MITSUBISHI UFJ FINANCIAL GROUP INC

During the fiscal year ended March 31, 2025, we engaged in transactions to ensure adequate capital base and structure, while pursuing strategies to improve our capital management and seek opportunities to grow our business. Japan faces some challenges such as a declining birth rate, an aging society and a shrinking population, while low growth has become normalized throughout the world. The environment we operate in has been affected by issues including significant inflationary price trends, instability in the financial system, geographical conflicts, changes in economic, monetary and trade policies adopted in major markets, evolving views on environmental and social issues, and advances in digital technologies that enable the entry of new competitors in the financial sector. These developments are changing the business environment in significant ways and with unprecedented speed. MUFG seeks to meet these changes with clear visions and to make the most of these challenges as opportunities for growth. Under our current medium-term business plan for the three years ending in the fiscal year ending March 31, 2027, we aim to leverage our extensive network and diverse solutions to provide value to our stakeholders around the world.

Implementation of Share Repurchase Programs and Cancellation of Treasury Shares

During November 2024 through March 2025, we repurchased 158,752,500 shares of our common stock for ¥299,999,995,801 under a share repurchase program that was adopted in November 2024. Under the program, we were authorized by the Board of Directors to repurchase up to the lesser of 230,000,000 shares of our common stock and ¥300.0 billion between November 15, 2024 and March 31, 2025. In addition, we canceled 270,000,000 shares of our common stock held in treasury on November 29, 2024.

On May 15, 2025, the Board of Directors approved a share repurchase program under which we are authorized to repurchase up to the lesser of 175,000,000 shares of our common stock and ¥250.0 billion from May 16, 2025 to July 31, 2025. Under this share repurchase program, we repurchased 86,587,600 shares of our common stock for ¥169,973,523,507 during May and June 2025. Based on information derived from Japanese GAAP-based financial data and used to calculate our capital ratios under applicable Japanese regulations, we estimate that, assuming we repurchase ¥250.0 billion of our common stock pursuant to this program, each of our Common Equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio as of March 31, 2025 would decline by approximately 0.2 percentage points.

We intend to agilely engage in repurchases of shares of our own stock as a means to return profits to shareholders and improve capital efficiency, taking into account our business performance and capital position, opportunities for growth investments, and market conditions including stock prices. As a general policy, we intend to cancel treasury shares to the extent that such shares exceed approximately 5% of our total issued shares (including treasury shares).

Issuances of TLAC Eligible Senior Debt

During the fiscal year ended March 31, 2025, we obtained $4.8 billion, or ¥710.2 billion, and €1.0 billion, or ¥162.1 billion, aggregate principal amount of External TLAC eligible senior debt financing in the form of securities issuance. In April 2025, we issued $3.0 billion, or ¥428.9 billion, and ¥40.0 billion, aggregate principal amount of External TLAC eligible senior debt in the form of securities issuance. In June 2025, we issued €1.7 billion, or ¥272.7 billion, aggregate principal amount of External TLAC eligible senior debt in the form of securities issuance.

As of March 31, 2025, our External TLAC ratios were 24.64% on a risk-weighted assets basis and 9.16% on a total exposure basis. As of the same date, we were required to maintain External TLAC ratios of at least 18% on a risk-weighted assets basis and 7.10% on a total exposure basis. See “—B. Liquidity and Capital Resources—Capital Adequacy” below and “Item 4.B. Information on the Company—Business Overview—Supervision and Regulation—Japan—Total loss-absorbing capacity.”

Issuances of Basel III-Compliant Subordinated Debt

During the fiscal year ended March 31, 2025, we obtained ¥358.0 billion aggregate principal amount of perpetual subordinated Additional Tier 1 debt financing in the form of securities issuance and borrowings in Japan. In June 2025, we issued ¥280 billion aggregate principal amount of perpetual subordinated Additional Tier 1 debt in the form of securities in Japan. These securities and borrowings are subject to our discretion to cease interest payments and a write-down of the principal upon the occurrence of certain events, including when our Common Equity Tier 1 capital ratio declines below 5.125% (but, following any such write-down, the principal may be reinstated if the ratio improves and to the extent permitted by the Japanese banking regulator), when we are deemed to have reached the point of non-viability (“PONV”) or when we become subject to bankruptcy proceedings.

During the fiscal year ended March 31, 2025, we obtained ¥363.0 billion aggregate principal amount of subordinated term Tier 2 debt financing in the form of securities issuance and borrowings in Japan. We can be exempted from the obligation to pay principal of and interest on the securities or the borrowings, as applicable, when we are deemed to have reached the PONV.

