> ## Content Index > Fetch the complete content index at: https://www.fintechobserver.com/llms.txt > Use this file to discover other available public pages before exploring further. # MUFG Investor Day 2024 - URL: https://www.fintechobserver.com/mufg-investor-day-2024/ - Published: 2024-07-26T03:23:07.000Z - Updated: 2024-12-15T07:36:42.000Z - Description: MUFG has held its Investor Day, with a detailed review of the new Medium-Term Business Plan (MTBP) by business line. The following is a… - Author: Norbert Gehrke - Tags: #Migrated-1734246964256, #Import 2024-12-15 07:16 MUFG has held its [Investor Day](https://www.mufg.jp/dam/ir/presentation/2024/pdf/slides240710%5Fen.pdf?ref=fintechobserver.com), with a detailed review of the new Medium-Term Business Plan (MTBP) by business line. The following is a summary of the key points from the presentations. ### **1\. Retail & Digital** #### **Previous MTBP Review** - Exceeded net operating profit target (¥236 billion) and ROE target (8%). - Achieved significant customer shift to online transactions. - Mitsubishi UFJ IB service users reached a record high. #### **Current MTBP Overview** - Slogan: “Committed to supporting our customers’ lives.” - Goal: Maximize the lifetime value (LTV) of each customer across the existing 57 million customer base. #### **Internet Banking — Phase 1 (by FY24)** - Completely revamp internet banking (IB), seamlessly integrating group company services. - Provide a unified view of customer transactions, including credit card usage, mutual fund values, and deposit balances. - Enable applications for QR payments and other services directly through the IB platform. #### **Internet Banking — Phase 2 (by FY26)** - Develop a comprehensive “Money Advisory Platform” (MAP) tailored to individual customer life stages. - Leverage WealthNavi, Japan’s leading robo-advisor, for personalized financial advice. #### **Credit Card Strategy** - Increase customer LTV by promoting cross-selling and bundled product offerings. - Implement a new reward program in FY24, encouraging the use of various MUFG services. - Launch a new payment app integrated with external content (characters, animation) to attract a wider customer base. #### **Online Security Strategy** - Position au Kabu.com Securities as a key online securities company. - Deepen integration with MUFG entities, potentially incorporating “Mitsubishi UFJ” into the Kabu.com brand. - Introduce innovative services like installment payments for investment trusts and seamless account linking. - Offer Morgan Stanley’s Smart Order Routing system to individual investors in Japan. #### **New Customer Acquisition** - Launch “Bank as a Service” (BaaS) providing core financial functions to partner companies. - Leverage MUFG’s corporate customer base through the “MUFG at Work” framework, expanding financial services to employees. ### **2\. Commercial Banking & Wealth Management** #### **Previous MTBP Review** - Achieved net operating profits of ¥224.6 billion, exceeding the target. - Reduced expense ratio to 67%, exceeding the target. - Achieved ROE of 8.5%, exceeding the target. - Successfully captured growth opportunities from overseas interest rate hikes. - Completed cost structure reforms. #### **Challenges** - Untapped potential in business and asset succession services. - Need to improve balance sheet profitability. - Need to strengthen the corporate infrastructure in the front office. #### **Current MTBP Overview** - Improve balance sheet profitability in a positive interest rate environment. - Deepen and expand wealth management services by leveraging Morgan Stanley’s expertise. - Accelerate the provision of succession-related solutions. - Enhance corporate infrastructure through human resource development and DX. #### **Corporate Business** - Shift employee mindset and provide tools for effective deposit acquisition, particularly targeting operating account deposits. - Focus on high-margin loans (LBOs, non-recourse real estate loans). - Implement pricing management to improve the margin on low-profitability loan portfolios. - Form specialized teams to address capital strategy issues for core large corporate customers. - Enhance understanding of non-core customers and mobilize MUFG services to convert them to core customers. - Support startups using financial and non-financial functions, aiming to triple their market cap to ¥20 trillion. #### **Wealth Management Business** - Deepen transactions with existing customers and expand outreach to untapped customers. - Implement an advisory business model, strengthen collaboration with securities, and offer advanced wealth management services (asset fee plans, discretionary investment). - Expand the number of wealth management professionals by approximately double the current level by FY26. - Strengthen digital touchpoints, including sales support platforms, wealth simulation tools, and online RMS deployment. #### **Combined Corporate and Wealth Management Business** - Focus on addressing the financial needs of business