Fiscal 2022 Interim
Results
Fixed Income Investors
Presentation
December 2022
Mitsubishi UFJ Financial Group, Inc.

Disclaimer
This document contains forward-looking statements in regard to forecasts, targets and plans of Mitsubishi UFJ Financial Group, Inc. (“MUFG”) and its groupcompanies (collectively, the “group”). These forward-looking statements are based on information currently available to the group and are stated here on thebasis of the outlook at the time when this document was produced. In addition, in making these statements, certain assumptions (premises) have been utilized.
These statements and assumptions (premises) are subjective and may prove to be incorrect or may not be realized in the future. Underlying such assumptions
are a large number of risks and uncertainties. Please see other disclosures and public filings made or to be made by MUFG and the other companies comprising
the group, including our latest consolidated summary report, financial report, securities report, quarterly securities report, annual report, and our latest annual
report on Form 20-F and other reports submitted to the U.S. Securities and Exchange Commission, for additional information regarding such risks anduncertainties. The group has no obligation or intent to update any forward-looking statements contained in this document.
In addition, information on companies and other entities outside the group that is included in this document has been obtained from publicly available
information and other sources. The accuracy and appropriateness of that information has not been verified by the group and cannot be guaranteed.
The financial information used in this document was prepared in accordance with accounting principles generally accepted in Japan (“Japanese GAAP”), unlessotherwise stated. Accounting principles generally accepted in the United States (“U.S. GAAP”) differ in certain important respects. You should consult your own
professional advisers for a more complete understanding of the differences between U.S. GAAP and Japanese GAAP and the generally accepted accounting
principles of other jurisdictions and how those differences might affect the financial information contained in this document.
This document may not be reproduced, redistributed or passed on to any other person or published, in whole or in part, for any purpose, without our priorwritten consent.
The information included in this document is not an offer to sell, or a solicitation of an offer to buy, any securities in the United States, Japan or any otherjurisdiction.
This document is as of December 1, 2022.

Definitions of abbreviations used in this document
the Bank (BK):
the Trust Bank (TB):
the Securities HD (SCHD):NICOS:MUMSS:
MUAH:
KS:
BDI:
FSI:
MUB:

MUFG Bank, Ltd.
Mitsubishi UFJ Trust & Banking Corporation
Mitsubishi UFJ Securities Holdings Co., Ltd.
Mitsubishi UFJ NICOS Co., Ltd.
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
MUFG Americas Holdings Corporation
Bank of Ayudhya Public Company Limited (Krungsri)
PT Bank Danamon Indonesia, Tbk.
First Sentier Investors (Australia) Services Pty Limited
MUFG Union Bank, N.A.

DS:
R&C:
JCIB:
GCIB:
GCB:
AM/IS:
Global Markets:
FSA:

Digital Service Business Group
Retail & Commercial Banking Business Group
Japanese Corporate & Investment Banking Business Group
Global Corporate & Investment Banking Business Group
Global Commercial Banking Business Group
Asset Management & Investor Services Business Group
Global Markets Business Group
Financial Services Agency of Japan

Definitions of figures used in this document
Consolidated:
Non-consolidated:

Mitsubishi UFJ Financial Group Inc. (consolidated)the Bank consolidated:
MUFG Bank, Ltd. (consolidated)
Simple sum of MUFG Bank, Ltd. (non-consolidated) and Mitsubishi UFJ Trust & Banking Corporation (non-consolidated)

2

Contents
Section 1 Overview

4

Section 2 Financial results

8

Section 3 Capital raising strategy

20

Section 4 MUFG’s approach to ESG

26

Appendix33

3Section 1
Overview

4Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

Group structure
As of September 30, 2022

Mitsubishi UFJ Financial Group, Inc.
(MUFG)

Strategic
alliance

Morgan Stanley*1

Holding Company

MUFG Bank, Ltd.
(the Bank)

Mitsubishi UFJ
Trust and Banking
Corporation(the Trust Bank)

Mitsubishi UFJ Securities
Holdings Co., Ltd.
(the Securities HD)

Mitsubishi UFJ
NICOS Co., Ltd.
(NICOS)

MUFG
Americas Holdings
Corporation (MUAH)*2

Mitsubishi UFJ
Kokusai AssetManagement Co., Ltd.

Mitsubishi UFJ
Morgan Stanley
Securities
Co., Ltd. (MUMSS)ACOM Co., Ltd.

Bank of Ayudhya
Public Company
Limited (KS)First Sentier Investors(Australia) Services
Pty Limited (FSI)

Morgan Stanley MUFG
Securities Co., Ltd.*1

PT Bank Danamon
Indonesia, Tbk. (BDI)MUFG Investor
Services Holdings
Limited*1 Morgan Stanley and Morgan Stanley MUFG Securities are equity method investees of MUFG as of September 30, 2022
*2 We sold MUB, a subsidiary of MUAH, excluding its global corporate and investment banking business and certain related business and assets and liabilities,
to U.S. Bancorp on December 1, 2022

5

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

MUFG at a glance
Financials*1

Consolidated

CapitalCommon Equity Tier 1 Capital Ratio as ofend September 2022 (financial strength)

FY 2022 H1
Consolidated gross profits1(before credit costs for trust accounts)￥2,323.4bn / US$16.0bn

2 Profits attributable to owners of parent￥231.0bn / US$1.5bn

13.0%

End Sep 2022

12.0%

3 Total assets
4 Loans (banking + trust accounts)
5 Deposits
6 Market capitalization*2￥120.8tn / US$835bn

Current method basis*6
Finalized Basel III reforms basis

11.0%
10.0%

￥222.0tn / US$1,534bn￥9.2tn / US$66bn
158.6%

8 NPL ratio*4

1.09%

Group network

10.0%

9.8%

9.0%
End Mar End Mar End Mar End Mar End Mar End Mar End Mar End Sep
16
17
18
19
20
21
22
22

Ratings (holding company)(As of end September 2022)

461 locations*7

9. 8%(current method basis)*5￥391.8tn / US$2,707bn

7 Consolidated LCR*3

Domestic Network:

Consolidated(As of end November 2022)

Global Network:

Moody’s

S&P

Fitch

Approx. 2,400 locations*8

Long-term

A1

A-

A-

across over 50 countries

Short-term

P-1

-

F1

*1 Exchange rate applied is ¥144.69/US$*6 Estimated CET1 ratio reflecting the RWA increase calculated on the basis of the finalized*2 As of end November 2022. Exchange rate applied is ¥139.35/US$
Basel III reforms expected to be fully applied in 2029, according to the amended*3 The ratio is the three-month average of daily LCR for the three months ended September
notification on capital adequacy ratio published by the FSA on April 28, 2022
30, 2022, that is calculated by dividing the balance of High-Quality Liquid Assets by the*7 A facility that houses several branches for retail clients is counted as a single location.
amount of total net cash flows on a daily basis for the same three months
Total of the Bank, the Trust Bank and the Securities HD*4 The calculation of the NPL ratio has been changed per amendments to the definition of*8 Including 459 locations of Adira Finance, a subsidiary of BDI
risk-monitored loans under the Japanese Banking Act. Please see P.15
*5 Calculated on the basis of regulations applied at the end of September 2022

6

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

MUFG credit highlight
Profit track record
1Consolidated

2.0%

1,130.8

989.6
872.6

528.1
1

FY17

FY18

FY19

FY20

1.0%

Consolidated Liquidity Coverage Ratio*2(End September 2022)

231.0

Issuance track record*6

1.18%

1.09%

10

10
5

(End September 2022)
0

Credit ratings

TLAC-eligible senior debt
USD
AUD

5.0

0

(current method basis*5)

1.14%

NPL Ratio*3*4(US$bn)CET1 capital ratio

0.99%

End Mar End Mar End Mar End Mar End Sep
19
20
21
22
22

20

9.8%

New standard

0.0%

Profits attributable to owners of parent
Consolidated

0.90%

Consolidated

0.5%

FY21 FY22 H1

Sufficient capitalPreviousstandard

1.5%

158.6%

777.0
679.2

FY16

Sound asset quality

Consolidated

Estimated gains on MUB transfer*1：¥448.1bn

（¥bn）
926.4

Ample liquidity

14.9
EUR
14.1 11.7
12.5
JPY
0.9
0.7
0.9
0.3
3.2
8.6
8.8
0.5
1.0
1.3
5.0
13.2 10.3
0.5 11.3 10.9
7.5
4.5

A1 / A- / A-

AT1, Tier 2 bonds
AT1
Tier2
5.8
5.7
4.6
2.5
2.9
2.3
3.2
2.9
2.3
FY15

FY16

FY17

Moody’s / S&P / Fitch
2.1

3.8
1.0 1.8
1.1 2.0

FY18

FY19

2.5
2.0
1.4 1.1 1.9
1.5 0.4
0.6
0.3
FY20

FY21

(End November 2022)

FY22 *7
YTD*1 Extraordinary gains estimated as of September 30, 2022 to be recorded upon the transfer of MUB shares. See P.55 *2 The ratio is the three-month average of daily LCR for thethree months ended September 30, 2022, that is calculated by dividing the balance of High-Quality Liquid Assets by the amount of total net cash flows on a daily basis for the same
three months *3 Total non-performing loans / Total loans *4 NPL Ratio (1.14%) as of the end of March 2021, NPL Ratio (1.18%) as of the end of March 2022 and NPL Ratio (1.09%)
as of the end of September 2022 are calculated as per the amendments to the definition of risk-monitored loans under the Japanese Banking Act. See P.15 *5 Calculated on the basis ofregulations applied at the end of September 2022 *6 Total of public issuance (excluding the amount of buyback) as of the end November 2022. All figures are converted into US$ using
actual exchange rates as of the end November 2022 *7 From April 1, 2022 to November 30, 2022

7

Section 2
Financial results

8

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

Income statement summary
Consolidated （¥bn）
1Gross profits(before credit costs for trust accounts)

FY21 H1

FY22 H1

1,980.8 1 2,323.4

YoY
342.5

2

Net interest income

992.4

1,674.0

681.6

3

Trust fees +Net fees and commissions

744.7

772.2

27.4

4

Net trading profits +Net other operating profits

243.6(122.8)(366.5)70.5(497.1)(567.7)

1,343.2 2 1,428.1

84.8

5

Net gains (losses) on debt securities

6 G&A expenses
7 Net operating profits
8 Total credit costs
9 Net gains (losses) on equity securities

637.5

895.2

257.7

17.9 3 (243.8)(261.7)

126.0

76.1

(49.9)

10

Net gains (losses) on sales of equity securities

131.2

131.6

0.3

11

Losses on write-down of equity securities(5.2)(55.5)(50.3)

12 Equity in earnings of equity method investees

218.3

239.2

20.8

13 Other non-recurring gains (losses)(13.9) 4 (375.7)(361.8)14 Ordinary profits

986.0

591.0

(394.9)69.9(57.3)(127.2)(225.7)(260.8)(35.0)

781.4 5231.0

(550.3)

60.87

18.50

(42.36)15 Net extraordinary gains (losses)
16

Total of income taxes-current andincome taxes-deferred

17 Profits attributable to owners of parent
18

EPS (￥)*1 Impact of FX translation was approximately +¥111.5bn

1 Gross profits•

Net interest income increased due to improvement oflending spread as well as an increase of overseas interest
income from lending and deposits during the period wheninterest rates in U.S. rose.

•

Treasury recorded ¥490.1bn in gains on investment trusts
cancellation (as net interest income) and also recorded¥(497.1)bn in net losses on debt securities due to portfolio
rebalance mainly in foreign bonds considering gains onhedges with derivatives.

•

Thus, gross profits increased ¥342.5bn YoY.

2 G&A expenses•

G&A expenses excluding the impact of FX translation*1
decreased YoY.

