On Feb 14, 2013, we reiterated our long-term recommendation on
Mitsubishi UFJ Financial Group Inc.
) at Neutral. This reflects the company's strong capital position
backed by a solid deposits base. However, increasing expenses and
credit costs remain matters of concern.
BANCO BILBAO VZ (BBVA): Free Stock Analysis
BANCO FRANC-ADR (BFR): Free Stock Analysis
MITSUBISHI-UFJ (MTU): Free Stock Analysis
SHINHAN FIN-ADR (SHG): Free Stock Analysis
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Mitsubishi UFJ's deposits climbed to ¥126.9 trillion ($1.5
trillion) as of Dec 31, 2012, from ¥124.8 trillion ($1.5
trillion) as of Mar 31, 2012 and from ¥125.1 trillion ($1.6
trillion) as of Sep 30, 2012, mainly due to an increase in
individual, overseas and others deposits.
As of Dec 31, 2012, Mitsubishi UFJ reported total loans of ¥87.1
trillion ($1.0 trillion), up from ¥84.6 trillion ($1.0 trillion)
as of Mar 31, 2012 and from ¥84.8 trillion ($1.1 trillion) as of
Sep 30, 2012. These increases were primarily due to higher demand
in domestic corporate loans and overseas loans. This depicts the
company's strong capital position and reflects organic growth.
However, Mitsubishi UFJ reported net income of ¥532.5 billion
($6.7 billion) for the 9 months ended fiscal 2013 (Dec 31, 2012),
down from net income of ¥815.8 billion ($10.4 billion) in the
year-ago period. Results reflect a rise in G&A expenses and
decline in net interest income. Moreover, elevated credit costs
were a negative for the quarter.
Following fiscal third-quarter 2013 results, the Zacks Consensus
Estimate for fiscal 2013 has gone down 3.6% to 54 cents per
share. However, the Zacks Consensus Estimate for fiscal 2014
surged 3.7% to 56 cents per share. With the Zacks Consensus
Estimates going down for fiscal 2013 and up for fiscal 2014, the
company now has a Zacks Rank #4 (Sell).
Other Major Foreign Banks to Consider
Among foreign banks that are currently performing well include
Banco Bilbao Vizcaya Argentaria, S.A.
BBVA Banco Franc
Shinhan Financial Group Company Limited
). All these companies carry a Zacks Rank #1 (Strong Buy).