Loans and Allowance for Credit Losses | LOANS AND ALLOWANCE FOR CREDIT LOSSES The MUFG Group classifies its loan portfolio into the following portfolio segments—Commercial, Residential, Card, MUAH, Krungsri, and Other based on the grouping used by the MUFG Group to determine the allowance for credit losses. The MUFG Group further classifies the Commercial segment into classes based on initial measurement attributes, risk characteristics, and its method of monitoring and assessing credit risk. See Note 1 for further information. However, for the fiscal year ended March 2023, the MUA H segment is included in the Other segment in the respective tables, because its importance as a segment declined as a result of the sale of MUFG Union Bank and an internal reorganization within the MUFG Group. The reorganization involved the transfer of assets, including loans of ¥2,614,535 million from the MUAH segment to the Commercial segment on November 14, 2022. See Note 2 for further information. Total Outstanding Loans and Past Due Analysis The table below presents total outstanding loans and past due analysis by class at March 31, 2022 and 2023. Past Due At March 31, 2022: 1-3 months Greater Total Current Loans Held for Sale (1) Total Past Due 90 Days and (in millions) Commercial Domestic ¥ 12,556 ¥ 9,138 ¥ 21,694 ¥ 53,953,767 ¥ 69,257 ¥ 54,044,718 ¥ 3,260 Foreign 17,405 10,598 28,003 34,578,265 374,011 34,980,279 — Residential 32,078 13,598 45,676 13,255,829 — 13,301,505 3,360 Card 10,250 26,818 37,068 427,198 — 464,266 — MUAH 625 — 625 2,741,503 70,841 2,812,969 — Krungsri 115,636 126,494 242,130 6,580,635 — 6,822,765 — Other 21,729 21,152 42,881 1,002,240 — 1,045,121 — Total ¥ 210,279 ¥ 207,798 ¥ 418,077 ¥ 112,539,437 ¥ 514,109 ¥ 113,471,623 ¥ 6,620 Unearned income, unamortized premiums—net and deferred loan fees—net (322,230) Total ¥ 113,149,393 Past Due At March 31, 2023: 1-3 months Greater Total Current Loans Total Past Due 90 Days and Accruing (in millions) Commercial Domestic ¥ 6,599 ¥ 12,485 ¥ 19,084 ¥ 55,519,315 ¥ 87,659 ¥ 55,626,058 ¥ 2,652 Foreign 8,818 33,203 42,021 41,268,228 879,423 42,189,672 12,158 Residential 32,514 11,496 44,010 12,830,845 — 12,874,855 3,342 Card 14,992 26,587 41,579 431,263 — 472,842 — Krungsri 188,802 136,627 325,429 7,457,206 — 7,782,635 — Other (2) 14,241 20,235 34,476 1,375,934 — 1,410,410 — Total ¥ 265,966 ¥ 240,633 ¥ 506,599 ¥ 118,882,791 ¥ 967,082 ¥ 120,356,472 ¥ 18,152 Unearned income, unamortized premiums—net and deferred loan fees—net (401,012) Total ¥ 119,955,460 Notes: (1) Does not include the loans in transferred business of MUFG Union Bank to U.S. Bancorp, which is included in Other assets in the accompanying consolidated balance sheets at March 31, 2022. See Note 2 for further information. (2) The Other segment in the above table included loans of ¥176,691 million, which was previously included in the MUAH segment, at March 31, 2023. Nonaccrual Loans Originated loans are generally placed on nonaccrual status when substantial doubt exists as to the full and timely collection of either principal or interest, when principal or interest is contractually past due one month or more with respect to loans within all classes of the Commercial segment, three months or more with respect to loans within the Card, MUAH, and Krungsri segments, and six months or more with respect to loans within the Residential segment. See Note 1 for further information. The information on nonaccrual loans by class at March 31, 2022 and 2023, and recognized interest income on nonaccrual loans by class for the fiscal years ended March 31, 2022 and 2023 are shown below: Recorded Loan Balance March 31, 2022: Nonaccrual Loans (1) Nonaccrual Loans Not Requiring an Allowance for Credit Losses (2) Recognized Interest Income (in millions) Commercial Domestic ¥ 633,768 ¥ 109,919 ¥ 6,532 Foreign 224,566 84,837 4,734 Residential 56,175 3,579 811 Card 62,578 — 25 MUAH 15,349 — 77 Krungsri 165,775 2,824 4,076 Other 26,618 7 3,688 Total ¥ 1,184,829 ¥ 201,166 ¥ 19,943 Recorded Loan Balance March 31, 2023: Nonaccrual Loans (1) Nonaccrual