1,042
Other investment funds . . . . . . . . . . . . . . . . . 41,097(389) 3,997
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥55,487 ¥ (341) ¥5,448

Assets category— ¥1,075— 1,208— ¥2,283(40) ¥ 6,134

(117)

—

—

—

(3)
—
—
6,846
—
— (2,501)—(3)— (2,501) 6,846(4,503) 8,429— 48,631¥(4,871) ¥8,429 ¥(2,541) ¥61,611¥ 1,129431¥ 1,560

¥
¥

— ¥
—
— ¥

— ¥14,486—
1,983— ¥16,469

Domestic subsidiaries
Realized Unrealized Purchase, Transfer Transfer
March 31, gains
gains
sales andinto
out of March 31,
2013(losses)(losses)settlements Level 3 Level 3
2014(in millions)

Other debt securities . . . . . . . . . . . . . . . . . . . ¥ 6,134 ¥(4) ¥ (85)Japanese pooled funds:
Non-Japanese debt securities . . . . . . . . .
6,846
—
483
Total pooled funds . . . . . . . . . . . . . . . . .
6,846
—
483
Other investment funds . . . . . . . . . . . . . . . . . 48,631 (2,616) 1,381
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥61,611 ¥(2,620) ¥1,779

Assets category— ¥Foreign offices and subsidiaries
Realized Unrealized Purchase, Transfer Transfer
March 31, gains
gains
sales andinto
out of March 31,
2012(losses)(losses)settlements Level 3 Level 3
2013(in millions)

Other investment funds . . . . . . . . . . . . . . . . . ¥12,282 ¥Other investments . . . . . . . . . . . . . . . . . . . . .
344
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥12,626 ¥Assets category¥ (248) ¥¥(12) ¥— ¥(50) ¥ 5,983

13
13(3,950)¥(3,949) ¥

—
—
—
— ¥

—
7,342
—
7,342
— 43,446(50) ¥56,771

Foreign offices and subsidiaries
Realized Unrealized Purchase, Transfer Transfer
March 31, gains
gains
sales andinto
out of March 31,
2013(losses)(losses)settlements Level 3 Level 3
2014(in millions)

Other investment funds . . . . . . . . . . . . . . . . . ¥14,486 ¥Other investments . . . . . . . . . . . . . . . . . . . . .
1,983
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥16,469 ¥F-85— ¥6,688
11864
11 ¥7,552¥ 5,56643¥ 5,609

¥
¥

— ¥
—
— ¥

— ¥26,740—
2,901— ¥29,641

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Defined Contribution Plans
The MUFG Group maintains several qualified defined contribution plans in its domestic and foreign offices
and subsidiaries, all of which are administered in accordance with applicable local laws and regulations. Eachoffice and subsidiary matches eligible employee contributions up to a certain percentage of benefits-eligible
compensation per pay period, subject to plan and legal limits. Terms of the plan, including matching percentage
and vesting periods, are individually determined by each office and subsidiary.
The cost of these defined contribution plans charged to operations for the fiscal years ended March 31,
2012, 2013 and 2014 was ¥5,775 million, ¥6,396 million and ¥8,443 million, respectively.
14. OTHER ASSETS AND LIABILITIES
Major components of other assets and liabilities at March 31, 2013 and 2014 were as follows:
2013
2014
(in millions)

Other assets:
Accounts receivable:
Receivables from brokers, dealers and customers for securities
transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,217,164
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
956,000
Investments in equity method investees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,273,847
Prepaid benefit cost (Note 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
117,873
Cash collateral pledged (Note 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,573,698
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,647,213¥2,073,499
1,135,009
1,620,168
412,417
1,045,851
1,731,642

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥6,785,795¥8,018,586

Other liabilities:
Accounts payable:
Payables to brokers, dealers and customers for securities transactions . . . . . ¥1,047,514
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,053,294
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
127,218
Allowance for off-balance sheet credit instruments . . . . . . . . . . . . . . . . . . . . . . . .
55,915
Accrued benefit cost (Note 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
96,844
Guarantees and indemnifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50,433
Cash collateral received (Note 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
366,544
Accrued and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,250,927¥ 583,845
1,499,191
253,71469,871
61,02644,824
454,506
2,640,034

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥5,607,011¥5,048,689

Investments in equity method investees include marketable equity securities carried at ¥788,250 million and¥1,033,806 million at March 31, 2013 and 2014, respectively. Corresponding aggregated market values were
¥1,203,241 million and ¥1,789,053 million, respectively. Investments in equity method investees also include
investments in MSMS at ¥174,935 million and ¥163,520 million, and in Morgan Stanley at ¥664,031 million and¥825,385 million at March 31, 2013 and 2014, respectively. As of March 31, 2014, the MUFG Group held
approximately 21.91% of Morgan Stanley’s common stock.
The MUFG Group periodically evaluates whether a loss in value of investments in equity method investees
is other-than-temporary. As a result of evaluations, the MUFG Group recognized other-than-temporary declines
F-86

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
in the value of an investment and recorded impairment losses related to certain affiliated companies of¥580,474 million, ¥14,635 million and ¥32,824 million for the fiscal years ended March 31, 2012, 2013 and2014, respectively. The impairment losses are included in Equity in earnings (losses) of equity method
investees—net in the accompanying consolidated statements of income. See Note 2 for further details of theimpairment losses recorded on investments in Morgan Stanley for the fiscal year ended March 31, 2012.
Summarized Financial Information of the MUFG Group’s equity method investees
Summarized financial information of Morgan Stanley, the largest portion of the MUFG Group’s equity
method investees, as of March 31, 2013 and 2014, and for each of the three years in the period ended March 31,
2014 is as follows:
2013
2014
(in billions)

Trading assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal funds sold and securities purchased under agreements to resell . . . . . . . . . . . . . . . . .
Securities borrowed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities sold under agreements to repurchase and Securities loaned . . . . . . . . . . . . . . . . . .
Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nonredeemable noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012¥25,134
13,206
12,76575,37012,45915,012
15,532
68,740317¥26,712
11,072
15,19085,566
11,48515,083
15,78578,334329

2013(in billions)2014

Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,517 ¥2,271 ¥3,333
Total non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,084
2,105
2,812
Income from continuing operations before income taxes . . . . . . . . . . . . . . . . . . . . . . .
433
166
521
Net income applicable to Morgan Stanley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
244
100
349
Summarized financial information of the MUFG Group’s equity method investees, other than Morgan
Stanley as of March 31, 2013 and 2014, and for each of the three years in the period ended March 31, 2014 is asfollows:
2013
2014(in billions)

Net loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 7,673
12,906
2,729
9,455
181
2012

Total interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-87

¥475
98
377
51
128
75

¥ 9,493
16,277
4,674
12,247
457

2013
2014
(in billions)

¥444
92
352
55
163
124

¥543
165
378
59
214
159

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
15. OFFSETTING OF DERIVATIVES, REPURCHASE AGREEMENTS, AND SECURITIESLENDING TRANSACTIONS
The following tables present, as of March 31, 2013 and 2014, the gross and net of the derivatives, resale andrepurchase agreements, and securities borrowing and lending transactions, including the related gross amountsubject to an enforceable master netting arrangement or similar agreement not offset in the consolidated balance
sheet. The MUFG Group primarily enters into International Swaps and Derivatives Association master netting
agreements, master repurchase agreements and master securities lending agreements or similar agreements forderivative contracts, resale and repurchase agreements, and securities borrowing and lending transactions. In theevent of default on or termination of any one contract, these agreements provide the contracting parties with theright to net a counterparty’s rights and obligations and to liquidate and setoff collateral against any net amountowed by the counterparty. Generally, as the MUFG Group has elected to present such amounts on a gross basis,
the amounts subject to these agreements are included in “Gross amounts not offset in the consolidated balance
sheet” column in the tabular disclosure below. For certain transactions where a legal opinion with respect to theenforceability of netting has not been sought or obtained, the related amounts are not subject to enforceable
master netting agreements and not included in “Gross amounts not offset in the consolidated balance sheet”
column in the tabular disclosure below.

At March 31, 2013

Financial assets:
Derivative assets . . . . . . . . .
Receivables under resaleagreements . . . . . . . . . . . .
Receivables under securities
borrowing transactions . .
Total . . . . . . . . . . . . . .
Financial liabilities:
Derivative liabilities . . . . . .
Payables under repurchaseagreements(1) . . . . . . . . . .
Payables under securities
lending transactions . . . . .
Obligations to returnsecurities received ascollateral . . . . . . . . . . . . .
Total . . . . . . . . . . . . . .

Gross amounts not offset in
Gross amounts Net amounts
Gross amounts of offset in the presented in the the consolidated balance sheet
recognizedconsolidated
consolidated
Financial Cash collateral
assets/liabilities balance sheet balance sheet instruments received/pledged Net amounts(in billions)¥14,648¥—¥14,648¥(12,341)¥ (283)¥2,0246,960(1,300)5,660(4,849)

—

811

2,615

—

2,615

(1,815)—800¥24,223¥(1,300)¥22,923¥(19,005)¥ (283)¥3,635¥14,867¥—¥14,867¥(12,134)¥(1,207)¥1,526

17,188(1,300)15,888(15,804)

—

84

3,993

—

3,993

(1,695)

—

2,298

3,035

—

3,035

(374)

—

2,661

¥39,083¥(1,300)¥37,783¥(30,007)¥(1,207)¥6,569

F-88

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

At March 31, 2014

Financial assets:
Derivative assets . . . . . . . .
Receivables under resaleagreements . . . . . . . . . . .
Receivables under
securities borrowing
transactions . . . . . . . . . .
Total . . . . . . . . . . . . .
Financial liabilities:
Derivative liabilities . . . . .
Payables under repurchaseagreements(1) . . . . . . . . .
Payables under securities
lending transactions . . . .
Obligations to returnsecurities received ascollateral . . . . . . . . . . . .
Total . . . . . . . . . . . . .

Gross amounts not offset in
Gross amounts Gross amounts Net amountsof recognized offset in the presented in the the consolidated balance sheet
assets/consolidated
consolidated
Financial
Cash collateralliabilities
balance sheet balance sheet
instruments received/pledged Net amounts(in billions)¥11,810¥—¥11,810¥ (9,552)¥(360)¥1,898

10,346(3,046)7,300(6,502)

(7)

791

4,210

—

4,210

(3,614)—596¥26,366¥(3,046)¥23,320¥(19,668)¥(367)¥3,285¥11,765¥—¥11,765¥ (9,437)¥(984)¥1,344

24,674(3,046)

21,628(21,345)

(5)

278

5,521

—

5,521

(4,795)

(9)

717

3,971

—

3,971

(220)

—

3,751

¥45,931¥(3,046)¥42,885¥(35,797)¥(998)¥6,090Note:(1) Payables under repurchase agreements in the above table include those under long-term repurchase agreements of ¥188,100 million and¥360,220 million at March 31, 2013 and 2014, respectively, which are included in Long-term debt in the accompanying consolidatedbalance sheets.

16. PREFERRED STOCK
Pursuant to the Articles of Incorporation, MUFG had been authorized to issue 400,000,000 shares of Class 5
Preferred Stock, 200,000,000 shares of Class 6 Preferred Stock, 200,000,000 shares of Class 7 Preferred Stockand 1,000 shares of Class 11 Preferred Stock without par value as of March 31, 2014.
All classes of preferred stock are non-voting and have preference over common stock for the payment ofdividends and the distribution of assets in the event of a liquidation or dissolution of MUFG. They are all noncumulative and non-participating with respect to dividend payments. Shareholders of Class 5 and 11 Preferred
Stock have the right to receive a liquidation distribution at ¥2,500 and ¥1,000 per share, respectively, and do nothave the right to participate in any further liquidation distributions.

F-89

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The number of shares of preferred stock issued and outstanding at March 31, 2012, 2013 and 2014 was asfollows:
Outstanding at
March 31, 2012

Net change

Outstanding at
March 31, 2013 Net change(number of shares)

Outstanding at
March 31, 2014

Preferred stock:
Class 5 . . . . . . . . . . . . . . . . . . . . . . .
Class 11 . . . . . . . . . . . . . . . . . . . . . .

156,000,000
1,000

—
—

156,000,000
1,000

—
—

156,000,000
1,000

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .

156,001,000—

156,001,000—

156,001,000

None of the Class 6 and 7 Preferred Stock has been issued.
The aggregate liquidation preference of preferred stock issued and outstanding at March 31, 2012, 2013 and2014 was as follows:
Aggregate amount at
March 31, 2012

Net change

Aggregate amount at
March 31, 2013
(in millions)

Net change

Aggregate amount at
March 31, 2014

Preferred stock:
Class 5 . . . . . . . . . . . .
Class 11 . . . . . . . . . . .

¥390,000
1¥——¥390,000
1¥——¥390,000
1

Total . . . . . . . . . . . . . . . . . .

¥390,001¥—¥390,001¥—¥390,001

Preferred stock included in Capital stock on the accompanying consolidated balance sheets at March 31,
2013 and 2014 was ¥442,100 million, which consisted of ¥122,100 million of Class 1, ¥125,000 million of Class
3 and ¥195,000 million of Class 5 Preferred Stock.
On June 27, 2013, amendments to the Articles of Incorporation were made with respect to Class 3 Preferred
Stock. As a result, the aggregate number of shares authorized to be issued by MUFG was reduced from
120,000,000 shares to nil and the authority to issue Class 3 Preferred Shares was removed.
The portion of proceeds from the sale of shares that is designated as capital stock is determined byresolution of the Board of Directors of MUFG, however, at least 50% of the issue price of newly issued shares isrequired to be designated as capital stock at the time of incorporation or share issuance under the Company Law.
Proceeds in excess of amounts designated as capital stock are designated as capital surplus. However, theseprovisions are not applied in a company reorganization, such as a merger, company split and share exchange.
Preferred Stock Classes 8 through 12 were issued in exchange for UFJ Holdings’ preferred stock and recorded in
Capital surplus.
Preferred Stock Outstanding as of March 31, 2014
Class 5 Preferred StockClass 5 Preferred Stock is redeemable at the option of MUFG. At the time of issuance, the Board of
Directors determines an issue price, an annual dividend (not to exceed ¥250 per share), and redemption terms,
including a redemption price.
F-90

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Class 5 Preferred Stock was issued by means of a third-party allocation to Nippon Life Insurance Company,
Meiji Yasuda Life Insurance Company, TAIYO LIFE INSURANCE COMPANY, DAIDO LIFE INSURANCECOMPANY, Tokio Marine & Nichido Fire Insurance Co., Ltd., NIPPONKOA Insurance Company, Limited andAioi Nissay Dowa Insurance Company, Limited. The preferred stock does not have voting rights at any general
meetings of shareholders, unless otherwise provided by applicable laws and regulations. Preferred dividends are
set to be ¥115 per share annually, except as of March 31, 2009. Preferred dividends were ¥43 per share as ofMarch 31, 2009.
Class 11 Preferred StockClass 11 preferred stockholders are entitled to receive annual non-cumulative dividends of ¥5.30 per sharewith priority over common stockholders.
Class 11 Preferred Stock is convertible into fully paid shares of MUFG common stock at the election ofholders from establishment of MUFG to July 31, 2014, except during certain excluded periods, at an initialconversion price of ¥918.70 per share of common stock, subject to anti-dilution adjustments. The conversion
price was subject to reset annually on July 15 from 2006 to 2013 to the average market price of the common
stock for the 30 trading day period, if the average market price was less than the conversion price prior to thereset but not less than ¥918.70 per share. The acquisition price and the acquisition floor price of Class 11
Preferred Stock were adjusted as ¥889.60 per share on December 15, 2008, ¥888.40 per share on January 14,
2009, ¥867.60 per share on December 21, 2009, and ¥865.90 per share on December 25, 2009, in accordancewith the provisions relating to the adjustment of the acquisition price set forth in the terms and conditions ofClass 11 Preferred Stock.
All Class 11 Preferred Stock outstanding on August 1, 2014 will be mandatorily converted into shares ofcommon stock at a conversion ratio of ¥1,000 divided by the higher of the average market price of the common
stock for the 30 trading day period beginning 45 trading days prior to August 1, 2014 or ¥802.60.
17. COMMON STOCK AND CAPITAL SURPLUS
The changes in the number of issued shares of common stock during the fiscal years ended March 31, 2012,2013 and 2014 were as follows:
2012

2013
(shares)

2014

Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . .
Issuance of new shares of common stock by way of
exercise of the stock acquisition rights . . . . . . . . . . . . . .

14,150,894,620

14,154,534,220

14,158,585,720

3,639,600

4,051,500

5,440,700

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . .

14,154,534,220

14,158,585,720

14,164,026,420

Under the Company Law, issuances of common stock, including conversions of bonds and notes, arerequired to be credited to the common stock account for at least 50% of the proceeds and to the legal capitalsurplus account (“legal capital surplus”) for the remaining amounts.
The Company Law permits Japanese companies, upon approval by the Board of Directors, to issue shares in
the form of a “stock split,” as defined in the Company Law. Also, prior to April 1, 1991, Japanese companies
were permitted to issue free share distributions. BTMU and MUTB from time to time made free share
distributions. These free distributions usually ranged from 5% to 10% of outstanding common stock and
F-91

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
publicly-owned corporations in the United States issuing shares in similar transactions would be required toaccount for them as stock dividends as of the shareholders’ record date by reducing retained earnings andincreasing the appropriate capital accounts by an amount equal to the fair value of the shares issued. The
application of such United States accounting practice to the cumulative free distributions made by BTMU and
MUTB at March 31, 2014, would have increased capital accounts by ¥1,910,106 million with a corresponding
decrease in unappropriated retained earnings.
The Company Law permits that common stock, legal reserve, additional paid-in capital, and other capitalsurplus and retained earnings can be transferred among these accounts under certain conditions upon the approvalof a shareholders’ meeting. The Company Law limits the increase of paid in capital in case disposition oftreasury stock and issuance of common stock are performed at the same time.
As for Capital surplus, the fee retained by MUFG’s subsidiary as underwriting compensation, net of stock
issue expense, was included in the total Capital surplus balance.
Treasury Stock
The Company Law permits Japanese companies to effect purchases of their own shares pursuant to a
resolution by the shareholders at an annual general meeting until the conclusion of the following ordinary general
meeting of shareholders, and to hold such shares as their treasury stock indefinitely regardless of purpose.
However, the Company Law requires the amount of treasury stock purchased should be within the amount ofretained earnings available for dividends. Disposition of treasury stock is subject to the approval of the Board of
Directors and is to follow the procedures similar to a public offering of shares for subscription.
Parent Company Shares Held by Subsidiaries and Affiliated Companies
At March 31, 2014, certain subsidiaries and affiliated companies owned shares of common stock of MUFG.
Such shares are included in treasury stock in the accompanying consolidated balance sheets and deducted from
the MUFG’s shareholders’ equity.
18. RETAINED EARNINGS, LEGAL RESERVE AND DIVIDENDS
In addition to the Company Law, Japanese banks, including BTMU and MUTB, are required to comply with
the Banking Law of Japan (the “Banking Law”).
Legal Reserve Set Aside as Appropriation of Retained Earnings and Legal Capital Surplus
Under the Company Law
The Company Law provides that an amount at least equal to 10% of the aggregate amount of cash dividends
and certain appropriations of retained earnings associated with cash outlays applicable to each period shall beappropriated and set aside as a legal reserve until the aggregate amount of legal reserve set aside as an
appropriation of retained earnings and the legal capital surplus equals 25% of stated capital as defined in the
Company Law.
Under the Banking Law
The Banking Law provides that an amount at least equal to 20% of the aggregate amount of cash dividends
and certain appropriations of retained earnings associated with cash outlays applicable to each fiscal year shall beappropriated and set aside as a legal reserve until the aggregate amount of legal reserve set aside as appropriationof retained earnings and the legal capital surplus equals 100% of stated capital as defined in the Company Law.
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Transfer of Legal Reserve
Under the Company Law
Under the Company Law, Japanese companies, including MUFG, were permitted, pursuant to a resolution
by the shareholders at a general meeting, to make legal reserve set aside as appropriation of retained earnings andlegal capital surplus available for dividends until the aggregate amount of the legal reserve and legal capitalsurplus equals 25% of stated capital as defined in the Company Law.
Under the Company Law, Japanese companies, including MUFG, BTMU and MUTB, are permitted,
primarily pursuant to a resolution by the shareholders at a general meeting, to transfer legal capital surplus andlegal reserve to stated capital and/or retained earnings without limitations of thresholds, thereby effectively
removing the thresholds provided for in the Company Law and Banking Law at the company’s discretion.
Under the Banking Law
Under the Banking Law, Japanese banks, including BTMU and MUTB, were permitted, pursuant to a
resolution by the shareholders at a general meeting, to make legal reserve set aside as an appropriation ofretained earnings and legal capital surplus available for dividends until the aggregate amount of the legal reserve
and legal capital surplus equals 100% of stated capital as defined in the Company Law.
Unappropriated Retained Earnings and Dividends
In addition to the provision that requires an appropriation for legal reserve as described above, the Company
Law and the Banking Law impose certain limitations on the amount available for dividends.
Under the Company Law, the amount available for dividends is based on the amount recorded in MUFG’s
general books of account maintained in accordance with accounting principles generally accepted in Japan(“Japanese GAAP”). The adjustments included in the accompanying consolidated financial statements but notrecorded in MUFG’s general books of account, as explained in Note 1, have no effect on the determination ofretained earnings available for dividends under the Company Law. Under the Banking Law, MUFG, BTMU and
MUTB have to meet the minimum capital adequacy requirements and distributions of retained earnings of
MUFG, BTMU and MUTB, which are otherwise distributable to shareholders, are restricted in order to maintainthe minimum capital requirements.
MUFG was established on April 2, 2001 with common stock of ¥924,400 million, preferred stock of¥222,100 million, legal capital surplus of ¥2,838,693 million and no retained earnings in accordance with theCommercial Code of Japan (“the Code”), which was replaced by the Company Law, and Japanese GAAP.
On October 1, 2005, MUFG started with common stock and preferred stock of ¥1,383,052 million, legal
capital surplus of ¥3,577,570 million and retained earnings of ¥757,458 million in accordance with the Code andJapanese GAAP.
MUFG’s amount available for dividends, at March 31, 2014, was ¥4,402,718 million, which is based on theamount recorded in MUFG’s general books of account under Japanese GAAP.
Annual dividends, including those for preferred stock, are approved by the shareholders at an annual general
meeting held subsequent to the fiscal year to which the dividends are applicable. In addition, a semi-annualinterim dividend payment may be made by resolution of the Board of Directors, subject to limitations imposed by
the Company Law and the Banking Law.
F-93

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In the accompanying consolidated statements of equity, dividends and appropriations to legal reserve shownfor each fiscal year represent dividends approved and paid during the fiscal year and the related appropriation tolegal reserve.
19. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The following table presents the changes in Accumulated OCI, net of tax and net of noncontrolling interests,
for the fiscal years ended March 31, 2012, 2013 and 2014:
2012

2013
(in millions)2014

Accumulated other comprehensive income (loss), net of taxes:
Net unrealized gains on investment securities:
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . .
Net change during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 308,071
174,363¥ 482,434
623,882¥1,106,316
166,407

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 482,434¥1,106,316¥1,272,723

Net unrealized gains (losses) on derivatives qualifying for cash flow
hedges:Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . .
Net change during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(1,690) ¥437(1,253) ¥
3,423

2,170
(361)

¥

(1,253) ¥

2,170

1,809

¥

Defined benefit plans:
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . .
Net change during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(307,711) ¥ (401,923) ¥ (322,537)(94,212)
79,386116,201

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(401,923) ¥ (322,537) ¥(206,336)

Foreign currency translation adjustments:
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . .
Net change during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(627,331) ¥ (675,658) ¥ (211,602)(48,327)
464,056
501,088

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(675,658) ¥ (211,602) ¥ 289,486

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-94¥(596,400) ¥ 574,347¥1,357,682

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the before tax and net of tax changes in each component of Accumulated OCI
for the fiscal years ended March 31, 2012, 2013 and 2014:
2012
2013
2014
Tax
Tax
Tax
(expense)(expense)(expense)
Before tax or benefit Net of tax Before tax or benefit Net of tax Before tax or benefit Net of tax(in millions)
Net unrealized gains (losses) on
investment securities:
Net unrealized gains on
investment securities . . . ¥296,347 ¥(118,638) ¥177,709 ¥1,108,665 ¥(390,387) ¥718,278 ¥ 453,494 ¥(178,200) ¥ 275,294
Reclassification
adjustment for gains
included in net income
before attribution of
noncontrollinginterests . . . . . . . . . . . . .
(4,511)
1,641(2,870) (143,664)
53,856(89,808) (215,553)
81,778 (133,775)
Net change . . . . . . . .
Net unrealized gains(losses) on investment
securities attributable tononcontrollinginterests . . . . . . . . . . . . .

291,836(116,997)

Net unrealized gains on
investment securities
attributable to
Mitsubishi UFJ
Financial Group . . . . . .
Net unrealized gains (losses) on
derivatives qualifying forcash flow hedges:
Net unrealized gains(losses) on derivatives
qualifying for cash flow
hedges . . . . . . . . . . . . . .
Reclassification
adjustment for losses(gains) included in net
income before
attribution of
noncontrollinginterests . . . . . . . . . . . . .
Net change . . . . . . . .
Net unrealized gains onderivatives qualifying
for cash flow hedges
attributable tononcontrollinginterests . . . . . . . . . . . . .
Net unrealized gains(losses) on derivatives
qualifying for cash flow
hedges attributable to
Mitsubishi UFJ
Financial Group . . . . . .

(178)

99

174,839

965,001(336,531)

628,470

237,941(96,422)

141,519

476

4,588

(24,888)

174,363

623,882

166,407

(79)

6,850

(2,693)

4,157

3,615

(1,419)

2,196

850

(334)

516

(1,210)

476

(734)

(4,211)

1,654(2,557)

672

(235)

437

5,640

(2,217)

3,423

(596)

235

(361)

—

—

—

437

3,423

(361)

F-95

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2012
2013
2014
Tax
Tax
Tax
(expense)(expense)(expense)
Before tax or benefit Net of tax Before tax or benefit Net of tax Before tax or benefit Net of tax(in millions)Defined benefit plans:
Defined benefit plans . . . . . . (189,916)
Reclassification adjustment
for losses included in net
income before attributionof noncontrollinginterests . . . . . . . . . . . . . . .
29,128Net change . . . . . . . . . . (160,788)
Defined benefit plans
attributable tononcontrolling interests . .

