Mitsubishi UFJ Financial Group

Corporate Review 2007
Year ended March 31, 2007

Mitsubishi UFJ Financial Group (MUFG) is one of the world’s largest and most diversified
financial groups with total assets of almost ¥190 trillion as of March 31, 2007. Following
the creation of Mitsubishi UFJ NICOS Co., Ltd. and Mitsubishi UFJ Lease & Finance
Company Limited in April 2007, the group comprises five primary operating companies,
including The Bank of Tokyo-Mitsubishi UFJ, Ltd., Mitsubishi UFJ Trust and Banking
Corporation, and Mitsubishi UFJ Securities Co., Ltd. MUFG’s 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 of any Japanese bank, comprising offices and subsidiaries, including Union
Bank of California, in more than 40 countries.

Contents
Disclaimer for Corporate Review 2007

Major MUFG Companies

1

MUFG Worldwide

2

GAAP, unless otherwise noted.

Recent History of MUFG

4This document contains statements that constitute forward-looking state-

Financial Highlights

5

To Our Shareholders

7

A Discussion with the President

9

Reinforcing Compliance

15

Financial and Operation Review

16

Global Activities

32

Corporate Social Responsibility

36

Corporate Governance

40

Group Business Management

42

Risk Management

44

Compliance63Internal Audit

66

Corporate Management

68

Global Network

70

Company Overview

77

All figures contained in this report are calculated according to Japanesements within the meaning of the United States Private Securities Litigation
Reform Act of 1995. Such forward-looking statements represent targets thatmanagement will strive to achieve by implementing MUFG’s business strategies, but are not projections nor a guarantee of future performance. All forward-looking statements involve risks and uncertainties. MUFG may not be
successful in implementing its business strategies, and management may failto achieve its targets, for a wide range of possible reasons, including adverse
economic conditions in Japan, the United States, or other markets; declining
real estate or stock prices; deterioration of credit markets, particularly in the
United States; additional corporate bankruptcies or additional problems inbusiness sectors to which MUFG companies lend; difficulties or delays in integrating MUFG’s businesses and achieving strategic goals of the integration;difficulties in achieving the benefits of proposed business integration transactions; increased competitive pressures; operational or reputational impact
from regulatory actions in Japan, the United States and other jurisdictions;changes in laws and regulations applicable to MUFG’s businesses, such as
adverse regulatory changes relating to the consumer finance industry inJapan; and adverse changes in Japanese economic policies. Please see theannual report on Form 20-F for the fiscal year ended March 31, 2007, which
we plan to file with the SEC in September 2007, for additional information
regarding the risks relating to our businesses. Unlike this report, all figuresthat will be contained in the annual report on Form 20-F will be calculated
according to U.S. GAAP, unless otherwise noted. 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.

● Credit Cards/Consumer Loans● Asset Administration

Mitsubishi UFJ NICOSThe Master Trust Bank of JapanRyoshin DC Card
● Factoring

ACOM

Mitsubishi UFJ Factors

DC Cash One
Mobit

Major
MUFG Companies● Shareholder Relations

Consulting Services● Regional Banks

Japan Shareholder Services

Senshu Bank
Chukyo Bank

● Research/Consulting

Gifu Bank● Holding Company

Mitsubishi UFJ Research and

TAISHO Bank

Consulting

Mitsubishi UFJ Financial Group, Inc.
(MUFG)● Commercial Bank

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
(BTMU)

Mitsubishi Asset Brains● Foreign ExchangeTokyo Credit Services

Mitsubishi UFJ Trust Investment(World Currency Shop)

Technology Institute● Real-estate Brokerage

Mitsubishi UFJ Real Estate Services● Leasing

Mitsubishi UFJ Lease & Finance
BOT Lease● Trust Bank

Mitsubishi UFJ Trust and Banking

NBL● Debt Collection

MU Frontier Servicer● Venture Capital

Corporation (MUTB)● Securities

Mitsubishi UFJ Securities Co., Ltd. (MUS)● Wealth Management

Mitsubishi UFJ Capital

Mitsubishi UFJ Wealth

MU Hands-on CapitalManagement Securities
Mitsubishi UFJ Merrill Lynch● Information Technology

PB Securities

Mitsubishi Research Institute DCS

Mitsubishi UFJ Personal Financial

UFJIS

Advisers

UFJ & Hitachi Systems
Diamond Business Engineering● Asset Management

Corporation

Mitsubishi UFJ Asset Management
Kokusai Asset Management● DC Pensions

Defined Contribution Plan

MU Investments

Consulting of Japan● Online Securities/

Internet Settlements● Overseaskabu.com Securities

Union Bank of California

Paygent

Mitsubishi UFJ Securities
International
BTMU Capital Corporation● Finance

Tokyo Associates FinanceNippon Mutual Housing Loan

(As of April 1, 2007)

Mitsubishi UFJ Financial Group Corporate Review 2007

1

MUFG Worldwide
Shanghai
Wuxi

Warsaw

BTMU China

BTMU Polska

ChengduMoscowAmsterdam
Edinburgh

BTMU Holland

Mitsubishi UFJ Baillie Gifford

BTMU

BTMU
ZAO BTMU Eurasia

Hamburg
BTMU

Beijing

Guangzhou
BTMU

BTMU China
MUTB
MUS

BTMU
BTMU Lease (Deutschland)

Tianjin

Dusseldorf

Birmingham

BTMU China
BTMU
MUTB
Ling Zheng Investment Consulting

BTMU

LondonBerlinBTMU
MUTB
Mitsubishi UFJ Asset Management (UK)
Mitsubishi UFJ Trust International
MUS International

BTMU

BTMU China

Brussels
BTMU

Luxembourg
Mitsubishi UFJ Global Custody

Paris
BTMU

LisbonBTMU

Madrid

Tokyo

BTMU

Barcelona
BTMU

GeneveMitsubishi UFJ Wealth Management Bank (Switzerland)

ManilaMilanoBTMU

BTMU
MUS International

Karachi
BTMU

ZurichMumbaiMUS International

BTMU
MUS

Cairo

Munchen

BTMU

BTMU

New DelhiFrankfurt

BTMU

BTMU
MUS International

PragueBTMU Holland

Hanoi

BTMU

BTMU

ViennaBTMU Holland

Chennai

Johannesburg

BTMU

Dhaka

Istanbul

Ho Chi Minh City

BTMU

BTMU

BTMU

YangonTehranLabuanBTMU

BTMU

Bahrain
BTMU

SurabayaBTMU
BTMU Malaysia

Abu Dhabi

Singapore

BTMU

BTMU
MUTB
MUS Singapore(As of July 2, 2007)

BTMU

Kuala Lumpur

BTMU

Bandung
BTMU

JakartaBangkokBTMU
PT U Finance Indonesia

BTMU
BTMU Participation Thailand
BTMU Holding Thailand
Bangkok BTMU Limited

BekasiBTMU

Karawang
BTMU

Kota Bukit Indah Purwakarta
BTMU

2

Corporate Review 2007 Mitsubishi UFJ Financial GroupMinnesota

Portland

BTMU

BTMU

Shenyang

SeattleChicago

BTMU

BTMU

TorontoVancouver

BTMU Canada

BTMU Canada

BTMU

Montreal

DalianBTMU Canada

BTMU China

BostonBTMU Capital Corporation

New York
BTMU
MUTB
BTMU Trust Company
MUTB U.S.A.
BTMU Leasing & Finance
MUS U.S.A.

Seoul

Washington D.C.

BTMU

BTMU

Shenzhen
BTMU China

Taipei
Kentucky

BTMU

BTMU

Atlanta
KowloonMexico City

BTMU

BTMU
BTMU Mexico

BTMU

Houston
BTMU

Hong Kong

CaymanDallasBTMU
MUTB
MUS HK Holdings
MUS HK Capital
MUS HK

BTMU
MUTB

BTMU

Los Angeles
BTMU

San Francisco
BTMU
Union Bank of California
MUS U.S.A.

Rio de Janeiro
BTMU Brasil

Caracas
AucklandSao Paulo

BTMU

BTMU

SydneyBTMU

BTMU Brasil

BogotaBuenos Aires

BTMU

Melbourne

Santiago

BTMU

BTMU

BTMU

Domestic Network
West Japan Region

Central Japan Region

East Japan Region

Retail branches and offices: 250

Retail branches and offices: 165

Corporate banking offices: 117

Corporate banking offices: 81

Retail branches and offices: 458(Including Tokyo area: 435)

Numbers are as of March 31, 2007

Corporate banking offices: 190(Including Tokyo area: 164)

Mitsubishi UFJ Financial Group Corporate Review 20073

Recent History of MUFG

MUFG was formed in October 2005, but can trace its roots back to the 19th century. Through thechanging times and against the backdrop of mergers and reorganizations, we have been consistently
providing high-quality financial services to our customers.
2001

April

The Bank of Tokyo-Mitsubishi, Ltd. (BTM), The Mitsubishi Trust and Banking Corporation and Nippon
Trust Bank Limited jointly established holding company Mitsubishi Tokyo Financial Group, Inc. (MTFG)
through a share transfer.
The Sanwa Bank, Limited, The Tokai Bank, Limited and The Toyo Trust and Banking Company, Limited
jointly established holding company UFJ Holdings, Inc. (UFJH) through a share transfer.
October

Nippon Trust Bank Limited and The Tokyo Trust Bank, Ltd. merged into The Mitsubishi Trust andBanking Corporation.
2002

January

UFJ Bank Limited was created through the merger of The Sanwa Bank, Limited and The Tokai Bank, Limited.
The Toyo Trust and Banking Company, Limited was renamed UFJ Trust Bank Limited.
September

Mitsubishi Securities Co., Ltd. was created through the merger of Tokyo-Mitsubishi Securities Co., Ltd.,Tokyo-Mitsubishi Personal Securities Co., Ltd., KOKUSAI Securities Co., Ltd. and Issei Securities Co., Ltd.
2004

April

UFJH changed the status of UFJ Tsubasa Securities Co., Ltd. to a wholly owned subsidiary.
2005

October

Mitsubishi UFJ Financial Group, Inc. (MUFG) was created through the merger of MTFG and UFJH.
Mitsubishi UFJ Trust and Banking Corporation (MUTB) and Mitsubishi UFJ Securities Co., Ltd. (MUS)were created through the mergers of The Mitsubishi Trust and Banking Corporation and UFJ Trust Bank
Limited and Mitsubishi Securities Co., Ltd. and UFJ Tsubasa Securities Co., Ltd., respectively.
UFJ NICOS Co., Ltd. was created through the merger of UFJ Card Co., Ltd. and Nippon Shinpan Co.,
Ltd. and became a consolidated subsidiary of MUFG.
2006

January

The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) was created through the merger of the BTM and UFJ
Bank Limited.
2007

April

Mitsubishi UFJ Lease & Finance Company Limited was created through the merger of Diamond Lease
Company Limited and UFJ Central Leasing Co., Ltd.
Mitsubishi UFJ NICOS Co., Ltd. was created through the merger of UFJ NICOS Co., Ltd. and DC Card
Co., Ltd.

4

Corporate Review 2007 Mitsubishi UFJ Financial GroupFinancial Highlights

Consolidated Financial Summary and Data of MUFG under Japanese GAAP (not U.S. GAAP*1)
In billions of yen

FY 2006*2

FY 2005*2% change¥3,726.6¥3,609.9

3.2%

1,904.4

1,857.9

2.5%

152.9

146.6

4.3%

1,158.6

1,099.7

5.3%

Net trading profits

315.0

161.5

94.9%

Net other business income

195.5

344.1

(43.1%)

2,074.0

1,925.3

7.7%

and provision for general allowance for loan losses

1,652.7

1,685.5(1.9%)

Ordinary profit

1,457.0

1,433.3

1.6%

Net income

880.9

1,181.7(25.4%)

Total credit costs*3(186.9)389.7–

Gross profits*4¥3,745.2¥3,731.6

0.4%

Retail

1,245.6

1,130.9

10.1%

Corporate

1,992.2

2,073.8(3.9%)

Trust assets

197.8

143.8

37.6%

Operating Results
Gross profits
Net interest income
Trust fees
Net fees and commissions

General and administrative expenses
Net business profits before credit costs for trust accounts

Profits by Business Segment●

Figures of FY2005 are simple sum of MUFG and UFJH (April to September).

*1 Please refer to the Form 20-F for financial numbers under U.S. GAAP (to be released in September 2007)*2 FY2006: Fiscal year ended March 31, 2007, FY2005: Fiscal year ended March 31, 2006
*3 Total credit costs=Credit costs for trust accounts+Provision for formula allowance for loan losses+Credit related
costs+Reversal of allowance for loan losses (A positive amount of credit costs means a net reversal gain.)*4 On a management accounts basis (consolidated gross profits before adjusting intra-group transactions except
dividends from subsidiaries)

These financial highlights are prepared solely for your convenience and do not include the notes to financial information. Readers are strongly
recommended to refer to the notes contained in Consolidated Summary Reports <under Japanese GAAP>. (http://www.mufg.jp/english/ir/fs/)

Mitsubishi UFJ Financial Group Corporate Review 2007

5

In billions of yen except per share amounts

Mar 31Mar 312007

2006% change¥187,281.0¥187,046.7

0.1%

Loans and bills discounted

84,831.9

85,763.1(1.0%)

Total liabilities

176,757.3

177,220.4(0.2%)

Deposits

118,708.6

118,988.0(0.2%)

Total net assets

10,523.7

7,727.8*5¥1,325.8¥1,825.9

NPL ratio

1.46%

2.07%

Unrealized gains on securities available for sale

3,384.2

2,953.2

BIS risk-adjusted capital ratio

12.54%*6

12.20%*6

Tier 1 ratio

7.57%*6

6.80%*6

Balance Sheet Data
Total assets–

Asset Quality Data
Disclosed claims under the financial
reconstruction law(27.3%)

14.5%

Capital Data

Total net assets per common share (yen)¥801,320.41¥692,792.39*5 Figure of March 31, 2006 is total shareholders' equity*6 Figure of March 31, 2007 is calculated based on the new capital adequacy regulations (Basel II). Figure ofMarch 31, 2006 is calculated based on the old capital adequacy regulations (Basel I)

6Corporate Review 2007 Mitsubishi UFJ Financial Group

15.6%

To Our Shareholders

From left: Haruya Uehara, Deputy Chairman; Nobuo Kuroyanagi, President & CEO; Ryosuke Tamakoshi, Chairman

Fiscal 2006 Financial Results
In the fiscal year ended March 31, 2007, MUFG recorded consolidated net income of¥880.9 billion, slightly ahead of our forecast announced in November 2006. Looking backon the events of the past fiscal year, it was a year in which we saw positive signs emerge inthe earnings environment, such as clear evidence of a widening of the deposit-lending
spread in the second half of the fiscal year following the ending of the Bank of Japan’s
zero-interest-rate policy in July 2006.
Reflecting our promise made last November to endeavor to continuously increase our dividends and achieve a dividend payout ratio of around 20% in the medium term, we boosted our year-end dividend for the fiscal year under review by ¥1,000 to ¥6,000 per commonshare. We intend to further increase the dividend in the current fiscal year to ¥14 per common share after having implemented a 1,000-for-1 stock split at the end of September 2007.
Medium-term Business Plan
In February 2007, MUFG revised its medium-term business plan announced in the samemonth of the previous year, unveiling the Medium-term Business Plan (FY 2007 version).

Mitsubishi UFJ Financial Group Corporate Review 2007

7

The new plan is based upon the following four key strategies.
1. Become one of the top five global financial institutions in terms of market
capitalization by executing growth strategies
2. Strengthen compliance3. Complete full-scale systems integration and steadily realize the benefits ofintegration
4. Maintain and strengthen the MUFG brandWorking together, management and employees are determined to make MUFG a preeminent comprehensive, global financial group, recognized as being “No. 1 in Service, No. 1 inReliability, and No. 1 in Global Coverage.” To that end, we are devoting our utmost efforts
to building corporate value and maximizing shareholder value. In pursuing our growth challenge, we look forward to the continued support of our shareholders.

Ryosuke Tamakoshi

Haruya Uehara

Nobuo Kuroyanagi

Chairman

Deputy Chairman

President & CEO

August 2007

8

Corporate Review 2007 Mitsubishi UFJ Financial GroupA Discussion with the PresidentManagement Perspectives
An Overview of the Past Fiscal YearHow would you sum up the past fiscal year?
Starting with the economic and financial environment, Japanese exports expanded thanks
to a strong global economy, combining with a solid increase in private-sector capital
investment to produce overall firm growth in Japan’s economy. Although the loan demandof corporate Japan continued to be somewhat lackluster, I got the impression that the prolonged downward trend in corporate lending was coming to an end. Monetary policy also
reflected the brighter mood, with the Bank of Japan following the lifting of its zero-interestrate policy in July 2006 with a further increase in interest rates in February this year.

“ We are determined tomake MUFG a preeminent comprehensive,”

global financial group.

Mitsubishi UFJ Financial Group Corporate Review 20079

Looking back on the previous fiscal year in this light, I see it as a year in which MUFG
made steady progress, but also produced issues that need to be addressed. Among theachievements, we completed repayment of public funds in June 2006. Our non-performing loan ratio has declined to around the 1.5% level as we improved the quality of assets
further. We also made further progress with the integration of group businesses, as evidenced in our credit card and leasing businesses, where mergers resulted in the birth of
Mitsubishi UFJ NICOS Co., Ltd. and Mitsubishi UFJ Lease & Finance Company Limited,
respectively, on April 1, 2007. In combination with our commercial bank, trust bank, andsecurities companies, the addition of these two new companies completed the five majorarms of our financial group.
On the other hand, administrative orders were brought against us regarding compliancemanagement by the authorities in Japan and the United States. We have taken this disciplinary action very seriously and are implementing a variety of measures to fundamentallystrengthen our compliance system.
To briefly summarize our business performance last year, our consumer finance business
put downward pressure on earnings, but we overcame that to post consolidated net
income of ¥880.9 billion, slightly better than our forecast. One of the major points in our
improved profitability was the clear trend toward a widening of the deposit-lending spread
prompted by the hike in interest rates. Among other factors, overall customer assets in our
retail business expanded because of
the ongoing shift from savings toinvestment, as we steadily broadened
our operating base.

