I am Kamezawa. Thank you very much for watching MUFG Investors Day presentation video. In our current medium-term business plan, or MTBP, which started in April 2021, we have been working on challenge and transformation to empower our stakeholders under our purpose, "Committed to empowering a brighter future." We faced unprecedented changes in the business environment in FY 2022, the second year of our MTBP, including heightened geopolitical risks, accelerating inflation, and interest rate surge in the U.S. and Europe, and the outbreak of credit instability among some U.S. and European financial institutions in March of this year. Despite this challenging business environment, we made steady progress in the three strategies set forth in our MTBP: corporate transformation, growth strategy, and structural reform. We feel that our earning power has steadily improved, with net operating profits of the customer segment increasing by more than JPY 400 billion.
As a result, profits attributable to owners of parent exceeded JPY 1 trillion for the second consecutive year, paving the way toward achieving the MTBP targets. This fiscal year is the final year of our MTBP. We are targeting a record-high profits attributable to owners of parent of JPY 1.3 trillion and ROE of 7.5%, which is our biggest commitment in this MTBP. We will ensure that effects of the measures taken so far produce results, and will offset the impact of the sale of Union Bank on profits by higher net operating profits from each business group to achieve this goal by all means. On the other hand, the ROE target under the current MTBP is just one step, and we need to aim for even higher ROE in the future.
In FY 2023, as the final year of the MTBP, we will aim to achieve the target while promoting initiatives that will lead to growth in the next MTBP. After this, the heads of our seven business groups, including the four new heads, will explain our achievements and challenges to date, as well as our initiatives for FY 2023, focusing on our main efforts to achieve the ROE target of the current MTBP. We hope this video will help you deepen your understanding of our business strategies and feel our enthusiasm for achieving our ROE target. Please take a look at it till the end.
I am Yamamoto, group head of Digital Service Business Group. I will take you through FY 2022 results, outlook for FY 2023, and future initiatives. Please turn to page 4. Starting with FY 2022 results. Net operating profits were up year-over-year to JPY 209.7 billion, and ROE was 6% above our initial plan due to increase in revenue driven by economic recovery, combined with cost reductions through branch network optimization. Please look at the top right of the page. In FY 2022, the number of our online channel users reached 9.3 million, up 1 million year-over-year, which is top class among financial institutions. Volume of card shopping and number of new customers increased at NICOS and ACOM. At the same time, challenges of this business group have become clear, and I will later come back to explain our approach to each challenge.
Bottom right, FY 2023 outlook. The original ROE target for FY 2023 of 6% has been reached in fiscal year 2022. We believe 6% ROE can be achieved in FY 2023 as well through business expansion on the back of economic recovery from COVID and the booming cashless market, as well as by curbing expenses to the same level as the previous year through operational efficiency. Let me discuss our future plans, including the next medium-term business plan or MTBP. Please turn to page 5. This is our vision of mass-market business. With the acceleration of digital shift and new entrants into the financial business, just to name a few, the business environment in the financial sector is rapidly changing and our customer needs diversifying.
While we have strengths, such as the largest customer base of any Japanese bank and lineup of financial services, we are facing challenges in data marketing and cooperation among group entities. Based on these strengths and challenges, we have set forth our direction, as shown at the top right. In engaging with customers in the mass segment, we need to take a lifetime value or LTV perspective. Customers' needs for products and services change with life stage. By taking a lifetime perspective, we want to stay relevant to our customers by offering the right service from a rich array of services at the right timing and with the right touch points. Maximizing revenue by enhancing LTV for each and every one of our customer base is the direction we aim for.
MUFG has already built an overwhelming customer base. In addition to solidifying this base, we will maximize earnings by further focusing on increasing LTV. Specifically, as shown below on the right, we will focus on three major strategies: expand customer touchpoints through offline and online services, evolve customer experience, and enhance personalization through collaboration among MUFG's extensive array of financial services, and enhance LTV management through data marketing utilizing collected data. Let me explain each of these strategies. Please turn to page 6. First strategy: maintain and expand customer touchpoints. Left side summarizes our basic policy of the strategy, and the right side describes initiatives. On the top left is a redefined positioning of each channel. To respond to customers' diverse needs, we will pursue the best mix of in-store and online customer services.
