Mitsubishi cut its current FY (ends March '09) forecast to Y220 billion ($2.3 bln USD) from the previous forecast of Y640 billion. Depreciation in MTU investments, like Japanese stocks and bonds, and defaults by borrowers, which both stem from the 2008 Financial Crisis, have led to year over year declines in profits.
The 2008 Financial Crisis contributed to declines in MTU's investment portfolio. The company owns equity, bonds, and loans. Increased loan defaults and declining financial asset prices have led to year over year declines in profits. MTU now expects to earn Y220 billion ($2.3 trillion USD) for FY 2009 (end March '09) from its previous forecast of Y640 billion.
Mitsubishi Financial Holdings plans to raise 1 trillion yen in order to add capital reserves. The Japanese bank made a $9 bln USD investment in Morgan Stanley, and management aims to make more acquisitions in order to expand operations overseas.
Mitsubishi's investment and loan portfolio is heavily weighted in the Japanese market. A softening Japanese economy and falling shares on the Nikkei hurt MUFG's income.
The Mitsubishi UFJ Financial Group, Japan's largest bank, announced that it will consider buying a commercial bank in the US or Europe to expand its international business as the growth potential in Japan is limited.
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