10

Corporate Review 2007 Mitsubishi UFJ Financial GroupEarnings Growth Strategies

Please outline MUFG’s concrete strategies for expanding earnings.
In addition to our goal of being a comprehensive financial group that has the strong support of customers and society, we are aiming to earn a place among the top five global
financial institutions in terms of market capitalization rankings from the perspective of
increasing corporate value. Working toward that goal, we have set ourselves challenging
targets in our new Medium-term Business Plan (FY 2007 version), formulated in February
2007. Our financial targets for the fiscal year ending March 31, 2010, the final year of theplan, are consolidated net operating profits of approximately ¥2.5 trillion, consolidated net
income of approximately ¥1.1 trillion, and consolidated ROE of around 15%.
To reach these objectives, it is essential that we strengthen our earnings power in our corecustomer businesses, namely Corporate, Retail, and Trust Assets. Among these businesses,
we have high expectations for the Retail business because of its growth potential. With
that in mind, we are looking to increase the Retail business’ contribution to net operating
profits to 30% or more by the end of the mid-term plan.
There are three main components to our drive to strengthen the Retail business. We will
pursue Internet and mobile retail banking strategies appropriate for the full-scale emergence of the ubiquitous network society in Japan. Secondly, with an eye to the full liftingof prohibitions on the sales of insurance products by banks, we will strengthen sales targeting overall customer assets. Thirdly, we will undertake full-fledged development of ourretail securities business, including online trading and securities intermediation.
In our domestic corporate business, our strategic efforts revolve around the building of acorporate and investment banking (CIB) business model that features the close collaboration of corporate banking and investment banking in providing services. We will also
strengthen our regional strategies, frontline capabilities and small business in our SME
business, aiming to establish MUFG as the real top bank in every region of Japan.

Mitsubishi UFJ Financial Group Corporate Review 200711

We also have special plans for our Overseas Corporate business, one of our areas ofstrength. We plan to increase its contribution to net operating profits to 20% over the
medium term through organic and non-organic growth. Organic growth strategies include
improving its global cash management service (CMS), strengthening the leveraged financebusiness, and developing the credit portfolio management business. We will also be seeking to expand capacity and capabilities through capital and business alliances.
In our Trust Assets business, we will use our size to maximum advantage in developing thebusiness. With the pension business, we will increase our sale of non-passive products andstrengthen the collaboration of our banking and trust operations. Our emphasis in theinvestment trust business will be to strengthen product supply and sales not only among
our banking, trust banking, and securities subsidiaries, but also by developing sales channels outside the group through regional banks and other financial institutions.

Capital Policy

What is your thinking on capital policy, which underpins your growthstrategies? What are your plans for the use of excess capital, and actions tobenefit shareholders?
To increase shareholder value in the medium term, I think it is important for MUFG toachieve a balance among our three goals of increasing shareholder returns, strengthening
our equity capital, and making strategic investments. From that point of view, the policy
we have formulated is to focus on retaining resources to drive growth and maintaining a
globally competitive level of equity capital, as well as on sustaining an increase in dividend
payments.
Our targets for equity capital are a Tier 1 ratio of 8% and an equity capital ratio of 12%.
In terms of shareholder returns, our target is to raise the dividend payout ratio to around
20% in the medium term.

12

Corporate Review 2007 Mitsubishi UFJ Financial GroupIn the future, while reinforcing both
equity capital and shareholder returns,
we will look at ways of using our capital to achieve sustainable growth andenhance profitability. Specifically, we
will strengthen risk-return management
as we work to efficiently allocate capital, as well as make investments thathave strategic benefits and provide areturn on investment. Where there is a
dearth of attractive investments, we may consider options for returning capital via sharebuybacks and other methods.

Progress with Business Integration

What is the status of full system integration? Are you progressing according to schedule?
The project to implement full-scale systems integration of banking subsidiaries, which wecall the Day 2 project, is proceeding according to schedule. Through 2008, we plan tobring the new system online in stages. Through full-system integration we aim to steadily
realize the benefits of improvements in services and cost synergies.
Using The Bank of Tokyo-Mitsubishi UFJ, Ltd.’s system integration schedule as an example,
the bank is about to enter the system testing phase ahead of the planned cut-over date in
the first half of next year. On the administrative side, the bank is proceeding with full-scale
employee training programs and rehearsals to make ready for the big event.
We are well aware of the huge impact the system integration could have on customer service and the financial system as a whole and our social responsibility as a group in thatregard. Therefore, we are taking the utmost precautions to ensure that the system integration will go smoothly and maintain integrity and security.

Mitsubishi UFJ Financial Group Corporate Review 2007

13

MUFG Brand

Would you tell us about the measures being taken to establish an MUFG
brand?
We are working to establish a brand image for MUFG of a group that communities feel anaffinity with and support based on strong customer satisfaction and good corporate citizenship. We are raising the degree of customer satisfaction by providing superior services
worthy of MUFG’s goal to be recognized by customers as a group that can be trusted andprovides high-quality services. Through our corporate social responsibility (CSR) activities,
we are indicating our strong commitment to fulfilling our social responsibilities.
Among actions taken to improve customer satisfaction over the past fiscal year, we madecertain bank transfers free of charge and lowered the usage fees for automated teller
machines (ATMs) at convenience stores. We also implemented measures to reduce waitingtime for services at branches, made our branches easier to use for the elderly, and took
other steps to continually improve our services from the perspective of customers andpracticality.
We conducted an active program of CSR activities. We endeavored to use our core financial business to actively make social contributions by offering environmental loans andsocially responsible investment (SRI) products. We again held our MUFG Experience
Workshop, where we invite children from childcare facilities to come and experience avariety of activities. Under the slogan of “No. 1 in Service, No. 1 in Reliability, and No. 1 in
Global Coverage,” we intend to continue our efforts this year to establish a MUFG brandimage as a group that communities feel an affinity with and support.

14

Corporate Review 2007 Mitsubishi UFJ Financial GroupReinforcing Compliance
Since last year, MUFG has taken various steps to fundamentally reinforce its compliance framework.
The main reform points are as follows.
Enhanced enterprise-wide and global compliance framework
MUFG appointed an independent Chief Compliance Officer (CCO) in the holding company and formed
the Group CCO Committee, of which the CCOs of group companies and the holding company are
members. These actions represent the strengthening of the horizontal control system between groupcompanies. At the same time, we strengthened the vertical control system, putting in place a framework that is integrated yet preserves independence, from the holding company to the branches of thegroup’s different businesses.
Strengthened front-line capabilities at branches
In bolstering the effectiveness of the reinforced compliance system, the strengthening of capabilities atbranches is just as important as establishing an overall group compliance framework. The Bank ofTokyo-Mitsubishi UFJ, Ltd. has already appointed a total of 500 compliance officers: 244 in the Retailbusiness, 35 in the Domestic Corporate business, and more than 200 in the international business.
These compliance personnel monitor branch legal compliance as well as provide compliance educationfor employees in branches.

Group Compliance Framework

Branches

Director responsible
for complianceDirector responsible
for complianceDirector responsible
for compliance

Compliance & Legal
Division

Compliance & Legal
Division

ComplianceControl Division

Business Unit
Compliance Managers

Business Unit
Compliance Managers

Business Unit
Compliance Managers

Internal
Control Managers

Internal
Control Managers

Branches

Branches

Trust Bank

Securities Company

244 Area
Business
Administrators

Internal
ControlManagers

35 Compliance
Officers

Branches

Over 200 Overseas
Compliance Staff

Bank

Strengthen compliancefunctions that transcendbusiness categories

Create an independent and consistent framework, from theholding company to branches (vertical controls)

Corporate
CenterGroup CCO Committee

MUFG
ComplianceManagement
Division

Strengthensupervisory functions

MUFG director responsible for compliance(Chief Compliance Officer)

HoldingCompany
Corporate
CenterEnterprise-wide (horizontal controls)

Mitsubishi UFJ Financial Group Corporate Review 200715

Financial andOperation Review

Financial Review

17

Retail Business

20

Corporate Business24

Trust Assets Business 28

Business Portfolio (Net Operating Profits Basis)
Global Markets, others
9%
Trust Assets
3%
UNBC
8%

Retail22%

Corporate Review 2007 Mitsubishi UFJ Financial Group

Retail25%

Overseas8%

Overseas
6%

16

Global Markets, others
5%
Trust Assets
6%
UNBC
8%

Domestic
corporate
52%

Domestic
corporate
48%

FY
2005

FY
2006

Financial Review for Fiscal Year Ended March 31, 2007

Highlights of Consolidated Statements of Operations
Consolidated gross profits increased ¥115.8 billion compared to fiscal 2005, mainly due toincreased fees from investment trust related businesses and due to the increase in profits
from subsidiaries newly consolidated in October 2005, as the profits of the subsidiaries forthe full fiscal year were reflected in fiscal 2006.
Owing to the increase in consolidated subsidiaries, expenses increased by ¥148.7 billion
compared to fiscal 2005. As a result, consolidated net business profit for fiscal 2006 was¥1,652.7 billion, a decrease of ¥32.8 billion compared to fiscal 2005.
Consolidated net income was ¥880.9 billion, a decrease of ¥300.7 billion compared to fiscal 2005. This was mainly due to ¥186.9 billion of total credit costs in fiscal 2006 compared to a gain (reversal of total credit costs) of ¥389.7 billon in fiscal 2005.
Highlights of Consolidated Balance Sheets• Loans and Deposits
Loans and bills discounted (including trust accounts) was ¥85.1 trillion, a decrease of ¥0.9
trillion compared to March 31, 2006. The decreases in lending at domestic offices werepartially offset by increases in lending at overseas offices.
Deposits were ¥118.7 trillion, basically unchanged compared to March 31, 2006.

Earnings*1

Billions of Yen

Loans and Deposits*2

3,726.7

3,610.9

118.9

86.1
1,685.5

Trillions of Yen
118.7
85.1

1,652.7

1,181.7
880.9

FY
2005
Gross
profits

Mar 31
2006

FY
2006
Net businessprofits

Loans

Net income

Mar 31
2007
Deposits*1 Figures of FY2005 are the simple sum of MUFG and UFJH (April to September).
*2 Loans figures include trust accounts.

Mitsubishi UFJ Financial Group Corporate Review 200717

• Loan/Deposit interest rate spread (Sum of two banks*, domestic businesssegment)
The average interest rate spread between domestic loans and domestic deposits increased
to 1.39% in the second half of fiscal 2006, from 1.32% in the first half of fiscal 2006,
mainly due to rising interest rate policy of the Bank of Japan.
• Non-performing loans (Sum of two banks*)
Disclosed claims ratio under the Financial Reconstruction Law was 1.46%, representing adecline of 0.60 points compared to March 31, 2006. The upgrades of borrowers’ credit ratings resulting from improvements in their business performance, and progress in the disposalof non-performing loans contributed to this decline in disclosed claims ratio.
*Two banks means The Bank of Tokyo-Mitsubishi UFJ, Ltd., and Mitsubishi UFJ Trust and Banking Corporation.

NPL Status

Interest Rate Spread

Trillions of Yen
2.07%

1.39%

1.38%
1.33%

0.90

1.32%
0.76
0.92

1.46%
0.56

FY 2005
H1

FY 2005
H2

FY 2006
H1

FY 2006
H2

Mar 31
2006

Mar 31
2007

High risk, Bankrupt and Substantiallybankrupt
Close observation
NPL ratio

18

Corporate Review 2007 Mitsubishi UFJ Financial Group• Net unrealized gains (losses) on securities
Net unrealized gains (losses) on securities available for sale were ¥3.38 trillion, an increaseof ¥0.43 trillion compared to March 31, 2006. This was due to the increase in net unrealized gains on equities, and the decrease in net unrealized losses on debt securities.
• Risk-adjusted capital ratio (Preliminary basis)
As of March 31, 2007, risk-adjusted capital ratio is calculated based on the Basel llStandards. The consolidated risk-adjusted capital ratio and the Tier 1 ratio were 12.54%
and 7.57%, respectively, reflecting the further strengthening of our financial base.
• Deferred tax assets
Net deferred tax assets were ¥71.3 billion (representing 0.8% of Tier 1 capital), a declineof ¥551.7 billion from March 31, 2006. This decline was a result of progress in the elimination of retained losses due to recorded profits and the increase in unrealized gains ofmarketable securities in deferred tax liabilities.

Valuation Gains (Losses)

Trillions of Yen

Deferred Tax Assets

Capital Ratios*3

3.22

2.98

8.3%
12.20%

12.54%

3.38

2.95

Billions of Yen

623.1

7.57%
6.80%
0.8%
-0.21

71.3

-0.07

Mar 31
2006

Mar 31
2007

Securities
available for sale

Domestic equities
Domestic bonds

Mar 31
2006
BIS risk-adjusted
capital ratio

Mar 31
2006

Mar 31
2007
Tier 1 ratio

DTA

Mar 312007% of Tier1 capital*3 Figure of March 31, 2007 is calculated based on the new capital adequacy regulations (Basel II). Figure of March 31, 2006
is calculated based on the old capital adequacy regulations (Basel I)

Mitsubishi UFJ Financial Group Corporate Review 200719

Retail BusinessIn billions of yen

FY2006

FY2005% Change

Gross Profits

1,245.6

1,130.9

10.1%

412.1

382.7

7.7%

Net Operating Profits

FY2006 Performance Summary
Gross profits increased ¥114.7 billion, or 10.1%, to ¥1,245.6 billion. The growth in earnings reflected a full-year of income contribution by Mitsubishi UFJ NICOS (formerly UFJ
NICOS), which was consolidated in October 2005. Other contributors to expanded earnings were higher income from the deposits and loans business, and solid sales of investment trusts and other investment products. Consequently, overall customer assets,comprising deposits and investment products, steadily increased. Net operating profits
grew ¥29.4 billion, or 7.7%, to ¥412.1 billion.
FY2007 Plans
Guided by our medium-term business plan, we are pursuing the following measures todevelop and expand the retail business.
We are working on five priorities: (1) developing our Internet and mobile banking strategies; (2) increasing overall customer assets; (3) driving substantial growth in the retailsecurities business; (4) achieving sustained growth and expansion of our consumer

Corporate

RetailTrust
assets20

Corporate Review 2007 Mitsubishi UFJ Financial Groupfinance business; and (5) implementing far-reaching restructuring and expansion of ourloans business.
Investment Product Sales
FY2006 Performance
Income from investment products increased ¥7.2 billion year on year to ¥156.5 billion.
Total sales of investment products, including investment trusts, insurance annuities andsecurities intermediation products, climbed 14% to ¥4.7 trillion. Investment sentiment
regarding insurance annuities weakened as customers sought to carefully gauge risinginterest rates and improvement in economic conditions at this time. However, equity investment trust
sales grew due to the strong performance of the

Customer Account Balances:
Equity Investment Trusts,
Insurance Annuities,
Securities Intermediation

stock market in the second half and the introduc-

12tion of new products.

10

As a result, investment product assets in customer

Trillions of Yen

86

accounts had increased 36% from a year earlier to4¥11.4 trillion as of March 31, 2007.

20

Sep 302005
Securities
intermediation

Mar 31
2006

Sep 302006

Equityinvestment trusts

Mar 31
2007
Insurance
annuities

Mitsubishi UFJ Financial Group Corporate Review 200721

Corporate

RetailTrust
assets

FY2007 Plans
Through the Quality Life Club (QLC),* we are reinforcing our methods of attracting business from baby boomer retirees who are seeking to invest their retirement bonuses. We
are also expanding our product lineup by introducing products that will match customer
needs through an open architecture approach.
During the fiscal year we will increase BTMU’s approximately 5,000-strong sales staff by
about 500 people. We will also work to enhance the skills of sales personnel to better
serve customers.
* QLC: a special membership system that combines financial and non-financial services.

Consumer Finance
FY2006 Performance
Income from consumer finance increased ¥132.5 billion to ¥424.7 billion. The inclusion of
UFJ NICOS in the scope of consolidation in October 2005 added ¥128.8 billion to income
from consumer finance, supporting a 45% increase from the previous fiscal year.
The number of credit cards issued by group companies (UFJ NICOS and DC Card) rose firmly.
Furthermore, the number of comprehensive cards issued by BTMU, which serve as both an
ATM card and credit card, reached the 1.3 million mark as of March 31, 2007.

22

Corporate Review 2007 Mitsubishi UFJ Financial GroupFY2007 Plans
In April 2007, UFJ NICOS and DC Card merged to form Mitsubishi UFJ NICOS. As one ofJapan’s largest credit card issuers, the new company aims to be the leader in Japan’s credit
card industry in terms of scale and earnings. We aim to quickly capitalize on the synergies
produced by this merger.
Plans call for enhancing the attractiveness of comprehensive cards, by expanding sales
channels for these cards and implementing various campaigns to boost card use rates andspending per use. We also plan to launch a new type of card loan service.

Group Company Credit Cards Issued*

Millions

30

20

10

0

Sep 302005

Mar 31
2006

Former UFJ NICOS**

Sep 302006
Former DC Card

Mar 312007
Total* Former DC Card figures are non-consolidated and are
the number of card members.
** Sep 30 2005 are the sum of figures for the former
UFJ Card and the former Nippon Shinpan.

Mitsubishi UFJ Financial Group Corporate Review 200723

Corporate BusinessIn billions of yen

FY2006

FY2005% Change

Gross Profits

1,992.2

2,073.8(3.9%)Net Operating Profits

1,049.2

1,153.2(9.0%)

FY2006 Performance
Gross profits declined ¥81.7 billion, or 3.9%, to ¥1,992.2 billion. In domestic operations,
there was a decline in income mainly due to a decrease in income from deposit and loan
operations resulting from a contraction in the loan balances and spreads due to intensified competition, and lower income from investment banking operations.
In overseas operations, although earnings at UnionBanCal Corporation decreased,
MUFG’s strong overseas operations performed well overall. Deposits and loans operations of the overseas branches of the Bank of Tokyo-Mitsubishi UFJ recorded solid earnings growth. As a result, overall overseas income expanded.
Net operating profits decreased ¥104.0 billion, or 9.0%, to ¥1,049.2 billion.
FY2007 Plans
The Corporate Banking Group is giving top priority to three areas in the current fiscal
year. First, we are developing the CIB model, which encompasses our corporate andinvestment banking businesses, and utilizing it to fundamentally strengthen our businesswith large corporations. Next, we are further strengthening our business base by impleCorporate

RetailTrust
assets24

Corporate Review 2007 Mitsubishi UFJ Financial Groupmenting strategies that fit regional market characteristics. By capturing the commercial
flows of customers, we also will step up efforts to build an integrated system for asset
finance and domestic and international settlements.
Furthermore, MUFG has aspirations to grow profits from overseas business to 20% of total
earnings over the medium and long terms. Looking at concrete actions, in Asia, MUFG willaccumulate sound assets in Asia with respect to both Japanese and non-Japanese businesses
by leveraging its strong customer base, and it will strengthen its settlement business byenhancing global cash management services. In Europe and North America, MUFG will reinforce the leveraged finance business and pursue the credit portfolio management business.
Developing the CIB Model (New measures)
FY2006 Performance
The CIB model closely links the activities of corporate

Share of Public Offering Underwriting

and investment banking to enhance services.

