TOKYO: Mitsubishi UFJ Financial Group (MUFG) said Friday its nine-month net profit fell as Japan's banking sector grapples with the central bank's negative interest rate policy.
MUFG booked a net profit of 786.9 billion yen ($7.0 billion) for April-December, down 7.7 percent from the same period last year.
MUFG, one of the nation's "mega banks," maintained its net profit forecast at 850 billion yen for the year to March.
The banking sector has seen profits squeezed after the Bank of Japan last year adopted a negative interest rate policy to work alongside its massive asset-purchase programme as part of a drive to kickstart bank lending and inflation.
The policy means that banks parking their money with the central bank are actually charged for doing so. By penalising the banks for hoarding their cash, a central bank can give them the incentive to loan the money out.
Some critics, however, blasted the move as a desperate act following the failure of years of stimulus, while banking shares were battered as it hit their bottom lines.
Earlier this week, rival Mizuho Financial Group reported that its net profit fell 2.8 percent to 504.7 billion yen.
Mizuho also left its full-year forecast unchanged.
Sumitomo Mitsui Financial Group said last week its net profit sank 13.0 percent to 544.7 billion yen.
Japan's banking system has undergone huge changes over the past two decades, including numerous mergers that have lead to a sharply reduced number of large institutions.
Years of ultra-low interest rates have pressured profitability and pushed them to seek expansion overseas.
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