77,992(111,924)

81,568(27,506)

54,062(11,419)

17,70941,642(15,707)

66,573(94,215) 123,210(43,213)

Defined benefit plans
attributable to Mitsubishi
UFJ Financial Group . . . .
Foreign currency translation
adjustments:
Foreign currency translation
adjustments . . . . . . . . . . . .
Reclassification adjustment
for losses included in net
income before attributionof noncontrollinginterests . . . . . . . . . . . . . . .
Net change . . . . . . . . . .
Foreign currency translation
adjustments attributable tononcontrolling interests . .

(68,269)(1,528)

122,644(45,709)76,93525,93564,519(23,806)

40,713

79,997

187,163(69,515)

117,648

(3)

611

1,447

(94,212)

79,386116,201(69,797) 437,485

406

437,891

557,941(50,516)

507,425

31,956(11,702)

20,254

48,311(18,943)

29,368

1,603

(898)

705

(36,313)(13,230)(49,543) 485,796(18,537)

467,259

559,544(51,414)508,130(1,216)

3,203

7,042

Foreign currency translation
adjustments attributable to
Mitsubishi UFJ Financial
Group . . . . . . . . . . . . . . . .

(48,327)

464,056

501,088

Other comprehensive income
attributable to Mitsubishi UFJ
Financial Group . . . . . . . . . . . .

¥ 32,261¥1,170,747¥783,335

F-96

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the effect of the reclassification of significant items out of Accumulated OCI
on the respective line items of the accompanying consolidated statements of income for the fiscal year ended
March 31, 2014:
Details of Accumulated OCI components

Net unrealized losses (gains) on
investment securities
Net gains on sales and redemptionsof securities available-for-sale . .
Impairment losses on investment
securities . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . .

Net unrealized losses (gains) on
derivatives qualifying for cash flow
hedgesInterest rate contracts . . . . . . . . . . .

Amount reclassified out of
Accumulated OCI(in millions)Line items in the consolidated
statements of income¥(218,150)

Investment securities gains—net

2,622
(25)
(215,553)
81,778¥(133,775)

Investment securities gains—net¥(4,289)Interest income on Loans,including fees¥78
(4,211)
1,654(2,557)

Other . . . . . . . . . . . . . . . . . . . . . . . .

Defined benefit plans
Net actuarial loss . . . . . . . . . . . . . . .
Prior service cost . . . . . . . . . . . . . . .
Loss on settlements andcurtailment, and other . . . . . . . . .

Foreign currency translation
adjustments . . . . . . . . . . . . . . . . . . . . .

Total before tax
Income tax expense
Net of tax¥ 34,525(1)(11,705)(1)
41,699(1)64,519(23,806)¥ 40,713¥¥
Total reclassifications for the period . . . .

Total before tax
Income tax expense
Net of tax

1,603
1,603
(898)
705

¥(153,642)
58,728¥ (94,914)

Total before tax
Income tax expense
Net of tax
Other non-interest expenses
Total before tax
Income tax expense
Net of tax
Total before tax
Income tax expense
Net of tax

Note:(1) These Accumulated OCI components are included in the computation of net periodic benefit cost. See Note 13 for more information.

F-97

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
20. NONCONTROLLING INTERESTS
Deconsolidation of Subsidiaries
The gains and losses due to deconsolidation of subsidiaries were recognized under “Other non-interest
income” and “Other non-interest expenses,” respectively, in the accompanying consolidated statements ofincome. The amounts of net losses were ¥9,492 million and ¥17,585 million for the fiscal years ended March 31,
2012 and 2013 respectively, and the amount of net gains was ¥3,142 million for the fiscal year ended March 31,
2014.
Changes in MUFG’s Ownership Interests in Subsidiaries
The following table presents the effect on the MUFG’s shareholders’ equity from changes in ownership ofsubsidiaries resulting from transactions with the noncontrolling interest shareholders during the fiscal years
ended March 31, 2012, 2013 and 2014:
2012

2013
(in millions)2014

Net income attributable to Mitsubishi UFJ Financial Group . . . . . . . . . . . . ¥416,231 ¥1,069,124 ¥1,015,393
Transactions between Mitsubishi UFJ Financial Group and thenoncontrolling interest shareholders:Issuance of new shares of Mitsubishi UFJ Morgan Stanley Securities
Co., Ltd. (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(20,000)——
Purchase of shares of Mitsubishi UFJ Merrill Lynch PB Securities
Co., Ltd. from noncontrolling interest shareholders (Note 2) . . . . .
—(30,655)—
Reorganization of Mitsubishi UFJ Morgan Stanley PB Securities
Co., Ltd. (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
——13,839Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
759
(412)
204
Net transfers from (to) the noncontrolling interest shareholders . . . . . . . . .

(19,241)(31,067)

14,043

Change from net income attributable to Mitsubishi UFJ Financial Groupand transactions between Mitsubishi UFJ Financial Group and thenoncontrolling interest shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥396,990¥1,038,057¥1,029,436

21. REGULATORY CAPITAL REQUIREMENTSJapan
MUFG, BTMU, MUTB and MUSHD are subject to various regulatory capital requirements promulgated by
the regulatory authorities of the countries in which they operate. Failure to meet minimum capital requirements
will initiate certain mandatory actions by regulators that, if undertaken, could have a direct material effect on
MUFG’s consolidated financial statements.
In Japan, MUFG, BTMU, and MUTB are subject to regulatory capital requirements promulgated by the
Financial Services Agency of Japan (“FSA”) in accordance with the provisions of the Banking Law and related
regulations. A banking institution is subject to the minimum capital requirements both on a consolidated basis
and a stand-alone basis, and is required to maintain the minimum capital irrespective of whether it operates
independently or as a subsidiary under the control of another company. When a bank holding company manages
operations of its banking subsidiaries, it is required to maintain the minimum capital adequacy ratio on aconsolidated basis in the same manner as its subsidiary banks. The FSA provides two sets of capital adequacy
guidelines. One is a set of guidelines applicable to Japanese banks and bank holding companies with their foreign
offices conducting international operations, as defined, and the other is applicable to Japanese banks and bankholding companies that are not engaged in international operations conducted by their foreign offices.
F-98

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Under the capital adequacy guidelines applicable to a Japanese banking institution with international
operations conducted by its foreign offices, from March 31, 2013 until March 30, 2014, the required minimum
capital ratio is 3.5% for Common Equity Tier 1, 4.5% for Tier 1, and 8.0% for total capital, from March 31, 2014
until March 30, 2015, the required minimum capital ratio is 4.0% for Common Equity Tier 1, 5.5% for Tier 1,
and 8.0% for total capital, and the requirement will be raised progressively over time.
The Basel Committee on Banking Supervision (“BCBS”) of the Bank for International Settlements (“BIS”)
sets capital adequacy standards for all internationally active banks to ensure minimum level of capitals.
The Basel Committee revised the 1988 Accord (“Basel I”) in June 2004 and released “International
Convergence of Capital Measurement and Capital Standards: A Revised Framework” (“Basel II”). In addition,
the Group of Central Bank Governors and Heads of Supervision reached an agreement on the new global
regulatory framework, which has been referred to as “Basel III,” in July and September 2010. In December 2010,
the Basel Committee agreed on the details of the Basel III rules. Effective as of March 31, 2013, Basel III was
adopted by the FSA with transitional measures for Japanese banking institutions with international operations
conducted by their foreign offices. MUFG calculated capital ratios as of March 31, 2013 and 2014 in accordancewith Basel III.
Capital Ratios
Basel III, as same as Basel II, is based on “three pillars”: (1) minimum capital requirements, (2) the selfregulation of financial institutions based on supervisory review process, and (3) market discipline through thedisclosure of information. The framework of the 1988 Accord, Basel I is improved and expanded to be included
in “minimum capital requirements” as the first pillar of Basel II and Basel III.
As for the denominator of the capital ratio, Basel framework provides a few kinds of risk-sensitive
approaches and a range of options for determining the risk-weighted assets.
“Credit Risk”
The Basel framework provides options for determining the risk-weighted assets for credit risk to allowbanks to select approaches that are most appropriate for their level of risk assessment. Banks choose one ofthree approaches: “Standardized Approach,” “Foundation Internal Ratings-Based Approach (“FIRB”)” or“Advanced Internal Ratings-Based Approach (“AIRB”).”“Market Risk”
In the “Amendment to the Capital Accord to incorporate market risks” of the year 1996, a choice between
two methodologies “the Standardized Measurement Method” and “Internal Models Approach” is permitted.
“Combination of Internal Models Approach and the Standardized Measurement Method” is also allowed
under certain conditions. This is unchanged in Basel III.
“Operational Risk”
Operational risk, which is defined as the risk of loss resulting from inadequate or failed internal processes,
people and systems or from external events, is newly added in Basel II. Basel framework presents threemethods for calculating operational risk capital charges: (i) the Basic Indicator Approach; (ii) the
Standardized Approach; or (iii) Advanced Measurement Approaches (“AMA”). Banks adopt one of thethree approaches to determine the risk-weighted assets for operational risk.
F-99

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Banks need to obtain approval from their supervisors prior to adopting the following approaches to calculate
capital requirements for each risk:‰

the Internal Ratings-Based (“IRB”) Approach for credit risk‰

the Internal Models Approach for market risk‰

the Standardized Approach and AMA for operational risk

MUFG and most of its major subsidiaries adopt AIRB to calculate capital requirements for credit risk, adopt
the AMA to calculate capital requirements for operational risk, as for market risk, adopt the Internal Models
Approach mainly to calculate general market risk and adopt the Standardized Measurement Method to calculate
specific risk.
The MUFG Group’s proprietary assets do not include trust assets under management and administration in acapacity of agent or fiduciary and, accordingly trust account assets are generally not included in the capital
measure. However, guarantees for trust principal are counted as off-balance sheet items requiring a capital chargein accordance with the capital adequacy guidelines.
Under Basel III, as adopted by the FSA, MUFG’s risk-weighted assets increased, largely reflecting the newcapital charge of the credit valuation adjustment (CVA), the credit risk related to asset value correlation
multiplier for large financial institutions, and the 250% risk-weighted threshold items not deducted from
Common Equity Tier 1 capital, as well as the conversion of certain Basel II capital deductions to risk-weighted
assets, such as securitizations.
On the other hand, as for the numerator of the capital ratio, there are three primary regulatory capital ratios
used to assess capital adequacy, Common Equity Tier 1, Tier 1 and Total capital ratios, which are determined by
dividing applicable capital components by risk-weighted assets. Tier 1 capital is redefined, and consists ofCommon Equity Tier 1 capital and Additional Tier 1 capital. Common Equity Tier 1 capital is a new category ofcapital primarily consisting of common stocks, capital surplus, retained earnings, and Accumulated OCI.
Regulatory adjustments including certain intangible fixed assets, such as goodwill, and defined-benefit pension
fund assets will be deducted from Common Equity Tier 1. The amount of adjustments to be deducted will
increase progressively over time. Additional Tier 1 capital generally consists of Basel III compliant preferred
securities, other capital that meets Tier I requirements under Basel II standards, and net of regulatory
adjustments. Subject to transitional measures, adjustments are made to Additional Tier 1 capital for items
including intangible fixed assets, such as goodwill, and foreign currency translation adjustments, with theamounts of such adjustments to Additional Tier 1 capital progressively decreasing over time. Tier 2 capital
generally consists of Basel III compliant deferred obligations, such as subordinated debts, capital that meet TierII requirements under Basel II standards, certain allowances for credit losses and non-controlling interests in
subsidiaries’ Tier 2 instruments. Subject to transitional measures, certain items including 45% of unrealized
profit on securities available for sale and revaluation of land are deducted from Tier 2 capital with the deduction
amounts progressively decreasing over time. Total capital is defined as the sum of Tier 1 and Tier 2 capital.
Basel III will be adopted in accordance with transition arrangements. Examples of these transition
arrangements include initially lower capital adequacy ratios that will increase progressively up to the Basel III
adequacy levels as issued by BCBS. In addition, individual elements of capital will be phased out progressively
over the same period of time to arrive at a capital base that is consistent with that defined by BCBS in Basel III.

F-100

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The risk-adjusted capital amounts and ratios of MUFG, BTMU and MUTB presented in the following table
are based on amounts calculated in accordance with Japanese GAAP as required by the FSA.
For capital
Actualadequacy purposes
AmountRatio
AmountRatio(in millions, except percentages)

Consolidated:
At March 31, 2013:
Total capital (to risk-weighted assets):
MUFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier1 capital (to risk-weighted assets):
MUFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common Equity Tier1 capital (to risk-weighted assets):
MUFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
At March 31, 2014:
Total capital (to risk-weighted assets):
MUFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier1 capital (to risk-weighted assets):
MUFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common Equity Tier1 capital (to risk-weighted assets):
MUFG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stand-alone:
At March 31, 2013:
Total capital (to risk-weighted assets):
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier1 capital (to risk-weighted assets):
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common Equity Tier1 capital (to risk-weighted assets):
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
At March 31, 2014:
Total capital (to risk-weighted assets):
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier1 capital (to risk-weighted assets):
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common Equity Tier1 capital (to risk-weighted assets):
BTMU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MUTB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥14,673,951
12,034,152
2,035,576

16.68% ¥7,037,491
17.51
5,497,550
17.79
914,984

8.00%
8.00
8.00

11,214,815
9,015,774
1,575,140

12.74
13.11
13.77

3,958,589
3,092,372
514,678

4.50
4.50
4.50

10,300,558
8,052,750
1,500,578

11.70
11.71
13.12

3,078,902
2,405,178
400,305

3.50
3.50
3.50

¥15,394,342
12,256,176
2,057,338

15.53% ¥7,926,746
15.57
6,294,248
18.38
895,051

8.00%
8.00
8.00

12,341,870
9,611,553
1,652,410

12.45
12.21
14.76

5,449,638
4,327,295
615,347

5.50
5.50
5.50

11,153,032
8,696,589
1,590,690

11.25
11.05
14.21

3,963,373
3,147,124
447,525

4.00
4.00
4.00

¥11,501,001
2,039,037

18.52% ¥4,966,322
17.94
908,852

8.00%
8.00

8,685,464
1,502,425

13.99
13.22

2,793,556
511,2294.50
4.50

7,301,380
1,419,797

11.76
12.49

2,172,766
397,623

3.50
3.50¥11,582,199
2,068,948

17.52% ¥5,287,273
18.51
893,909

8.00%
8.00

9,087,335
1,606,684

13.74
14.37

3,635,000
614,5635.50
5.50

7,854,651
1,533,733

11.88
13.72

2,643,636
446,955

4.00
4.00

MUMSS and other securities subsidiaries in Japan and overseas are also subject to regulatory capitalrequirements of the countries or jurisdictions in which they operate. In Japan, the Financial Instruments and
F-101

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Exchange Law and related ordinance require financial instruments firms to maintain a minimum capital ratio of
120% calculated as a percentage of capital accounts less certain fixed assets, as determined in accordance withJapanese GAAP, against amounts equivalent to market, counterparty credit and operations risks. Specificguidelines are issued as a ministerial ordinance which details the definition of essential components of the capitalratios, including capital, deductible fixed asset items and risks, and related measures. Failure to maintain aminimum capital ratio will trigger mandatory regulatory actions. A capital ratio of less than 140% will call for
regulatory reporting and a capital ratio of less than 100% may lead to a suspension of all or part of the businessfor a period of time and cancellation of a registration.
At March 31, 2013, MUMSS’s capital accounts less certain fixed assets of ¥388,163 million on a standalone basis were 315.9% of the total amounts equivalent to market, counterparty credit and operations risks. At
March 31, 2014, its capital accounts less certain fixed assets of ¥377,325 million on a stand-alone basis and¥400,570 million on a consolidated basis, were 292.9% and 295.0% of the total amounts equivalent to market,
counterparty credit and operations risks, respectively. During the fiscal year ended March 31, 2014, Mitsubishi
UFJ Morgan Stanley PB Securities Co., Ltd. became MUMSS’s consolidated subsidiary, and therefore wasincluded in the calculation of the amounts and the ratios on a consolidated basis at March 31, 2014.
Management believes, as of March 31, 2014, that MUFG, BTMU, MUTB and other regulated securities
subsidiaries met all capital adequacy requirements to which they are subject.
Note:
MUMSS’s capital ratio on a stand-alone basis calculated as a percentage of capital accounts less certain fixed assets against amounts
equivalent to market, counterparty credit and operations risks at March 31, 2013 has been restated from 315.8% to 315.9%.

United States of America
In the United States of America, MUAH and its banking subsidiary MUB, BTMU’s largest subsidiaries
operating outside Japan, are subject to various regulatory capital requirements administered by U.S. Federalbanking agencies, including minimum capital requirements. Under the capital adequacy guidelines and theregulatory framework for prompt corrective action, MUAH and MUB must meet specific capital guidelines thatinvolve quantitative measures of MUAH’s and MUB’s assets, liabilities, and certain off-balance sheet items as
calculated under U.S. regulatory accounting practices. MUAH’s and MUB’s capital amounts and MUB’s prompt
corrective action classification are also subject to qualitative judgments by the regulators about components, risk
weightings and other factors.
Quantitative measures established by regulation to ensure capital adequacy require MUAH and MUB to
maintain minimum ratios (set forth in the table below) of total and Tier I capital (as defined in the regulations) torisk-weighted assets (as defined) and of Tier I capital (as defined) to quarterly average assets (as defined).
As a result of a recent regulatory communication, which clarified the treatment of certain off-balance sheet
credit exposures included in risk-weighted assets, MUAH updated the methodologies applied to the calculationof its regulatory capital ratios. MUAH applied the new methodology beginning with the MUAH’s December 31,
2012 capital ratios. As a result, the Tier 1 risk-based capital ratio decreased from 12.44% to 11.91% and the
Total risk-based capital ratio decreased from 13.93% to 13.34% at December 31, 2012. The methodologies
applied to the computation of MUB’s capital ratios were not affected.

F-102

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The figures on the tables below are calculated according to Basel I as MUAH and MUB do not meet thecriteria in the new U.S. rules which would make adoption of the new Basel II rules mandatory. MUAH’s and the
MUB’s actual capital amounts and ratios are presented as follows:
For capital
Actualadequacy purposes
AmountRatio
AmountRatio(in millions, except percentages)

MUAH:
At December 31, 2012:
Total capital (to risk-weighted assets) . . . . . . . . . . . . . . . . . . . . .
Tier I capital (to risk-weighted assets) . . . . . . . . . . . . . . . . . . . . .
Tier I capital (to quarterly average assets)(1) . . . . . . . . . . . . . . . .
At December 31, 2013:
Total capital (to risk-weighted assets) . . . . . . . . . . . . . . . . . . . . .
Tier I capital (to risk-weighted assets) . . . . . . . . . . . . . . . . . . . . .
Tier I capital (to quarterly average assets)(1) . . . . . . . . . . . . . . . .

$11,048
9,864
9,864

13.34% $6,628
11.91
3,314
11.18
3,531

8.00%
4.00
4.00

$13,499
11,471
11,471

14.61% $7,393
12.41
3,696
11.27
4,073

8.00%
4.00
4.00

Ratios OCC
For capitalrequires to be
Actualadequacy purposes“well capitalized”
AmountRatio
AmountRatio
AmountRatio(in millions, except percentages)

MUB:
At December 31, 2012:
Total capital (to risk-weighted assets) . . . . . . $10,362
Tier I capital (to risk-weighted assets) . . . . . .
9,192
Tier I capital (to quarterly averageassets)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,162
At December 31, 2013:
Total capital (to risk-weighted assets) . . . . . . $12,990
Tier I capital (to risk-weighted assets) . . . . . .
11,274Tier I capital (to quarterly averageassets)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,27413.17% $6,294
11.68
3,147

8.00% $7,867
4.00
4,720

10.00%
6.00

10.51

4.00

5.00

3,498

4,373

14.91% $6,970
12.94
3,485

8.00% $8,713
4.00
5,228

10.00%
6.00

11.13

4.00

5.00

4,051

5,063

Note:
(1) Excludes certain intangible assets.

Management believes, as of December 31, 2013, that MUAH and MUB met all capital adequacy
requirements to which they are subject.
As of December 31, 2012 and 2013, the notification from the U.S. Office of the Comptroller of theCurrency (“OCC”) categorized MUB as “well capitalized” under the regulatory framework for prompt corrective
action. To be categorized as “well capitalized,” MUB must maintain a minimum total risk-based capital ratio of
10%, a Tier I risk-based capital ratio of 6%, and a Tier I leverage ratio of 5% as set forth in the table. There areno conditions or events since that notification that management believes have changed MUB’s category.

F-103

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
22. EARNINGS PER COMMON SHARE APPLICABLE TO COMMON SHAREHOLDERS OF MUFG
Reconciliations of net income and weighted average number of common shares outstanding used for thecomputation of basic EPS to the adjusted amounts for the computation of diluted EPS for the fiscal years ended
March 31, 2012, 2013 and 2014 are as follows:

Income (Numerator):
Net income attributable to Mitsubishi UFJ Financial Group . . . . . . .
Income allocable to preferred shareholders:Cash dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in a foreign affiliated company’s interests in its
subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥Earnings applicable to common shareholders of Mitsubishi UFJ
Financial Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of dilutive instruments:
Stock options and restricted stock units—Morgan Stanley . . . .
Convertible preferred stock—Mitsubishi UFJ Merrill Lynch
PB Securities Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings applicable to common shareholders of Mitsubishi UFJ
Financial Group and assumed conversions . . . . . . . . . . . . . . . . . . .

¥

2012

2013
(in millions)2014

416,231¥ 1,069,124¥ 1,015,393(17,940)(17,940)(17,940)——(3,301)

398,291

1,051,184

994,152—(336)(1,875)

(589)

—

—

397,702¥ 1,050,848

2012

Shares (Denominator):
Weighted average common shares outstanding . . . . . . . . . . . . . . . . .
Effect of dilutive instruments:
Convertible preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2013(thousands of shares)

992,2772014

14,148,060

14,158,698

1
16,683

1
21,0191
21,381

14,156,820

14,169,080

14,180,080

2012

2013
(in yen)2014

Weighted average common shares for diluted computation . . . . . . . .

14,140,136

Earnings per common share applicable to common shareholders
of Mitsubishi UFJ Financial Group:
Basic earnings per common share:
Earnings applicable to common shareholders of Mitsubishi
UFJ Financial Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

28.17

¥

74.30

¥

70.21

Diluted earnings per common share:
Earnings applicable to common shareholders of Mitsubishi
UFJ Financial Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

28.09

¥

74.16

¥

69.98

For the fiscal year ended March 31, 2012, stock options and restricted stock units issued by Morgan Stanley
to purchase 57 million shares and convert into 21 million shares, respectively, could potentially dilute earnings
per common share but were not included in the computation of diluted earnings per common share as they wereantidilutive. All outstanding convertible preferred stock issued by Mitsubishi UFJ Merrill Lynch PB Securities
Co., Ltd. were acquired by MUSHD and BTMU in December 2012 and converted into common stock.
F-104

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In computing the number of the potentially dilutive common shares for the fiscal years ended March 31,
2012, 2013 and 2014, Class 11 Preferred Stock has been based on the conversion price of ¥865.9 at March 31,
2012, 2013 and 2014.
23. DERIVATIVE FINANCIAL INSTRUMENTS
The MUFG Group uses various derivative financial instruments both for trading purposes and for purposes
other than trading (primarily risk management purposes) in the normal course of business to meet the financial
needs of its customers, as a source of revenue and to manage its exposures to a variety of risks.
Market risk is the possibility that future changes in market indices make the financial instruments lessvaluable. The MUFG Group is a party to derivative financial instruments, including swaps, forwards, options andother types of derivatives, dealing primarily with market risk associated with interest rates, foreign currencies,
equity and commodity prices, and credit risk associated with counterparty’s nonperformance of transactions.
Credit risk is the possibility that a loss may result from a counterparty’s failure to perform according to theterms and conditions of the contract, which may exceed the value of underlying collateral. To reduce credit risk,
the MUFG Group may require collateral or guarantees based on a case-by-case assessment of creditworthiness ofeach customer and evaluation of the instrument. The MUFG Group also uses master netting agreements in orderto mitigate overall counterparty credit risk.
Trading Activities
The MUFG Group’s trading activities include dealing and customer accommodation activities. As part of its
trading activities, the MUFG Group offers a variety of derivative financial instruments for managing interest rate
and foreign exchange risk to its domestic and foreign corporate and financial institution customers. The MUFG
Group also enters into other types of derivative transactions, including equity and credit-related contracts, for its
own account.
Risk Management Activities
As part of the MUFG Group’s risk management activities, asset and liability management is viewed as oneof the methods for the MUFG Group to manage its interest rate exposures on interest-bearing assets andliabilities. The MUFG Group uses certain derivative financial instruments in order to minimize significant
unplanned fluctuations in earnings that are caused by interest rate volatility. For example, an increase or adecrease of interest income and interest expense on hedged variable rate assets and liabilities as a result ofinterest rate fluctuations are expected to substantially offset the variability in earnings by gains and losses on thederivative instruments that are linked to these hedged assets and liabilities.
The MUFG Group enters into interest rate swaps and other contracts primarily to manage the interest raterisk of its loans, investment securities and deposit liabilities. Interest rate contracts, which are generally nonleveraged generic interest rate and basis swaps, options and futures, allow the MUFG Group to effectively
manage its interest rate risk position. Option contracts primarily consist of caps, floors, swaptions and options on
index futures. Futures contracts used for asset and liability management activities are primarily index futures
providing for cash payments based upon the movement of an underlying rate index.
The MUFG Group enters into forward exchange contracts, currency swaps and other contracts in response
to currency exposures resulting from on-balance sheet assets and liabilities denominated in foreign currencies inorder to limit the net foreign exchange position by currency to an appropriate level.
F-105

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Derivatives Designated as Hedges
The MUFG Group adopts hedging strategies and applies hedge accounting to certain derivative transactions
entered by MUAH whose fiscal period ends on December 31.
Cash Flow Hedges
MUAH used interest rate swaps with a notional amount of ¥453.2 billion at December 31, 2013 to hedge therisk of changes in cash flows attributable to changes in the designated benchmark interest rate on LIBOR indexedloans. To the extent effective, payments received (or paid) under the swap contract offset fluctuations in interest
income on loans caused by changes in the relevant LIBOR index. At December 31, 2013, the weighted averageremaining life of the currently active cash flow hedges was approximately 4.02 years.
For cash flow hedges, the effective portion of the gain or loss on the hedging instruments is reported as acomponent of OCI and reclassified into earnings in the same period or periods during which the hedged cash
flows are recognized in net interest income. Gains and losses representing hedge ineffectiveness are recognizedin earnings in the period in which they arise. At December 31, 2013, MUAH expects to reclassify approximately¥6.7 billion of income from Accumulated OCI to net interest income during the year ending December 31, 2014.
This amount could differ from amounts actually realized due to changes in interest rates, hedge terminations andthe addition of other hedges subsequent to December 31, 2013.
Notional Amounts of Derivative Contracts
The following table summarizes the notional amounts of derivative contracts at March 31, 2013 and 2014:
Notional amounts(1)
2013
2014
(in trillions)Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 956.6 ¥ 962.5
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
155.2
169.5
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.0
3.1
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.2
2.5
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.6
7.1
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.9
2.7
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,125.5 ¥1,147.4
Note:(1) Includes both written and purchased position.