35

%

30

Following the planned conversion of Mitsubishi UFJ
Securities at the end of September 2007 into a whol-

25
20
11%
15

ly owned subsidiary of the holding company, MUFG
aims to establish a MUFG-styled investment banking

10

6%

5
0

business model that combines banking and securities
functions. Based on that business model, banking

NomuraNikko
Daiwa
Citigroup SMBC

FY2005MUS

MizuhoFY2006

Source: Thomson Financial

Mitsubishi UFJ Financial Group Corporate Review 200725

Corporate

RetailTrust
assetsand securities operations will further strengthen their cooperation and be able to provide
integrated and sophisticated investment banking services covering origination to distribution. MUFG already has an expanding track record as a lead manager of major offerings,
and we are implementing measures to further accelerate our growing presence in theinvestment banking business by establishing a new organization and specialist unit as wellas transferring human resources from our banks to our securities company.
FY2007 Plans
We are establishing a CIB planning division in the Integrated Corporate Banking BusinessGroup to promote integrated development of the CIB model. Furthermore, aiming tostrengthen customer coverage, we are launching a CIB unit within the BTMU Corporate
Banking Business Unit and putting a director in charge of the CIB unit. We are strengthening our securities sales organization by increasing staff.
Average overseas loans and depositsbalance (excluding UNBC)
Trillions of Yen

We plan to transfer dozens of employees to the securi-

12ties company during the fiscal year.

108Overseas Business

6

FY2006 Performance4

Excluding UNBC operations, gross profits of overseas

2business activities rose ¥28.1 billion, to ¥307.8 billion.

0

FY 2005
H1

FY 2005
H2

FY 2006
H1

FY 2006
H2

In our Japanese corporate client-related overseas busi-

Lending
Deposit26

ness, earnings from deposits expanded along with the

Corporate Review 2007 Mitsubishi UFJ Financial Groupincrease in interest rates, while foreign exchange income also grew, primarily with regard
to Asia. In other corporate client-related business, loan balances increased, particularly in
our European and Asian operations. The overseas loan balance, excluding UNBC operations, at the end of the second half of fiscal 2006, amounted to approximately ¥11 trillion,up ¥2.6 trillion year on year. The average overseas deposit balance also increased, up
about ¥1.3 trillion, to ¥6.5 trillion.
FY2007 Plans
In Asia, we are focusing on Japanese corporate clients as the drivers of income growth.
Leveraging our solid business relationships with prominent client parent companies in Japanand the leading Japanese banking network in Asia, we are aiming to maintain and expand
our dominant share of the Japanese corporate client-related business in Asia. Moreover, weplan to strengthen our settlement business to further enhance competitiveness in Asia.
Because of its size and anticipated steady growth, we believe the Americas to be a promising market. In addition to our commercial banking operations, which encompass large corporate, middle-market, and retail clients, we are developing our trust and securities
businesses in the region.
On November 1, 2006, ZAO Bank of Tokyo-Mitsubishi UFJ (Eurasia) began operations in
Russia. We are continuing to develop business by expanding our network in the emerging
markets in Central and Eastern Europe and Russia and other members of theCommonwealth of Independent States (CIS). We are also committed to strengthening ourinvestment banking and settlement businesses.

Mitsubishi UFJ Financial Group Corporate Review 200727

Trust Assets BusinessIn billions of yen

FY2006

FY2005% Change

Gross Profits

197.8

143.8

37.6%

Net Operating Profits

90.7

51.8

74.9%

FY2006 Performance
Gross profits rose ¥54.0 billion, or 37.6%, to ¥197.8 billion. Income from businesses ininvestment trust management and administration rose, backed by the continued expansion of the investment trust market. The pension business and the custody business also
posted steady income growth. The inclusion of Kokusai Asset Management and The
Master Trust Bank of Japan in the scope of consolidation in October 2005 also contributed to higher income in the fiscal year under review. Net operating profits increased ¥38.8
billion, or 74.9%, to ¥90.7 billion.
FY2007 Plans
In the pension business, we remain focused on strengthening our offerings of actively
managed investment products matched to customer segments. We also are stepping up
our efforts in the defined contribution pension business for SMEs.
Our strategy in the investment trust management business is to continue product supply
and sales support to Group channels and develop regional bank and other non-Groupchannels. On the other hand, our efforts in the investment trust administration businessCorporate

RetailTrust
assets28

Corporate Review 2007 Mitsubishi UFJ Financial Group

are focused on leveraging enhanced asset administration functions, such as our responsiveness to new schemes, to win mandates from securities company-affiliated asset management companies.
Pension Business
FY2006 Performance
Gross profits from the pension business increased ¥7.1 billion to ¥57.5 billion. During the fiscal
year we strengthened sales of actively managed investment products in key pension trusts.
Sales of defined contribution pension products were also firm, supporting income growth.
FY2007 Plans
In the defined-benefit pension field, we are strengthening our sales of actively managed
investment products, concentrating on winning
Defined Contribution
Pension Plans Sharenew mandates based on collaboration between
BTMU and MUTB.

Pension Trust Share

(Asset administration)

For defined contribution pensions, our emphasis
in sales is to target the main customers of BTMU,

34%

34%

customers for which MUTB already acts as thearranger for defined-benefit pension plans, andcustomers with 300 or more employees.

Mar 31
2007
Mitsubishi UFJ Trust

Mar 31
2007
OthersMitsubishi UFJ Financial Group Corporate Review 200729

Corporate

RetailTrust
assetsIn response to the defined-contribution pension plan needs of SMEs, we are taking such initiatives as introducing defined-contribution pension plans that integrate plans offered by lifeand non-life insurance companies with which the Group has a close business relationship.
Investment Trust Management and Administration
FY2006 Performance
Gross profits from investment trust management activities grew ¥28.9 billion year on yearto ¥69.5 billion. Backed by strong sales of equity investment trusts, the investment trust
management balance as of March 31, 2007 had increased by ¥1.2 trillion to ¥14.8 trillion.
Gross profits from investment trust administration activities increased ¥6.6 billion to ¥12.9
billion. The investment trust administration balance as of the end of the fiscal year
expanded by ¥2.9 trillion to approximately ¥32.8 trillion.

Investment TrustManagement Balance*

Investment Trust
Administration Balance

Trillions of Yen

Trillions of Yen
35

15

30

12

25
9

20

6

15
10

3

5

0

30

0
Sep 30 Mar 31 Sep 30 Mar 31

Sep 30 Mar 31 Sep 30 Mar 31

2005

2005

2006

2006

2007

2006

Corporate Review 2007 Mitsubishi UFJ Financial Group

2006

2007

*Including Kokusai AssetManagement figuresfrom FY2005 H2.

FY2007 Plans
In the investment trust management business, we are supplying quality products to Groupchannels, and continuing our sales support for them through our training services and support organization for sales companies. We also are stepping up our efforts to develop
regional bank and other non-Group channels with significant growth potential.
Our targets in the investment trust administration business are to win new mandates fromasset managers by reinforcing the functions of The Master Trust Bank of Japan in this area
and to actively develop the investment trust administration agency business.
Custody
FY2006 Performance
In the custody business, gross profits rose ¥0.9 billion year on year to ¥18.4 billion due to
steady increases in the custody asset balance.
In pursuit of synergies between the yen custody business and the yen funds settlementbusiness, we integrated the organizations for both of these businesses within BTMU.
FY2007 Plans
In the global custody business, through efforts to integrate the overlapping functions of
MUFG overseas subsidiaries (in Luxembourg, New York and London) and to enhance systems functions, we aim to establish a network that can provide even better services forcustomers.

Mitsubishi UFJ Financial Group Corporate Review 2007

31

Global Activities

One of its strengths, MUFG’s overseas network is the largest among global Japanesebanks. As of March 31, 2007, MUFG had a presence in over 40 countries, with 429 outlets outside Japan. The Group also boasts a broad network of capital and businessalliances with leading financial institutions around the world. Leveraging its network andalliances, MUFG provides powerful support for Japanese companies entering overseas
markets or developing their businesses internationally.
MUFG is also developing a firm base in global investment banking services, providing
derivatives, syndicated loans, asset finance, structured finance, and other services tomajor U.S. and European global companies and regional companies, as well as Japanese
corporations.
Americas
We have 26 branches, sub-branches, representative offices and subsidiaries in theAmericas, and our subsidiary Union Bank of California (UBOC) has a 323-branch networkin the United States, concentrated mainly in the State of California.
In the Americas, MUFG offers many forms of fund-raising support, including syndicatedloans, securitization, leases, and other services. We also provide a broad scope ofservices, including settlements, M&A advisory, and others. MUFG is endeavoring toenhance its services in the market through business alliances with local institutions.

32

Corporate Review 2007 Mitsubishi UFJ Financial GroupMitsubishi UFJ Trust and Banking Corporation now has an agreement with Northern Trust
Corporation, of the United States, giving Japanese customers access to will execution andestate-administration services in the U.S.
In Central and South America, MUFG has the largest network of any Japanese bank, with
10 branches in 7 countries, and an alliance with Banco Bradesco, the largest private-sectorbank in Brazil. Based on this network, we serve customers by offering syndicated loans,project finance for natural resource projects and other services.
• Union Bank of California
As one of the 25 largest commercial banks in the United States in terms of total assets,
UBOC has 323 branch offices and a network of 608 ATMs across the country. The bank isheadquartered in San Francisco and has more than 10,000 employees. Offering loan andtrade financing services to SMEs and other corporate clients, the bank also provides
deposit, investment product, insurance, private banking, and other services to individuals.
UnionBanCal Corporation, the bank’s holding company, is a consolidated subsidiary of
BTMU, which holds approximately 62% of the equity of UnionBanCal.
Europe, Russia, Middle East and Africa
MUFG has 28 branches, sub-branches, representative offices and subsidiaries inthese regions.

Mitsubishi UFJ Financial Group Corporate Review 200733

In the Middle and Eastern European regions, where an increasing number of Japanesecompanies are advancing their businesses, in April 2006, BTMU became the first Japanesebank to establish a banking presence in Prague by opening a branch office of its wholly
owned subsidiary Bank of Tokyo-Mitsubishi UFJ (Holland) N.V. Furthermore, in November
2006, ZAO Bank of Tokyo-Mitsubishi UFJ (Eurasia) opened its doors for business in Russia,
one of the so-called BRIC emerging economies, beginning to offer a wide range of rublebased financial services.
In the Middle East, where local economies are benefiting from higher natural resource
prices, MUFG is engaged mainly in project finance for natural resource projects, syndicatedloans, and trade finance. As financial advisor, BTMU played a major role in a financeproject connected with the expansion of the petrochemical plant facilities of Saudi Arabia’s
Eastern Petrochemical Company (SHARQ).
Asia and Oceania
MUFG covers this region with a total of 52 branches, representative offices and subsidiaries. Based on its strength in Asia, the Group uses its network and information gathering
capabilities to offer a diverse range of sophisticated products and services.

34

Corporate Review 2007 Mitsubishi UFJ Financial GroupIn June 2006, BTMU invested approximately US$180 million (about ¥20 billion) in the Bankof China Limited, one of the four largest state-owned commercial banks in China.
Following BTMU’s purchase of a stake in the Bank of China, the two banks concluded abusiness collaboration agreement in August 2006. The tie-up enables MUFG to provide
more convenient and high-quality services in China to its Japanese customers in areas outside MUFG’s network by introducing the Bank of China’s branches.
BTMU continued to expand its branch network in China during the fiscal year underreview, opening a Wuxi Branch in December 2006. The bank also opened the Tianjin
Binhai Sub-Branch of the Tianjin Branch in Tianjin in January 2007 and the Dalian
Economic & Technological Development Area Sub-Branch in Dalian in March 2007. These
were the bank’s second offices in these two cities.
In February 2007, BTMU made an additional investment in Commerce International
Merchant Bankers (CIMB) Group, of Malaysia, to forge an even stronger collaborative relationship in the investment banking field in Malaysia, including Islamic financing. Bank ofTokyo-Mitsubishi UFJ (Malaysia) Berhad was the first Japanese bank in Malaysia to arrange
a bond issuance program incorporating Islamic financing methods.

Mitsubishi UFJ Financial Group Corporate Review 200735

Corporate Social Responsibility

Establishing a CSR Promotion System Integrated with Group Management Strategies
MUFG’s approach to CSR is to integrate into its management strategies corporate activities that
contribute to the sustained development of society and the environment, and implement those
activities in parallel with the creation of economic value. MUFG has introduced a "balanced scorecard" (BSC)* approach at each company as a common platform to spread management strategies
throughout the organization and to put them into practice. BSC involves formulating strategies
BSC: A business managementfrom many perspectives besides just financial priorities such as earnings, including the perspectives

methodology, consisting ofof customers and society, internal processes, and human resources and management infrastruc-strategic maps and scorecards,
first proposed in the Unitedture, in pursuit of organizational goals. The BSC approach thus facilitates the integration of CSR

States in the early 1990s.

into management strategies. Based on this approach, by implementing PDCA (Plan, Do, Check,Act) cycles from the perspective of customers and other stakeholders, we seek to enhance thequality of our strategies and keep the Group on the path to sustainable growth.
In February 2006, MUFG established the CSR Committee to oversee CSR promotion activities
throughout the Group. Meeting in principle twice annually, the committee principally comprises
members of the Executive Committee of the holding
company. Its purpose is to deliberate CSR policies, devel-

MUFG CSR Promotion Structure

op group-wide programs, and reinforce CSR collabora-

MUFG Executive Committeetion among Group companies. Group companies also
Workshop for
corporate directors
and employees

Corporate Planning
Division,
MUFG

CSR Committee

have their own CSR promotion organizations and committees, pursuing CSR activities that reflect the characteristics of each company.

CSR Promotion Office,Corporate Planning Division,
BTMU

CSR Office,Corporate Planning Division,
MUTB

CSR Promotion Office,Corporate Planning Division,MUS

Executive Committee/
ISO Promotion Committee

Executive Committee/
CSR Committee

Executive Committee/
CSR Committee

For Customers
MUFG provides high quality services that reflect the needs, opinions, and wishes of its customers to enhance their satisfaction.
• Continuous Improvement in Customer Services
As part of our commitment to put the customer first in the management of our business andCSR activities, we are constantly improving services that originate with the customers and thefrontlines of operations. We will establish PDCA cycles throughout the group. This will involve

36

Corporate Review 2007 Mitsubishi UFJ Financial Groupestablishing policies and targets that reflect customer needs,

Process for Continuous Improvement of
Customer Service (PDCA cycle)

developing and supplying products and services as required, andutilizing customer feedback to evaluate the products and services.

Customer input

Through these and other continuous improvements to our business, including customer-oriented services originating from their

Check
Customer evaluation,internal audit

perspective, we believe that CSR-driven management practices
will become even more deeply ingrained in the group, including
the sales frontlines.

Do
Develop and provide
products and services

The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) has acquired theContinuous Improvementof Service

Act
Review by
management

ISO 9001 international quality standard certification as a meansPlanof developing uniform systems for enhancing customer satisfac-

Formulate plan basedon customer needs

tion throughout this bank.

For Employees
MUFG creates vibrant workplaces where employees can freely express their opinions and aretaught to respect human rights.
• Creating workplaces where employees can easily perform their jobs
To reflect the views of employees in the workplace and systems, various group companies collect opinions and conduct employee satisfaction surveys using their intranets. We also create
opportunities for dialog between employees and management to enable management todirectly communicate with employees at the frontlines.
• Developing motivating and worthwhile working environments
MUFG is focusing on developing the skills and careers of employees so that they can accurately
discern customer needs and make optimal recommendations as service sector professionals.
Each Group company has tier-specific training programs covering every level of the organizationfrom new recruits to corporate directors, and offers separate training programs for different
business sectors and a wide variety of seminars. In addition, MUFG
strongly supports employees who wish to obtain special qualifications, take special training courses or conduct external studies, suchas at business school or through cross-industry interaction.

United Nations Global Compact
In March 2006, MUFG declared its support for the United
Nations Global Compact. The Global Compact is a voluntarycode of conduct advocated in 1999 by the then-SecretaryGeneral of the United Nations, Kofi Annan, that calls for

MUFG supports the United Nations Global Compact* and respects

corporations and organizations around the world to work

the principles of human rights. We endeavor to create workplaces

within their respective spheres of influence to support internationally-recognized standards for human rights, labor, thewhere employees with different values and lifestyles can work

environment, and anti-corruption, and to take concrete

together in harmony.

action based on them. MUFG, as a financial group that
upholds the philosophy of contributing to progress toward asustainable society, endorses the principles of the Global
Compact, and works to fulfill its duties as a global citizen.

Mitsubishi UFJ Financial Group Corporate Review 200737

For the Environment
MUFG seeks to contribute to solving environmental problems through its activities as a financial
services group, by providing financing for environmentally friendly corporate activities and othermeasures.
• Participation in UNEP-FI
BTMU and Mitsubishi UFJ Trust and Banking Corporation (MUTB) are signatories to the United
Nations Environmental Programme Finance Initiative (UNEP-FI) Statement on the Environment
and Sustainable Development. This voluntary partnership of financial institutions promotes best
environmental and sustainability practices in various operations in the financial industry. In
November 2006, MUTB co-hosted Responsible Investment Seminar 2006 with the organization.
• Environmental Loan Program
To contribute to the protection of the environment through financing services, BTMU has estabEnvironmental consultants
conduct geological andlished an Environmental Finance Office, which conducts environmental loan initiatives in envi-

groundwater surveys at theronmental business areas being promoted by the Japanese government, such as wind and solar

construction site of a petrochemical project inpower. In order to determine the indirect environmental contribution it is making through its

Southeast Asia for whichloans to environmentally friendly businesses, BTMU quantifies the environmental benefits of its

BTMU offers financial

activities. Specifically, BTMU has introduced an environmental accounting system that converts

advisory services.

reductions in environmental impact, such as a decreased amount of greenhouse gas emissions,
into monetary terms.
• Promoting Clean Development Mechanism (CDM) Consulting
To support sustainable development in industrializing nations and reduction of greenhouse gas
emissions, Mitsubishi UFJ Securities Co., Ltd. (MUS) has established a Clean Energy FinanceCommittee to provide consulting services for CDM projects under the Kyoto Protocol. MUS has
obtained approval for four methodologies from the United Nations.

Wind turbines operated by JapanAn NPO-operated community

Wind Development Co., Ltd. inwind turbine in Akita City

Karatsu City, Saga Prefecture38

Corporate Review 2007 Mitsubishi UFJ Financial GroupFor Society
MUFG interacts with a wide variety of people in Japan and overseas and is mindful of its roles
and responsibilities as a citizen of local communities and international society. Through employee-based activities, Group companies and branch offices pursue voluntary social contribution
activities.
• Contributing to Local Communities
BTMU and MUTB provide funds and information-based support for voluntary community activities conducted by branch offices. Their activities emphasize partnership with local communities
and include neighborhood clean-up programs, planting flowerbeds in front of branches, tree
planting initiatives and community-based educational assistance.
• Support for Healthy Development of Children and YouthTo support the development of human capital in Asian countries, each year we offer scholarships to 16 students from Asia and Australia who are studying at graduate schools in Japan. In
fiscal 2006, BTMU and the UFJ Foundation provided scholarships to 572 students studying at
28 universities in China, Vietnam, Thailand, and 5 other countries.
• Activities Overseas
MUFG is also contributing to the advancement of local communities overseas, based on the philosophy of being "locally-driven" and "employee-based."In the United States, we provide unsecured small-denomination loans and micro-financing services to the poor and women to assist them in becoming independent and improving their standard of living.
Since 1991, New York and New Jersey employees have been participating in the annual Marchof Dimes WalkAmerica. It is a charity walk based on the theme of preventing premature births
and protecting maternal health. In fiscal 2006, this program attracted a record number of 350
participants, including employees and their friends and family, and raised $50,000. In fiscal
2007, 20 people affiliated with the Los Angeles Branchalso participated in the March of Dimes WalkAmerica
drive, raising US$2,000.

