| Loans and Allowance for Credit Losses [Text Block] | LOANS AND ALLOWANCE FOR CREDIT
LOSSES
Loans at March 31, 2017 and 2018 by domicile and industry of
the borrower are summarized below. Classification of loans by
industry is based on the industry segment loan classifications as
defined by the Bank of Japan.
2017 2018
(in
millions)
Domestic:
Manufacturing ¥ 11,796,803 ¥ 10,876,625
Construction 819,262 781,262
Real estate 11,622,372 11,763,769
Services 2,549,300 2,689,086
Wholesale and retail 7,970,579 7,989,080
Banks and other financial institutions (1) 5,223,906 4,818,364
Communication and information services 1,634,584 1,551,533
Other industries 8,898,712 8,939,291
Consumer 16,491,010 16,287,332
Total domestic 67,006,528 65,696,342
Foreign:
Governments and official institutions 1,037,795 920,538
Banks and other financial institutions (1) 13,844,964 12,851,570
Commercial and industrial 30,279,641 30,591,173
Other 6,334,551 7,270,928
Total foreign 51,496,951 51,634,209
Unearned income, unamortized premiums—net and deferred loan
fees—net (288,507 ) (294,656 )
Total (2) ¥ 118,214,972 ¥ 117,035,895
Notes:
(1) Loans
to so-called “non-bank Non-bank
(2) The above table includes loans held
for sale of ¥185,940 million and
¥226,923 million at March 31, 2017 and 2018,
respectively.
The MUFG Group classifies its loan portfolio into the following
portfolio segments—Commercial, Residential, Card, MUFG
Americas Holdings, and Krungsri based on the grouping used by the
MUFG Group to determine the allowance for credit losses. See Note 1
for further information.
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, MUFG Americas Holdings, and
Krungsri segments, and six months or more with respect to loans
within the Residential segment. See Note 1 for further
information.
The nonaccrual loans by class at March 31, 2017 and 2018 is
shown below:
2017 2018
(in
millions)
Commercial
Domestic ¥ 471,148 ¥ 332,994
Manufacturing 185,095 77,163
Construction 15,202 10,791
Real estate 44,374 33,317
Services 38,602 30,717
Wholesale and retail 131,213 108,175
Banks and other financial institutions 2,432 1,145
Communication and information services 18,685 13,815
Other industries 10,034 37,549
Consumer 25,511 20,322
Foreign-excluding MUAH and Krungsri 191,889 109,516
Residential 75,399 69,464
Card 61,424 61,387
MUAH 82,150 52,282
Krungsri 94,902 121,286
Total (1) ¥ 976,912 ¥ 746,929
Note:
(1) The above table does not include
loans held for sale of nil and ¥61 million at March 31,
2017 and 2018, respectively, and loans acquired with deteriorated
credit quality of ¥9,720 million and
¥6,659 million at March 31, 2017 and 2018,
respectively.
