TOKYO -- Mitsubishi UFJ Financial Group expects net profit to increase 9% in the year ending next March as Japan's largest bank accelerates its digitalization drive.
Net profit for the current business year is projected at 850 billion yen ($7.8 billion), the Japanese bank said on Monday.
Nikkei reported over the weekend that MUFG aims to restore net profit to a level of 1 trillion yen under a new three-year business plan that aims to eliminate paperwork, trim branches and shift to smartphone-based services in Japan and Southeast Asia, all through digitalization.
MUFG Bank President Junichi Hanzawa has said the bank will enable customers to do everything online, including opening or closing an account. The bank aims to complete its plan to reduce the number of branches by 40% and downsize half of the remaining ones between fiscal 2018 and 2023.
MUFG's net profit hovered around 1 trillion yen between 2011 and 2018, but its recent bottom line has been weighed down by the Bank of Japan's negative interest rates starting in 2016, a write-down on its 94% ownership in Bank Danamon, Indonesia's fifth-largest bank, in 2019 and the coronavirus pandemic last year.
For the year ended in March, net profit came to 777 billion yen ($7.1 billion), up 47%, on core operating profit of 1.2 trillion yen, up 5%.
Digitalization is also a common refrain at Japan's two other megabanks.
Sumitomo Mitsui Financial Group, the second-largest bank, last year announced a partnership with SBI, Japan's largest online broker, to roll out smartphone-based investment services and launch a digitalized stock exchange in Osaka next year.
Other initiatives include introducing a common computer platform for managing the financial records of 200 group companies by fiscal 2025, to eliminate paperwork and allow the company to monitor the financial performance of the entire group in real time.
SMFG will also set up a joint venture with advertising company Dentsu to start an advertising business through its smartphone app.
SMFG expects net profit of 600 billion yen, up 17%, for the year ending in March 2022, on core operating profit of 1.12 trillion yen, up 3%. In the year ended in March, SMFG suffered a 27% drop in net profit to 512.8 billion yen after loan-loss provisions almost doubled to 360 billion yen due to the pandemic.
Core operating profit is made up of net interest income as well as fee and commission income.
Mizuho Financial Group, the nation's third-largest banking group, expects an 8% increase in net profit to 510 billion yen in the year to March 2022, following a 5% increase to 471 billion yen in the last fiscal year.
Mizuho already operates a smartphone-based stock trade service with SoftBank and plans to launch a smartphone-based bank with Japanese chat app operator Line next year.