F-106

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Impact of Derivatives on the Consolidated Balance Sheets
The following table summarizes fair value information on derivative instruments that are recorded on the
MUFG Group’s consolidated balance sheets at March 31, 2013 and 2014:
Fair value of derivative instruments
March 31, 2013(1)(5)March 31, 2014(1)(5)
Not designated DesignatedTotal
Not designated DesignatedTotal
as hedges(2) as hedges(3) derivatives(4) as hedges(2) as hedges(3) derivatives(4)(in billions)

Derivative assets:
Interest rate contracts . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . .
Equity contracts . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . .
Credit derivatives . . . . . . . . . . . . . . . . . .
Others(6) . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,214
3,193
104
73
62
—

¥ 2
—
—
—
—
—

¥11,216
3,193
104
73
62
—

¥ 8,616
2,916
149
69
57
2

¥ 1
—
—
—
—
—

¥ 8,617
2,916
149
69
57
2

Total derivative assets . . . . . . . . . .

¥14,646¥ 2¥14,648¥11,809¥ 1¥11,810

Derivative liabilities:
Interest rate contracts . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . .
Equity contracts . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . .
Credit derivatives . . . . . . . . . . . . . . . . . .
Others(6) . . . . . . . . . . . . . . . . . . . . . . . . .

¥11,205
3,429
131
64
62
(24)

¥—
—
—
—
—
—

¥11,205
3,429
131
64
62
(24)

¥ 8,522
2,999
144
60
62
(23)

¥ 1
—
—
—
—
—

¥ 8,523
2,999
144
60
62
(23)

Total derivative liabilities . . . . . . . .

¥14,867¥—¥14,867¥11,764¥ 1¥11,765

Notes:(1) The fair value of derivative instruments is presented on a gross basis even when derivative instruments are subject to master netting
agreements. Cash collateral payable and receivable associated with derivative instruments are not added to or netted against the fair value
amounts.
(2) The derivative instruments which are not designated as a hedging instrument are held for trading and risk management purposes, and arepresented in Trading account assets/liabilities except for (6).
(3) The MUFG Group adopts hedging strategies and applies hedge accounting to certain derivative transactions entered into by MUAH. The
derivative instruments which are designated as hedging instruments are presented in Other assets or Other liabilities on theaccompanying consolidated balance sheets.
(4) This table does not include contracts with embedded derivatives for which the fair value option has been elected.
(5) For more information about fair value measurement and assumptions used to measure the fair value of derivatives, see Note 31.
(6) Others include mainly bifurcated embedded derivatives carried at fair value, which are presented in Deposits and Long-term debt.

F-107

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Impact of Derivatives and Hedged Items on the Consolidated Statements of Income and Accumulated OCI
The following tables provide more detailed information regarding the derivative-related impact on theaccompanying consolidated statements of income by accounting designation for the fiscal years ended March 31,
2012, 2013 and 2014:
Gains and losses for trading and risk management derivatives (not designated as hedging instruments)
Trading and risk management derivatives gains and losses(Not designated as hedging instruments)
Foreign exchange
Trading accountgains (losses)—net
profits (losses)—net
Total(in billions)Fiscal year ended March 31, 2012:
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fiscal year ended March 31, 2013:
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fiscal year ended March 31, 2014:
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-108

¥

—
(94)
—
—
—
(1)

¥

160
—
(47)
(1)
2
(36)

¥

160
(94)
(47)
(1)
2
(37)

¥ (95)

¥

78

¥

(17)

¥

—
(92)
—
—
—
(2)

¥

121
—
(138)
4
(11)
(59)

¥

121
(92)
(138)
4
(11)
(61)

¥ (94)¥(83)¥ (177)

¥

—
(51)
—
—
—
(2)

¥

30
—
(105)
3
(6)
(6)

¥

¥ (53)¥(84)¥ (137)

30
(51)
(105)
3
(6)
(8)

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Gains and losses for derivatives designated as cash flow hedges
For the fiscal year ended March 31,
2012
2013
2014
(in billions)

Gains (losses) recognized in Accumulated OCI onderivative instruments (Effective portion)
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

—

¥

7

¥

3

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

—

¥

7

¥

3

Gains (losses) reclassified from Accumulated OCI into income(Effective portion)
Interest rate contracts(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

(1)

¥

1

¥

4

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

(1)

¥

1

¥

4

Gains (losses) recognized in income on derivative instruments(Ineffective portion and amount excluded from effectiveness testing)Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

—

¥

—

¥

—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

—

¥

—

¥

—

Note:
(1) Included in Interest income.

Embedded Derivatives
Features embedded in other non-derivative hybrid contracts are separated from the host contracts andmeasured at fair value when they are not clearly and closely related to the host contracts and meet the definitionof a derivative. The change in the fair value of such an embedded derivative is recognized currently in earnings,
unless it qualifies as a hedge. The fair value of the embedded derivative is presented in the accompanying
consolidated balance sheets with the host contract. The MUFG Group accounts for credit-linked notes as hostcontracts with embedded derivatives and measures the entire contracts at fair value.

F-109

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Credit Derivatives
The MUFG Group enters into credit derivatives to manage its credit risk exposure, to facilitate clienttransactions, and for proprietary trading purposes, under which they provide the counterparty protection against
the risk of default on a set of debt obligations issued by a specified reference entity or entities. Types of suchcredit derivatives primarily include single name credit default swaps, index and basket credit default swaps andcredit-linked notes. The MUFG Group will have to perform under a credit derivative if a credit event as defined
under the contract occurs. Such credit events include bankruptcy, dissolution or insolvency of the referencedentity, default and restructuring of the obligations of the referenced entity. The MUFG Group’s counterparties
are banks, broker-dealers, insurance and other financial institutions. The contractual or notional amounts of these
credit derivatives represent the maximum potential amounts of future payments without consideration of possible
recoveries under recourse provisions or from collateral held or pledged. The table below summarizes certain
information regarding protection sold through credit default swaps and credit-linked notes as of March 31, 2013
and 2014:
Protection soldMaximum potential/Notional amountby expiration period
1 yearOveror less
1-5 years
5 years
Total(in millions)

At March 31, 2013:

Fair value(Asset)/Liability(1)Single name credit default swaps:
Investment grade(2) . . . . . . . . . . . . . . . . . . . . .
Non-investment grade . . . . . . . . . . . . . . . . . . .
Not rated . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥488,834
75,95910,807¥1,775,720
164,215
4,024¥102,613
13,793—¥2,367,167
253,967
14,831¥ (8,863)
9,275
(73)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

575,600

1,943,959

116,406

2,635,965

339

Index and basket credit default swaps held by
BTMU:
Investment grade(2) . . . . . . . . . . . . . . . . . . . . .
Non-investment grade . . . . . . . . . . . . . . . . . . .

34,479—47,599940

116,173—

198,251940

600—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Index and basket credit default swaps held by
MUSHD:
Investment grade(2) . . . . . . . . . . . . . . . . . . . . .
Non-investment grade . . . . . . . . . . . . . . . . . . .
Not rated . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

34,47948,539116,173

199,191

600

7,680
7,203
—

367,8142,284
24,7089,000——

384,494
9,487
24,708(4,131)(153)
215

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,883394,806

9,000

418,689(4,069)Total index and basket credit default swaps
sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

49,362

443,345

125,173

617,880(3,469)Total credit default swaps sold . . . . . . . . . . . . . . . .

¥624,962¥2,387,304¥241,579¥3,253,845¥ (3,130)

Credit-linked notes(3) . . . . . . . . . . . . . . . . . . . . . . . .

¥

¥

¥

¥

¥(12,741)

7,500

F-110

1,505

4,517

13,522

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Protection soldMaximum potential/Notional amountby expiration period
1 year
1-5
Overor lessyears
5 years
Total(in millions)

At March 31, 2014:

Fair value(Asset)/Liability(1)Single name credit default swaps:
Investment grade(2) . . . . . . . . . . . . . . . . . . . . .
Non-investment grade . . . . . . . . . . . . . . . . . . .
Not rated . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥422,991
49,5791,132¥1,952,552
180,168
4,221¥ 78,741
2,750—¥2,454,284
232,497
5,353¥(30,634)
1,326
(74)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

473,7022,136,941

81,491

2,692,134(29,382)

Index and basket credit default swaps held by
BTMU:
Investment grade(2) . . . . . . . . . . . . . . . . . . . . .
Non-investment grade . . . . . . . . . . . . . . . . . . .

940—

83,816—

166,629—

251,385—(3,316)—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Index and basket credit default swaps held by
MUSHD:
Investment grade(2) . . . . . . . . . . . . . . . . . . . . .
Non-investment grade . . . . . . . . . . . . . . . . . . .
Not rated . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

940

83,816

166,629

251,385(3,316)

122,837——

339,606
7,407
51,5271,000——

463,443
7,407
51,527(5,520)
(779)
(487)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

122,837

398,540

1,000

522,377(6,786)

Total index and basket credit default swaps
sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

123,777

482,356

167,629773,762(10,102)

Total credit default swaps sold . . . . . . . . . . . . . . . .

¥597,479¥2,619,297¥249,120¥3,465,896¥(39,484)

Credit-linked notes(3) . . . . . . . . . . . . . . . . . . . . . . . .

¥

¥

¥

¥

¥ (4,368)

—

—

4,546

4,546

Notes:(1) Fair value amounts are shown on a gross basis prior to cash collateral or counterparty netting.
(2) The MUFG Group considers ratings of Baa3/BBB- or higher to meet the definition of investment grade.
(3) Fair value amounts shown represent the fair value of the hybrid instruments.

Single name credit default swaps—A credit default swap protects the buyer against the loss of principal on abond or loan in case of a default by the issuer. The protection buyer pays a premium to the MUFG Group and isprotected for the period of the credit default swap. As the seller of protection, the MUFG Group in turn will haveto perform under a credit default swap if a credit event as defined under the contracts occurs. In order to provide
an indication of the current payment/performance risk of the credit default swaps, the external credit ratings,
primarily those provided by Moody’s and Standard & Poor’s (“S&P”), of the underlying reference entity of thecredit default swaps are disclosed.
Index and basket credit default swaps—Index and basket credit default swaps are credit default swaps thatreference multiple names through underlying baskets or portfolios of single name credit default swaps. Typically,in the event of a default on one of the underlying names, the MUFG Group, as the seller of protection, will haveto pay a pro rata portion of the total notional amount of the credit default index or basket contract. In order toprovide an indication of the current payment/performance risk of these credit default swaps, BTMU and MUSHD
rating scale based upon the entity’s internal ratings, which generally correspond to ratings defined by primarily
Moody’s and S&P, of the underlying reference entities comprising the basket or index were calculated anddisclosed.
F-111

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Credit-linked notes (“CLNs”)—The MUFG Group has invested in CLNs, which are hybrid instruments
containing embedded derivatives, in which credit protection has been sold to the issuers of the notes. If there is acredit event of the reference entity underlying the CLN, the principal balance of the note may not be repaid infull to the MUFG Group. As part of its financing activities, MUSHD and other securities subsidiaries in Japanand overseas issue CLNs.
The MUFG Group may economically hedge its exposure to credit derivatives by entering into offsetting
derivative contracts. The carrying value and notional amounts of credit protection sold in which the MUFG
Group held purchased protection with identical underlying referenced entities were approximately ¥3 billion and¥2,779 billion, respectively, at March 31, 2013, and approximately ¥35 billion and ¥3,048 billion, respectively, atMarch 31, 2014.
Collateral is held by the MUFG Group in relation to these instruments. Collateral requirements are
determined at the counterparty level and cover numerous transactions and products as opposed to individual
contracts.
Credit Risk, Liquidity Risk and Credit-risk-related Contingent Features
Certain of the MUFG Group’s derivative instruments contain provisions that require the MUFG Group’s
debt to maintain an investment grade credit rating from each of the major credit rating agencies. If the MUFG
Group’s debt were to fall below investment grade, it would be in violation of these provisions, and thecounterparties to the derivative instruments could request payments on early termination or demand immediateand ongoing full overnight collateralization on derivative instruments in net liability positions. The aggregate fairvalue of all derivative instruments with credit-risk-related contingent features that were in a liability position atMarch 31, 2013 and 2014 was approximately ¥3.6 trillion and ¥2.5 trillion, respectively, for which the MUFG
Group has posted collateral of approximately ¥579 billion and ¥253 billion, respectively, in the normal course ofbusiness. The amount of additional collateral and early termination amount which could be requested if the
MUFG Group’s debt falls below investment grade was ¥116 billion and ¥23 billion, respectively, as of March 31,
2013 and ¥125 billion and ¥43 billion, respectively, as of March 31, 2014.
24. OBLIGATIONS UNDER GUARANTEES AND OTHER OFF-BALANCE SHEET INSTRUMENTS
Obligations under Guarantees
The MUFG Group provides customers with a variety of guarantees and similar arrangements, including
standby letters of credit, financial and performance guarantees, credit protection, liquidity facilities, other offbalance sheet credit-related support and similar instruments, in order to meet the customers’ financial andbusiness needs. The tables below present the contractual or notional amounts of such guarantees at March 31,
2013 and 2014. The contractual or notional amounts of these instruments represent the maximum potential
amounts of future payments without consideration of possible recoveries under recourse provisions or fromcollateral held or pledged.
For certain types of derivatives, such as written interest rate options and written currency options, themaximum potential future payments are unlimited. Accordingly, it is impracticable to estimate the maximum
potential amount of future payments. As such, the notional amounts of the related contracts, other than the
maximum potential payments, are included in the table.
The MUFG Group mitigates its credit risk exposure resulting from guarantees by utilizing various
techniques, including collateralization in the form of cash, securities, and real estate properties based on
management’s credit assessment of the guaranteed parties and the related credit profile. In order to manage the
F-112

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
credit risk exposure, the MUFG Group also enters into sub-participation contracts with third parties who willfund a portion of the credit facility and bear its share of the loss to be incurred in the event that the borrower fails
to fulfill its obligations. The following table includes guarantees of ¥160.7 billion and ¥183.7 billion atMarch 31, 2013 and 2014, respectively, which are syndicated out to third parties. The contractual or notionalamounts summarized in the following table do not necessarily bear any direct relationship to the future actual
credit exposure, primarily because of risk management techniques of the MUFG Group.
Maximum
potential/
Contractualor Notionalamount

At March 31, 2013:

Standby letter of credit and financial guarantees . . . . . . . . . . . . . . . .
Performance guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative instruments(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities of trust accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amount by expiration period
1 yearOveror less
1-5 years
5 years(in billions)

¥

3,849
2,214
144,471
4,839

¥

2,101
1,509
99,846
3,969¥ 1,094627
35,784300¥¥155,373¥107,425¥37,805¥10,143

Maximum
potential/
Contractualor Notionalamount

At March 31, 2014:

Standby letter of credit and financial guarantees . . . . . . . . . . . . . . . .
Performance guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative instruments(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities of trust accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

3,774
2,571
68,811
7,751¥ 82,907

654
78
8,841
570

Amount by expiration period
1 yearOveror less
1-5 years
5 years(in billions)

¥

2,082
1,766
33,281
6,580¥ 1,116727
26,432
343

¥

576
78
9,098
828

¥ 43,709¥28,618¥10,580

Note:(1) Credit derivatives sold by the MUFG Group are excluded from this presentation.

Nature of Guarantee Contracts
Standby letters of credit and financial guarantees generally include an obligation of an issuer or a designatedthird-party to guarantee the performance of the customer to the beneficiary under the terms of contracts such as
lending contracts and other similar financial transactions. The MUFG Group is required to make payments to theguaranteed parties in the event that the customers fail to fulfill the obligations under the contracts. The guarantees
whose contractual maturities are over 5 years are mainly comprised of guarantees of housing loans.
Performance guarantees are contracts that contingently require the MUFG Group to make payments to theguaranteed party based on another party’s failure to perform under an obligating agreement, except financial
obligation. For example, performance guarantees include guarantees of completion of construction projects.
Derivative instruments that are deemed to be included within the definition of guarantees as prescribed in
the guidance on guarantees include certain written options and credit default swaps. In order for the MUFG
Group to determine if those derivative instruments meet the definition of guarantees as prescribed in the guidanceon guarantees, the MUFG Group tracks whether the counterparties are actually exposed to losses that will result
F-113

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
from the adverse change in the underlyings. Accordingly, the MUFG Group has disclosed information on allcredit default swaps and certain written options for which there is a possibility of meeting the definition ofguarantees as prescribed in the guidance on guarantees, regardless of whether the counterparties have assets or
liabilities related to the underlyings of the derivatives. However, credit derivatives sold by the MUFG Group at
March 31, 2013 and 2014 are excluded from this presentation, as they are disclosed in Note 23.
Liabilities of trust accounts represent the trustee’s potential responsibility for temporary payments tocreditors of liabilities of trust accounts making use of funds of the MUFG Group, unless there are the certain
agreements with trust creditors that have provisions limiting the MUFG Group’s responsibility as a trustee to thetrust account assets. A trust may incur external liabilities to obtain certain services during the terms of the trust
arrangement. While, in principle, any liabilities of a trust are payable by the trust account and its beneficiaries, atrustee’s responsibility may be interpreted to encompass temporary payments for the trust account liabilities
when the trust account does not maintain sufficient liquidity available for such liabilities unless the agreementwith trust creditors limits the trustee’s responsibility to the trust account assets. At March 31, 2013 and 2014,
there were liabilities of ¥4,839 billion and ¥7,751 billion, respectively, in the segregated records of trust accounts
including the amounts related to liabilities with provisions limiting trustee responsibility. Liabilities of trust
accounts principally included obligations to return collateral under security lending transactions. The MUFG
Group has experienced no significant losses on such responsibilities and its exposure to the risk associated withthe temporary payments is judged to be remote because trust account liabilities are generally covered by thecorresponding trust account assets; the MUFG Group continuously monitors the liabilities of trust accounts andassesses the trust account’s ability to perform its obligations to prevent any unfavorable outcomes; and the
MUFG Group claims its recourse for its temporary payments against the trust account assets and thebeneficiaries.
Carrying AmountAt March 31, 2013 and 2014, the carrying amounts of the liabilities related to guarantees and similar
instruments set forth above were ¥1,695,799 million and ¥1,441,092 million, respectively, which are included in
Other liabilities and Trading account liabilities. The guarantees and similar instruments comprising the largest
components of the total were options sold in the amount of ¥1,645,258 million and ¥1,396,178 million as ofMarch 31, 2013 and 2014, respectively. Credit derivatives sold by the MUFG Group at March 31, 2013 and 2014
are excluded from this presentation, as they are disclosed in Note 23. In addition, Other liabilities also include anallowance for off-balance sheet instruments of ¥27,721 million and ¥35,457 million at March 31, 2013 and 2014,
respectively, related to these transactions.
Performance Risk
The MUFG Group monitors performance risk of its guarantees using the same credit rating system utilized
for estimating probabilities of default with its loan portfolio. The MUFG Group’s credit rating system isconsistent with both the method of evaluating credit risk under Basel III and those of third-party credit rating
agencies. On certain underlying referenced credits or entities, ratings are not available. Such referenced credits
are included in the “Not rated” category in the following tables.

F-114

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Presented in the tables below is the maximum potential amount of future payments classified based uponinternal credit ratings as of March 31, 2013 and 2014. The determination of the maximum potential future
payments is based on the notional amount of the guarantees without consideration of possible recoveries underrecourse provisions or from collateral held or pledged. Such amounts bear no relationship to the anticipatedlosses, if any, on these guarantees.

Maximum
potential/
Contractualor Notionalamount

At March 31, 2013:

Amount by borrower grade
Likely to
becomeBankrupt
or Legally/
Close
Virtually(1)
Normal Watch
Bankrupt(2)(in billions)

Not
rated

Standby letters of credit and financial guarantees . . . . . . . . .
Performance guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥3,8492,214¥3,540
2,152

¥182
43

¥11
2

¥116
17

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥6,063¥5,692

¥225

¥13

¥133

Maximum
potential/
Contractualor Notionalamount

At March 31, 2014:

Amount by borrower grade
Likely to
becomeBankrupt
or Legally/
Close
Virtually
Normal Watch(1)Bankrupt(2)(in billions)

Not
rated

Standby letters of credit and financial guarantees . . . . . . . . .
Performance guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥3,774
2,571¥3,500
2,493

¥171
53

¥ 9
8

¥ 94
17

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥6,345¥5,993

¥224

¥17

¥111

Notes:(1) Borrowers classified as Close Watch represent those that require close monitoring as the borrower has begun to exhibit elements ofpotential concern with respect to its business performance and financial condition, the borrower has begun to exhibit elements of serious
concern with respect to its business performance and financial condition, including business problems requiring long-term solutions, orthe borrower’s loans are TDRs or loans contractually past due 90 days or more for special reasons.
(2) Borrowers classified as Likely to become Bankrupt or Legally/Virtually Bankrupt represent those that have a higher probability ofdefault than those categorized as Close Watch due to serious debt repayment problems with poor progress in achieving restructuring
plans, the borrower being considered virtually bankrupt with no prospects for an improvement in business operations, or the borrower
being legally bankrupt with no prospects for continued business operations because of non-payment, suspension of business, voluntaryliquidation or filing for legal liquidation.

The guarantees the MUFG Group does not classify based upon internal credit ratings are as follows.
The MUFG Group records all derivative contracts at fair value. Aggregate market risk limits have been
established, and market risk measures are routinely monitored against these limits. The MUFG Group also
manages its exposure to these derivative contracts through a variety of risk mitigation strategies, including, but
not limited to, offsetting economic hedge positions. The MUFG Group expects the risk of loss to be remote andbelieves that the notional amounts of the derivative contracts generally exceed its exposure.
Liabilities of trust accounts represent the trustee’s potential responsibility for temporary payments tocreditors of liabilities of trust accounts making use of funds of the MUFG Group. The MUFG Group has
experienced no significant losses on such responsibilities and its exposure to the risk associated with thetemporary payments is judged to be remote because trust account liabilities are generally covered by thecorresponding trust account assets.
F-115

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The MUFG Group conducts securities lending transactions for institutional customers as a fully disclosed
agent. At times, securities lending indemnifications are issued to guarantee that a security lending customer will
be made whole in the event the borrower does not return the security subject to the lending agreement andcollateral held is insufficient to cover the market value of the security. All lending transactions are collateralized,
primarily by cash. At March 31, 2014, the MUFG Group had no exposure that would require it to pay under thissecurities lending indemnification, since the collateral market value exceeds the securities lent.
Other Off-balance Sheet Instruments
In addition to obligations under guarantees and similar arrangements set forth above, the MUFG Groupissues other off-balance sheet instruments to meet the financial needs of its customers and for purposes other than
trading. Such off-balance sheet instruments consist of lending-related commitments, including commitments toextend credit and commercial letters of credit that the MUFG Group provides to meet the financing needs of its
customers. Once the MUFG Group issues these financial instruments, the MUFG Group is required to extend
credit to or make certain payments to the customers or beneficiaries specified pursuant to the underlying
contracts unless otherwise provided in the contracts. Since many of these commitments expire without being
drawn upon, the total commitment amounts do not necessarily represent future cash requirements. At March 31,
2014, approximately 68% of these commitments will expire within one year, 30% from one year to five years
and 2% after five years. The table below presents the contractual amounts with regard to such instruments at
March 31, 2013 and 2014:
2013
2014
(in billions)

Commitments to extend credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial letters of credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments to make investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥66,702706
94—¥72,240855
81
21

Commitments to extend credit, which generally have fixed expiration dates or other termination clauses, arelegally binding agreements to lend to customers. Commitments are different from guarantees in that thecommitments are generally revocable or have provisions that enable the MUFG Group to avoid payments in theevent of violations of any conditions of the contracts and certain deterioration of the potential borrowers’
financial condition.
Commercial letters of credit, generally used for trade transactions, are typically secured by the underlying
goods. The MUFG Group continually monitors the type and amount of collateral and other securities, andrequires counterparties to provide additional collateral or guarantors as necessary.
Commitments to make investments are legally binding contracts to make additional contributions tocorporate recovery or private equity investment funds in accordance with limited partnership agreements. Someof these funds, in which the MUFG Group has significant variable interests, are described in Note 25.

