By Takashi Umekawa
TOKYO (Reuters) – Mitsubishi UFJ Financial Group Inc (MUFG) <8306.T>, Japan’s largest lender by assets, reported a net loss in the third quarter, for the first time in nearly a decade, as its banking unit booked a one-off charge on an Indonesian subsidiary.
MUFG’s net loss came in at 25.7 billion yen ($236 million) in October-December, which compared with 221.4 billion yen net profit in the same period a year earlier, according to Reuters’ calculation based on nine-month cumulative figures disclosed in a stock exchange filing.
MUFG, which is in the midst of a leadership transition, said in December that its core unit MUFG Bank would book a one-off charge of about 207.4 billion yen ($1.9 billion) for the third quarter due to a drop in the share price of Bank Danamon <BDMN.JK>.
That led MUFG, which owns 24% of Wall Street investment bank Morgan Stanley <MS.N>, to also cut its full-year outlook to a 750 billion yen net profit from 900 billion yen. The forecast compared with the 820.3 billion yen average of 12 analyst estimates compiled by Refinitiv.
MUFG’s trading division, however, reported a 276.7 billion yen net operating profit in the nine months, up 35.2% year on year, supported by sales of foreign bonds.
Its rivals Sumitomo Mitsui Financial Group Inc (SMFG) <8316.T> and Mizuho Financial Group Inc <8411.T> reported increased profits last week.
SMFG reported an 8.3% rise in third-quarter profit, driven by a strong performance of its bond trading business. Mizuho said its net profit in the quarter more than doubled from a year earlier, due primarily to a recovery in market conditions.
Japanese banks have been struggling to boost profits under a policy of aggressive monetary easing that has seen the central bank guide short-term rates toward -0.1% and the 10-year government bond yield to around 0%.
As the traditional lending business remained weak, MUFG’s net interest income came in at 1.38 trillion yen for the nine months through December, down 4.7% from a year earlier.
SMFG and Mizuho also said their net interest income fell in the quarter.
MUFG said last month it was promoting Deputy President Hironori Kamezawa to CEO in April. Kamezawa, 58, will become the first chief executive to have not previously headed MUFG Bank.
(Reporting by Takashi Umekawa; Editing by Muralikumar Anantharaman and Louise Heavens)