Loans Not Requiring an Allowance for Credit Losses (2) Recognized Interest Income (in millions) Commercial Domestic ¥ 401,836 ¥ 99,657 ¥ 5,409 Foreign 246,675 65,242 5,918 Residential 47,910 3,962 1,052 Card 67,159 — 17 Krungsri 211,705 3,286 6,482 Other 29,848 5 3,885 Total ¥ 1,005,133 ¥ 172,152 ¥ 22,763 Notes: (1) Nonaccrual loans in the above table do not include loans held for sale of ¥7,946 million and ¥9,205 million at March 31, 2022 and 2023, respectively. (2) These loans do not require an allowance for credit losses because the recorded loan balance equals, or does not exceed, the present value of expected future cash flows discounted at the loans’ original effective interest rate, or the fair value of the collateral if the loan is a collateral-dependent loan. Troubled Debt Restructurings The following table summarizes the MUFG Group’s TDRs by class for the fiscal years ended March 31, 2021, 2022 and 2023: 2021 2022 Troubled Debt Restructurings Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment (in millions) Commercial (1)(3) Domestic ¥ 39,282 ¥ 39,282 ¥ 168,348 ¥ 167,342 Foreign 33,839 33,839 16,144 16,144 Residential (1)(3) 18,121 18,121 22,484 22,484 Card (2)(3) 20,857 19,737 20,937 19,824 MUAH (2)(3) 22,801 22,763 11,384 11,384 Krungsri (2)(3) 18,548 18,548 14,869 14,869 Other (2) 24,968 24,956 11,403 11,403 Total ¥ 178,416 ¥ 177,246 ¥ 265,569 ¥ 263,450 2021 2022 Troubled Debt Restructurings Recorded Investment (in millions) Commercial (1)(3) Domestic ¥ 16,179 ¥ 12,020 Foreign 9,861 13,180 Residential (1)(3) 157 203 Card (2)(3) 2,733 2,746 MUAH (2)(3) 3,437 — Krungsri (2)(3) 6,226 5,657 Other (2) 857 4,715 Total ¥ 39,450 ¥ 38,521 Notes: (1) TDRs for the Commercial and Residential segments include accruing loans, and do not include nonaccrual loans. (2) TDRs for the Card, MUAH, Krungsri and Other segments include accrual and nonaccrual loans. (3) For the fiscal year ended March 31, 2021, extension of the stated maturity date of loans was the primary concession type in the Commercial, Residential and Krungsri segments, reduction in the stated rate was the primary concession type in the Card segment and forbearance was the primary concession type in the MUAH segment. For the fiscal year ended March 31, 2022, extension of the stated maturity date of loans was the primary concession type in the Commercial, Residential and Krungsri segments, reduction in the stated rate was the primary concession type in the Card segment and forbearance was the primary concession type in the MUAH segment. 2023 Troubled Debt Restructurings Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment (in millions) Commercial (1)(3) Domestic ¥ 68,477 ¥ 68,477 Foreign 35,319 35,319 Residential (1)(3) 15,291 15,291 Card (2)(3) 22,355 21,407 Krungsri (2)(3) 94,790 94,790 Other (2) 21,141 21,141 Total ¥ 257,373 ¥ 256,425 2023 Troubled Debt Restructurings Recorded Investment (in millions) Commercial (1)(3) Domestic ¥ 8,123 Foreign 11,945 Residential (1)(3) 116 Card (2)(3) 2,783 Krungsri (2)(3) 5,289 Other (2) 1,569 Total ¥ 29,825 Notes: (1) TDRs for the Commercial and Residential segments include accruing loans, and do not include nonaccrual loans. (2) TDRs for the Card, Krungsri and Other segments include accrual and nonaccrual loans. (3) For the fiscal year ended March 31, 2023, extension of the stated maturity date of loans was the primary concession type in the Commercial, Residential and Krungsri segments and reduction in the stated rate was the primary concession type in the Card segment. A modification of terms of a loan under a TDR mainly involves: (i) a reduction in the stated interest rate applicable to the loan, (ii) an extension of the stated maturity date of the loan, (iii) a partial forgiveness of the principal of the loan, or (iv) a combination of all of these. The amount of pre-modification outstanding recorded investment and post-modification outstanding recorded investment may differ due to write-offs made as part of the concession. The impact of write-offs associated with TDRs on the MUFG Group’s results of operations for the