F-116

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
25. VARIABLE INTEREST ENTITIESIn the normal course of business, the MUFG Group has financial interests and other contractual obligations
in various entities which may be deemed to be VIEs such as asset-backed conduits, various investment funds,
special purpose entities created for structured financing, repackaged instruments, entities created for the
securitization of the MUFG Group’s assets, and trust arrangements.
The following tables present the assets and liabilities of consolidated VIEs recorded on the accompanying
consolidated balance sheets at March 31, 2013 and 2014:
Consolidated VIEs

At March 31, 2013:

Total

Consolidated assets
Cash and Interest-earning
Trading
due from
deposits inaccount
Investment
banksother banks
assetssecurities(in millions)

Asset-backed conduits . . . . . . ¥ 5,641,295 ¥ 25,520
Investment funds . . . . . . . . . . 2,567,049 47,176
Special purpose entities
created for structured
financing . . . . . . . . . . . . . .
175,627
1,427
Repackaged instruments . . . .
56,902—
Securitization of the MUFG
Group’s assets . . . . . . . . . . 1,756,940—
Trust arrangements . . . . . . . . 1,006,961—
Others . . . . . . . . . . . . . . . . . .
100,013295¥ 72,968
18,113—54,154

—
3,601
681

—
277
—

(71,464)

Total consolidated assets . . . . ¥10,177,097 ¥ 2,692¥ 26,087

97,551

F-117

All otherassets¥966 ¥601,444 ¥4,927,509 ¥ 12,888
2,322,430
8,643
173 170,514

2,188
—

Total consolidated assets
before elimination . . . . . . . 11,304,787 74,418
The amounts eliminated inconsolidation . . . . . . . . . . . (1,127,690) (71,726)

Loans

—
—

156,903
2,748

15,109—— 1,720,066
91,707909,14685
64,94836,8742,230
34,004

2,377,827 701,879 7,781,493 271,619(1,237)(6)(966,616) (16,641)¥2,376,590 ¥701,873 ¥6,814,877 ¥254,978

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Consolidated liabilities
Other short-term
Deposits
borrowings(in millions)

Total

Asset-backed conduits . . . . . . . . . . . . . . . ¥ 5,645,471 ¥—Investment funds . . . . . . . . . . . . . . . . . . .
232,533—
Special purpose entities created forstructured financing . . . . . . . . . . . . . . .
173,928—
Repackaged instruments . . . . . . . . . . . . .
57,452—
Securitization of the MUFG Group’s
assets . . . . . . . . . . . . . . . . . . . . . . . . . .
1,741,837—
Trust arrangements . . . . . . . . . . . . . . . . .
1,003,916
1,001,815
Others . . . . . . . . . . . . . . . . . . . . . . . . . . .
99,505—
Total consolidated liabilities before
elimination . . . . . . . . . . . . . . . . . . . . . .
The amounts eliminated inconsolidation . . . . . . . . . . . . . . . . . . . .
The amount of liabilities with recourse to
the general credit of MUFG Group . . .

330,171 ¥ 446,652
12,246
218,9395,241—

166,810
56,236

1,877
1,216

25,000—64,216

1,715,823—
35,143

1,014
2,101
146

1,001,815

4,964,453

2,316,429

671,945(4,251,981)—(3,078,982)(1,146,963)(26,036)(3,117,515)(1,001,815)(1,845,698)(2,772)(267,230)

Consolidated VIEs

Total

¥

All other
liabilities

8,954,642

Liabilities of consolidated VIEs forwhich creditors or beneficial interest
holders do not have recourse to thegeneral credit of the MUFG Group . . . ¥ 1,585,146 ¥At March 31, 2014:¥ 4,868,648
1,348

Long-term
debt

Cash anddue frombanks

Asset-backed
conduits . . . . . . . . . . . ¥ 6,202,924 ¥ 30,484
Investment funds . . . . . .
2,433,575
46,198Special purpose entities
created for structured
financing . . . . . . . . . .
257,874
1,840
Repackaged
instruments . . . . . . . .
29,296—
Securitization of the
MUFG Group’s
assets . . . . . . . . . . . . .
1,473,901—
Trust arrangements . . . .
1,325,602—
Others . . . . . . . . . . . . . .
84,882342—¥

39,773¥ 1,166,694 ¥ 378,679

Consolidated assets
Interest-earning
Trading
deposits inaccount
Investment
other banks
assetssecurities(in millions)¥ 117,116
36,076All otherassetsLoans¥
1,783 ¥762,103 ¥ 5,277,749 ¥ 13,689
2,190,419
10,270— 150,612

2,794

—

—

236,115

17,125—29,296

—

—

—

—
1,528
680

—
139
—

—
95,33973

1,439,002
1,226,221
48,91434,8992,375
34,873

Total consolidated assets
before elimination . . . 11,808,054
The amounts eliminatedin consolidation . . . . . (1,428,412)

78,864

158,194

2,221,637

867,785

8,228,001

253,573(75,697)(125,036)(1,883)(6)(1,208,348)(17,442)

Total consolidated
assets . . . . . . . . . . . . . ¥ 10,379,642 ¥

3,167

¥

33,158F-118¥2,219,754 ¥867,779 ¥ 7,019,653 ¥ 236,131

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Consolidated liabilities
Other short-term
Deposits
borrowings(in millions)

Total

Asset-backed conduits . . . . . . . . . . . . . . . ¥ 6,227,784 ¥—Investment funds . . . . . . . . . . . . . . . . . . .
87,702—
Special purpose entities created forstructured financing . . . . . . . . . . . . . . .
174,055—
Repackaged instruments . . . . . . . . . . . . .
29,181—
Securitization of the MUFG Group’s
assets . . . . . . . . . . . . . . . . . . . . . . . . . .
1,452,857—
Trust arrangements . . . . . . . . . . . . . . . . .
1,322,103
1,320,209
Others . . . . . . . . . . . . . . . . . . . . . . . . . . .
84,527—
Total consolidated liabilities before
elimination . . . . . . . . . . . . . . . . . . . . . .
The amounts eliminated inconsolidation . . . . . . . . . . . . . . . . . . . .
The amount of liabilities with recourse to
the general credit of MUFG Group . . .

¥ 5,239,304—

Long-termdebt¥

All other
liabilities

467,005 ¥ 521,475
422
87,2801,993—

169,231
29,0002,831
181

23,800—48,368

1,428,202—
36,025

855
1,894
134

9,378,209

1,320,209

5,313,465

2,129,885

614,650(4,196,910)—(2,988,582)(1,163,047)(45,281)(3,910,836) (1,320,209)(2,280,662)—(309,965)

Liabilities of consolidated VIEs forwhich creditors or beneficial interest
holders do not have recourse to thegeneral credit of the MUFG Group . . . ¥ 1,270,463 ¥—¥

44,221¥

966,838 ¥ 259,404

In general, the creditors or beneficial interest holders of consolidated VIEs have recourse only to the assetsof those VIEs of which they are creditors or beneficial interest holders, and do not have recourse to other assetsof the MUFG Group, except where the MUFG Group is also contractually required to provide credit
enhancement or program-wide liquidity.
The following tables present the total assets of non-consolidated VIEs, the maximum exposure to loss
resulting from the MUFG Group’s involvement with non-consolidated VIEs and the assets and liabilities which
relate to the MUFG’s variable interests in non-consolidated VIEs at March 31, 2013 and 2014:
Non-consolidated VIEs

At March 31, 2013:

Total assets

Maximum
exposure

Total

On-balance sheet assets
Tradingaccount Investment
assetssecurities
Loans(in millions)On-balance sheet
liabilities
All
other
assetsAll other
Total liabilities

Asset-backed
conduits . . . . . . . . . . . ¥ 12,926,458 ¥ 3,072,591 ¥2,256,903 ¥ 3,384 ¥ 363,521 ¥1,889,998 ¥ — ¥ — ¥ —Investment funds . . . . . . 25,517,222
744,935
634,662 168,580
149,036
317,046— 1,186 1,186
Special purpose entities
created for structured
financing . . . . . . . . . . 20,978,132 3,048,178 2,346,557 136,118
85,254 2,124,202
983
466
466
Repackaged
instruments . . . . . . . . 13,097,513 1,638,067 1,546,726 106,661 1,181,828
258,237———
Trust arrangements . . . .
14,866
13,58912,740——12,740— 5,739 5,739
Others . . . . . . . . . . . . . . 29,381,902 2,174,939 1,714,409 66,563
286,937 1,353,826 7,083
99
99
Total . . . . . . . . . . . ¥101,916,093 ¥10,692,299 ¥8,511,997 ¥481,306 ¥2,066,576 ¥5,956,049 ¥8,066 ¥7,490 ¥7,490

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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Non-consolidated VIEs

At March 31, 2014:

Total assets

Maximum
exposure

Total

On-balance sheet assets
Tradingaccount Investment
assetssecurities
Loans(in millions)On-balance sheet
liabilities
All
other
assetsAll other
Total liabilities

Asset-backed
conduits . . . . . . . . . . . ¥ 16,114,320 ¥ 3,826,653 ¥ 2,879,545 ¥ 1,851 ¥ 512,835 ¥2,364,858 ¥1 ¥ 217 ¥ 217
Investment funds . . . . . . 24,216,292
844,762
735,423 100,099
300,295
326,860 8,169——
Special purpose entities
created for structured
financing . . . . . . . . . . 27,811,920 3,305,869 2,586,162 138,023
84,964 2,361,243 1,932 1,788 1,788
Repackaged
instruments . . . . . . . .
9,106,418 2,132,268 2,034,180 202,209 1,536,859
295,112———
Trust arrangements . . . .
26,79523,68022,940——22,940— 5,471 5,471
Others . . . . . . . . . . . . . . 50,444,297 2,720,245 2,113,300 129,020
100,000 1,884,280
—
125
125
Total . . . . . . . . . . . ¥127,720,042 ¥12,853,477 ¥10,371,550 ¥571,202 ¥2,534,953 ¥7,255,293 ¥10,102 ¥7,601 ¥7,601

Maximum exposure to loss on each type of entity is determined based on the carrying amount of any onbalance sheet assets and any off-balance sheet liabilities held, net of any recourse liabilities. Therefore, themaximum exposure to loss represents the maximum loss the MUFG Group could possibly incur at each balance
sheet date and does not reflect the likelihood of such a loss being incurred. The difference between the amount of
on-balance sheet assets and the maximum exposure to loss primarily comprises the remaining undrawn
commitments.
Analysis of Each Transaction Category
Asset-Backed Conduits
This category primarily comprises the following:Multi-Seller Conduits (MUFG-sponsored Asset-Backed Commercial Paper (“ABCP”) Conduits and OtherABCP Conduits)
The MUFG Group administers several conduits under asset-backed financing programs under which theconduits purchase financial assets, primarily trade accounts receivable, from the MUFG Group’s customers by
issuing short-term financing instruments, primarily commercial paper, to third-party investors. Under the assetbacked financing programs, the MUFG Group acts as an agent for the conduits, which enter into agreements with
the MUFG Group’s customers where the customers transfer financial assets to the conduits in exchange formonetary consideration. The MUFG Group also underwrites commercial paper for the conduits that is secured by
the assets held by them and provides program-wide liquidity and credit enhancement facilities to the conduits.
The MUFG Group receives fees related to the services it provides to the conduits and the program-wide liquidity
and credit enhancement. The MUFG Group considers itself to be the primary beneficiary of the multi-seller
conduits because, as an agent and sponsor, the MUFG Group has the power to direct activities of the conduitsthat most significantly impact the conduits’ economic performance and also has the obligation to absorb losses of
the conduits that could potentially be significant to the conduits through the program-wide liquidity and credit
enhancement. Consequently, the MUFG Group consolidates the conduits.
In addition to the entities described above, the MUFG Group participates as a provider of financing toseveral conduits that are administered by third parties. Most of these conduits are established under a multi-seller
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
asset-backed financing program and the MUFG Group provides financing along with other financial institutions.
With respect to these conduits, the MUFG Group is not considered as the primary beneficiary because the MUFG
Group’s participation to the conduits is only to provide financing along with other third-party financial
institutions and it does not have the power to direct the activities of the conduits. Consequently, the MUFG
Group does not consolidate the conduits.
Asset-Backed Conduits (MUFG-sponsored Asset-Backed Loan (“ABL”) Programs and Other Programs)
The MUFG Group administers several conduits under asset-backed financing programs where the MUFG
Group provides financing to fund the conduits’ purchases of financial assets, comprising primarily trade accounts
receivable, from its customers. The MUFG Group acts as an agent and sponsor for the conduits, which enter into
agreements with the MUFG Group’s customers where the customers transfer assets to the conduits in exchange
for monetary consideration. In most cases the MUFG Group is the sole provider of financing that is secured by
the assets held by the conduits. The MUFG Group considers itself to be the primary beneficiary of the conduits
because, as an agent and sponsor for the conduits, the MUFG Group has the power to direct activities of the
conduits, such as selection of the assets to be purchased and condition for purchases, and debt collection from theoriginal obligors, that most significantly impact the conduits’ economic performance, and also has the obligation
to absorb losses of the conduits that could potentially be significant to the conduits through financing it provides.
Consequently, the MUFG Group consolidates the conduits.
In addition, the MUFG Group is involved with entities, which take in most cases the form of a trust, where
originators of financial assets, which primarily comprise lease receivables, entrust the assets with trust banks andreceive beneficial certificates in trusts in exchange. The originators then transfer the beneficiary certificates tothe MUFG Group in exchange for cash. The originators of the financial assets entrusted continue to be involvedin the assets as servicers. Because the originators are deemed to have the power to direct activities of the entities
that most significantly impact the entities’ economic performance through their role as a servicer, the MUFG
Group is not considered as the primary beneficiary of these entities. Consequently, the MUFG Group does notconsolidate these entities.
The MUFG Group also participates as a provider of financing to the ABL programs that are managed bythird parties. The MUFG Group is not considered as the primary beneficiary of the entities used in these
programs as the MUFG Group’s participation to the entities is only to provide financing with other third parties
and it does not have the power to direct the activities of the conduits. Consequently, the MUFG Group does notconsolidate the entities used in these programs.
Investment Funds
On February 2010, the FASB issued an accounting standards update that indefinitely defers the applicationof the current guidance for consolidation of VIEs on entities that are deemed as investment companies, which
include most of corporate recovery funds, private equity funds, and investment trusts. For VIEs that areconsidered investment companies, the MUFG Group determines whether it is the primary beneficiary by
evaluation of whether it absorbs a majority of expected losses, receives a majority of expected residual returns, or
both.
This category primarily comprises the following:
Corporate Recovery Funds
These entities are established by fund managers, which are unrelated to the MUFG Group, for the purposeof investing in debt or equity instruments issued by distressed companies. After investment, the fund managers
F-121

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
work closely with the management of the issuers and attempt to enhance corporate value by various means
including corporate restructuring and reorganization. Their exit strategies include, among others, sales to others
and initial public offerings.
Typically, these entities take the form of a limited partnership which is entirely funded by general andlimited partner interests. In some cases, the general partners of the partnerships are entities that have no
substantive decision making ability. The fund managers that establish these partnerships assume investment
management and day-to-day operation by entering into asset management contracts with the general partners.
These partnerships are, therefore, financing vehicles and as such are considered as VIEs. In other cases, thegeneral partners have substantive decision making ability but the partnerships are considered as VIEs when thegeneral partners’ equity investments in the partnerships are considered as non-substantive, usually based on thepercentage interest held, and they do not have substantive limited partner interests.
The MUFG Group mostly serves as a limited partner in corporate recovery funds. While the MUFG Group’s
share in partnership interest is generally insignificant, in certain cases, the MUFG Group is the only limited
partner and it consolidates these partnerships as the primary beneficiary.
Private Equity Funds
The MUFG Group is involved in venture capital funds that are established by either the MUFG Group’s
entities or fund managers unrelated to the MUFG Group. These entities have specific investment objectives inconnection with their acquisition of equity interests, such as providing financing and other support to start-up
businesses, medium and small entities in a particular geographical area, and to companies with certain
technology or companies in a high-growth industry.
These entities typically take the form of a limited partnership and usually are entirely funded by general andlimited partner interests. The general partners of the partnerships in some cases are entities that have no
substantive decision making ability. The fund managers that establish these partnerships assume investment
management and day-to-day operation by entering into asset management contracts with the general partners.
These partnerships are, therefore, financing vehicles and as such are considered as VIEs. In other cases, thegeneral partners have substantive decision making ability but the partnerships are considered VIEs because thegeneral partners’ equity investments in the partnerships are disproportionate to their voting rights and the limited
partners have the majority of the economics without any voting rights. The MUFG Group consolidates theprivate equity funds when it owns a majority of the interests issued by the private equity funds.
The MUFG Group participates in these partnerships as a general partner or limited partner. While the
MUFG Group’s share in partnership interests is generally limited, in certain cases, the MUFG Group provides
most of the financing to the partnership. The MUFG Group consolidates these funds as the primary beneficiary
because it absorbs a majority of the expected losses or receives a majority of the expected residual returns.
Investment Trusts
The MUFG Group invests in investment trusts that are professionally managed collective investment
schemes which pool money from many investors and invest in, among others, equity and debt securities. Most ofthese funds take the form of a trust where there is a separation in investment decisions, which is assumed by aninvestment manager who has no investment in a trust, and ownership through beneficiary interests issued by atrust are owned by investors. Therefore, these investment trusts are considered as VIEs. Based on the deferral
requirements of the current guidance, the MUFG Group consolidates investment trusts when it absorbs a majorityof the expected losses or receives a majority of the expected residual returns.
F-122

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Buy-out Financing Vehicles
The MUFG Group provides financing to buy-out vehicles. The buy-out vehicles are established by equity
investments from, among others, private equity funds or the management of target companies for the purpose ofpurchasing the equity shares of target companies. Along with other financial institutions, the MUFG Group
provides financing to the buy-out vehicles in the form of loans. While the buy-out vehicles’ equity is normally
substantive in its amount and the rights and obligations associated with it, in some cases, the vehicles have equity
that is insufficient to absorb expected variability primarily because the amount provided by equity investors isnominal in nature. These vehicles engage in non-investment activities, and are considered as VIEs. Assessment
as to whether the MUFG Group is the primary beneficiary is required under the current guidance. In most cases,
the MUFG Group’s participation to these vehicles is only to provide financing to the vehicles, and the power todirect the activities that most significantly impact the economic performance of the vehicles is held by the
management of target companies. As a result, the MUFG Group is not considered as the primary beneficiary ofthese vehicles and does not consolidate them.
Other Investment Funds
The MUFG Group’s investments in VIEs through MUAH primarily consist of equity investments in low
income housing credit (“LIHC”) structures, designed to generate a return primarily through the realization offederal tax credits. MUAH considers itself as the primary beneficiary of certain types of LIHC investments.
LIHC Unguaranteed Syndicated Investment Funds
MUAH creates the investment funds, serves as the managing investor member, and sells limited investor
member interests to third parties. MUAH receives benefits through income from the structuring of these funds,
servicing fees for managing the funds and, as an investor member, tax benefits and tax credits to reduce the
MUAH tax liability. MUAH considers itself to be the primary beneficiary and consolidated them upon adoptionof the current guidance because, as a sponsor and managing member of the funds, it has the power to direct
activities that most significantly impact the funds’ economic performance and also has the obligation to absorb
losses of the funds that could potentially be significant to the funds.
LIHC Guaranteed Syndicated Investment Funds
MUAH also forms limited liability companies, which in turn invest in LIHC operating partnerships, tocreate LIHC guaranteed syndicated investment funds. Interests in these funds are sold to third parties who pay a
premium for a guaranteed return. MUAH earns structuring fees from the sale of these funds and asset
management fees. MUAH serves as the funds’ sponsor and non-member asset manager, and also guarantees aminimum rate of return throughout the investment term, therefore, it directs the activities that most significantly
impact the funds’ economic performance and also has an obligation to absorb losses pertaining to its minimum
rate of return guarantee to investors. Therefore, the MUFG Group is considered as the primary beneficiary ofthese funds and consolidates them.
Special Purpose Entities Created for Structured Financing
This category primarily comprises the following:
Leveraged Leasing Vehicles
These entities are established to raise funds to purchase or build equipment and machinery including, among
others, commercial vessels, passenger and cargo aircraft, and production equipment for the purpose of leasing
F-123

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
them to lessees who use the equipment and machinery as part of their business operations. These entities
typically take the form of a limited partnership or a special purpose company where they fund their purchases ofequipment and machinery via senior and subordinate financing. In some cases, the entities are funded only by
senior financing or there is a guarantee provided to the senior financing by parties unrelated to those providing
the senior financing. In most cases, the MUFG Group participates in the senior financing and does not participate
in the subordinate financing or provide guarantees. Generally, because the MUFG Group’s participation in these
entities is only to provide financing, it does not have the power to direct the activities of the entities that mostsignificantly impact the economic performance of the entities. Therefore, the MUFG Group does not consider
itself to be the primary beneficiary of these entities and does not consolidate them, except for limited
circumstances where the MUFG Group is directly involved with the structuring of the transaction and has thepower to direct the activities of the entities that most significantly impact the economic performance of theentities.
Project Financing Vehicles
These entities are established to raise funds in connection with, among others, production of natural
resources, construction and development of urban infrastructure (including power plants and grids, highways andports), and the development of real estate properties or complexes. These projects typically involve special
purpose companies which issue senior and subordinate financing to raise funds in connection with the various
projects. The subordinate financing is usually provided by parties that will ultimately make use of the assets
constructed or developed. By contrast, the senior financing is typically provided by financial institutions,
including the MUFG Group. Because the MUFG Group’s participation to these entities is only to provide
financing, it does not have the power to direct the activities that most significantly impact the economic
performance of these entities. Therefore, the MUFG Group is not considered as the primary beneficiary of these
entities and does not consolidate them.
Sale and Leaseback Vehicles
The MUFG Group is involved with vehicles that acquire assets, primarily real estate, from the MUFG
Group’s clients and other unrelated parties where the sellers of the assets continue to use the assets throughleaseback agreements. These vehicles typically take the form of a limited partnership where the general partner
effectively has no power to direct the activities that most significantly impact the economic performance because
an equity holder of the general partner serves a perfunctory role. Therefore, these vehicles are considered as
VIEs. The subordinated financing of these vehicles is usually provided by the sellers of the assets, with the
MUFG Group providing senior financing for the vehicles. Because the MUFG Group’s participation to thesevehicles is only to provide financing, it does not have the power to direct the activities that most significantly
impact the economic performance of these entities. Therefore, the MUFG Group is not considered as the primary
beneficiary and does not consolidate them.
Securitization of Client Real Estate Properties
These entities are established for the purpose of securitizing real estate properties held by the MUFG
Group’s customers. In most cases, these entities take the form of a limited partnership or a special purpose
company. These entities are designed to have non-substantive power to direct the activities that mostsignificantly impact the economic performance because the general partner or an equity holder serves aperfunctory role. The entities are typically funded by senior and subordinated financing where the original
owners of the properties provide the subordinated financing, primarily in the form of partnership interests or
subordinated notes, and financial institutions, including the MUFG Group, provide senior financing in the form
F-124

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)of senior loans. Because the MUFG Group’s participation to these vehicles is only to provide financing, it does
not have the power to direct the activities that most significantly impact the economic performance of these
entities. Therefore, the MUFG Group is not considered as the primary beneficiary and does not consolidate these
entities.
Repackaged Instruments
This category primarily comprises the following:
Investments in Financially-Engineered Products
The MUFG Group is involved in special purpose entities that have been established to issue financial
products through the engineering and repackaging of existing financial instruments, such as CDOs and synthetic
CDOs. These special purpose entities are considered as VIEs because the holders of the equity investment at risk
do not have the power to direct the activities that most significantly impact the economic performance. These
special purpose entities are generally arranged and managed by parties that are not related to the MUFG Group.
The MUFG Group’s involvement with the entities arranged and managed by third parties is for investment
purposes. In these cases, the MUFG Group participates as one of many other investors and the MUFG Grouptypically holds investments in senior tranches or tranches with high credit ratings. Therefore, the MUFG Group
does not have the power to direct activities of the entities that most significantly impact the entities’ economic
performance, and thus is not considered as the primary beneficiary of these entities and does not consolidate
these entities.
In certain instances, special purpose entities have been established and are managed by the MUFG Group.
The MUFG Group’s involvement includes establishing and arranging the transaction and underwriting securities
issued by the entities to general investors. For these entities, the MUFG Group has the power to direct activities
that most significantly impact the economic performance and it has the obligation to absorb losses or receive
benefits that could potentially be significant to the entities. As such, the MUFG Group considers itself as theprimary beneficiary of these entities and consolidates them.
Investments in Securitized Financial Instruments
The MUFG Group holds investments in special purpose entities that issue securitized financial products.
The assets held by the special purpose entities include credit card receivables and residential mortgage loans.
These entities are established and managed by parties that are unrelated to the MUFG Group and the MUFG
Group’s involvement with these entities is for its own investment purposes. In all cases, the MUFG Groupparticipates as one of many other investors and the MUFG Group does not have the power to direct activities ofthe entities that most significantly impact the entities’ economic performance. Therefore, the MUFG Group is notconsidered as the primary beneficiary of these entities and does not consolidate them.
Securitization of the MUFG Group’s Assets
The MUFG Group establishes entities to securitize its own financial assets that include, among others,
corporate and retail loans and lease receivables. The entities used for securitization, which typically take the formof a special purpose company or a trust, are established by the MUFG Group and, in most cases, issue senior andsubordinate interests or financing. After securitization, the MUFG Group typically continues to service
securitized assets as a servicer. The MUFG Group may also retain subordinate interests or financing or otherinterests. The MUFG Group is considered as the primary beneficiary and consolidates the entities used for
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
securitization since it has the obligation to absorb losses through subordinate interests, and also has the power for
determining and implementing of policies as servicer that give it the ability to manage the entities’ assets that
become delinquent or are in default in order to improve the economic performance of the entities.
Trust Arrangements
The MUFG Group offers, primarily through its wholly-owned trust banking subsidiary, MUTB, a variety oftrust products and services including securities investment trusts, pension trusts and trusts used as securitization
vehicles. In a typical trust arrangement, however, the MUFG Group manages and administers assets on behalf ofthe customers in an agency, fiduciary and trust capacity and does not assume risks associated with the entrusted
assets. The trusts are generally considered as VIEs because the trust beneficiaries, who provide all of the equity
at risk, usually do not have power to direct the activities that most significantly impact its economic performancein the arrangements. The MUFG Group, however, is not considered as the primary beneficiary, except for thecase mentioned below, because it merely receives fees for compensation of its services on terms that are
customary for these activities and the fees are insignificant relative to the total amount of the entities’ economic
performance and variability. Therefore, the MUFG Group does not consolidate these entities.
With respect to the jointly operated designated money in trusts, MUTB pools money from investors or trust
beneficiaries and determines how best to invest it. MUTB typically invests in high-quality financial assets,
including government bonds, corporate bonds and corporate loans including loans to MUTB and receives fees ascompensation for services. In this role as a sponsor of these products, MUTB provides guarantees under which itis required to compensate a loss on the stated principal of the trust beneficial interests. MUTB is considered as
the primary beneficiary of these products because it is exposed to a potentially significant amount of losses andalso has the power to direct activities of these products that most significantly impact the economic performance.
Upon consolidation of the jointly operated designated money in trusts, the certificates issued to the trust
beneficiaries are accounted for as deposit liabilities as the products are structured and marketed to customers
similar to MUTB’s term deposit products.
MUTB considers the likelihood of incurring losses on the face value guarantee to be highly remote. In thetrusts’ operational history that extends over decades, the face value guarantee has never been called upon. The
variability in fair value of the net assets of jointly operated designated money in trusts has been primarily
affected by the fluctuations in interest rates, and the majority of such variability has been absorbed by generalinvestors.
OthersThis category primarily comprises the following:
Financing Vehicles of the MUFG Group’s Customers
The MUFG Group is involved with several entities that are established by the MUFG Group’s customers.
These entities borrow funds from financial institutions and extend loans to their group entities. These entities
effectively work as fund-raising vehicles for their respective group companies and enable the groups to achieve
efficient financing by integrating their financing activities into a single entity. In all cases the MUFG Group is
not considered as the primary beneficiary because the MUFG Group’s participation to these entities is only toprovide financing, and the customers effectively hold the power to direct activities of these entities that mostsignificantly impact the economic performance of the entities. Consequently, the MUFG Group does notconsolidate these entities.
F-126

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Funding Vehicles
The MUFG Group has established several wholly-owned, off-shore vehicles which issue securities,
typically preferred stock that is fully guaranteed by the MUFG Group, to investors unrelated to the MUFG Groupto fund purchases of debt instruments issued by the MUFG Group. These entities are considered as VIEs because
the MUFG Group’s investment in the vehicles’ equity is not considered at risk and substantive as the entire
amount raised by the vehicles was used to purchase debt instruments issued by the MUFG Group. Because the
MUFG Group does not have variable interests in these financing vehicles, these financing vehicles are notconsidered as the MUFG Group’s subsidiaries.
Troubled Borrowers
During the normal course of business, the borrowers from the MUFG Group may experience financial
difficulties and sometimes enter into certain transactions that require the MUFG Group to assess whether theywould be considered as VIEs due to their difficult financial position. While in most cases such borrowers are notconsidered as VIEs when the transactions take place, in limited circumstances they are considered as VIEs due toinsufficient equity investment at risk. In all cases, however, the MUFG Group is not considered as the primary
beneficiary because the power to direct activities that most significantly impact the economic performance of thetroubled borrowers resides with management of the troubled borrowers, and the MUFG Group, as a lender, does
not have power over or assume any role in management. Therefore, the MUFG Group does not consolidate thesetroubled borrowers.
26. COMMITMENTS AND CONTINGENT LIABILITIES
Lease Commitments
The MUFG Group leases certain technology systems, office space and equipment under noncancelable
agreements expiring through the fiscal year 2046.
Future minimum rental commitments for noncancelable leases at March 31, 2014 were as follows:
Capitalized Operatingleasesleases(in millions)Fiscal year ending March 31:
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 7,640
4,561
3,271
1,640
893
4,642

¥ 85,660
71,85563,87259,021
53,614
390,208

Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,647¥724,230(1)Amount representing interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2,528)Present value of minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥20,119Note:(1) One of MUFG’s subsidiaries has entered into non-cancelable operating lease agreements which will commence in April, 2016. The total
minimum lease payments of ¥30,247 million under these commitments have been included in the above.