•

Expense ratio decreased to 61.4%

3 Total credit costs•

Credit costs associated with accounting treatment inconnection with our decision to sell all shares of MUB(valuation losses on loans held by MUB etc.) was recordedat ¥(231.9)bn.

4 Other non-recurring gains (losses)•

Losses associated with accounting treatment in connection
with our decision to sell all shares of MUB (valuation losses
on bonds held by MUB etc.) was recorded at ¥(331.8)bn.

5 Profits attributable to owners of parent•

Although profits attributable to owners of parent
decreased by¥550.3bn to ¥231.0bn, we are making good
progress toward the FY2022 target considering estimatedgains of ¥448.1bn that will be recorded as extraordinary
gains upon MUB’s transfer in the quarter ending December
31, 2022.

9

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

Net operating profits results by business group
Net operating profits by business group*1 Consolidated

Changes by business group*1

(¥bn)

(¥bn)

FY22H1

GlobalMarkets
225.3
(24%)

¥889.6bn*2

GCIB

GCIB
+82.0

109.2
R&C
(11%) 55.4
(6%)

180.1
(19%)
JCIB
53.8
(6%)

AM/IS

GlobalMarkets
+64.1

DS

176.8
(19%)

Consolidated*1 On a managerial accounting basis*2 Includes net operating profits (losses) of “Others” (FY21H1: ¥(26.4)bn, FY22H1: ¥(53.6)bn)

Others(27.2)

GCB
+32.2
JCIB
+71.2

634.3*2

DS
+15.2

142.4
(15%)

GCB

889.6*2

AM/IS
(3.8)

R&C
+21.7

Total of customer business+218.4FY21H1FY22H1

10

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

Outline of profits attributable to owners of parent
History of profits attributable toowners of parent

Consolidated（¥bn）

Breakdown of profits attributable toowners of parent*2

Consolidated

（¥bn）

1

Morgan *Stanley

4

Estimated gains on MUB transfer*1：¥448.1bn

166.1

1,130.8

Others

(0.7)

989.6
KS

926.4

BDI

9.3
*3 44.7
MUAH

872.6

FSI

10.4

the
59.6
the Securities
Trust
HD NICOS ACOMBank 18.7 0.4 13.0

777.0
679.2

99.9

the
Bank
441.0

528.1

Impact of MUB’svaluation losses¥(631.8)bn

1
MUFG

231.0

231.0

FY16

FY17

FY18

FY19

FY20

FY21

FY22
H1

*1 Extraordinary gains estimated as of September 30, 2022 to be recorded upon the transfer of MUB shares. See P.55
*2 The figures reflect the profit attributable to the group’s percentage holding in each subsidiary and equity method investee*3 Exclude the impact of MUB’s valuation losses*4 The figure includes ¥(23.7)bn of losses on change in equity

11

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

Balance sheet summary
Balance sheet summary

Consolidated

As of end Sep 2022

Assets¥391.8tn

Loans (Period end balance)*1(¥tn)

Housing loan*2

Consolidated*2*3

Domestic corporate

Government
Overseas*4
Consumer finance / Others

Overseas: +8.7 from end Mar 22(+2.9 excluding impact of FX fluctuation)

Liabilities¥373.9tn

120.8

109.4

107.5

111.5

2.5

2.2

2.2

44.4

39.3

43.0

51.8

3.0

2.5

2.1

2.4

Loans

44.6

48.4

48.9

49.6

(Banking + Trust accounts)

14.8

14.9

15.0

14.8

¥120.8tn

End
Mar 20End
Mar 21

EndMar 22End
Sep 22

Investment
Securities

Deposits¥222.0tn

Deposits (Period end balance)(¥tn)(Banking accounts)

2.0

*5

Domestic individual

Consolidated*5

Domestic corporate, etc.

Overseas and others

Overseas and others: +7.2 from end Mar 22(+0.9 excluding impact of FX fluctuation)¥84.4tn

211.5

215.4

222.0

46.9

47.1

54.3

79.7

80.0

77.9

79.3

84.8

88.2

89.7

End
Mar 20End
Mar 21

EndMar 22End
Sep 22

187.6
41.7
66.5

Net assets¥17.8tn*1 Sum of banking and trust accounts*2 Non-consolidated + trust accounts*3 Excluding loans to government and governmental institutions, and including foreign currency-denominated loans (excluding impact of FX fluctuation:¥(0.1)tn from end March 2022)*4 Loans booked in overseas branches, MUAH, KS, BDI, the Bank (China), the Bank (Malaysia) and the Bank (Europe)*5 Non-consolidated

12

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

Domestic loans
Loan balance (Period end balance)*1(¥tn)+0.8 from end Mar 2022

Housing loan *2

SME

Consolidated((0.0) excluding impact of FX fluctuation)*2*3*4

Changes in domestic deposit / lending rate*5*6
0.9%

Lending rate

Deposit / lending spread

Large corporate*2*3
Government

62.5

65.9

66.1

66.9

2.5

2.1

2.4

24.4

24.2

21.2

Deposit rate

0.79%

0.8%

0.76%

0.75%

0.75%

0.75%

0.00%

0.00%

0.76%
0.79%

0.7%

3.0

Non-consolidated

24.7

0.77%

0.00%

0.00%

0.6%

0.0%

23.9

0.75%

25.2
0.00%

FY20

FY21

FY22

Q2

Q2

Q2

Domestic corporate lending spread*3*5*6
23.3

0.77%

24.3

Large corporate

0.7%
0.6%

SME

0.55%

0.54%

Non-consolidated

0.65%

*7

0.53%

0.53%

0.48%

0.49%

0.54%

*7

0.5%

0.52%

14.8

14.9

15.0

14.8

0.4%

0.45%

0.46%

FY21

列7

0.0%

End

End

End

End

Mar 20Mar 21Mar 22

Sep 22

FY20
Q2

列4

20年度
4Q2

列5

Q2

*1 Sum of banking and trust accounts *2 Non-consolidated + trust accounts *3 Including non-JPY loans*4 Domestic loans to small / medium-sized companies and proprietors (excluding domestic consumer loans)*5 Excluding lending to government etc. *6 Managerial accounting basis*7 Excluding impact of the collective recording of interest received at fiscal year-end via COVID-19 government subsidized interest payment programs

21年度 21年度
4Q

1Q

FY22
Q2

13

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

Overseas loans
Loan balance (Period end balance)(¥tn)

Americas

EMEA

Asia / Oceania

MUAH

KS

BDI

Others

43.0
0.0
0.9
4.9

51.8
0.0
1.1
5.8

2.94%

3.0%

2.0%
1.22%

10.4

1.0%

15.1

0.0%

6.8

9.5

7.3

8.8

11.2

End

End

End

End

Mar 20Mar 21Mar 22

Sep 22

Lending spread*2

Non-consolidated

0.96%
0.94% 0.94%

0.99% 1.00%

1.22%

1.33%

1.02% 1.04% 1.08%
0.18% 0.25%
0.20%

FY20
Q2

7.9

6.7

1.05%
1.00%
0.95%
0.90%
0.85%
0.80%

Deposit / lending spread

12.3

11.2

7.4

Lending rate

9.1

8.3

11.9

Non-consolidated

Deposit rate

39.3
0.0
0.8
4.6

9.5

Change in overseas deposit / lending rate*2+8.7 from end Mar 2022(+2.9 excluding impact of FX fluctuation)

*1

44.4
0.1
1.0
4.8

Consolidated

MUAH

FY22
Q2
MUAH / KS / BDI

*3

KS

7.8%

6.0%
8.0%

0.67%

FY21
Q2

Net interest margin
10.0%

1.86%
1.61%
1.19%
1.33%

*4

7.8%

BDI

7.9%

*5

7.9%

7.9%

3.41% 3.28% 3.32%
3.05% 3.20%

4.0%

1.86% 1.99% 1.98%

2.0%

2.09% 2.17%

0.0%

FY20
Q2

FY21
Q2

FY22
Q2

FY20
Q2

FY21
Q2

*1 Loans booked at offshore markets etc. *2 Managerial accounting basis*3 Financial results based on U.S. GAAP including balance classified as held-for-sale account*4 Financial data as disclosed in KS’s financial reports based on Thai GAAP, and starting from January 1, 2020, Thailand adopted TFRS 9 (which is broadly similar
to the IFRS 9 international accounting standard)*5 Financial data as disclosed in BDI’s financial reports based on Indonesia GAAP. Calculation method modified from FY21 and retroactively applied in thisdocument

FY22
Q2

14

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

Loan assets
Non-performing loans*1

Total credit costs*3 / Credit cost ratio*4

Consolidated(¥bn)

Total credit costs*3(¥bn)
Risk-monitored loans（previous standard）

Credit cost ratio*4

New standard
NPL ratio*2

Reversal ofcredit costs

1.14% 1.18% 1.09%

Increase incredit costs

11.8(0.01)%

1.40% 1.45% 1.41%

1.25%

1.17%
0.90% 0.99%

1,539.9

0.04%(46.1)

1,655.8

0.15%

1,539.2
1,341.0

1,271.7

Consolidated

1,471.8 1,478.9
1,363.9

0.14%(161.6)(155.3)

(5.8)

0.20%
(222.9)0.22%

1,089.8

0.01%(255.1)

967.0
0.30%
(243.8)(331.4)

Including ¥(231.9)bn of valuation
losses on loans to be sold inconnection with MUB transfer etc.
0.48%
(515.5)FY13Mar.15 Mar.16 Mar.17 Mar.18 Mar.19 Mar.20 Mar.21［Breakdown］

Mar.21 Mar.22 Sep.22

133.9

116.0

71.3

64.0

63.7

134.7

138.7

124.0

176.9

Nonconsolidated*5

35.1

Americas

100.7

199.4

216.0

157.5

148.2

145.5

224.7

226.7

178.1

170.0

CF*6

(35.7)

Asia

108.8

145.3

142.3

155.8

170.3

259.1

300.5

305.8

302.9

363.1

Overseas*7

584.3

621.3

680.9

692.5

866.6

FY16

FY17

FY18

FY19

FY20

FY21

768.7

*1 Due to amendments to the Japanese Banking Act, the scope of risk-monitored loans disclosed under theJapanese Banking Act was changed and became the same as the scope of non-performing loans disclosed
under the Japanese Financial Reconstruction Act (FRA). Under the previous standard, these loans were “riskmonitored loans,” but they are now “non-performing loans.” Regions are based on the borrowers’ location.
*2 Total non-performing loans / Total loans under the Japanese Banking Act (Previous standard: Total riskmonitored loans / Total loans and bills discounted (banking accounts as of period end))*3 Including gains from recovery of loans written off

Others

*8

FY22
H1

88.2

887.0

FY15

［Breakdown］

EMEA

Domestic 1,242.0 1,177.1 1,064.7

FY14

9.2
3.2

(71.1) (103.7)(47.9)

79.5

129.8

(44.1)(51.6)(64.5)(83.6)(81.7)(63.2) (100.8)(45.0)(42.7)(52.3) (141.6) (232.3)(28.9) (296.9)

2.1

0.8

(1.5)

(2.6)

16.9

1.0

12.6 (223.2)(87.6)(6.2)(64.4)

4.5(233.8)95.1(66.0)(34.7)(7.3)*4 Total credit costs / loan balance as of period end. It is currently estimated that the total credit
costs of the major overseas subsidiaries (which were consolidated based on their financial
statements for the six months ended June 30, 2022) for the quarter ended September 30,
2022 will be approx. ¥240bn. The subsidiaries’ total credit costs will be reflected inconsolidated financial statements for the quarter ending December 31, 2022
*5 Including overseas branches*6 Sum of NICOS and ACOM on a consolidated basis*7 Sum of overseas subsidiaries of the Bank and the Trust Bank
*8 Sum of other subsidiaries and consolidation
adjustment

15

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

Investment securities
Available-for-sale securities with fair value*1
Balance(¥bn)