March of Dimes WalkAmerica

Mitsubishi UFJ Financial Group Corporate Review 200739

Corporate Governance

MUFG regards the establishment and operationof properly functioning corporate governance systems as an important management issue.

• Oversight from the Board of Corporate
Auditors
The Board of Corporate Auditors has five members, with the three outside corporate auditors

Corporate Governance Framework at
Holding Company
The holding company has established a stable andhighly effective corporate governance structure,in part due to the establishment of a Board ofcomprising a majority. The outside members help
to improve the quality of auditing activities bycorporate auditors by expressing opinions at
meetings of the Board of Corporate Auditorsfrom an independent and objective viewpoint.

Corporate Auditors and the inclusion of various“external perspectives” and a system of voluntary• External support from the Advisory Board

committees. Ongoing efforts are being made toComposed of external experts, the Advisory Board

refine this structure.

convenes regularly and reports to the Executive
Committee. This body provides valuable input and• Outside directors and voluntarycommittees
Three members of the 15-member Board of
Directors are outside directors. This arrangement

guidance to senior management by discussing
and debating corporate strategy, business planning and other key management topics from an
independent standpoint.

aims to enhance transparency in decision-making
as well as introduce checks to strengthen over-

Corporate Governance Framework at Major

sight of directors who have operational responsi-

Subsidiaries

bilities. Outside directors help to maintain and

Cross-group governance frameworks covering riskenhance corporate governance functions by over-management, compliance and internal audits bol-seeing the operational execution duties of direc-

ster the governance of MUFG and aid the holding

tors at board meetings.

company in supervising group business activities.

The holding company has also establishedThe holding company assigns directors to Bank ofthree voluntary committees that report to theTokyo-Mitsubishi UFJ, Mitsubishi UFJ Trust andBoard of Directors. Outside directors chair the

Banking and Mitsubishi UFJ Securities to provide

Internal Audit and Compliance Committee, theadditional oversight of the operations of these

Nomination Committee and the Compensation

major subsidiaries.

Committee. Outside members constitute a majority of each of these committees.

40

Corporate Review 2007 Mitsubishi UFJ Financial GroupIn addition, Bank of Tokyo-Mitsubishi UFJ,sidiaries has also voluntarily established an audit

Mitsubishi UFJ Trust and Banking and Mitsubishi

committee that reports to their respective direc-

UFJ Securities have each appointed outside direc-

tors. These committees have a majority of exter-

tors as a means of actively stimulating objective

nal members, including outside directors anddiscussion at board meetings and promoting

externally appointed legal or accounting experts.

greater transparency. Each of these major sub-Group Corporate Governance Structure
General Meeting of Shareholders
Board of Corporate Auditors(3 of 5 auditors are outside corporate auditors)
Board of Directors(Several outside directors)

Voluntary committee
Reports andrecommendations

Internal Audit andCompliance Committee

AdviceAdvisory Board(External experts)

Corporate Auditors
OfficeExecutive Committee
President & CEO

Nomination Committee

ReportCompensation Committee
Various committees
ReportIntegrated
Business Group

Corporate Staff
Units

Audit

Corporate Risk
Management Units

Internal Audit
Unit

Internal Audit and Compliance Committee ofBank of Tokyo-Mitsubishi UFJ, Mitsubishi UFJ Trust and Banking
and Mitsubishi UFJ Securities

Includes external members

Members of Committees Reporting to the Board of Directors(As of June 28, 2007)

Scope of committee deliberations

Members

Internal Audit andCompliance Committee

Matters related to internal audits and statutorycompliance at the holding company and groupsubsidiaries

Chairman: Akio Harada (Outside director)
Iwao Okijima (Outside director)
Koji Tajika (External expert/certified public accountant)
Yoshinari Tsutsumi (External expert/attorney-at-law)Haruya Uehara (Deputy Chairman and CAO, MUFG)

Nomination Committee

Matters related to the selection of holding company
directors and the selection or dismissal of directorsof Bank of Tokyo-Mitsubishi UFJ and Mitsubishi UFJ
Trust and Banking

Chairman: Iwao Okijima (Outside director)
Akio Harada (Outside director)
Takuma Otoshi (Outside director)
Nobuo Kuroyanagi (President & CEO, MUFG)

Compensation Committee

Matters related to the evaluation and remunerationof senior management at the holding company, Bankof Tokyo-Mitsubishi UFJ and Mitsubishi UFJ Trust andBanking, and related executive compensation systems

Chairman: Takuma Otoshi (Outside director)
Iwao Okijima (Outside director)
Akio Harada (Outside director)
Nobuo Kuroyanagi (President & CEO, MUFG)

Members of Advisory Board(As of June 28, 2007)

Kazuhito Ikeo

Kunio Egashira

Yuko Kawamoto

Professor, Faculty of Economics,

Chairman of the board,

Professor, Graduate School of

Yoshihide Munekuni
Former Chairman,

Keio University

Ajinomoto Co., Inc.

Finance, Accounting & Law,

Honda Motor Co., Ltd.

Waseda University

Mitsubishi UFJ Financial Group Corporate Review 200741

Group Business Management

Operational Management Framework

Internal Performance Indicators

MUFG has adopted a group organizational struc-

MUFG has introduced a system to monitor andture that features cross-integration along func-

allocate capital across subsidiary banks, businesstional lines to deliver timely and value-addedgroups and segments, and between different cat-financial products and services that address theegories of risk. Based on quantitative measure-needs of a wide range of customers. This frame-ment of the various risks faced by MUFG using

work involves close cooperation among groupinternal risk management methods, the systemcompanies and is based on an integrated businessguides the risk-weighted allocation of capitalgroup system to develop operations in line with a(economic capital) with the aim of improving theunified strategy. The holding company has estab-overall risk-return profile for MUFG and ensuring

lished integrated business groups to focus onthat the proper allocation of economic resources

MUFG’s three core businesses of retail banking,delivers returns that are commensurate with risk.

corporate banking and trust assets. This frame-

Under this system, the holding company formu-

work aims to ensure that MUFG can address cus-

lates a capital allocation plan for each six-month

tomer needs with speed and accuracy.

period based on discussions with subsidiarybanks. In addition, MUFG has introduced two

Integrated BusinessGroup System
Integrated
Business
Group Systeminternal performance indicators (cost of capitalBank ofTokyo-Mitsubishi UFJ

Mitsubishi UFJ
Trust and Banking

Mitsubishi UFJ
Securities

Card business andleasing, etc.

Retail Banking BusinessCorporate Banking Business

Trust Assets Businessadjusted return and consolidated operating ROE)
to help assess and manage risk-weighted profitability and capital productivity. (See chart p.43.)
Overview of Internal Capital Adequacy
Assessment Process
The holding company assesses its internal capital
adequacy from two perspectives, namely regulatory capital based on capital adequacy regula-

Glossary of terms:

tions, and its own economic capital based on● Cost of capital-adjusted return is a

● Consolidated operating ROE is apost-tax performance indicator (derived

post-tax performance indicator (derived

from Japanese GAAP data) equal to net

from Japanese GAAP data) equal tobusiness profit (gross profits minus

net business profit minus credit costs,

expenses), from which credit costs andwhich is then divided by the value ofthe cost of capital are also deducted.

allocated capital. MUFG pursues higher

MUFG aims to build corporate value overreturns on capital by seeking to maximize

the medium and long term by assessing

the returns generated from allocatedthe returns from business development

capital at each business group andafter fully taking into account the cost of

segment.

capital (the expected return forshareholders).

42

Corporate Review 2007 Mitsubishi UFJ Financial Group

internal risk assessment.
Internal capital adequacy assessment based on
regulatory capital is carried out by using a capital
adequacy ratio and Tier 1 ratio calculated fromrisk-weighted assets and capital which are stipulated in the capital adequacy regulation. The
holding company compares these figures with its

Management of Allocated CapitalMulti-risk quantification
Monitoring of risk-return profile

Tier 1
capitalEconomic
capitalEconomic capital

ReturnEconomic capital

ReturnEconomic capital

ReturnRisk controlled within scope ofTier 1 capital

Assessment of risk-weighted profitability
and capital productivity
Application to performance evaluation

Economic capital allocated acrossbanks, business groups and segments
Capital allocation plan

Summation acrossbanks, business groups
and segments

Cost of capital-adjusted return, consolidated operating ROE

Risk assumed within
scope ofcapital allocation plantargets—a capital ratio of 12% and Tier 1 ratio of

available for sale, is compared with Tier 1 capital

8%— when formulating its internal risk-weight-

to assess internal capital adequacy, and the capi-

ed assets plan and capital plan. In addition, thetal allocation plan is then formulated. Thereafter,

capital adequacy ratio and Tier 1 ratio are regularly

the use of allocated capital is regularly checkedcalculated and reported to management during

against the plan during the fiscal year, including

the fiscal year in order to monitor internal capitalrisk assessment with a 99.9% confidence interval,

adequacy.

and compared with Tier 1 capital to provide

Internal capital adequacy assessment based on

ongoing monitoring of internal capital adequacy.

economic capital is carried out within the frame-

When drawing up a regulatory capital plan

work of the capital allocation system, which allo-and economic capital plan, both methods under-

cates capital in accordance with credit risk,

go stress testing. The plans for regulatory andstrategic equity portfolio risk, market risk, andeconomic capital are formulated following

operational risk. Included within these risks aredetailed analysis of the impact of the stress test-

credit concentration risk and interest rate risk ining on capital and risk, and assessment of internal

the banking book as stipulated by the Second

capital adequacy.

Pillar of Basel II. Each risk is calculated using the

The major banking subsidiaries, namely thebasic assumptions of a confidence interval of

Bank of Tokyo-Mitsubishi UFJ and Mitsubishi UFJ

99% and a holding period of one year. The total

Trust and Banking, utilize a similar framework torisk amount, taking into account the effect of diver-assess their internal capital adequacy.

sification and net unrealized gains on securities

Mitsubishi UFJ Financial Group Corporate Review 2007

43

Risk Management

Numerous changes in MUFG’s business environ-value. Based on this policy, MUFG identifies, mea-

ment have resulted from the deregulation andsures, controls and monitors a wide variety of

globalization of finance, and the advancement ofrisks so as to achieve a stable balance between

information technology. MUFG aims to be a glob-

earnings and risks. We enforce the risk manage-

al and comprehensive financial group encompass-ment to create an appropriate capital structure

ing leading Japanese players in commercial andand to achieve optimal allocation of resources.

trust banking, and securities. Risk management
plays an increasingly important role as the risks
faced by financial groups such as MUFG increase

Risk Classification
At the holding company level, MUFG broadly classifies and defines risk categories faced by thein scope and variety.
MUFG identifies various risks arising from businesses based on uniform criteria, and implements

group. Group companies perform more detailed risk
management based on their respective operations.

integrated risk management to ensure a stronger
financial condition and to maximize shareholder

44Type of Risk

Definition

Credit Risk

The risk of financial losses in credit assets (including off-balance sheet instruments) caused
by deterioration in the credit conditions of counterparties. This category includes country risk.

Market Risk

Market risk is the risk of financial losses where the value of our assets and liabilities 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 losses caused by theinability to secure market transactions at the required volume or price levels as the result ofmarket turbulence or a lack of trading liquidity.

Liquidity Risk

The risk of incurring losses if a poor financial position at a group company hampers theability to meet funding requirements or necessitates fund procurement at interest rates
markedly higher than normal.

Operational Risk

The risk of losses resulting from inadequate or failed internal processes, people or systems,
or from external events.

Operations Risk

The risk of incurring losses that might be caused by negligence of correct operational
processing, or by incidents or misconduct by either officers or staff, as well as risks similar
to this risk.

Information
Asset Risk

The risk of losses caused by loss, alteration, falsification or leakage of information, or by
destruction, disruption, errors or misuse of information systems, as well as risks similar tothis risk.

Reputation
Risk

The risk of losses due to deterioration in reputation as a consequence of the spread of
unfounded rumors among customers or the market, or as a consequence of inadequate
response to the truth by MUFG, as well as risks similar to this risk.

Corporate Review 2007 Mitsubishi UFJ Financial GroupRisk Management System

The holding company seeks to enhance group-

MUFG has adopted an integrated risk manage-

wide risk identification; to integrate and improvement system and promotes close cooperation

the group’s risk management system and related

among the holding company and group compa-

methods; to maintain asset quality; and to elimi-

nies. The holding company and the major sub-nate concentrations of specific risks. Group-widesidiaries each appoint Chief Risk Management

risk management policy is determined at the

Officers and establish independent risk manage-

holding company level and each group company

ment divisions. At Risk Management Committees,

implements and improves its own risk manage-

our management members discuss and dynami-

ment system. Bank of Tokyo-Mitsubishi UFJ andcally manage various types of risks from both

Mitsubishi UFJ Trust and Banking have deliberated

qualitative and quantitative perspectives. The

plans to upgrade risk management systems in line

Board of Directors determines risk managementwith the requirements for major banks stipulated

policies for various types of risk based on the dis-by the Financial Services Agency (FSA) of Japan

cussions held by these committees.

and have been constructing advanced risk management systems.

Risk Management

Holding company (Mitsubishi UFJ Financial Group)

Risk Management
SystemBoard of Directors

Framework
Corporate Risk Management
Committee

Executive Committee(includes crisis management)

Credit & Investment
Committee

Corporate Risk Management
Division(Coordinates risk management)Group Credit Management
Committee

Asset Liability and CapitalManagement Committee

Market Risk, Liquidity Risk,
Operational Risk,
Operations Risk,
Information Asset Risk

Credit & Investment
Management Division

Credit Risk

Public Relations Division

Reputation Risk

Establish fundamental
policyDiscuss andreportGuidance and advice

Discuss andreportGroup Companies
Mitsubishi UFJ Trust and Banking

Bank of Tokyo-Mitsubishi UFJ

Board of Directors

Risk Management
Committee

Executive Committee

ALM Committee

Credit & Investment
Management Committee

Corporate Risk Management
Division

Market Risk,
Liquidity Risk,
Operational Risk

Credit and Investment
Council(Coordinates risk management)

Operational Risk
Management Committee

Crisis Management
Committee

Executive Committee

Corporate Risk Management
Division

ALM Council

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

Credit Risk

(Coordinates risk management)

Information Security
Management Committee

Operations Services
Planning Division

Operations Risk,
Settlement Risk

Credit Risk Management
Division

Credit Risk

Crisis Management
Committee

Information Security
Management Division

Information Asset Risk

Operations Administration
Division

Operations Risk

Corporate Administration
Division

Tangible Asset Risk

Corporate Administration
Division

Tangible Asset Risk

Human Resources Division

Personnel Risk

Personnel Division

Personnel Risk

Compliance & Legal Division

Legal Risk

Compliance & Legal Division

Legal Risk

Public Relations Division

Reputation Risk

Corporate Planning Division

Reputation Risk

Other Subsidiaries

Credit Policy & Planning
Division

Mitsubishi UFJ Securities

Board of Directors

Mitsubishi UFJ Financial Group Corporate Review 200745

Business Continuity Management

called Basel II was released. Basel II has been

Based on a clear critical response rationale andapplied to Japanese banks since March 31, 2007.

associated decision-making criteria, MUFG has

Basel II is based on “three pillars”: minimum

developed systems to ensure that operations arecapital requirements, the self-regulation of finan-

not interrupted or can be restored to normal

cial institutions based on supervisory review pro-quickly in the event of a natural disaster or systemcess, and market discipline through the disclosure

failure, to minimize any disruption to customers

of information. The idea is that these three pillars

and markets. A crisis management team within

will mutually reinforce to ensure the effectivenessthe holding company is the central coordinatingof regulations. Basel II is thus a more comprehen-body in the event of any emergency. Based on

sive regulatory framework for ensuring theinformation collected from crisis managementsoundness and stability of the international bank-personnel at the major subsidiaries, this central

ing system. In addition, for credit risk and opera-

body would assess the overall impact of a crisis on

tional risk, the revised Framework provides more

the group’s business and establish task forces thatrisk-sensitive approaches and a range of options

could implement all countermeasures to restore

for measuring risks and determining the capitalfull operations. MUFG has business continuity

requirements. As a result, Basel II also reflects theplans to maintain continuous operational viability

nature of risks at each bank more closely.

in the event of natural disasters, system failures

In Basel II, MUFG adopts the Foundationand other types of emergencies. Regular training

Internal Ratings-Based Approach to calculate capi-

drills are conducted to upgrade the practical

tal requirements for credit risk. The Standardised

effectiveness of these systems.

Approach is used for some subsidiaries that areconsidered to be immaterial to the overall MUFG

Implementing Basel II
The Basel Committee on Banking Supervision of
the Bank for International Settlements (BIS) sets
capital adequacy standards for all internationallyactive banks to ensure minimum level of capitals.
The Basel Committee worked over recent years
to revise the 1988 Accord, and in June 2004,“International Convergence of Capital Measurement
and Capital Standards: A Revised Framework”

46

Corporate Review 2007 Mitsubishi UFJ Financial Group

capital requirements and a few subsidiaries adopt
a phased rollout of the IRB approach.
MUFG adopts the Standardised Approach to
calculate capital requirements for operational risk.
As for market risk, MUFG adopts the Internal
Models Approach mainly to calculate generalmarket risk and adopts the Standardised
Methodology to calculate specific risk.

Credit Risk Management
Credit risk is the risk of losses due to deterioration

while the holding company oversees and manages

in financial condition of a borrower.

credit risk on an overall group-wide basis. The

MUFG has established risk management sys-

holding company also convenes regular committee

tems to maintain asset quality, manage credit risk

meetings to monitor credit risk management at

exposure and achieve earnings commensurate

subsidiary banks and to issue guidance wherewith risk.

necessary.

MUFG applies a uniform group-wide credit rat-

Each major banking subsidiary has in place aing system for asset evaluation and assessment,

system of checks and balances in which a credit

loan pricing, and the quantitative measurementadministration section that is independent of theof credit risk. This system also underpins the cal-business promotion sections screens individual

culation of capital requirements and managementtransactions and manages the extension of credit.

of credit portfolios.

At the management level, regular meetings of

MUFG continually seeks to upgrade credit

Credit and Investment Management Committees

portfolio management (CPM) expertise to achieve

and related deliberative bodies ensure full discus-

an improved risk-adjusted return, based on thesion of important matters related to credit risk

group’s credit portfolio status and flexible

management. Besides such checks and balances

response capability to economic and other exter-and internal oversight systems, credit examination

nal changes.

sections also undertake credit testing and evaluation to ensure appropriate credit risk management.

Credit Risk Management System
The credit portfolios of the major banking subsidiaries are monitored and assessed on a regularManagement
SystemtheBanking
Major Subsidiaries
Banking Subsidiaries
Management
Systemof theofMajorbasis to maintain and improve asset qualities.

