Mitsubishi UFJ to Post Loss on Botched System Development
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Tokyo, April 23 (Jiji Press)--Mitsubishi UFJ Financial Group Inc. <8306> is expected to report a loss of some 100 billion yen for the year ended last month on the cancellation of a system development project by a credit card arm, informed sources said Tuesday.
The projected loss will also include costs for reserves set aside by the credit card unit, Mitsubishi UFJ Nicos Co., to return overpayments to customers, the sources said.
In 2016, Mitsubishi UFJ Nicos started work on integrating systems for three credit card brands--Nicos, DC and MUFG. It planned to spend 150 billion yen through the year ending in March 2022.
But the company recently concluded that the envisioned new system would not be able to respond to advanced technologies for cashless payments, the sources said. It will consider developing a different system that would meet requirements of next-generation technologies, they said.
Mitsubishi UFJ Financial is currently studying what impact the loss will have on its earnings estimates that call for a consolidated net profit of 950 billion yen for the year ended last March.
[Copyright The Jiji Press, Ltd.]