Mitsubishi UFJ (MTU) To Post Q3 Earnings: What's In Store?

Mitsubishi UFJ Financial Group (NYSE:MTU) is scheduled to report third-quarter fiscal 2018 (ended Dec 31, 2017) results on Feb 2.

The banking giant of Japan reported profits attributable to owners of parent of ¥629.9 billion ($5.6 billion) for the first six months of fiscal year ended Mar 31, 2018, up 27.8% year over year. Results reflected increased gross profits and a fall in net interest income. Higher general and administrative expenses posed a headwind.

Further, Mitsubishi UFJ has gained 17.6% on the NYSE over the past six months, outperforming the 13.2% rally of the industry it belongs to.

Factors to Impact Q3 Results

Net Interest Income Under Pressure: Profitability of Mitsubishi UFJ is likely to be hit by sluggish economic growth in Japan and persistent negative interest rate environment that was adopted by the Bank of Japan in early 2016. Though the central bank aims to boost growth and inflation through a negative interest rates policy, this will likely keep Mitsubishi UFJ’s net interest income under pressure.

Expenses Might Rise: Bottom-line growth might be hurt by continued rise in expenses, driven by digital investment and branch network restructuring in Japan and abroad.

Investment Banking Fees Likely to Rise: Global investment banking fees were slightly higher on a year-over-year basis in the last three months of 2017. Strong rally in the equity markets worldwide might have propelled IPOs and follow-on offerings across the world. Thus, the company might have recorded higher fee income.

Reaffirmation of Net Income Target: Notably, Mitsubishi UFJ targets to deliver ¥950 billion of consolidated net income for the fiscal year ending Mar 31, 2018, indicating an increase of 2.5% year over year.

Mitsubishi UFJ carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Schedule of Other Foreign Stocks

Among other foreign banks, Sumitomo Mitsui Financial Group (NYSE:SMFG) is scheduled to report results on Feb 2 while Macro Bank (NYSE:BMA) and Banco Bilbao Viscaya Argentaria S.A. (NYSE:BBVA) are scheduled to report on Feb 21 and Feb 7, respectively.

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