Mitsubishi UFJ Posts First-Half Profit Beat, Raises Annual Target — Update

By Kosaku Narioka

Mitsubishi UFJ Financial Group raised its annual earnings target following better-than-expected profit growth in the first half, driven by a steady rise in domestic lending rates, loan growth and greater fee income.

The Japanese financial company now targets a 15% rise in net profit to 2.800 trillion yen, equivalent to $17.52 billion, for the fiscal year ending March, up from Y2.700 trillion forecast previously.

It also said it will buy back up to Y200 billion of its own shares by the end of January.

The return of sustained inflation and higher interest rates in Japan is boosting earnings at big banks and attracting foreign investors to a debt market that had long suffered from ultralow rates.

Last month, the Bank of Japan declared victory in its decadeslong battle against deflation, after raising the policy rate in September to 1.25%, its highest level since 1995.

Mitsubishi UFJ in September said it would explore a potential collaboration with U.S. asset manager BlackRock that would enable a diverse range of both Japanese and foreign institutional investors to participate in domestic private credit opportunities.

The move came as Japanese government bond yields, which banks use as a reference for lending rates, have risen steadily over the past few years. In September, the 10-year Japanese government bond yield climbed to 3.115%, its highest level since August 1996.

Higher government bond yields generally allow banks to charge higher interest rates on commercial loans and receive higher yields on bonds and other investments.

Shares of Mitsubishi UFJ have been driven higher by prospects of the BOJ's rate increases and wider lending spreads, rising 39% year to date.

On Friday, the company said net profit climbed 26% from a year earlier to Y1.631 trillion, or $10.20 billion, for the six months ended September. That beat the estimate of Y1.544 trillion in a poll of analysts by data provider Visible Alpha.

The bottom line was also supported by gains from its stake in Morgan Stanley, while cybersecurity-related expenses increased, the company said.

First-half net interest income--the difference between interest earned on loans and that paid on deposits--increased 29% to Y1.851 trillion thanks to higher domestic interest rates and a rise in lending.

Net fees and commissions rose 14% to Y1.138 trillion, thanks partly to the strong performance of its asset-management business.

The company recorded net losses on debt securities of Y196.10 billion, partly due to sales of U.S. mortgage-backed securities, compared with Y2.99 billion of gains a year earlier.

Mitsubishi UFJ booked total credit costs of Y70.95 billion in its first half, compared with Y76.39 billion in the year-earlier period.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

November 13, 2026 04:58 ET (09:58 GMT)