Impaired Loans
The MUFG Group’s impaired loans primarily include nonaccrual
loans and TDRs. The following table shows information about
impaired loans by class at March 31, 2017 and 2018:
Recorded Loan Balance
At March 31, 2017: Requiring Not Requiring (1) Total (2) Unpaid Related
(in millions)
Commercial
Domestic ¥ 875,977 ¥ 187,738 ¥ 1,063,715 ¥ 1,107,203 ¥ 608,122
Manufacturing 555,009 39,587 594,596 602,038 411,787
Construction 15,007 9,068 24,075 24,907 9,107
Real estate 53,048 30,274 83,322 90,797 14,987
Services 48,304 23,162 71,466 78,097 31,074
Wholesale and retail 160,422 53,760 214,182 224,141 115,673
Banks and other financial institutions 1,836 607 2,443 2,443 1,674
Communication and information services 14,166 10,652 24,818 26,641 10,565
Other industries 10,714 5,806 16,520 17,403 7,226
Consumer 17,471 14,822 32,293 40,736 6,029
Foreign-excluding MUAH and Krungsri 262,887 23,019 285,906 309,975 164,682
Loans acquired with deteriorated credit quality 8,013 — 8,013 11,513 3,619
Residential 120,465 6,557 127,022 154,006 46,971
Card 71,849 462 72,311 80,392 20,523
MUAH 77,160 16,292 93,452 113,414 19,173
Krungsri 44,679 20,752 65,431 71,075 19,118
Total (3) ¥ 1,461,030 ¥ 254,820 ¥ 1,715,850 ¥ 1,847,578 ¥ 882,208
Recorded Loan Balance
At March 31, 2018: Requiring Not Requiring (1) Total (2) Unpaid Related
(in millions)
Commercial
Domestic ¥ 626,469 ¥ 188,984 ¥ 815,453 ¥ 875,795 ¥ 331,851
Manufacturing 361,268 36,566 397,834 408,124 166,098
Construction 10,936 7,172 18,108 18,490 7,921
Real estate 43,553 23,053 66,606 71,809 10,665
Services 38,097 16,600 54,697 59,335 25,890
Wholesale and retail 128,661 49,628 178,289 189,404 94,832
Banks and other financial institutions 1,125 26 1,151 1,151 972
Communication and information services 18,782 7,852 26,634 28,082 16,041
Other industries 12,978 34,282 47,260 67,525 5,350
Consumer 11,069 13,805 24,874 31,875 4,082
Foreign-excluding MUAH and Krungsri 122,243 40,249 162,492 190,518 82,855
Loans acquired with deteriorated credit quality 7,837 — 7,837 15,470 4,324
Residential 105,089 6,261 111,350 134,777 16,928
Card 66,964 388 67,352 74,840 21,223
MUAH 48,895 33,650 82,545 94,565 7,743
Krungsri 58,529 25,565 84,094 90,957 29,402
Total (3) ¥ 1,036,026 ¥ 295,097 ¥ 1,331,123 ¥ 1,476,922 ¥ 494,326
Notes:
(1) 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, loans’ observable market price, or the fair
value of the collateral if the loan is a collateral-dependent
loan.
(2) Included in impaired loans at
March 31, 2017 and 2018 are accrual TDRs as follows:
¥688,746 million and ¥536,748
million—Commercial; ¥50,213 million and
¥40,734 million—Residential; ¥32,564 million
and ¥28,541 million—Card; ¥24,708 million and
¥39,333 million—MUFG Americas Holdings; and
¥23,588 million and ¥24,899 million—Krungsri,
respectively.
(3) In addition to impaired loans
presented in the above table, there were impaired loans held for
sale of ¥9,879 million and ¥61 million at
March 31, 2017 and 2018, respectively.
The following table shows information regarding the average
recorded loan balance and recognized interest income on impaired
loans for the fiscal years ended March 31, 2016, 2017 and
2018:
2016 2017 2018
Average Recognized Average Recognized Average Recognized
(in millions)
Commercial
Domestic ¥ 1,066,585 ¥ 16,572 ¥ 1,137,501 ¥ 14,116 ¥ 918,093 ¥ 9,441
Manufacturing 464,157 5,530 601,256 5,845 472,081 3,787
Construction 29,548 708 26,684 434 19,465 281
Real estate 123,203 2,169 96,229 1,593 74,087 1,146
Services 91,339 1,967 81,967 1,236 59,916 794
Wholesale and retail 249,656 4,333 238,798 3,466 186,356 2,347
Banks and other financial institutions 3,982 51 2,272 11 1,729 8
Communication and information services 29,547 677 27,531 570 25,461 388
Other industries 29,018 301 24,709 397 50,377 215
Consumer 46,135 836 38,055 564 28,621 475
Foreign-excluding MUAH and 230,018 3,235 291,612 5,132 209,297 4,244
Loans acquired with deteriorated credit quality 11,549 495 9,974 432 8,591 492
Residential 154,760 2,918 133,876 1,883 119,409 1,563
Card 85,006 3,330 75,809 2,483 69,831 1,993
MUAH 71,966 1,550 91,690 1,664 83,504 1,993
Krungsri 40,037 2,252 51,597 2,201 75,370 3,899
Total ¥ 1,659,921 ¥ 30,352 ¥ 1,792,059 ¥ 27,911 ¥ 1,484,095 ¥ 23,625
Interest income on nonaccrual loans for all classes was recognized
on a cash basis when ultimate collectibility of principal was
certain. Otherwise, cash receipts were applied as principal
reductions. Interest income on accruing impaired loans, including
TDRs, was recognized on an accrual basis to the extent that the
collectibility of interest income was reasonably certain based on
management’s assessment.
