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Mitsubishi UFJ (MUFG) Repurchases 35.3M Shares Under 600M Plan

·3 min read

Progressing with its share buyback activities, Mitsubishi UFJ Financial Group, Inc. MUFG announced that from May 17 through May 31, 2022, it repurchased 35,303,700 shares of its common stock.

It carried out the repurchases for ¥25,760,524,597. The repurchases were carried out through the company’s ¥300-billion share repurchase program announced on May 16, 2022. The plan authorizes the company to buy back up to 600,000,000 shares, indicating 4.7% of total shares outstanding (excluding treasury stock).

The company seeks to continuously improve shareholder return and increase capital efficiency. To achieve this, it takes into consideration its business performance and capital situation, opportunities for investment in growth, and market conditions, including share price.

Since May 2017, the company has completed share-repurchase programs that have also enhanced shareholder value and facilitated flexible capital policy implementations in response to changes in the business environment. In February 2022, MUFG repurchased shares worth ¥41.4 billion.

Share buybacks aside, MUFG increased its dividend forecast for fiscal 2022 to ¥32 per share and targets a dividend payout ratio of 40% by the end of fiscal 2023. Thus, by leveraging the capital surplus, MUFG aims to add shareholder value by a progressive increase in dividends and executing flexible share repurchases.

Also, it targets a payout ratio of 40% by the end of fiscal 2023.

Given its capital strength and a robust balance sheet, the company is well-poised to sustain the capital deployment activities and enhance shareholder value. As of Mar 31, 2022, MUFG had cash and due from banks of ¥110.76 trillion, up 7.6% from ¥102.98 trillion recorded as of Mar 31, 2021.  Also, the bank’s capital ratios remained solid, well above the regulatory requirements. Its deal to divest MUFG Union Bank to U.S. Bancorp in an $8-billion transaction is expected to improve its Common Equity Tier 1 (CET1) ratio.

So far this year, shares of MUFG have lost 3.3% compared with a 17.7% decline of the industry it belongs to.

 

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Zacks Investment Research


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Currently, MUFG carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Share Buyback Plans of Other Finance Companies

Flushing Financial Corporation FFIC announced that its board of directors approved the repurchase of up to 1 million shares of FFIC’s outstanding stock. The buyback program, effective immediately, has no expiration date and is in addition to the existing authorization. Under the existing plan, Flushing Financial repurchased 0.4 million shares in the first quarter.

City Holding Company CHCO cheered investors by announcing that its board authorized the buyback of up to 1 million shares of its common stock. CHCO has 14.9 million outstanding common shares at present and the repurchase authorization indicates roughly 7% of the company’s outstanding shares. The buyback has no expiry date.

Simultaneously, City Holding canceled the previous share repurchase plan approved on Mar 31, 2021. Under the program, it repurchased 826,330 shares through May 25, 2022.


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