Board of Directors/Executive Committee
Credit & Investment Management Committee/related deliberative bodies

Uniform group-wide credit rating as well as asset
evaluation and assessment system is used to ensure

Decisions regarding
important matters
Delegation of
authority

Discussion ofimportant matters
Transaction report

timely and proper evaluation of all credit risks.
Under the MUFG credit risk management system,
each major banking subsidiary manages its respective credit risk on a consolidated and global basis,

Credit administration
sections
Creditscreening andmanagement
Business promotion
sections

Monitoring by
MUFG Credit & Investment
Committee

Regular report

Quantitative risk monitoring

Credit risk management
sections

Credit testingand evaluation
Credit examination
sections

Mitsubishi UFJ Financial Group Corporate Review 200747

Internal Rating System
MUFG (MUFG and its major banking subsidiaries

Country risk is assigned on a uniform group-

the Bank of Tokyo-Mitsubishi UFJ and Mitsubishi

wide basis. These ratings are reviewed periodically

UFJ Trust and Banking) has introduced an inte-

to take into account relevant political and economic

grated group-wide credit rating system as unified

factors, including foreign currency availability.

criteria to evaluate credit risk.

Risk exposure for small retail loans, such as res-

The credit rating system is classified into borrower rating, facility risk rating, structured financeidential mortgage loans, is managed assigning
exposure at a pool level.

rating and asset securitization rating. In principle,
the same client and clients with the same risk are
given the same credit rating.

Definitions of Borrower Ratings
Borrower
rating

1~2

Borrower capacity to meet financial obligations deemed high and stable

3~5

Borrower capacity to meet financial obligations deemed free of problems

6~8

Borrower capacity to meet short-term financial obligations deemed free ofproblems

9

Borrower capacity to meet financial obligations deemed slightly poor

10~12

48

Definition

Borrower
category

NormalClose monitoring of borrower required due to one or more of following conditions:[1] Borrower who has problems meeting financial obligations (e.g. principal
repayments or interest payments in arrears)[2] Borrower whose business performance is poor or unsteady, or in an
unfavorable financial condition[3] Borrower who has problems with loan conditions (e.g. interest rates havebeen reduced or deferred)

Normalclaims

10

Causes for concern identified in borrower’s business management necessitate
ongoing monitoring, despite only minor problems or significant ongoing
improvement

11

Emergence of serious causes for concern in borrower’s business management
signal need for caution in debt repayment due to major problems or requiring
protracted resolution

12

Borrower applicable to the definition of rating 10 or 11 and holds restructured loan, or borrower with loan contractually past due 90 days or more due
to particular reasons, such as an inheritance-related issue

13

Borrower where losses are expected due to major debt repayment problems(that is, although not yet bankrupt, borrower deemed likely to becomebankrupt due to financial difficulties and failure to make significant progresswith restructuring plans)

Likely to
becomebankrupt

14

Although not legally or officially bankrupt, borrower in virtual bankruptcy
due to serious financial difficulties, without any realistic prospect of businessrecovery

Virtuallybankrupt

15

Borrower legally or officially bankrupt and subject to specific procedures,such as legal liquidation/business suspension/winding up of business/private
liquidation

Bankrupt

Corporate Review 2007 Mitsubishi UFJ Financial GroupNPL
Classifications
under FRL

Close
watch

Claims under close
observation
Doubtful

claimsClaims overbankrupt or
virtuallybankrupt
borrowers• Borrower rating

The system is used by financial institutions to

Borrower rating is classified into 15 grades based

conduct write-offs and allocate allowances against

on evaluations of their debt-service capability overcredit risk in a timely and adequate manner.

the next 3 to 5 years.
Quantitative Analysis of Credit Risk
• Facility risk rating
Facility risk rating is used to evaluate and classify
the quality of individual credit facilities (guarantees,
collateral, etc.). This is done by measuring thequantitative estimated loss rate of a facility in theevent of default.
• Structured finance rating and asset securitization rating

MUFG and its major banking subsidiaries not only
manage credit amount and expected losses, butalso run simulations based on internal models toestimate the amount of credit risk in the worst
case scenarios. They are used for internal management purposes, including loan pricing andmeasurement of economic capital. When quantifying credit risk amounts using the internal model,

These ratings are used to evaluate and classify the

MUFG and its major banking subsidiaries take into

quality of individual credit facilities (guarantees, col-account PD, LGD, EAD applicable to borrower rat-lateral, credit period, structure, etc.). In evaluating

ing, facility risk rating, pool assignment, and any

debt service potential, it is critical to scrutinize

credit concentration risk in borrower groups orunderlying structure as whether or not planned

industry sectors. Depending on the degree of

future cash flow can be achieved.

importance, MUFG and its major banking sub-• Pool assignment
Each of the major banking subsidiaries of MUFG

sidiaries also store credit portfolio data for othersubsidiaries and manage their credit risk.

has their own pool assignment system that clearlyreflects the special features of their loan portfolios
in terms of retail risk exposure.

Glossary of terms:● PD (Probability of Default)● EAD (Exposure at Default)

The estimated default rate or the

The amount expressed in relevant

Asset Evaluation and Assessment Systemprobability that the borrower will

currency of exposure to loss at time

The asset evaluation and assessment system is used

default. The definition of default isof default, or in other words, thenonperformance in payments of inter-

estimated amount of exposure to loss

est or principal in the narrow sense;on loan when a borrower defaults

according to the probability of collection and the

however, in quantifying credit risk, adue to bankruptcy or other reasons.

risk of any impairment in value taking into consid-

wider definition of default is used.

to classify assets held by financial institutions

eration borrower classifications consistent withborrower rating and the status of collateral, guarantees, or other conditions.

● LGD (Loss Given Default)

The percentage loss at time ofdefault, or in other words, the estimated percentage of loss on loan
when a borrower defaults due tobankruptcy or other reasons.

Mitsubishi UFJ Financial Group Corporate Review 200749

Loan Portfolio Management

Continuous CPM Improvement

MUFG aims to achieve and maintain levels ofWith the growth of securitized products and cred-earnings commensurate with credit risk exposure.

it derivatives in global markets, MUFG actively

Products are priced to take into account expectedseeks to supplement conventional CPM tech-losses, based on the internal credit ratings.

niques with advanced methods based on the use

MUFG assesses and monitors loan amountsof such market-based instruments.

and credit exposure by credit rating, industry andThrough credit risk quantification and portfolio

region. Portfolios are appropriately managed to

management, MUFG aims to improve the risk

limit concentrations of risk in specific categories

return profile of the group’s credit portfolio using

by establishing large exposure guidelines.

financial markets to rebalance credit portfolios in

To manage country risk, MUFG has establishedspecific credit ceilings by country. These ceilings

a dynamic and active manner, based on an accurate assessment of credit risk.

are reviewed when there is any material change
in a country’s credit standing, in addition to regular review.

Credit Portfolio Management (CPM) Framework

Implementation of Basel II

Portfolio management

Objective credit rating system

Risk quantification

Risk-based earnings management

Risk-based pricing management

Asset evaluation and assessment

50

Market-based advanced CPM

Corporate Review 2007 Mitsubishi UFJ Financial Group

Appropriate write-offs
and allowance

Execute business strategies

Quantitative monitoring of credit risk
Portfolio risk concentration checks

Risk Management of Strategic Equity Portfolio
Strategic equity investment risk is the risk of losses

subject to a variation of approximately ¥4.2 billion

caused by a decline in the prices of equity invest-

per point of movement in the TOPIX index.

ments of MUFG.

MUFG seeks to manage and reduce strategic

MUFG uses quantitative analysis to manage

equity portfolio risk based on such types of simu-

the risks associated with the portfolio of equities

lation. The aim is to keep this risk at appropriate

held for strategic purposes. According to internal

levels compared with Tier 1 capital while generat-

calculations, the market value of our strategically-ing returns commensurate with the degree of risk

held (TSE-listed) stock as of March 31, 2007 was

exposure.

Market Risk Management
Market risk is the risk that the value of our assets

which back and middle offices operate indepen-and liabilities could be adversely affected bydently from front offices. In addition, ALM

changes in market variables such as interest rates,

Committee, ALM Council and Risk Management

securities prices, or foreign exchange rates.

Meetings are held respectively at Bank of Tokyo-

Management of market risk at MUFG aims to

Mitsubishi UFJ, Mitsubishi UFJ Trust and Banking

control related risk exposure across the group

and Mitsubishi UFJ Securities every month towhile ensuring that earnings are commensuratedeliberate important matters related to market

with levels of risk.

risk and control.
The holding company and the major sub-Market Risk Management System
MUFG adopts uniformed systems to manage thesidiaries have allocated economic capital commensurate with level of market risk and determinedmarket risks from its trading and non-trading activities. The holding company monitors group-wide
market risk, while each of the major subsidiaries

Management System of the Major Subsidiaries

manages their market risks on a consolidated andBoard of Directors / Executive Committee
ALM Committee / ALM Council / Risk Management Meetings

global basis.
At each of the major subsidiaries, checks andDelegation of
authoritybalances are maintained through a system in

Trading results
reportFront Office
Quantitative risk monitoring

ReportMiddle Office(Market risk management
division)

Confirmation of contracts
and agreements
Back Office

Mitsubishi UFJ Financial Group Corporate Review 200751

within the scope of their capital bases. The majorrisk profiles, including stress testing, are conduct-

subsidiaries have established quantitative limits

ed and reported to the Executive Committees andrelated to market risk based on the allocated capital.

the Corporate Risk Management Committees on

The major subsidiaries have also set limits for thea regular basis.

maximum amount of losses arising from market
activities.

At the business unit levels in the major subsidiaries, the market risks on their marketableassets and liabilities, such as interest rate risk andMarket Risk Management and Control
At the holding company and the major subsidiaries, market risk exposure is reported to theChief Risk Management Officers on a daily basis.
At the holding company, the Chief Risk
Management Officer keeps track of market risk
exposure across the group as well as the major
subsidiaries’ control over their quantitative limits
for market risk and losses. Meanwhile, Chief Risk
Management Officers at the major subsidiaries

foreign exchange rate risk, are controlled byentering into various hedging transactions using
marketable securities and derivatives.
Activities in the trading business are performedin accordance with the predetermined rules andprocedures. The internal auditors as well as independent accounting auditors regularly verify theappropriateness of the management controls overthese activities and the risk evaluation models
adopted.

monitor their own market risk exposure and theircontrol over their quantitative limits for market

Market Risk Measurement Modelrisk and losses. In addition, various analyses on

Since the daily variation in market risk is significantly greater than with other types of risk,
MUFG measures and manages market risk using

Glossary of terms:● Value at Risk (VaR)

VaR is a statistical estimate of the amount by which the market value

VaR on a daily basis.
Market risk for trading and non-trading activi-of a portfolio could vary going forward within a certain period of time,ties is measured using a uniformed market risk

based on historical market changes.

measurement model. The principle model used
for these activities is historical simulation (HS)model (holding period, 10 days; confidence interval, 99%; and observation period, 701 businessdays). The HS model calculates VaR amount by

52

Corporate Review 2007 Mitsubishi UFJ Financial Groupestimating the profit and loss on the current port-

Sensitive monitoring of interest rate risk is thefolio by applying actual fluctuations in the market

key to managing market risk in MUFG’s non-trading

rates and prices over a fixed period in the past.

activities. The major banking subsidiaries have set

This method is capable of capturing certain statis-the following assumptions for measuring riskstically infrequent movements, e.g., a fat tail, andconcerning core deposits, loan prepayments andaccounts for the characteristics of financial instru-

early deposit withdrawals.

ments with non-linear behavior. Independent

On recognizing interest rate risk from deposits

auditors have verified the accuracy and appropri-

without contract-based fixed maturities, “coreateness of this internal market risk model. The

deposits” amount is determined from the results

holding company and banking subsidiaries alsoof a statistical analysis of each product using

use the HS model to calculate Basel II regulatory

deposit balance trend data and the outlook forcapital adequacy ratios. MUFG has notified theinterest rates on deposits, business decisions, and

FSA of its use as the internal market risk model,

other factors. Then a portion of this amount isand received approval for its use in March 2007.

partitioned into maturity terms of up to five years

In calculating VaR by the HS method, MUFG

(2.5 years on average) to recognize interest risk.

has implemented a uniformed market risk mea-

These methods of determining the core deposits

surement system throughout the group. The major

and partitioning them into maturity terms are reg-

subsidiaries calculate their VaR from the risk andularly reviewed.

market data prepared by the information systems

Meanwhile, deposits and loans with contract-of their front offices and other departments. This

based maturities are sometimes cancelled orrisk data is provided by the major subsidiaries torepaid before their maturity dates. On measuring

the holding company, which calculates overall VaRinterest rate risk for these deposits and loans,taking into account the diversification effect

MUFG reflects these early termination events

among all portfolios of the major subsidiaries.

mainly by applying early termination rates calcu-

For the internal purpose of evaluating capital

lated from statistical analysis of historical repay-

adequacy on an economic capital basis withment and cancellation data coupled withrespect to market risk, we use this market risk

historical market interest rate data.

measurement model to calculate risk amounts
based on a holding period of one year and a confidence interval of 99%.

Mitsubishi UFJ Financial Group Corporate Review 200753

Summary of Market Risks (Fiscal Year EndedMUFG experienced a large increase in market risk

March 2007)

during the fiscal year in review, particularly its expo-• Trading activities

sure to foreign exchange and equity-related risk.

Aggregate VaR for MUFG’s total trading activities

MUFG’s average daily VaR for the fiscal year

as of March 31, 2007 was ¥16.04 billion, compris-

ended March 2007 was ¥6.40 billion, rising froming interest-rate risk exposure of ¥4.68 billion, for-the daily VaR of ¥4.13 billion for the period ofeign exchange risk exposure of ¥5.98 billion, andJanuary–March 2006. Interest-rate risk and equity-

equity-related risk exposure of ¥8.77 billion.

related risk increased particularly.

Compared with the VaR as of March 31, 2006,

VaR for Trading Activities
April 1, 2005~September 30, 2005
Average
MTFG
Interest rate
Yen
U.S. dollar
Foreign exchange
Equities
Commodities(Diversification effect)

Maximum

Minimum

Billions of Yen
Sep 30, 2005

7.69
7.76
6.99
0.70
1.16
0.55
0.11
(1.89)

15.39
15.14
14.39
1.77
2.46
4.04
0.25
–

2.53
2.17
1.24
0.25
0.20
0.23
0.01
–

4.11
4.04
3.36
0.50
0.94
0.25
0.12
(1.24)

2.5

3.2

1.5

1.8

0

0

0

0

Average

Maximum

4.13
3.64
2.72
0.90
1.83
0.50
0.12
(1.97)

5.40
5.71
5.51
1.75
3.72
2.10
0.16
–

UFJ Bank
UFJ Trust Bank
January 1, 2006~March 31, 2006
MUFG
Interest rate
Yen
U.S. dollar
Foreign exchange
Equities
Commodities(Diversification effect)

Billions of Yen
Minimum Mar 31, 2006
3.45
2.63
1.71
0.49
0.74
0.24
0.07
–

3.81
3.65
2.51
1.35
0.74
0.45
0.07
(1.10)

October 1, 2005~December 31, 2005
Average
MUFG
Interest rate
Yen
U.S. dollar
Foreign exchange
Equities
Commodities(Diversification effect)
UFJ Bank

Maximum

Minimum

Billions of Yen
Dec 31, 2005

3.53
2.60
1.69
0.71
2.71
0.42
0.19
(2.38)

5.36
4.11
3.48
1.20
4.62
1.07
0.36
–

2.25
2.00
1.02
0.39
0.99
0.27
0.12
–

2.29
2.11
1.38
1.03
1.86
0.27
0.13
(2.08)

1.2

1.9

0.6

0.7

Average

Maximum

6.40
4.60
2.55
1.25
2.03
1.52
0.11
1.85

20.80
8.48
5.13
3.27
5.98
14.64
0.34
–

April 1, 2006~March 31, 2007
MUFG
Interest rate
Yen
U.S. dollar
Foreign exchange
Equities
Commodities(Diversification effect)

Billions of Yen
Minimum Mar 31, 2007
2.79
2.78
1.10
0.43
0.46
0.24
0.04
–

16.04
4.68
2.37
1.32
5.98
8.77
0.16
3.55

Assumptions for VaR calculations:
MTFG/MUFG:

Historical simulation method
Holding period: 10 days
Confidence interval: 99%
Observation period: 701 business days

UFJ Bank:

Historical simulation method
Holding period: 1 day
Confidence interval: 99%
Observation period: 750 business days

UFJ Trust Bank:

Variance-covariance method
Holding period: 1 day
Confidence interval: 99%
Observation period: 2 years• The maximum and minimum VaR overall and for various risk categories
were taken from different days

Note: The VaR for MUFG’s total trading activities in the fiscal year ended March 31, 2006 are divided into separate periods to reflect the mergers of theholding companies and of the trust banks in October 2005 as well as the merger of the two commercial banks in January 2006. The former
Mitsubishi Tokyo Financial Group (MTFG) and UFJ Group used different risk measurement methods, and the pre-merger figures are based on theserespective approaches.

54

Corporate Review 2007 Mitsubishi UFJ Financial GroupReflecting the nature of trading operations,

VaR for Non-trading Activities

market risk varied substantially during the fiscal
April 1, 2006~March 31, 2007

year depending on the fluctuations in trading

Billions of Yen
Minimum Mar 31, 2007

Average

Maximum• Non-trading activities

Interest rate
Yen
U.S. dollar
Euro
Equities

168.5
106.9
94.8
19.1
97.1

185.8
127.7
106.6
25.7
111.7

142.4
80.1
79.0
13.8
62.9

174.8
115.8
88.3
17.8
94.7

Aggregate VaR for MUFG’s total non-trading

Total

197.1

220.3

176.6

199.6

positions.

activities as of March 31, 2007, excluding market
risks related to our strategic equity portfolio andmeasured using the same standards as trading
activities, was ¥199.6 billion. Market risks related tointerest rates equaled ¥174.8 billion and equitiesrelated risks equaled ¥94.7 billion.
Based on a simple sum of figures across mar-Assumptions for VaR calculations:
Historical simulation method
Holding period: 10 days
Confidence interval: 99%
Observation period: 701 business days
• The maximum and minimum VaR for each category andin total were taken from different days.
The equities-related risk figures do not include market risk
exposure from our strategic equity portfolio.

ket risk categories, interest rate risks accounted
for approximately 65% of our total non-trading
activity market risks. Looking at a breakdown ofinterest-rate related risk by currency, at March 31,
2007, the yen accounted for roughly 50% while
the U.S. dollar generated roughly 40%.

• Outlier ratio
To monitor interest-rate risk on its non-trading
activities in accordance with the Second Pillar ofBasel II Framework, MUFG measures “outlier”
ratio of the holding company as well as of the two
major banking subsidiaries. At March 31, 2007,
the outlier ratios of the holding company, Bank ofTokyo-Mitsubishi UFJ, Mitsubishi UFJ Trust andBanking were all less than 20%.

