(AFP) – Aug 5, 2008

TOKYO (AFP) — Japan's biggest banking group Mitsubishi UFJ Financial said Tuesday its net profits plunged 66 percent in the three months to June, hit by weak markets and the US financial crisis.

Net profit tumbled to 51.2 billion yen (474 million dollars) in the first quarter of the fiscal year from 151.3 billion a year earlier, a company statement said.

Pre-tax profits plunged 66.9 percent to 96.9 billion yen as revenue declined 7.3 percent to 1.44 trillion yen.

The megabank said it had lost 16 billion yen in the quarter offloading residential mortgage-backed securities, which have plunged in value because of a wave of defaults by US homeowners.

Other Japanese banks have also been hit by the US subprime loan crisis, but their losses so far have been dwarfed by those of many foreign peers, due to a cautious stance following a domestic banking crisis in the 1990s.

Mitsubishi UFJ said its total credit related costs increased 69 percent to 141.7 billion yen in the first quarter. Weaker income from securities fees, investment trust sales and derivative transactions also weighed on earnings.

For the current fiscal year to March 2009, MUFJ maintained its forecasts for net profit to rise 0.5 percent to 640 billion yen.

Pre-tax profit is seen increasing 17.6 percent to 1.21 trillion yen on revenue of 6.40 trillion yen, up 0.1 percent.

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