1 Total2

3
4Domestic equity securities
Domestic bonds
Japanese government bonds

5

Foreign equity securities

6

Foreign bonds

7

Others

Unrealized gains (losses)

End Sep 22

Changes fromEnd Mar 22

End Sep 22

Changes fromEnd Mar 22

70,792.2(4,117.4)

769.3(1,622.5)

4,235.7(377.9)2,592.4(321.6)36,936.2(3,497.3)(154.1)(92.3)

29,194.6(2,217.2)(120.0)(64.6)

197.1(21.4)

25.5

(2.2)

20,506.6(1,523.8)(1,840.9)(988.0)8,916.4

1,303.2

146.5(218.1)

Balance of JGB portfolio*4 and duration
Over 10 years
1 year to 5 years
Average duration (year) *5

(¥tn)

50

33.4
2.5

7.5

0.73
2.13

Unrealized gains (losses) on foreign bonds
reflecting hedging positions etc.*3 (¥tn)
End
Mar 20

4.0

3.8

33.1
2.5
3.5
6.0

36.3
1.4
4.6

30

0.76

2.91

2.59

End
Mar 21

Over 10 years
1 year to 5 years
Average duration (year)*5(1.84)

Approx.
(0.4)

Approx.
(1.0)

End
Mar 22End
Sep 22
Non-consolidated

5 years to 10 years
Within 1 year

5.8

5.5

5.9

20

8.9

10.8

1.1
10

22.8

21.0

5.4

21.2

Mar 21

EndMar 22

2.9
2.5

18.4

6.5

7.5

10.4

5.6

3.5
3.0
2.8

4.4
5.5

End

End

Sep 22

Mar 20Mar 21*1 Unrealized gains (losses) as of September 30, 2022 do not include ¥385.2bn of valuation
losses in connection with the sale of all shares of MUB*2 Approximately ¥(0.7)tn excluding the impact of FX translation*3 Managerial accounting basis

19.7

18.5

1.9
End

0

End

5.2

21.6

10.3

Mar 202.39
0.39

Balance of foreign bonds*4 and duration
(¥tn)

0

End

3.35

Domestic bonds
Others

(0.85)

Non-consolidated

1.9

2.9

30

10

2.88

Consolidated

2.8

3.5

21.7
2.6

*2

Domestic equity securities
Foreign bonds
3.74

(¥tn)

5 years to 10 years
Within 1 year40

20

Unrealized gains (losses) on available-for-sale securities*1

Consolidated

3.2
1.9
End

End

Mar 22

Sep 22*4 Available for sale securities and securities being held to maturity*5 Available for sale securities

16

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

Response to rises in non-JPY interest rates• Utilize hedging tools, etc. to control unrealized losses
Treasury business in response to rises in non-JPY interest
rates

Current unrealized gains / losses• Unrealized losses of foreign bonds were expanding due torises in interest rates• Recorded net unrealized “gains” on a total AFS securities*1
basis (including equities)

Controlling unrealized gains / losses on foreign bonds

Impact of rises in non-JPY interest rates• Increase in net interest income from loans anddeposits
Customer⁻ Both loan interest income and deposit interest
business
expenses are linked to interest rates
⁻ Seek to curb funding costs with liquid deposits

Treasury• Aim to reduce interest rate risk*2• Utilize hedging tools to increase financial profits and sellforeign bonds with unrealized losses*3• Purchase foreign bonds in the HTM securities*4 account• Decrease in net interest income due to increasein funding costs from rises in interest rates• Expansion of unrealized losses on investment
securities, while increase in reinvestment yield∎ Non-JPY balance sheet*6(US$ bn)

As of end Sep. 2022(¥tn)

Disclosed figures as of
Includingend Sep. 2022
hedging position

Linked to rises
in interest rates

Loans
307

Approx.
(1.0)
Approx.
(1.8)
Utilized hedging tools (bear funds,
hedge swaps, etc.)
Due to reduction of foreign bonds during FY22H1, wereduced unrealized losses by approx. 30% compared to thelevel if we maintained the same position as of end Mar. 2022

Linked to rises
in interest rates
Expansion of
unrealized
losses, while
increase inreinvestment
yield(incl. deposits
from central
banks)

Seek to curb
increase infunding costswith liquid
deposits

Market funding,etc.

Linked to rises
in interest rates

Customer
deposits∎ Unrealized gains / losses on foreign bonds (as of end Sep. 2022)*5

Interbank mkt
operations, etc.

99

Investment
securities

246

268

87
OthersOthersAssetsLiabilities*1 Available-for-sale securities *2 Risks of price fluctuations associated with our bond holdings due to interest rate fluctuations*3 MUFG recorded ¥(497.1)bn in net losses on debt securities for the six months ended September 30, 2022 *4 Held-to-maturity securities*5 MUFG consolidated basis (excluding MUB) *6 The Bank consolidated excl. MUAH, KS and BDI. Managerial accounting basis

17Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

Capital
CET1 / Total capital ratio

Consolidated

Transitional basis (-End March 2018)
Current method basis*1 (End March 2019-)

CET1 Ratio
16.5

16.0

Excluding impact of net
unrealized gains (losses) on
available for sale securities

AT1 / Tier2 Ratio
15.8

16.3

Current
methodbasis*1

14.2

Finalized
Basel III
reforms basis*2

9.8

12.2

11.9

12.3

11.0

9.8

9.4

10.0

9.9

End Mar
19

5.01%

4.94%

End Mar20

4.42%

End Mar21

5.45%*4

End Mar22

5.14%*4

End Sep
22

End Sep
22

End Sep
22

4.49%*4*1 Calculated on the basis of regulations applicable to the respective dates shown*2 Estimated CET1 ratio reflecting the RWA increase calculated on the basis of the finalized
Basel III reforms expected to be fully applied in 2029, according to the amended
notification on capital adequacy ratio published by the FSA on April 28, 2022
*3 Adjustments made for the difference between risk–weighted assets under Basel I andBasel III
*4 Based on FSA notification, deposits with the Bank of Japan are excluded from total
exposures

Common Equity Tier 1
capital ratioEnd
Sep 22

Changes

11.06%

9.82%(1.24)ppt

2 Tier 1 capital ratio

12.38%

11.15%(1.23)ppt

3 Total capital ratio

14.29%

13.04%(1.25)ppt

4 Leverage ratio

5.14%

4.49%

(0.64)ppt

13,823.9

12,984.2(839.6)

1

Common Equity Tier 1 capital

6

Retained earnings

11,998.1

12,047.9

49.7

7

Other comprehensive income

2,565.1

2,549.2(15.8)

8

Regulatory adjustments(3,242.9)(3,902.0)(659.1)9Additional Tier 1 capital

1,652.3

1,759.1

106.8

10

Preferred securities andsubordinated debt

1,534.0

1,634.0

100.0

11 Tier 1 capital

15,476.2

14,743.4(732.8)12 Tier 2 capital

2,382.3

2,490.7

108.4

Subordinated debt

1,730.7

1,874.4

143.7

14 Total capital (Tier 1+Tier 2)

17,858.6

17,234.2(624.3)15 Risk weighted assets

124,914.2 132,159.3

7,245.1

13
End Mar18
Leverage
Ratio

Consolidated

End
Mar 22

(¥bn)

5

13.0

12.5

Capital summary

16

Credit risk

91,927.2 100,044.5

8,117.3

17

Market risk

4,389.9

6,308.7

1,918.7

18

Operational risk

7,990.1

7,989.6(0.5)

20,606.9

17,816.3(2,790.5)

300,792.3 327,918.4

27,126.0

19*3

Floor adjustment

20 Total exposures*418

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

Global financial institutions' senior bonds ratings
As of November 30, 2022

HD / Non-preferred senior

Operating bank / Preferred senior

Moody’s
Aa2
Aa3
A1
A2
A3
Baa1
Baa2
Baa3

■
★

0

■
2

■

★

■
2

3

★

■

■
3

★
★

■
★

■
2

■

■

4

4

★

2
★

■

3
★

3
★

★

S&P
AA
AAA+
A
ABBB+
BBB
BBB-

■
■
★ 1

■
3

■
2

■
2

★

3

★

★

■

■
■

2
★

■

★

★

3
3

■
2

2
★

■
3

★

★

★

Fitch
AA
AAA+
A
ABBB+
BBB
BBB-

■
1
★
★

0

■
★ 1

■
1
★
■
1
★

■
1
★

■
1
★

■
1
★

■

■
1
★

■
★ 1

Japan

US

■
1
★

Europe*1 For CA, BNP and DB, there is a single issuing entity, issuing both Preferred and Non-preferred senior bonds rather than separate HD and Operating bankissuing senior bonds, respectively

19Section 3
Capital raising strategy

20

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

Japanese TLAC framework- The best capital mix and external TLAC ratio• Aiming for optimal balance between capital efficiency and capital adequacy in qualitative and quantitative aspects−Secure necessary and sufficient level of capital with utilization of AT1 / Tier2−Maintain sustainable external TLAC ratio for the long term by raising external TLAC-eligible senior debt

MUFG’s RWA*2 based external TLAC ratio

MUFG’s external TLAC ratio and minimum
requirement
As of end
Sep 22
Risk weighted asset
basis

As of end Sep 2022

Minimum requirement

Minimum
requirement

6.1%
18.63%

Other TLAC
Eligible Debt*3

18.0%

3.5%
Total exposure basis*1

9.12%

6.75%

Contribution of
DIFR*4: 3.5%

1.8%
1.3%

Tier2
AT1

5.8%
MUFG is the primary funding entity,
which is designated as the resolution entity
in Japan by FSA
External TLAC ratio
18.63%

4.0%
Total capital ratio
13.04%

CET1: 4.5%
Regulatory
Capital Buffers*5
4.0%
External
TLAC ratio
18%*1 Based on FSA notification; deposits with the Bank of Japan are excluded from total exposures for the period until March 31, 2024
*2 Risk weighted asset*3 Including adjustment of difference between calculation method of total capital ratio and external TLAC ratio and adjustment of amount of other TLACeligible liabilities owned by the issuer’s group, etc.
*4 Contribution of Deposit Insurance Fund Reserves : Japanese Deposit Insurance Fund Reserves fulfill the requirements for ex-ante commitments torecapitalize a G-SIB in resolution set out in the FSB’s TLAC termsheet(Can include 3.5% of RWAs, in external TLAC ratio)*5 CET1 Buffer applicable to MUFG: G-SIB Surcharge:1.5%, Capital Conservation Buffer:2.5%, and Counter-cyclical Buffer:0.01%

Total
capital ratio
12%21

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

MUFG issuance track record and redemption schedule
TLAC-eligible senior debt*1(US$bn equi.)Issuance track record*2
20

(1.6)

(1.0)

8.6

10

0.9

8.8
1.3

5.0
5

13.2

7.5

12.5

11.7

0.9

USD

FY16

EUR

FY17

5.0
10.3

11.3

0.3
0.9

10.9

0.5

AUD

FY19

FY20

2.8

2.3
FY21

FY22

The amount of buyback YTD

JPY

0.2
0.3

8.4

4.5
FY18

4.2

0.7 3.2
0.5

0.3
1.0

0
FY15

16.3

14.9

14.1

15

Redemption schedule*3

0.5

FY22

7.5
11.6

7.3
FY23

4.8
0.2

4.6
FY24

FY25

0.3 5.8
0.5

6.7
FY26

0.2

5.6
FY27

3.9

3.8

3.5

2.6

0.5 1.3

2.6

3.0

FY28

FY29

3.6

FY30

0.2

FY31

3.0

0.2
0.8

FY32

*4

AT1, Tier2 bond*1(US$bn equi.)Issuance track record*2

10

5.8

5.7
5

4.6
2.5

2.9

3.2

2.9

2.3

FY15

FY16

Tier2

4.4

3.8
2.1

3.1

2.5

1.8

2.0

2.3

1.0
1.1

2.0

1.5
0.4

1.1 0.3

FY17

FY18

FY19

FY20

FY21

0
AT1

Redemption schedule*3

1.4

1.8

1.9
0.6

FY22
YTD

1.1

2.9

2.9

1.8

1.7

1.2

0.7
0.4

1.1

1.2

FY22

FY23

FY24

FY25

2.2

3.6
2.1

2.1

1.5

1.5

0.7
0.8

1.2

FY29

FY30

0.3

2.2

1.4

1.8

FY26

FY27

FY28

0.3
0.3

FY31

0.8

0.5
0.3

FY32

*4

*1 All figures are converted into US$ using actual exchange rates as of end November 2022
*2 Total of public issuance (excluding the amount of buyback) as of end November 2022
*3 Annual figures assuming that all callable notes are to be redeemed on their respective first callable dates, while there is no assurance they will be redeemedon such dates. Tier2 includes Basel II Tier2 sub notes issued by the Bank and the Trust Bank (including their respective overseas special purpose companies)*4 From April 1, 2022 to November 30, 2022

22

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

MUFG TLAC-eligible senior debt issuance summary
By currency*1*2(US$bn equi.)
15

USD

By term*1*2*3
EUR

7%

100%

FY16

FY17

12% 89%

88%

83%

100%
FY15

93%

FY19

FY20

10

73%

FY21

4 years
3NC2

50%
50%

0

FY15

65%

65%

FY16

FY17

7 years
6NC5

7%

10 years
11NC1020 years

21%
13%

30%

30%

17%
19%

29%
6%

5

FY22
YTD *45 years
4NC3

24%

88%
FY18

3 years
2NC1

15

6%
6% 21%
4%

3%

9%
17%

5

(US$bn equi.)

