Loans and Allowance for Credit Losses [Text Block] | 4. LOANS AND ALLOWANCE FOR CREDIT LOSSES Loans at March 31, 2019 and 2020 by domicile and industry of the borrower are summarized below. Classification of loans by industry is based on the industry segment loan classifications as defined by the Bank of Japan. 2019 2020 (in millions) Domestic: Manufacturing ¥ 11,153,996 ¥ 11,448,778 Construction 717,664 733,212 Real estate 11,706,419 12,054,671 Services 2,653,191 2,585,111 Wholesale and retail 7,643,397 7,504,561 Banks and other financial institutions (1) 5,213,020 5,161,093 Communication and information services 1,510,596 1,572,344 Other industries 8,756,483 8,673,871 Consumer 15,802,024 15,319,721 Total domestic 65,156,790 65,053,362 Foreign: Governments and official institutions 841,695 726,347 Banks and other financial institutions (1) 11,641,373 11,788,225 Commercial and industrial 31,951,169 32,565,030 Other 7,597,502 8,404,062 Total foreign 52,031,739 53,483,664 Unearned income, unamortized premiums—net and deferred loan fees—net (304,588 ) (350,287 ) Total (2) ¥ 116,883,941 ¥ 118,186,739 Notes: (1) Loans to so-called “non-bank Non-bank (2) The above table includes loans held for sale of ¥291,794 million and ¥344,790 million at March 31, 2019 and 2020, respectively. The MUFG Group classifies its loan portfolio into the following portfolio segments—Commercial, Residential, Card, MUFG Americas Holdings, Krungsri, and Other based on the grouping used by the MUFG Group to determine the allowance for credit losses. See Note 1 for further information. Nonaccrual Loans Originated loans are generally placed on nonaccrual status when substantial doubt exists as to the full and timely collection of either principal or interest, when principal or interest is contractually past due one month or more with respect to loans within all classes of the Commercial segment, three months or more with respect to loans within the Card, MUFG Americas Holdings, and Krungsri segments, and six months or more with respect to loans within the Residential segment. See Note 1 for further information. The nonaccrual loans by class at March 31, 2019 and 2020 are shown below: 2019 2020 (in millions) Commercial Domestic ¥ 272,777 ¥ 312,972 Manufacturing 65,896 93,776 Construction 9,813 8,484 Real estate 23,152 21,790 Services 26,188 51,195 Wholesale and retail 94,531 94,037 Banks and other financial institutions 898 994 Communication and information services 11,955 10,539 Other industries 25,406 20,234 Consumer 14,938 11,923 Foreign 111,002 127,001 Residential 68,499 63,998 Card 61,419 61,172 MUAH 46,549 35,840 Krungsri 127,424 149,732 Other — 27,754 Total (1) ¥ 687,670 ¥ 778,469 Note: (1) The above table does not include loans held for sale of ¥12,702 million and ¥330 million at March 31, 2019 and 2020, respectively, and loans acquired with deteriorated credit quality of ¥6,284 million and ¥25,427 million at March 31, 2019 and 2020, respectively. Impaired Loans The MUFG Group’s impaired loans primarily include nonaccrual loans and TDRs. The following table shows information about impaired loans by class at March 31, 2019 and 2020: Recorded Loan Balance At March 31, 2019: Requiring Not Requiring (1) Total (2) Unpaid Related (in millions) Commercial Domestic ¥ 560,474 ¥ 157,465 ¥ 717,939 ¥ 759,399 ¥ 227,004 Manufacturing 349,597 28,189 377,786 384,306 92,919 Construction 8,366 5,975 14,341 14,779 6,574 Real estate 20,848 29,961 50,809 55,943 5,704 Services 30,239 13,020 43,259 46,838 20,059 Wholesale and retail 118,253 45,620 163,873 175,714 84,503 Banks and other financial institutions 1,012 21 1,033 1,033 830 Communication and information services 8,794 6,929 15,723 16,587 6,817 Other industries 13,772 17,989 31,761 38,342 6,874 Consumer 9,593 9,761 19,354 25,857 2,724 Foreign 127,521 34,484 162,005 183,133 85,966 Loans acquired with deteriorated credit quality 8,136 — 8,136 14,990 5,450 Residential (4) 97,176 6,495 103,671 120,526 14,357 Card (4) 64,691 330 65,021 72,226 21,829 MUAH (4) 46,552 23,208 69,760 83,300 8,294 Krungsri (4) 57,066 26,193 83,259 