Mitsubishi UFJ Financial Group Corporate Review 200755

Outlier Ratio

Backtesting
As of March 31, 2007

The holding company conducts backtesting in

7.92%

which estimated VaR, calculated using our VaR

Bank of Tokyo-Mitsubishi UFJ

7.00%

measurement model, are compared with actual

Mitsubishi UFJ Trust and Banking

13.82%MUFG

Assumptions for Outlier ratio calculations:
Measurement method:
Interest rate sensitivity method
Interest rate shock range: 1st and 99th percentile ofobserved interest changes using
one-year holding period andfive-year observation period

realized and unrealized losses on a daily basis toverify the accuracy of the model. In addition, we
conduct backtesting using various methods,
including testing VaR against hypothetical losses,
and testing VaR by changing various parameters,such as confidence intervals, observation periods,
etc, used in the model. In this manner, we cap-

Glossary of terms:

ture the characteristics of our VaR model and● Outlier ratio

ensure the accuracy and appropriateness of our

The Second Pillar of Basel II Framework introduced a new “outlier bank”
criterion to control interest rate risk in the banking book, of whichmost of the products held are not measured at fair value. As part ofmeasuring interest rate risk in the banking book, MUFG and the majorbanking subsidiaries monitor the “Outlier Ratio”, the ratio of expected

VaR measurement.
The graph in the upper right corner of the next
page plots the results of backtesting for trading

losses resulting from an interest rate shock in a certain range to capital.

activities over one year, showing actual losses

The capital is broadly defined as the sum of Tier 1 + Tier 2 capital. In casenever exceeded VaR in the fiscal year ended

an outlier ratio for a bank exceeds 20%, the FSA, as part of its early
warning framework, will conduct a preliminary interview with the bank toMarch 2007. This means that MUFG’s VaR model

determine the appropriateness of bank’s risk management and its

provided reasonably accurate measurements ofimprovement measures, if any. However, an outlier ratio of over 20%
does not necessarily mean that a management improvement order isimmediately issued by the FSA.

market risk.
The graphs in the lower row on the next pageillustrate MUFG’s VaR and daily profit/loss for
trading activities during the fiscal years ended
March 2006 and 2007. Given the nature of trading activities, the front offices of the major subsidiaries control their trading positions dynamicallyto market volatility.

56

Corporate Review 2007 Mitsubishi UFJ Financial GroupMarket Risk Backtesting

Market Risk Backtesting(April 1, 2006–March 31, 2007)

Billions of Yen

6

Daily profit/loss

Daily profit/loss(April 1, 2005–March 31, 2006)

Case of losses exceeding VaR: 0
4
2

Case of losses exceeding VaR: 0
4
2

0

0

-2

-2

-4

-4

-6

-6

-8

-8

-10

0

2

4

6

8

10

Billions of Yen

6

-10

0

2

4

6

8

VaR

10
VaR

Backtesting for the fiscal year ended March 2006 applied only todata for surviving entities from the former MTFG.

VaR and Daily Profit/Loss for Trading Activities

VaR and Daily Profit/Loss for Trading Activities(April 1, 2005–March 31, 2006)(April 1, 2006–March 31, 2007)
Billions of Yen

Billions of Yen
8

8

Daily profit/loss
Daily profit/loss
4

4

0

0

-4

-4

-8

-8

VaR shown on a negative scale
VaR shown on a negative scale
-12

-12
Apr
05

May
05

Jun
05

Jul
05

Aug
05

Sep
05

Oct
05

Nov
05

Dec
05

Jan
06

Feb
06

Mar
06

Apr
06

May
06

Jun
06

Jul
06

Aug
06

Sep
06

Oct
06

Nov
06

Dec
06

Jan
07

Feb
07

Mar
07

Mitsubishi UFJ Financial Group Corporate Review 2007

57

Stress Testing
MUFG adopts the HS-VaR model, which calculates

estimate potential losses resulting from scenarios

a VaR as statistically possible amount of losses in ashifting individual interest rate or currency rate to

fixed confidence occurrence based on historicalreflect the market conditions at the time of testing;market volatility. In stressful market conditions,scenarios based on extreme historic market condi-

where normally inconceivable changes aretions, such as Black Monday or the 1994 bond sell-occurred in the market, there is a case where theoff; and scenarios involving the largest fluctuations

HS-VaR model could not properly recognize mar-in markets over a specific period in the past.

ket risks. In order to complement this weakness

Daily stress testing at the holding company esti-of the model, MUFG conducts portfolio stressmates maximum potential losses in each market on

testing to measure potential losses using a variety

the current trading portfolio based on the worstof scenarios.

ten-day historical volatility recorded during the VaR

The holding company and the major subsidiaries

observation period. As of March 31, 2007, maxi-

conduct stress testing on a daily, monthly andmum predicted losses at the group level on thisquarterly basis to monitor their overall portfolio risk

basis were ¥19.1 billion for trading activities andapplying various scenarios. For example, such tests¥249.7 billion for non-trading activities.

Liquidity Risk Management

58

Liquidity risk is the risk of incurring losses if a poor

offices of the major subsidiaries and the holding

financial position hampers the ability to meetcompany exchange information and data on liquid-funding requirements.

ity risk even at the Normal stage. At higher alert

The major subsidiaries maintain appropriate

stages, we centralize information about liquidity

liquidity in both Japanese yen and foreign curren-

risk and discuss issues of group-wide liquidity con-cies by managing their funding sources andtrol actions among group companies, if necessary.

mechanism, such as liquidity gap, liquidity-supplying

We have also established a system for liaison andproducts such as commitment lines, and buffer

consultation on funding in preparation for contin-

assets for maintaining liquidity.

gency, such as natural disasters, wars and terrorist

MUFG has established the group-wide system

attacks. The holding company and the major sub-for liquidity risk by categorizing the risk in the fol-sidiaries conduct group-wide contingency pre-lowing three stages: Normal, With-Concern, andparedness drills on a regular basis to ensure

Critical. The front offices and risk managementsmooth implementation in a state of emergency.

Corporate Review 2007 Mitsubishi UFJ Financial GroupOperational Risk Management
Operational risk refers to the risk of losses caused

forth the following: The Board of Directors andby either internal control issues, such as inade-the Executive Committee formulate fundamental

quate operational processes or misconduct; sys-

principles of operational risk management andtem failures; or external factors, such as a natural

establish and maintain an appropriate risk man-disaster. The term includes a broad range of risks

agement system. The Chief Risk Managementthat could lead to losses, including operations

Officer is responsible for recognizing, evaluating,risk, information asset risk, reputation risk, legal

and appropriately managing operational risk inrisk, and tangible asset risk. These risks that com-accordance with the fundamental principles for-prise operational risk are referred to as sub-cate-mulated by the Board of Directors and thegory risks.

Executive Committee. A division in charge of

MUFG’s Board of Directors has approved theoperational risk management must be establishedMUFG Operational Risk Management Policy as athat is independent of business promotion sec-group-wide policy for managing operational risk.

tions to manage overall operational risk in a com-

This policy sets forth the core principles regarding

prehensive manner. These fundamental principles

operational risk management, including the defi-

have also been approved by the Boards ofnition of operational risk (please refer to the table

Directors of the major subsidiaries, providing theon page 44 for details), and the risk management

consistent framework for operational risk man-system and processes. The policy also clearly set

agement of MUFG group.

Management System of the Major Banking Subsidiaries

Board of Directors / Executive Committee
Committees regarding risk management

Reporting on risk profile

Instruction
Head OfficeandBranches

Instruction

Division in charge ofOperational Risk Management
Coordination

Reporting

Divisions in charge ofSub-category Risk Management

Mitsubishi UFJ Financial Group Corporate Review 2007

59

MUFG has introduced a risk management sys-

voluntarily mitigating them according to their

tem that includes loss data collection, control self-

importance. In the CSA approach, each divisionassessment (CSA), and measurement of operational

identifies issues and risks inherent in business pro-risk in order to appropriately identify, recognize,

cesses and evaluates their impact and the effec-

evaluate, measure, control, monitor and reporttiveness of internal controls. Of these, important

operational risk.

issues and risks are subject to necessary counter-

MUFG has established group-wide reporting

measures to make improvements. In this way,

guidelines with respect to loss data collection and

CSA aims to strengthen the autonomous risk man-its monitoring. Efforts are focused on ensuring

agement capabilities of the entire organization.

accurate assessment of the status of operational

Operational risk is measured by the statisticalrisk losses and the implementation of appropriate

estimation utilizing two sets of data — actual loss

countermeasures, while maintaining databases ofdata and potential loss scenario data that are esti-internal and external loss events.

mated based on the assessments of internal and

MUFG has introduced CSA as a mechanism forexternal business environment and internal con-identifying potential issues and related risks, andtrol factors. This risk measure is used to allocate

Risk Management Framework

Identify and
Recognize

Evaluate andMeasureControl

Incident
occuredCausal analysis

Implement preventive
measures

RecordMonitoring

Prompt reportingto the management
and the relevantsupervisors

Major incidents and misconduct

Internal loss data

Monitor andReportCreate potential loss
scenario

External loss data
Risk measurement

Allocate economic capital tobusiness units/subsidiaries

Risk evaluation and management through control self-assessment

60

Corporate Review 2007 Mitsubishi UFJ Financial Group

Monitoring of
economic capitaleconomic capital under MUFG’s capital allocation

enhancement of operational education programs

system and to assess its capital adequacy.

and internal audit.
The status of operations risk is reported regu-

Operations Risk Management
Operations risk refers to the risk of incurring losses that might be caused by negligence of correct
operational processing, or by incidents or misconduct by either officers or staff, as well as risks similar to this risk. MUFG subsidiaries offer a variety
of financial services, ranging from commercial
banking products such as deposits, exchange services and loans to trust and related services cover-larly to the senior management including theBoard of Directors, and information and expertise
concerning operational incidents and preventive
measures are shared within MUFG group where
necessary.
Our efforts to enhance operations risk management continue with the aim of providing
MUFG customers with a variety of services ingood quality.

ing pensions, securities, real estate andsecuritization, as well as transfer agent services.
Based on the recognition that exposure to operations risk may have a significant impact on the
MUFG group's management and business performance, subsidiary banks ensure that effective
operations risk management systems are established, maintained and developed.
Specific efforts to minimize operations risk
include the implementation of preventive measures through database analysis; the reinforcement of internal controls through revisions ofoperational procedures, related approval authorityand personnel management system; the improvement of operational efficiency through introduction and update of computer systems; and the

Mitsubishi UFJ Financial Group Corporate Review 2007

61

Information Asset Risk Management

The status of the development of any mission-

Information asset risk refers to the risk of losses

critical IT systems is reported regularly to thecaused by loss, alteration, falsification or leakage

senior management. MUFG has developed disas-of information, or by destruction, disruption, errors

ter countermeasures system and has also promot-

or misuse of information systems, as well as risks

ed the duplication of the group's IT infrastructure

similar to this risk. In order to fulfill proper handlingto minimize damage in the event of any system

of information and prevent loss or leakage offailure. Emergency drills help to increase staff

information, the major banking subsidiaries arepreparedness.

developing systems to manage and reduce such

With the aim of preventing any recurrence,risks through the appointment of managers with

MUFG also works to promote sharing of informa-

specific responsibilities for information security

tion within the group related to the causes of any

issues, the establishment of internal procedures,loss or leakage of information, or system failure.

training courses targeting all staff and the implementation of measures to ensure stable IT systems
control. MUFG has also formulated the Personal
Information Protection Policy as the basis forongoing programs to protect the confidentiality of
personal information.
Systems planning, development and operations
include appropriate design and extensive testing
phases to ensure that systems are designed to help
prevent failures while providing sufficient safeguards for the security of personal information.

62

Corporate Review 2007 Mitsubishi UFJ Financial Group

Compliance

Basic Policy
The MUFG group strictly observes laws, regulations and internal rules, and conducts business in a fair,trustworthy and highly transparent manner based on the group’s management philosophy of obtaining
the trust and confidence of society as a whole. Furthermore, an ethical framework and code of conduct
have been established as basic ethical guidelines for the group’s directors and employees. We haveexpressed our commitment to building a corporate culture in which we act with integrity and fairness
in conformity with these guidelines.
Recently, certain group companies have received administrative orders from government authorities
in Japan and abroad. We view these actions with the deepest concern. In response, MUFG is working
to ensure an appropriate compliance structure across the MUFG group. We will make every effort torestore trust in the group by maintaining sound and appropriate business management, through suchmeans as establishing sales practices which take into account the best interests of our customers.

■

Ethical Framework
We, the directors and employees of MUFG, will comply with this Ethical Framework andCode of Conduct as the basis of our daily work, seeking to put into practice the management
philosophy of our global comprehensive financial group and to build a corporate culture inwhich we act with integrity and fairness.
1. Establishment of trust
We will remain keenly aware of the group’s social responsibilities and public mission and will
exercise care and responsibility in the handling of customer and other information. By conducting sound and appropriate business operations and disclosing corporate information in a timely
and appropriate manner we will seek to establish enduring public trust in the group.
2. Putting customers first
We will always consider our customers, and through close communication will endeavor tosatisfy them and gain their support by providing financial services that best meet their needs.
3. Strict observance of laws, regulations and internal rules
We will strictly observe applicable laws, regulations and internal rules, and will conduct ourbusiness in a fair and trustworthy manner that conforms to societal norms. As a global comprehensive financial group we will also respect internationally accepted standards.
4. Respect for human rights and the environment
We will respect the character and individuality of others, work to maintain harmony with society,and place due importance on the protection of the global environment that belongs to all mankind.
5. Disavowal of anti-social elements
We will stand resolutely against any anti-social elements that threaten public order and safety.

Mitsubishi UFJ Financial Group Corporate Review 2007

63

Compliance Framework

CCO of the holding company to provide compli-

Management and coordination of compliance-

ance-related guidance, advice, and instruction torelated matters are the responsibility of separate

MUFG group companies.

compliance management divisions established at
the holding company MUFG, as well as Bank ofTokyo-Mitsubishi UFJ, Mitsubishi UFJ Trust andBanking, and Mitsubishi UFJ Securities (hereafter“the three operating companies”). Each compliance management division formulates complianceprograms and organizes training courses to promote compliance, and regularly reports to eachcompany’s Board of Directors and Executive
Committee on the status of compliance activities.
The holding company and each of the threeoperating companies have also established voluntary committees where members from outside thegroup account for a majority, such as an Internal
Audit and Compliance Committee and aCompliance Committee. Through these measures,
we have established a structure for deliberating key

Establishment of Group CCO Committee
The Group CCO Committee was establishedunder the Executive Committee of the holding
company. Its members comprise the CCO of theholding company as the committee chairman and
the CCOs of the three operating companies.
Pursuing greater sharing of compliance-related
information among the MUFG group companies,
the committee strives to strengthen the group’s
incident prevention controls and link it to aproactive response to problematic situations. The
committee also aims to continuously improve
compliance systems throughout the group.
Internal Reporting System and Accounting
Auditing Hotline
The holding company, the Bank of Tokyo-Mitsubishi

issues related to compliance. Additionally, Group

UFJ, Mitsubishi UFJ Trust and Banking, and Mitsubishi

CCO (Chief Compliance Officer) Committee was

UFJ Securities have each established internal report-

established within the holding company in April

ing systems that aim to identify compliance issues

2007. The purpose of this committee is to rein-at the earliest opportunity so that any problems canforce the holding company’s business administra-

be quickly rectified. These systems include indepen-tion functions with respect to group companies.

dent external compliance hotlines. Furthermore, theholding company has set up a Group Compliance

CCO of Holding Company

Helpline that acts in parallel with group-company

The director responsible for compliance at theinternal reporting systems and provides a reporting

holding company has been named the chief

channel for corporate officers and employees ofcompliance officer (CCO) of the holding company.

group companies.

The CCOs of the three operating companies have

In addition to these internal reporting systems,

been appointed as the deputy CCOs of the holding

the holding company has also established ancompany. This system promotes the rapid reporting

Accounting Auditing Hotline at a law office thatof compliance-related information to the holding
company and also strengthens the ability of theprovides a means for internal and external people
to report any problems or suspected problems
related to MUFG accounting.

64

Corporate Review 2007 Mitsubishi UFJ Financial Group

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 Management Division(Coordinates compliance issues)

Internal reporting system

Guidance, advice
and instruction

Consultation
and report

Bank of Tokyo-Mitsubishi UFJ

Mitsubishi UFJ Trust and Banking

Mitsubishi UFJ Securities

Other Subsidiaries

Group Companies● Accounting Auditing Hotline

MUFG has set up an accounting auditing hotline to be used to make reports related to instancesof improper practices (violations of laws and regulations) and inappropriate practices, or of practices raising questions about such impropriety or inappropriateness, regarding accounting andinternal 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
Address : Kojimachi 4-3-4, Chiyoda-ku, Tokyoe-mail : MUFG-accounting-audit-hotline@hokusei-law.com
When reporting information please pay attention to the following :• Please include the name of the company concerned, and provide detailed information withrespect to the matter. Without detailed factual information there is a limit to how much ourinvestigations can achieve.
• Anonymous information will be accepted.
• No information regarding the identity of the informant will be passed on to third parties
without the approval of the informant themselves. However, this excludes instances wheredisclosure is legally mandated, or to the extent that the information is necessary for surveys
or reports, when data may be passed 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 a reasonable period of time following the receipt of specific information, butcannot promise to do so in all instances.

Mitsubishi UFJ Financial Group Corporate Review 200765

Internal Audit

The Role of Internal Audit

The boards of Bank of Tokyo-Mitsubishi UFJ,Internal audit functions within MUFG seek to pro-

Mitsubishi UFJ Trust and Banking and Mitsubishi

vide independent verification of the adequacy and

UFJ Securities have also formulated separate inter-

effectiveness of internal control systems. This

nal audit policies consistent with MUFG’s Internal

includes monitoring the status of risk manage-

Audit Policy. This arrangement ensures that ament and compliance systems, which are criticalconsistent and integrated internal audit frame-to the maintenance of sound and appropriate

work applies to all MUFG operations, including

business operations. Internal audit results are

subsidiaries of the major group subsidiaries.

reported to senior management. An additional

In addition to having primary responsibility forrole for internal audit is to make suggestions toinitiating and preparing plans and proposals relat-

help improve or rectify any issues or specific prob-

ed to internal audits of the entire group, thelems that are identified.

Internal Audit Division at the holding company
monitors, and as necessary, guides, advises andGroup Internal Audit Framework
The Board of Directors at the holding company
level has instituted MUFG’s Internal Audit Policy todefine the policy, function and organizational
position of internal audit. Separate divisions havebeen created within the holding company and the
major group subsidiaries to conduct internal audits
based on this policy (called the Internal Audit
Division at the holding company, the Internal
Audit & Credit Examination Division at Bank ofTokyo-Mitsubishi UFJ and the Audit Division at
Mitsubishi UFJ Trust and Banking, and the Internal

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 andbranch operations of these companies. In addition, each of these three divisions undertakes
direct audits of their respective subsidiaries, andmonitors and oversees the separate internal audit
functions established within them. This helps toevaluate and verify the adequacy and effectiveness of internal controls within the MUFG groupon a consolidated basis.