JPY

17%

10

0

AUD

23%
5%

44%

44%

38%
25%

19%

29%
25%
34%12%26%

FY18

FY19

FY20

FY21

44%

FY22
*4
YTD

5% 2%

Past issuance calendar
Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

5y/10yUS$5.0Bn$$

5y/10y (Re-open)
US$2.0Bn

€

FY18

$

€

€

$

5y/10yUS$4.0Bn

7y
EUR0.75Bn

5y Green
EUR0.5Bn

5y/7y/10y
US$3.5Bn$

5y
EUR0.35Bn

3y/5y/10y(Re-open)/20y
US$4.6Bn$

FY19

3y/5y/10y/20y
US$6.5Bn€

FY20

4y Sustainability
EUR0.5Bn€

FY21$
4NC3/6NC5/11NC10
US$2.0Bn$

5y/10yUS$2.5Bn

5y/7y Green /10y
US$4.0Bn

FY17

FY22

Mar

$

FY15
FY16

Feb

€

$

5y/10yUS$3.0Bn¥ €$3NC2/10y 3NC2/6NC5/11NC10
EUR1.75Bn
US$4.5Bn$

10y Green
US$120MM (Sold in domestic market)$

A$

10y Social
US$90MM (Sold in domestic market)$

3y/5y/10y/20y
US$5.5Bn$

5y/10yUS$3.75Bn$

4NC3
US$1.5Bn$

4NC3/6NC5/11NC10
US$6.0Bn€

5y Green
EUR0.5Bn

5y Green
AU$0.5Bn

5y/10y Green
EUR1.0Bn

6NC5
EUR0.5Bn
2NC1/4NC3/
6NC5/11NC10
JPY120Bn$

5y(Re-open)/10y
US$3.0Bn$¥

4NC3/6NC5/11NC10 4NC3/6NC5/11NC10
US$3.0Bn
JPY100Bn$

6NC5/11NC10
US$2.3Bn$ €3NC2/6NC5/ 3NC2
11NC10 EUR1.3Bn
US$4.4Bn*1 Total of public issuance (excluding the amount of buyback), as of end November 2022
*2 Exchange rates: As of end of each FY (for FY22: end November 2022)*3 Re-opening bonds are included in the original bonds’ terms*4 From April 1, 2022 to November 30, 2022

23

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

MUFG’s Green, Social and Sustainability Bonds• MUFG revised its “Green, Social and Sustainability” bond framework in May 2020 and it is the first
framework in Japan to channel funds specifically towards the fight against COVID-19• MUFG has a proven track record as a frequent ESG bond issuer
Track Record of Bond Framework Revision

Green / Social / Sustainability
Bond Framework

Sep. 2016
Created our inaugural
green bond framework

Investor

5

Green/ Social /Sustainability Bonds

Proceeds

2
1

MUFG
MUFG BankGreen
Building

Renewable
Energy

3

8

9

7
6

May 2020
Included COVID19-related
projects in thegreen, social andsustainability
bond framework

4
Oct. 2019
Created the green, socialand sustainability bondframework

Green Bond Issuances

Loans

Green Eligible
Categories

Oct. 2018
Included green
buildings in the green
bond framework

Social Eligible Categories

1
2
3
4
5
6

Issuance
9/13/16
1/26/18
10/9/18
12/18/18
7/19/19
10/1/19

Currency
USD
EUR
EUR
USD
EUR
AUD

Amount
500mm
500mm
500mm
120mm
500mm
500mm

Tenor
7y
5y
5y
10y
10y
5y

Format
SEC
Reg S
Reg S
Japan Domestic
Reg S
Reg S

Social Bond Issuances
Healthcare

Education

Employment
Generation/
Preservation

Affordable
Housing7

Issuance
12/12/19

Currency
USD

Amount
90mm

Tenor
10y

FormatJapan Domestic

Sustainability Bond Issuances899Issuance
6/9/209/30/20
9/30/20

Currency
EUR
JPY
JPY

Amount
500mm
54bn
96bn

Tenor
4y
10y
10NC5

FormatReg S
Japan Domestic
Japan Domestic

24

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

Corporate structure and issuing entities
EntityStraightforward balance
sheet with the Bank andthe Trust Bank as the
directly-held operating
subsidiaries

Mitsubishi UFJ Financial Group, Inc.
A1 / A- / A-*1

Status of Securities and offering method
Senior (TLAC), Additional Tier1, Tier2•

SEC registered (benchmark)•Reg S EMTN programme(benchmark and private placement)•

Japanese domestic issuance (JPY)100% ownership

The Bank holds othersubsidiaries of the group

MUFG Bank, Ltd.
A1 / A / A-*1
Global banking branches

Global banking branches

Mitsubishi UFJ Trust andBanking Corporation
A1 / A / A-*1

*1 Credit ratings assigned by Moody’s, S&P and Fitch, respectively, as of end November 2022

Senior•Reg S EMTN programme (private placement)•

Formosa (Taiwan)

Senior•Certificates of deposit•

Local currency of relevant branch (AUD, NZD etc.)

Senior•Certificates of deposit

25Section 4
MUFG’s approach to ESG

26

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

MUFG’s approach to ESG• Plan to place greater emphasis on ESG in our business management to achieve sustainable growth incorporate value
Major Challenges

Major actions on ESG

Consider societal expectations andaffinities with MUFG’s business areas2022• Publication of MUFG Progress Report• Publication of MUFG Transition Whitepaper

2021• Carbon Neutrality Declaration• Sustainable Finance Goal (¥35tn) by
end of FY2030*1• Joined Net-Zero Banking Alliance

Supporting
Developing
industrialsocialdevelopment &infrastructure
innovation
Response to
Climate change measures
aging population& environmental& low birthrate
protection

2022

2020
2019

• Established CSuO*2• Sustainable Finance Goal (¥20tn) by endof 2030*1• Issued first sustainability linked loan(the Bank)

2018

Inclusion &diversity

MUFG’sSustainability
Management• MUFG Environmental Policy Statement
and Social Policy Framework

Ensuring equal
access tofinancial services• Issued first green bonds

Overcoming
threats
to health
Response
to poverty• Declared support for TCFD

2016

Integration withmanagement strategies
Reduction of
educational
disparities

2017

2005
• Adopted Equator
Principles (the Bank)

Promotingworkstylereforms*1 Set goals in FY19, and revised goals in April 2021
*2 Chief Sustainability Officer

27

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

Milestones toward carbon neutrality• Set and disclosed 2030 interim target range toward carbon neutrality by 2050
• Aim to achieve goals by supporting customers’ decarbonization initiatives through financing, etc.
Milestones
2019

2020

2021

・・・

2030

・・・

2040

Net zero GHG emissions fromthe financed portfolio

・・・

2050
Net zeroPower (emission intensity) *1

Oil & gas (absolute emission)*2

349

156–192

gCO2e / kWhgCO2e / kWh

83MtCO2e

Reduction rate

15-28%

Decarbonization through financial
services

Sustainable finance(environmental only) *3¥3.5tn¥8.0tn¥14.5tn¥35tn(¥2.0tn)(¥3.7tn)(¥5.4tn)(¥18tn)

US$3.58bn

US$3.77bn

Credit balance targets forcoal-fired power generation
Project finance (FY)Corporate finance (FY)

Approx.

¥120bn50% reduction
from FY2019

Zero
Zero
Bold：targets*1 Scope 1 of power generation businesses*3 Cumulative balance since FY2019*2 Scope 1, 2 and 3 of upstream production businesses

28Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

Approach to carbon neutrality– Progress on sustainable finance• Steady growth in sustainable finance with expanding track-record in environmental area
Progress in sustainable finance
Environment
Social and others
Cumulative balance
up to the previous year

Approx.
¥19.4tn

Expanding track-record in environmental area
Goal ¥35tn

A
s
i
a

1.2
3.8
1.8
4.8

2.8
2.0
1.6
FY20
20年度

• Green loan to offshore wind power project(Taiwan), first in APAC
⁻ APAC Renewable Energy Deal of the Year*1• Awarded the Year of the Bank*2 in China
⁻ As the only foreign bank to receive the award• Financed funding platform to expand e-buses in
the UK and Ireland

1.7

FY19
19年度

• Became the first in Japan to extend green loans
for data centers

FY21
21年度

FY22H1
22年度上期

FY30
30年度

E
M
E
A

• Awarded with Project Finance Houseof the Year, Global*1• Climate bond initiative certified solar project in
Egypt• Renewable project finance⁻ Ranked No.1 in league table (PFI*3)

External evaluation (global)• Awarded the Lender of the Year at the Wind
Investment Awards 2022, three years in a row• Green loan for sewage treatment plants in
Saudi Arabia

U
S• Green loan to the largest solar project in the US
to date*4• Leading the decarbonization market in key asset
classes such as battery storages*5*1 Awarded by The Asset, a leading financial magazine in APAC, in 2022 *2 China ESG Frontier Awards 2022 *3 Project Finance International CY2022 H1*4 As a single financing solar project *5 Devices that enable energy from renewables to be stored and then released when power is needed

29Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

Approach to carbon neutrality– Progress on supporting customers’ carbon neutrality• Proactive support for industrial transition and steady growth in business & solutions
for carbon neutrality
Transition finance
Assisted ENEOS Holdings, Inc. in the issuanceof transition-linked bonds as a lead manager

Progress in decarbonization business & solutions

Visualization• The first scheme of its kind in Japan• Selected as a case study in Asia
Transition Finance Guidelines• ¥100bn (in total)

Developing
strategy• Model case selected by METI*1• ¥50bn (in total)• Collaboration with Zeroboard Inc.
- Collaborated cases*2：251• Collaboration with Hitachi, Ltd.
- Proposals of visualization and reduction：16

Consulting services for TCFD disclosure

Assisted JERA Co., Inc., Idemitsu Kosan Co., Ltd.
and Mitsubishi Heavy Industries, Ltd.
in the issuance of transition bonds as a lead manager• Includes the first transition bondissuance in a sector

Visualization of GHG emissions

Carbon credits• Collaboration with Tokio Marine Nichido Fire
Insurance, Ltd.
- Consulting service for disclosure*3- A simplified consulting service employinga system developed by the company• Collaboration with Codo Advisory Inc.*4 andsupport for transition strategy development

