The Asian Strategy July, 2012 This document contains forward - - PowerPoint PPT Presentation

The Asian Strategy July, 2012

This document contains forward - looking statements in regard to forecasts, targets and plans of Mitsubishi UFJ Financial Group, Inc. (“MUFG”) and its 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, 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. 2

Contents � The Outline of Asia (1) Millenary Changes in GDP (AD1~2050) 5 (2) Changes from Asian Financial Crisis 6 (3) Shift in Demographics 7 (4) Overview of Japan’s Financial History 8 (5) Financial Markets in Major Countries in Asia 9 � The Asian Strategy (1) Commitment to Asia Spanning Two Centuries 11 (2) Mid-Term Business Plan in Asia 12 (3) Targeted Countries / Region and Key Strategies 13 (4) Asian Strategy (i)~(iii) 14~16 � Appendix (1) Global Network (China, Hong Kong, Taiwan, Korea) 18 (2) Global Network (South East Asia, India, Oceania) 19 (3) Overview of Recent Investments and Alliances in Asia 20 3

4 The Outline of Asia

Millenary Changes in GDP (AD1~2050) � Asia was the economic center with more than half of the world GDP until the middle of the 19th century. � The center has moved to Europe and the US since then, however, it is widely expected to return to Asia by the middle of the 21st century. Changes of Regional GDP Share （ AD1~2050 ） 1841: Opium War 1858: Indian Revolt 1945: WWII 2008: Financial Crisis Asia Era Europe Era US Era Asia Era 100% 100% 3% 5% 6% 7% 6% 7% 7% 7% 10% 11% 12% 17% 90% 22% 18% 29% 80% 30% 32% 31% 24% 26% 75% 29% 39% 17% 47% 14% 45% 70% 2% 3% 23% 4% 1% 2% 60% 4% 50% 50% 31% 40% 33% 12% 40% 20% 37% 63% 62% 61% 61% 30% 59% 57% 52% 25% 20% 37% 33% 29% 29% 27% 10% 18% 0% 0% 1 1 1000 1500 1600 1700 1820 1870 1900 1950 2000 2010 2015 2050 Asia Americas Europe Middle East & Africa (Source) AD1~1950 ： Angus Maddison 、 2000~2015 ： IMF 、 2050 ： Asian Development Bank (Note) 1. Asia includes 5 Central Asia, 3 Caucasian countries and Iran only for 2050. 5

Changes from Asian Financial Crisis � Current-account to GDP ratio and foreign exchange reserves of major countries in Asia have improved and increased while the external debt to GDP ratio has declined since the Asian financial crisis. � The economic situation has improved significantly with higher resistance to economic crisis. Current-account to GDP ratio and Foreign Exchange Reserves of major countries in Asia Thailand Indonesia Vietnam Malaysia -15% -15% -15% -15% 2010 External debt to GDP ratio 2010 0% 0% 0% 0% 2010 15% 15% 15% 15% 2010 30% 30% 30% 30% 1997 45% 45% 45% 45% 1997 1997 60% 60% 60% 60% 75% 75% 75% 75% 1997 90% 90% 90% 90% -7% 0% 7% 14% -7% 0% 7% 14% -7% 0% 7% 14% -7% 0% 7% 14% Current-account to GDP ratio China Korea India Philippines -15% -15% 2010 -15% -15% External debt to GDP ratio 0% 0% 2010 0% 0% 1997 2010 15% 15% 15% 2010 15% 1997 1997 1997 30% 30% 30% 30% 45% 45% 45% 45% 60% 60% 60% 60% 75% 75% 75% 75% 90% 90% 90% 90% -7% 0% 7% 14% -7% 0% 7% 14% -7% 0% 7% 14% -7% 0% 7% 14% Current-account to GDP ratio (Source) BTMU Economic Research Office Foreign exchange reserves / Imports 6