Audit Division and Inspections Division at

66

Mitsubishi UFJ Securities). These divisions perform

Implementing Efficient and Effective Internal

the core internal audit functions of the group.

AuditsThrough close cooperation and collaboration

To ensure that internal audit processes use avail-

between the divisions in each of the four compa-

able resources with optimal efficiency and effec-

nies, the internal audit divisions provide coverage

tiveness, the internal audit divisions implement

for the entire group and also support the Board ofrisk-focused internal audits in which the nature andDirectors at the holding company to monitor andmagnitude of the associated risks are considered inoversee all MUFG operations.

determining audit priorities and the frequency

Corporate Review 2007 Mitsubishi UFJ Financial Groupand depth of internal audit activities. The internal

Trust and Banking and Mitsubishi UFJ Securities

audit divisions ensure that audit personnel attend

have established Internal Audit and Compliancekey meetings, collect important internal control

Committees that are chaired by external directors.

documents, and access databases to facilitate effi-

These committees receive direct reports from thecient off-site monitoring.

internal audit divisions on important internal
audit-related matters, including the results of all

Measures to Enhance Internal Audit

internal audits and internal auditing plans requir-

Independence and Supervision by the Boardsof Directors

ing board approval. The deliberations of the audit
committees concerning such matters are then

To strengthen the respective boards of directors’monitoring and supervision of operational execution status and to enhance the independence of
the internal audit divisions, the holding company,

reported to the respective boards of directors.
This structure enhances the independence ofinternal audit functions from functions responsible for business execution.

Bank of Tokyo-Mitsubishi UFJ, Mitsubishi UFJ

Internal Audit
Holding Company (MUFG)

Internal Audit and Compliance Committee(Committee chairman: Outside director)

Board of Directors

Executive Committee

ReportReportAudit
Each MUFG Division

Board of Directors

Internal Audit DivisionInternal Audit and Compliance Committee(Committee chairman: Outside director)

Executive Committee(Representative Director at Mitsubishi UFJ Securities)

ReportAudit
Each headquarters division andbranch office, etc.

Pre-eventdiscussion
Post-event
reportCooperation

Planning
Monitoring
Cooperation

Internal Audit Division(Internal Audit Division and Inspections Divisionat Mitsubishi UFJ Securities )Bank of Tokyo-Mitsubishi UFJ/Mitsubishi UFJ Trust and Banking/Mitsubishi UFJ Securities

Mitsubishi UFJ Financial Group Corporate Review 200767

Corporate Management● Mitsubishi UFJ Financial GroupAs of June 28, 2007

Board of Directors

Taihei Yuki

Shigeru Tsuburaya

Hatsuhito Kaneko

ChairmanIwao Okijima

Takeshi Ogasawara

Yoshihiro Hashimoto

Ryosuke Tamakoshi

Akio Harada

Kyota Omori

Tadachiyo Osada

Takuma Otoshi

Ryusaburo Harasawa

Takami Onodera

Junichi Itoh

Katsumi Hatao

Kazuaki Kido

Kenichi Ihara

Shigeyasu Kasamatsu

Juichi Nishimura

Deputy Chairman

Haruya Uehara

Corporate Auditors

President & CEO

Haruo Matsuki*

Nobuo Kuroyanagi

Shota Yasuda*

Deputy President

Katsunori Nagayasu
Senior Managing Directors

Executive Officers

Tsutomu Takasuka

Jun Sato

Takashi Oyamada

Kunie Okamoto

Kazuhiro Shimanuki

Satoshi Murabayashi*Full-time

Takehiko Nemoto

Takashi Kanagami

Fumio Sato

Masayoshi Nakamura

Akira Kamiya

Masaaki Yoshida

Takashi Morisaki

Yoshiaki Masuda

Shunichi Nakajima

Shigenobu Tokuoka

Hikari Yamazaki

Yuya Saijo

Hidekazu Fukumoto

Mikiyasu Hiroi

Kaoru Wachi

Takashi Mikumo

Yoshihiro Watanabe
Toshihide Mizuno
Hiroshi Saito

Officers
Managing Officers

Takamune Okihara
Directors

Shintaro Yasuda
Hirohisa Aoki
Fumiyuki Akikusa
Nobuyuki Hirano

Kinya Okauchi
Tetsuya Wada
Norimichi Kanari
Noriaki Hanamizu
Toshiro Toyoizumi● The Bank of Tokyo-Mitsubishi UFJ

As of June 30, 2007

Board of Directors

Managing Directors

Corporate Auditors

Officers

ChairmanTakao Kawanishi

Tatsunori Imagawa*Managing Executive

Shigemitsu Miki

Sohei Sasaki

Tadashi Yanagisawa*

Officers

Ryusaburo Harasawa

Kazuhiko Hasegawa*

Kyota Omori

Nobuyuki Hirano

Akira Enomoto*

Yoshiaki Kawamata

Junichi Itoh

Tsutomu Takasuka*

Saburo Sano

Tetsuya Wada

Kotaro Muneoka

Tatsuo Tanaka

Directors

Yoshiharu Hayakawa

Toshiro Toyoizumi

Hiroshi Saito

Tetsuya Nakagawa

Tamotsu Kokado

Kunio Ishihara*Full-timeTakashi Hara

Deputy Chairman

Ryosuke Tamakoshi
President

Nobuo Kuroyanagi
Deputy Presidents

Norimichi Kanari
Katsunori Nagayasu

Teruo Ozaki

Nobushige Kamei

Takamune Okihara

Takashi Morimura

Ryuichi Murata

Tadashi Shiraishi

Kazuo Sassa

68

Takashi Kawasaki

Takeo Imai

Corporate Review 2007 Mitsubishi UFJ Financial GroupTakashi Nagaoka

Minoru Shimada

Masashi Oka

Hirokazu Yanaoka

Kiyoshi Sono

Hitoshi Suzuki

Takashi Oyamada

Masaaki Yoshida

Jun Sato

Hidekazu Fukumoto

Hidenobu Fujii

Takeshi Ashizaki

Akihiko Minato

Ichiro Hamakawa

Haruo Hayashi

Hideaki Fujizuka

Takashi Kimura

Muneo Kurauchi

Mikiyasu Hiroi

Hiroshi Iizumi

Takeshi Ogasawara

Yoshiaki Masuda

Yoshihiko Kasuya

Shoji Nakano

Masaaki Tanaka

Takashi Morisaki

Makoto Motooka

Hiroshi Sato

Yoshitsugu Yokogoshi

Takashi Muraoka

Akihiko Sasaki

Takehiko Yamana

Shigenobu Tokuoka

Akihiko Kagawa

Saburo Araki

Takehiko Nemoto

Hiroshi Akiyama

Yasuhiro Maeda

Katsumi Hatao

Toshiaki Arai

Yoshihiro Hashimoto

Takami Onodera

Satoshi Murabayashi

Akira Kamiya

Shigeyasu Kobayashi

Tadachiyo Osada

Eiichi Yoshikawa

Takeo Sato

Kanetsugu Mike

Fumio Sato

Executive Officers● Mitsubishi UFJ Trust and Banking

As of June 27, 2007

Board of Directors

Managing Directors

Officers

Kaoru Wachi

Chairman

Shigeru Tsuburaya

Senior Managing

Kenichi Ihara

Taihei Yuki

Executive Officers

Yuya Saijo

Kazuaki Kido

Kozo Yamada

Kunio Takahashi

Toshiaki Kajiura

Shingo Asakura

Haruhisa Yazaki

Directors

Managing Executive

Yutaka Ishii

Officers

Hatsuhito Kaneko

Shunsuke Teraoka

Takashi Kawasaki

Takashi Kanagami

Shigetsugu Nakata

Tatsuo Wakabayashi

Juichi Nishimura

Yoshikazu Ueda

Tsuyoshi Noda

Yoshiyuki Hirano

Hikari Yamazaki

Kesafumi Kobayashi

Makoto Ueno

Executive Officers

Hisami Suzuki

Yoshiyasu Ito

Shinya Kada

Yoshinari Morisaki

Toru Hayashi

Yutaka Hongo

Toru Matsuda

Minoru Sakurai

Takashi Mikumo

Akio Utsumi
President

Haruya Uehara
Deputy Presidents

Shintaro Yasuda
Noriaki Hanamizu

Toshihide Mizuno
Tadao Takashima

Senior Managing Directors

Corporate Auditors

Yoichi Fukae

Akira Nakamura*

Koji Kaihotsu

Tadashi Takahashi*

Kinya Okauchi

Yoshio Yamada*

Tetsuo Maeda

Takeshi Fukuzawa

Yuji Suzuki

Eiji Katayama
Yoshinobu Shimizu*Full-time

Mitsubishi UFJ Financial Group Corporate Review 2007

69

Global Network
NORTH AMERICA
CanadaBank of Tokyo-Mitsubishi UFJ(Canada), Toronto Head Office

Suite 1700, Royal Bank Plaza, South Tower, Toronto, Ontario,
Canada M5J 2J1

1-416-865-0220(Montreal Office)Suite 2780, Tour de la Banque Nationale, 600 de la Gauchetiere St. W.,
Montreal, Quebec, Canada H3B 4L8

1-514-875-9261(Vancouver Office)Suite 950, Park Place, 666 Burrard Street, Vancouver,
British Columbia, Canada V6C 3L1

1-604-691-7300

1251 Avenue of the Americas, New York, NY 10020-1104 U.S.A.

1-212-782-4000

Georgia-Pacific Center, Suite 3450, 133 Peachtree Street,
N.E. Atlanta, GA 30303-1808 U.S.A.

1-404-577-2960

New York Branch

520 Madison Avenue, New York, NY 10022 U.S.A.

1-212-838-7700

Mitsubishi UFJ Securities(USA), Inc.

1251 Avenue of the Americas, New York, NY 10020-1104 U.S.A.

1-212-782-6868

U.S.A.
New York Branch(Atlanta Agency)

Chicago Branch

227 West Monroe Street, Suite 2300, Chicago, IL 60606 U.S.A.

1-312-696-4500

601 Carlson Parkway, Suite 370, Minnetonka, MN 55305 U.S.A.

1-952-473-5090

900 Fourth Avenue, Suite 4000, Seattle, WA 98164-1068 U.S.A.

1-206-382-6000(Portland Branch)

2300 Pacwest Center, 1211 South West 5th Avenue, Portland,
OR 97204 U.S.A.

1-503-222-3661

San Francisco Branch

400 California Street, 11th Floor, San Francisco, CA 94104 U.S.A.

1-415-765-2050

Mitsubishi UFJ Securities(USA), Inc.
(San Francisco Branch)

400 California Street, 11th Floor, San Francisco, CA 94104 U.S.A.

1-415-765-2370

Los Angeles Branch

777 South Figueroa Street, Suite 600, Los Angeles, CA 90017 U.S.A.

1-213-488-3700

Houston Agency

1100 Louisiana Street, Suite 2800, Houston, TX 77002-5216 U.S.A.

1-713-658-1160(Dallas Corporate
Banking Office)Trammell Crow Center, Suite 3150, 2001 Ross Avenue, Dallas,
TX 75201 U.S.A.

1-214-954-1200

Washington D.C.
Representative Office

1909 K Street, N.W. Suite 350, Washington, D.C., 20006-1101
U.S.A

1-202-463-0477

Kentucky Representative Office7300 Turfway Road, Suite 440, Florence, KY 41042 U.S.A.

1-859-746-1800

Union Bank of California, N.A.

400 California Street, San Francisco, CA 94104 U.S.A.

1-415-705-7000

Bank of Tokyo-Mitsubishi
UFJ Trust Company

1251 Avenue of the Americas, New York, NY 10020-1104 U.S.A.

1-212-782-4000(Retail:1-212-782-4603)

Mitsubishi UFJ Trust & Banking
Corporation (U.S.A.)

420 Fifth Avenue, 6th Floor, New York, NY 10018 U.S.A.

1-212-915-0129

BTMU Leasing & Finance, Inc.

1251 Avenue of the Americas, New York, NY 10020-1104 U.S.A.

1-212-782-4000

BTMU Capital Corporation

111 Huntington Avenue, Suite 400, Boston, MA 02199 U.S.A.

1-617-573-9000

Av. Corrientes 420, 1043 Buenos Aires, The Argentine Republic(mailing address: C. Correo 5494, Correo Central, 1000 Capital Federal,
The Argentine Republic)

54-11-4348-2001(Minnesota Corporate
Banking Office)Seattle Branch

LATIN AMERICA
Argentina
Buenos Aires Branch

70

Corporate Review 2007 Mitsubishi UFJ Financial GroupBank of Tokyo-Mitsubishi UFJ’s operations appear in black
Mitsubishi UFJ Trust and Banking’s in blue Mitsubishi UFJ Securities’s in green

BrazilBanco de Tokyo-Mitsubishi UFJ
Brasil S/A(Rio de Janeiro Office)Av. Paulista 1274, Bela Vista, Sao Paulo, SP, Brasil CEP: 01310-925

55-11-3268-0211

Praia de Botafogo 228, 12 andar, Sala 1201-A, Rio de Janeiro,
RJ, Brasil CEP 22250-906

55-21-2553-1840

Cayman Islands
Cayman Branch

c/o The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch＿

Cayman Branch

c/o CIBC Bank and Trust Company (Cayman) Limited, P.O. Box 694 GT,
Grand Cayman, Cayman Islands

＿

Chile
Santiago Branch

Avda. Mariano Sanchez Fontecilla 310, Las Condes, Santiago,
Republic of Chile

56-2-345-1000

Colombia
Bogota Representative Officec/o The Bank of Tokyo-Mitsubishi UFJ, Ltd., Caracas Representative Office＿

MexicoMexico City
Representative Office

Av. Paseo de Las Palmas 405, Piso 17, Col. Lomas de Chapultepec,
C.P.11000, Mexico D.F., Mexico

52-55-5540-7912

Bank of Tokyo-Mitsubishi UFJ(Mexico) S.A.

Av. Paseo de Las Palmas 405, Piso 17, Col. Lomas de Chapultepec,
C.P.11000, Mexico D.F., Mexico

52-55-5540-8800

Edificio Parque Cristal, Torre Este, Piso 15, Oficina Top 15-12,
Avenida Francisco de Miranda, Los Palos Grandes, Caracas,
Bolivarian Republic of Venezuela

58-212-283-3076
58-212-283-3254

Theresianumgasse 11/E.1, A-1041 Vienna, Republic of Austria(mailing address: P.O. Box 99, A-1041 Vienna, Republic of Austria)

43-1-50262

Avenue des Arts 58 Bte 1, B-1000 Brussels, Kingdom of Belgium

32-2-551-4411

Klicperova 3208/12, 150 00 Prague 5, Czech Republic420-257-257-911

4-8, rue Sainte-Anne, 75001 Paris, Republic of France(mailing address: B.P. 2101, 75021 Paris, Cedex 01, Republic of France)

33-1-4926-4927

Immermannstrasse 43, 40210 Dusseldorf, F.R. Germany(mailing address: Postfach 10 49 51, 40040 Dusseldorf, F.R. Germany)

49-211-36670(Munchen Sub-Branch)

Elisenstrasse 3, 80335 Munchen, F.R. Germany

49-89-225354(Frankfurt Sub-Branch)

Bockenheimer Landstrasse 55, 60325 Frankfurt am Main, F.R. Germany

49-69-7137490(Hamburg Branch)

ABC Bogen, ABC Strasse 19, 20354 Hamburg, F.R. Germany(mailing address: Postfach 30 05 40, 20302 Hamburg, F.R. Germany)

49-40-34990

Internationales Handelszentrum, 5th Floor, Friedrichstrasse 95,
10117 Berlin, F.R. Germany

49-30-2096-3037

Venezuela
Caracas Representative Office

EUROPE
Austria
Bank of Tokyo-Mitsubishi UFJ(Holland) N.V.
(Vienna Branch)
Belgium
Brussels Branch
Czech
Bank of Tokyo-Mitsubishi UFJ(Holland) N.V.
(Prague Branch)
FranceParis Branch
Germany
Dusseldorf Branch

Berlin Representative Office

Mitsubishi UFJ Financial Group Corporate Review 2007

71

BTMU Lease (Deutschland)GmbH

Immermannstrasse 43, 40210 Dusseldorf, F.R. Germany(mailing address: Postfach 10 49 51 40040 Dusseldorf, F.R. Germany)

49-211-366783

Mitsubishi UFJ Securities
International plc,
(Frankfurt Branch)

Bockenheimer Landstrasse 55, 60325 Frankfurt am Main, F.R. Germany

49-69-509594-0

Milano Branch

Viale della Liberazione 18, 20124 Milano, Republic of Italy

39-02-669931

Mitsubishi UFJ Securities
International plc,
(Milan Branch)

1st Floor, Largo Augusto 7, 20122 Milan, Italy

39-02-7787101

287-289, route d’Arlon L-1150 Luxembourg, Luxembourg(mailing address: P.O. Box 364, L-2013 Luxembourg, Luxembourg)352-445180-1

World Trade Center, Tower D-5th floor, Strawinskylaan 565,
1077 XX Amsterdam, The Netherlands(mailing address: P.O. Box 75682, 1070 AR, Amsterdam, The Netherlands)

31-20-5737737

ul. Emilii Plater 53, 00-113 Warszawa, Republic of Poland(mailing address: Warsaw Financial Center 19F, ul. Emilii Plater 53,
00-113 Warszawa, Republic of Poland)

48-22-520-5233

Avenida da Liberdade 180 E-6ESQ. 1250-146 Lisboa, Portugal

351-21-351-4550

ZAO Bank of Tokyo-Mitsubishi
UFJ (Eurasia)

Romanov Dvor Building II 7F, 4 Romanov Pereulok, Moscow 125009,
Russian Federation

7-495-225-8999

Moscow Representative Office

Romanov Dvor Building II 7F, 4 Romanov Pereulok, Moscow 125009,
Russian Federation

7-495-797-4501

Jose Ortega y Gasset 29, 28006 Madrid, Spain

34-91-432-8500

Paseo de Gracia, 56, 6-C, 08007 Barcelona, Spain

34-93-494-7450

Mitsubishi UFJ WealthManagement Bank
(Switzerland), Ltd.

Rue du Rhone 67, 1207 Geneve, Switzerland

41-22-718-6600

Mitsubishi UFJ Securities
International plc,
(Zurich Branch)

Stockerstrasse 23, P.O. Box 8022, Zurich, Switzerland

41-44-289-1111

Finsbury Circus House, 12-15 Finsbury Circus, London EC2M 7BT, U.K.
(mailing address: P.O. Box 280, London EC2M 7DX, U.K.)

44-20-7588-1111(Birmingham Sub-Branch)

3rd Floor, Bank House, 8 Cherry Street, Birmingham B2 5AL, U.K.

