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 group's stand-alone credit profile (SACP), which excludes extraordinary government support, is relatively high compared with our sovereign rating on Japan. The outlooks also incorporate our view that the creditworthiness of companies in the group will remain stable in the next two years when incorporating the likelihood of extraordinary government support. We believe the group's profitability and asset quality will come under pressure if the domestic and global economies deteriorate beyond our assumptions. However, we expect the likelihood

...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 continued uncertainty in the economic outlook for Japan, the U.S., and other economies in which the group operates. 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 the continuing competition in Japan's lending market that the 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%. We expect the RAC ratio of the group to remain at current levels. Accumulation of retained earnings...

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