MUFG Consumer Finance Strategy

September 28, 2007 Mitsubishi UFJ Financial Group

0 This document contains forward-looking statements in regard to forecasts, targets and plans of Mitsubishi UFJ Financial Group, Inc. (“MUFG”) and its respective group companies (collectively, “the group”). These forward-looking statements are based on information currently available to the group and are stated here on the basis of the outlook at the time that this document was produced. In addition, in producing these statements certain assumptions (premises) have been utilized. These statements and assumptions (premises) are subjective and may prove to be incorrect and may not be realized in the future. Underlying such circumstances are a large number of risks and uncertainties. Please see other disclosure and public filings made or will be made by MUFG and the other companies comprising the group, including the latest kessantanshin, the Form 20F financial reports, Japanese securities reports and annual reports, for additional information regarding such risks and uncertainties. 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 recorded in this document has been obtained from publicly available information and other sources. The accuracy and appropriateness of that information has not been verified by the group and cannot be guaranteed. The financial information used in this document was prepared in accordance with accounting standards generally accepted in Japan, or Japanese GAAP.

1 Contents

1. Outline of MUFG’s Retail Business 2. Trends in the Consumer Finance Market 3. Announced plans （1） Summary of announced plans （2） Implications for JACCS and its installment credit business （3） Implications for Mitsubishi UFJ NICOS （4） Thorough measures to shift to proactive approach （5） Credit Card business as MUFG’s core business alongside banking , trust banking and securities 4. MUFG’s Consumer Finance Business Formation 5. MUFG’s Credit Card Business: Outline and strengths （1） Bank-issued credit cards （2） Cost competitiveness through maximizing share and concentrating functionalities of systems / operations （3） Summary 6. MUFG’s Consumer Loan Business 7. Growth outlook for MUFG’s Consumer Finance Business

2 1. Outline of MUFG’s Retail Business

—Overall Customer assets : ¥ 90 tn —Consumer finance —Loans (End Jul. 07) (+¥4 tn YoY) ¾BTMU non-consolidated □Housing loans: ¥2.6 tn extended in FY06 □Steady increase in Comprehensive Card members □Housing loan balance at End Jun. 07 : ¥17 tn ¾Retail deposits (1.7 mn cards at End Aug. 07) +¥0.1 tn YoY excluding securitization □Steady growth □Plan to release new personal loan products □7 serious illnesses product: Over ¥1 tn in a year : Balance (End Jun. 07) : ¥62 tn □Consolidated loan promotion offices to boost

Business promotion (+¥1.3 tn YoY) ¾BTMU consolidated (Mitsubishi UFJ NICOS) efficiency (189 at time of integration→132) □Japan’s largest card company ¾Bank/Trust bank cooperation ¾Investment products (FY06 Gross billings ¥7.1 tn, 26 mn members at End Mar. 07) (Inheritance business) □Steady growth in sales (sales of 3 investment □Sep 20 announced full-scale structural reform □40 MUTB staff seconded to BTMU products FY05: ¥4.1 tn; FY06: ¥4.7 tn) →To become wholly-owned subsidiary of MUFG □Preparing for full deregulation of ¾Fees & commissions: Strengthen business insurance products sales ¾ACOM base /improve customer satisfaction □Returning excess interest □Abolished transfer fees (BTMU/MUTB) May 06 □Reduced interest on new loans (June), actively □Reduced CVS ATM usage fees (BTMU) Mar. 07 —Combined banking/Securities model moving customers to new rates ¾Channels: No. of Branches MUFG 871, □FY07 Q1 profits +20% YoY (securities intermediation) (of which BTMU: 671) □635 staff seconded from MUS to BTMU ¾JACCS □MUFG PLAZA 63 branches (Plan to grow to 100) □ □ FY06 sales ¥900 bn, major contribution to growth taking over installment credit business of NICOS PBO 13 (Plan to grow to 30) □ □CVS ATM (25,000) of MUS business base (customer assets) Joining the Group (as equity method affiliate) □Strong increase in accounts (#190,000) ¾DC CashOne, Mobit, etc. ¾Marketing □Strong sales of JGBs for individuals □Steadily growing balances under interest rate □Launch new products and services （ MUFG total FY06 sales of ¥700bn) restriction law □Strengthen database marketing

