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Business Segments
 6 Months Ended
Jun. 30, 2014
Business Segments  
Business Segments

Note 14—Business Segments

        During the fourth quarter 2013, the composition of the Company's reporting segments were revised to reflect a new internal management structure resulting from the BTMU Americas Holdings business integration initiative announced in 2013. The Company now has five reportable segments: Retail Banking & Wealth Markets, Commercial Banking, Corporate Banking, Transaction Banking, and Investment Banking & Markets. Prior period segment results have been revised to conform to current period presentation. Below is a detailed description of these reportable segments.

Retail Banking & Wealth Markets

        Retail Banking & Wealth Markets offers a range of banking products and services to individuals and small businesses, including high net worth individuals and institutional clients, delivered generally through a network of branches, private banking offices, ATMs, broker mortgage referrals, telephone services, and web-based and mobile banking applications. These products and services include mortgages, home equity lines of credit, consumer and commercial loans, deposit accounts, financial planning and investments.

        The Consumer Lending Division provides the centralized origination, underwriting, processing, servicing, collection and administration for consumer assets including residential mortgages.

        The Community Banking Division serves its customers through 358 full-service branches in California and 45 full-service branches in Washington and Oregon, as well as through ATMs, call centers, web-based and mobile internet banking applications and through alliances with other financial institutions. Community Banking provides checking and deposit products and services; bill and loan payment, merchant, and various types of financing and investment services; and products including credit cards.

        The Wealth Markets Division serves its customers through the Private Bank; UnionBanc Investment Services LLC (UBIS), a subsidiary of MUFG Union Bank and a registered broker-dealer and investment advisor; and Asset Management which includes HighMark Capital Management, Inc., a subsidiary of MUFG Union Bank and a registered investment advisor. Wealth Markets provides investment management and advisory services to institutional clients, wealth planning, deposits and risk management strategies, trust and estate administration, as well as investment sub-advisory services to unaffiliated funds. Products provided to its customers include traditional brokerage, managed accounts, annuities, mutual funds, fixed income products and insurance and customized lending.

Commercial Banking

        Commercial Banking provides credit products including commercial loans, and accounts receivable, inventory, project, trade and real estate financing to corporate customers with revenues generally less than $2 billion. Commercial Banking also offers its customers a range of noncredit services and products, which include global treasury management and capital markets solutions, foreign exchange and various interest rate risk and commodity risk management products through cooperation with other segments.

        Commercial Banking is comprised of five main divisions: Western Markets, which serves companies primarily in California, Oregon and Washington; Petroleum, which serves oil and gas companies; Expansion Markets, which serves clients nationally, outside of the western states, and also targets certain defined industries such as entertainment and technology; Specialized Products, which focuses on specific industries on a national basis including commercial finance, funds finance, environmental services, non-profits, healthcare, and transportation, aerospace and defense; and Real Estate Industries, which serves professional real estate investors and developers. Additionally, through its Community Development Finance unit, tax credit investments are made in affordable housing projects, as well as construction and permanent financing.

Corporate Banking

        Corporate Banking provides commercial lending products, including commercial loans, lines of credit and project financing, to corporate customers with revenues generally greater than $2 billion. The segment employs an industry-focused strategy including dedicated coverage teams in General Industries, Power and Utilities, Oil and Gas, Telecom and Media, Technology, Healthcare, Public Finance, and Financial Institutions (predominantly Insurance and Asset Managers). By working with the Company's other segments, Corporate Banking offers its customers a range of noncredit services, which include global treasury management and capital market solutions, and foreign exchange and various interest rate risk and commodity risk management products.

Transaction Banking

        Transaction Banking works alongside the Company's other segments to provide working capital management and asset servicing solutions, including deposits and treasury management, trade finance, and institutional trust and custody, to the Company's customers. This segment also manages the digital banking channels for retail, small business, wealth management and commercial clients, as well as commercial product development. The client base consists of financial institutions, corporations, government agencies, insurance companies, mutual funds, investment managers and non-profit organizations.

Investment Banking & Markets

        Investment Banking & Markets, which includes Global Capital Markets, works with the Company's other segments to provide customers structured credit services, including project finance; foreign exchange, interest rate and energy risk management solutions; and to facilitate merchant and investment banking-related transactions. Additionally, the segment's leasing arm provides lease and other financing services to corporate customers.