Our focus in expanding new touchpoints is Banking-as-a-Service, or BaaS, as shown in the bottom left. MUFG's relationship with large corporate clients is one of our greatest strengths, and by making maximum use of this strength, we will bring MUFG's financial services to an even greater number of individual clients. Our BaaS offerings include not only a general banking type that offers basic banking functions, but also a function-specific type that includes settlement and asset management in order to meet the diverse needs of our corporate partners. Turning to our initiatives on the top right regarding channel, branch network optimization has more or less completed after taking drastic measures in the last few years. We believe that we have gained the advantage of being able to quickly and flexibly deploy the most appropriate channels in line with customer needs in the future.
For branches, we plan to open new type of branch based on changes in traffic. In the meantime, we are expanding online consultation, where customers can connect from the comfort of their home. In June, we began piloting a new initiative, offering consultations at booths set up in train stations and offices. We will seek opportunities for new customer touchpoints in the Metaverse as well. As for BaaS, as shown on the lower right, this month, we started offering financial functions on Recruit's Shift Board, a shift management app for part-timers. Our goal is to acquire accounts from younger customers to become their main bank. At the same time, we are currently developing a general purpose BaaS system and have already signed MOUs with about five companies to accelerate our efforts. As for function-specific BaaS, we are already providing the function of QR code payment function, COIN+.
Going forward, we will white label Money Canvas and asset formation and support service and provide it to external companies. Please turn to page 7. Second strategy is evolve customer experience and propose personalization. As shown on the left side of the slide, one of MUFG's strength is its diverse product and service lineup. For example, among those shown on the lower left, the bundle card of ACOM, now a consolidated subsidiary, has already reached 8 million downloads and has gained strong support, especially among the younger generation. In order to realize an evolution of the customer experience, it's essential to strengthen coordination among products to provide customers with frictionless service, and to offer personalized proposals tailored to each customer's life events, in addition to expanding the product lineup.
As shown in the upper right-hand corner, a guide for inheritance was released this month as an example of our expanded product lineup. In addition to creating an inheritance to-do list tailored to the customer's situation and managing tasks by due date, it also has functions such as search for specialists, such as lawyers, to support customers' needs. We plan to develop this into a hub for expanding transactions with heirs by linking with other MUFG services and opening new accounts. Bottom right shows the customer experience we aim for. By seamlessly linking products and services from the home screen on the app, use of a wide variety of products will be encouraged. Based on the customer information obtained through transactions, we will provide dedicated advice and information tailored to the life events of each individual customer to make customers want to carry out more or all transactions at MUFG.
We will accelerate our efforts. Turning to page 8, evolution of customer experience and personalized offerings will be underpinned by our third strategy, enhanced data marketing and LTV management. The left side of the slide shows MUFG's direction of data marketing. We will accumulate high-quality data by utilizing not only data from individual business categories, but also external data. By conducting group-based analysis, we will gain more detailed customer understanding to make personalized offerings. We will also consider opportunities for expanding the use of accumulated customer base and data to corporate clients. On the right are specific initiatives. As a first step in developing the infrastructure for personalized proposals, the bank will introduce a customer data platform to centrally manage information obtained from various customer contact points. This will enable more timely and detailed proposals to customers. We believe that AI is effective in understanding customers' potential needs.
The use of generative AI in customer contact points will be sought.
Regarding business for operators using financial data, we currently run advertising business, but in the future, initiatives in the areas of data analysis and market support will be considered. Lastly, on the use of new technologies to support company-wide digital transformation, or DX. At MUFG, DX is an integral part of running each business group. The driver of company-wide DX is DS Business Group. Please look at the left side of page 9. We believe that the use of AI is indispensable for improving operational efficiency and enhancing services we provide to our customers. Therefore, we have established a group-wide project team across the MUFG Group to introduce and utilize ChatGPT to pick up speed and utilize it again in areas where it is expected to be highly effective.