fiscal years ended March 31, 2021, 2022 and 2023 was not material. TDRs for the Commercial and Residential segments in the above tables include accruing loans, and do not include nonaccrual loans. Once a loan is classified as a nonaccrual loan, a modification would have little likelihood of resulting in the recovery of the loan in view of the severity of the financial difficulty of the borrower. Therefore, even if a nonaccrual loan is modified, the loan continues to be classified as a nonaccrual loan. The vast majority of modifications to nonaccrual loans are temporary extensions of the maturity dates, typically for periods up to 90 days, and continually made as the borrower is unable to repay or refinance the loan at the extended maturity. Accordingly, the impact of such TDRs on the outstanding recorded investment is immaterial, and the vast majority of nonaccrual TDRs have subsequently defaulted. TDRs that subsequently defaulted in the Commercial and Residential segments in the above tables include those accruing loans that became past due one month or more within the Commercial segment and six months or more within the Residential segment, and those accruing loans reclassified to nonaccrual loans due to financial difficulties even without delinquencies. This is because classification as a nonaccrual loan is regarded as default under the MUFG Group’s credit policy. Also, the MUFG Group defines default as payment default for the purpose of the disclosure. In regards to the Card, MUAH, Krungsri and Other segments, the TDRs in the above tables represent nonaccrual and accruing loans, and the defaulted loans in the above table represent nonaccrual and accruing loans that became past due one month or more within the Card segment, 60 days or more within the MUAH segment, and six months or more within the Krungsri segment. Historical payment defaults are one of the factors considered when projecting future cash flows in determining the allowance for credit losses for each segment. The MUFG Group provided commitments to extend credit to customers with TDRs. The amounts of such commitments were ¥132,456 million and ¥101,339 million at March 31, 2022 and 2023, respectively. See Note 24 for further discussion of commitments to extend credit. In the Krungsri segment, TDR accounting was suspended for loan modifications, where COVID-19 related short-term modifications (i.e., six months or less) were granted to loans that were current as of the loan modification date, based on interagency statements issued by the U.S. federal bank regulatory agencies. These loan modifications included payment deferrals and reductions in stated rate, and the related borrowers’ past due and nonaccrual status will not be impacted during the deferral period. Interest income will continue to be recognized over the contractual life of the loan. Credit Quality Indicator Credit quality indicators of loans and fiscal year of origination by class at March 31, 2022 and 2023 are shown below: Term Loans Amortized Cost Basis by Origination Year Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis Total (1) At March 31, 2022: 2021 2020 2019 2018 2017 Prior (in millions) Commercial: ¥ 27,445,726 ¥ 10,850,943 ¥ 7,634,337 ¥ 6,509,048 ¥ 3,924,194 ¥ 8,827,987 ¥ 23,380,258 ¥ 9,236 ¥ 88,581,729 Domestic 19,038,698 7,937,529 5,003,439 4,499,174 2,817,819 6,639,931 8,038,871 — 53,975,461 Normal 18,756,933 7,646,272 4,669,784 4,335,640 2,698,956 6,205,070 7,686,772 — 51,999,427 Close Watch 257,276 266,311 167,387 150,834 104,047 307,367 306,193 — 1,559,415 Likely to become Bankrupt or Legally/Virtually Bankrupt 24,489 24,946 166,268 12,700 14,816 127,494 45,906 — 416,619 Foreign 8,407,028 2,913,414 2,630,898 2,009,874 1,106,375 2,188,056 15,341,387 9,236 34,606,268 Normal 8,250,729 2,814,362 2,501,594 1,881,532 1,031,105 2,031,243 15,089,995 1,912 33,602,472 Close Watch 149,502 90,355 73,253 110,170 36,274 93,622 223,203 7,324 783,703 Likely to become Bankrupt or Legally/Virtually Bankrupt 6,797 8,697 56,051 18,172 38,996 63,191 28,189 — 220,093 Residential ¥ 782,446 ¥ 641,706 ¥ 