44-121-633-7953(Broadgate Sub-Branch)

6 Broadgate, London EC2M 2SX, U.K.
(mailing address: P.O. Box 280, London EC2M 7DX, U.K.)

44-20-7588-1111

24 Lombard Street, London EC3V 9AJ, U.K.

44-20-7929-2323

Italy

Luxembourg
Mitsubishi UFJ Global
Custody S.A.
Netherlands
Bank of Tokyo-Mitsubishi UFJ(Holland) N.V.
PolandBank of Tokyo-Mitsubishi UFJ(Polska) Spolka Akcyjna
Portugal
London Branch(Lisbon Office)RussiaSpain
Madrid Branch(Barcelona Sub-Branch)
Switzerland

U.K.
London Branch

London Branch

72

Corporate Review 2007 Mitsubishi UFJ Financial GroupBank of Tokyo-Mitsubishi UFJ’s operations appear in black
Mitsubishi UFJ Trust and Banking’s in blue Mitsubishi UFJ Securities’s in green

Mitsubishi UFJ AssetManagement (UK) Ltd.

Finsbury Circus House, 12-15 Finsbury Circus, London EC2M 7BT, U.K.

44-20-7577-2149

Mitsubishi UFJ TrustInternational Limited

24 Lombard Street, London EC3V 9AJ, U.K.

44-20-7929-2866

Mitsubishi UFJ Baillie Gifford
Asset Management Limited

Calton Square, 1 Greenside Row, Edinburgh EH1 3AN, Scotland, U.K.

44-131-275-3145

Mitsubishi UFJ Securities
International plc

6 Broadgate, London EC2M 2AA, U.K.

44-20-7628-5555

6th Floor Standard Chartered Bank Building, Government Avenue,
Manama, Kingdom of Bahrain(mailing address: P.O. Box 5850, Manama, Kingdom of Bahrain)973-17227518

Nile Hilton Annex No. 247, Tahrir Square, Cairo, Arab Republic of Egypt

20-2-2394-5647

MIDDLE EAST AND AFRICA
Bahrain
Bahrain Branch

Egypt
Cairo Representative Office
IranTehran Representative
Office4th Floor, 239 Ostad Mottahari Avenue, Tehran 15876,
98-21-8873-0505
Islamic Republic of Iran(mailing address: P.O. Box No. 15875-1383, Tehran, Islamic Republic of Iran)South Africa
Johannesburg Representative
Office15th Floor, The Forum, Corner 5th and Maude Street, Sandown,
Sandton 2146, Republic of South Africa(mailing address: P.O. Box 78519, Sandton 2146, Republic of South Africa)

27-11-884-4721

Maya-Akar Center, Buyukdere Caddesi, No. 100-102, B Blok D.79,
Esentepe 34394, Istanbul, Republic of Turkey

90-212-288-5645

17th Floor, Office 17A, One NBAD Tower, Sheikh Khalif Street,
Abu Dhabi, United Arab Emirates(mailing address: P.O. Box 2174, Abu Dhabi, United Arab Emirates)971-2-6277762

Level 25, Gateway, 1 Macquarie Place, Sydney, N.S.W. 2000 Australia

61-2-9296-1111

Level 18, 600 Bourke Street, Melbourne, Victoria 3000 Australia

61-3-9602-8999

Sena Kalyan Bhaban 5th Floor, 195, Motijheel Commercial Area,
Dhaka-1000, Bangladesh

880-2-9553057

TurkeyIstanbul Representative Office
U.A.E.
Abu Dhabi Representative
OfficeASIA AND OCEANIA
Australia
Sydney Branch(Melbourne Branch)
Bangladesh
Dhaka Representative Office
China＿

Shanghai Branch2303, AZIA Center, No.1233, Lujiazui Ring Road, Pudong New District,
Shanghai 200120, People’s Republic of China

Bank of Tokyo-Mitsubishi UFJ(China), Ltd.
Head Office

22F, AZIA Center, No.1233, Lujiazui Ring Road, Pudong New District,
Shanghai 200120, People’s Republic of China

86-21-6888-1666

20F, AZIA Center, No.1233, Lujiazui Ring Road, Pudong New District,
Shanghai 200120, People’s Republic of China

86-21-6888-1666(Shanghai Branch)

Mitsubishi UFJ Financial Group Corporate Review 2007

73

(Beijing Branch)

Beijing Fortune Building, 5 Dong Sanhuan Bei-Lu, Chaoyang District,
Beijing, People’s Republic of China

86-10-6590-8888(Tianjin Branch)

21F Tianjin International Building, 75 Nanjing Road, Tianjin,
People’s Republic of China

86-22-2311-0088(Tianjin Binhai Sub-Branch)

3F, W2A Building, Binhai Finance Zone, No.51 3rd Street, TEDA,
Tianjin, People's Republic of China

86-22-5982-8855(Dalian Branch)

11F, Senmao Building, 147 Zhongshan Road, Xigang District, Dalian,
Liaoning Province, People’s Republic of China

86-411-8360-6000(Dalian Economic &Technological Development
Area Sub-Branch)

18F, International Business Buildings of Gugeng, 138 Jinma Road,
Dalian Economic & Technological Development Area, Dalian,
Liaoning Province, People's Republic of China

86-411-8793-5300(Wuxi Branch)

10F, Wuxi Software Park, No. 16 Changjiang Road, Wuxi New District,Wuxi, Jiangsu Province 214028, People's Republic of China

86-510-8521-1818(Shenzhen Branch)

16F, Shenzhen International Financial Building, 2022 Jianshe Road,
Luohu District, Shenzhen, Guangdong Province,
People’s Republic of China

86-755-8222-3060

Shanghai Representative
Office24-04, Rui Jin Building, 205 Mao Ming Road (South), Shanghai,
People’s Republic of China

86-21-6472-6270
86-21-6472-3963

Ling Zheng Investment
Consulting (Shanghai) Co., Ltd.

Unit 3106, Azia Center, 1233, Lujiazui Ring Road, Pudong New Area,
Shanghai 200120, People’s Republic of China

86-21-6841-3018

Beijing Representative Office

Room 304, 3rd Floor, Chang Fu Gong Office Building, No. Jia 26,
Jianguomenwai Dajie, Chaoyang District, Beijing 100022,
People’s Republic of China

86-10-6513-9016
86-10-6513-9017

Beijing Representative Office

805 Beijing Fortune Building, No. 5 Dong San Huan Bei-lu, Chao Yang
District, Beijing 100004, People’s Republic of China

86-10-6590-8770

Shenyang Representative Office

Room 705, 7F Fangyuan Mansion, No. 1 Yuebin Street,
Shenhe District, Shenyang, Liaoning, People’s Republic of China

86-24-2250-5599

Chengdu Representative Office

Room 2617, Holiday Inn Crowne Plaza Chengdu, 31 Zong Fu Street,
Chengdu, Sichuan Province, People’s Republic of China

86-28-8674-5575

Guangzhou Representative Office

Room 28-02, Citic Plaza, 233 Tianhe North Road, Guangzhou,
Guangdong Province, People’s Republic of China

86-20-3877-0268

8F, AIG Tower, 1 Connaught Road, Central, Hong Kong,
People’s Republic of China

852-2823-6666

Room 1701, Miramar Tower, 132 Nathan Road, Tsim Sha Tsui,
Kowloon, Hong Kong, People’s Republic of China

852-2378-5111

15F Peninsula Office Tower, 18 Middle Road, Tsim Sha Tsui,
Kowloon, Hong Kong, People’s Republic of China

852-2315-4333

Rooms 127-130, 1st Floor East Ocean Centre, 98 Granville Road,
Tsim Sha Tsui East, Kowloon, Hong Kong, People’s Republic of China

852-2369-5407

Hong Kong BranchRooms 3802-3808, Gloucester Tower, 15 Queen’s Road, Central,
Hong Kong, People’s Republic of China

852-2844-8000

Mitsubishi UFJ Securities(HK) Holdings, Limited

11/F AIG Tower, 1 Connaught Road, Central, Hong Kong,
People’s Republic of China

852-2860-1500

Mitsubishi UFJ Securities(HK) Capital, Limited

11/F AIG Tower, 1 Connaught Road, Central, Hong Kong,
People’s Republic of China

852-2860-1500

Mitsubishi UFJ Securities(HK), Limited

11/F AIG Tower, 1 Connaught Road, Central, Hong Kong,
People’s Republic of China

852-2860-1500<Hong Kong>
Hong Kong Branch(Tsim Sha Tsui Sub-Branch)
Kowloon Branch(East Tsim Sha Tsui
Sub-Branch)

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Corporate Review 2007 Mitsubishi UFJ Financial GroupBank of Tokyo-Mitsubishi UFJ’s operations appear in black
Mitsubishi UFJ Trust and Banking’s in blue Mitsubishi UFJ Securities’s in green<Taiwan>Taipei Branch

9th Floor, Union Enterprise Plaza, 109 Min Sheng East Road Sec. 3,
Taipei 105, Taiwan

886-2-2514-0598

New Delhi Branch

Jeevan Vihar 3, Parliament Street, New Delhi 110001, India(mailing address: P.O. Box 717, New Delhi, India)

91-11-4100-3456
91-11-4100-4567

Mumbai Branch

15th Floor, Hoechst House, 193 Vinay K. Shah Marg,
Nariman Point, Mumbai 400 021, India

91-22-6669-3000

Chennai Branch

6th Floor, Venkataramana Centre, 563/2 Anna Salai,
Teynampet, Chennai 600018, India

91-44-2432-0034

Mumbai Representative Office

Unit No. 11, Maker Chamber VI-1st Floor, Nariman Point,
Mumbai 400 021, India

91-22-2202-3254

Midplaza Building 1F-3F, Jl. Jenderal Sudirman Kav. 10-11,
Jakarta 10227, Republic of Indonesia

62-21-570-6185
62-21-573-6565(Bekasi Service Point)

EJIP Center, EJIP Industrial Park, Cikarang Selatan, Bekasi 17550,
Republic of Indonesia

62-21-570-6185(MM2100 Industrial Town
Service Point)

Ruko Mega Mall D-12, MM2100 Industrial Town,
Cikarang Barat, Bekasi 17520, Republic of Indonesia

62-21-570-6185(Karawang Service Point)

Graha KIIC, Kawasan Industri KIIC, Jalan Permata Raya Lot C 1B,
Karawang 41361, Republic of Indonesia

62-21-570-6185(Sunter Service Point)

Graha Kirana Building, 1st Floor Jalan Yos Sudarso no. 88,
Jakarta 14350, Republic of Indonesia

62-21-570-6185(Cengkareng Service Point)

Wisma Soewarna, 3rd Floor, Suite 3W, Soewarna Business Park,
Block E Lot 1 & 2, Soekarno-Hatta International Airport,
Jakarta 19110, Republic of Indonesia

62-21-570-6185(Cikampek Service Point)

Wisma Bukit Indah 1st Floor, Block L,
Kota Bukit Indah Purwakarta 41181, Republic of Indonesia

62-21-570-6185(Surabaya Sub-Branch)

Graha Bumi Modern, Jl. Jenderal Basuki Rakhmat 106-128,
Surabaya 60271, Republic of Indonesia

62-31-531-6711(Bandung Sub-Branch)

Graha Internasional Jl. Asia Afrika No. 129, Bandung 40112,
Republic of Indonesia

62-22-424-1870
62-22-424-1871
62-22-423-2958

Wisma Standard Chartered Bank Building, 20 & 21 FLoor,
Jl. Jenderal Sudirman Kav, 33A, Jakarta 1022, Republic of Indonesia

62-21-571-1109

4F Young Poong Bldg., 33 Seorin-Dong, Chongro-ku,
Seoul, Republic of Korea

82-2-399-6400

Level 12 (A & F), Main Office Tower Financial Park Labuan,
Jalan Merdeka, 87000 Federal Territory of Labuan, Malaysia

60-87-410-487

Level 9, Menara IMC, No. 8, Jalan Sultan Ismail, 50250
Kuala Lumpur, Malaysia

60-3-2034-8080

Level 9, 10 and 11, Menara IMC, No. 8, Jalan Sultan Ismail,50250 Kuala Lumpur, Malaysia

60-3-2034-8000
60-3-2034-8008

India

Indonesia
Jakarta Branch

PT U Finance Indonesia
Korea
Seoul Branch
Malaysia
Labuan Branch(Kuala Lumpur Marketing Office)Bank of Tokyo-Mitsubishi UFJ(Malaysia) Berhad

Mitsubishi UFJ Financial Group Corporate Review 200775

Bank of Tokyo-Mitsubishi UFJ’s operations appear in black
Mitsubishi UFJ Trust and Banking’s in blue Mitsubishi UFJ Securities’s in green

Myanmar
Yangon Representative Office

Room No. 04-09, Sedona Business Suites, Sedona Hotel, No. 1 Kaba Aye
Pagoda Road, Yankin Township, Yangon, Union of Myanmar

95-1-557080
95-1-557085

Level 22, 151 Queen Street, Auckland, New Zealand(mailing address: P.O. Box 105160, Auckland, New Zealand)

64-9-302-3554

1st Floor Shaheen Complex, M.R. Kayani Road, Karachi,
Islamic Republic of Pakistan

92-21-2630171

15th Floor, 6788 Ayala Avenue, Makati City, Philippines

63-2-886-7371

Singapore Branch

9 Raffles Place, #01-01 Republic Plaza, Singapore 048619,
Republic of Singapore

65-6538-3388

Singapore Branch

50 Raffles Place #42-01, Singapore Land Tower, Singapore 048623,
Republic of Singapore

65-6225-9155

Mitsubishi UFJ Securities(Singapore), Limited

9 Raffles Place, #01-01, Republic Plaza, Singapore 048619,
Republic of Singapore

65-6536-7818

Bangkok BranchHarindhorn Tower, 54 North Sathorn Road, Bangrak, Bangkok
10500, Kingdom of Thailand

66-2-266-3011

BTMU Participation(Thailand) Co., Ltd.

4th Floor, Harindhorn Tower, 54 North Sathorn Road, Bangrak,
Bangkok 10500, Kingdom of Thailand

66-2-266-3070

BTMU Holding (Thailand)Co., Ltd.

4th Floor, Harindhorn Tower, 54 North Sathorn Road, Bangrak,
Bangkok 10500, Kingdom of Thailand

66-2-266-3056

Bangkok BTMU Limited

4th Floor, Harindhorn Tower, 54 North Sathorn Road, Bangrak,
Bangkok 10500 Kingdom of Thailand

66-2-266-3075

Ho Chi Minh City Branch

8th Floor, The Landmark, 5B Ton Duc Thang Street, District 1,
Ho Chi Minh City, Socialist Republic of Vietnam

84-8-8231-560

Hanoi Branch

6th Floor, Pacific Place, 83B Ly Thuong Kiet Street, Hanoi,
Socialist Republic of Vietnam

84-4-946-0600

New Zealand
Auckland Branch
Pakistan
Karachi BranchPhilippines
Manila Branch
Singapore

Thailand

Vietnam76

Corporate Review 2007 Mitsubishi UFJ Financial Group

Company Overview
Mitsubishi UFJ Financial Group, Inc.
Date of Establishment:

April 2, 2001

Head Office:7-1, Marunouchi 2-Chome, Chiyoda-ku, Tokyo 100-8330, Japan

Amount of Capital:¥1,383.0 billion

Stock Exchange Listings:

Tokyo, Osaka, Nagoya, New York (NYSE ticker: MTU)
(As of June 30, 2007)

Long-term Ratings:

AA– (JCR), A (R&I), A (S&P)(As of June 30, 2007)

BIS Risk-adjusted Capital Ratio:

12.54%

Contact:

Investor Relations Office, Corporate Planning DivisionTel:81-3-3240-8111

Websitewww.mufg.jp/english/

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Date of Establishment:

August 25, 1919

Head Office:7-1, Marunouchi 2-Chome, Chiyoda-ku, Tokyo 100-8388, Japan

Amount of Capital:¥996.9 billion

Long-term Ratings:

Aa2 (Moody’s), A+ (S&P), A (FITCH), AA (JCR), A+ (R&I)(As of June 30, 2007)

BIS Risk-adjusted Capital Ratio:

12.77%

Contact:

Public Relations DivisionTel:81-3-3240-1111

Websitewww.bk.mufg.jp/english/

Mitsubishi UFJ Trust and Banking Corporation
Date of Establishment:

March 10, 1927

Head Office:4-5, Marunouchi 1-Chome Chiyoda-ku, Tokyo 100-8212, Japan

Amount of Capital:¥324.2 billion

Long-term Ratings:

Aa2* (Moody’s), A+ (S&P), A (FITCH), AA (JCR), A+ (R&I)*Deposit Rating Only
(As of June 30, 2007)

BIS Risk-adjusted Capital Ratio:

13.20%

Contact:

Public Relations Section, Corporate Planning DivisionTel:81-3-3212-1211

Websitewww.tr.mufg.jp/english/(As of March 31, 2007)(Continue to next page)

Mitsubishi UFJ Financial Group Corporate Review 200777

Mitsubishi UFJ Securities Co., Ltd.
Date of Establishment:

March 4, 1948

Head Office:4-1, Marunouchi 2-Chome, Chiyoda-ku, Tokyo 100-6317, Japan

Amount of Capital:¥65.5 billion

Stock Exchange Listings*:

Tokyo, Osaka, Nagoya(As of June 30, 2007)*Scheduled to become a wholly owned subsidiary of
Mitsubishi UFJ Financial Group, Inc. on September 30, 2007

Long-term Ratings:

Aa2 (Moody’s), A+ (R&I)(As of June 30, 2007)

Contact:

Public & Investor Relations Office, Corporate Planning DivisionTel:81-3-6213-8500

Website:www.sc.mufg.jp/english/

Mitsubishi UFJ NICOS Co., Ltd.
Date of Establishment:

June 7, 1951

Head Office:33-5, Hongo 3-Chome, Bunkyo-ku, Tokyo 113-8411, Japan

Amount of Capital:¥109.3 billion

Stock Exchange Listings:

Tokyo(As of June 30, 2007)

Long-term Ratings:

A2 (Moody’s), A+ (JCR), A (R&I)(As of June 30, 2007)

Contact:

Investor Relations OfficeTel:81-3-3811-3111

Website:www.cr.mufg.jp/english/

Mitsubishi UFJ Lease & Finance Company Limited
Date of Establishment:

April 12, 1971

Head Office:5-1, Marunouchi 1-Chome, Chiyoda-ku, Tokyo 100-6525, Japan

Amount of Capital:¥16.4 billion

Stock Exchange Listings:

Tokyo, Nagoya(As of June 30, 2007)

Long-term Ratings:

AA- (JCR), A (R&I)(As of June 30, 2007)

Contact:

Corporate Communications DepartmentTel:81-3-6865-3000

Website:www.lf.mufg.jp/english/(As of March 31, 2007)(Information on Mitsubishi UFJ NICOS Co., Ltd. and Mitsubishi UFJ Lease & Finance Company Limited as of April 1, 2007)

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Corporate Review 2007 Mitsubishi UFJ Financial GroupThis corporate review is printed on recycled paper with soy ink.

Mitsubishi UFJ Financial Group

Corporate Review 2007www.mufg.jp

Printed in Japan

Corporate Review 2007