By Kosaku Narioka
Mitsubishi UFJ Financial Group reported a drop in first-quarter net profit but maintained its fiscal-year profit target.
The Japanese financial company said Monday that net profit fell 1.8% to 546.07 billion yen, equivalent to $3.70 billion, for the three months ended June. That beat the estimate of Y527.82 billion in a poll of analysts by data provider Quick.
In the same period a year earlier, Mitsubishi UFJ's bottom line was boosted by one-off gains related to a change in subsidiary Bank of Ayudhya's accounting year. Excluding these, the company said its first-quarter net profit increased from a year ago.
For the year that began in April, the company said it continues to target a 7.4% rise in net profit to Y2 trillion.
Japanese government bond yields have been trending higher over the past year as the Bank of Japan has gradually raised interest rates, leaving behind a long period of negative rates.
The 10-year JGB yield in late July climbed to 1.605%, its highest level since October 2008, before giving up some gains in recent sessions.
Last week, the BOJ maintained its policy rate at 0.5% but raised inflation forecasts, stoking expectations for further rate increases as a trade deal with the U.S. eased economic uncertainty.
Higher government bond yields generally allow banks to charge higher interest rates on commercial loans and receive higher yields on bonds and other investments.
The stock has risen 11% so far this year, following a 52% gain in 2024, supported by expectations that the central bank will continue to raise rates gradually.
Mitsubishi UFJ booked total credit costs of Y46.94 billion in its first quarter, down from Y166.76 billion a year earlier.
First-quarter net fees and commissions rose 3.0% to Y461.60 billion.
Net interest income--the difference between interest earned on loans and that paid on deposits--fell 16% to Y690.79 billion.
The company booked net losses on debt securities of Y28.25 billion, wider than Y12.68 billion a year earlier.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
(END) Dow Jones Newswires
August 04, 2025 05:13 ET (09:13 GMT)
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