New companies ¾Internet strategy 1 ¾Internet strategy 2 ¾Segment strategy ¾Loan strategy ¾Regional strategy 9kabu.com Securities 9DeNA 9MU Merrill Lynch PB Securities 9Japan Housing Finance Agency 9Strengthen tie-ups with Alliances/ □TOB implemented (Apr. 07) □PAYGENT established/ Net launched (May 06) □Released joint securitization partner regional banks □Bank agency business (Apr. 07) settlement business (Aug. 06) □Strong performance scheme 9Strengthen alliance with □Consolidated sub. (Jun. 07) □ JA (Norinchukin) 9KDDI 9Walt Disney 9JTB As a result developing alliances □MNB preparatory co. established □Joint net branch launched □QLC steady starting with regional banks, Norinchukin, etc. 9Pursue Kyushu and Chubu (May 06) (May 07) 9Walt Disney (May 07) 9Alliances with major housebuilders strategies □MNB to start business □Aim to expand business with young □Strengthen sales route via (planned H1 2008) /female customers housing brokers Internal control Internal ¾Organization/ Staffing ¾Internal control ¾CS ¾ES ¾Staff development □Area administrators assigned □Enhancing customer response □Since integration a total of 37,000 □HQ staff reduced by around 700 □ □Two-way communication etc. Respond to Financial gathering system since integration □Introduce standard staff received average 2.1 days of Instruments and Exchange Law □trying to improve customer training →reassigned to front lines (BTMU) □Strengthen controls at major waiting time business hours □Commencing personally tailored affiliate companies □Formulated “10 promises to customers” curricula Day2 preparations: Full scale response including informing customers, branch staff training, etc

3 2. Trends in the Consumer Finance Market z The credit card market is expected to enter a major growth phase 1. Expanding business in new settlement areas and through new channels 2. Enhanced profitability through shift from consumer loans to revolving credit z Increased card payments for utilities, tax, insurance, pensions, medical expenses, etc. →Expanding opportunities for bank-type financial institutions z Low past liabilities (return of excess interest, reduced interest rates) and sound compliance are vital competitive advantages Market Growth scale potential Expanding opportunities for bank-type (Volume*) financial institutions

Settlement ShoppingShopping z No liabilities for return of excess interest z Cost competitiveness (not single product sales) New settlement areas z Shift from money transfer to card payment New settlement areas z Customer information and marketing Credit cards Credit cards zzUtility,Utility, pension,pension, insurance,insurance, ¥32 tn medicalmedical feefee paymentspayments z Sales foundations and network New channels New channels Expand mobile phone channel zzMobileMobile phone,phone, internetinternet

RevolvingRevolving creditcredit ¥3 tn Increasing along with higher use of cards

CashCash Advancement/loansAdvancement/loans ¥8 tn Affected by operating environment Shrinking market. Sound compliance essential but still an ¥8 tn market including high priced house InstallmentInstallment creditcredit ¥10 tn appliances etc. Merit for remaining players depends

Transactions on low past liabilities + strength in compliance and cost control

CardCard loansloans ¥3 tn Competition intensifying

Market shrinking. But core demand stable. Key points are ability to make profit at interest rates ConsumerConsumer loansloans ¥10 tn below the upper limit and strong compliance management.

BankBank loansloans ¥4 tn Brand and cost structure provide competitive edge (Total: ¥ 68 tn)

* Source: Japan Consumer Credit Industry Asso 4

ciation, Consumer Credit Statistics 3-(1) Summary of announced plans

¾ Reorganization of Mitsubishi UFJ NICOS/JACCS operations ⇒ Transform earnings and cost structure of both JACCS and Mitsubishi UFJ NICOS to sharply boost competitiveness ¾ Mitsubishi UFJ NICOS - Thorough measures to shift to proactive approach ¾ Build credit card business as MUFG’s core business, alongside banking, trust banking and securities

5 3-(2) Implications for JACCS and its installment credit business

Mitsubishi UFJ NICOS Advantages, benefits to JACCS Inherited by Current installment JACCS credit business 1. Large benefits from integration of installment credit business 9 Inherit business after streamlining cost structure in Mitsubishi UFJ NICOS Sales Sales ⇒Estimated ¥8 bn of integration benefits mainly from cost synergies