976,736 ¥ 866,282 ¥ 900,959 ¥ 9,104,691 ¥ 28,685 ¥ — ¥ 13,301,505 Accrual 782,314 641,499 976,162 865,761 900,120 9,054,326 26,460 — 13,246,642 Nonaccrual 132 207 574 521 839 50,365 2,225 — 54,863 Card ¥ 19 ¥ 106 ¥ 182 ¥ 175 ¥ 276 ¥ 437 ¥ 400,552 ¥ 62,519 ¥ 464,266 Accrual 1 8 8 9 13 41 387,648 13,960 401,688 Nonaccrual 18 98 174 166 263 396 12,904 48,559 62,578 MUAH ¥ 364,236 ¥ 306,134 ¥ 147,821 ¥ 62,455 ¥ 50,264 ¥ 122,149 ¥ 1,689,069 ¥ — ¥ 2,742,128 Credit Quality Based on Internal Credit Ratings Pass 357,334 298,658 126,083 48,653 43,938 117,778 1,642,946 — 2,635,390 Special Mention 3,106 — 20,013 2,415 5,981 805 33,471 — 65,791 Classified 3,796 7,476 1,725 11,387 345 3,566 12,652 — 40,947 Krungsri ¥ 1,350,265 ¥ 964,094 ¥ 901,955 ¥ 680,090 ¥ 329,847 ¥ 481,981 ¥ 2,099,727 ¥ 14,806 ¥ 6,822,765 Performing 1,297,054 891,374 788,828 573,840 270,783 363,905 1,961,481 — 6,147,265 Under-Performing 42,326 58,084 90,519 80,841 45,982 78,690 113,283 — 509,725 Non-Performing 10,885 14,636 22,608 25,409 13,082 39,386 24,963 14,806 165,775 Other ¥ 400,482 ¥ 143,336 ¥ 85,496 ¥ 40,445 ¥ 35,346 ¥ — ¥ 340,016 ¥ — ¥ 1,045,121 Accrual 398,744 136,317 83,278 38,609 32,934 — 328,621 — 1,018,503 Nonaccrual 1,738 7,019 2,218 1,836 2,412 — 11,395 — 26,618 Term Loans Amortized Cost Basis by Origination Year Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Loans Amortized Cost Basis Total (1) At March 31, 2023: 2022 2021 2020 2019 2018 Prior (in millions) Commercial: ¥ 32,957,651 ¥ 10,100,587 ¥ 8,626,319 ¥ 5,653,421 ¥ 4,385,807 ¥ 9,366,641 ¥ 25,743,172 ¥ 15,050 ¥ 96,848,648 Domestic 20,132,474 6,099,692 6,675,895 4,002,329 3,214,528 7,406,590 8,006,891 — 55,538,399 Normal 19,867,845 5,957,659 6,472,135 3,823,755 3,126,146 6,722,981 7,722,379 — 53,692,900 Close Watch 222,202 124,499 172,270 114,534 74,635 567,514 262,686 — 1,538,340 Likely to become Bankrupt or Legally/Virtually Bankrupt 42,427 17,534 31,490 64,040 13,747 116,095 21,826 — 307,159 Foreign 12,825,177 4,000,895 1,950,424 1,651,092 1,171,279 1,960,051 17,736,281 15,050 41,310,249 Normal 12,508,547 3,931,278 1,857,934 1,577,120 1,083,934 1,824,977 17,540,822 15,050 40,339,662 Close Watch 262,388 34,656 60,637 50,210 71,966 79,450 174,436 — 733,743 Likely to become Bankrupt or Legally/Virtually Bankrupt 54,242 34,961 31,853 23,762 15,379 55,624 21,023 — 236,844 Residential ¥ 688,000 ¥ 747,161 ¥ 607,237 ¥ 919,359 ¥ 811,469 ¥ 9,077,669 ¥ 23,960 ¥ — ¥ 12,874,855 Accrual 687,800 747,121 607,047 918,781 810,933 9,034,589 22,093 — 12,828,364 Nonaccrual 200 40 190 578 536 43,080 1,867 — 46,491 Card ¥ 12 ¥ 147 ¥ 240 ¥ 239 ¥ 181 ¥ 587 ¥ 403,687 ¥ 67,749 ¥ 472,842 Accrual 1 7 10 8 9 37 391,237 14,374 405,683 Nonaccrual 11 140 230 231 172 550 12,450 53,375 67,159 Krungsri ¥ 1,824,628 ¥ 1,046,959 ¥ 654,933 ¥ 692,616 ¥ 515,731 ¥ 605,053 ¥ 2,427,923 ¥ 14,792 ¥ 7,782,635 Performing 1,689,034 956,470 570,865 553,616 406,258 459,322 2,292,418 — 6,927,983 Under-Performing 108,770 66,555 67,504 111,435 85,928 98,103 104,652 — 642,947 Non-Performing 26,824 23,934 16,564 27,565 23,545 47,628 30,853 14,792 211,705 Other ¥ 551,560 ¥ 190,786 ¥ 108,148 ¥ 48,867 ¥ 19,875 ¥ 80,252 ¥ 410,922 ¥ — ¥ 1,410,410 Accrual 549,274 187,638 106,522 47,235 17,832 75,726 396,334 — 1,380,561 Nonaccrual 2,286 3,148 1,626 1,632 2,043 4,526 14,588 — 29,849 Note: (1) Total loans in the above table do not include loans held for sale, and represent balances without adjustments in relation to unearned income, unamortized premiums and deferred loan fees. The MUFG Group classifies loans into risk categories based on relevant information about the ability of borrowers to service their debt, including, but not limited to, historical and current financial information, historical and current payment experience, credit documentation, public and non-public information about borrowers and current economic trends as deemed appropriate to each segment. The primary credit quality indicator for loans within all classes of the Commercial segment is the internal credit rating assigned to each borrower based on the MUFG Group’s internal borrower ratings of 