90,377 28,254 Total (3) ¥ 961,616 ¥ 248,175 ¥ 1,209,791 ¥ 1,323,951 ¥ 391,154 Recorded Loan Balance At March 31, 2020: Requiring Not Requiring (1) Total (2) Unpaid Related (in millions) Commercial Domestic ¥ 598,737 ¥ 147,890 ¥ 746,627 ¥ 784,298 ¥ 268,070 Manufacturing 375,716 32,057 407,773 414,091 119,070 Construction 6,609 5,261 11,870 12,023 5,026 Real estate 20,739 28,928 49,667 55,303 6,649 Services 55,293 13,114 68,407 72,708 40,987 Wholesale and retail 113,288 38,897 152,185 160,508 80,996 Banks and other financial institutions 1,069 39 1,108 1,262 855 Communication and information services 7,971 5,808 13,779 14,698 6,009 Other industries 10,558 16,449 27,007 33,229 6,434 Consumer 7,494 7,337 14,831 20,476 2,044 Foreign 141,897 56,464 198,361 220,283 96,009 Loans acquired with deteriorated credit quality 12,906 — 12,906 19,947 4,767 Residential (4) 88,075 4,822 92,897 107,629 12,770 Card (4) 65,240 280 65,520 72,714 19,799 MUAH (4) 33,884 33,835 67,719 84,737 5,977 Krungsri ( 4) 68,126 30,833 98,959 106,265 30,198 Other (4) 22,749 1,091 23,840 26,091 6,152 Total (3) ¥ 1,031,614 ¥ 275,215 ¥ 1,306,829 ¥ 1,421,964 ¥ 443,742 Notes: (1) These loans do not require an allowance for credit losses because the recorded loan balance equals, or does not exceed, the present value of expected future cash flows discounted at the loans’ original effective interest rate, loans’ observable market price, or the fair value of the collateral if the loan is a collateral-dependent loan. (2) Included in impaired loans at March 31, 2019 and 2020 are accrual TDRs as follows: ¥497,013 million and ¥505,681 million—Commercial; ¥34,449 million and ¥28,450 million—Residential; ¥26,183 million and ¥25,492 million—Card; ¥33,155 million and ¥42,910 million—MUFG Americas Holdings; ¥26,851 million and ¥35,226 million—Krungsri; and nil and ¥8,401 million—Other, respectively. (3) In addition to impaired loans presented in the above table, there were impaired loans held for sale of ¥12,702 million and ¥330 million at March 31, 2019 and 2020, respectively. (4) Impaired Loans for Residential, Card, MUAH, Krungsri and Other segments in the above table include loans acquired with deteriorated credit quality. The following table shows information regarding the average recorded loan balance and recognized interest income on impaired loans for the fiscal years ended March 31, 2018, 2019 and 2020: 2018 2019 2020 Average Recognized Average Recognized Average Recognized (in millions) Commercial Domestic ¥ 918,093 ¥ 9,441 ¥ 766,847 ¥ 12,383 ¥ 726,794 ¥ 8,722 Manufacturing 472,081 3,787 387,725 6,057 387,470 4,085 Construction 19,465 281 15,721 291 13,093 218 Real estate 74,087 1,146 57,850 1,069 48,740 731 Services 59,916 794 48,945 1,044 58,704 759 Wholesale and retail 186,356 2,347 171,687 2,848 157,751 2,195 Banks and other financial institutions 1,729 8 1,330 8 1,094 6 Communication and information services 25,461 388 22,478 491 14,804 322 Other industries 50,377 215 39,178 234 28,345 170 Consumer 28,621 475 21,933 341 16,793 236 Foreign 209,297 4,244 159,999 3,127 174,831 3,013 Loans acquired with deteriorated credit quality 8,591 492 7,814 182 9,395 74 Residential 119,409 1,563 107,165 1,620 98,238 1,252 Card 69,831 1,993 66,187 1,614 65,270 1,241 MUAH 83,504 1,993 71,162 2,292 82,832 2,801 Krungsri 75,370 3,899 83,165 4,995 91,577 5,274 Other — — — — 11,854 494 Total ¥ 1,484,095 ¥ 23,625 ¥ 1,262,339 ¥ 26,213 1,260,791 ¥ ¥ 22,871 Interest income on nonaccrual loans for all classes was recognized on a cash basis when ultimate collectibility of principal was certain. Otherwise, cash receipts were applied as principal reductions. Interest income on accruing impaired loans, including TDRs, was recognized on an accrual basis to the extent that the collectibility of interest income was reasonably certain based on management’s assessment. The following table shows a roll-forward of accrual TDRs and other impaired loans (including nonaccrual TDRs) for the fiscal years ended March 31, 2018, 2019 and 2020: 2018 2019 2020 (in millions) Accrual TDRs: Balance at beginning