MUFG Report 2019 Integrated Report Mitsubishi UFJ Financial Group Editorial Overview Who We Are We, Mitsubishi UFJ Financial Group, or MUFG, have compiled our integrated report, MUFG Report 2019, in order to explain our efforts to create sustained value to our investors and other stakeholders. Referencing the framework provided by the International Integrated Corporate Vision Reporting Council (IIRC),* this report introduces our business model through the opening section (“Who We Are”), and explains the methods we have used to create sustainable value through “Value Creation Initiatives,” “Important Issues Concerning Value Creation” and “Foundations of Value.” Further details on our initiatives for addressing ESG issues are available on our website. * A private-sector foundation established in 2010 by companies, investors, accounting organizations and administrative agencies to develop an international framework for corporate reporting. Our The corporate vision serves as the basic policy in mission conducting our business activities, and provides Important Issues Concerning Value Creation guidelines for all group activities. Who We Are P. 1 How MUFG Addresses ESG Issues P. 64 The corporate vision also is the foundation for Our vision P. 1 Corporate Vision Initiatives for Addressing ESG Issues management decisions, including the formulation of P. 65 Corporate Vision toward Sustainable Growth P. 2 MUFG Value Creation Process management strategies and management plans, and P. 68 Environmental Initiatives P. 4 History of MUFG serves as the core value for all employees. P. 72 Social Contributions Our values P. 6 Financial Highlights P. 78 Upgrading the Governance Framework P. 8 ESG Highlights Management Message P. 10 Foundations of Value P. 90 MUFG has established Principles of Ethics and Conduct based on its Corporate Vision. These Responsibility Ethical and Customer as a Corporate Dynamic P. 92 Communicating with Stakeholders Focus P. 10 Message from the CEO principles provide standards for all MUFG Citizen Workplace P. 94 Risk Management and Conduct P. 22 An Interview with an Outside Director employees to guide their decisions and actions. Principles of Ethics How we act to realize the Corporate Vision P. 98 Compliance P. 26 Message from the CFO P. 100 Internal Audit Value Creation Initiatives P. 101 Responding to Global Financial Regulations Business Overview P. 36 Financial Data / Corporate Data P. 102 P. 38 Retail & Commercial Banking Business Group P. 42 Japanese Corporate & Investment Banking Business Group P. 102 Ten-Year Summary of Major Financial Data P. 46 Global Corporate & Investment Banking Business Group P. 104 Consolidated Financial Statements P. 50 Global Commercial Banking Business Group P. 108 Company Overview To be a foundation of strength, committed to meeting the needs P. 54 Asset Management & Investor Services Business Group of our customers, serving society, and fostering shared and P. 58 Global Markets Business Group sustainable growth for a better world. P. 62 Initiatives to Utilize Digital Technologies Our mission Definitions of Specific Terms Used in This Report Be the world’s most trusted financial group MUFG: Mitsubishi UFJ Financial Group, Inc. R&C: Retail & Commercial Banking Business Group the Bank: MUFG Bank, Ltd. JCIB: Japanese Corporate & Investment Banking Business Group 1. Work together to exceed the expectations of our customers the Trust Bank: Mitsubishi UFJ Trust and Banking Corporation GCIB: Global Corporate & Investment Banking Business Group 2. Provide reliable and constant support to our customers the Securities Business: Mitsubishi UFJ Securities Holdings Co., Ltd. GCB: Global Commercial Banking Business Group and its subsidiaries AM/IS: Asset Management & Investor Services Business Group Our vision 3. Expand and strengthen our global presence MUMSS: Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. Global Markets: Global Markets Business Group MUAH: MUFG Americas Holdings Corporation Krungsri: Bank of Ayudhya Public Company Limited Bank Danamon: PT Bank Danamon Indonesia, Tbk. CFSGAM: Colonial First State Global Asset Management 1. Integrity and Responsibility 2. Professionalism and Teamwork Disclaimer 3. Challenge Ourselves to Grow This report contains forward-looking statements with regard to the expectations, forecasts, targets and plans of Mitsubishi UFJ Financial Group, Inc. (“MUFG”) and its subsidiaries and affiliates (collectively, “the Group”). These forward-looking statements are based on information currently available to the Group and are stated in this document on the basis of the outlook at the time that this document was produced. In producing these forward-looking statements certain assumptions (premises) Our values have been utilized that are subjective