The following table shows a roll-forward of accrual TDRs and other
impaired loans (including nonaccrual TDRs) for the fiscal years
ended March 31, 2016, 2017 and 2018:
2016 2017 2018
(in
millions)
Accrual TDRs:
Balance at beginning of fiscal year ¥ 867,090 ¥ 613,844 ¥ 819,819
Additions (new accrual TDR status) (1) 175,178 492,269 144,368
Transfers to other impaired loans (including nonaccrual TDRs) (164,016 ) (40,182 ) (25,122 )
Loans sold (9 ) (1,637 ) (39,378 )
Principal payments and other (264,399 ) (244,475 ) (229,432 )
Balance at end of fiscal year (1) ¥ 613,844 ¥ 819,819 ¥ 670,255
Other impaired loans (including nonaccrual TDRs):
Balance at beginning of fiscal year ¥ 819,716 ¥ 1,111,306 ¥ 896,031
Additions (new other impaired loans (including nonaccrual TDRs)
status) (1)(2) 617,481 541,789 281,275
Charge-off (65,198 ) (106,097 ) (98,355 )
Transfers to accrual TDRs (32,190 ) (333,478 ) (43,858 )
Loans sold (12,224 ) (44,984 ) (31,581 )
Principal payments and other (216,279 ) (272,505 ) (342,644 )
Balance at end of fiscal year (1) ¥ 1,111,306 ¥ 896,031 ¥ 660,868
Notes:
(1) For the fiscal year ended
March 31, 2016, lease receivables of ¥3,124 million
and ¥240 million in the Krungsri segment, which were
accrual TDRs and nonaccrual TDRs, respectively, are excluded from
the additions of accrual TDRs and other impaired loans,
respectively, and the related ending balances of such TDRs
amounting to ¥4,172 million and ¥567 million,
are also excluded from the balance of accrual TDRs and other
impaired loans, respectively, as of March 31, 2016. For the
fiscal year ended March 31, 2017, lease receivables of
¥875 million and ¥74 million in the Krungsri
segment, which were accrual TDRs and nonaccrual TDRs, respectively,
are excluded from the additions of accrual TDRs and other impaired
loans, respectively, and the related ending balances of such TDRs
amounting to ¥4,065 million and ¥389 million,
are also excluded from the balance of accrual TDRs and other
impaired loans, respectively, as of March 31, 2017. For the
fiscal year ended March 31, 2018, lease receivables of
¥1,809 million and ¥113 million in the Krungsri
segment, which were accrual TDRs and nonaccrual TDRs, respectively,
are excluded from the additions of accrual TDRs and other impaired
loans, respectively, and the related ending balances of such TDRs
amounting to ¥4,282 million and ¥1,286 million,
are also excluded from the balance of accrual TDRs and other
impaired loans, respectively, as of March 31, 2018.
(2) Included in the additions of other
impaired loans for the fiscal years ended March 31, 2016, 2017
and 2018 are nonaccrual TDRs as follows: ¥10,954 million,
¥11,699 million and ¥12,002 million—Card;
¥19,725 million, ¥25,023 million and
¥12,799 million—MUFG Americas Holdings; and
¥7,989 million, ¥7,471 million and ¥12,280
million—Krungsri, respectively.