1 through 15, with the rating of 1 assigned to a borrower with the highest quality of credit. When assigning a credit rating to a borrower, the MUFG Group evaluates the borrower’s expected debt-service capability based on various information, including financial and operating information of the borrower as well as information on the industry in which the borrower operates, and the borrower’s business profile, management and compliance system. In evaluating a borrower’s debt-service capability, the MUFG Group also conducts an assessment of the level of earnings and an analysis of the borrower’s net worth. Based on the internal borrower rating, loans within the Commercial segment are categorized as Normal (internal borrower ratings of 1 through 9), Close Watch (internal borrower ratings of 10 through 12), and Likely to become Bankrupt or Legally/Virtually Bankrupt (internal borrower ratings of 13 through 15). Loans to borrowers categorized as Normal represent those that are not deemed to have collectibility issues. Loans to borrowers categorized as Close Watch represent those that require close monitoring as the borrower has begun to exhibit elements of potential concern with respect to its business performance and financial condition, the borrower has begun to exhibit elements of serious concern with respect to its business performance and financial condition, including business problems requiring long-term solutions, or the borrower’s loans are TDRs or loans contractually past due 90 days or more for special reasons. Loans to borrowers categorized as Likely to become Bankrupt or Legally/Virtually Bankrupt represent those that have a higher probability of default than those categorized as Close Watch due to serious debt repayment problems with poor progress in achieving restructuring plans, the borrower being considered virtually bankrupt with no prospects for an improvement in business operations, or the borrower being legally bankrupt with no prospects for continued business operations because of non-payment, suspension of business, voluntary liquidation or filing for legal liquidation. The accrual status is a primary credit quality indicator for loans within the Residential segment, the Card segment and the Other segment. The accrual status of these loans is determined based on the number of delinquent payments. See Note 1 for further details of categorization of Accrual and Nonaccrual. Commercial loans within the MUAH segment are categorized as either pass or criticized based on the internal credit rating assigned to each borrower. Criticized credits are those that are internally risk graded as Special Mention, Substandard or Doubtful. Special Mention credits are potentially weak, as the borrower has begun to exhibit deteriorating trends, which, if not corrected, may jeopardize repayment of the loan and result in further downgrade. Classified credits are those that are internally risk graded as Substandard or Doubtful. Substandard credits have well-defined weaknesses, which, if not corrected, could jeopardize the full satisfaction of the debt. A credit classified as Doubtful has critical weaknesses that make full collection improbable on the basis of currently existing facts and conditions. Loans within the Krungsri segment are categorized as Performing, Under-Performing or Non-Performing based on their delinquency status. Loans categorized as Under-Performing generally represent those that have significant increases in credit risk since origination, including, among other things, loans that are 30 days or more past due, and loans categorized as Non-Performing generally represent those that are 90 days or more past due. For the Commercial, Residential and Card segments, credit quality indicators are based on information as of March 31. For the MUAH, Krungsri and Other segments, credit quality indicators are generally based on information as of December 31. Allowance for Credit Losses Changes in the allowance for credit losses by portfolio segment for the fiscal years ended March 31, 2021, 2022 and 2023 are shown below: Fiscal