JACCS 9 Become top installment credit company Consider effects of in both quantity and quality Locations/ integrating and streamlining; 2. Immediate strategic expansion possible: Personnel Locations/ Inherit truly vital JACCS has few instances of excess interest locations and Mitsubishi UFJ NICOS returns; had completed lowering interest Personnel personnel; Transfer of installment Dramatically boost rates credit business will allow profitability and thorough rationalization 3. Further cost reduction expected through ⇒ efficiency of installment Company-wide Credit card credit business coordination with Mitsubishi UFJ NICOS in reinforcement of cost processing card processing, etc. (approx. ¥3 bn) structure operations 4. In addition to the current business objective Boost comprehensive Concentrate Reduce (”Management Objectives for the Upcoming credit card functions in JACCS processing Three Years”), substantial increase in operations and Mitsubishi cost earnings UFJ NICOS earnings possible by adding this business and capital alliance Aiming for ¥20 bn+ ordinary income in FY12 (historical record in FY05 was ¥15.1 bn)

Source: Press release by JACCS announced Sep.20 2007 6 3-(3) Implications for Mitsubishi UFJ NICOS(1)

Advantages, benefits to Mitsubishi UFJ NICOS

Mitsubishi UFJ NICOS 1. Improve cost structure dramatically by transferring Current installment Inherited by installment credit business to JACCS credit business JACCS 9 Substantially reduce locations and personnel by specializing in credit card business 9 Revisions of unprofitable card business alliances making steady progress, following current Sales Sales medium-term business plan

JACCS 2. Coordination benefit expected by insourcing JACCS Consider effects of credit card processing, etc integrating and 3. Aim to drastically boost capital for strategic investment Mitsubishi UFJ NICOS Locations/ streamlining; focused on credit card business Transfer of installment Personnel inherit truly vital Locations/ locations and 4. Complete responses to changes in environment such as credit business will allow excess interest repayment liabilities, etc., toward thorough rationalization Personnel personnel; dramatically boost proactive strategic development ⇒Company-wide profitability and reinforcement of cost 5. Use this opportunity to develop new brand, “MUFG efficiency of Card”. Reinforce alliance with Norinchukin and JA Bank; structure Credit card installment credit processing business focus on growth markets operations 100 100.0 Boost comprehensive Concentrate credit card Ordinary income functions in 80 Toward ordinary operations and JACCS Reduce (\bn） Mitsubishi earnings processing income of ¥100 bn UFJ NICOS 60 cost 45.9 38.2 40 23.2 21.5 20

(54.3) 0

(target) (target) (target) (target) (target) FY06 (results) FY07 FY08 FY09 FY10 Mid-long term Source: Press release by Mitsubishi UFJ NICOS announced Sep.20 2007 7 3-(4) Implication(2): Thorough measures to shift to proactive approach

ResponseResponse to to changes changes in in environment environment ResponseResponse to to structural structural reform reform Allowance for repayment of excess interest Transfer of installment credit business ¾Number of claims received has stabilized to JACCS–an opportunity for transformation in operating structure (1st ＞2nd quarter) ¾Toward a business management system ¾However, a conservative estimate involving the continuation of a 30% increase in specializing in credit card business repayments over 1 year lead to 5 year ¾ Accelerate integration of locations allowance and business centers (134⇒47) ¾ Interest rates on new loans reduced to ¾Decided to integrate six regional subsidiaries with parent company within Interest rate restriction law in April ※ Sweeping personnel reductions Expected to complete for existing loans ¾ Substantial increase in numbers originally within 2 years planned for personnel reduction to follow installment credit business transfer Allowance for credit losses (1,400 increased to 2,890 over 3 years, ¾Advanced increase in credit loss reserve with 2,300 occurring in FY07) since change to bank provision standard in ’04 ⇒ Record one-time expense of ¥58.6 bn as ¾Increase preparing for higher risk of debt structural reform allowance in interim period reorganization, at this time provided for in same timing as increase in allowance for excess interest repayment Strengthen capital by ¥120 bn to secure capital for strategic investment Rapid growth as new Mitsubishi UFJ NICOS — aim for dramatic increase in corporate value —

8 3-(5) Credit Card business as MUFG’s core business alongside banking, trust banking and securities

Current Post-event

Retail MUFG MUFG alliance Norinchukin Bank

Discussion Capital / Business alliance about making MUN an equity method affiliate

Card Bank Trust bank Securities Bank Trust bank Securities Mitsubishi UFJ MUTB MUS MUTB MUS BTMU BTMU NICOS