of fiscal year ¥ 819,819 ¥ 670,255 ¥ 617,651 Additions (new accrual TDR status) (1) 144,368 71,033 171,740 Transfers to other impaired loans (including nonaccrual TDRs) (25,122 ) (19,053 ) (39,646 ) Loans sold (39,378 ) (26 ) (11,220 ) Principal payments and other (229,432 ) (104,558 ) (92,365 ) Balance at end of fiscal year (1) ¥ 670,255 ¥ 617,651 ¥ 646,160 Other impaired loans (including nonaccrual TDRs): Balance at beginning of fiscal year ¥ 896,031 ¥ 660,868 ¥ 592,140 Additions (new other impaired loans (including nonaccrual TDRs) status) (1)(2) 281,275 222,003 373,091 Charge-off (98,355 ) (55,309 ) (52,935 ) Transfers to accrual TDRs (43,858 ) (22,110 ) (45,310 ) Loans sold (31,581 ) (26,022 ) (29,928 ) Principal payments and other (342,644 ) (187,290 ) (176,389 ) Balance at end of fiscal year (1) ¥ 660,868 ¥ 592,140 ¥ 660,669 Notes: (1) For the fiscal year ended March 31, 2018, lease receivables of ¥1,809 million and ¥113 million in the Krungsri segment, which were accrual TDRs and nonaccrual TDRs, respectively, are excluded from the additions of accrual TDRs and other impaired loans, respectively, and the related ending balances of such TDRs amounting to ¥4,282 million and ¥1,286 million, are also excluded from the balance of accrual TDRs and other impaired loans, respectively, as of March 31, 2018. For the fiscal year ended March 31, 2019, lease receivables of ¥2,947 million and ¥2,088 million in the Krungsri segment, which were accrual TDRs and nonaccrual TDRs, respectively, are excluded from the additions of accrual TDRs and other impaired loans, respectively, and the related ending balances of such TDRs amounting to ¥5,060 million and ¥3,361 million, are also excluded from the balance of accrual TDRs and other impaired loans, respectively, as of March 31, 2019. For the fiscal year ended March 31, 2020, lease receivables of ¥3,647 million and ¥465 million in the Krungsri segment, and ¥68 million and nil in the Other segment, which were accrual TDRs and nonaccrual TDRs, respectively, are excluded from the additions of accrual TDRs and other impaired loans, respectively, and the related ending balances of such TDRs amounting to ¥6,946 million and ¥3,810 million in the Krungsri segment, and ¥66 million and nil in the Other segment are also excluded from the balance of accrual TDRs and other impaired loans, respectively, as of March 31, 2020. (2) Included in the additions of other impaired loans for the fiscal years ended March 31, 2018, 2019 and 2020 are nonaccrual TDRs as follows: ¥12,002 million, ¥13,493 million and ¥14,685 million—Card; ¥12,799 million, ¥12,738 million and ¥15,135 million—MUFG Americas Holdings; ¥12,280 million, ¥10,519 million and ¥9,828 million—Krungsri; and nil, nil and ¥1,031 million—Other, respectively. Troubled Debt Restructurings The following table summarizes the MUFG Group’s TDRs by class for the fiscal years ended March 31, 2018, 2019 and 2020: 2018 2019 2020 Troubled Debt Restructurings Pre- Post- Pre- Post- Pre- Post- (in millions) Commercial (1)(3) Domestic ¥ 70,380 ¥ 69,021 ¥ 36,693 ¥ 36,693 ¥ 61,735 ¥ 61,735 Manufacturing 35,954 35,954 11,654 11,654 27,435 27,435 Construction 1,020 1,020 703 703 289 289 Real estate 1,269 1,269 948 948 2,714 2,714 Services 4,139 4,139 2,141 2,141 6,487 6,487 Wholesale and retail 16,280 14,921 19,315 19,315 20,813 20,813 Banks and other financial institutions 246 246 — — — — Communication and information services 9,643 9,643 268 268 376 376 Other industries 761 761 472 472 3,279 3,279 Consumer 1,068 1,068 1,192 1,192 342 342 Foreign 25,522 25,522 5,692 5,692 39,827 39,827 Loans acquired with deteriorated credit quality — — 50 50 10,786 10,786 Residential (1)(3) 9,763 9,763 7,379 7,379 5,137 5,137 Card (2)(3) 17,436 16,912 19,685 18,837 22,625 21,561 MUAH (2)(3) 40,578 38,224 19,837 19,837 33,782 33,564 Krungsri (2)(3) 24,015 23,929 24,392 24,330 31,238 31,209 Other (2)(3) — — — — 12,781 12,780 Total ¥ 187,694 ¥ 183,371 ¥ 113,728 ¥ 112,818 ¥ 217,911 ¥ 216,599 2018 2019 2020 Troubled Debt Restructurings Recorded Investment (in millions) Commercial (1)(3) Domestic ¥ 4,067 ¥ 11,002 ¥ 8,857 Manufacturing 839 312 3,094 Construction — 89 6 Real estate 10 — 73 Services 822 473 43 Wholesale and retail 2,231 1,713 5,421 Banks and other financial institutions — — — Communication and information services 140 8,365 9 Other industries — 50 123 Consumer 25 — 88 Foreign — — 2,337 Loans acquired with deteriorated credit quality — — — Residential (1)(3) 159 362 31 Card (2)(3) 4,191 3,442 3,320 MUAH (2)(3) 2,565 349 4,656 Krungsri (2)(3) 4,789 7,926 7,305 Other (2)(3) — — 15 Total ¥ 15,771 ¥ 23,081 ¥ 26,521 Notes: (1) TDRs for the Commercial and Residential segments include accruing loans, and do not include nonaccrual loans. (2) TDRs for the Card, MUFG Americas Holdings, Krungsri and Oth e (3) For the fiscal year ended March 31, 2018, extension of the stated maturity date of loans was the primary concession type in the Commercial, Residential and Krungsri segments, reduction in the stated rate was the primary concession type in the Card segment and payment deferrals were the primary concession type in the MUFG Americas Holdings segment. For the fiscal year ended March 31, 2019, extension of the stated maturity date of loans was the primary concession type in the Commercial, Residential and Krungsri segments, reduction in the stated rate was the primary concession type in the Card segment and forbearance was the primary concession type in the MUFG Americas Holdings segment. For the fiscal year ended March 31, 2020, extension of the stated maturity date of loans was the primary concession type in the Commercial, Residential, MUFG Americas Holdings and Krungsri segments and The following table summarizes outstanding recorded investment balances of TDRs by class at March 31, 2019 and 2020: 2019 2020 (in millions) Commercial (1) Domestic ¥ 445,312 ¥ 433,783 Manufacturing 311,890 313,996 Construction 4,591 3,435 Real estate 27,657 27,877 Services 17,135 17,287 Wholesale and retail 69,350 58,148 Banks and other financial institutions 135 113 Communication and information services 3,780 3,244 Other industries 6,357 6,775 Consumer 4,417 2,908 Foreign 51,701 71,898 Residential (1) 34,449 28,450 Card (2) 65,021 65,520 MUAH (2) 48,128 62,151 Krungsri (2) 62,980 76,831 Other (2) — 9,525 Total ¥ 707,591 ¥ 748,158 Notes: (1) TDRs for the Commercial and Residential segments include accruing loans, and do not include nonaccrual loans. (2) TDRs for the Card, MUFG Americas Holdings, Krungsri and Other segments include accrual and nonaccrual loans. Included in the outstanding recorded investment balances as of March 31, 2019 and 2020 are nonaccrual TDRs as follows: ¥38,838 million and ¥40,028 million—Card; ¥14,973 million and ¥19,241 million—MUFG Americas Holdings; ¥31,069 million and ¥34,659 million—Krungsri; and nil and ¥1,058 million—Other, respectively. A modification of terms of a loan under a TDR mainly involves: (i) a reduction in the stated interest rate applicable to the loan, (ii) an extension of the stated maturity date of the loan, (iii) a partial forgiveness of the principal of the loan, or (iv) a combination of all of these. Those loans are also considered impaired loans, and hence the allowance for credit losses is separately established for each loan. As a result, the amount of allowance for credit losses increases in many cases upon classification as a TDR loan. The amount of pre-modification TDRs for the Commercial and Residential segments in the above tables include accruing loans, and do not include nonaccrual loans. Once a loan is classified as a nonaccrual loan, a modification would have little likelihood of resulting in the recovery of the loan in view of the severity of the financial difficulty of the borrower. Therefore, even if a nonaccrual loan is modified, the loan continues to be classified as a nonaccrual loan. The vast majority of modifications to nonaccrual loans are temporary extensions of the maturity dates, typically for periods up to 90 days, and continually made as the borrower is unable to repay or refinance the loan at the extended maturity. Accordingly, the impact of such TDRs