Troubled Debt Restructurings
The following table summarizes the MUFG Group’s TDRs by class
for the fiscal years ended March 31, 2016, 2017 and 2018:
2016 2017 2018
Troubled Debt
Restructurings
Pre- Post- Pre- Post- Pre- Post-
(in millions)
Commercial (1)(3)
Domestic ¥ 116,299 ¥ 76,530 ¥ 377,563 ¥ 377,563 ¥ 70,380 ¥ 69,021
Manufacturing 63,304 23,535 335,347 335,347 35,954 35,954
Construction 2,881 2,881 1,377 1,377 1,020 1,020
Real estate 7,167 7,167 7,457 7,457 1,269 1,269
Services 12,226 12,226 5,268 5,268 4,139 4,139
Wholesale and retail 27,545 27,545 22,868 22,868 16,280 14,921
Banks and other financial institutions — — — — 246 246
Communication and information services 869 869 2,405 2,405 9,643 9,643
Other industries 1,240 1,240 1,493 1,493 761 761
Consumer 1,067 1,067 1,348 1,348 1,068 1,068
Foreign-excluding MUAH and Krungsri 23,849 23,849 58,178 58,178 25,522 25,522
Loans acquired with deteriorated credit quality — — 1,030 1,030 — —
Residential (1)(3) 19,316 19,316 13,092 13,092 9,763 9,763
Card (2)(3) 16,002 15,670 17,256 16,759 17,436 16,912
MUAH (2)(3) 64,064 64,064 38,558 38,449 40,578 38,224
Krungsri (2)(3) 17,869 17,781 32,340 32,340 24,015 23,929
Total ¥ 257,399 ¥ 217,210 ¥ 538,017 ¥ 537,411 ¥ 187,694 ¥ 183,371
2016 2017 2018
Troubled Debt Restructurings
Recorded Investment
(in millions)
Commercial (1)(3)
Domestic ¥ 150,142 ¥ 4,587 ¥ 4,067
Manufacturing 147,025 1,373 839
Construction 6 11 —
Real estate 745 38 10
Services 1,193 217 822
Wholesale and retail 1,090 2,530 2,231
Banks and other financial institutions — — —
Communication and information services 20 385 140
Other industries 40 — —
Consumer 23 33 25
Foreign-excluding MUAH and Krungsri — 11,268 —
Loans acquired with deteriorated credit quality — — —
Residential (1)(3) 284 231 159
Card (2)(3) 4,479 3,661 4,191
MUAH (2)(3) 3,925 6,624 2,565
Krungsri (2)(3) 6,219 3,984 4,789
Total ¥ 165,049 ¥ 30,355 ¥ 15,771
Notes:
(1) TDRs for the Commercial and
Residential segments include accruing loans, and do not include
nonaccrual loans.
(2) TDRs for the Card, MUFG Americas
Holdings and Krungsri segments include accrual and nonaccrual
loans.
(3) For the fiscal year ended March 31,
2016, 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 payment deferrals were the primary
concession type in the MUFG Americas Holdings segment. For the
fiscal year ended March 31, 2017, extension of the stated maturity
date of loans was the primary concession type in the Residential
segment, reduction in the stated rate was the primary concession
type in the Commercial and Card segments and payment deferrals were
the primary concession type in the MUFG Americas Holdings and
Krungsri segments. For the fiscal year ended March 31, 2018,
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, payment deferrals were the primary
concession type in the MUFG Americas Holdings segment.
