Mitsubishi UFJ Financial Group Inc. posted a 66 percent drop in first-quarter profit, missing analysts' estimates, as bad-loan costs soared, the company said Tuesday.

Net income declined to ¥51.2 billion in the three months ended June 30 from ¥151.3 billion a year earlier, Japan's biggest bank by market value said. That was less than the average estimate of ¥127.8 billion by four analysts in a recent survey.

Mitsubishi UFJ joined Sumitomo Mitsui Financial Group Inc. and Sumitomo Trust & Banking Co. in reporting their profit dropped as lending costs rose.

Bad-loan costs rose as sliding markets wiped more than $11.8 trillion off global stocks so far this year, and as bankruptcies in Japan rose 7 percent amid a slowing economy.

"The credit cycle has turned in Japan after several years of a very benign environment with abnormally low" bad-loan costs, said Brett Hemsley, an analyst at HSBC Holdings PLC in Tokyo.

Mitsubishi UFJ's bad-loan costs increased to ¥141.7 billion from ¥84 billion a year earlier, according to the bank. The Tokyo-based bank left its ¥640 billion full-year net income forecast unchanged.

Mitsubishi UFJ's net interest income rose to ¥470 billion from ¥465.7 billion a year earlier. The bank's net fee income declined to ¥239.2 billion, compared with ¥265.9 billion a year earlier. The company lost ¥10.1 billion on securities.

Chief Executive Officer Nobuo Kuroyanagi, 66, is expanding lending and investment abroad, taking advantage of falling stock prices and a need for capital at foreign financial firms such as Merrill Lynch & Co. and UBS AG.

Banks and brokerages have recorded at least $480 billion in writedowns and credit losses globally.