Card Mitsubishi UFJ NICOS • Looking ahead, the credit card business, with its strong growth potential, is positioned alongside banking, trust banking and securities as MUFG’s core business domain • Mitsubishi UFJ NICOS will be a direct subsidiary of MUFG that will be able to fully leverage group synergies such as the brand, channels, etc. • Develop and maintain the Norinchukin Bank and Mitsubishi UFJ NICOS capital alliance, consider and discuss making a Mitsubishi UFJ NICOS an equity method affiliate of Norinchukin Bank

9 4. MUFG’s Consumer Finance Business Formation z Create a leading company in each area and meet expanding, diversifying customers needs z Accelerate and take the lead with a consumer finance business matched to a new era

Bank customers MUFG Other customers 40 mn Make 100% Norinchukin/ JA Bank: 38 mn accounts

Credit cards subsidiary Continue business and capital alliance BTMU Full roll-out of JA card →May make equity method affiliate Mitsubishi UFJ NICOS JACCS Has issued approx. 1.7mn Japan’s largest card company bank-issued credit cards Business Cards issued: 9 mn Cards issued: 26 mn Support bank-issued card alliance Gross billings: ¥900 bn business Gross billings ¥7.1 tn Installment

credit Make equity method affiliate; Gross billings Gross billings business alliance ¥420 bn ＋ ¥860 bn (Investment ratio:20%) Business succeeded by JACCS: ¥1.28 tn→ One of Japan’s leading installment credit Companies

Consumer Consumer Unsecured card Unsecured loan balance: ACOM Unsecured card

loan loan balance ¥600 bn Loan balance ¥1.4 tn ¥320 bn loan balance ¥120 bn DC CashOne: Loan Mobit: Loan balance balance ¥80 bn ¥240 bn

* Figures are as of FY06, except bank-issued credit cards, end of Aug 07 10 5. MUFG’s Credit Card Business: Outline and strengths

bank customers High potential Other customers 40 mn MUFG Norinchukin/ JA Bank:38 mn accounts BTMU Make 100% subsidiary Full roll-out of JA card Continue business and capital alliance 本体発行カード →May make equity method affiliate Has issued累計発行枚数 approx. 1.7mn bank-issued約160 credit万枚 cards Mitsubishi UFJ NICOS JACCS Business Support bank-issued card alliance Japan’s largest card company Cards issued: 9 mn business Cards issued: 26 mn Gross billings: ¥900 bn Gross billings: ¥7.1 tn

zNorinchukin/ JA Bank business and capital A major opportunity for bank-type alliance financial institutions 9 Extremely high potential 9 Increased use by senior citizens for healthcare, travel, etc. 9 Full-scale roll-out of JA Card + zNo.1 in Japan with 26 mn cardholders z Bank-issued credit cards (3 mn new cardholders per year) Only mega bank with own bank-issued credit focus on “MUFG Card” as strategy for next- card—numbers issued and rate of use already generation credit card exceeding internal plans z Solid business foundation in place for transport, Boost cost efficiency by outsourcing processing healthcare, etc. and merchant acquiring operations to MUN z Plan to expand mobile channels z Compatible with 4 international brands (AMEX, etc.) 11 5-(1) MUFG’s Credit Card Business: Outline and strengths - Bank-issued credit cards z Bank-issued credit card ＝ Global standard ～ Strengths of bank-type financial institutions → significant opportunity 9 Develop sales by leveraging the bank’s customer base and network 9 Proceed with shift to card settlements from money transfers 9 Enhance marketing by using customer information 9 Cost competitiveness derived from bank’s financial strength (multi products sales, funding cost, etc.) 9 Bank has no burden of returning excess interest, etc. Profit potential of the bank-issued card No. of cards issued 1 to 1.5 mn cards issued annually ⇒Aiming for as early as possible No. of cards issued: balance of 5 mn cards Approx. 1.7 mn (current) Gross billings Gross Billings Targeting ¥800 to ¥900 bn (@¥300,000) Approx. ¥200 bn ⇒Aiming to reach ¥1.5 tn (FY07 forecast) as early as possible Impact on revenues Targeting annual revenues of ¥20 bn ⇒Aiming for the ¥40 bn level as early as possible

12 5-(2) MUFG’s Credit Card Business: Outline and strengths - Cost competitiveness through maximizing share and concentrating functionalities of systems/operations z In a high growth market pursuing market share expansion (diversity of issuers) z Increase cost competitiveness through optimum combination of operations and systems

