MUFG (8306)

Equity Research 3 August 2026 | 8:53PM JST

MUFG (8306.T) 1Q in line with GSe / above consensus; fund demand, spread expansion, and market-related revenues contribute to solid start

8306.T 12m Price Target: ¥4,000 Price: ¥3,567 Upside: 12.1% BUY Makoto Kuroda MUFG reported 1Q3/27 results after the close on August 3. 1Q | Goldman Sachs Japan Co., Ltd. consolidated net business profits for FY3/27 came to ¥809.0 bn Hibiki Takuma (+49% yoy, 28% progress against revised guidance of ¥2.9 tn). Net | Goldman Sachs Japan Co., Ltd. income was ¥809.4 bn (+48% yoy, 30% progress against full-year guidance of ¥2.7 tn; GSe ¥812.6 bn, 29% progress against full-year BBG consensus of ¥2.76 tn), landing in line with our relatively strong estimates and above the BBG consensus. In addition to contributions from loan growth (+11% yoy excluding loans to the Key Data _____________________________________ Market cap: ¥40.1tr / $252.2bn government), wider domestic corporate lending spreads, domestic 3m ADTV: ¥139.6bn / $868.6mn Japan and overseas loan-related income and solutions-related fee income, Japan Financials market-related operations also contributed to profit growth. M&A Rank: 3

Although there were no gains on bonds like the gains on foreign GS Forecast __________________________________ 3/26 3/27E 3/28E 3/29E bond sales seen in the previous year, MUFG booked equity gains Net inc. (¥ bn) New 2,427.2 2,832.7 3,251.7 3,537.3

(gains on ETF sales) and gains on yen interest rate derivatives/losses Net inc. (¥ bn) Old 2,427.2 2,823.1 3,217.0 3,507.0 EPS (¥) New on yen bond sales. Solid S&T revenue at the securities business and EPS (¥) Old

equity-method investment profits from Morgan Stanley also EPS growth (%) P/E (X) contributed to the profit increase. P/B (X) 1.2 1.7 1.6 1.4 Price/PPOP (X)

MUFG left FY3/27 guidance unchanged, partly because (unlike Dividend yield (%) 3.7 2.7 3.0 3.4

other banks) its initial guidance assumed a policy rate of 1.0%. 6/26 9/26E 12/26E 3/27E EPS (¥)

While the CET1 ratio will be disclosed at a later date, we estimate GS Factor Profile ______________________________ that even after subtracting MS double gearing and share buybacks Growth

from the ¥809.4 bn net income accumulation, CET1 capital likely Financial Returns

grew 3-4% qoq while RWA increased only slightly. Thus, we expect Multiple the ratio to have recovered somewhat at the end of June from 9.2% at the end of March. However, given that AOCI has also expanded, Integrated

we believe it may not have risen to 9.5%. Percentile 20th 40th 60th 80th 100th

Looking ahead, amid continued high loan growth, the 8306.T relative to Japan Coverage

lending/deposit spread and corporate lending spread expanded in 8306.T relative to Japan Financials

1Q; although partly impacted by M&A-related financing, we view Source: Company data, Goldman Sachs Research estimates. See disclosures for details. this as a positive development. While the tailwinds from equity gains and market-related revenue may settle down somewhat from 2Q

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MUFG (8306.T) Income Statement (¥ bn) ___________________________________ BUY Rating since Dec 16, 2022 3/26 3/27E 3/28E 3/29E Net interest income 3,006.3 3,590.8 4,272.2 4,686.8 Net fees 2,389.9 2,464.8 2,538.3 2,626.8 Treasury income Ratios & Valuation __________________________________________ Other operating income /26 3/27E 3/28E 3/29E Total revenue 5,944.5 6,655.6 7,298.4 7,835.5 P/E (X) Compensation & benefits exp. -- -- -- -- Price/PPOP (X) Non-employee costs (3,567.2) (3,646.5) (3,758.9) (3,896.8) P/B (X) 1.2 1.7 1.6 1.4 Pre-provision op. profit 2,377.2 3,009.0 3,539.4 3,938.7 P/NTA per share (X) -- -- -- -- Provision for loans ( ) Dividend…