Other

        "Other" includes the Asian Corporate Banking segment, Corporate Treasury and the impact of certain corporate activities. The Asian Corporate Banking segment offers a range of credit, deposit, and investment management products and services to companies located primarily in the U.S. that are affiliated with companies headquartered in Japan and other Asian countries. Corporate Treasury is responsible for ALM, wholesale funding and the ALM investment and derivatives hedging portfolios. These Treasury management activities are carried out to manage the net interest rate and liquidity risks of the Company's balance sheet and to manage those risks within the guidelines established by ALCO. For additional discussion regarding these risk management activities, see Part I, Item 2. "Quantitative and Qualitative Disclosures About Market Risk" in this Form 10-Q.

        Additionally, "Other" is comprised of certain corporate activities of the Company; the net impact of the funds transfer pricing charges and credits allocated to the reportable segments; the residual costs of support groups; the unallocated allowance; goodwill, intangible assets, and the related amortization/accretion associated with the Company's privatization transaction; the elimination of the fully taxable-equivalent basis amount; the difference between the marginal tax rate and the consolidated effective tax rate; and the FDIC covered assets.

        The information, set forth in the tables that follow, is prepared using various management accounting methodologies to measure the performance of the individual segments. Unlike U.S. GAAP there is no standardized or authoritative guidance for management accounting. Consequently, reported results are not necessarily comparable with those presented by other companies and they are not necessarily indicative of the results that would be reported by the business units if they were unique economic entities. The management reporting accounting methodologies, which are enhanced from time to time, measure segment profitability by assigning balance sheet and income statement items to each operating segment. Methodologies that are applied to the measurement of segment profitability include a funds transfer pricing system, an activity-based costing methodology, other indirect costs and a methodology to allocate the provision for credit losses. The fund transfer pricing system assigns a cost of funds or a credit for funds to assets or liabilities based on their type, maturity or repricing characteristics. The activity-based costing methodology allocates certain indirect costs, such as operations and technology expense, to the segments based on studies of billable unit costs for product or data processing. Other indirect costs, such as corporate overhead, are allocated to the segments based on internal surveys and metrics that serve as proxies for estimated usage. The Company periodically changes or updates its management accounting methodologies in the normal course of business. The Company reflects a "market view" perspective in measuring the business segments. The market view is a measurement of customer markets aggregated to show all revenues generated and expenses incurred from all products and services sold to those customers regardless of where product areas organizationally report. Therefore, revenues and expenses are included in both the business segment that provides the service and the business segment that manages the customer relationship. The duplicative results from this internal management accounting view are eliminated in "Reconciling Items."

As of and for the Three Months Ended June 30, 2014:

(Dollars in millions)   Retail
Banking &
Wealth
Markets		   Commercial
Banking		   Corporate
Banking		   Transaction
Banking		   Investment
Banking &
Markets		   Other   Reconciling
Items		   MUFG
Americas
Holdings
Corporation		  

Results of operations—Market View

                                                  

Net interest income (expense)

   $ 362   $ 277   $ 43   $ 94   $ 43   $ 36   $ (92 ) $ 763  

Noninterest income (expense)

     87     58     22     39     57     (6 )   (55 )   202  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total revenue

     449     335     65     133     100     30     (147 )   965  

Noninterest expense

     340     104     16     88     28     111     (38 )   649  

(Reversal of) provision for loan losses

     (2 )   (10 )   9     2     15     3     (8 )   9  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Income (loss) before income taxes and including noncontrolling interests

     111     241     40     43     57     (84 )   (101 )   307  

Income tax expense (benefit)

     44     65     16     17     12     (53 )   (39 )   62  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net income (loss) including noncontrolling interests

     67     176     24     26     45     (31 )   (62 )   245  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Deduct: net loss from noncontrolling interests

     —     —     —     —     —     4     —     4  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net income (loss) attributable to MUAH

   $ 67   $ 176   $ 24   $ 26   $ 45   $ (27 ) $ (62 ) $ 249  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                                   

Total assets, end of period

   $ 36,417   $ 35,423   $ 4,916   $ 1,938   $ 6,199   $ 27,485   $ (3,558 ) $ 108,820  

As of and for the Three Months Ended June 30, 2013:

(Dollars in millions)   Retail
Banking &
Wealth
Markets		   Commercial
Banking		   Corporate
Banking		   Transaction
Banking		   Investment
Banking &
Markets		   Other   Reconciling
Items		   MUFG
Americas
Holdings
Corporation		  