In the initial POC conducted at the bank, a 40% reduction in time was realized on creating a summary report, which generative AI is good at. We've already received more than 100 use cases. We will proceed with POC in priority areas such as handling inquiries for internal procedures, AI approval requests, and wealth management, among others. On the right side is the use of new technologies, such as AI and quantum computers. With the aim of further utilizing AI and quantum technology, the bank entered into a capital and business alliance with Groovenauts this month, making it an equity method affiliate. The bank will use the technology to improve operational efficiency, such as predicting ATM deposits and withdrawals, and optimizing site visits, and to improve the predictive management of risks. Groovenauts SaaS services will strengthen MUFG's ability to provide solutions such as DX support to our customers. That will be all for me. Thank you for your attention.
I am Miyashita, Head of Retail and Commercial Banking, or R&C, Business Group. Today, I will explain the progress of the current medium-term business plan and our key strategies for FY 2023. Please look at the upper left table summarizing the progress of the MTBP. Last year, net operating profits were JPY 146.8 billion, and ROE was 5.5%. We steadily increased our earnings year-on-year and achieved the target level for the final year of the MTBP, one year ahead of schedule.
As shown in the ROE step chart on the lower left, although we struggled in the asset management business, cross-transactions expanded, thanks to the activation of intragroup collaboration, and base income and derivatives transactions also expanded with proposals that captured market conditions. In addition, ROE improved significantly as a result of steady progress in cost reductions through branch network optimization and other measures. On the other hand, as shown on the upper right, we recognize our challenges, including providing wealth management solutions to a much bigger customer base, further improving lending spread, diversifying customer touchpoints through the use of digital technology, and improving productivity. From the next page, I will review our key strategies in FY 2022 and explain our key strategy for FY 2023, which aims for higher ROE. First is review of FY 2022.
Upper left, as mentioned earlier, in the wealth management business, net operating profits increased from JPY 51 billion in FY 2020 to JPY 79 billion as a result of cross-transactions centered on loans and real estate, outperforming the shortfall of the Asset Management Business. Lower left, wealth management digital platform, developed by incorporating Morgan Stanley's knowledge, was fully deployed last fiscal year. In addition to deepening the collaboration among BK, TB, and MUMSS, the use of this system allowed us to enhance the recommendations to Relationship Managers and to utilize the goal planning function. The number of proposals using the system has reached 200,000, and the results of these activities are also becoming evident, such as doubling of the fee income per customer. Next is base income on the upper right, which consists of deposits, loans, and domestic and foreign exchange transactions.
Although we had a major change in the environment last year with the policy rate hikes by the U.S. and European central banks, our business group expanded its stable revenue base by increasing non-Japanese yen deposit interest income, improving loan spread, and acquiring new FX customers. Lower right, cost structure reforms. In addition to a decrease in system depreciation cost and deposit insurance premiums, the so-called base cost decreased by approximately JPY 40 billion compared with FY 2020 through branch network optimization. By achieving both income growth and cost reduction, the expense ratio declined significantly from 90% in FY 2020 to 76% in FY 2022, and we believe that we have steadily strengthened our earnings base. This is our review of last fiscal year. I will explain our key strategies for FY 2023. The first key strategy is corporates and wealth management strategy.
Our business group's plan for FY 2023 is to generate JPY 18 billion, or about half of the growth in net operating profits from this area. I will explain the specific actions we will take on asset management and cross-transactions, which are the main items of the strategy. First, in asset management, as shown on the lower left, the balance of investment assets from retail clients has steadily increased, thanks to stronger collaboration between BK and MUMSS. As part of our strategy to further increase the balance of investment assets, we are increasing the number of staffs in the family office division in MUMSS, which is in charge of wealth management clients with large transaction potential, and released a function to list up and visualize the risk of clients' financial assets as a function of the wealth management digital platform.
We expect this will further enhance the quality of our portfolio proposals. Next, right side shows cross-transactions that leverage the strength of intergroup collaboration. In business succession, which is the core of cross-transactions, we will strengthen the coverage of clients. Specifically, in addition to the corporate-oriented approach to clients who have clear succession plans, the Wealth Management Consulting Division, with strength in retail asset succession skills, will also approach clients on business succession in order to provide specialized solutions to a greater number of clients. Lower right. Of all the cross-transactions, real estate transactions are also important in succession events, and we are steadily achieving results by expanding transactions with wealth management client families who have large transaction scale. This fiscal year, we will also introduce a system that utilizes real estate registration data to implement efficient and effective proposals and achieve our profit plan.