Total rental expense for the fiscal years ended March 31, 2012, 2013 and 2014 was ¥97,105 million,¥99,817 million and ¥103,754 million, respectively.
F-127

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Repayment of Excess Interest
The Japanese government implemented regulatory reforms affecting the consumer lending industry. In
December 2006, the Diet passed legislation to reduce the maximum permissible interest rate under theInvestment Deposit and Interest Rate Law from 29.2% per annum to 20% per annum. The reduction in interest
rates was implemented in June 2010. The regulatory reforms also included amendments to the Money Lending
Business Act which, effective June 18, 2010, abolished the so-called “gray-zone interest.” Gray-zone interest
refers to interest rates exceeding the limits stipulated by the Interest Rate Restriction Act (between 15% perannum to 20% per annum depending on the amount of principal). Under the regulatory reforms, all interest rates
for loans originated after this reform are subject to the lower limits imposed by the Interest Rate Restriction Act.
Furthermore, the new regulations require stringent review procedures for consumer finance companies before
lending, and with the exception of certain provisions, one of those new regulations introduces a limit on
aggregate credit extensions to one-third of the borrower’s annual income.
Formerly, consumer finance companies were able to charge interest rates exceeding the limits stipulated by
the Interest Rate Restriction Act so long as the payment was made voluntarily by the borrowers, and the lendercomplied with various notice and other requirements. Accordingly, MUFG’s consumer finance subsidiaries andequity method investees offered loans at interest rates above the Interest Rate Restriction Act. Upon theimplementation of the regulatory reforms in June 2010, they lowered the interest rates for loans originated after
this reform to below the Interest Rate Restriction Act.
In 2006, the Supreme Court of Japan passed decisions in a manner more favorable to borrowers requiring
reimbursement of previously paid interest exceeding the limits stipulated by the Interest Rate Restriction Act incertain circumstances. Borrowers’ claims for reimbursement of excess interest arose after such decisions andother regulatory changes. The MUFG Group maintains an allowance for repayment of excess interest based on an
analysis of past experience of reimbursement of excess interest, borrowers’ profile, recent trend of borrowers’
claims for reimbursement, and management future forecasts. Management believes that the provision for
repayment of excess interest is adequate and the allowance is at the appropriate amount to absorb probablelosses, so that the impact of future claims for reimbursement of excess interest will not have a material adverse
effect on the MUFG Group’s financial position and results of operations. The allowance for repayment of excessinterest established by MUFG’s consumer finance subsidiaries, which was included in Other liabilities, was¥77,640 million and ¥54,068 million as of March 31, 2013 and 2014, respectively. Provision (reversal) related tothe allowance is included in Other non-interest expenses in the accompanying consolidated statements of income.
For the fiscal years ended March 31, 2012, 2013 and 2014, an MUFG’s equity method investee had a negative
impact of ¥19,326 million, ¥17,014 million and ¥18,014 million, respectively, on Equity in earnings (losses) ofequity method investees—net in the accompanying consolidated statements of income.
Litigation
The MUFG Group is subject to various litigation matters. Based upon the current knowledge and the resultsof consultation with counsel, liabilities for losses from litigation matters are recorded when they are determined
to be both probable in their occurrences and can be reasonably estimated. Management believes that the eventual
outcome of such litigation matters will not have a material adverse effect on the MUFG Group’s financial
position, results of operations or cash flows.

F-128

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
27. FEES AND COMMISSIONS INCOME
Details of fees and commissions income for the fiscal years ended March 31, 2012, 2013 and 2014 were as
follows:

Trust fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees on funds transfer and service charges for collections . . . . . . . . . . . .
Fees and commissions on international business . . . . . . . . . . . . . . . . . . .
Fees and commissions on credit card business . . . . . . . . . . . . . . . . . . . . .
Service charges on deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees and commissions on securities business . . . . . . . . . . . . . . . . . . . . . .
Fees on real estate business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Insurance commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees and commissions on stock transfer agency services . . . . . . . . . . . . .
Guarantee fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees on investment funds business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other fees and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

2012

2013
(in millions)

95,037
139,840
57,688
149,946
18,216
128,436
23,61033,68649,28358,393
126,601
219,227¥¥1,099,963

2014

92,525
137,338
58,905
149,671
16,727
155,983
28,041
33,472
49,13755,427130,006
253,642¥ 105,721
139,974
68,273
157,227
20,451
221,791
34,71539,66949,394
52,634
155,572
248,695¥1,160,874¥1,294,116

Trust fees consist primarily of fees earned by fiduciary asset management and administration services forcorporate pension plans, investment funds, etc. Fees on funds transfer and service charges for collection are
earned by providing settlement services such as domestic fund remittances and domestic collection services. Fees
and commissions on international business primarily consist of fees from international fund transfer andcollection services, and trade-related financing services. Fees and commissions on credit card business arecomposed of interchange income, annual fees, royalty and other service charges from franchisees. Service
charges on deposits are fees charged for deposits such as checking account deposits. Fees and commissions on
securities business include underwriting, brokerage and advisory services and arrangement fees on
securitizations. Fees on real estate business primarily consist of fees from real estate agent services. Insurance
commissions are earned by acting as agent for insurance companies to sell insurance products. Fees andcommissions on stock transfer agency services consist of fees earned primarily by stock title transfers and agency
services for the calculation and payment of dividends. Guarantee fees are earned by providing guarantees on
residential mortgage loans. Fees on investment funds business primarily consist of management fees forinvestment funds. Other fees and commissions include various arrangement fees and agent fees excluding thefees mentioned above.
28. TRADING ACCOUNT PROFITS AND LOSSESThe MUFG Group performs trading activities through market-making, sales and arbitrage, while
maintaining risk levels within appropriate limits in accordance with its risk management policy.
The MUFG Group has trading account securities and trading derivative assets and liabilities for thispurpose. In addition, the trading account securities include foreign currency-denominated debt securities such as
foreign government or official institution bonds, corporate bonds and mortgage-backed securities, which aremainly comprised of securities measured at fair value under the fair value option.

F-129

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Net trading gains (losses) for the fiscal years ended March 31, 2012, 2013 and 2014 were comprised of thefollowing:
2012

2013
(in millions)2014

Interest rate and other derivative contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account securities, excluding derivatives . . . . . . . . . . . . . . . . . . . . . . .

¥ 77,698
589,587¥ (82,684) ¥(84,408)
652,960
50,522

Trading account profits (losses)—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange derivative contracts(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

667,285(94,853)

570,276(94,223)(33,886)(52,737)

Net trading gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥572,432¥476,053¥(86,623)

Note:(1) Gains (losses) on foreign exchange derivative contracts are included in Foreign exchange gains (losses)—net in the accompanying
consolidated statements of income. Foreign exchange gains (losses)—net in the accompanying consolidated statements of income arealso comprised of foreign exchange gains (losses) other than derivative contracts and foreign exchange gains (losses) related to the fairvalue option.

For further information on the methodologies and assumptions used to estimate fair value, see Note 31,
which also shows fair values of trading account securities by major category. Note 23 discloses further
information regarding the derivative-related impact on Trading account profits (losses)—net by major category.
29. BUSINESS SEGMENTS
The business segment information, set forth below, is derived from the internal management reporting
system used by management to measure the performance of the MUFG Group’s business segments. In addition,
the business segment information is based on the financial information prepared in accordance with Japanese
GAAP as adjusted in accordance with internal management accounting rules and practices. Accordingly, theformat and information is not consistent with the accompanying consolidated financial statements prepared on
the basis of U.S. GAAP. A reconciliation is provided for the total amounts of segments’ operating profit withincome before income tax expense under U.S. GAAP.
See Note 30 for financial information relating to the MUFG Group’s operations by geographic area. The
geographic financial information is consistent with the basis of the accompanying consolidated financial
statements.
The following is a brief explanation of the MUFG Group’s business segments:
Integrated Retail Banking Business Group—Covers all domestic retail businesses, including commercial
banking, trust banking and securities businesses. This business group integrates the retail business of BTMU,
MUTB, MUMSS, Mitsubishi UFJ NICOS and other subsidiaries as well as retail product development,
promotion and marketing in a single management structure. At the same time, the business group has developedand implemented MUFG Plaza, a one-stop, comprehensive financial services concept that provides integratedbanking, trust and securities services.
Integrated Corporate Banking Business Group—Covers all domestic corporate businesses, includingcommercial banking, investment banking, trust banking and securities business. Through the integration of thesebusiness lines, diverse financial products and services are provided to the MUFG Group’s corporate clients. The
business group has clarified strategic domains, sales channels and methods to match the different growth stages
and financial needs of the MUFG Group’s corporate clients.
F-130

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Integrated Trust Assets Business Group—Covers asset management and administration services for
products such as pension trusts and security trusts by integrating the trust banking expertise of MUTB and theglobal network of BTMU. The business group provides a full range of services to corporate and other pension
funds, including stable and secure pension fund management and administration, advice on pension schemes, andpayment of benefits to scheme members.
Integrated Global Business Group—Covers businesses outside Japan, including commercial banking suchas loans, deposits and cash management services, investment banking, retail banking, trust banking and securities
businesses (with the retail banking and trust assets businesses being conducted through MUB), through a global
network of more than 500 offices outside Japan to provide customers with financial products and services thatmeet their increasingly diverse and sophisticated financing needs. MUB is one of the largest commercial banks in
California by both total assets and total deposits. MUB provides a wide range of financial services to consumers,
small businesses, middle market companies and major corporations, primarily in California, Oregon andWashington but also nationally and internationally. MUB’s parent company is MUAH, which is a bank holding
company in the United States.
Global Markets—Covers asset and liability management and strategic investment of BTMU and MUTB,
and sales and trading of financial products of BTMU, MUTB and MUSHD.
Other—Consists mainly of the corporate centers of MUFG, BTMU, MUTB and MUMSS. The eliminationof duplicated amounts of net revenue among business segments is also reflected in Other.
Management does not use information on segments’ total assets to allocate resources and assess
performance. Accordingly, business segment information on total assets is not presented.
Effective April 1, 2013 and October 1, 2013, in order to further streamline and integrate managerial
accounting methodologies on a group-wide basis, the MUFG Group made modifications to such methodologies,
which mainly affected the Integrated Retail Banking Business Group and the Corporate Banking Business Group.
These modifications had no impact on total operating profit for the fiscal years ended March 31, 2012 and 2013,
but affected net revenue and operating expenses allocations among segments.

F-131

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The table set forth below has been reclassified to enable comparisons between the relevant amounts for the
fiscal years ended March 31, 2012, 2013 and 2014, respectively:
Global Business
Integrated Integrated Integrated IntegratedGroup
RetailCorporate
Trust
Banking Banking
AssetsOther
Business Business Business
than
Group
Group
Group
MUAH MUAH
Total(in billions)Fiscal year ended March 31, 2012:
Net revenue: . . . . . . . . . . . . . . . . . . . . . ¥1,227.1
BTMU and MUTB: . . . . . . . . . . .
583.0
Net interest income . . . . . . . .
467.7
Net fees . . . . . . . . . . . . . . . . .
105.6
Other . . . . . . . . . . . . . . . . . . .
9.7
Other than BTMU and(1)
MUTB . . . . . . . . . . . . . . . . . .
644.1
Operating expenses . . . . . . . . . . . . . . . .
915.8
Operating profit (loss) . . . . . . . . . . . . . .
Fiscal year ended March 31, 2013:
Net revenue: . . . . . . . . . . . . . . . . . . . . .
BTMU and MUTB: . . . . . . . . . . .
Net interest income . . . . . . . .
Net fees . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . .
Other than BTMU and
MUTB(1) . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . . .
Operating profit (loss) . . . . . . . . . . . . . .
Fiscal year ended March 31, 2014:
Net revenue: . . . . . . . . . . . . . . . . . . . . .
BTMU and MUTB: . . . . . . . . . . .
Net interest income . . . . . . . .
Net fees . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . .
Other than BTMU and
MUTB(1) . . . . . . . . . . . . . . . . . .
Operating expenses . . . . . . . . . . . . . . . .
Operating profit (loss) . . . . . . . . . . . . . .

GlobalMarkets

Other

¥

Total

¥870.7
778.2
402.8
303.1
72.3

¥140.1
55.7
—
55.7
—

¥364.6
286.1
128.2
122.6
35.3

¥252.0————¥616.6
286.1
128.2
122.6
35.3

¥727.9645.8
309.0(16.4)
353.2(1.3) ¥3,581.1
0.6 2,349.4
39.6 1,347.3(27.3)
543.3(11.7)
458.8

92.5
440.5

84.4
87.3

78.5
196.5

252.0
173.0

330.5
369.5

82.1
128.1

¥ 311.3¥430.2¥ 52.8¥168.1¥ 79.0¥247.1¥599.8¥(162.7) ¥1,478.5¥1,207.8
561.5
428.1
124.8
8.6

¥864.0
767.9
382.2
312.6
73.1

¥138.8
55.4
—
55.4
—

¥465.4
358.4
181.5
141.6
35.3

¥288.5————¥753.9
358.4
181.5
141.6
35.3

¥763.0655.7
262.1(19.2)
412.8¥ (10.8) ¥3,716.7(8.6) 2,390.3
64.1 1,318.0(32.8)
582.4(39.9)
489.9

646.3
917.3

96.1
434.4

83.4
88.3

107.0
246.8

288.5
205.4

395.5
452.2

107.3
142.5

¥ 290.5¥429.6¥ 50.5¥218.6¥ 83.1¥301.7¥620.5¥(185.2) ¥1,507.6¥1,290.6
569.9
398.1
163.5
8.3

¥924.5
801.0
374.8
337.5
88.7

¥159.2
65.5
—
65.5
—

¥567.9
443.1
235.8
164.7
42.6

¥375.9————¥943.8
443.1
235.8
164.7
42.6

¥568.6411.6
219.5(23.1)
215.2¥ (13.6) ¥3,873.1(4.4) 2,286.7
79.6 1,307.8(62.0)
646.1(22.0)
332.8

720.7
961.9

123.5
438.4

93.7
94.4

124.8
299.5

375.9
266.9

500.7
566.4

157.0
176.5

¥ 328.7¥486.1¥ 64.8¥268.4¥109.0¥377.4¥392.1

(1.9)
161.4

(2.2)
174.4

(9.2)
172.4

1,231.7
2,102.6

1,326.4
2,209.1

1,586.4
2,410.0¥(186.0) ¥1,463.1

Note:(1) Includes MUFG and its subsidiaries other than BTMU and MUTB.

Reconciliation
As set forth above, the measurement bases and the income and expense items of the internal management
reporting system are different from the accompanying consolidated statements of income. Therefore, it isimpracticable to present reconciliations of all of the business segments’ information, other than operating profit,
to corresponding items in the accompanying consolidated statements of income.

F-132

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
A reconciliation of operating profit under the internal management reporting system for the fiscal years
ended March 31, 2012, 2013 and 2014 above to income before income tax expense shown on the accompanying
consolidated statements of income is as follows:
2012

2013
(in billions)2014

Operating profit: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,479 ¥1,508 ¥1,463
Credit (provision) for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(224)
(145)
106
Trading account profits (losses)—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
372
285
(394)
Equity investment securities gains (losses)—net . . . . . . . . . . . . . . . . . . . . . . . . . .
(95)
(22)
170
Debt investment securities losses—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(153)
(153)
(6)
Foreign exchange gains (losses)—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21
(53)
(48)
Equity in earnings (losses) of equity method investees—net . . . . . . . . . . . . . . . .
(499)
60
111
Impairment of goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
——(8)Impairment of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(31)
(3)
—
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(20)
(61)
26
Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 850¥1,416¥1,42030. FOREIGN ACTIVITIESForeign operations include the business conducted by overseas offices, as well as international businessconducted from domestic offices, principally several international banking-related divisions of BTMU’s and
MUTB’s Head Office in Tokyo, and involve various transactions with debtors and customers residing outside
Japan. Close integration of the MUFG Group’s foreign and domestic activities makes precise estimates of theamounts of assets, liabilities, income and expenses attributable to foreign operations difficult and necessarily
subjective. Assets, income and expenses attributable to foreign operations are allocated to geographical areas
based on the domicile of the debtors and customers.

F-133

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Generally, interest rates with respect to funds borrowed and loaned between domestic and foreign operations
are based on prevailing money market rates appropriate for the transactions. In general, the MUFG Group has
allocated all direct expenses and a proportionate share of general and administrative expenses to income derived
from foreign loans and other transactions by the MUFG Group’s foreign operations. The following table sets
forth estimated total assets at March 31, 2012, 2013 and 2014, and estimated total revenue, total expense, income(loss) before income tax expense (benefit) and net income (loss) attributable to Mitsubishi UFJ Financial Groupfor the respective fiscal years then ended:
Domestic

Japan

UnitedStates ofAmerica

ForeignAsia/Oceania
excluding
EuropeJapan(in millions)

Total
Other
areas(1)Fiscal year ended March 31, 2012:
Total revenue(2)(4) . . . . . . . . . . . . ¥ 2,936,875 ¥ 192,775 ¥ 290,482 ¥ 450,651 ¥ 165,749 ¥ 4,036,532
Total expense(3) . . . . . . . . . . . . .
2,438,729
284,557
151,077
223,253
88,974
3,186,590
Income (loss) before income tax
expense (benefit) . . . . . . . . . . .
498,146(91,782)
139,405
227,398
76,775849,942
Net income (loss) attributable to
Mitsubishi UFJ Financial
Group . . . . . . . . . . . . . . . . . . .
163,334(119,829)
113,593
192,753
66,380416,231
Total assets at end of fiscal
year . . . . . . . . . . . . . . . . . . . . . 148,702,461 28,457,027 18,620,484 12,410,540 7,012,002 215,202,514
Fiscal year ended March 31, 2013:
Total revenue(2) . . . . . . . . . . . . . . ¥ 3,016,008 ¥ 426,377 ¥ 256,495 ¥ 585,474 ¥ 211,076 ¥ 4,495,430
Total expense(3) . . . . . . . . . . . . . .
2,248,856
327,565
160,061
268,349
74,7283,079,559
Income before income tax
expense . . . . . . . . . . . . . . . . . .
767,152
98,81296,434
317,125
136,348
1,415,871
Net income attributable to
Mitsubishi UFJ Financial
Group . . . . . . . . . . . . . . . . . . .
499,125
95,56578,442274,951
121,041
1,069,124Total assets at end of fiscal
year . . . . . . . . . . . . . . . . . . . . . 151,999,696 30,730,705 23,224,502 15,938,673 8,665,700 230,559,276
Fiscal year ended March 31, 2014:
Total revenue(2) . . . . . . . . . . . . . . ¥ 3,110,050 ¥ 218,953 ¥ 155,022 ¥ 569,018 ¥ 290,321 ¥ 4,343,364
Total expense(3) . . . . . . . . . . . . . .
1,952,250
426,084
143,417315,20385,9672,922,921
Income (loss) before income tax
expense (benefit) . . . . . . . . . . .
1,157,800(207,131)
11,605
253,815
204,354
1,420,443
Net income (loss) attributable to
Mitsubishi UFJ Financial
Group . . . . . . . . . . . . . . . . . . .
859,846(131,566)
6,484
149,417
131,2121,015,393
Total assets at end of fiscal
year . . . . . . . . . . . . . . . . . . . . . 158,809,701 40,625,000 22,352,446 22,312,805 9,561,125 253,661,077
Notes:(1) Other areas primarily include Canada, Latin America, the Caribbean and the Middle East.
(2) Total revenue is comprised of Interest income and Non-interest income.
(3) Total expense is comprised of Interest expense, Provision for credit losses and Non-interest expense.
(4) For the fiscal year ended March 31, 2012, Total revenue of United States of America includes an other-than-temporary impairment lossof Morgan Stanley’s common stock. See Note 2 for further details of an other-than-temporary impairment loss of Morgan Stanley’scommon stock.

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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following is an analysis of certain asset and liability accounts related to foreign activities at March 31,
2013 and 2014:
2013

2014
(in millions)

Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 676,833 ¥ 804,617
Interest-earning deposits in other banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,830,923
9,020,949
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 4,507,756¥ 9,825,566

Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥28,450,804¥28,319,251

Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 6,960,616¥ 4,749,265

Loans—net of unearned income, unamortized premiums and deferred loan fees . . .

¥29,174,592¥39,763,643

Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥29,317,297¥40,648,813

Funds borrowed:
Call money, funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 254,796 ¥ 201,606
Payables under repurchase agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,857,970
8,995,939
Payables under securities lending transactions . . . . . . . . . . . . . . . . . . . . . . . . . .
77,42896,202Other short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,531,308
3,698,004
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,847,585
3,376,761
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥12,569,087¥16,368,512

Trading account liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 7,012,658¥ 5,876,702

31. FAIR VALUE
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date. The guidance on fair value
measurements also specifies a fair value hierarchy that prioritizes the inputs to valuation techniques used tomeasure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in
active markets and the lowest priority to unobservable inputs, for example, the reporting entity’s own data. Basedon the observability of the inputs used in the valuation techniques, the following three-level hierarchy is specified
by the guidance:‰

Level 1—Unadjusted quoted prices for identical instruments in active markets.

‰

Level 2—Observable inputs other than Level 1 prices for substantially the full term of the instruments,
such as quoted prices for similar instruments in active markets; quoted prices for identical or similar
instruments in markets that are not active; other inputs that are observable; or market-corroborated
inputs.

‰Level 3—Unobservable inputs that are supported by little or no market activity and that are significant
to the fair value of the instruments.

