TOKYO (Reuters) - Mitsubishi UFJ (NYSE:MUFG) Financial Group Inc (MUFG), Japan's largest lender by assets, on Monday reported that first-quarter net profit doubled year on year as credit-related costs dropped sharply.
MUFG, which owns about 20% of Wall Street investment bank Morgan Stanley (NYSE:MS), reported profit of 383.1 billion yen ($3.49 billion) for the three months to June 30, against 183.5 billion yen a year earlier.
The bank retained its full-year profit forecast of 850 billion yen. That compared with an average forecast of 859 billion yen from nine analyst estimates compiled by Refinitiv.
Japanese banks have been struggling with years of ultra-low interest rates and a shrinking population. In the past financial year, three major lenders including MUFG collectively booked 1.1 trillion yen in credit-related costs, which nearly doubled year on year, amid the COVID-19 pandemic.
MUFG's credit-related costs in the first quarter came in at 5.1 billion yen, versus 145 billion yen in the same period last year.
The lender had estimated 350 billion yen of credit-related costs for the current financial year which runs through March.
In contrast, net interest income - mainly derived from its traditional lending business - came in at 496.9 billion yen for the quarter, marking a 5.9% on-year rise, as corporate clients rushed to borrow to overcome the pandemic fallout.
Peers Sumitomo Mitsui (NYSE:SMFG) Financial Group Inc and Mizuho Financial Group Inc last week both reported their net profit for the quarter more than doubled as credit-related costs dropped.
($1 = 109.6400 yen)