owners, both corporate and personal. - Aim to achieve ¥1 trillion in loan balance related to business succession. - Target ¥88 billion in net operating profits related to business succession services. #### **Corporate Infrastructure Enhancement** - Allocate over 100 employees to strategic fields. - Commit to early promotions, encourage senior and female leadership, and expand training programs. - Implement autonomous branch management, empowering branches to develop their own management policies and self-report financial targets. - Launch social contribution activities (“MUFG Soul”) in each region. - Deepen data utilization and upgrade CRM systems to support sales activities, provide recommendations, and streamline internal coordination. ### **3\. Japanese Corporate & Investment Banking** #### **Previous MTBP Review** - Achieved significant growth due to improved profitability and increased non-JPY deposit income. - Successfully transitioned to an ROE-oriented business model. - Reduced equity holdings by over ¥500 billion, exceeding the initial target. - Increased risk-taking in high-profitability assets. #### **Challenges** - Need to strengthen origination and create new, highly profitable assets. - Need to further deepen RWA management. #### **Current MTBP Overview** - Achieve stable double-digit ROE. #### **Balance Sheet Strengthening** - Implement strategic pricing focused on ensuring appropriate returns. - Control BS management policy in accordance with market conditions. - Continue reducing equity holdings, aiming for ¥350 billion in sales under the current plan and a ratio of less than 20% of total assets by the end of the next MTBP. #### **Enhanced Risk-Taking** - Expand highly profitable transactions in real estate and solutions businesses. - Build a “through-the-cycle” real estate business model, resilient to market fluctuations. - Diversify and strengthen origination capabilities in the solutions business. - Establish an M&A strategy office to strengthen origination capabilities for small and medium-sized M&A deals. #### **Value Co-Creation Approach** - Accompany customers in expanding their business domains and nurture new industries and businesses. - Target new business domains such as the space industry, green energy (hydrogen, storage batteries), and industrial cluster infrastructure. #### **Corporate Transformation** - Develop employees with a global worldview, understanding structural changes and future industry trends. - Foster a culture of passion, ownership, and professional standards. - Implement human resource development programs that go beyond traditional classroom training, focusing on practical thinking, networking, and new experiences. - Utilize AI, data infrastructure, and media content to create a new organizational culture. ### **4\. Global Commercial Banking** #### **Previous MTBP Review** - Initial struggles due to COVID-19, but strong performance in final year led by the consolidation of foreign subsidiaries and the auto business. - Achieved both net operating profit and net profit targets. - Partner banks’ ROE improved to 7.5% after initial investment. - Balanced growth across the business portfolio, including strong earnings from equity method affiliates in Vietnam and Security Bank. #### **Challenges** - Managing and strategically utilizing a growing number of subsidiaries and investees. - Deepening the digital finance strategy. - Identifying and developing new growth markets. #### **Current MTBP Overview** - Contribute to MUFG’s overall profit by growing the existing portfolio, centered on partner banks. - Establish a digital finance platform. #### **Partner Bank Strategy** - Support the growth strategies of each partner bank in their respective countries. - Leverage the trust-based relationship built through consistent management involvement and governance support. #### **Asia and Digital Strategy** - Promote investments in digital finance service providers. - Build a new digital finance platform. - Focus on India as a new high-growth market and strengthen the business platform there. #### **Business Portfolio Evolution** - Drive growth in the short term through the conventional finance platform centered on partner banks. - In the mid to long term (10 years), strategically invest in growth areas like digital and India. - Achieve an optimal balance between existing and new businesses and between conventional and digital finance platforms. #### **Financial Targets** - Achieve net operating profits of ¥350 billion (a ¥95 billion increase from FY23). - Achieve ROE of 9% after amortization. #### **Krungsri (Thailand)** - Maintain focus on business growth while closely monitoring credit portfolio. - Capture growth opportunities in neighboring countries. - Manage overseas business expansion through a new unit under the CEO, focusing on both growth and governance. #### **Bank Danamon (Indonesia)** - Continue to realize the positive impact of structural reforms and growth investments. - Deepen collaboration among investees and enhance MUFG’s