Shift in Demographics � One of the factors of Asia’s economic growth is its demographic bonus where the working age population shows increase over the dependent population. � Asia is expected to constantly have countries with demographic bonus and to maintain high growth. Ratio of Working Age to Dependent Population 1 2.6 Demographic bonus Chart Rising East Asia Declining Demographic onus 2.4 Japan Southeast Asia South Asia Europe 2.2 North America 2 1.8 1.6 1.4 1.2 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 (Source) UN (Note) 1.Working age: between 15 and 64, Dependent population: up to 14 and 65 or over 7

Overview of Japan’s Financial History � Asia consists of various countries which vary in economic fundamentals, regulations, and financial development. � It is essential to consider what and how each country is in making the strategies and business plans. History of Japanese banks, GDP growth rate, and GDP per capita (2010) Demographic Bonus Demographic Onus Eco- Oil High Growth Stable growth Bubble Low growth Shock nomy Singapore Lifting of a ban on mutual entry into bank, trust bank and securities Full liberalization of deposit interest rate $43,100 Big Bang Lift a ban on financial holding companies Full liberalization of foreign exchange 20% 40,000 Deregulation of domestic investments from foreign investors Full revision of Foreign Exchange and Foreign Trade Report released by Japan-US Yen-Dollar Plaza Accord Liberalization of overseas capital transactions 15% Hong Kong Opening of Tomei and Meishin Expressway 30,000 $31,500 Financial System Reform Act GDP per capita (Japan/USD) 10% Real GDP growth rate Korea $20,700 20,000 Tokyo Olympics Osaka Expo *Shanghai in 2009 5% Taiwan (National Bureau of Statistics of China) $18,500 (Source) IMF and Cabinet Office 10,000 China's coastal areas 0% $12,800 Malaysia $8,423 Philippines Cambodia Thailand $814 Vietnam India $2,123 Myanmar China (avg.) $4,992 $1,173 $1,370 $742 Indonesia $4,382 0 $2,974 -5% 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 GDP $3 K < <$10 K <$3 K $10 K < $30 K < per capita 8

Financial Markets in Major Countries in Asia � Diverse Asian countries are classified into three categories. � As the degree of economic / financial development differs, expected financial needs and banking business also vary. Figure 1: Classification of Major Asian Countries (2010) Japan-dependent economies Self-sustaining economies Thailand, 35% 15% Taiwan, 23% Philippines, 29% Australia, 12% Indonesia, 10% 12% Trade with Japan 2 Korea, 23% Malaysia, 12% Vietnam, 23% 9% China, 7% Hong Kong, 2% Degree of 6% Japanese Singapore, 10% companies’ entry into the Peripheral countries 3% market 3 Myanmar, 1% Pakistan, 4% India, 12% 0% -3% 3% 8% 13% 18% 23% Japan’s ODA 1 (Source) IMF and Ministry of Foreign Affairs of Japan Figure 2: Stages of Financial Development by Economy Type Self-sustaining economies Japan-dependent economies Peripheral countries GDP per capita USD 13,000 or more Under USD 8,000 Under USD 1,000 Stage Growth - Maturity Development Dawn Advanced Advancement started Mainly deposits and loans Banking business 1. Japan ’ s cumulative ODA to the country divided by GDP of the country (2009) (Note) 2. Volume of trade with Japan divided by total trade of the country (2010) 3. Cumulative direct investment by Japan divided by the total direct investments to the country (2009) 9

The Asian Strategy

Commitment to Asia Spanning Two Centuries � BTMU's presence in Asian stretches back to the 19th century (as Yokohama Shokin Bank). � Despite interruptions due to war and internal conflicts our commitment has continued through two centuries. A long-term relationship with Asia. Cambodia Representative office Branch 2012 1956 1967 Thailand Subsidiary 1936 1940 1945 1952 1962 Vietnam 1920 1942 1945 1956 1962 1975 19931996 Indonesia 19181919 1957 1959 Myanmar 1945 1954 1995 1918 1919 1984 Philippines 1918 1919 1945 1953 1977 Singapore 1916 1941 1954 1957 1919 India 1894 1900 1941 1953 China 2007 1893 1900 1945 1980 1995 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 11