year ended March 31, 2021: Commercial Residential Card MUAH Krungsri Other Total (in millions) Allowance for credit losses: Balance at beginning of fiscal year ¥ 482,275 ¥ 34,746 ¥ 35,180 ¥ 58,995 ¥ 169,626 ¥ 28,718 ¥ 809,540 Effect of adopting new guidance on measurement of credit losses on financial instruments (1) 83,828 49,494 14,262 25,037 118,333 32,750 323,704 Provision for credit losses 235,584 1,385 17,876 90,064 90,167 49,134 484,210 Charge-offs 77,904 2,745 24,564 40,376 93,192 51,725 290,506 Recoveries collected 9,262 13 1,463 4,362 23,415 6,567 45,082 Net charge-offs 68,642 2,732 23,101 36,014 69,777 45,158 245,424 Other (2) 1,532 — — (6,327) (14,953) (3,891) (23,639) Balance at end of fiscal year ¥ 734,577 ¥ 82,893 ¥ 44,217 ¥ 131,755 ¥ 293,396 ¥ 61,553 ¥ 1,348,391 Fiscal year ended March 31, 2022: Commercial Residential Card MUAH Krungsri Other Total (in millions) Allowance for credit losses: Balance at beginning of fiscal year ¥ 734,577 ¥ 82,893 ¥ 44,217 ¥ 131,755 ¥ 293,396 ¥ 61,553 ¥ 1,348,391 Provision for (reversal of) credit losses 236,659 (10,899) 15,473 (101,112) 90,514 47,360 277,995 Charge-offs 57,848 2,121 20,153 19,208 83,474 55,208 238,012 Recoveries collected 11,898 14 1,231 9,532 22,890 13,150 58,715 Net charge-offs 45,950 2,107 18,922 9,676 60,584 42,058 179,297 Other (2) 8,800 — — 9,398 (940) 6,354 23,612 Balance at end of fiscal year ¥ 934,086 ¥ 69,887 ¥ 40,768 ¥ 30,365 ¥ 322,386 ¥ 73,209 ¥ 1,470,701 Fiscal year ended March 31, 2023: Commercial Residential Card Krungsri Other (3) Total (in millions) Allowance for credit losses: Balance at beginning of fiscal year ¥ 934,086 ¥ 69,887 ¥ 40,768 ¥ 322,386 ¥ 103,574 ¥ 1,470,701 Transfer from MUAH to Commercial segment 33,062 (33,062) — Provision for (reversal of) credit losses (113,886) (9,511) 19,236 70,729 41,580 8,148 Charge-offs 158,780 645 18,255 95,489 55,922 329,091 Recoveries collected 18,784 16 720 25,457 24,506 69,483 Net charge-offs 139,996 629 17,535 70,032 31,416 259,608 Other (2) 6,323 — — 34,948 12,386 53,657 Balance at end of fiscal year ¥ 719,589 ¥ 59,747 ¥ 42,469 ¥ 358,031 ¥ 93,062 ¥ 1,272,898 Notes: (1) Effective as of April 1, 2020, the MUFG Group adopted new guidance on measurement of credit losses on financial instruments. (2) Other is principally comprised of gains or losses from foreign exchange translation. (3) For the fiscal year ended March 31, 2023, the beginning balance and the ending balance of the Other segment in the above table includes the allowance for credit losses of ¥30,365 million and ¥3,428 million, respectively, which were previously included in the MUAH segment. Nonperforming loans were actively disposed of by sales during recent years. The allocated allowance for credit losses for such loans was removed from the allowance for credit losses and transferred to the valuation allowance for loans held for sale upon a decision to sell. Net charge-offs in the above table include a decrease from charge-offs in the allowance for credit losses amounting to ¥16.8 billion, ¥0.4 billion and ¥79.9 billion for the fiscal years ended March 31, 2021, 2022 and 2023, respectively, due to loan disposal activity. The MUFG Group sold ¥1,684 billion, ¥2,011 billion and ¥2,879 billion of loans within the Commercial segment during the fiscal years ended March 31, 2021, 2022 and 2023, respectively. The MUFG Group sold ¥586 billion and ¥518 billion of loans within the MUAH segment during the fiscal years ended March 31, 2021 and 2022, respectively. The MUFG Group sold ¥556 billion of loans within the current Other segment, previously included in the MUAH segment, during the fiscal year ended March 31, 2023. Collateral Dependent Loans The MUFG Group uses, as a practical expedient, the fair value of the collateral when recording the net carrying amounts of loans and determining the allowance for credit losses of such loans, for which the repayment is expected to be provided substantially through the operation or sale of the collateral, when the borrower is experiencing financial difficulty based on the assessment as of the reporting date. |