on the outstanding recorded investment is immaterial, and the vast majority of nonaccrual TDRs have subsequently defaulted. TDRs that subsequently defaulted in the Commercial and Residential segments in the above tables include those accruing loans that became past due one month or more within the Commercial segment and six months or more within the Residential segment, and those accruing loans reclassified to nonaccrual loans due to financial difficulties even without delinquencies. This is because classification as a nonaccrual loan is regarded as default under the MUFG Group’s credit policy. Also, the MUFG Group defines default as payment default for the purpose of the disclosure. In regards to the Card, MUFG Americas Holdings, Krungsri and Other segments, the TDRs in the above tables represent nonaccrual and accruing loans, and the defaulted loans in the above table represent nonaccruing and accruing loans that became past due one month or more within the Card segment, 60 days or more within the MUFG Americas Holdings segment, and six months or more within the Krungsri segment. Historical payment defaults are one of the factors considered when projecting future cash flows in determining the allowance for credit losses for each segment. The MUFG Group provided commitments to extend credit to customers with TDRs. The amounts of such commitments were ¥169,819 million and ¥90,097 million at March 31, 2019 and 2020, respectively. See Note 24 Credit Quality Indicator Credit quality indicators of loans by class at March 31, 2019 and 2020 are shown below: At March 31, 2019: Normal Close Likely to become Total (1) (in millions) Commercial Domestic ¥ 49,391,991 ¥ 1,242,075 ¥ 217,745 ¥ 50,851,811 Manufacturing 10,819,594 279,801 47,968 11,147,363 Construction 672,152 37,236 7,857 717,245 Real estate 11,403,613 222,791 22,515 11,648,919 Services 2,436,489 174,784 19,953 2,631,226 Wholesale and retail 7,240,801 329,249 68,736 7,638,786 Banks and other financial institutions 5,199,889 7,654 898 5,208,441 Communication and information services 1,465,652 34,542 10,172 1,510,366 Other industries 8,610,464 119,581 24,947 8,754,992 Consumer 1,543,337 36,437 14,699 1,594,473 Foreign 35,418,267 562,854 112,103 36,093,224 Loans acquired with deteriorated credit quality 11,622 10,833 3,790 26,245 Total ¥ 84,821,880 ¥ 1,815,762 ¥ 333,638 ¥ 86,971,280 Accrual Nonaccrual Total (1) (in millions) Residential ¥ 13,661,794 ¥ 66,290 ¥ 13,728,084 Card ¥ 516,983 ¥ 61,599 ¥ 578,582 Credit Quality Based on Credit Quality Based on Accrual Nonaccrual Pass Special Classified Total (1)(2) (in millions) MUAH ¥ 4,752,021 ¥ ¥ ¥ ¥ ¥ Normal Special Substandard or Total (1) (in millions) Krungsri ¥ 5,682,245 ¥ 199,070 ¥ 129,222 ¥ 6,010,537 At March 31, 2020: Normal Close Likely to become Total (1) (in millions) Commercial Domestic ¥ 49,695,889 ¥ 1,186,044 ¥ 220,245 ¥ 51,102,178 Manufacturing 10,997,241 317,018 58,615 11,372,874 Construction 696,491 28,350 6,927 731,768 Real estate 11,790,467 190,972 20,080 12,001,519 Services 2,390,210 158,851 21,802 2,570,863 Wholesale and retail 7,124,098 301,965 71,778 7,497,841 Banks and other financial institutions 5,146,320 13,237 926 5,160,483 Communication and information services 1,530,887 32,366 8,880 1,572,133 Other industries 8,540,144 112,813 19,292 8,672,249 Consumer 1,480,031 30,472 11,945 1,522,448 Foreign 34,719,041 636,523 128,073 35,483,637 Loans acquired with deteriorated credit quality 8,255 9,739 18,978 36,972 Total ¥ 84,423,185 ¥ 1,832,306 ¥ 367,296 ¥ 86,622,787 Accrual Nonaccrual Total (1) (in millions) Residential ¥ 13,256,744 ¥ 61,746 ¥ 13,318,490 Card ¥ 504,357 ¥ 61,286 ¥ 565,643 Credit Quality Based on Credit Quality Based on Accrual Nonaccrual Pass Special Classified Total (1)(2) (in millions) MUAH ¥ 4,590,805 ¥ 15,119 ¥ 4,877,863 ¥ 87,648 ¥ 84,033 ¥ 9,655,468 Normal Special Substandard or Total (1) (in millions) Krungsri ¥ 6,513,615 ¥ 246,328 ¥ 151,647 ¥ 6,911,590 Accrual Nonaccrual Total (1) (in millions) Other ¥ 1,086,517 ¥ 31,376 ¥ 1,117,893 Notes: (1) Total loans in the above table do not include