According to the FSA’s approach, PONV will be deemed to have been reached when the Prime Minister of Japan, following deliberation by Japan’s Financial Response Crisis Council pursuant to the Deposit Insurance Act of Japan (“DIA”), confirms that Specified Item 2 Measures need to be applied to MUFG under circumstances where its liabilities exceed or are likely to exceed its assets, or it has suspended or is likely to suspend payment of its obligations.

Acquisition of Link Administration Holdings Limited

On May 16, 2024, Mitsubishi UFJ Trust and Banking acquired all of the issued shares of Link Administration Holdings Limited, an Australian pension and stock administration company, for ¥113.5 billion in cash. The company's corporate name has been changed to MUFG Pension & Market Services Holdings Limited.

The acquisition of the global pension and stock administration functions of MUFG Pension & Market Services Holdings Limited is expected to further enable MUFG to accelerate its global business expansion, with access to Australian pension funds and global corporate clients for the Global Investor Services Business to offer a broad range of financial solutions, allowing it to strengthen its global reach, develop growth opportunities and expand the business scale.

Acquisition of au Kabucom Securities and Sale of Shares of Jibun Bank

In January 2025, MUFG Bank acquired 49% of the shares of au Kabucom Securities Co., Ltd. held by au Financial Holdings Corporation, a wholly owned subsidiary of KDDI Corporation. As a result of this acquisition and the transfer of the remaining 51% of the shares of au Kabucom Securities held by Mitsubishi UFJ Securities Holdings to MUFG Bank, au Kabucom Securities became a wholly owned subsidiary of MUFG Bank. In February 2025, au Kabucom Securities was renamed “Mitsubishi UFJ eSmart Securities Co., Ltd.” See Note 2 to the consolidated financial statements for additional information.

These transactions are part of our strategy to streamline and strengthen the MUFG Group's online securities business, with an aim to gain a more competitive position in the industry.

We sold all of the shares of au Jibun Bank Corporation, a subsidiary of KDDI, that we held, representing 22% of the shares of the bank, to au Financial Holding in January 2025.

Acquisition of WealthNavi

In January 2025, MUFG Bank acquired 46,563,404 shares, taking into account the stock acquisition rights as well as the shares of common stock acquired in the aggregate, of WealthNavi Inc., a Japan-based online asset management service provider, through a tender offer conducted from December 2, 2024 through January 20, 2025. This acquisition transaction resulted in MUFG Bank holding 92.45% of the voting rights on WealthNavi, including the voting rights held by MUFG Bank prior to the transaction. MUFG Bank acquired the remaining shares of WealthNavi through a subsequent squeeze-out process and, on March 6, 2025, WealthNavi became a wholly owned subsidiary of MUFG Bank. The aggregate acquisition price was ¥98.8 billion.

Acquisition of Zenhoren

On April 10, 2025, Mitsubishi UFJ NICOS acquired 13,026,468 shares, representing 50.02% of the shares, of Zenhoren Co., Ltd., a rent guarantee company, for ¥13.0 billion through a tender offer conducted from February 17, 2025 through April 3, 2025. This transaction was part of the capital and business alliance agreement entered into among Mitsubishi UFJ NICOS, MUFG Bank and Zenhoren in February 2025. Mitsubishi UFJ NICOS has also agreed with Mitsubishi UFJ Factors Ltd., a wholly owned subsidiary of MUFG Bank, that Mitsubishi UFJ Factors would exercise the voting rights on the 384,615 shares, representing 1.48% of the shares, of Zenhoren it holds in accordance with the intentions of Mitsubishi UFJ NICOS. Consequently, on April 16, 2025, Zenhoren became a consolidated subsidiary of Mitsubishi UFJ NICOS.

Through this acquisition, Mitsubishi UFJ NICOS expects to be in a position to integrate its credit card services with Zenhoren’s rent guarantee services, enabling it to enhance the functionality of the credit cards it offers to customers and cross-sell its services to Zenhoren's customer base.

Acquisition of Shares of JACCS through a Third-Party Allotment

In March 2025, MUFG Bank agreed to acquire 9,980,831 newly issued shares of common stock of JACCS Co., Ltd., an equity-method investee of MUFG Bank, through a third-party allotment transaction for approximately ¥39.0 billion.

This transaction is expected to result in MUFG Bank’s shareholding ratio increasing to 37.72% and the aggregate voting rights held by MUFG Group companies, including MUFG Bank, increasing to 40.00%. The transaction is currently expected to close by the end of September 2025. Following the completion of the transaction, MUFG Bank plans to nominate two representatives to serve on the board of directors of JACCS. JACCS is expected to remain an equity-method investee of MUFG Bank.

The transaction is part of the capital and business alliance agreement between MUFG Bank and JACCS to expand, deepen and strengthen the existing collaborative relationship between the parties.