Despite the hit, Mitsubishi UFJ Financial Group Inc (MUFG) has continued to forecast a net profit.
On Monday, As per a report from the Nikkei, Japan’s MUFG is set to book a charge of around $893.34 million (100 billion yen) in the year ended March 31, 2019. The development comes in the wake of its credit card business stopping the development of a new system amid increased competition from cashless services.
As per the report, despite the debit entry, Mitsubishi UFJ Financial Group Inc, Japan’s biggest bank by assets, has continued to forecast a net profit of 950 billion yen.
MUFG is set to report quarterly earnings in the middle of May.
MUFG’s spokesman declined to comment on the report.
Since 2016, Mitsubishi UFJ Nicos, MUFG’s subsidiary, has been developing a new system to merge the management of three credit card brands, with 75 billion yen invested in the project out of a planned total of 150 billion yen, reported the Nikkei.
With competition in the cashless payments intensifying in 2018, the project’s economic viability was deemed as unprofitable, said the Nikkei.
With the report reaching the market, MUFG’s shares fell by 1.1% in morning Tokyo trade whereas the Nikkei share price index rose by 0.1%.