The following table summarizes outstanding recorded investment
balances of TDRs by class at March 31, 2017 and 2018:
2017 2018
(in
millions)
Commercial (1)
Domestic ¥ 592,578 ¥ 482,566
Manufacturing 409,500 320,702
Construction 8,881 7,362
Real estate 38,953 33,289
Services 32,864 23,987
Wholesale and retail 82,968 70,119
Banks and other financial institutions 11 6
Communication and information services 6,133 12,837
Other industries 6,486 9,712
Consumer 6,782 4,552
Foreign-excluding MUAH and Krungsri 96,168 54,182
Residential (1) 50,213 40,734
Card (2) 72,311 67,352
MUAH (2) 69,830 65,373
Krungsri (2) 46,651 54,036
Total ¥ 927,751 ¥ 764,243
Notes:
(1) TDRs for the Commercial and
Residential segments include accruing loans, and do not include
nonaccrual loans.
(2) TDRs for the Card, MUFG Americas
Holdings and Krungsri segments include accrual and nonaccrual
loans. Included in the outstanding recorded investment balances as
of March 31, 2017 and 2018 are nonaccrual TDRs as follows:
¥39,747 million and ¥38,811 million—Card;
¥45,122 million and ¥26,040 million—MUFG
Americas Holdings; and ¥18,998 million and ¥24,855
million—Krungsri, respectively.
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. Those loans are
also considered impaired loans, and hence the allowance for credit
losses is separately established for each loan. As a result, the
amount of allowance for credit losses increases in many cases upon
classification as a TDR loan. The amount
of pre-modification
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, MUFG Americas Holdings and Krungsri
segments, the TDRs in the above tables represent nonaccrual and
accruing loans, and the defaulted loans in the above table
represent nonaccruing and accruing loans that became past due one
month or more within the Card segment, 60 days or more within the
MUFG Americas Holdings 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
¥168,840 million and ¥172,159 million at
March 31, 2017 and 2018, respectively. See Note 25 for
further discussion of commitments to extend credit.
Credit Quality Indicator
Credit quality indicators of loans by class at March 31, 2017
and 2018 are shown below:
At March 31, 2017: Normal Close
Likely to become Total (1)
(in
millions)
Commercial
Domestic ¥ 49,572,413 ¥ 2,161,965 ¥ 296,961 ¥ 52,031,339
Manufacturing 10,882,533 821,062 65,112 11,768,707
Construction 753,879 53,255 11,550 818,684
Real estate 11,137,637 352,785 42,382 11,532,804
Services 2,267,272 237,067 31,202 2,535,541
Wholesale and retail 7,403,680 462,577 98,423 7,964,680
Banks and other financial institutions 5,207,774 14,341 892 5,223,007
Communication and information services 1,573,518 45,342 15,357 1,634,217
Other industries 8,725,914 125,725 8,086 8,859,725
Consumer 1,620,206 49,811 23,957 1,693,974
Foreign-excluding MUAH and Krungsri 36,134,401 971,228 189,599 37,295,228
Loans acquired with deteriorated credit quality 16,503 12,572 5,065 34,140
Total ¥ 85,723,317 ¥ 3,145,765 ¥ 491,625 ¥ 89,360,707
Accrual Nonaccrual Total (1)
(in
millions)
Residential ¥ 14,256,263 ¥ 76,185 ¥ 14,332,448
Card ¥ 531,331 ¥ 61,822 ¥ 593,153
Credit Quality Based on Credit Quality Based on
Accrual
Nonaccrual Pass Special Classified Total (1)(2)
(in
millions)
MUAH ¥
3,837,763 ¥
22,949 ¥ 4,879,158 ¥