presence. #### **Asia and Digital** - Accelerate investments in digital finance, aiming to become ASEAN’s number one digital finance group in 10 years. - Leverage the success of the Home Credit acquisition and strategic investments in two digital finance companies. - Capitalize on improved deal flow and market recognition as a strategic investor in the Asian digital finance space. - Facilitate horizontal connections between digital finance investees, enabling them to share knowledge, leverage each other’s strengths, and benefit from MUFG’s ecosystem. - Address financial inclusion in Asia, targeting 14 million digital lending borrowers by FY26. - Utilize the “Enhanced Growth Model” to categorize the value proposition for investees, including access to the customer base, financial solutions, ecosystems, and knowledge sharing opportunities. #### **India Strategy** - Capitalize on India’s high growth potential driven by domestic demand. - Explore investment opportunities in both conventional and digital finance, targeting the growing SME and retail lending markets. ### **5\. Global Corporate & Investment Banking** #### **Previous MTBP Review** - Achieved net operating profit of over ¥150 billion, exceeding the target. - Achieved ROE of 6%, falling short of the target. - Successfully improved margins through balance sheet optimization and growth in institutional finance. - Increased underwriting and sales fees in project finance. - Expanded cross-selling of foreign exchange and derivatives through integrated operations with the Global Markets Business Group. #### **Challenges** - Need to further enhance competitiveness in the debt business. - Need to strengthen risk management to align with portfolio diversification. #### **Current MTBP Overview** - Achieve stable double-digit ROE. - Establish a world-leading position as a financial institution. #### **Enhance Competitiveness in the Debt Business** - Thoroughly optimize the profitability of the balance sheet. - Improve lending spreads through balance sheet optimization. - Aim for a top 10 position in both investment grade and non-investment grade syndication and DCM wallet rankings. #### **Enhance Profitability of Global Platforms** - Pursue capital efficiency and diversify origination of non-deal transactions, particularly in structured finance. #### **Financial Targets** - Achieve a net operating profit increase of ¥95 billion by FY26 (compared to FY23). - Achieve an ROE of 8%. #### **Balance Sheet Optimization** - Continue to reduce low-profitability assets. - Maintain discipline in asset generation and invest in areas where MUFG can demonstrate value. #### **Project Finance** - Capitalize on strong demand for project finance, particularly in traditional assets (resources, infrastructure) and new areas (semiconductors, digital infrastructure). - Provide integrated solutions through combined GCIB and Global Markets operations. #### **Global Structured Solutions** - Establish a dedicated unit to integrate structuring capabilities across business divisions and categories. - Provide tailor-made debt solutions by combining coverage, product, distribution, and investor knowledge. #### **Morgan Stanley Alliance** - Strengthen collaboration in Asia, leveraging MUFG’s client base and Morgan Stanley’s investment banking capabilities. - Focus on expanding capital assistance transactions, particularly in event finance. - Expand the scope of collaboration in the US beyond investment grade, increasing deal flow and targeting a broader customer base. #### **Blended Finance** - Leverage industry-leading track record and capabilities to expand into portfolio-type blended finance. - Utilize funds and partnerships to address social issues and deliver economic value. #### **Regional Strategies** - **Americas:** Expand business with new customers and products while enhancing risk management. - **Europe:** Pursue capital efficiency and diversify origination of non-deal transactions, particularly in structured finance. - **Asia:** Deepen relationships with investment-grade clients, accelerate business with sister clients, and expand product offerings. - **Resource Allocation:** Establish Tokyo headquarters as a control tower for agile resource allocation between regions. - **Global Operations Support:** Establish cross-regional teams for finance, MIS, and operations to pursue global optimization and support global strategy execution. ### **6\. Global Markets** #### **Previous MTBP Review** - Net operating profits in FY23 were ¥27.5 billion, lower than FY20. - ROE was 0.5%, lower than FY20. - Declines primarily attributed to systematic sales of securities with unrealized losses and losses in the treasury business. - Sales and trading business achieved record profits in FY22, driven by customer flows and flexible position management. - Successfully launched Alliance 2.0 with Morgan Stanley. - Actively utilized hedging tools in treasury operations to manage the foreign bond portfolio. #### **Sales and Trading** - Develop an integrated management