Mitsubishi UFJ's Quarterly Profit Tops Expectations — Update

By Kosaku Narioka

Mitsubishi UFJ Financial Group reported sharply higher quarterly profit, buoyed by a steady rise in domestic lending rates partly driven by the Bank of Japan's rate increases.

The Japanese bank said Monday that net profit rose 48% from a year earlier to 809.43 billion yen, equivalent to $5.14 billion, for the three months ended June. That beat the estimate of Y644.01 billion in a poll of analysts by data provider S&P Global Market Intelligence.

For the fiscal year ending March 2027, it said it continues to target an 11% rise in net profit to Y2.700 trillion.

Japanese government bond yields, which banks use as a reference for lending rates, have risen over the past year as the BOJ has gradually raised its policy rate to rein in inflation.

On Friday, the Bank of Japan maintained its policy rate at 1.0% after having raised the rate to a three-decade high in June, citing the possibility that underlying inflation could exceed its 2% target.

Last month, the 10-year JGB yield climbed to 2.900%, its highest level since September 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.

Driven by prospects of earnings growth, Mitsubishi UFJ's stock has surged 43% so far this year, following a 35% gain in 2025.

First-quarter net interest income--the difference between interest earned on loans and that paid on deposits--rose 28% to Y882.40 billion as domestic lending spreads widened and loan balances increased.

Net fees and commissions also climbed, rising 21% to Y558.17 billion.

The company booked total credit costs of Y72.06 billion in its first quarter, up from Y46.94 billion a year earlier, and recorded net losses on debt securities of Y35.04 billion, wider than the Y28.25 billion a year earlier.

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

(END) Dow Jones Newswires

August 03, 2026 04:14 ET (08:14 GMT)