Provide overseas voluntary carbon credits
to Japanese companies• Provide information on carbon pricing• Released a business matching service withcarbon credits provided by ENGIE Impact*1 Selected by the Ministry of Economy, Trade and Industry (METI) as a model financing initiative under a METI-sponsored transition financing model project*2 The number of cases in which clients were referred to Zeroboard following dialogue regarding the visualization of the volume of their GHG emissions*3 Consulting service by GX advisory task force organized with Tokio Marine Nichido Fire Insurance, Ltd.
*4 The only domestic firm licensed by the ACT (Assessing low Carbon Transition: An initiative developed jointly by the French Environment and Energy
Management Agency and the non-profit organization CDP with the aim of strategically transitioning to decarbonization)

30

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

Approach to carbon neutrality–Rulemaking & communicating our view
• Communicate to stakeholders around the globe the necessity of supporting transition
Sep

26th Sep

Lead discussion in Asia

Asia Transition Finance Study Grouppublished “Asia Transition Finance Guidelines”

MUFG leads study group

Background to MUFG Transition Whitepaper
1
Awareness• Need to raise stakeholder recognition of
the status of Japan’s energy affairs• Published guidelines for practitioners and action
report including policy proposals

Oct

Lead global discussion

5th Oct

NZBA Transition Finance Guide was publishedMUFG is the chair of working group• Establish rules for practical references• Deliver policy proposals

26th Oct

Communicate Japanese decarbonization
pathway to Europe and the US• Engage in the exchange of opinions withbusinesses in materials and power sectors,
which are emission-intensive, regarding
Discussion &issues they are now confronting
publication- MUFG Executive Forum (Aug 2022)
Theme ”Transition and role of Japaneseindustry”• Compile and publish a whitepaper outlining
issues confronting each business andPublishedinitiatives under way to address themin Oct• Provide explanations to financial authorities
2022
and government officials in Europe and theU.S.

2

MUFG Transition Whitepaper was published
MUFG’s original initiative• Communicate our insights regarding possible pathways
for the materials and power sectors’ decarbonization tofinancial authorities and government officials in Europe
and the U.S.

3

• Explained at peripheral
events held as part ofCommunication
COP27（Nov 2022）

31

Overview

Financial results

Capital raising strategy

MUFG’s approach to ESG

Approach to carbon neutrality–Reduction of GHG emissions & organizational structure• Reduction in GHG emissions in our own operations and enhancing organizational structure
Net-zero financed emissions

Next
step

Decarbonization through responsible investment① Progress on emission intensity of “power” and “oil &gas” sectors② Interim targets for some sectors of NZBA 9
sectors*1“Progress Report” will be published next spring

Disclosure of NZAM interim targets for 2030
• Scope : 55% of assets under management*2• Reduce the volume of GHG emissions associated with them(in terms of economic-based emissions intensity) by 50%
from the 2019 level

Reduction in GHG emissions in our own operations• Engagement with investees• Collaboration with asset owners, etc.
• Product development aimed atcontributing to net-zero emissions

Approach∎ Emissions from all consolidated subsidiaries（Thd t-CO2）

400

Enhancing organizational structure（from Oct 2022）

300
200

Net-zero

Board ofDirectors

100
0
FY2020

FY2021

FY2022(Estimate)

FY2030(Target)Completedahead ofschedule

Shifted domestic electricity procurement by all
domestic consolidated subsidiaries including
NICOS and ACOM to renewable sources

Enhancedmanagement

Achieved auto aggregation and improved
efficiency by GHG management platform
installed in all group companies globally

External advisor（3 members）
New

Executive
Committee• ESG management
consultant• Experience in multiple
government-related
Kenji Fuma
committees

Sustainability Committee
New

Miyuki Zeniya• Dedicated Chief Sustainability Officer（CSuO）• Appointed as chair of Sustainability Committee• Equipped with in-depth expertise in thesustainability field*1 Power, oil & gas, coal, commercial and residential real estate, iron and steel, aluminum, cement, transport, agriculture*2 Approx. ¥41tn (as of end Jun 2022)

32

Appendix

33

Japanese TLAC framework summary
TLAC minimum requirement

Japanese resolution system’s features• Contribution of Deposit Insurance Fund Reserves*2

As of September 2022
(for Japanese G-SIBs)

18%
TLAC
Min.

TLAC

• Multiple treatments prior to loss absorption point, even after Pointof Non-Viability (“PONV”)

Regulatory *1
CapitalBuffers

3.5%• Multiple precedents of prompt corrective action and preemptive
capital infusion*4

6.75%
Total
Exposurebasis *3

*2

2.0%
1.5%

Regulatory Capital Buffers• The Holding Company is a resolution entity in Japan (“Domestic
Resolution Entity”) designated by the FSA• External TLAC-eligible debt is issued by the Holding Company as
the Domestic Resolution Entity

4.5%
TLAC RWA based
Requirement

Requirements for external TLAC-Eligible Debt
(excerpt)

TLAC Total Exposure based Requirement

Other TLAC Eligible Debt

Contribution of Deposit Insurance Fund Reserves

T2

AT1

CET1

*1 CET1 Buffer applicable to MUFG: G-SIB Surcharge:1.5%, Capital Conservation Buffer:2.5%, Counter-cyclical Buffer: ranging from 0% to 2.5% to be
calculated as the weighted average of the buffers deployed across all the jurisdictions to which MUFG has credit exposures will be imposed*2 Japanese Deposit Insurance Fund Reserves fulfill the requirements for ex-ante commitments to recapitalize a G-SIB in resolution set out in the FSB’s TLAC
termsheet*3 Based on FSA notification, deposits with the Bank of Japan are excluded from total exposures for the period until March 31, 2024
*4 It is uncertain which measure is to be taken in a given case, and ordinary resolution measures may be applied without implementing any preemptive
capital infusion

34

Multiple treatments prior to loss absorption point• In addition to the existence of capital subordinated to TLAC senior bonds, there are multiple measuresthat can contribute to ensure the remoteness to PONV, although these are dependent on the premiseof MUFG’s self-efforts such as pre-determined recoveries, etc.
• At PONV, there is Tier 2 that is subordinated to TLAC senior bonds
Treatments

予防的措置• Insolvency proceedings– Senior bonds of MUFG absorb
loss in the proceeding after
systemically significant assets
and liabilities are transferred to abridge financial institution

Negative net worth orsuspension of repayment of
obligations(incl. the likelihood thereof)

4.5%

5.125%

CET 1:
Minimum Requirement

2

AT1 : Write-down

1

CET1 : Regulatory
Capital Buffer

4

T2: Loss Absorption(Plus AT1, if any)
PONV

• Specified Item 1 Measures*1– Special Supervision– Provision of Financial Liquidity– Capital Injection• Capital
Distribution
Constraints

TLAC Senior Bonds
Loss Absorption• Specified Item 2 Measures*1– Special Supervision– Special Control- Specified Merger, etc.
– Specified Financial Assistance• Prompt
Corrective
Action*2
3

5• MUFG’s Recovery
Plan• Multiple measures help
lower the PONV
probability• Even after PONV, AT1,
if any, and Tier 2
should contribute firstas a buffer before
TLAC loss absorption• Early Warning
System*1 Implementation of Specified Item 1 and 2 measures will depend on economic conditions and the financial institution’s soundness. Also,
Specified Item 1 measures may not necessarily be applied even before Specified Item 2 measures*2 In case TLAC ratio falls below minimum requirement, Business Improvement Order may be issued

35

Japanese TLAC framework- Precedents of capital infusions in Japan• The Japanese government has historically had multiple precedents of prompt corrective action andpreemptive capital infusion*1

Major public sector support and resolutions
Applicable rules
PublicSectorSupportResolution

-

Bank

Article 102, Paragraph
1, Item 1 of the
Deposit Insurance Act

Resona Bank

Preemptive capitalinfusion

Act on Special
Measures forStrengthening
Financial Functions

Negative net worth
or failed

Date

Amount(¥bn)

Description

Jun 2003

296

Jun 2003

1,663

Public funds infusion in common shares—government ownership of
50.1%
Public funds infusion in convertible preferred shares

Howa Bank
Kirayaka Bank (Jimoto Holdings)
Tohoku Bank
77 Bank
Tsukuba Bank
Sendai bank (Jimoto Holdings)
Miyazaki Taiyo Bank
Hokuto Bank (Fidea Holdings)
Kochi Bank
Towa Bank
Daisan Bank
Kirayaka Bank (Jimoto Holdings)
Michinoku Bank
Minaminihon Bank
Fukuho Bank
Hokuyo Bank
Howa Bank
Kiyo Holdings (Kiyo Bank)Mar 2014
Dec 2012
Sep 2012
Dec 2011
Sep 2011
Sep 2011
Mar 2010
Mar 2010
Dec 2009
Dec 2009
Sep 2009
Sep 2009
Sep 2009
Mar 2009
Mar 2009
Mar 2009
Dec 2006
Nov 2006

16
30
10
20
35
30
13
10
15
35
30
20
20
15
6
100
9
31.5

Public funds infusion in convertible preferred shares
Public funds infusion in convertible preferred shares
Public funds infusion in convertible preferred shares
Public funds infusion in subordinated loans
Public funds infusion in convertible preferred shares
Public funds infusion in convertible preferred shares
Public funds infusion in convertible preferred shares
Public funds infusion in convertible preferred shares
Public funds infusion in convertible preferred shares
Public funds infusion in convertible preferred shares
Public funds infusion in convertible preferred shares
Public funds infusion in convertible preferred shares
Public funds infusion in convertible preferred shares
Public funds infusion in convertible preferred shares
Public funds infusion in convertible preferred shares
Public funds infusion in convertible preferred shares
Public funds infusion in convertible preferred shares
Public funds infusion in convertible preferred shares

Article 74 of the
Deposit Insurance Act

Incubator Bank of JapanSep 2010

N.A.

First resolution in which deposit payoff rule was actually invoked

Negative net worth
or failed

Article 102, Paragraph
1, Item 2 of the
Deposit Insurance Act

N.A.

Negative net worth
and failed

Article 102, Paragraph
1, Item 3 of the
Deposit Insurance Act

Ashikaga Bank

Nov 2003

N.A.

DIC acquired all shares of the bank－

Act on Emergency
Measures for the
Revitalization of the
Financial Functions

Nippon Credit Bank
Long-term Credit Bank

Dec 1998
Dec 1998

3.6tn
3.2tn

Purchases the shares, unsuitable assets using special financial
assistance, compensation for losses and purchase of shares,
capital injection etc.

