Mitsubishi UFJ returns to profitability

TOKYO: Mitsubishi UFJ Financial Group Inc., Japan's largest bank, said Tuesday it climbed back to the black last fiscal year thanks to cost cuts and a recovering global economy.

The Tokyo-based company booked a net profit of 388.7 billion yen ($4.2 billion) in the 12 months through March 31. The result marks a dramatic turnaround from last year's 257 billion yen loss.

The bank, known as MUFG, said better business in corporate lending and financial products offset lower deposit income. It also benefited from companywide cost cuts and rising stock markets, which bolstered equity investments.

Its results follow similar rebounds by rivals Mizuho Financial Group Inc. and Sumitomo Mitsui Financial Group Inc., both of which recovered from deep losses to post annual profits.

``The US and European economies showed a strong recovery, primarily due to financial and monetary packages addressing the global financial crisis,'' it said in its earnings report. ``In Asian economies, stimulus packages led to economic recovery ahead of the economic improvement of the United States and Europe.''

Operating profit came to 545.7 billion yen, compared with an operating loss of 82.8 billion yen. Revenue fell 11 percent to 5.04 trillion yen.

The bank said it plans to shift its focus this year from restructuring to seeking growth, particularly through its alliance with Morgan Stanley. MUFG owns 20 percent of the New York-based company.

With a shrinking domestic market, MUFG and other Japanese megabanks have been looking to expand their overseas presence. Last month, MUFG's San Francisco-based unit UnionBanCal Corp. purchased two smaller lenders, Tamalpais Bank in northern California and Frontier Bank based near Seattle.

For the full fiscal year through March 2011, MUFG said it will aim for a net profit of 400 billion yen.

President Katsunori Nagayasu said the bank's relatively conservative target takes into account looming uncertainties, including growing concerns about sovereign debt risks in Europe, according to Kyodo news agency.

In trading Tuesday ahead of the earnings release, shares of MUFG fell 0.8 percent to 449 yen on the Tokyo Stock Exchange. The benchmark Nikkei 225 stock average edged up 0.1 percent.

MUFG reports earnings based on Japanese accounting standards.