English Translation of Excerpts from Shelf Registration Supplemental Documents Filed in
Japan
This document is an English translation of the risk factor disclosure included in the Shelf Registration Supplemental Documents
filed by Mitsubishi UFJ Financial Group, Inc. (MUFG or we) with the Kanto Local Financial Bureau, the Ministry of Finance of Japan, on May 26, 2023 (the Shelf Registration Supplemental Documents).
The Shelf Registration Supplemental Documents have been prepared and filed in Japan in accordance with applicable Japanese disclosure
requirements. In addition, the Shelf Registration Supplemental Documents contain updates to prior disclosures filed by MUFG in Japan and discuss selected recent developments in the context of those prior disclosures. Accordingly, you may need to
review the following risk factor disclosure, together with other prior disclosures, to obtain all of the information that is important to you. For a more complete discussion of the background to information provided below, please see our annual
report on Form 20-F for the fiscal year ended March 31, 2022, and other reports filed with or submitted to the U.S. Securities and Exchange Commission by MUFG.
The following disclosure contains forward-looking statements, which, unless specifically stated otherwise, reflect our understanding as of the
date of filing of the Shelf Registration Supplemental Documents. Actual results may significantly differ from those expressed or implied by such forward-looking statements. In addition, although the Risk Committee identified the top risks below,
there may be other material risks that emerge as we operate our businesses.
Risks Relating to Our Business
We describe below some major developments and changes to update our risk factor disclosure previously included in our annual securities report
for the fiscal year ended March 31, 2022, filed in Japan on June 27, 2022, and our quarterly securities report for the nine months ended December 31, 2022 filed in Japan on February 14, 2023. With the completion of the transfer
of shares in MUFG Union Bank, N.A., we deem Risks relating to the sale of MUFG Union Bank, N.A. included in our quarterly securities report for the six months ended September 30, 2022, filed in Japan on November 29, 2022, no
longer significant. The updates below are not a complete update of the prior disclosure, but instead intended to explain only the significant developments and changes that we believe may have a material impact on the risks to our business and other
risks. The discussion below contains forward-looking statements, which, unless specifically described otherwise, reflect our understanding as of the date of filing of the Shelf Registration Supplemental Documents.
The numbering of the subheading of the risk disclosure below corresponds to the numbering of the subheading of the same risk disclosure in our
most recent annual securities report filed in Japan.
We determine the significance of various risk scenarios based on their impact and
probability and identify potential risk events that are deemed to require close monitoring and attention for the next one-year period as top risks. The main top risks identified by our Risk Committee in March
2023 are as follows. By identifying these top risks, we seek to implement necessary risk management measures designed to minimize such risks to the extent possible and manage them in such a manner that they can be agilely dealt with in the event
that they materialize. In addition, through managements participation in discussions on such top risks, we strive to take effective measures based on a shared assessment of risks.
Main Top Risks
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Risk events |
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Risk scenarios |
A decline in capital sufficiency/an increase in risk assets |
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Our capital management may be adversely affected by an increase in unrealized losses on debt
securities due to a rise in interest rates globally. |
Foreign currency liquidity risk |
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Deterioration in market conditions may result in a depletion of foreign currency funding
liquidity and an increase in our foreign currency funding costs. |
An increase in credit costs |
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Sudden deterioration in global economic activities may result in an increase in our credit
costs. Deterioration in the credit quality of particular industries or counterparties, to
which we have relatively larger exposures, may result in an increase in our credit costs. |
IT risk |
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Cyber-attacks may result in customer information leakage, suspension of our services, and
reputational damage. System problems may result in our payment of financial compensation and
damage to our reputation. |
Risks relating to climate changes |
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If our efforts to address climate change-related risks or to make appropriate disclosure are
deemed insufficient, our corporate value may be impaired. Our credit portfolio may be
adversely affected by the negative impact of climate change on our borrowers and transaction counterparties. |
* |
These risk events are among the risk events that were reported to MUFGs Board of Directors following the
Risk Committees discussion in March 2023. These risk events include risk events of general applicability. |
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