BTMU Mitsubishi UFJ Norinchukin / Bank issued NICOS (26 mn members) JA Bank JACCS (40 mn accounts) (38 mn customers) + (9 mn members) ¥7.1 tn (excluding FC) Almost 1.7 mn members Aiming for 2 mn members in ¥8.3 tn (including FC) 1-1.5 mn annual increase 2 years Cooperation Mobile Net Bank Issuing (Issue / recruit members) KDDI Expand overall share by growing footprint (25 mn to include Group and strategic alliance customers) partners ＜MUFG strengths＞ Processing (systems / operations) z Large scale and growth Reduce costs by concentrating potential of issue functionalities (member) share, (strong growth market) Mitsubishi z Also expand mobile UFJ NICOS phone channel z Leverage benefits of the scale of issue (member) share, establish a cost JCB advantage 9 Concentrate Joint system development functionalities Cost share 9 Share system development costs

13 5-(3) MUFG’s Credit Card Business: Outline and strengths - Summary

Strengthening Bank-issued Comprehensive credit Ability to grow Responsibilities the cost card company and structure for credit cards –a core operation market share functionalities environmental change ‡ Unique to ‡Top company ‡Strengths in ‡Concentrate MUFG/BTMU 26 mn members, future expanding functionalities for among the three ¥7.1 tn billings markets such as processing mega-banks transportation, and merchant ‡Significant market medical, etc. acquiring operations ‡ High growth potential of major ‡Alliances and within MUN potential financial groups issues with top Thorough (JA Bank) other players in each ‡Joint system measures than MUFG industry development taken this time ‡ Processing / ‡Mobile phone project with Merchant ‡Make wholly channel: KDDI and MUN and JCB acquiring owned subsidiary of BTMU are operations MUFG preparing a Mobile outsourced to MUN Net Bank

+

Responding to interest rate law; Compliance Group Compliance Committee, Reduction of all interest rates on new lending completed, Mitsubishi UFJ NICOS and ACOM actively inviting existing customers to switch to lower interest rate loans

14 6. MUFG Consumer Loan Business MUFG 40 mn bank customers Other customers An equity method affiliate company, Mobit ¥240 bn business alliance implemented (Investment ratio: 15%) BTMU ACOM MUN JACCS Unsecured loan DC Cash One Balance ¥600 bn ¥80 bn Loan balance Unsecured Unsecured card loan card loan ¥1.4 tn balance ¥320 bn balance ¥120 bn Launch new product （Planned)

Operating environment Development with ACOM based on cooperation ¾ Effects of the Amendment of the ☆ Plan to launch new product through cooperation Money-Lending Business Control between BTMU and ACOM and Regulation Law were tough, ☆ Acquisition of Indonesian bank however core demand remains ☆ Acom stable ¾ June: rates on new lending reduced within legal limits, actively proposing shift to new rates to existing quality ¾ Shift of excess demand due to clients; leading industry in compliance volume regulations and brand ¾FY06 reported allowance for excess interest return of ¥490 selection are advantages for bn bank-type institutions ¾FY07 forecast: ¥51.6 bn ordinary income, ¥47.0 bn net income (FY07 Q1 results: ¥13.2 bn net income)

Source: Press release, etc. by ACOM 15 7. Growth outlook for MUFG’s Consumer Finance Business z Comprehensive response means that effect on net income is bottoming out Impact in FY06 FY07 (forecast) Change (forecast)

ACOM +7.0 ACOM -95.0(15％ holding) ACOM +102.0 MUN from -70 to -80 MUN -34.5 MUN from -35.5 to -45.5＋α ＋α（VisaIPO, etc.) Total -¥129.5 bn Total from -¥63bn Total from ＋¥60bn to -¥73bn＋α to ¥70bn＋α z Post-FY08 operations growth forecast Aiming for ordinary income of MUN ¥45.9bn in three years Targeting ¥100bn in medium/long-term Targeting ordinary income JACCS* of ¥20bn in five years

Bank-issued cards Aiming for an additional ¥20bn gross profit Targeting +¥40bn in 4 - 5 years

New small-lot loan Target ¥10 bn gross profit in the fifth year bank products

*The Bank of Tokyo-Mitsubishi UFJ expects to make JACCS an equity method affiliate company during FY07 16