Results of operations—Market View

                                                  

Net interest income (expense)

   $ 332   $ 217   $ 31   $ 95   $ 43   $ 30   $ (76 ) $ 672  

Noninterest income (expense)

     94     49     18     41     54     (4 )   (51 )   201  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total revenue

     426     266     49     136     97     26     (127 )   873  

Noninterest expense

     366     102     12     91     25     138     (32 )   702  

(Reversal of) provision for loan losses

     (7 )   3     (4 )   (4 )   7     3     (1 )   (3 )
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Income (loss) before income taxes and including noncontrolling interests

     67     161     41     49     65     (115 )   (94 )   174  

Income tax expense (benefit)

     27     40     15     20     17     (48 )   (36 )   35  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net income (loss) including noncontrolling interests

     40     121     26     29     48     (67 )   (58 )   139  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Deduct: net loss from noncontrolling interests

     —     —     —     —     —     3     —     3  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net income (loss) attributable to MUAH

   $ 40   $ 121   $ 26   $ 29   $ 48   $ (64 ) $ (58 ) $ 142  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                                   

Total assets, end of period

   $ 33,008   $ 31,153   $ 4,364   $ 1,507   $ 5,585   $ 28,525   $ (1,863 ) $ 102,279  

As of and for the Six Months Ended June 30, 2014:

(Dollars in millions)   Retail
Banking &
Wealth
Markets		   Commercial
Banking		   Corporate
Banking		   Transaction
Banking		   Investment
Banking &
Markets		   Other   Reconciling
Items		   MUFG
Americas
Holdings
Corporation		  

Results of operations—Market View

                                                  

Net interest income (expense)

   $ 709   $ 504   $ 74   $ 194   $ 89   $ 48   $ (172 ) $ 1,446  

Noninterest income (expense)

     166     106     40     79     107     (13 )   (102 )   383  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total revenue

     875     610     114     273     196     35     (274 )   1,829  

Noninterest expense

     675     209     31     177     55     235     (73 )   1,309  

(Reversal of) provision for loan losses

     (8 )   6     (7 )   3     30     (12 )   (19 )   (7 )
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Income (loss) before income taxes and including noncontrolling interests

     208     395     90     93     111     (188 )   (182 )   527  

Income tax expense (benefit)

     82     99     35     36     23     (92 )   (71 )   112  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net income (loss) including noncontrolling interests

     126     296     55     57     88     (96 )   (111 )   415  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Deduct: net loss from noncontrolling interests

     —     —     —     —     —     9     —     9  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net income (loss) attributable to MUAH

   $ 126   $ 296   $ 55   $ 57   $ 88   $ (87 ) $ (111 ) $ 424  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                                   

Total assets, end of period

   $ 36,417   $ 35,423   $ 4,916   $ 1,938   $ 6,199   $ 27,485   $ (3,558 ) $ 108,820  

As of and for the Six Months Ended June 30, 2013:

(Dollars in millions)   Retail
Banking &
Wealth
Markets		   Commercial
Banking		   Corporate
Banking		   Transaction
Banking		   Investment
Banking & Markets		   Other   Reconciling
Items		   MUFG
Americas
Holdings
Corporation		  

Results of operations—Market View

                                                  

Net interest income (expense)

   $ 669   $ 423   $ 60   $ 206   $ 89   $ 31   $ (153 ) $ 1,325  

Noninterest income (expense)

     187     92     35     79     101     50     (92 )   452  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total revenue

     856     515     95     285     190     81     (245 )   1,777  

Noninterest expense

     730     199     26     184     50     291     (65 )   1,415  

(Reversal of) provision for loan losses

     (15 )   30     2     (3 )   4     (24 )   —     (6 )
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Income (loss) before income taxes and including noncontrolling interests

     141     286     67     104     136     (186 )   (180 )   368  

Income tax expense (benefit)

     56     69     26     41     36     (72 )   (71 )   85  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net income (loss) including noncontrolling interests

     85     217     41     63     100     (114 )   (109 )   283  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Deduct: net loss from noncontrolling interests

     —     —     —     —     —     7     —     7  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net income (loss) attributable to MUAH

   $ 85   $ 217   $ 41   $ 63   $ 100   $ (107 ) $ (109 ) $ 290  
                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                                   

Total assets, end of period

   $ 33,008   $ 31,153   $ 4,364   $ 1,507   $ 5,585   $ 28,525   $ (1,863 ) $ 102,279