Mitsubishi UFJ Financial Group Inc. (Holding Company); MUFG Bank Ltd. (Lead Bank)

The stable outlooks on the long-term issuer credit ratings on MUFG and its core subsidiaries, including core operating banks, reflect our view that the group will likely maintain its solid business base, strong funding, and ample liquidity in the next two years. The outlooks also incorporate our view that creditworthiness of companies in the group will remain stable in the next two years. There remain uncertainties over the economic recovery following the pandemic. Also, prospects for the global economy are increasingly unpredictable. These factors may pressure the group's profitability and asset quality. We expect the likelihood of the group receiving extraordinary government support if required will remain high, counterbalancing the detrimental issues and underpinning the ratings. The likelihood of a

...We expect Japan-based megabank Mitsubishi UFJ Financial Group Inc. (MUFG) to maintain a strong business and favorable financial position as Japan's largest banking group. MUFG group has a leading business presence in Japan and overseas among Japanese banking groups and has been focusing on global diversification of revenue sources and promoting businesses with growth potential. Accordingly, we believe the group is likely to remain somewhat resilient to a persistent low interest rate environment, falling profitability in the Japanese banking industry, and increasing uncertainty in the global economy. We project the group's risk-adjusted capital (RAC) ratio will remain adequate in the next two years, at between 7.3% and 7.8%. MUFG group has sought to improve profitability under its new medium-term management plan. Efforts to diversify earnings sources and businesses in recent years have borne some fruit. The group's core profitability is relatively strong for Japan's banking industry. The...

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