Mitsubishi UFJ Financial Group Inc. sees full-year profits falling 11 percent as negative interest rates squeeze loan profitability and the costs of bad loans increase.
The country's largest bank is targeting net income of ¥850 billion in the year ending March 2017, it said in a statement Monday. That is lower than the ¥982 billion average estimate of nine analysts surveyed by Bloomberg. Profit fell 8 percent to ¥951.4 billion last fiscal year, said Tokyo-based MUFG, which also announced plans to buy back shares.
Chief Executive Officer Nobuyuki Hirano has been among the biggest critics of the Bank of Japan's negative-rate policy, saying last month that it has caused anxiety among households and companies and will weaken lenders by narrowing net interest margins that are already among the world's lowest. MUFG's outlook is also hampered by the risk of soured loans to the energy industry even as oil prices recover from a two-year rout.