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We maintain our no-moat rating on Mitsubishi UFJ Financial Group, or MUFG, and our fair value estimate of JPY 550, equivalent to 0.43 times book value based on our average forecast ROE of 4.6%. Our fair value estimate for MUFG's ADRs moves to USD 5.24 from USD 5.10 to reflect strengthening in the yen against the U.S. dollar since the first half of 2020.
Mitsubishi UFJ Financial Group is the largest bank in Japan in terms of market capitalization and assets with an 8.9% share of all domestic loans as of June 2020. It is the largest non-Chinese bank group globally and has a balance sheet slightly larger than those of JPMorgan Chase and HSBC Holdings. MUFG’s operations in Japan account for around half of profit, Bank of Ayudhya in Thailand around 10%, banking operations in the U.S. around 12% and equity-method earnings from Morgan Stanley more than 20%. We expect newly consolidated Bank Danamon in Indonesia to contribute 2%-3% of total earnings going forward.
