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November 19, 2009

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Mitsubishi UFJ profit surges 53%, plans to raise US$11.2b

Mitsubishi UFJ Financial Group reported a 53 percent jump in fiscal first-half profit and disclosed plans to raise up to US$11.2 billion as Japan's biggest bank seeks to shore up its balance sheet.

Tokyo-based Mitsubishi UFJ credited economic recovery in the United States, Europe, Japan and the rest of Asia in helping boost April-September profit to 140.9 billion yen (US$1.58 billion) from 92.0 billion yen the same period the previous year.

Mitsubishi UFJ also revised plans to combine its Japan securities business with Morgan Stanley to allow the US investment bank more control over some operations.

The holding company, which did not break down quarterly numbers, said yesterday it was on track to meet its earnings target for the fiscal year through March 2010, which was kept unchanged at 300 billion yen.

Mitsubishi UFJ posted a 256.9 billion yen loss for the fiscal year ended March 31.

First-half revenue slid 10.5 percent to 2.62 trillion yen.

The public offering in Japan of shares to be issued from November 26 through November 25, 2010, is designed to raise up to 1 trillion yen to shore up the capital base of its banking operations, the financial group said.

Mitsubishi UFJ, with assets of more than 198 trillion yen, outlined changes to its earlier plan to merge its securities operations in Japan with US investment bank Morgan Stanley, citing financial regulatory concerns.

Earlier this year, both sides said they will merge their Japanese brokerage units into a new securities company.

Under the latest plan, one entity called Mitsubishi UFJ Morgan Stanley Securities Co will include the wholesale and retail businesses of Mitsubishi UFJ Securities and the investment banking operations of Morgan Stanley Japan Securities.

The other part called Morgan Stanley MUFG Securities will be all the operations of Morgan Stanley Japan Securities except for investment banking, such as sales and trading.

The plan will be done by May 2010, instead of March. Both will be owned 60 percent by MUFG, and 40 percent by Morgan Stanley, but Morgan Stanley will retain 51 percent voting rights in the second entity, both sides said.


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