loans held for sale, and represent balances without adjustments in relation to unearned income, unamortized premiums and deferred loan fees. (2) Total loans of MUFG Americas Holdings do not include FDIC covered loans which are not individually rated totaling ¥689 million and ¥365 million as of March 31, 2019 and 2020, respectively. The MUFG Group will be reimbursed for a substantial portion of any future losses on FDIC covered loans under the terms of the FDIC loss share agreements. The MUFG Group classifies loans into risk categories based on relevant information about the ability of borrowers to service their debt, including, but not limited to, historical and current financial information, historical and current payment experience, credit documentation, public and non-public The primary credit quality indicator for loans within all classes of the Commercial segment is the internal credit rating assigned to each borrower based on the MUFG Group’s internal borrower ratings of 1 through 15, with the rating of 1 assigned to a borrower with the highest quality of credit. When assigning a credit rating to a borrower, the MUFG Group evaluates the borrower’s expected debt-service capability based on various information, including financial and operating information of the borrower as well as information on the industry in which the borrower operates, and the borrower’s business profile, management and compliance system. In evaluating a borrower’s debt-service capability, the MUFG Group also conducts an assessment of the level of earnings and an analysis of the borrower’s net worth. Based on the internal borrower rating, loans within the Commercial segment are categorized as Normal (internal borrower ratings of 1 through 9), Close Watch (internal borrower ratings of 10 through 12), and Likely to become Bankrupt or Legally/Virtually Bankrupt (internal borrower ratings of 13 through 15). Loans to borrowers categorized as Normal represent those that are not deemed to have collectibility issues. Loans to borrowers categorized as Close Watch represent those that require close monitoring as the borrower has begun to exhibit elements of potential concern with respect to its business performance and financial condition, the borrower has begun to exhibit elements of serious concern with respect to its business performance and financial condition, including business problems requiring long-term solutions, or the borrower’s loans are TDRs or loans contractually past due 90 days or more for special reasons. Loans to borrowers categorized as Likely to become Bankrupt or Legally/Virtually Bankrupt represent those that have a higher probability of default than those categorized as Close Watch due to serious debt repayment problems with poor progress in achieving restructuring plans, the borrower being considered virtually bankrupt with no prospects for an improvement in business operations, or the borrower being legally bankrupt with no prospects for continued business operations because of non-payment, The accrual status is a primary credit quality indicator for loans within the Residential segment, the Card segment, the Other segment and consumer loans within the MUFG Americas Holdings segment. The accrual status of these loans is determined based on the number of delinquent payments. See Note 1 for further details of categorization of Accrual and Nonaccrual. Commercial loans within the MUFG Americas Holdings segment are categorized as either pass or criticized based on the internal credit rating assigned to each borrower. Criticized credits are those that are internally risk graded as Special Mention, Substandard or Doubtful. Special Mention credits are potentially weak, as the borrower has begun to exhibit deteriorating trends, which, if not corrected, may jeopardize repayment of the loan and result in further downgrade. Classified credits are those that are internally risk graded as Substandard or Doubtful. Substandard credits have well-defined weaknesses, which, if not corrected, could jeopardize the full satisfaction of the debt. A credit