The second key strategy is the enhancement of base income. We plan to increase our base income by JPY 32 billion in FY 2023, and to steadily increase non-Japanese yen deposit interest income, as well as FX and loans for corporates. As for FX, shown on the lower left, we will consolidate the FX section in branches into a stronger specialized unit at the headquarters and deepen the existing FX businesses by sophisticating the account plans by client. Furthermore, we will increase the number of new contracts for FX internet banking services and strengthen our income base. Next is loans on the right side. During the long negative interest rate environment, lending spread declined over the past few years, but it turned into an improving trend, thanks to the introduction of pricing management with stronger headquarter management.
Of the JPY 17 trillion outstanding loans in R&C, approximately 40% will mature or be refinanced in FY 2023. We will aim to improve spread by accurately seizing these opportunities, by thoroughly implementing a competitive pricing operation, and by expanding the target of deal screening. We will increase loan interest income by accumulating high-value-added financing, such as LBO loans and real estate loans. Next is business foundation enhancement, eyeing the next MTBP. The upper left diagram shows measures to diversify customer touchpoints and improve productivity. Biz-Create, which provides solutions for management issues on the platform, had been delivered through RMs. From April this year, it will be available to customers without RMs directly from the bank's portal site for corporate customers. We hope that this service will be useful in resolving management issues for more customers.
For retail clients, we released Wealth Canvas in October last year, which allows clients to perform various simulations, such as asset succession, on their own. We will continue to diversify customer touchpoints and create new customer touchpoints through various other initiatives. Although it is a measure that will continue into the next MTBP period, we are planning a complete renewal of the sales activity platform used by our RMs in their daily sales activities. By building digital knowledge on top of RMs' diverse experience, we aim to realize a data-based sales model that is highly reproducible and productive. Research on the use of generative AI, which has the potential to drastically improve productivity, will be conducted at a rapid pace. Lower left, on human capital enhancement. As a business group with the largest number of employees in Japan, we will develop measures to support company-wide initiatives.
Specifically, we will enhance the professionals treatment system to improve the professionalism of our employees and will actively work to increase the number of women in management to enhance gender diversity. Next, on exploring new business opportunities on the right side, we will make efforts to create new business pillars by taking on the challenge of new initiatives, such as support for growing companies, corporate turnaround business, and business development, utilizing the outcome of industry-academia collaboration. Lastly, FY 2023 is a year to develop the next MTBP. Although we are currently in the process of examining the plan, the core competence of R&C Business Group is.
The capability to provide finance services through excellent RMs, which we have cultivated over the years. From now on, we will proactively embrace digital technology to radically improve productivity of our comprehensive consultation services by our staffs, create an attractive workplace, and maximize customer satisfaction. We will achieve higher ROE as a result of that. I plan to draw up a strategy based on these basic concepts. That concludes my explanation.
Thank you very much for your attention. I am Akita, Group Head of the Japanese Corporate and Investment Banking Business Group. I will give an update on our progress of the medium-term business plan, MTBP, and operations for FY 2023. Let me start by sharing two points regarding the direction of the Japanese Corporate and Investment Banking Business Group in FY 2023, including my personal views. First, our vision.
Large corporate customers are seriously pursuing measures to achieve business transformation in the face of major societal changes led by GX and DX. MUFG's growth is linked to the growth of customers. We would like to accompany our customers as a partner in realizing change by demonstrating MUFG's potential to the maximum. We will work together with our customers and lead the renewal of Japan's industry. Next is our plan for FY 2023 to achieve our vision. JCIB has already achieved the plan initially set for FY 2023 in the MTBP ahead of schedule in FY 2022. In FY 2023, we will continue to strive to achieve the revised plan while preparing to ensure sustainable growth in the next MTBP period. From here, I will give an update of our MTBP and walk you through our key strategies for this fiscal year. Please refer to page 18, top left.