framework to address the increasingly diverse needs of customers. - Strengthen capabilities to respond to a positive interest rate environment. #### **Treasury and Other Operations** - Enhance the soundness of foreign currency and yen portfolios. - Strengthen yen balance sheet management. - Enhance investment capabilities to support Japan’s development as a leading asset management center. #### **Current MTBP Overview** - **Slogan:** “Lead the transformation of MUFG for further growth.” - Achieve sustainable growth by adapting to structural changes. - Become a trusted partner by providing solutions to social issues through business activities. - Contribute to MUFG’s overall growth through collaboration with other business groups. #### **Key Strategies** - Enhance MUFG optimization with GCIB, targeting gross profits of over ¥160 billion. - Deepen collaboration with Morgan Stanley under Alliance 2.0, targeting synergies of over ¥10 billion. - Enhance the Japanese yen business, targeting gross profits of over ¥100 billion. - Enhance the Asia business, targeting gross profits of over ¥120 billion. - Enhance market risk management in treasury operations. - Strengthen Japanese yen balance sheet management. - Promote green business initiatives, including investments in global forest investment funds and activating carbon credit markets. - Contribute to making Japan a leading asset management center. - Accelerate digital transformation (DX) initiatives. - Strengthen infrastructure through human resource investment, DEI promotion, and middle/back office efficiency improvements. #### **Financial Targets** - Achieve net operating profits of ¥300 billion by FY26. - Achieve an ROE of 6.5% by FY26. ### **7\. Asset Management & Investor Services** #### **Previous MTBP Review** - Achieved net operating profits of ¥110.8 billion in FY23, a ¥31 billion increase from FY20. - Reduced the expense ratio by 2% to 70%. - Expanded business volume in both Japan and overseas. - Increased profits in the investment trust and DC businesses. #### **Achievements** - Mitsubishi UFJ Asset Management achieved the top position in Japan for publicly offered equity investment trust balance (excluding ETFs). - Acquired Albacore, strengthening the private asset domain. - The Master Trust Bank of Japan became the top manager of assets under management in Japan. - Received continued high customer satisfaction in the pension business. #### **Challenges** - Declining fees due to increased competition in both the asset management (AM) and investor services (IS) sectors. - Need to expand alternative products and strengthen active management capabilities. #### **Current MTBP Overview** - **Vision:** Become a trusted group for asset management and investor services. - Become Japan’s number one asset manager with a global presence. - Expand regions and functions globally in the IS business. - Expand the scope of BPO services for institutional investors and asset management companies in Japan. - Explore new channels, such as B2B2C, in the pension sector. #### **Financial Targets** - Achieve net operating profits of ¥145 billion in FY26, a ¥35 billion increase from FY23. - Maintain ROE at the FY23 level, taking into account the impact of acquisitions and new product development. #### **Global Asset Management** - Position asset management as a growth area to drive overall business group growth. - Capitalize on the growth potential of the private market, aiming to outperform industry growth rates. - Expand product offerings through non-recourse infrastructure investments and the private debt business. #### **Global Investor Services** - Build a stronger revenue base by expanding product offerings and geographical reach. - Leverage the acquisition of Link Administration Holdings (renamed MUFG Pension and Market Services) to enter new areas, such as pension and stock transfer agency services. - Seek synergies between domestic and international operations, leveraging MUFG Trust Bank’s expertise. #### **“Japan as Asset Management Nation”** - Strengthen product offerings, asset management capabilities, and governance frameworks. - Review remuneration systems and launch new investment management personnel training programs. - Leverage MUFG’s knowledge base to expand investment capabilities, particularly in the private sector. - Aim to achieve an asset management balance of ¥200 trillion by March 2030. #### **Investor Services Contribution** - Promote the outsourcing of middle and back-office operations for asset management companies, aiming to achieve a BPO balance of ¥100 trillion by March 2030. #### **Pension Sector Expansion** - Enhance investment education content to improve financial literacy and promote independent asset building. - Leverage the success of the “D-Canvas” platform and expand outreach to individual customers and employees through business partners. --- Please follow us to read more about Finance & FinTech in Japan, like hundreds of readers do every day. 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