classified as Doubtful has critical weaknesses that make full collection improbable on the basis of currently existing facts and conditions. Loans within the Krungsri segment are categorized as Normal, Special Mention, Substandard, Doubtful, and Doubtful of Loss primarily based on their delinquency status. Loans categorized as Special Mention generally represent those that have the overdue principal or interest payments for a cumulative period exceeding one month commencing from the contractual due date. Loans categorized as Substandard, Doubtful or Doubtful of Loss generally represent those that have the overdue principal or interest payments for a cumulative period exceeding three months commencing from the contractual due date. For the Commercial, Residential and Card segments, credit quality indicators are based on information as of March 31. For the MUFG Americas Holdings, Krungsri and Other segments, credit quality indicators are generally based on information as of December 31. Past Due Analysis Ages of past due loans by class at March 31, 2019 and 2020 are shown below: At March 31, 2019: 1-3 Greater Total Current Total (1) Recorded (in millions) Commercial Domestic ¥ 11,551 ¥ 30,648 ¥ 42,199 ¥ 50,809,612 ¥ 50,851,811 ¥ 6,900 Manufacturing 1,597 3,036 4,633 11,142,730 11,147,363 — Construction 218 60 278 716,967 717,245 1 Real estate 2,034 4,256 6,290 11,642,629 11,648,919 2,524 Services 778 569 1,347 2,629,879 2,631,226 1 Wholesale and retail 2,791 2,390 5,181 7,633,605 7,638,786 62 Banks and other financial institutions — 21 21 5,208,420 5,208,441 — Communication and information services 411 758 1,169 1,509,197 1,510,366 — Other industries 365 13,037 13,402 8,741,590 8,754,992 — Consumer 3,357 6,521 9,878 1,584,595 1,594,473 4,312 Foreign 10,881 19,993 30,874 36,062,350 36,093,224 236 Residential 62,686 16,615 79,301 13,641,449 13,720,750 6,584 Card 17,203 30,568 47,771 527,421 575,192 — MUAH 28,696 10,827 39,523 9,557,501 9,597,024 2,287 Krungsri 126,313 106,777 233,090 5,771,541 6,004,631 — Total ¥ 257,330 ¥ 215,428 ¥ 472,758 ¥ 116,369,874 ¥ 116,842,632 ¥ 16,007 At March 31, 2020: 1-3 Greater Total Current Total (1) Recorded (in millions) Commercial Domestic ¥ 9,215 ¥ 26,971 ¥ 36,186 ¥ 51,065,992 ¥ 51,102,178 ¥ 4,720 Manufacturing 820 2,762 3,582 11,369,292 11,372,874 620 Construction 143 100 243 731,525 731,768 — Real estate 880 3,300 4,180 11,997,339 12,001,519 1,181 Services 812 908 1,720 2,569,143 2,570,863 5 Wholesale and retail 2,598 2,603 5,201 7,492,640 7,497,841 19 Banks and other financial institutions — 54 54 5,160,429 5,160,483 — Communication and information services 336 57 393 1,571,740 1,572,133 — Other industries 171 12,889 13,060 8,659,189 8,672,249 97 Consumer 3,455 4,298 7,753 1,514,695 1,522,448 2,798 Foreign 9,927 23,548 33,475 35,450,162 35,483,637 164 Residential 48,404 15,443 63,847 13,248,278 13,312,125 6,288 Card 14,735 29,997 44,732 518,008 562,740 — MUAH 31,052 14,435 45,487 9,603,339 9,648,826 2,101 Krungsri 160,253 129,186 289,439 6,616,104 6,905,543 — Other 16,442 24,348 40,790 1,069,186 1,109,976 — Total ¥ 290,028 ¥ 263,928 ¥ 553,956 ¥ 117,571,069 ¥ 118,125,025 ¥ 13,273 Note: (1) Total loans in the above table do not include loans held for sale and loans acquired with deteriorated credit quality and represent balances without adjustments in relation to unearned income, unamortized premiums and deferred loan fees. Allowance for Credit Losses Changes in the allowance for credit losses by portfolio years Fiscal year ended March 31, 2018: Commercial Residential Card MUAH Krungsri Total (in millions) Allowance for credit losses: Balance at beginning of fiscal year ¥ 900,686 ¥ 67,336 ¥ 30,165 ¥ 73,733 ¥ 110,268 ¥ 1,182,188 Provision for (reversal of) credit losses (297,401 ) (22,291 ) 23,422 (9,309 ) 64,732 (240,847 ) Charge-offs 134,807 3,838 22,696 14,701 56,067 232,109 Recoveries 24,913 1,339 1,228 6,140 17,490 51,110 Net charge-offs 109,894 2,499 21,468 8,561 38,577 180,999 Other (1) (2,293 ) — — (2,098 ) 8,173 3,782 Balance at end of fiscal year ¥ 491,098 ¥ 42,546 ¥ 32,119 ¥ 53,765 ¥ 144,596 ¥ 764,124 Fiscal year ended March 31, 2019: Commercial Residential Card MUAH Krungsri Total (in millions) Allowance for credit losses: Balance at beginning of fiscal year ¥ 491,098 ¥ 42,546 ¥ 32,119 ¥ 53,765 ¥ 144,596 ¥ 764,124 Provision for (reversal of) credit losses (43,850 ) (4,480 ) 23,809 9,277 49,574 34,330 Charge-offs 76,664 274 24,310 13,224 59,569 174,041 Recoveries 17,565 834 932 3,733 21,053 44,117 Net charge-offs 59,099 (560 ) 23,378 9,491 38,516 129,924 Other (1) 1,466 — — (970 ) (10,842 ) (10,346 ) Balance at end of fiscal year ¥ 389,615 ¥ 38,626 ¥ 32,550 ¥ 52,581 ¥ 144,812 ¥ 658,184 Fiscal year ended March 31, 2020: Commercial Residential Card MUAH Krungsri Other Total (in millions) Allowance for credit losses: Balance at beginning of fiscal year ¥ 389,615 ¥ 38,626 ¥ 32,550 ¥ 52,581 ¥ 144,812 ¥ — ¥ 658,184 Provision for (reversal of) credit losses 153,782 (1,028 ) 26,542 30,825 70,023 41,569 321,713 Charge-offs 85,326 3,227 25,149 27,934 77,907 23,592 243,135 Recoveries 26,427 375 1,237 4,173 23,170 8,476 63,858 Net charge-offs 58,899 2,852 23,912 23,761 54,737 15,116 179,277 Other (1) (2,223 ) — — (650 ) 9,528 2,265 8,920 Balance at end of fiscal year ¥ 482,275 ¥ 34,746 ¥ 35,180 ¥ 58,995 ¥ 169,626 ¥ 28,718 ¥ 809,540 Note: (1) Other is Allowance for credit losses and recorded investment in loans by portfolio segment at March 31, 2019 and 2020 are shown below: At March 31, 2019: Commercial Residential Card MUAH Krungsri Total (in millions) Allowance for credit losses: Individually evaluated for impairment ¥ 312,970 ¥ 14,175 ¥ 21,829 ¥ 8,294 ¥ 28,254 ¥ 385,522 Collectively evaluated for impairment 63,366 23,413 10,708 44,282 116,529 258,298 Loans acquired with deteriorated credit quality (2) 13,279 1,038 13 5 29 14,364 Total ¥ 389,615 ¥ 38,626 ¥ 32,550 ¥ 52,581 ¥ 144,812 ¥ 658,184 Loans: Individually evaluated for impairment ¥ 879,944 ¥ 102,948 ¥ 64,752 ¥ 69,760 ¥ 83,259 ¥ 1,200,663 Collectively evaluated for impairment 86,065,091 13,617,802 510,440 9,527,264 5,921,372 115,641,969 Loans acquired with deteriorated credit quality (2) 26,245 7,334 3,390 11,228 5,906 54,103 Total (1) ¥ 86,971,280 ¥ 13,728,084 ¥ 578,582 ¥ 9,608,252 ¥ 6,010,537 ¥ 116,896,735 At March 31, 2020: Commercial Residential Card MUAH Krungsri Other Total (in millions) Allowance for credit losses: Individually evaluated for impairment ¥ 364,079 ¥ 12,651 ¥ 19,799 ¥ 5,977 ¥ 30,198 ¥ 5,073 ¥ 437,777 Collectively evaluated for impairment 108,100 21,130 15,369 53,013 139,401 22,566 359,579 Loans acquired with deteriorated credit quality (2) 10,096 965 12 5 27 1,079 12,184 Total ¥ 482,275 ¥ 34,746 ¥ 35,180 ¥ 58,995 ¥ 169,626 ¥ 28,718 ¥ 809,540 Loans: Individually evaluated for impairment ¥ 944,988 ¥ 92,448 ¥ 65,292 ¥ 67,719 ¥ 98,959 ¥ 17,512 ¥ 1,286,918 Collectively evaluated for impairment 85,640,827 13,219,677 497,448 9,581,107 6,806,584 1,092,464 116,838,107 Loans acquired with deteriorated credit quality (2) 36,972 6,365 2,903 7,007 6,047 7,917 67,211 Total (1) ¥ 86,622,787 ¥ 13,318,490 ¥ 565,643 ¥ 9,655,833 ¥ 6,911,590 ¥ 1,117,893 ¥ 118,192,236 Notes: (1) Total loans in the above table do not include loans held for sale, and represent balances without adjustments in relation to unearned income, unamortized premiums and deferred loan fees. (2) Loans acquired with deteriorated credit quality in the above table include impaired loans which are individually evaluated for impairment. Nonperforming loans were actively disposed of by sales during recent years. The allocated allowance for credit losses for such loans was removed from the allowance for credit losses and transferred to the valuation allowance for loans held for sale upon a decision to sell. Net charge-offs in the above table include a decrease from charge-offs in the allowance for credit losses amounting to ¥12.2 billion and ¥19.4 billion for the fiscal years ended March 31, 2018 and 2020, respectively, and an increase from recoveries in the allowance for credit losses amounting to ¥15.1 billion for the fiscal year ended March 31, 2019 due to loan disposal activity. The MUFG Group sol |