In FY 2022, net operating profits was up JPY 127.5 billion year-over-year, with increase in revenue, among others. RWA control was thoroughly implemented, including reduction of equity holdings to reach ROE 10%, improvement of 4% year-over-year. Achievements and challenges for FY 2022 are described on the top right. In FY 2023, we will strive for a higher ROE and prepare for the next MTBP. Our four key strategies are outlined in the lower right. First is maintaining and expanding high-quality portfolio. Second, further strengthening of origination. Third, establishment of business model to address social issue. Fourth, facilitate changes in customer expectation regarding the roles we should fulfill. I will cover each of these key strategies in more detail from the next page. First, maintaining and expanding high-quality portfolio. Please look at top left of page 19.
JCIB introduced ROE-linked performance evaluation system in FY 2021. Level of RORA and amount of RWA being expended are visualized in a four-quadrant management effort, which started. Profitability-driven mindset is instilled in our sales staff to improve profitability. As shown in the top right, lending spreads improved by 10 basis points in JPY and by 8 basis points in non-JPY since the beginning of the MTBP. Non-JPY deposits have seen a significant increase in spreads supported by the interest rate environment. We will continue to maintain and expand this momentum in FY 2023. As described on the bottom right, progress is made in the reduction of equity holdings. Total reduction from FY 2021 is JPY 323 billion. Balance of equities agreed for sale but not sold yet is building up. Reduction target during the current MTBP is JPY 500 billion.
We will continue to steadily reduce equity holdings through respectful dialogue with customers. Next is further strengthening of origination. In order to achieve sustainable growth when the international financial market is growing uncertain, we are working to improve profitability, risk-taking, and strengthen our ability to originate deals through group-integrated management....As shown on the top left of page 20, we have been working to replace low-margin RWAs with investment in high-margin assets, such as capital finance and real estate NRLs. As a result, solutions and real estate brokerage have steadily increased revenues since the beginning of the midterm business plan. As shown on the right, we are working to enhance cross-organizational use of MUFG solutions. In the primary business, profits have nearly doubled in the 10 years since joint venture with Morgan Stanley was established.
In real estate business, MUFG's collective strength in CRE, equity mezzanine support, and leasing are mobilized, while new technologies, such as Progmat, are utilized to provide support for the entire real estate value chain. We aim to establish a structure that will ensure we do not miss out on new business opportunities by providing our customers with the best balance sheet in Japan and industry-leading solutions from our group companies in a seamless manner. Next is establishing business model to address societal issues. Regarding initiatives to achieve carbon neutrality, as shown on the left of page 21, we are advanced and issued MUFG White Paper in October last year. Our focus has been on dialogue with high emitters in the materials and utility sectors, and have communicated to global stakeholders, policymakers in the West in particular, about Japan's unique path to carbon neutrality due to regional characteristics, among others.
In the White Paper 2.0, scheduled for release in October this year, the goal is to identify and publicize key technologies and supply chains that are critical to advancing carbon neutrality in Japan in order to improve investment predictability and mobilize funds. In addition to these efforts, as shown in the lower left, we have made progress in our decarbonization business that support our customers' efforts toward carbon neutrality. Our efforts to achieve carbon neutrality will be accelerated. Other initiatives executed to address important societal issues as investment for co-creation business are on the right. Domestic production of semiconductors, which is becoming increasingly important due to rising geopolitical risks, implementation of space business, and telecommunication infrastructure sharing, which will play a fundamental role in the era of information explosion. The investment balance at the end of FY 2022 was up significantly year-over-year to 9x .
Going forward, we will use the investment as a starting point to gather knowledge and networking and accelerate studies for business implementation. Let me talk you through our initiatives to facilitate changes in customers' expectations regarding MUFG's roles. To contribute to addressing societal challenges, we need to change customers' expectations of our role, for them to see us as their partner, assisting them in achieving social transition. For customers' expectations to change, our employees need to see change in their daily modes of behavior and the culture of JCIB. To instill our approach for co-creation of value that started from April last year, initiatives have been taken to facilitate behavioral change of our staff with support from outside partners, as summarized at the bottom left of the page. These initiatives will continue in fiscal year 2023.