A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of
input that is significant to the fair value measurement.
The MUFG Group has an established and documented process for determining fair values in accordancewith the guidance. When available, quoted prices are used to determine fair value. If quoted prices are not
F-135

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
available, fair value is based upon valuation techniques that use observable or unobservable inputs. The fairvalues of liabilities are determined by discounting future cash flows at a rate which incorporates the MUFG
Group’s own creditworthiness. In addition, valuation adjustments may be made to ensure the financial
instruments are recorded at fair value. These adjustments include, but are not limited to, amounts that reflect
counterparty credit quality, liquidity risk and model risk.
The following section describes the valuation techniques used by the MUFG Group to measure fair valuesof certain financial instruments. The discussion includes the general classification of such financial instrumentsin accordance with the fair value hierarchy, a brief explanation of the valuation techniques, the significant inputs
to those valuation techniques, and any additional significant assumptions.
Interest-earning Deposits in Other Banks
Cash flows are estimated based on the terms of the contracts and discounted using the market interest rates
applicable to the maturity of the contracts, which are adjusted to reflect credit risks on counterparties. As the
inputs into the valuation techniques are readily observable, these deposits are classified in Level 2 of the fairvalue hierarchy.
Receivables Under Resale Agreements
Certain receivables under resale agreements are measured at fair value upon election of the fair value option
and fair value is measured using discounted cash flows. Cash flows are estimated based on the terms of thecontracts and discounted using the market interest rates applicable to the maturity of the contracts, which areadjusted to reflect credit risks on counterparties. These receivables are classified in Level 2 of the fair value
hierarchy.
Trading Account Assets and Liabilities—Trading Account Securities
When quoted prices are available in an active market, the MUFG Group uses quoted prices to measure thefair values of securities and such securities are classified in Level 1 of the fair value hierarchy. Examples ofLevel 1 securities include certain Japanese and foreign government bonds, and marketable equity securities.
When quoted prices are available but the securities are not traded in active markets, such securities areclassified in Level 2 of the fair value hierarchy. These securities include certain Japanese government agency
bonds, Japanese prefectural and municipal bonds, foreign governments and official institutions bonds, corporate
bonds, residential mortgage-backed securities and equity securities.
When quoted prices are not available, the MUFG Group estimates fair values by using internal valuation
techniques, quoted prices of securities with similar characteristics or non-binding prices obtained fromindependent pricing vendors. Such securities include certain commercial paper, corporate bonds, asset-backed
securities and residential mortgage-backed securities. For commercial paper, the MUFG Group estimates fairvalue using discounted cash flows. The cash flows are estimated in accordance with the terms of contracts anddiscounted using a discount rate based on the yield curve estimated from market interest rates appropriate to thesecurities. Commercial paper is generally classified in Level 2 of the fair value hierarchy. For corporate bonds,
the MUFG Group estimates fair value by using internal valuation techniques. Key inputs to the internal valuation
techniques include estimated cash flows based on the terms of the contracts, yield curves based on market
interest rates and volatilities. Corporate bonds which are valued using internal valuation techniques are generallyclassified in Level 2 of the fair value hierarchy. If any such key inputs are unobservable, they are classified in
Level 3 of the fair value hierarchy. Certain investments in funds valued at net assets value are classified in
Level 2 if they can be redeemed at their net asset value at the measurement date.
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
When there is less liquidity for securities or significant inputs used in the fair value measurements areunobservable, such securities are classified in Level 3 of the fair value hierarchy. Examples of such Level 3
securities include CLOs backed by general corporate loans, which are classified in asset-backed securities. The
fair value of CLOs is measured by weighting the estimated fair value amounts from internal valuation techniques
and the non-binding quotes from the independent broker-dealers. The weight of the quotes from independent
broker-dealer is determined based on the result of inquiries with the broker-dealers to understand their basis offair value calculation with consideration given to transaction volume. Key inputs to the internal valuation
techniques include projected cash flows through an analysis of underlying loans, probability of default which
incorporates market indices such as LCDX (which is an index of loan credit default swaps), repayment rates anddiscount rates reflecting liquidity premiums based on historical market data.
Trading Account Assets and Liabilities—Derivatives
Exchange-traded derivatives valued using quoted prices are classified in Level 1 of the fair value hierarchy.
Examples of Level 1 derivatives include stock futures index and interest rate futures. However, the majority ofthe derivative contracts entered into by the MUFG Group are traded over-the-counter and valued using valuation
techniques as there are no quoted prices for such derivatives. The valuation techniques and inputs vary dependingon the types and contractual terms of the derivatives. The principal valuation techniques used to value derivatives
include discounted cash flows, the Black-Scholes model and the Hull-White model. The key inputs include
interest rate yield curve, foreign currency exchange rate, volatility, credit quality of the counterparty or the
MUFG Group and spot price of the underlying. These models are commonly accepted in the financial industry
and key inputs to the models are generally readily observable in an active market. Derivatives valued using suchvaluation techniques and inputs are generally classified in Level 2 of the fair value hierarchy. Examples of such
Level 2 derivatives include plain-vanilla interest rate swaps, foreign currency forward contracts and currency
option contracts.
Derivatives that are valued using valuation techniques with significant unobservable inputs are classified in
Level 3 of the fair value hierarchy. Examples of Level 3 derivatives include long-term interest rate or currency
swaps and certain credit derivatives, where significant inputs such as volatility, credit curves and correlation ofsuch inputs are unobservable.
Investment Securities
Investment securities include available-for-sale debt and equity securities, whose fair values are measured
using the same valuation techniques as the trading account securities described above except for certain private
placement bonds issued by Japanese non-public companies. Fair values of private placement bonds issued by
Japanese non-public companies are measured based on discounted cash flow method using discount rates
applicable to the maturity of the bonds, which are adjusted to reflect credit risk of issuers. Credit risk of issuers isreflected in the future cash flows being discounted by the interest rates applicable to the maturity of the bonds.
The private placement bonds are generally utilized to finance medium or small size non-public companies. Thesebonds are classified in either Level 2 or Level 3 of the fair value hierarchy, depending on the significance of theadjustments for unobservable input of credit worthiness. Investment securities also include investments innonmarketable equity securities which are subject to specialized industry accounting principles. The valuation ofsuch nonmarketable equity securities involves significant management judgment due to the absence of quoted
prices, lack of liquidity and the long term nature of these investments. Further, there may be restriction ontransfers of nonmarketable equity securities. The MUFG Group values such securities initially at transaction
price and subsequently adjusts such valuations, considering evidence such as current sales transactions of similar
securities, initial public offerings, recent equity issuances and change in financial condition of the investee
company. Nonmarketable equity securities are included in Level 3 of the fair value hierarchy.
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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Other Assets
Other assets measured at fair value mainly consist of securities received as collateral that may be sold or
repledged under securities lending transactions, money in trust for segregating cash deposited by customers on
security transactions and derivatives designated as hedging instruments. The securities received as collateral
under lending transactions mainly consist of certain Japanese and foreign government bonds which are valued
using the valuation techniques previously described in the section entitled “Trading Accounts Assets andLiabilities—Trading Account Securities” above.
Money in trust for segregating cash deposited by customers on security transactions mainly consists ofcertain Japanese government bonds which are valued using the valuation techniques described in the “Trading
Account Assets and Liabilities—Trading Account Securities” above and is included in Level 1 or Level 2 of thefair value hierarchy depending on the component assets.
The fair values of derivatives designated as hedging instruments are measured using the valuation
techniques described in the “Trading Account Assets and Liabilities—Derivatives” above.
Obligations to Return Securities Received as Collateral
Obligations to return securities received as collateral under securities lending transactions are measured at
the fair values of the securities received as collateral. The securities received as collateral consist primarily ofcertain Japanese and foreign government bonds, whose fair values are measured using the valuation techniques
described in the “Trading Account Assets and Liabilities—Trading Account Securities” above.
Other Short-term Borrowings and Long-term Debt
Certain short-term borrowings and long-term debt are measured at fair value due to the election of the fairvalue option. The fair value of these instruments are measured principally based on the discounted cash flows.
Where the inputs into the valuation techniques are mainly based on observable inputs, these instruments areclassified in Level 2 of the fair value hierarchy. Where significant inputs are unobservable, they are classified in
Level 3 of the fair value hierarchy.
Market Valuation Adjustments
Counterparty credit risk adjustments are made to certain financial assets such as over-the-counter
derivatives. As not all counterparties have the same credit rating, it is necessary to take into account the actual
credit rating of a counterparty to arrive at the fair value. In addition, the counterparty credit risk adjustment takes
into account the effect of credit risk mitigation such as pledged collateral and legal right of offsets with thecounterparty.
For own credit risk adjustments, the MUFG Group takes into consideration all the facts and circumstances,including its own credit rating, the difference between its funding rate and market interest rate, and the existenceof collateralization or netting agreements. As a result of these analyses, the MUFG Group considered that own
credit risk adjustments for financial liabilities were not material.
Liquidity adjustments are applied mainly to the instruments classified in Level 3 of the fair value hierarchy
when recent prices of such instruments are unobservable or traded in inactive or less active markets. The liquidity
adjustments are based on the facts and circumstances of the markets including the availability of external quotes
and the time since the latest available quote.
F-138

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Model valuation adjustments such as unobservable parameter valuation adjustments may be provided when
the fair values of instruments are determined based on internally developed valuation techniques. Examples ofsuch adjustments include adjustments to the model price of certain derivatives where parameters such ascorrelation are unobservable. Unobservable parameter valuation adjustments are applied to mitigate thepossibility of error in the model-based estimated value.
Investments in Certain Entities That Calculate Net Asset Value per Share
The MUFG Group has interests in investment funds mainly hedge funds, private equity funds, and realestate funds that are measured at fair value on a recurring or nonrecurring basis.
Hedge funds are primarily multi-disciplinary hedge funds that employ a fundamental bottom-up investment
approach across various asset classes and strategies. The MUFG Group’s investments in hedge funds are
generally redeemable on a monthly-quarterly basis with 30-90 days advance notice.
Private equity funds have specific investment objectives in connection with their acquisition of equity
interests, such as providing financing and other support to start-up businesses, medium and small entities in aparticular geographical area, and to companies with certain technology or companies in a high-growth industry.
Generally, these investments cannot be redeemed with the funds, and the return of invested capital and its gains
are derived from distributions received upon the liquidation of the underlying assets of the fund. It is estimatedthat the underlying assets of the fund would be liquidated within a ten-year period.
Real estate funds invest globally and primarily in real estate companies, debt recapitalizations and direct
property. These investments are generally not redeemable with the funds. Distributions from each fund will bereceived as the underlying investments of the funds are liquidated. It is estimated that the underlying assets of thefunds would be liquidated within a four-year period.

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MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following tables present the financial instruments carried at fair value by level within the fair value
hierarchy as of March 31, 2013 and 2014:
March 31, 2013
Level 2
Level 3(in millions)Level 1
AssetsTrading account assets:
Trading securities(1)Debt securities
Japanese national government and Japanese government
agency bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese prefectural and municipal bonds . . . . . . . . . . . . . .
Foreign governments and official institutions bonds . . . . . .
Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Residential mortgage-backed securities . . . . . . . . . . . . . . . .
Asset-backed securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading derivative assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities:
Securities available-for-sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities
Japanese national government and Japanese government
agency bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese prefectural and municipal bonds . . . . . . . . . . . . . .
Foreign governments and official institutions bonds . . . . . .
Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Residential mortgage-backed securities . . . . . . . . . . . . . . . .
Commercial mortgage-backed securities . . . . . . . . . . . . . . .
Asset-backed securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others(3)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities
Trading account liabilities:
Trading securities sold, not yet purchased . . . . . . . . . . . . . . . . . . . . . .
Trading derivative liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligation to return securities received as collateral . . . . . . . . . . . . . . . . . .
Others(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-140

Fair Value¥15,613,802¥ 9,935,591¥ 631,113¥ 26,180,506

4,420,457—
9,983,023—————
1,210,322
52,242
6,770
511
34,062
10,899—182,098
129,974
2,144,396
2,729,892
3,220,036
80,447
11,5971,129,508
307,643
14,520,461
11,175,763
3,171,002
53,87459,07560,747——
96,25577,0899,881
396,071
29,526—
22,29173,17531,794
21,131
15,735
3,628
887

4,602,555
129,974
12,223,674
2,806,981
3,229,917
476,518
41,123
1,129,508
1,540,256
14,645,878
11,214,327
3,192,644
103,671
73,602
61,63452,347,228

6,024,714

472,127

58,844,069

48,069,738—
319,176—————
3,958,314—
455,0121,410,216
217,075
248,398
1,830,100
1,202,128
269,343
708,428—
139,026
1,105
134,569——
148,722
92,846
21,492
39
102,250
106,71464
24,7958,418

49,479,954
217,075
716,296
1,922,946
1,223,620
269,382810,678
106,714
4,097,404
25,900597,999¥68,468,284¥30,616,440¥1,209,628¥100,294,352

¥

¥

6,057
14,672,597
11,126,837
3,390,222
49,312
46,75359,473
147,122431,773¥¥¥15,257,549¥ 215,573

72,756
124,431
43,946274
67,551
12,660—2,887,425—¥ 3,084,612—
93,641
34,04437,937
14,354
4,432
2,874
—
121,932

78,813
14,890,669
11,204,827
3,428,433
131,217
63,84562,3473,034,547
553,705¥ 18,557,734

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
March 31, 2014
Level 2
Level 3(in millions)Level 1
AssetsTrading account assets:
Trading securities(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities
Japanese national government and Japanese government agency
bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese prefectural and municipal bonds . . . . . . . . . . . . . . . . . .
Foreign governments and official institutions bonds . . . . . . . . . .
Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Residential mortgage-backed securities . . . . . . . . . . . . . . . . . . . .
Asset-backed securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading derivative assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities:
Securities available for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities
Japanese national government and Japanese government agency
bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese prefectural and municipal bonds . . . . . . . . . . . . . . . . . .
Foreign governments and official institutions bonds . . . . . . . . . .
Corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Residential mortgage-backed securities . . . . . . . . . . . . . . . . . . . .
Commercial mortgage-backed securities . . . . . . . . . . . . . . . . . . .
Asset-backed securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others(3)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities
Trading account liabilities:
Trading securities sold, not yet purchased . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading derivative liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligation to return securities received as collateral . . . . . . . . . . . . . . . . . . . . . .
Others(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fair Value¥20,102,994¥ 8,075,408¥ 658,917¥28,837,319

5,688,374—
13,133,023
—
—
—
—
—
1,281,597
90,74022,677507
50,425
17,131—

235,944
89,017
1,784,478
3,160,057
1,483,547
215,686
20,285794,868
291,526
11,640,992
8,565,213
2,909,201
65,827
43,82656,925——
15,450132,518
11,601
439,664
32,565—
27,11977,22428,202
6,471
32,434
10,102
15

5,924,318
89,017
14,932,951
3,292,575
1,495,148
655,350
52,850794,868
1,600,242
11,808,956
8,616,092
2,916,179
148,686
71,05956,94045,302,514

6,038,450

544,688

51,885,652

39,852,612—
794,822—————
4,655,080—
489,356

1,736,397
203,131324,952
1,485,280
961,337
197,034
948,168—
182,151—
28,169——151,647
75,84919,2583,112
109,876
184,946—
26,201
5,598

41,589,009
203,131
1,271,421
1,561,129
980,595
200,146
1,058,044
184,946
4,837,231
26,201
523,123¥65,985,604¥25,783,019¥1,312,628¥93,081,251

¥

¥

4,719
11,611,316
8,481,947
2,981,272
57,89230,02960,17657,013612,124¥¥¥12,285,172¥ 161,227

189,524
108,059
25,293
3,997
57,46421,305—
3,914,441—¥ 4,212,024—
68,36014,526
13,50928,23910,724
1,362—
92,867

194,243
11,787,735
8,521,766
2,998,778
143,595
62,05861,5383,971,454
704,991¥16,658,423

Notes:(1) Includes securities measured under the fair value option.
(2) Includes investments valued at net asset value of ¥38,959 million and ¥28,922 million at March 31, 2013 and 2014, respectively. The
unfunded commitments related to these investments at March 31, 2013 and 2014 were ¥8,644 million and ¥11,373 million, respectively.
These investments were mainly hedge funds.
(3) Mainly comprised of securities received as collateral that may be sold or repledged under securities lending transactions, money in trust
for segregating cash deposited by customers on security transactions and derivatives designated as hedging instruments.
(4) Includes investments valued at net asset value of real estate funds, hedge funds and private equity funds, whose fair values at March 31,
2013 were ¥4,276 million, ¥3,189 million and ¥2,943 million, respectively, and those at March 31, 2014 were ¥1,669 million,¥1,232 million and ¥2,441 million, respectively. The amounts of unfunded commitments related to these real estate funds, hedge funds
and private equity funds at March 31, 2013 were nil, ¥1,221 million and ¥2,028 million, respectively, and those at March 31, 2014 werenil, ¥104 million and ¥1,871 million, respectively.
(5) Includes other short-term borrowings, long-term debt, bifurcated embedded derivatives carried at fair value and derivative liabilities
designated as hedging instruments.

F-141

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Transfers Between Level 1 and Level 2
During the fiscal years ended March 31, 2013 and 2014, the transfers between Level 1 and Level 2 were as
follows:
Fiscal years ended March 31,
2013
2014
Transfers out of Transfers out of Transfers out of Transfers out of
Level 1
Level 2
Level 1
Level 2
into Level 2(1)into Level 1(1)into Level 2(1)into Level 1(1)(in millions)
AssetsTrading account assets:
Trading securities
Debt securities
Japanese national government andJapanese government agency
bonds . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign governments and official
institutions bonds . . . . . . . . . . . . . . . .
Residential mortgage-backed
securities . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . .
Investment securities:
Securities available-for-sale
Debt securities
Foreign governments and official
institutions bonds . . . . . . . . . . . . . . . .
Marketable equity securities . . . . . . . . . . . . . .

¥—¥10,717¥ 7,420

¥

—

—

1,289

—

—

3,247,522
5,308

—
—

—
13,762——

413,515
19,026—
13,737—
19,011—
13,252

Note:(1) All transfers between Level 1 and Level 2 were assumed to have occurred at the beginning of the first-half or the second-half of the fiscal
year.

In general, the transfers from Level 1 into Level 2 represented securities whose fair values were measured atquoted prices in active markets at the beginning of the period but such quoted prices were not available at the endof the period. The transfers from Level 2 into Level 1 represented securities for which quoted prices in active
markets became available at the end of the period even though such quoted prices were not available at the
beginning of the period. For the first-half of the fiscal year ended March 31, 2013, certain residential mortgagebacked securities which are accounted for as trading securities were transferred from Level 1 to Level 2 based on
an analysis of the then-current market activity. In addition, a certain subsidiary, based on its analysis, transferred
its U.S. government sponsored agency securities, which are accounted for as Securities available-for-sale, fromLevel 1 to Level 2.

F-142

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Changes in Level 3 Recurring Fair Value Measurements
The following tables present a reconciliation of the assets and liabilities measured at fair value on a recurring
basis using significant unobservable inputs (Level 3) during the fiscal years ended March 31, 2013 and 2014. The
determination to classify a financial instrument within Level 3 is based upon the significance of the unobservable
inputs to overall fair value measurement. However, Level 3 financial instruments typically include, in addition to theunobservable or Level 3 input, observable inputs (that is, inputs that are actively quoted and can be validated toexternal sources). Accordingly, the gains and losses in the tables below include changes in fair value due in part toobservable inputs used in the valuation techniques.

Total gains (losses)
for the period
Included
Includedin otherinMarch 31,
comprehensive
earnings
2012
Purchases Issues
incomeSales

Change inunrealized
gains (losses)
included inearnings for
assets andTransfers Transfers
liabilities
into
out ofMarch 31,
still held at(5)(5)
Level 3
Settlements Level 3
2013
March 31, 2013

(in millions)

AssetsTrading account assets:
Trading securities(1) . . . . . . . . . ¥1,076,657 ¥ 77,239(2) ¥—Debt securities
Foreign governments andofficial institutions
bonds . . . . . . . . . . . . . .
149,731 19,142—
Corporate bonds . . . . . . .
501,895
3,354—
Residential mortgagebacked securities . . . . .
10,124
1,677—
Asset-backed
securities . . . . . . . . . . .
395,198 44,365—
Other debt securities . . . .
—
4,358
—
Equity securities . . . . . . . . .
19,7094,343—
Trading derivatives—net . . . . .
(27,458) 20,344(2)(5,408)Interest rate
contracts—net . . . . . . . . .
(44,904) 42,457
233
Foreign exchange
contracts—net . . . . . . . . .
23,907 (28,164)(5,517)
Equity contracts—net . . . . .
(7,019) 9,275
10Commodity
contracts—net . . . . . . . . .
162
(438)
(19)
Credit derivatives—net . . . .
396 (2,786)(115)
Investment securities:
Securities available-for-sale . . 1,673,387
3,218(3)16,083
Debt securities
Foreign governments andofficial institutions
bonds . . . . . . . . . . . . . .
130,720—
2,582
Corporate bonds . . . . . . . 1,460,489
1,629(1,855)Residential mortgagebacked securities . . . . .
22,351(27)
100
Commercial mortgagebacked securities . . . . .
3,802
1,090
(126)
Asset-backed
securities . . . . . . . . . . .
54,947606
8,400
Other debt securities . . . .
964
(84)
6,980
Marketable equity securities
114
4
2
Other investment securities . . .
32,321(505)(4)—Others
10,368(597)(4)—Total . . . . . . . . . . . . . . . . . . . . . . ¥2,765,275 ¥ 99,699
Liabilities
Others . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . ¥¥ 10,675

43,536 (74,957)(4)(20,590)

43,536 ¥(74,957)¥(20,590)¥518,698 ¥— ¥(360,580) ¥(378,767) ¥ 49,521 ¥ (351,655)¥ 631,113

179,907
55,147——(205,581) (24,043)(2,089) (223,088)—(12,042)

12,050239,598
25,1686,828
1,379

23,202(46,103)
96,25526,315(6) (284,445)(6)(7) 77,089

11,831
5,206(1,928)

—

—

9,881

1,599

— (132,275) (129,708)————(8,593)—(2,775)—(24,964)——
4
29,392(21,107)——(10,976)

396,071
29,526
22,291(20,466)

41,7484,358
22
17,466(2)

2

(4)

—

(8,468)8,431

3(2,250)38,552448
444(1,852)(434)——(16,150)(833)

21,644(62)(11,122)—(16,806)
1,381(27,532)
9,449

485
—

(485)
—

—
—

(52)
539

(600)
(21)

143
—

(804)
(1,987)(140)(2,863)

230,505—(14,809) (211,058) 113,491 (1,338,690)

472,127(4,380)(3)23,158
11,465——(31)(7,707)——
148,722(12,843) (140,840) 113,491(6) (1,338,690)(6)(7) 92,846

4,500

—

—

—

—

85,469105,889
24
875
637

—
—
—
—
—

(5,432)——

21,492(1,855)(2,872)

—

—

39

—
—
(80)
(3,092)(1,990)(47,172)(7,035)
—
(16)
—

—
—
—
—
—

—
—
—
(4,788)—102,250
106,71464
24,7958,418¥752,094 ¥(2,775) ¥(380,471) ¥(614,805) ¥192,404 ¥(1,706,109)¥1,115,987
239¥¥ 64,764(2)2,432

239 ¥ 2,432 ¥

F-143

—

(20,907)1,181— ¥ (20,907) ¥ 1,181 ¥(96)

121,932(96)¥ 121,932—(4,370)
(1)
—
30
(43)
4
(618)(4)129(4)¥ 77,361(61,188)(4)¥(61,188)

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Change inunrealized
gains (losses)
included inearnings for
assets andliabilities
Transfers Transfers
still held at
into
out of March 31, March 31,
Settlements Level 3(5) Level 3(5)
2014
2014

Total gains (losses)
for the period
Included
Includedin other
March 31,
comprehensivein2013
earnings
incomePurchases Issues

Sales(in millions)

AssetsTrading account assets:
Trading securities(1) . . . . . . . . . ¥Debt securities
Foreign governments andofficial institutions
bonds . . . . . . . . . . . . . .
Corporate bonds . . . . . . . .
Residential mortgagebacked securities . . . . .
Asset-backed securities . .
Other debt securities . . . .
Equity securities . . . . . . . . .
Trading derivatives—net . . . . .
Interest rate
contracts—net . . . . . . . . .
Foreign exchange
contracts—net . . . . . . . . .
Equity contracts—net . . . . .
Commodity
contracts—net . . . . . . . . .
Credit derivatives —net . . . .
Investment securities:
Securities available-for-sale . .
Debt securities
Foreign governments andofficial institutions
bonds . . . . . . . . . . . . . .
Corporate bonds . . . . . . . .
Residential mortgagebacked securities . . . . .
Commercial mortgagebacked securities . . . . .
Asset-backed securities . .
Other debt securities . . . .
Marketable equity
securities . . . . . . . . . . . . .
Other investment securities . . .
Others . . . . . . . . . . . . . . . . . . . . . .

631,113 ¥ 50,809(2) ¥—¥499,143 ¥— ¥(302,363) ¥(173,816) ¥12,574 ¥(58,543) ¥ 658,917

96,25577,089——65,828100,011

—
—

9,881
1,187
396,071 32,794
29,526
3,039
22,291
3,968(20,466) 30,791(2)————(3,463)

83,179245,342
—
4,783
4,732

(2,250) 19,554

714

878

—

—

4,905
4,916

(32,354)(7,242)

2,414 (49,539)
15,45010,074(6) (9,004)(6) 132,518

232
4,922

—
—
—
86
15,116————(10,705)

11,601
439,664
32,565
27,1198,864

702
27,2523,039(3)15,146(2)(4,762)

6,712(7,170)13,676

14,695—(81,698)(948)— (101,271) (133,272)————(4,009)—(4,889)—(2,252)(16,806)
1,381

9,615
4,125

(3,835)
34

770
1,323

(1,215)(1,323)——(431)(1,345)8,432—(3,568)—(7,038)
4,195

460
202

(804)
(1,987)109(2,612)

(10)
(366)

1,761
—

(2,351)
—

—
—

668
3,618

(28)
—

33
—

(622)
(1,347)809(1,020)472,127

3,950(3)51,538

256,776—(10,961) (218,806)

4,744(14,680)544,688

148,722
92,846

—
4,059

3,393
(51)

5,574
5,046

—
—

—
(1,367)(6,042)(14,772)——
151,647
4,744(6) (14,656)(6) 75,849(609)(869)(3)—(873)

21,492

3

83

3,015

—

(4,726)——

19,258—39
102,250
106,714

—
(120)
—

(153)
17,63630,6303,265
178,735
61,118

—
—
—

(39)
—
(8,751) (179,874)(195) (13,321)

—
—
—

—
—
—

3,112
109,876
184,946—4—

64
24,7958,418

81,751(4)432(4)

—
14
—

23
2,879
336

—
—
—

—
(2,126)(3,588)

—
—
—

(24)
(1,110)——26,201
5,598—
1,258(4)
163(4)

Total . . . . . . . . . . . . . . . . . . . . . . . ¥1,115,987 ¥ 87,733
Liabilities
Others . . . . . . . . . . . . . . . . . . . . . .

(72,059)(43,326)¥ 36,144(2)121,932 (19,097)(4)

Total . . . . . . . . . . . . . . . . . . . . . . . ¥ 121,932 ¥(19,097)¥ 48,089¥763,866 ¥(4,889) ¥(319,038) ¥(394,876) ¥32,434 ¥(85,038) ¥1,244,268(24,145)¥(24,145)

(71)
(2)
—

¥

—

302

—

— ¥

302 ¥

— ¥ (28,498) ¥(28,498)(10)(44,101)(10) ¥(44,101) ¥¥ 51,842

92,867(10,707)(4)

92,867¥(10,707)

Notes:(1) Includes Trading securities under fair value option.
(2) Included in Trading account profits (losses)—net and in Foreign exchange gains (losses)—net.
(3) Included in Investment securities gains—net.
(4) Included in Trading account profits (losses)—net.
(5) All transfers out of Level 3 or into Level 3 were assumed to have occurred at the beginning of the first-half or the second-half of the
fiscal year.
(6) Transfers out of and transfers into Level 3 for corporate bonds were due principally to changes in the impact of unobservable credit worthiness
inputs of the private placement bonds.
(7) Certain private placement bonds issued by non-public companies which are accounted for as trading account securities amounted to¥223,938 million and securities available-for-sale amounted to ¥1,209,272 million were transferred from Level 3 to Level 2 during the fiscal
year ended March 31, 2013. These transfers were due to change in the significance of the unobservable inputs used to measure fair value of theprivate placement bonds.