133,032 ¥
151,553 ¥
9,024,455
Normal Special Substandard or Total (1)
(in
millions)
Krungsri
¥ 4,672,435 ¥ 195,472 ¥ 98,335 ¥
4,966,242
At March 31, 2018: Normal Close Watch Likely to become Total (1)
(in
millions)
Commercial
Domestic ¥ 49,050,274 ¥ 1,690,924 ¥ 271,456 ¥ 51,012,654
Manufacturing 10,215,497 596,662 57,730 10,869,889
Construction 727,932 43,673 9,116 780,721
Real estate 11,379,291 279,931 32,692 11,691,914
Services 2,467,540 175,733 24,081 2,667,354
Wholesale and retail 7,518,383 374,706 77,870 7,970,959
Banks and other financial institutions 4,800,281 10,923 1,145 4,812,349
Communication and information services 1,491,093 48,153 11,958 1,551,204
Other industries 8,780,517 120,466 36,951 8,937,934
Consumer 1,669,740 40,677 19,913 1,730,330
Foreign-excluding MUAH and Krungsri 36,049,123 569,137 108,276 36,726,536
Loans acquired with deteriorated credit quality 12,035 11,728 3,562 27,325
Total ¥ 85,111,432 ¥ 2,271,789 ¥ 383,294 ¥ 87,766,515
Accrual Nonaccrual Total (1)
(in
millions)
Residential
¥ 14,012,978 ¥ 67,258 ¥ 14,080,236
Card
¥ 528,108 ¥ 61,707 ¥ 589,815
Credit Quality Based on Credit
Quality Based on
Accrual
Nonaccrual Pass Special Classified Total (1)(2)
(in
millions)
MUAH ¥ 4,360,445 ¥ 14,238 ¥ 4,509,044 ¥ 59,890 ¥ 116,842 ¥ 9,060,459
Normal Special Substandard or Total (1)
(in
millions)
Krungsri
¥ 5,284,018 ¥ 198,526 ¥ 123,106 ¥ 5,605,650
Notes:
(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.
(2) Total loans of MUFG Americas Holdings
do not include FDIC covered loans which are not individually rated
totaling ¥40,534 million and ¥953 million as of
March 31, 2017 and 2018, respectively. The MUFG Group will be
reimbursed for a substantial portion of any future losses on FDIC
covered loans under the terms of the FDIC loss share
agreements.
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
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,
The accrual status is a primary credit quality indicator for loans
within the Residential segment, the Card segment and consumer loans
within the MUFG Americas Holdings 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 MUFG Americas Holdings 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 Normal,
Special Mention, Substandard, Doubtful, and Doubtful of Loss
primarily based on their delinquency status. Loans categorized as
Special Mention generally represent those that have the overdue
principal or interest payments for a cumulative period exceeding
one month commencing from the contractual due date. Loans
categorized as Substandard, Doubtful or Doubtful of Loss generally
represent those that have the overdue principal or interest
payments for a cumulative period exceeding three months commencing
from the contractual due date.
For the Commercial, Residential and Card segments, credit quality
indicators are based on information as of March 31. For the
MUFG Americas Holdings and Krungsri segments, credit quality
indicators are generally based on information as of
December 31.
Past Due Analysis
Ages of past due loans by class at March 31, 2017 and 2018 are
shown below:
At March 31, 2017: 1-3 months Greater Total Current Total (1)(2) Recorded
(in
millions)
Commercial
Domestic ¥ 12,410 ¥ 19,468 ¥ 31,878 ¥ 51,999,461 ¥ 52,031,339 ¥ 5,817
