Japan's biggest bank Mitsubishi UFJ Financial Group said Friday its net profit for the nine months to December dropped 34.7 percent, after a one-time gain had boosted its income a year earlier.
The giant banking group said net profit for the period came to 532.46 billion yen ($5.78 billion), while revenue fell 9.3 percent to 3.44 trillion yen.
The year-over-year profit decline was mainly due to a one-time gain that the bank recorded a year before from the conversion of its preferred shares in Morgan Stanley to common shares, it said.
Mitsubishi owns a slice of Morgan Stanley after throwing a $9.0 billion lifeline to the troubled Wall Street investment bank in 2008 during the global financial crisis.
But the Japanese bank said its latest results were supported by trading gains, while its ratio of bad loans was also lower from the same period a year earlier.
It added that its exposure to debt-hit Europe was minimal, with no holdings of Greek or Irish government bonds.
The bank left unchanged its earnings forecast for the fiscal year through March 2013, expecting a net profit of 670 billion yen.
Japan's third-biggest bank Mizuho Financial Group said Thursday that its net profit in the nine months to December soared 44.8 percent from a year earlier, crediting the rise to big trading gains.
Japanese banks have traditionally held big stakes in their affiliates and clients to cement ties, so they are vulnerable to stock market declines, but can also post big gains when those shares surge.
The sector has been ramping up its overseas operations at a time when European financial institutions have been forced to scale back their businesses as markets fret about the eurozone's fiscal woes.
Mitsubishi has a presence in the United States through its California-based retail unit Union Bank, which in December bought another California lender, Pacific Capital Bancorp, for about $1.5 billion.