Japan's Mitsubishi UFJ Financial Group Inc. (MUFG) is considering phasing out some of its businesses with low potential to contribute to return on equity (ROE) so that the company can more effectively utilize its resources, according to Chief Strategy Officer Yoshiaki Ueno.
During an interview with The Yomiuri Shimbun, Ueno also expressed an intent to expand projects under the originate-to-distribute model in the next medium-term business plan. "One of the themes for the next three years is the domestic market," he said.
The following is excerpted from the interview.
The Yomiuri Shimbun: How well is MUFG performing?
Yoshiaki Ueno: Our business is doing well. Corporate growth investment is accelerating, and we are seeing a tailwind from rising interest rates as well. Fee-based revenue, which comes from services rather than interest, is also growing. In the medium- to long-term, we will consider phasing out some of our businesses with low potential to contribute to ROE so that we can more effectively utilize our resources.
Yomiuri: What will be the company's focus for the next medium-term business plan?
Ueno: President (and Group CEO) Junichi Hanzawa is increasingly keen to grow the company, having set a goal of ranking among the world's top five banking groups. One of the themes for the next three years is the domestic market. Backed by a government growth strategy spanning 17 sectors, corporate demand for funding is robust.
Bank loans are not sufficient to meet this demand -- capital markets should also be utilized. We will promote an originate-to-distribute business model in which banks act as lead managers for project finance and other methods, then sell the resulting loan receivables to investors.
We aim to offer individual customers financial products that support their asset building while directing those funds toward growth investments for Japanese companies. Creating an "investment chain" that links corporate growth with individual asset management is also an important role for MUFG.
Yomiuri: What areas do you think investors are focusing on?
Ueno: There is a high level of interest in our medium- to long-term growth potential, which drives our goals of becoming a top five global banking group and reaching an ROE in the mid-10% range. Deposit growth has mostly leveled off in Japan, so investors will also be keen to know how we will increase it in the future.
Investors are also highly interested in our collaboration with Morgan Stanley. We are exchanging perspectives on various topics, including wealth management for affluent customers and countermeasures against AI-powered cyberattacks.
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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.
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