Manufacturing 1,427 1,671 3,098 11,765,609 11,768,707 20
Construction 281 235 516 818,168 818,684 —
Real estate 2,655 5,058 7,713 11,525,091 11,532,804 1,542
Services 1,294 3,225 4,519 2,531,022 2,535,541 4
Wholesale and retail 1,932 1,883 3,815 7,960,865 7,964,680 149
Banks and other financial institutions 3 21 24 5,222,983 5,223,007 —
Communication and information services 583 216 799 1,633,418 1,634,217 —
Other industries 337 99 436 8,859,289 8,859,725 —
Consumer 3,898 7,060 10,958 1,683,016 1,693,974 4,102
Foreign-excluding MUAH and Krungsri 5,268 50,105 55,373 37,239,855 37,295,228 2,244
Residential 78,227 42,335 120,562 14,202,076 14,322,638 31,382
Card 17,490 31,298 48,788 533,484 582,272 —
MUAH 25,162 14,212 39,374 8,998,049 9,037,423 1,165
Krungsri 103,055 73,261 176,316 4,780,709 4,957,025 —
Total ¥ 241,612 ¥ 230,679 ¥ 472,291 ¥ 117,753,634 ¥ 118,225,925 ¥ 40,608
At March 31, 2018: 1-3 months Greater Total Current Total (1)(2) Recorded
(in
millions)
Commercial
Domestic ¥ 13,290 ¥ 43,913 ¥ 57,203 ¥ 50,955,451 ¥ 51,012,654 ¥ 6,419
Manufacturing 1,495 1,300 2,795 10,867,094 10,869,889 —
Construction 359 437 796 779,925 780,721 —
Real estate 2,090 3,225 5,315 11,686,599 11,691,914 1,633
Services 1,025 620 1,645 2,665,709 2,667,354 26
Wholesale and retail 3,886 4,198 8,084 7,962,875 7,970,959 1,349
Banks and other financial institutions — 21 21 4,812,328 4,812,349 —
Communication and information services 657 328 985 1,550,219 1,551,204 —
Other industries 251 28,315 28,566 8,909,368 8,937,934 —
Consumer 3,527 5,469 8,996 1,721,334 1,730,330 3,411
Foreign-excluding MUAH and Krungsri 12,512 19,655 32,167 36,694,369 36,726,536 1,083
Residential 78,073 19,399 97,472 13,974,118 14,071,590 10,806
Card 18,887 32,218 51,105 528,284 579,389 —
MUAH 23,145 13,648 36,793 9,009,426 9,046,219 771
Krungsri 116,665 99,315 215,980 5,383,477 5,599,457 —
Total ¥ 262,572 ¥ 228,148 ¥ 490,720 ¥ 116,545,125 ¥ 117,035,845 ¥ 19,079
Notes:
(1) Total loans in the above table do not
include loans held for sale and loans acquired with deteriorated
credit quality and represent balances without adjustments in
relation to unearned income, unamortized premiums and deferred loan
fees.
(2) Total loans of MUFG Americas Holdings
do not include ¥438 million and ¥5 million of
FDIC covered loans at March 31, 2017 and 2018, respectively,
which are not subject to the guidance on loans and debt securities
acquired with deteriorated credit quality.
Allowance for Credit Losses
Changes in the allowance for credit losses by portfolio segment for
the fiscal years ended March 31, 2016, 2017 and 2018 are shown
below:
Fiscal year ended March 31, 2016: Commercial Residential Card MUAH Krungsri Total
(in millions)
Allowance for credit losses:
Balance at beginning of fiscal year ¥ 807,716 ¥ 72,366 ¥ 35,670 ¥ 64,769 ¥ 74,958 ¥ 1,055,479
Provision for (reversal of) credit losses 117,024 (9,478 ) 885 47,429 76,002 231,862
Charge-offs 116,620 6,691 8,323 5,721 61,416 198,771
Recoveries 21,110 2,401 2,955 2,412 12,934 41,812
Net charge-offs 95,510 4,290 5,368 3,309 48,482 156,959
Others (1) (12,671 ) — — (435 ) (6,146 ) (19,252 )
Balance at end of fiscal year ¥ 816,559 ¥ 58,598 ¥ 31,187 ¥ 108,454 ¥ 96,332 ¥ 1,111,130
Fiscal year ended March 31, 2017: Commercial Residential Card MUAH Krungsri Total
