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, incorporating the likelihood of extraordinary government support. While economic recovery from the pandemic is only partial, uncertainties about a slowdown in the Japanese and global economies are growing. These factors may pressure the group's profitability and asset quality. However, we expect the group's likelihood of receiving extraordinary government support if required to remain high, counterbalancing the detrimental

...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. This is despite growing concern about a slowdown in the global economy. Among Japan-based banking groups, MUFG group has a leading business presence in Japan and overseas. The group has pursued restructuring in recent years aimed at improving its profitability and digitally transforming its business operations and services. Accordingly, we believe the group is likely to remain somewhat resilient to declines in profitability that Japan's banking industry faces as well as to 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 7.2% and 7.7%. The group has accumulated retained earnings thanks to restructuring and a recovery in the profit of its core business following the pandemic. In addition, the group curbed risk-weighted...

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