and may prove to be incorrect. Should any underlying assumption provide to be incorrect, actual results in the future may vary materially from some of the forward-looking statements in this document. The Group has no obligation or intent to update any forward-looking statements contained in this document. In addition, information on companies and other entities outside the Group that is included in this document has been obtained from publicly Details on our corporate vision are available on our website. https://www.mufg.jp/english/profile/philosophy available information and other sources. The accuracy and appropriateness of that information has not been verified by the Group and cannot be guaranteed. All figures contained in this report are calculated according to generally accepted accounting principles in Japan, unless otherwise noted. MUFG Report 2019 1 Who We Are MUFG Value Creation Process Sustainable growth backed by business activities aimed at providing solutions for issues society is confronting Social Issues MUFG Value delivered to stakeholders Global economy Shareholders Enhance our new business model • Countering low economic growth in Invested capital Business models via the MUFG Re-Imagining Strategy • Further enhancing developed countries and slowing shareholder returns growth in emerging nations A groupwide integrated • Global warming & climate change management approach that is p. 30 • Adapting to widespread simple, speedy and transparent digitalization Groupwide • Social infrastructure integrated operations Commercial • Political and geopolitical risks Banking Human Retail & Commercial Customers capital p. 38 41 Banking • Services beyond Domestic economy Strategic investment aimed at seizing expectations • Declining birthrate and aging Japanese Corporate & opportunities arising population p. 42 45 from market growth p. 38 63, p. 93 • Ongoing de­lationary trend Investment Banking • Reforming investment chains Investment Intellectual Banking • Invigorating regional economies Global Corporate & • Workstyle reforms capital p. 46 49 Corporate Investment Banking governance Environment and society framework Retail Business Global Commercial • Initiatives to help realize • Stable asset building p. 50 53 Banking environmental and • Securing the smooth succession of Risk appetite assets for the next generation Social and framework AM / IS social sustainability relationship Asset Management & capital p. 54 57 p. 66 73 Corporate Business Investor Services Culture of compliance • Corporate governance reforms Employees • Securing business succession in light of an aging generation of Global Markets p. 58 61 Initiatives to • HR systems to assist corporate managers Global • Establishing and executing sound Financial address environmental employees in the pursuit and social issues Markets growth strategies (globalization, capital of professional success M&A and the expansion of sales channels) p. 74 77 Contributing to the betterment of society Committed engagement with stakeholders p. 92 93 Priority environmental and social issues determined by MUFG in reference to such international norms as United Nations Sustainable Development Goals (SDGs) Invested capital Aging population & Business incubation & Social infrastructure & • 180,000 domestic and overseas employees with diverse • Extensive customer base (34 million individual 1 low birth rate 2 job creation 3 town planning backgrounds customers and 1.3 million corporate customers in Japan) Human Social and capital • Wealth of human resources boasting professional skills relationship • Global network (600 domestic bases and approximately • Strong employee engagement capital 3,000 overseas bases in more than 50 countries) Global warming & Financial innovation Workstyle reforms 4 climate change 5 6 • Expertise in the global ­inancial business • Solid balance sheet • Open innovation aimed at incorporating external insights • Diversi­ied pro­it structure Intellectual Financial capital capital • Stable procurement bases at home and abroad 7 Cross-sectoral environment and social issues 2 MUFG Report 2019 MUFG Report 2019 3 Who We Are History of MUFG The Medium-Term Business Plan announced (Fiscal 2018 – 2020) The MUFG Basic Policy for The Eleven Transformation Initiatives Among MUFG’s precursors, the oldest dates back approximately 360 years. Over this long span of time, ・MUFG Corporate Governance Fiduciary Duties established were formulated to specify strategic Policies established measures to realize the goal of the our commitment to addressing customer needs has remained unchanged, weathering the course of The formulation of common guidelines for the MUFG Re-Imagining Strategy. mergers prompted by recurring periods of social change and economic adversity, including