F-144

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Quantitative Information about Level 3 Fair Value Measurements
The following tables present information on the valuation techniques, significant unobservable inputs andtheir ranges for each major category of assets and liabilities measured at fair value on a recurring basis andclassified in Level 3:
March 31, 2013
AssetsTrading securities andInvestment securities:
Foreign governments
and official
institutions
bonds . . . . . . . . . .

Fair value(1)(in millions)

Valuation technique¥ 33,649

Monte Carlo method

9,059

Correlation between interest rate andforeign exchange rate
Correlation between interest rates
Return on equity method Probability of default
Recovery rate
Market-required return on capital
Discounted cash flow
Probability of default
Recovery rate
Monte Carlo method
Correlation between interest rate andforeign exchange rate
Correlation between interest rates
Internal model
Liquidity premium

72,640Discounted cash flow

289,398

Internal model

29,526104,957

Discounted cash flow
Liquidity premium
Return on equity method Probability of default
Recovery rate
Market-required return on capital

19,699Corporate bonds . . . .

62,7881,986

Residential
mortgage-backed
securities,
Commercial
mortgage-backed
securities andAsset-backed
securities . . . . . . . .

Other debt
securities . . . . . . . .

Significant unobservable inputs

Discount factor
Prepayment rate
Probability of default
Recovery rate
Asset correlations
Discount factor
Prepayment rate
Probability of default
Recovery rate

F-145

Range

Weighted
Average(2)32.5%~51.9%
41.3%~63.3%
0.0%~8.0%
25.0%~90.0%
15.0%~17.0%
0.1%~14.2%
15.0%~100.0%

36.0%
62.1%
0.7%
56.2%
15.7%
4.2%
44.9%

32.5%~37.9%
63.3%
1.5%~2.5%

35.2%
63.3%
2.3%

1.0%~1.2%
6.2%~14.8%
0.0%~5.2%
0.0%~76.0%
11.0%~14.0%
1.0%~4.8%
3.9%~38.3%
0.0%~84.6%
53.6%~69.8%

1.1%
8.8%
4.9%
65.4%
13.5%
1.5%
32.6%
—(3)
67.5%

0.5%~0.8%
0.0%~8.0%
25.0%~90.0%
15.0%~17.0%

0.8%
0.6%
64.8%
16.5%

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
March 31, 2013
Trading derivatives—net:
Interest rate contracts—net . . . .

Foreign exchange contracts—
net . . . . . . . . . . . . . . . . . . . . .

Equity contracts—net . . . . . . . .
Credit derivative
contracts—net . . . . . . . . . . . .

Fair value(1) Valuation technique(in millions)(2,533)(16,806)

1,381(1,987)

Option model

Option model

Option model

Option model

F-146

Significant unobservable inputs

Probability of default
Correlation between interest rates
Correlation between interest rate andforeign exchange rate
Recovery rate
Volatility
Prepayment rate

Range

0.3%~12.5%(0.1)%~97.6%
32.5%~60.2%
40.0%~51.0%
29.1%~58.3%
0.0%~2.3%

Probability of default
Correlation between interest rates
Correlation between interest rate andforeign exchange rate
Correlation between underlying assets
Recovery rate
Correlation between interest rate andequity0.4%~14.2%
28.2%~80.6%

10.6%~52.0%

Recovery rate
Correlation between underlying assets

20.0%~36.8%
11.6%~88.2%

22.2%~66.3%
44.1%~82.8%
40.0%~51.0%

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
March 31, 2014
AssetsTrading securities andInvestment securities:
Foreign governments
and official
institutions
bonds . . . . . . . . . .

Fair value(1)(in millions)

Valuation technique¥Monte Carlo method

6,876

9,064

Correlation between interest rate andforeign exchange rate
Correlation between interest rates
Return on equity method Probability of default
Recovery rate
Market-required return on capital
Discounted cash flow
Probability of default
Recovery rate
Monte Carlo method
Correlation between interest rate andforeign exchange rate
Correlation between interest rates
Internal model
Liquidity premium

90,420Discounted cash flow

430,386

Internal model

32,565
182,613

Discounted cash flow
Liquidity premium
Return on equity method Probability of default
Recovery rate
Market-required return on capital

23,983

Corporate bonds . . . .

126,101
269

Residential
mortgage-backed
securities,
Commercial
mortgage-backed
securities andAsset-backed
securities . . . . . . . .

Other debt
securities . . . . . . . .

Significant unobservable inputs

Probability of default
Recovery rate
Asset correlations
Discount factor
Prepayment rate
Probability of default
Recovery rate

F-147

Range

Weighted
Average(2)32.6%~48.3%
42.1%~59.8%
0.3%~1.9%
60.0%~80.0%
8.0%~10.0%
0.1%~14.0%
14.0%~68.4%

37.3%
58.1%
0.9%
73.0%
9.4%
0.9%
40.7%

32.6%~44.6%
52.2%~59.8%
1.5%~2.5%

36.9%
59.5%
2.3%

4.6%~5.1%
65.0%~76.0%
11.0%~14.0%
1.5%~5.8%
4.5%~44.8%
0.0%~88.8%
54.5%~79.2%

5.0%
68.0%
13.7%
1.9%
40.9%
—(3)
77.7%

0.6%~0.8%
0.0%~25.0%
25.0%~90.0%
8.0%~10.0%

0.8%
0.7%
66.9%
9.7%

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
March 31, 2014
Trading derivatives—net:
Interest rate contracts—net . . . .

Foreign exchange contracts—
net . . . . . . . . . . . . . . . . . . . . .

Equity contracts—net . . . . . . . .
Credit derivative
contracts—net . . . . . . . . . . . .

Fair value(1) Valuation technique(in millions)
12,366(7,038)

Option model

Option model

4,548

Option model(1,347)

Option model

Significant unobservable inputs

Range

Probability of default
Correlation between interest rates
Correlation between interest rate andforeign exchange rate
Recovery rate
Volatility

0.0%~14.0%
22.8%~99.4%
31.2%~48.3%
40.0%~47.0%
27.1%~39.5%

Probability of default
Correlation between interest rates
Correlation between interest rate andforeign exchange rate
Correlation between underlying assets
Recovery rate
Correlation between interest rate and equity

0.1%~14.0%
38.8%~78.7%
31.2%~58.7%
49.9%~85.0%
40.0%~47.0%
24.9%~49.0%

Recovery rate
Correlation between underlying assets

37.0%~37.0%
11.4%~87.3%

Notes:(1) The fair value as of March 31, 2013 and 2014 excludes the fair value of investments valued using vendor prices.
(2) Weighted averages are calculated by weighting each input by the relative fair value of the respective financial instruments.
(3) See “Probability of default” in “Sensitivity to and range of unobservable inputs”.

Sensitivity to and range of unobservable inputs
Probability of default—Probability of default is an estimate of the likelihood that the default event will
occur and the MUFG Group will be unable to collect the contractual amounts. A significant increase (decrease)in the default rate would result in a significant decrease (increase) in a fair value through a decrease (increase) inthe estimated cash flows. Probability of default used in Internal model of Residential mortgage-backed securities,
Commercial mortgage-backed securities and Asset-backed securities represents that of underlying assets,
whereas probability of default used in other valuation techniques represents the counterparty default risks,determined through the MUFG Group’s credit rating system.
The wide range of probability of default used in Internal model of Residential mortgage-backed securities,
Commercial mortgage-backed securities and Asset-backed securities is mainly caused by Asset-backed
securities. Asset-backed securities have a large number of underlying loans, mainly corporate loans, in several
industries. The MUFG Group primarily makes investments in the senior tranches of such securities, with noinvestments in the equity portion. Thus, the MUFG Group’s investments have higher priority of payments thanmezzanine and equity and even if some of underlying loans become default status, the MUFG Group may still beable to receive the full contractual payments.
For derivative contracts, the MUFG Group holds positions with a large number of counterparties withvarious credit quality, which results in wider range of probability of default. However, the majority ofcounterparties have higher ratings, categorized as “Normal” in the internal credit rating system, the inputs used toestimate fair value of derivative contracts are concentrated in the lower end of the range.
Discount factor and Liquidity premium—Discount factor and liquidity premium are adjustments todiscount rates to reflect uncertainty of cash flows and liquidity of the instruments. When recent prices of similar
instruments are unobservable in inactive or less active markets, discount rates are adjusted based on facts andcircumstances of the markets including the availability of quotes and the time since the latest available quotes.
A significant increase (decrease) in discount rate would result in a significant decrease (increase) in a fair value.
F-148

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Recovery rate and Prepayment rate—Recovery rate is the proportion of the total outstanding balance of abond or loan that is expected to be collected in a liquidation scenario. For many credit securities (such as assetbacked securities), there is no directly observable market input for recovery, but indications of recovery levels
are available from third-party pricing services. The assumed recovery of a security may differ from its actual
recovery that will be observable in the future. Prepayment rate represents the proportion of principal that is
expected to be paid prematurely in each period on a security or pool of securities. Prepayment rates change thefuture cash flows for the investor and thereby change the fair value of the security. Recovery rate and prepayment
rate would affect estimation of future cash flows to a certain extent and changes in these inputs could result in asignificant increase or decrease in fair value.
Volatility—Volatility is a measure of the speed and severity of market price changes and is a key factor in
pricing. Typically, instruments can become more expensive if volatility increases. A significant increase(decrease) in volatility would result in a significant increase (decrease) in fair value through a significant increase(decrease) in the value of an option.
The level of volatility generally depends on the tenor of the underlying instrument and the strike price orlevel defined in the contract. Volatilities for certain combinations of tenor and strike are not observable. The
volatility inputs used to estimate fair value of interest rate contracts are distributed throughout the range.
Correlation—Correlation is a measure of the co-movement between two variables. A variety of correlationrelated assumptions are required for a wide range of instruments including foreign governments and official
institutions bonds, asset-backed securities, corporate bonds, derivatives and certain other instruments. In mostcases, correlations used are not observable in the market and must be estimated using historical information.
Changes in correlation inputs can have a major impact, favorable or unfavorable, on the value of an instrument,
depending on its nature. In addition, the wide range of correlation inputs are primarily due to the complex andunique nature of these instruments. There are many different types of correlation inputs, including cross-asset
correlation (such as correlation between interest rate and equity), and same-asset correlation (such as correlation
between interest rates). Correlation levels are highly dependent on market conditions and could have a relatively
wide range of levels within or across asset classes.
For interest rate contracts and foreign exchange contracts, the diversity in the portfolio held by the MUFG
Group is reflected in wide ranges of correlation, as the fair values of transactions with a variety of currencies andtenors are determined using several foreign exchange and interest rate curves. For equity derivative contracts, thewide range of correlation between interest rate and equity is primarily due to the large number of correlation
pairs with different maturities of contracts. For credit derivative contracts, the wide range of correlation between
underlying assets is primarily due to factors such as reference assets with different maturities, capital structure
subordinations, and credit quality.
Valuation Process for Level 3 Fair Value Measurements
The MUFG Group establishes valuation policies and procedures for measuring fair value, for which the risk
management departments ensure that the valuation techniques used are logical, appropriate and consistent withmarket information. The financial accounting offices ensure that the valuation techniques are consistent with theaccounting policies.
In accordance with the valuation policies and procedures, fair value is determined by the risk management
departments or similar sections that are independent of the front offices in order to ensure objectivity and validityof measuring fair value. An analysis performed on the determined fair value is periodically reported to the
management.
F-149

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
When valuation techniques are used to measure fair value, the valuation techniques are required to be preapproved by the risk management departments. If the risk management departments determine that thetechniques are not consistent with market practice, the valuation techniques are modified as necessary.
Fair value measurements are verified for reasonableness by the risk management departments which areresponsible to perform an analytical review of the fair value measurements which includes a comparison withmarket trends and information.
For broker-dealer quotes, internal price verification procedures are performed by the risk management
departments. Such verification procedures include analytical review of periodic price changes, comparison
analysis between periodic price changes and changes of indices such as a credit default swap index, or inquiries
regarding the underlying inputs and assumptions used by the broker-dealers such as probability of default,
prepayment rate and discount margin.
Unobservable inputs used in a level 3 fair value measurement are internally estimated by the risk
management departments based upon the market information such as observable inputs. The reasonableness of
the inputs is validated by other risk management departments by comparison analysis between the market valueof financial instruments using such level 3 inputs and the internally estimated fair value, to the extent necessary.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Certain assets and liabilities may be measured at fair value on a nonrecurring basis in periods subsequent totheir initial recognition. These assets are subject to fair value adjustments that result from the application of thelower of cost or fair value accounting or write-downs of individual assets. The following table presents the
carrying value of assets measured at fair value on a nonrecurring basis by level within the fair value hierarchy asof March 31, 2013 and 2014:
March 31, 2013
Level 1

Level 2

Level 3

AssetsInvestment securities(1) . . . . . . . ¥— ¥— ¥ 6,466
Loans . . . . . . . . . . . . . . . . . . . . . 11,757 18,236 351,584
Loans held for sale . . . . . . .
—
—
4,104
Collateral dependent
loans . . . . . . . . . . . . . . . . 11,757 18,236 347,480
Premises and equipment . . . . . .
—
—
8,938
Intangible assets . . . . . . . . . . . . .
——549
Other assets . . . . . . . . . . . . . . . . 17,105— 16,340
Investments in equity
method investees(1) . . . . 17,105— 11,751
Other . . . . . . . . . . . . . . . . .
—
—
4,589
Total . . . . . . . . . . . . . . ¥28,862 ¥18,236 ¥383,877

March 31, 2014
Total
carrying value Level 1(in millions)Level 2

Level 3Total
carrying value¥ 6,466
381,577
4,104

¥
— ¥
— ¥ 5,469
11,510 15,834 303,757
—
549
6,890

¥ 5,469
331,101
7,439

377,473
8,938
549
33,445

11,510 15,285 296,867
—
—
6,264
—
—
228
15,138 60,833 10,161

323,662
6,264
228
86,13228,856
4,589

15,138 60,833
—
—

7,902
2,259

83,873
2,259¥26,648 ¥76,667 ¥325,879¥429,194¥430,975

Note:(1) Includes investments valued at net asset value of ¥4,354 million and ¥3,483 million at March 31, 2013 and 2014, respectively. The
unfunded commitments related to these investments are ¥1,603 million and ¥864 million at March 31, 2013 and 2014, respectively.
These investments are private equity funds.

F-150

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents losses recorded as a result of nonrecurring changes in fair value for the fiscal
years ended March 31, 2013 and 2014:
Losses forthe fiscal year ended
March 31,2013
2014
(in millions)

Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 2,387 ¥ 4,113
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
92,43858,660Loans held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
380
106
Collateral dependent loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
92,05858,554
Premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,536
13,899Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,378
312
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—7,792
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16,82033,905Investments in equity method investees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,63532,824
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,185
1,081
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥120,559¥118,681

Investment securities primarily include impaired cost-method investments which were written down to fairvalue during the period. The fair values are determined based on recent net asset value and projected future cash
flows of investees.
Loans include loans held for sale and collateral dependent loans. Loans held for sale are recorded at thelower of cost or estimated fair value. The fair value of the loans held for sale is based on secondary market
prices, recent transactions or discounted cash flows. These loans are principally classified in Level 3 of the fairvalue hierarchy, and when quoted prices are available but not traded actively, such loans held for sale areclassified in Level 2 of the fair value hierarchy. Collateral dependent loans are measured at fair value of theunderlying collateral. Collateral is comprised mainly of real estate and exchange-traded equity securities. The
MUFG Group maintains an established process for internally determining the fair value of real estate, using thefollowing valuation techniques and assumptions. Collateral dependent loans that are measured based onunderlying real estate collateral are classified in Level 3 of the fair value hierarchy.
‰

Replacement cost approach. The replacement cost approach is primarily used for buildings and the land
they are built on. This approach calculates the fair value of the collateral using the replacement cost of
the property as of the valuation date. Replacement cost tables and useful life tables used for thisapproach are developed by subsidiaries of MUFG.

‰

Sales comparison approach. The sales comparison approach is mainly used for land. The fair value ofthe collateral is based on Japanese government official land prices and standard land prices, considering
the results of comparison analysis between the official roadside value which is used for tax purposes andthe related government official land and standard land prices.

‰

Income approach. The income approach is, as a general rule, applied to all rental properties based on thehighest and best use concept. This approach calculates the fair value of the collateral using expected
future cash flows. In this approach, the expected annual net operating income is discounted using therelated capitalization yield. The significant assumptions within the income approach are the expectedannual net operating income and capitalization yield. The expected annual net operating income isestimated based on rental income of the property. The capitalization yield is determined based on thelocation and use of the property by subsidiaries of MUFG. The capitalization yield may be adjusted toreflect the trends in locations, occupancy rates and rent level and other factors.
F-151

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Premises and equipment consist of those assets which were written down to fair value. The fair values are
determined based on prices obtained from an appraiser or discounted cash flows. These impaired premises andequipment are classified as Level 3 of the fair value hierarchy.
Intangible assets consist of those assets which were written down to fair value. The fair values are
determined based on discounted cash flows. These impaired intangible assets are classified as Level 3 of the fairvalue hierarchy.
Other assets mainly consist of investments in equity method investees which were written down to fair value
due to impairment. The MUFG Group records impairment losses when a decline in fair value below cost is otherthan-temporary. The impairment losses are included in Equity in earnings (losses) of equity method investees—
net in the accompanying consolidated statements of income. When investments in equity method investees aremarketable equity securities, the fair values are determined based on quoted prices. Impaired investments inequity method investees which are marketable equity securities are classified in either Level 1 or Level 2 of thefair value hierarchy. When investments in equity method investees are nonmarketable equity securities, the fairvalues are determined using the same methodologies as impaired nonmarketable equity securities describedabove. Impaired investments in equity method investees which are nonmarketable equity securities are classified
in Level 3 of the fair value hierarchy.
Fair Value Option
The MUFG Group elected the fair value option for foreign currency-denominated debt securities and equity
securities held by BTMU and MUTB. The election was made to mitigate accounting mismatches related tofluctuations of foreign exchange rates by allowing the gains and losses on translation of these securities to be
included in current earnings. Had the fair value option not been elected, the gains and losses on translation ofthese securities would have been reflected in OCI, while the gains and losses on translation of foreign currencydenominated financial liabilities would have been included in current earnings.
The MUFG Group also elected the fair value option for certain financial instruments held by MUSHD’s
foreign subsidiaries because those financial instruments are managed on a fair value basis, and these exposures
are considered to be trading-related positions. These financial assets are included in Other assets. These financial
liabilities are mainly included in Other short-term borrowings and Long-term debt. Unrealized gains and losses
on such financial instruments are recognized in the accompanying consolidated statements of income.

F-152

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the gains or losses recorded during the fiscal years ended March 31, 2013 and2014 related to the eligible instruments for which the MUFG Group elected the fair value option:

Tradingaccount
profits (losses)

For the fiscal years ended March 31,
2013
2014
Foreign
Total
Trading
Foreignexchangechanges inaccount
exchange
gains (losses)
fair value
profits (losses) gains (losses)(in millions)Totalchanges infair value

Financial assets:
Receivables underresaleagreements(1) . . . . . .
Trading accountsecurities . . . . . . . . . .
Other assets . . . . . . . . .

¥ (1,436)¥

311,827(469)

2,185,903—

2,497,730(469)(225,985)(531)

2,017,311—

1,791,326(531)

Total . . . . . . . . . . .

¥309,922¥2,185,903¥2,495,825¥(226,516)¥2,017,311¥1,790,795

¥

1,542
22,097

¥

—
—

¥

1,542
22,097¥

4,064
87,877

¥

—
—

¥

4,064
87,877¥ 23,639¥—¥

23,639¥ 91,941¥—¥

91,941

Financial liabilities:
Other short-termborrowings(1) . . . . . .
Long-term debt(1) . . . . .
Total . . . . . . . . . . .

—¥(1,436)

¥

—

¥

—

¥

—

Note:
(1) Change in value attributable to the instrument-specific credit risk related to those financial assets and liabilities are not material.

The following table presents the differences between the aggregate fair value and the aggregate remaining
contractual principal balance outstanding as of March 31, 2013 and 2014 for long-term receivables and debt
instruments for which the fair value option has been elected:
2013

2014
Fair value
over (under)
remaining
Remaining
aggregate
aggregate
contractual
contractual
amounts
amounts
outstanding
outstanding(in millions)Remaining
aggregate
contractual
amounts
outstanding

Fair value

Financial assets:
Other assets . . . . . . . . . . . . . . .

¥

3,000

¥

3,006

¥

6

¥

Total . . . . . . . . . . . . . . . . .

¥

3,000

¥

3,006

¥

6

¥

Fair value

Fair value
over (under)
remaining
aggregate
contractual
amounts
outstanding

2,000

¥

2,000

¥

—

2,000

¥

2,000

¥

—

Financial liabilities:
Long-term debt . . . . . . . . . . . .

¥650,382¥564,845¥(85,537)¥728,385¥687,927¥(40,458)

Total . . . . . . . . . . . . . . . . .

¥650,382¥564,845¥(85,537)¥728,385¥687,927¥(40,458)

Interest income and expense and dividend income related to the assets and liabilities for which the fair value
option is elected are measured based on the contractual rates and reported in the accompanying consolidated
statements of income as either interest income or expense, depending on the nature of the related asset or
liability.
F-153

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Estimated Fair Value of Financial Instruments
The following is a summary of carrying amounts and estimated fair values by level within the fair value
hierarchy of financial instruments which are not carried at fair value on the accompanying consolidated balance
sheets as of March 31, 2013 and 2014:
March 31, 2013
Estimated fair value
Total
Level 1
Level 2(in billions)

Carrying
amountFinancial assets:
Cash and due from banks . . . . . . . . . . . . . . . . . . . . . .
Interest-earning deposits in other banks . . . . . . . . . . .
Call loans and funds sold . . . . . . . . . . . . . . . . . . . . . .
Receivables under resale agreements . . . . . . . . . . . . .
Receivables under securities borrowing
transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities(1) . . . . . . . . . . . . . . . . . . . . . . . .
Loans, net of allowance for credit losses(2) . . . . . . . .
Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . .
Financial liabilities:
Deposits
Non-interest-bearing . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deposits . . . . . . . . . . . . . . . . . . . . . . .
Call money and funds purchased . . . . . . . . . . . . . . . .
Payables under repurchase agreements . . . . . . . . . . .
Payables under securities lending transactions . . . . .
Due to trust account . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other financial liabilities . . . . . . . . . . . . . . . . . . . . . .

F-154

¥

3,619
8,112
619
5,660

¥

3,619
8,112
619
5,660

¥3,619
—
—
—

2,615
2,492
97,254
5,132

2,615
2,778
98,7295,132¥ 18,810
129,420
148,230
4,011
15,7003,993
633
11,604
11,622
4,753¥ 18,810
129,480
148,290
4,011
15,7003,993
633
11,604
11,9804,753¥¥

Level 3

—
8,112
619
5,660

¥

—
272
12
—

2,615
495
284
5,132

—
2,011
98,433
—

—
—
—
—
—
—
—
—
—
—

¥ 18,810
129,480
148,290
4,011
15,7003,993
633
11,604
11,969
4,753

¥

—
—
—
—

—
—
—
—
—
—
—
—
11
—

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
March 31, 2014
Estimated fair value
Total
Level 1
Level 2(in billions)

Carrying
amountFinancial assets:
Cash and due from banks . . . . . . . . . . . . . . . . . . . . . .
Interest-earning deposits in other banks . . . . . . . . . . .
Call loans and funds sold . . . . . . . . . . . . . . . . . . . . . .
Receivables under resale agreements . . . . . . . . . . . . .
Receivables under securities borrowing
transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment securities(1) . . . . . . . . . . . . . . . . . . . . . . . .
Loans, net of allowance for credit losses(2) . . . . . . . .
Other financial assets . . . . . . . . . . . . . . . . . . . . . . . . .
Financial liabilities:
Deposits
Non-interest-bearing . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deposits . . . . . . . . . . . . . . . . . . . . . . .
Call money and funds purchased . . . . . . . . . . . . . . . .
Payables under repurchase agreements . . . . . . . . . . .
Payables under securities lending transactions . . . . .
Due to trust account . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other financial liabilities . . . . . . . . . . . . . . . . . . . . . .

¥

3,689
20,501
919
7,300

¥

3,689
20,501919
7,300¥3,689
—
—
—

4,210
2,870
109,182
5,832

4,210
2,908
110,577
5,832

—
220
11
—

4,210
701
307
5,832

¥ 21,123
141,406
162,529
3,417
21,2685,521
750
11,077
13,823
5,123¥ 21,123
141,447
162,570
3,417
21,2685,521
750
11,077
14,118
5,123

—
—
—
—
—
—
—
—
—
—

¥ 21,123 ¥
141,447
162,570
3,417
21,2685,521
750
11,077
14,118
5,123¥¥

Level 3

— ¥20,501
919
7,300

—
—
—
—
—
1,987
110,259
—

—
—
—
—
—
—
—
—
—
—

Notes:(1) Includes impaired securities measured at fair value on a nonrecurring basis. Refer to “Assets and Liabilities Measured at Fair Value on a
Nonrecurring Basis” for the details of the level classification.
(2) Includes loans held for sale and collateral dependent loans measured at fair value on a nonrecurring basis. Refer to “Assets and Liabilities
Measured at Fair Value on a Nonrecurring Basis” for the details of the level classification.