*1 It is uncertain which measure is to be taken in a given case, and ordinary resolution measures may be applied without implementing any preemptive
capital infusion

36

Japanese TLAC framework- A model of procedures of orderly resolution under the SPE strategy for Covered SIBs*1• The below is based on a possible model of Covered SIBs resolution under the SPE approach*2 as statedin the FSA’s explanatory paper outlining its approach to introduction of the TLAC framework in Japan
Financial Crisis Response Council

Deposit Insurance
Corporation of Japan

Prime Minister(2) Specified Confirmation(4) Bankruptcy Proceedings ofDomestic Resolution Entity
100% Ownership

External TLAC-eligible liabilities(incl. senior bonds)

Tier 2*
Additional Tier 1*

Domestic
Resolution
EntityCommon Equity Tier 1(*) Basel III eligible(1) Loss absorption (upstream)

Material
Sub-group A(Bank)

Material
Sub-group B(Securities)

Private financial
institution(s)Specified Bridge Holding
Company, etc.
(3) Transfer of Systemically
Important Assets and Liabilities(including shares of Material Subgroups, etc.) of Domestic
Resolution Entity

Material
Sub-group C(Other)Material
Sub-group A(Bank)

Within 2 years (inprinciple) after theSpecified
Confirmation

Material
Sub-group B(Securities)

Material
Sub-group C(Other)Material Sub-groups continue their business as usual*1 Covered SIBs : (i) Japanese G-SIBs and (ii) a domestic systemically important bank (“Japanese D-SIB”) that is deemed to be in particular need for a crossborder resolution arrangement and of particular systemic significance to the Japanese financial system if it fails*2 Single Point of Entry approach : to resolve a financial group at the level of its ultimate parent, rather than the operating companies at subsidiary level infinancial difficulty, by the single national financial authority

37

Japanese TLAC framework- Requirements for external TLAC-Eligible Debt (Summary)• Relevant obligations must be issued by a holding company designated as the Domestic Resolution
Entity by the FSA;
– There is no requirement for contractual loss absorption provisions as Japanese law provides forstatutory loss absorption through bankruptcy proceedings• Relevant obligations must be paid-in, unsecured and have a tenor of at least one year;• Relevant obligations must not be subject to set-off or netting rights at the time of a PONV;• Relevant obligations must not be redeemable by the holder prior to maturity, other than whenredeemed at the option of the holder no less than one year after issuance;• Relevant obligations must not be redeemable prior to maturity, other than when redeemed at theoption of the issuer, in general, no less than one year after issuance, and with the FSA’s priorconfirmation;• Relevant obligations must be subordinated (including by way of structural subordination only where
the amount of excluded liabilities of the issuer ranking pari passu or junior to the issuer’s unsecured
senior liabilities does not exceed 5% of the issuer’s external TLAC)

38

Social- Inclusion & diversity• Diverse talent pools are the foundation of effective decision-making, innovative ideas, value-added
services and a productive workplace. We continue to invest in the enhancement of all kinds of diversity
MUFG’s diversity
Results
Ratio of women in
management*1
Number of female directors
and executive officers*2
GenderRatio of female directors(MUFG)（As of end Sep 2022）

Targets

19%（As of Oct 2022）

20.0%
by end Mar 202420–

• I&D events (workshops, events organizedby employees)• Hold LGBTQ-related seminars and events

25%

Agreeing with the“Challenge initiatives for
30% of Executives*3 to be
Women by 2030”*4

Ratio of male employees
taking childcare leave*5（the Bank, the Trust Bank,MUMSS)

98%, 91％,
100%（FY2021）

Ratio of employees

58%（As of Mar 2022）–

Number of executive officers(the Bank)

10（Inc. 2 women）–

Ratio of foreign nationals in
middle managerial positions*6

29.6%

Maintaining or improving
the current level

Mid-careerhires

Ratio of mid-career hired inmanagerial positions*7

11.3%

Maintaining or improving
the current level

People withdisabilities

Number of people withdisabilities

Approx. 1,400（As of Jun 2022）–

Foreignnationals

100%

Approach to creating inclusive culture where
employees respect and accept diversity• Develop women’s career• Hold seminars with people with disabilities
as instructors• Raising awareness of unconscious bias
• Promote well balanced management ofchildcare, caregiving, infertility treatment

External recognition
Selected due to our
initiatives to facilitate
women’s careerdevelopment

Received Gold rating
due to such measures
as the introduction of asame-sex partnershipcertification program*1 Employees in positions of line manager (jicho or kacho) or above in Japan *2 Total of MUFG, the Bank, the Trust Bank, MUMSS, and NICOS*3 Based on the Japanese Companies Act *4 The initiative led by the Nippon Keidanren *5 Percentage of the use of the leave by male employees of each subsidiary
whose eligibility for childcare leaves expired in FY21 *6 Ratio of individuals hired overseas (the Bank and MUMSS cover overseas branches and affiliates which
are substantially treated as a branch, such as MUB. The Trust Bank only covers overseas branches.) in positions equivalent to director or above to the numberof those in positions equivalent to director or above in Japan and abroad *7 Ratio of mid-career hires in positions tasked with supervision (kanri kantokusha)(including senior manager (joseki chosayaku) and line manager) in Japan to the number of individuals in such positions in Japan

39

Social- Response to aging population and low birthrate)• Released products and services designed to serve as solutions for Japan’s aging society while joining a
new project involving industry-academia collaboration in FY22
Response to aging population and low birth rate
＝Help to create a safe and secure society, in which the elderly and children can live with confidence
Aging population

IssuesMain businessgroup

Succession of businesses and assets
Deterioration in economic capabilities
due to the closing or suspension ofbusinesses

R&C• Support succession of businesses
and assets- Groupwide, integrated approach

Financial
Services

Response to the elderly
Increase in number of people withcognitive difficulties, and inheritanceissuesR&C

DS

Research / social
contribution
Support for
employees

Other• Respond to deterioration of
cognitive functions• Prepare for inheritance andliving wills• Support testament and bestowal,
etc. via trust banking functions

２

Infrastructure

Low birthrate• Services in response to aging population anddeterioration of cognitive functions(23,000 registered supporters in the Bank)• MUFG Inheritance Research Institution• Japan Financial Gerontology Institution

3 Industry-academia collaboration

Asset building
Preparation for the coming age ofcentenarians

R&C

DS

AM/IS

• Financial planning / robo-advisor• Pension investment and consulting
services for corporates• Asset building for post retirement

1

Support for next generation
Education for the future

Other• Contribute by utilizing financial
knowledge

Tsunageru Toshin

Excellent Club
• Universal branches• Improvement of UI/UX*1• MUFG Financial Education Institute• Financial and economic education for students fromelementary – high school• Donation for children and students• Measures designed to create a workplace that enables both men and women to strike an optimal balance between work and childcare, nursing care or infertility
treatment (ensure that our assistance programs are known by all, promote the utilization of such programs, foster an inclusive corporate culture and promote
flexible work styles)∎ Major services released and launched
1 Tsunageru Toshin Service（Jul 2022）

The Trust Bank released new Tsunageru Toshin (gift during life/asset succession) service designed forindividual customers

2 Excellent Club*2（Aug 2022）

The Bank launched the MUFG Bank Excellent Club, a free membership program that is designed to help
customers enrich their daily lives after retirement through financial and other products and services

Industry-academia collaboration

3 （Started in FY2022 H1）

The Trust Bank launched verification testing as part of industry-academia research collaboration tocommercialize new products and services designed to deliver solutions for an aging society by developing
technologies to assess cognitive functions and systems to verify testament capabilities, etc.

*1 UI(User interface) and UX(User experience). Experiences and values capable of earning through usability of the services*2 Free membership service that provides financial and non-financial services to support people's lives during the era of a 100-year life expectancy

40Governance- Structure of the Board of Directors
NameCommitteerelated duties

Indepen-dent Corporate
Outside management

Knowledge, expertise and experience（As of end June 2022)

FinanceFinance &accounting

Legalaffairs

GlobalIT/digital

Sustainability

Independent
outside directors

1

Mariko Fujii

Nominating
Compensation
Risk*

2

Keiko Honda

Audit

●

–

●

–

–

●

–

●

3

Kaoru Kato

Nominating
Compensation
Audit

●

●

–

–

–

–

●

●

4

Satoko Kuwabara

Nominating
Compensation*

●

–

–

–

●

●

–

●

5

Toby S. Myerson

Risk

●

–

–

–

●

●

–

–

Female directors

6

Hirofumi Nomoto

Nominating*Compensation

●

●

–

–

–

–

●

●

4/16

7

Yasushi Shingai

Audit
Risk

●

●

–

●

–

●

●

●

8

Koichi Tsuji

Audit*

●

–

–

●

–

●

–

–

9

Tarisa Watanagase

Risk

●

–

●

–

–

●

–

–

10

Ritsuo Ogura

Audit

–

–

–

11

Kenichi Miyanaga

Audit

●

–

–

12

Kanetsugu Mike

●

●

●

13

Hironori Kamezawa

●

●

●

14

Iwao Nagashima

●

–

●

15

Junichi Hanzawa

–

–

●

16 Makoto Kobayashi

●

–

●

Nominating
Compensation

●

–

●

–

–

●

–

–

Extensive knowledge of MUFG’s
business and the ability to appropriately
perform management of MUFG

Nominating: Nominating and Governance Committee member Compensation: Compensation Committee member
Audit: Audit Committee member Risk: Risk Committee member*Chairperson

9/16

56.2%

25.0%

Foreign nationals

2/16

12.5%

41

Governance- Compensation system of corporate executives
Type ofcompensation

Link toperformance

Performancebased
compensation
range

Annualbasesalary

Fixed

-

Non
performance- based-Stockcompensation

Cashbonuses

Medium- tolong-term
performance-basedShort-term
performance-based0% - 150%

0% - 150%

WeightTime ofpayment

Payment
methodProportion of
corporate
executive’scompensation(Example ofGroup CEO)・Paid based on positions, etc.
・Includes Director Allowance, Committee and Chair Allowance, Housing
Allowance, Overseas Representative Allowance, etc.

-

MonthlyCash1・Base amount by position-

At the time ofretirement ofexecutives

50% in shares
50% in cash*4

1

Cash

1

Standards for payment

Baseamount byposition ×

Baseamount byposition ×

Target attainment rate of indices below in MTBP
（1) Consolidated ROE（2) Consolidated expenses reduction amount(excluding those linked to revenues)(3) Ratings granted by ESG rating agencies*1

<50%>
30%
15%

Comparison of year-on-year growth rate of indices below withcompetitors*2（1）Consolidated net operating profits（2）Profits attributable to owners of parent<50%>

Performance factor(For example: quantitative evaluation factor applied to
the Group CEO
Rate of year-on-year change and target attainment rate ofindices below（1) Consolidated net operating profits（2) Profits attributable to owners of parent（3) Consolidated ROE（4) Consolidated expense amount)<60%>

Status of individual execution of duties(For example: qualitative evaluation factor applied to
the Group CEO
・Improvement in customer-segment profitability
・Risk handling・Advances in ESG-related initiatives and sustainability
management*3
・Total shareholder return, etc.)

<40%>

5%

At the end of
the MTBP

25%
25%(Example ofGroup CEO:
20%
10%
20%
10%)

Annually*1 An absolute evaluation basis in light of the degree of improvement in external ratings granted by major five ESG rating agencies (CDP, FTSE, MSCI, S&P
Dow Jones and Sustainalytics) *2 Evaluated based on comparisons with main competitors (Mizuho Financial Group and Sumitomo Mitsui Financial Group)*3 Includes contribution to the resolution of environmental and social concerns, raising awareness of inclusion & diversity and its promotion, and thestrengthening and upgrading of MUFG’s governance structure *4 Subject to malus (confiscation) and clawback (restitution claim)

42

Basic Environmental and Social policies and framework• Formulated basic policies to contribute to addressing E/S issues through business activities aiming toappropriately identify and manage risks to the environment and society associated with business activities
Corporate Vision and the Principles of Ethics and Conduct
MUFG Environmental Policy Statement

MUFG Human Rights Policy Statement

MUFG Environmental and Social Policy Framework*1• Identify “Prohibited Transactions*1” and “Restricted Transactions*1”• Declare our policy of actively financing renewable energy business, such as solar and wind power generation, to help combat
climate change while supporting the adoption of advanced technologies aimed at reducing GHG (Greenhouse Gas) emissions
Prohibited Transactions*1(1) Illegal transactions and transactions for illegal purpose, (2) Transactions which violate public order and good morals,(3) Transactions that negatively impact wetlands designated under the Ramsar Convention,(4) Transactions that negatively impact UNESCO designated World Heritage Sites,(5) Transactions violating the Convention on International Trade in Endangered Species of Wild Fauna and Flora (Washington
Convention)*2,(6) Transactions involving the use of child labor or forced labor(7) Cluster Munitions and Inhumane Weapons Manufacturing
Restricted transactions*1
Cross-sectoral
items