(in millions)
Allowance for credit losses:
Balance at beginning of fiscal year ¥ 816,559 ¥ 58,598 ¥ 31,187 ¥ 108,454 ¥ 96,332 ¥ 1,111,130
Provision for (reversal of) credit losses 177,295 12,224 13,289 (62 ) 50,942 253,688
Charge-offs 108,262 5,339 16,309 32,074 51,774 213,758
Recoveries 21,124 1,853 1,998 2,916 16,058 43,949
Net charge-offs 87,138 3,486 14,311 29,158 35,716 169,809
Others (1) (6,030 ) — — (5,501 ) (1,290 ) (12,821 )
Balance at end of fiscal year ¥ 900,686 ¥ 67,336 ¥ 30,165 ¥ 73,733 ¥ 110,268 ¥ 1,182,188
Fiscal year ended March 31, 2018: Commercial Residential Card MUAH Krungsri Total
(in millions)
Allowance for credit losses:
Balance at beginning of fiscal year ¥ 900,686 ¥ 67,336 ¥ 30,165 ¥ 73,733 ¥ 110,268 ¥ 1,182,188
Provision for (reversal of) credit losses (297,401 ) (22,291 ) 23,422 (9,309 ) 64,732 (240,847 )
Charge-offs 134,807 3,838 22,696 14,701 56,067 232,109
Recoveries 24,913 1,339 1,228 6,140 17,490 51,110
Net charge-offs 109,894 2,499 21,468 8,561 38,577 180,999
Others (1) (2,293 ) — — (2,098 ) 8,173 3,782
Balance at end of fiscal year ¥ 491,098 ¥ 42,546 ¥ 32,119 ¥ 53,765 ¥ 144,596 ¥ 764,124
Note:
(1) Others are principally comprised of
gains or losses from foreign exchange translation.
Allowance for credit losses and recorded investment in loans by
portfolio segment at March 31, 2017 and 2018 are shown
below:
At March 31, 2017: Commercial Residential Card MUAH Krungsri Total
(in millions)
Allowance for credit losses:
Individually evaluated for impairment ¥ 772,804 ¥ 46,520 ¥ 20,523 ¥ 19,174 ¥ 19,035 ¥ 878,056
Collectively evaluated for impairment 115,489 19,255 9,632 54,096 91,137 289,609
Loans acquired with deteriorated credit quality 12,393 1,561 10 463 96 14,523
Total ¥ 900,686 ¥ 67,336 ¥ 30,165 ¥ 73,733 ¥ 110,268 ¥ 1,182,188
Loans:
Individually evaluated for impairment ¥ 1,349,621 ¥ 125,611 ¥ 71,879 ¥ 93,452 ¥ 65,028 ¥ 1,705,591
Collectively evaluated for impairment 87,976,946 14,197,027 510,393 8,944,409 4,891,997 116,520,772
Loans acquired with deteriorated credit quality 34,140 9,810 10,881 27,128 9,217 91,176
Total (1) ¥ 89,360,707 ¥ 14,332,448 ¥ 593,153 ¥ 9,064,989 ¥ 4,966,242 ¥ 118,317,539
At March 31, 2018: Commercial Residential Card MUAH Krungsri Total
(in millions)
Allowance for credit losses:
Individually evaluated for impairment ¥ 414,706 ¥ 16,644 ¥ 21,223 ¥ 7,743 ¥ 29,402 ¥ 489,718
Collectively evaluated for impairment 64,375 24,718 10,884 45,571 115,161 260,709
Loans acquired with deteriorated credit quality 12,017 1,184 12 451 33 13,697
Total ¥ 491,098 ¥ 42,546 ¥ 32,119 ¥ 53,765 ¥ 144,596 ¥ 764,124
Loans:
Individually evaluated for impairment ¥ 977,945 ¥ 110,197 ¥ 66,957 ¥ 82,545 ¥ 84,094 ¥ 1,321,738
Collectively evaluated for impairment 86,761,245 13,961,393 512,432 8,963,679 5,515,363 115,714,112
Loans acquired with deteriorated credit quality 27,325 8,646 10,426 15,188 6,193 67,778
Total (1) ¥ 87,766,515 ¥ 14,080,236 ¥ 589,815 ¥ 9,061,412 ¥ 5,605,650 ¥ 117,103,628
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.
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 in the allowance for credit losses due to loan disposal
activity amounting to ¥0.8 billion,
¥11.0 billion and ¥12.2 billion for the fiscal
years ended March 31, 2016, 2017 and 2018, respectively.
The |