The following section describes the valuation techniques adopted by the MUFG Group to estimate fairvalues of financial instruments that are not recorded at fair value on the accompanying consolidated balance
sheets.
Cash and due from banks, Interest-earning deposits in other banks, Call loans and funds sold,Receivables under resale agreements and Receivable under securities borrowing transactions—For cash anddue from banks, interest-earning deposits in other banks, call loans and funds sold, receivables under resaleagreements and receivable under securities borrowing transactions, the carrying amounts are a reasonableestimate of the fair values because of their short-term nature and limited credit risk.
Investment securities—The fair values of investment securities other than those classified as available-forsale or being held-to-maturity (i.e., nonmarketable equity securities) are not readily determinable as they do nothave readily available quoted prices or secondary market prices. The fair values of certain nonmarketable equity
securities, such as preferred stock convertible to marketable common stock issued by public companies are
determined by utilizing commonly accepted valuation techniques to derive a fair value using the present value ofdividend cash flows and option prices. For option prices, the Trinomial Tree Method determines possible paths offuture stock prices using a forward rate for a common stock, and the price is calculated by multiplying thepossible paths of future stock prices by the expected cash flows generated from the probability of exercising
F-155

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
options or upon exercising of the options. Inputs used in the valuation include but are not limited to stock price,
volatility and credit spread. The valuation is performed on a quarterly basis. At the time of any sale, the MUFG
Group generally separately calculates a valuation to be used in sales price negotiations with the counterparty. The
price agreed between the MUFG Group and a counterparty is also used as a reference for validating theappropriateness of previous valuations of the investment. The MUFG Group performs periodic validation of thevaluation techniques. Specifically, the sensitivity and appropriateness of the inputs are verified by using different
valuation techniques employed by the MUFG Group. It is not practicable for the MUFG Group to estimate thefair value of other nonmarketable securities issued by nonpublic companies for which a quoted price is notavailable. For these securities, the MUFG Group is unable to estimate fair value without incurring undue costbecause they comprise investments in numerous nonpublic companies and each investment represents aninsignificant percentage relative to each company. Therefore, the above summary does not include the carrying
amounts of such investment securities. The carrying amounts not included in the above summary are ¥504 billionand ¥549 billion at March 31, 2013 and 2014, respectively.
Loans—The fair value of loans is estimated by discounting expected future cash flows based on types ofloans, internal ratings and possibility of prepayment using the discount rates which include adjustments to reflect
the expectations about possible variations to the current market rates. For certain residential loans with variableinterest rates provided to individual home owners, the carrying amount is presented as the fair value since suchcarrying amount approximates the fair value, unless the creditworthiness of the borrower has changed
significantly since the loan origination. Where quoted prices or estimated fair values are available, primarily forloans to refinancing countries, loans held for sales and certain other foreign loans, the fair values are based onsuch market prices and estimated fair values, including secondary market prices. For receivables from bankrupt,
virtually bankrupt, and likely to become bankrupt borrowers, credit loss is estimated based mainly on the
expected amount to be collected from collateral and guarantees. The carrying amount is presented as the fairvalue since the fair value approximates such carrying amount.
Other financial assets—The estimated fair values of other financial assets, which primarily include accrued
interest receivable, customers’ acceptance liabilities and accounts receivable, approximate their carrying
amounts. The above summary does not include the carrying amounts of investments in equity method investees
amounting to ¥1,274 billion and ¥1,620 billion at March 31, 2013 and 2014, respectively.
Non-interest-bearing deposits, Call money and funds purchased, Payables under repurchase agreements
and Payable under securities lending transactions—For non-interest-bearing deposits, the amount payable on
demand as of the consolidated balance sheet date (i.e., the carrying amount) is considered to be the fair value. For
call money and funds purchased, payables under repurchase agreements and payable under securities lendingtransactions, the carrying amount are reasonable estimate of the fair value because of their short-term nature andlimited credit risk.
Interest–bearing deposits—For variable rate time deposits, the carrying amount is presented as the fairvalue because the market interest rate is reflected in such deposits within a short time period. Fixed rate time
deposits are grouped by certain maturity lengths. The fair value of such deposits are estimated by discounting
expected future cash flows using the discount rates that would be applied to newly accepted deposits.
Due to trust account—Since these are cash deposits with no maturity, the carrying amount is presented as
the fair value as the fair value approximates such carrying amount.
Other short-term borrowings—For most other short-term borrowings, the carrying amount is presented as
the fair value since such carrying amount approximates the fair value because of their short-term nature andlimited credit risk.
F-156

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Long-term debt—The fair value of corporate bonds issued by the MUFG Group is determined based onquoted prices of those corporate bonds. The fair value of fixed rate corporate bonds without quoted prices is thepresent value of expected future cash flows from these borrowings, which is discounted at an interest rate
generally applicable to similar borrowings reflecting premium applicable to the MUFG Group. For variable rate
corporate bonds without quoted prices, the carrying amount of such bonds is presented as the fair value sincesuch carrying amount approximates the fair value. This is on the basis that the market interest rate is reflected in
the fair value of such corporate bonds because such bond terms were set within a short time period and that there
has been no significant impact on the fair value of those bonds.
Other financial liabilities—The estimated fair values of other financial liabilities, which primarily include
accrued interest payable, bank acceptances, accounts payable and obligations under standby letters of credit andguarantees, approximate their carrying amounts. The fair values of obligations under standby letters of credit andguarantees are based on fees received or receivable by the MUFG Group.
The fair values of certain off-balance sheet financial instruments held for purposes other than trading,including commitments to extend credit and commercial letters of credit, are estimated using the fees currently
charged to enter into similar agreements, taking into account the remaining terms of the agreements and thecredit quality. The aggregate fair value of such instruments at March 31, 2013 and 2014 was not material.
The fair value estimates presented herein are based on pertinent information available to management at
March 31, 2013 and 2014. These amounts have not been comprehensively reevaluated since that date, andtherefore, current estimates of fair values may have changed significantly from the amounts presented herein.
32. STOCK-BASED COMPENSATION
The following describes the stock-based compensation plans of MUFG, BTMU, MUTB, MUSHD, MUMSS
and MUAH.
MUFG, BTMU, MUTB, MUSHD and MUMSS
MUFG, BTMU, MUTB, MUSHD and MUMSS have a stock-based compensation plan for directors,
executive officers, corporate auditors and senior fellows (“officers”).
The awards under the stock-based compensation plan are a type of stock option (referred to as “Stock
Acquisition Rights”) to officers of MUFG, BTMU, MUTB, MUSHD and MUMSS. The Stock Acquisition
Rights were normally issued and granted to these officers once a year until the fiscal year ended March 31, 2013.
They are normally issued and granted to these officers except for corporate auditors once a year from the fiscal
year ended March 31, 2014.
The class of shares to be issued or transferred on exercise of the Stock Acquisition Rights is common stockof MUFG. The number of shares to be issued or transferred on exercise of each Stock Acquisition Right(“number of granted shares”) is 100 shares. In the event of stock split or stock merger of common stock of
MUFG, the number of granted shares shall be adjusted in accordance with the ratio of the stock split or stock
merger. If any events occur that require the adjustment to the number of granted shares (e.g., mergers,
consolidations, corporate separations or capital reductions of MUFG), MUFG shall appropriately adjust the
number of granted shares to a reasonable extent.
The contractual term of the Stock Acquisition Rights is approximately 30 years from the date of grant. Someof the Stock Acquisition Rights vest on the date of grant and the rest of the rights graded-vest depending on theholders’ service periods as officers. The Stock Acquisition Rights are only exercisable after the date on which thefollowing conditions are met: (1) holder as a director or an executive officer loses the status of both director andexecutive officer, and (2) holder as a corporate auditor loses the status of a corporate auditor, and (3) holder as asenior fellow loses the status of a senior fellow. The exercise price is ¥1 per share.
F-157

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following is a summary of the Stock Acquisition Rights transactions of MUFG, BTMU, MUTB,
MUSHD and MUMSS for the fiscal year ended March 31, 2014:

Number ofsharesFiscal year ended March 31, 2014
Weighted average
Weighted averageremaining
exercise pricecontractual term(in years)

Outstanding, beginning of fiscal year . . . . . . . . . . 23,574,800
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,951,500
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,440,700)
Forfeited or Expired . . . . . . . . . . . . . . . . . . .
(45,700)

¥

1
1
1
1

Outstanding, end of fiscal year . . . . . . . . . . . . . . .

21,039,900

¥

1

27.38

Exercisable, end of fiscal year . . . . . . . . . . . . . . .

—

¥

—

—

Aggregate
intrinsic value(in millions)¥11,909¥—

The fair value of the Stock Acquisition Rights is estimated on the date of grant using the Black-Scholes
option pricing model that uses the assumptions described in the following table. The risk-free rate is based on theJapanese government bonds yield curve in effect at the date of grant based on the expected term. The expectedvolatility is based on the historical data from traded common stock of MUFG. The expected term is based on the
average service period of officers of MUFG, BTMU, MUTB, MUSHD and MUMSS, which represents the
expected outstanding period of the Stock Acquisition Rights granted. The expected dividend yield is based on thedividend rate of common stock of MUFG at the date of grant.
Fiscal years ended March 31,
2012
2013
2014

Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0.29%
44.96%
4 years
3.13%

0.11%
40.48%
4 years
3.18%

0.22%
30.16%
4 years
1.96%

The weighted-average grant date fair value of the Stock Acquisition Rights granted for the fiscal years
ended March 31, 2012, 2013 and 2014 was ¥33,700, ¥33,100 and ¥61,100 per 100 shares, respectively.
The MUFG Group recognized ¥2,771 million, ¥2,862 million and ¥2,069 million of compensation costs
related to the Stock Acquisition Rights with ¥1,127 million, ¥1,088 million and ¥737 million of thecorresponding tax benefit for the fiscal years ended March 31, 2012, 2013 and 2014, respectively. As of
March 31, 2014, the total unrecognized compensation cost related to the Stock Acquisition Rights was¥253 million and it is expected to be recognized over 3 months.
Cash received from the exercise of the Stock Acquisition Rights for the fiscal years ended March 31, 2012,2013 and 2014 was ¥4 million, ¥4 million and ¥5 million, respectively. The actual tax benefit realized for the tax
deductions from exercise of the Stock Acquisition Rights for the fiscal years ended March 31, 2012, 2013 and2014 was ¥821 million, ¥675 million and ¥789 million, respectively.
MUAH
MUFG Americas Holdings Corporation Stock Bonus Plan (“Stock Bonus Plan”)
Effective as of April 27, 2010, MUAH adopted the Stock Bonus Plan. Under the Stock Bonus Plan, MUAH
grants restricted stock units settled in American Depositary Shares (“ADSs”) representing shares of common
F-158

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
stock of MUAH’s indirect parent company, MUFG, to key employees at the discretion of the Executive
Compensation and Benefits Committee of the Board of Directors (“the Committee”). The Committee determines
the number of shares, vesting requirements, and other features and conditions of the restricted stock units. Under
the Stock Bonus Plan, MUFG ADSs are purchased in the open market upon the vesting of the restricted stock
units, through a revocable trust. There is no amount authorized to be issued under the Plan since all shares arepurchased in the open market. These awards generally vest pro-rata on each anniversary of the grant date andbecome fully vested three years from the grant date, provided that the employee has completed the specified
continuous service requirement. Generally, the grants vest earlier if the employee dies, is permanently and totallydisabled, retires under certain grant, age and service conditions, or terminates employment under certain
conditions.
Under the Stock Bonus Plan, the restricted stock unit participants do not have dividend rights, voting rights
or other stockholder rights. The grant date fair value of these awards is equal to the closing price of the MUFG
ADSs on date of grant.
The following table is a summary of the Stock Bonus Plan:
Grant Date

Units
GrantedFair Valueof Stock

Vesting
Duration

Pro-rata
Vesting Date

April 15, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
July 15, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April 15, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
July 15, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April 15, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
July 15, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,754,105
180,740
4,816,795
74,1753,656,340
78,725

$4.69
4.94
4.78
4.72
6.66
6.67

3 years
3 years
3 years
3 years
3 years
3 years

April 15
July 15
April 15
July 15
April 15
July 15

The following table is a rollforward of the restricted stock units under the Stock Bonus Plan for the fiscal
years ended December 31, 2012 and 2013:
Restricted Stock Units
2012
2013

Units outstanding, beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,138,334 8,857,884
Activity during the year:
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,890,970 3,735,065
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,920,392) (4,325,661)
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(251,028) (416,271)
Units outstanding, end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,857,884

7,851,017

The following table is a summary of MUAH’s compensation costs, the corresponding tax benefit for the
fiscal years ended December 31, 2011, 2012 and 2013, and unrecognized compensation costs as of December 31,
2011, 2012 and 2013:2011

Compensation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrecognized compensation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-159

December 31,
2012
2013
(in millions)¥1,198479
1,710¥1,437 ¥2,051
559
781
2,251 2,846

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
33. PARENT COMPANY ONLY FINANCIAL INFORMATION
Distributions of retained earnings of BTMU and MUTB are restricted in order to meet the minimum capital
adequacy requirements under the Banking Law. Also, retained earnings of these banking subsidiaries are
restricted, except for ¥5,511,969 million, in accordance with the statutory reserve requirements under theCompany Law at March 31, 2014. See Notes 18 and 21 for further information.
The following table presents the parent company only financial information of MUFG:
Certain parent company condensed financial statement line items have been revised to conform to thecurrent year presentation to separately present amounts for banking subsidiaries from amounts for subsidiaries
and affiliated companies.
Condensed Balance Sheets
2013

2014
(in millions)

Assets:Cash and interest-earning deposits with banking subsidiaries . . . . . . . . . . . . . . ¥ 127,303 ¥ 130,338
Investments in subsidiaries and affiliated companies . . . . . . . . . . . . . . . . . . . . .
12,849,434
14,439,803
Banking subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,394,347
11,104,470
Non-banking subsidiaries and affiliated companies . . . . . . . . . . . . . . . . . .
2,455,087
3,335,333
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56,43564,808
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥13,033,172¥14,634,949

Liabilities and Shareholders’ equity:
Short-term borrowings from banking subsidiaries . . . . . . . . . . . . . . . . . . . . . . . ¥ 1,873,336
Long-term debt from non-banking subsidiaries and affiliated companies . . . . .
384,107
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
59
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
166,875¥ 1,917,647
384,44578
127,739

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,424,377

2,429,909

Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,608,795

12,205,040

Total liabilities and shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . .

¥13,033,172¥14,634,949

F-160

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Condensed Statements of Income
2012

2013
(in millions)2014¥270,923
241,329
29,594¥ 220,050
184,462
35,588¥ 255,175
207,771
47,404

139,320
16,70899
32,237
5,614—
17,154
77(59,375)634—
18,922
73(44,544)294

Total income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

464,901

178,540

229,920

Expense:Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense to subsidiaries and affiliated companies . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,51537,905
1,196
923

15,95230,501
1,122
2,620

18,30428,897
1,121591

Total expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

54,53950,195

48,913Equity in undistributed net income of subsidiaries and affiliatedcompanies—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55,139937,673793,548

Income before income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

465,501
49,2701,066,018(3,106)

974,555(40,838)

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥416,231¥1,069,124¥1,015,393

Income:Dividends from subsidiaries and affiliated companies . . . . . . . . . . . .
Banking subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-banking subsidiaries and affiliated companies . . . . . . . . . .
Gain on conversion rate adjustment of Morgan Stanley’s convertible
preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management fees from subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange gains (losses)—net . . . . . . . . . . . . . . . . . . . . . . . . .
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-161

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Condensed Statements of Cash Flows2012

Operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . .

2013(in millions)2014¥ 416,231 ¥1,069,124 ¥1,015,393(133,368)(858,288)(790,050)
282,863

210,836

225,343

Investing activities:
Proceeds from sales and redemption of stock investment in
subsidiaries and affiliated companies . . . . . . . . . . . . . . . . . . . . . . .
Purchases of equity investments in subsidiaries and affiliatedcompanies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net decrease in interest-earning deposits with banks . . . . . . . . . . . . .
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,371

21,160—(20,000)
18,696(7,245)(3,838)
8,996(10,623)—
1,494(2,788)Net cash provided by (used in) investing activities . . . . . . . . . . . . . . . . . .

8,822

15,695(1,294)

Financing activities:
Net increase (decrease) in short-term borrowings fromsubsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayment of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayment of long-term debt to subsidiaries and affiliatedcompanies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . .
Payments to acquire treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

66,600(8)(34,989)
(20)

(4)
(16)

(169,710)
3(12)(187,616)(1,346)—1(16)(187,778)
(212)

—
2
(46)
(216,117)(2,988)Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(292,089)(223,014)(219,169)

Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of fiscal year . . . . . . . . . . . . . . . .

(404)
11,026

3,517
10,622

4,880
14,139Cash and cash equivalents at end of fiscal year . . . . . . . . . . . . . . . . . . . . .

¥ 10,622¥

14,139¥19,01934. SEC REGISTERED FUNDING VEHICLES ISSUING NON-DILUTIVE PREFERREDSECURITIESIn February 2006, MUFG established MUFG Capital Finance 1 Limited, MUFG Capital Finance 2 Limited
and MUFG Capital Finance 3 Limited, wholly-owned funding vehicles in the Cayman Islands, for the issuance ofpreferred securities to enhance the flexibility of its capital management.
On March 17, 2006, MUFG Capital Finance 1 Limited, MUFG Capital Finance 2 Limited and MUFG
Capital Finance 3 Limited registered with the SEC and issued $2,300,000,000 in 6.346% non-cumulative
preferred securities, €750,000,000 in 4.850% non-cumulative preferred securities and ¥120,000,000,000 in
2.680% non-cumulative preferred securities (collectively, the “Preferred Securities”), respectively. Total net
proceeds before expenses were approximately $4.17 billion. All of the ordinary shares of MUFG Capital
Finance 1 Limited, MUFG Capital Finance 2 Limited and MUFG Capital Finance 3 Limited are owned by
MUFG. MUFG fully and unconditionally guarantees the payment of dividends and payments on liquidation orredemption of the obligations under the Preferred Securities.
F-162

MITSUBISHI UFJ FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The Preferred Securities entitle holders to receive a non-cumulative preferential cash dividend starting on
July 25, 2006 and on January 25 and July 25 of each year thereafter. These funding vehicles will not be obligatedto pay dividends on the Preferred Securities upon the occurrence of certain events relating to the financial
condition of MUFG. From July 25, 2016, dividends on the Preferred Securities will be re-calculated at a floating
rate per annum.
The dollar-denominated and euro-denominated preferred securities are subject to redemption on any
dividend payment date on or after July 25, 2016. All the Preferred Securities are subject to redemption in whole(but not in part) at any time upon the occurrence of specified events, in each case at the option of each of thefunding vehicles and subject to necessary government approvals.
The Preferred Securities are non-dilutive and not convertible into MUFG’s common shares. The Preferred
Securities were included as part of MUFG’s Tier 1 capital at March 31, 2013 and 2014 under its capital adequacy
requirements.
These funding vehicles are not consolidated as the MUFG Group’s subsidiaries. See Note 25 for discussion.
The funds raised through such funding vehicles are primarily loaned to the MUFG Group and presented as Longterm debt in the accompanying consolidated balance sheet at March 31, 2013 and 2014.
On July 25, 2011, MUFG redeemed a total of ¥120,000,000,000 of non-cumulative and non-dilutive
perpetual preferred securities issued by MUFG Capital Finance 3 Limited.
35. SUBSEQUENT EVENTS
Acquisition and Cancellation of First Series of Class 5 Preferred StockOn April 1, 2014, MUFG acquired all of the First Series of Class 5 Preferred Stock issued in accordancewith the provisions of Article 18, Paragraph 1 of the Articles of Incorporation of MUFG and Paragraph 14 of theTerms and Conditions of the said Preferred Stock, and canceled all the acquired shares in accordance with theprovisions of Article 178 of the Company Law. As a result, the aggregate number of shares authorized to beissued by MUFG was decreased by 156,000,000 shares, and the aggregated number of First Series of Class 5
Preferred Stock authorized to be issued was deleted. Acquisition price was ¥2,500 per share, totaling ¥390,000
million.
Approval of Dividends
On June 27, 2014, the shareholders approved the payment of cash dividends to the shareholders of record on
March 31, 2014, of ¥57.50 per share of Class 5 Preferred Stock, totaling ¥8,970 million, of ¥2.65 per share ofClass 11 Preferred Stock, totaling ¥0 million, and ¥9 per share of Common stock, totaling ¥127,474 million.
Stock Acquisition Rights
On July 15, 2014, MUFG allotted the directors (excluding outside directors), executive officers and senior
fellows of MUFG, BTMU, MUTB, MUSHD and MUMSS stock acquisition rights to acquire an aggregate
amount of 3,019,400 shares of MUFG’s common stock. The stock acquisition rights have an exercise price of¥1 per common share, and are exercisable until July 14, 2044.
*****
F-163

Signature
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has
duly caused and authorized the undersigned to sign this Annual Report on its behalf.
MITSUBISHI UFJ FINANCIAL GROUP, INC.

Date: July 18, 2014

By:

/s/

NOBUYUKI HIRANO

Name:
Title:

Nobuyuki Hirano
President & Chief Executive Officer

EXHIBIT INDEXExhibitDescription

1(a)Articles of Incorporation of Mitsubishi UFJ Financial Group, Inc., as amended on June 27,
2013. (English translation)*1(b)Board of Directors Regulations of Mitsubishi UFJ Financial Group, Inc., as amended on
December 24, 2010. (English translation)**1(c)Corporation Meetings Regulations of Mitsubishi UFJ Financial Group, Inc., as amended on
December 24, 2010. (English translation)**1(d)Share Handling Regulations of Mitsubishi UFJ Financial Group, Inc., as amended on June 26,
2009. (English Translation)***2(a)Form of American Depositary Receipt.****

2(b)Form of Deposit Agreement, amended and restated as of December 22, 2004, among Mitsubishi
Tokyo Financial Group, Inc. (subsequently renamed Mitsubishi UFJ Financial Group, Inc.), The
Bank of New York Mellon and the holders from time to time of American Depositary Receipts
issued thereunder.****

8

Subsidiaries of the Company—see “Item 4.C. Information on the Company—Organizational
Structure.”11

Principles of Ethics and Conduct, Compliance Rules, Compliance Manual, and Rules of
Employment of Mitsubishi UFJ Financial Group, Inc. applicable to its principal executive
officer, principal financial officer, principal accounting officer and persons performing similarfunctions. (English translation of relevant sections)*

12

Certifications required by Rule 13a-14(a) (17 CFR 240.13a-14(a)) or Rule 15d-14(a)(17 CFR 240.15d-14(a)).

13

Certifications required by Rule 13a-14(b) (17 CFR 240.13a-14(b)) or Rule 15d-14(b)(17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code
(18 U.S.C. 1350).

101.INSXBRL Instance Document

101.SCHXBRL Schema Document

101.CALXBRL Calculation Linkbase Document

101.DEFXBRL Definition Linkbase Document

101.LABXBRL Label Linkbase Document

101.PREXBRL Presentation Linkbase Document

Notes:*
Incorporated by reference to our annual report on Form 20-F (File No. 000-54189) field on July 22, 2013.
** Incorporated by reference to our annual report on Form 20-F (File No. 000-54189) field on July 28, 2011.
*** Incorporated by reference to our annual report on Form 20-F (File No. 333-98061-99) filed on September 2, 2009.
**** Incorporated by reference to our annual report on Form 20-F (File No. 000-54189) field on July 23, 2012.

Exhibit 12
CERTIFICATION
I, Nobuyuki Hirano, certify that:1.

I have reviewed this annual report on Form 20-F of Mitsubishi UFJ Financial Group, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to statea material fact necessary to make the statements made, in light of the circumstances under which suchstatements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of thecompany as of, and for, the periods presented in this report;

4.

The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company andhave:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures tobe designed under our supervision, to ensure that material information relating to the company,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in thisreport our conclusions about the effectiveness of the disclosure controls and procedures, as of the endof the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the company’s internal control over financial reporting that
occurred during the period covered by the annual report that has materially affected, or is reasonably
likely to materially affect, the company’s internal control over financial reporting; and5.

The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation ofinternal control over financial reporting, to the company’s auditors and the audit committee of thecompany’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the company’s ability to record,
process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have asignificant role in the company’s internal control over financial reporting.

July 18, 2014/s/ Nobuyuki Hirano
Name: Nobuyuki Hirano
Title: President & Chief Executive Officer

CERTIFICATION
I, Taihei Yuki, certify that:1.

I have reviewed this annual report on Form 20-F of Mitsubishi UFJ Financial Group, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to statea material fact necessary to make the statements made, in light of the circumstances under which suchstatements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of thecompany as of, and for, the periods presented in this report;

4.

The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company andhave:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures tobe designed under our supervision, to ensure that material information relating to the company,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in thisreport our conclusions about the effectiveness of the disclosure controls and procedures, as of the endof the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the company’s internal control over financial reporting that
occurred during the period covered by the annual report that has materially affected, or is reasonably
likely to materially affect, the company’s internal control over financial reporting; and5.

The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation ofinternal control over financial reporting, to the company’s auditors and the audit committee of thecompany’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the company’s ability to record,
process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have asignificant role in the company’s internal control over financial reporting.

July 18, 2014/s/ Taihei Yuki
Name: Taihei Yuki
Title: Senior Managing Director and Chief Financial Officer

Exhibit 13
MITSUBISHI UFJ FINANCIAL GROUP, INC.
CERTIFICATION REQUIRED BY
RULE 13a-14(b) OR RULE 15d-14(b)AND 18 U.S.C. Section 1350
In connection with the Annual Report of Mitsubishi UFJ Financial Group, Inc. (the “Company”) on
Form 20-F for the fiscal year ended March 31, 2014 as filed with the US Securities and Exchange Commission
on the date hereof (the “Report”), I, Nobuyuki Hirano, President & Chief Executive Officer of the Company,
hereby certify, pursuant to 18 U.S.C. Section 1350 that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Actof 1934; and2. The information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the Company.
Dated: July 18, 2014/s/ Nobuyuki Hirano
Name: Nobuyuki Hirano
Title: President & Chief Executive Officer

MITSUBISHI UFJ FINANCIAL GROUP, INC.
CERTIFICATION REQUIRED BY
RULE 13a-14(b) OR RULE 15d-14(b)AND 18 U.S.C. Section 1350
In connection with the Annual Report of Mitsubishi UFJ Financial Group, Inc. (the “Company”) on
Form 20-F for the fiscal year ended March 31, 2014 as filed with the US Securities and Exchange Commission
on the date hereof (the “Report”), I, Taihei Yuki, Senior Managing Director and Chief Financial Officer of theCompany, hereby certify, pursuant to 18 U.S.C. Section 1350 that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Actof 1934; and2. The information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the Company.
Dated: July 18, 2014/s/ Taihei Yuki
Name: Taihei Yuki
Title: Senior Managing Director and Chief
Financial Officer