Sector specific
items(1) Impact on Indigenous Peoples Communities,(2) Land expropriation leading to involuntary resettlement, (3) Impact on High Conservation Value areas
Coal Fired Power Generation Sector

Mining Sector (Coal)

Oil and Gas Sector (Oil Sands, Arctic Development,
Shale oil and gas, Oil and Gas Pipeline)

Large Hydro Power Generation Sector

Forestry Sector

Palm Oil Sector*1 Applied to products and services, including the extension of credit and the underwriting of bonds and stocks, for corporate clients of the Bank, the Trust
Bank and the Securities HD*2 Taking into consideration country specific considerations

43

MUFG’s Green, Social and Sustainability Bond Framework• An amount equivalent to the net proceeds will be allocated to finance / refinance:
Use of Proceeds– Eligible Green Projects: green building, renewable energy– Eligible Social Projects: healthcare, education, employment generation and preservation, affordable
housing• Look back period: 24 months*1 for Eligible Green Projects and 36 months for Eligible Social Projects
Project
Evaluation and
Selection
Management ofProceeds• Each responsible division of the Bank or MUFG selects Eligible Projects based on the criteria• MUFG’s Office of the CFO, Financial Planning Division makes a final decision on the selection• Net proceeds managed on a portfolio basis• Allocation reporting: At least annually until full allocation and in a timely manner in case of material
developments
Reporting– Assertions by management and a review by Sustainalytics: Until full allocation• Impact reporting: Annually, where feasible, containing impact metrics, reflecting the share of the relevant
Eligible Projects financed by the Bank

External
Reviewer• Sustainalytics“Sustainalytics believes that MUFG is well positioned to mitigate potential environmental and social risks
associated with the projects funded by the green, social, and sustainability bonds”(Source) Sustainalytics: Second Party Opinion, May 13, 2020

*1 With regards to eligible green building projects, certain certification must be received during the look back period except that DBJ Green Building
Certification may be received during 1 year prior to the look back period

44External recognition
Evaluation of ESG-related efforts
The Third ESG Finance Awards
Japan*1Gold award in the Banking category(MUFG Bank）
Silver Award in the Financial Services
category (Securities division) (MUMSS)
Selected as an environmental sustainable
company in the Environmental Sustainable
Company category

Inclusion in ESG indices：indicators in executive compensation
Entities*1 Awarded by the Ministry of the Environment of Japan*2 As of November 2022
*3 Toyo Keizai Japan CSR Ranking. Toyo Keizai Inc. is an eminent economic magazine publisher in Japan*4 Government Pension Investment Fund of Japan

2022*2

1

MSCI

A

-

2

FTSE

3.3

3.9

19.3

18.0

74

89

B

-

3

Sustainalytics*Smaller figure is higher
evaluation

4

S&P Dow Jones

5

CDP

6

Nikkei SDGs

★5.0

7

Toyo Keizai*3

389.9*Percentile rank

No1.
financial
institution in
Japan

-

Others

ESG indices selected by GPIF*4
New

2021

New

45

Basic policy of the medium-term business plan
• Position the 3-year term from FY21 to FY23 as the “3 years of new challenges and transformation”
and seek to develop our business model to respond to the changes in environment and improve ROE

Our visionafter
3 years

Be the premier business partner that pioneers the
future through the power of finance and digital services
To cope with the drastically changing society,we commit to empowering all stakeholders to move forward to the next step

Corporatetransformation

Strategy for growth

Structural reforms

Wealth management
Digital transformationKey
strategies

Cost and RWA control
Approach of proposing
solutions to customer’s issues

Contribution to addressing
environmental and social
issuesTransformation of corporate
culture (a culture with afocus placed on “speed” and“new challenges”)

Asia businessTransformation of
platforms and our business
infrastructure

GCIB & Global Markets
Global AM / IS

Review of our businessportfolios

46

Progress on the medium-term business plan
• Progress made on key strategies in the medium-term business plan for the current 3-year term with “newchallenges and transformation”∎ Progress on initiatives to update ourselves into a financial
and digital platform operator
Digital transformation
Contribution to addressenvironmental and social issues

Transformation of
corporate culture
Wealth management

StrategyforgrowthAsia business
GCIB & Global Markets
Global AM / IS

The cumulative total number of users has grown to morethan 1,450thd

Progmat*3

Balance of assets managed expected to surpass ¥40bn
in FY22

D-Canvas*4

Employees of over 2,300 companies are using the app

Mars Growth Capital
Grab
MUFG Ganesha Fund

Loan agreement signed with 24 startups (USD303mm)
Achieved growth of joint loan balance. Issued cobranded credit cards
1st investment was made in September 2022

Initiatives started such as “Spark X” aiming at creating new businesses and “Boost
Project” disseminating best practices that embody MUFG Way within and outside of
the Group∎ Progress on strengthening profitability in each business fieldby taking advantage of strengths of MUFG
FY21 + FY22 H1 (vs FY20)
Increase in NOP*6 due tostrategy for growth
Increase in NOP*6 due tostructural reforms

Transformation of platforms
and our business infrastructure
Review of ourbusiness portfolios

Money Canvas*2∎ Transforming employee behavior to aim for sustainable growth

Cost and RWA control

Structuralreforms

Per-month number of proposals employing Busikul
exceeded 100∎ Progress on initiatives to deepen and explore new fields ofopen innovation leveraging strategic investment*5
New Collaboration on NFT
Invested US$22.5mm in Animoca Brands KK
related business

Progress

Approach of proposing
solutions to customer’s issues

Progress

Corporate
Transformation

Busikul*1+¥215.0bn*7*8+¥65.0bn*8∎ The sale of MUFG Union Bank to U.S. Bancorp*1 Business platform for corporate customers*2 Asset management platform for retail customers that delivers a range of offerings,
including financial products, starting with smartphone-based customer contact points*3 Security token issuance and management service platform*4 Pension plan participant solutions platform

Progress*5 Non-fungible token. Data that is unique, cannot be replaced, and can be transferredusing blockchain technology*6 Net operating profit*7 Exclude losses overseas around (¥30.0bn)*8 Excluding impact of FX translation47

Non-JPY liquidity*1
As of end Sep 2022

(US$bn)Historical loan-to-deposit gap
Loans（US$bn）

Loan-to-deposit gap(right axis)

400

300

Deposits
Loans
307

Deposits（incl. deposits
from central
banks）

100

200

0
End
Mar
18

246

200

End
Sep
18

End
Mar
19

End
Sep
19

End
Mar
20

End
Sep
20

End
Mar
21

End
Sep
21

End
Mar
22

End
Sep
22

Historical mid-to long-term market funding200

Mid-to long-term market funding (left axis)
Mid-long term currency swap (right axis)
125

175

100

150

75

125

50

(US$bn)Mid-to long-term
market funding

126
Corp bonds/
loans
Collateralized
funding, etc.
Mid-long term
currency swap

*1

73
16
31

The Bank consolidated excl. MUAH, KS and BDI. Managerial accounting basis

100

25
End
Mar
18

End
Sep
18

End
Mar
19

End
Sep
19

End
Mar
20

End
Sep
20

End
Mar
21

End
Sep
21

End
Mar
22

End
Sep
22

48

Overseas corporate credit exposure
Credit exposure*1 to overseas corporate borrowers by region

Consolidated(¥tn)

East Asia
OthersAmericas
MexicoBrazilCanadaKorea

East Asia

OthersTaiwanHong Kong

Asia/Oceania*2

60

EMEA

China

EMEA

US
3
Others*UK

Asia / Oceania*2
OthersIreland

30

FranceUAE

Indonesia

Americas
Saudi Arabia

Thailand

Italy
Luxemburg

Malaysia

Netherlands
Germany
Switzerland

India

Singapore Australia
Australia Singapore

0
End Sep 22*1 Based on borrower’s location. Including undrawn commitment, exposure in project finance etc. Excluding market risk exposure, inter-bank transactions
and exposures to government agencies and central banks. Exchange rate applied is ¥144.81/US$*2 Excludes BDI’s exposure*3 Others in EMEA are comprised of approximately 60 countries to which MUFG held less than 3% exposure(Note) All figures are on managerial accounting basis

49

Exposures to Russia*1• Exposures to Russia*1 were approx. ¥350bn (End Sep 22)• Balance excluding central bank and inter-bank transactions was approx. ¥230bn, less than 0.2% of thetotal balance of the Bank consolidated*2∎ the Bank consolidated, incl local subsidiaries, excl MUAH, KS, BDI

the Bank consolidated*2

Central bank /inter-bank*3

Exposures
to Russia

Japanese*4

Less than 0.2%

29%

Approx.
¥350bnEnd Sep 22

34%

NonJapanese*5
37%*1 Based on borrower’s location. Including undrawn commitment, market risk exposure and etc. All figures are on managerial accounting basis*2 Excluding the balance of central bank and inter-bank transactions etc.
*3 Including due from banks and Russian government bond
*4 Affiliated with Japanese companies*5 Affiliated with non-Japanese companies

50Reduction of equity holdings• Reduced equity holdings by ¥57bn in FY22H1, ¥226bn in cumulative total from FY21*1

Historical performance*2 and target

Total amount of sale*1

（¥tn）
（¥bn）

(¥870bn)*1(¥500bn)*1

3yearsAmount ofAcquisitionSale
cost basis

Net gains(losses)

FY15

211

117

94

FY16

267

149

118

FY17

318

201

117

FY18

242

127

115

FY19

240

139

101

FY20

267

137

130

1,545

870

675

FY21

470

169

301

FY22H1

174

57

117

9.20
2.79
1.86 1.69

End

End

Mar 02

Mar 15EndEnd

FY15-20
Total

1.64

End

Mar 21 Mar 22 Sep 22

End
Mar 24*1 Sum of the Bank and the Trust Bank. Total amount of sale on an acquisition cost basis*2 Acquisition price of domestic equity securities with the category “other securities” with market value (consolidated)

51

Expenses• Made progress on the reduction of base expenses. FY21H1 expenses decreased YoY excluding theimpact of FX fluctuation
Expenses*1
Performancelinked expenses 2（¥bn）

Expenses forbusiness growth (5)Base expenses (23)

1,428

1,343

FX
fluctuation+111

WM, etc.
Global AM / IS

System(13)

Domestic(13)

Overseas
3

FY21H1
21年度中間期

FY22H1
22年度中間期

Expenses (the Bank including MUAH, KS, BDI)*1,3（¥bn）
FY22H1*2
MUFG total expenses

(27)
(26)

NICOS・ACOM
the Securities HD
the Trust Bank

FX
fluctuation+99
the Bank

Approx.
65%

Domestic

FY21H1
21年度中間期*1 Internal managerial figure*2 Includes FX fluctuation impact*3 Includes parts of expenses for business growth, etc.

Personnel
人件費

PremiseOverseas
物件費
海外経費(facility etc.),(the Bank)（ファシリティ費用等）・（銀行）
others
その他

Overseas
海外経費(MUAH)（MUAH）

KS・BDI
KS・BDIFY22H1
22年度中間期

52

Strategic investments for sustainable growth• Consider capital utilization, albeit in a disciplined manner, as a key measure for securing
sustainable growth. Periodically review existing investments
Disciplined investment criteria
Strategy

Profitability criteria for enhancing
Profitability corporate values
Periodic monitoring after investments

Consider new investments ingrowth areas such as digital,
global AM/IS and Asia, etc.

Current situationof consideration

Strategic investment

Asia

Capitalefficiency

Reallocate capital to strategicareas• Focus on capturing returns in existing investments• In spite of continuous consideration, no major investment projects are currently being considered• If there is no candidate satisfying our criteria, excess capital is planned to be allocated to additional shareholder return

Global AM/IS

Digital related
2012

2013

Approx. ¥63bn*1

Approx. ¥536bn*1

2016

2017–2019

Divestment

Approx. ¥89bn*1

Approx. ¥687bn

2017

2018

Approx. ¥68bn

Approx. ¥45bn

2020

Approx. ¥78bn

2020-2021

2022

2019

Approx. ¥61bn*2

Approx. ¥3bn*3Approx. ¥300bn

2023（Plan）

2022

Capital Nomura
Securities

MUFG Ganesha
Fund

2016–2021
Investment inopen innovation
Approx. 35 investees

Approx. 21bn*4

Approx. ¥37bn*5

Approx. ¥73bn

2019

Approx. ¥49bn

2019

Approx. ¥10bn

2020

Approx. ¥36bn

2013–2020

Approx. ¥76bn

2022

Approx. ¥10bn*1 Initial investment amount *2 JPY equivalent of USD500ｍｍ, MUFG’s LP commitment for No. 1 and 2 funds using actual exchange rates as of end Mar 2022 *3 JPY equivalent ofplanned investment of USD22.5mm using actual exchange rates as of end Aug 2022 *4 JPY equivalent of planned investment of THB5,501mm using actual exchange rates as of end
Jun 2022 *5 JPY equivalent of planned investment of USD300mm using actual exchange rates as of end Mar 2022 *6 Approx. US$15.2bn which is the estimated total transaction value
as converted into ¥ using actual exchange rates as of end Sep 2022

2022(1st Dec）

Approx. ¥2.2tn*6

53

Overview of the sale of MUB• All required regulatory approvals were obtained in October. Closing is completed on Dec. 1st
Schedule of the sale of MUB
Nov. 2008:
Increased ownership of MUB*1 to 100%
• Contributed to MUFG’s revenues for morethan a decade
Business environment surrounding MUB∎

Increasing importance of scale and
IT investments in retail business
MUFG’s Management Challenges∎

Reshape global businessSep. 2021: Announced sale of all shares of MUB
to U.S. Bancorp (USB)
MUFG
MUB
MUB’s
customers

Optimize management resource
allocation to improve shareholder value
Unlock MUB’s potential franchise value
by integrating with U.S. Bancorp
Access to USB’s high quality financial
services

Oct. 19th 2022: Obtained all required regulatory approvals

Dec. 1st 2022: Closing of the transaction

Financial and capital impact (current estimation)∎ Transaction gains and expenses(¥bn)

AmountTotal gains on sale(includes amounts recorded in FY21 andexpected to be recorded within five years
from FY22) *2

Approx. 120.0

One-time expenses related to thetransaction*3

Approx. 30.0

∎ Impact on CET1 ratio
Decrease in RWA

Approx.+50bps

Investment in USB

Approx. (5)bps∎ Results of the discontinued operations(businesses held for sale)(Jan-Jun 2022, managerial accounting basis)• Total revenue is approx. US$1,500mm,
pre-tax, pre-provision income is approx. US$300mm,
Net income attributable to MUAH is approx. US$250mm• Loans held for sale is approx. US$60bn,
total deposits is approx. US$90bn(Above figures are a rough estimate of the results of the businessheld for sale, based on certain assumptions, excluding accounting
adjustments for MUB sale transaction, such as valuation losses onbonds and other instruments held by MUB)

1st half of 2023: MUB system conversion and integration at
USB (Expected)*1 Increased to 100% our ownership of UnionBanCal Corporation (currently MUAH), parent company of Union Bank of California (currently MUB)
*2 The accounting treatment associated with receiving US$3.5 bn from USB within 5 years will result in recording a portion of the gain on sale over a period of up to 5 years. Amounts
received within five years are expected to be recognized at discounted present value at closing, and the difference from US $3.5 billion is expected to be amortized and accrued over 5
years*3 Total costs of advisory and expert fees in connection with the project. For information on the impact on MUFG of valuation losses on financial instruments held by MUB, see P.55

54

Valuation losses on bonds and other instruments held by
MUB
Fair value assessments of and accounting treatment applied to assets held by MUB∎ Valuation losses totaling ¥631.8bn*1 on MUB’s holding of bonds and other instruments were recorded in the first half of FY22.
However, we have countered these losses through hedging and partially offset them by ¥68.0bn.
∎ As valuation losses have been increasing due to interest rate hikes since the end of March 2022, MUFG expects to record additional
estimated losses in 1-3Q (totaling approx. ¥1,040.0bn before considering hedging impact).
∎ Among these valuation losses, 1 tax effect of available-for-sale securities, ２ held-to-maturity securities, etc., and ３ loans will berecorded as an extraordinary gains*2 upon MUB’s transfer.
∎ Valuation losses that will not be reversed have been countered through hedging *3. MUFG thus forecasts that the impact on its
full-year results of profits attributable to owners of parent will amount to approx. ¥(200.0)bn*4.

(¥bn)

Account

Impact on
Impact on
Estimated
Impact on Estimated
FY22
1-3Q
gains on MUB
gains on MUB
H1
(est,
*5
*5
transfer

1 Available-for-salesecurities

２ Held-to-

maturity
bond,
etc.

３ Loans

effecttransfer

Other nonrecurring
gains (losses)(249.0)65.2(330.0)90.0

Other nonrecurring
gains (losses)(150.8)150.8(270.0)270.0

Total credit
costs(231.9)231.9(440.0)440.0(631.8)448.1(1,040.0)

800.0

Subtotal

４ Hedging(est, approx.)

Other nonrecurring
gains (losses)

Impact on MUFG PL

approx.)*4

Offset by
extraordinary
gains

Accounting treatment
 Valuation losses are reflected in income
statement on a quarterly basis
 Tax effect will be recorded as an
extraordinary gains on MUB transfer
 Valuation losses are reflected in income
statement on a quarterly basis
 Full amount will be recorded as an
extraordinary gains on MUB transfer

68.0(563.8)(200.0)*1 US$1 = ¥136.68 for FY22 H1, US$1 = ¥144.81 for FY22 1-3Q *2 It is expected to be recorded as net extraordinary gains on MUB transfer mainly due to reduction of the bookvalue of the assets to be sold by valuation losses*3 Although a portion of risks cannot be hedged, the impact is expected be kept up to several tens of billion yen of losses *4 Based on the assumed exchange rate of US$1 =¥144.81; the figure may fluctuate in line with the exchange rates *5 The amount of estimated gains is estimated as of September 30, 2022 (approx.)55

Structure of the sale of MUB and future direction
Structure*1
Consider forming

3 a business

MUFG
Approx. 21%

Morgan Stanley100%

the Securities
HD

5.0%

alliance*2

U.S. Bancorp
（USB）

100%

100%

the Trust Bank

2 Approx. 3%

the Bank*3

Ownership

95.0%

Subsidiaries operating in the U.S.

Branches
the Bank

MUAH
MUFG
Securities
Americas

Non-Bank
subsidiaries（Leasing、AM*4、IS*5）（NY / LA / Chicago）

MUB

GCIB /
GM

Scope of thetransaction(NY)

GCIB /GM

1

the Trust Bank

GCIB business, Global Markets (GM)business, etc. transferred *6

U.S. Bank
2 Share transfer to USB

Future direction
Strategic importance of the
U.S. market remains unchanged• Focus on corporate transactions
through collaboration among the Bank,
the Trust Bank and the Securities aswell as the strategic alliance with
Morgan Stanley• Streamline operations and systems

Capital and business alliance with
U.S. Bancorp• Indirect involvement in the U.S. retailand commercial banking businesses• Plan to collaborate in businesses withJapanese customers and the digitalfield

Use of released capital• Giving comprehensive consideration toshareholder returns, investment ingrowth areas, etc.

*1 The transaction closed on December 1, 2022
*2 Discuss forming business alliances with USB *3 Post-transaction ownership ratio (based on the number of USB shares outstanding as of December 1, 2022)*4 Asset Management *5 Investor Services *6 GCIB business, Global Markets business to the extent related to the GCIB business (transactions with clientsand investors) and certain middle and back office functions was transferred to the Bank’s U.S. branches or its affiliates

56

US GAAP consolidated financials - Balance sheet
Balance sheet
(¥mm)

(¥mm)
AssetsEnd Mar 22

Liabilities and shareholders' equity

Cash and due from banks

50,972,491

Total Deposits

Interest-earning deposits in other banks

58,848,056

Call money, funds purchased, and payables under repurchaseagreements

Call loans, funds sold, and receivables under resale agreements

13,819,157

Receivables under securities borrowing transactions

4,496,376

Payables under securities lending transactions

30,141,925
1,021,887
22,850,600

Trading account liabilities

11,019,046

42,668,336

Obligations to return securities received as collateral

Investment securities

55,815,751

Bank acceptances outstanding

111,678,692

224,589,943

Due to trust account and other short-term borrowings

Trading account assets

Net loans

End Mar 22

6,826,215
371,034

Accrued interest

98,183Long-term debt

34,696,599

Premises and equipment

815,829

Other liabilities

19,738,064

Accrued interest

246,271

Total liabilities

351,353,496

Customers’ acceptance liability

371,034

Intangible assets—net
Goodwill
Deferred tax assets

1,148,601
303,611
79,191Other assets

26,386,622

Total assets

367,650,018

Capital stock

2,090,270

Capital surplus

5,327,772

Retained earnings

8,412,217

Accumulated other comprehensive income, net of taxes

227,033

Treasury stock, at cost(452,224)

Noncontrolling interests

691,454

Total equity
Total liabilities and shareholders’ equity

16,296,522
367,650,018

57

US GAAP consolidated financials - Statement ofoperations
Statement of operations(¥mm)
Statement of Operations Data

Fiscal year ended Mar 22

Interest income

2,530,938

Interest expense

560,357

Net interest income

1,970,581

Provision for (reversal of) credit losses

277,995

Net interest income after provision for (reversal of) credit losses

1,692,586

Non-interest income

1,394,789

Non-interest expense

3,146,102

Income (loss) before income tax expense(58,727)

Income tax expense (benefit)(14,511)Net income before attribution of noncontrolling interests(44,216)

Net income (loss) attributable to noncontrolling interests

39,104

Net income attributable to Mitsubishi UFJ Financial Group(83,320)(¥)
Earnings (loss) per share

Fiscal year ended Mar 22

Basic earnings
Earnings applicable to common shareholders of Mitsubishi UFJ Financial Group

(6.51)

Diluted earnings
Earnings applicable to common shareholders of Mitsubishi UFJ Financial Group

(6.93)

58

US GAAP consolidated financials- Reverse reconciliation from US GAAP to Japanese GAAP
Reverse reconciliation of shareholders’ equity and net income
(¥mm)

(¥mm)
Fiscal year
ended Mar 22

End Mar 22
Total equity in accordance with U.S. GAAP
Differences arising from different accounting for:Net Income before attribution of noncontrollinginterests in accordance with U.S. GAAP
Differences arising from different accounting for:16,296,522(44,216)(21,441)

1

Investment securities

1,546

2

Loans

(3,013)

Allowance for credit losses

430,694

3

Allowance for credit losses

32,656

4

Fixed assets

296,137

4

Fixed assets

5

Pension liability

15,4055Pension liability

31,993

6

Derivative financial instruments and hedging
activities

175,877

6

Derivative financial instruments and hedging
activities

294,950

7Compensated absences

50,396

7

Compensated absences

8

Long-term debt

(14,482)8Long-term debt

(1,034)9Consolidation

292,8919Consolidation(48,485)

10Goodwill

305,000

10

Goodwill(22,547)

11

Intangible assets(119,728)

11

Intangible assets(90,272)

12

Investments in equity method investees

687,738

12

Investments in equity method investees

51,121

13

Others(580,857)

13

Others185,064

1

Investment securities

2

Loans

3

Deferred income tax effects of the above
adjustments, when applicable
Net assets in accordance with Japanese GAAP

172,547
17,988,245

1,163,174(43,746)(399)

Deferred income tax effects of the above adjustments,
when applicable(298,799)

Net Income before attribution of noncontrollinginterests in accordance with Japanese GAAP

1,206,447

59