Lastly, regarding the pathway for growth in the next MTBP, as I mentioned at the outset, to achieve sustainable ROE growth, it is most crucial to support the transition of society with our customers and to lead the renewal of Japan's industry. We will step up our efforts implemented in the past to achieve higher growth in the next MTBP and beyond. That concludes my presentation. Thank you for your attention.
I am Itagaki, Head of Global Commercial Banking Business Group. I have been involved in the management of Bank Danamon for four and a half years until April, and prior to that, I had long been involved in MUFG's overseas strategy in Asia, including serving as the Head of Planning Division at Global Business Group. Today, I would like to explain the current situation and strategy of GCB Business Group based on my career to date. This year marks the 10th year since MUFG began investing in Asia and the 5th year since the establishment of GCB. First of all, let me look back on the past 10 years. Since we announced our investment in VietinBank in 2012, we have considered Asia as our second mother market and accelerated our investment in Asia.
With the acquisition of additional shares in Bank Danamon in 2019, we completed our commercial banking platform consisting of four ASEAN banks. Prior to that, in 2018, we established GCB Business Group with a view to further develop our partner banks, including the creation of further synergies among MUFG partner banks. In recent years, we have also increased our strategic investments in digital financial businesses in Asia. By supporting the growth of our portfolio companies, we aim to contribute to financial inclusion in Asia and capture the growth of digital finance in the region, which is not fully captured by commercial banks. Looking back at the performance of each partner bank, VietinBank and Krungsri grew strongly in the 10 years post-investment.
Security Bank and Bank Danamon have not grown as expected due to their early stage of investment and the impact of COVID-19 in the last three years. Both banks have large market potential with their demographic background and are expected to make a quantum leap from a 10-year perspective. We will continue to support the growth of each partner bank. I will now explain the progress of the MTBP. In FY 2022, both net operating profits and net profits increased year-on-year, thanks to an increase in the loan balance and liquid deposits and successful expense control. ROE after amortization was 6.5%, up 1% year-on-year. In FY 2023, we will continue to promote various measures, aiming for net operating profits of JPY 230 billion, net profits of JPY 85 billion, and ROE of 7% after amortization.
Let me explain some specific initiatives. In FY 2022, Krungsri made progress in its inorganic strategy, and Bank Danamon also strengthened its auto business. In digital-related investments, we have made several investments since last November, and our future challenge is to create synergies with the investee companies as soon as possible. We also see the strengthening of the retail base of Bank Danamon and the increase in the number of sustainable finance deals as challenges, and will promote measures to address them in FY 2023. Next, I will elaborate on each partner bank, starting with Krungsri. In FY 2022, both net operating profits and net profits increased year-on-year due to an increase in loans and an improved spread resulting from higher policy interest rates. In the first quarter of FY 2023, both net operating profits and net profits increased year-on-year, thanks to continued loan growth and spread improvement.
As shown on the lower left, we continued to maintain a low NPL ratio compared to other banks. While the Thai economy is maturing, Krungsri is pursuing discontinuous growth opportunities by expanding into neighboring countries as one of its growth strategies, and plans to complete the acquisition of four companies in the four countries listed in the upper right in FY 2023. Through these initiatives, we will further strengthen and expand our retail business. The other growth strategy is to invest in and collaborate with start-ups through our corporate venture capital. We will focus on the collaboration with fintech-related companies to strengthen Krungsri's products and improve its operations. Next is Bank Danamon. In FY 2022, the MUFG collaboration led to record-high loan and CASA, and its loan growth rate, in particular, was the highest among the top 10 Indonesian banks.
Net operating profits declined due to struggling treasury and fee income and increased investment in the operating infrastructure, but net profits increased significantly as credit costs were controlled. In the first quarter of FY 2023, net operating profits were up year-over-year, thanks to an increase in the balance of auto loans, while net profits declined as increase in loans pushed up credit costs. As shown on the lower left, the NPL ratio remains lower than other banks. By managing Bank Danamon, I realized that the main reason it has failed to achieve breakthroughs in the 10 years since 2013 in a growth market of Indonesia, is that the investment in the growth of the commercial bank's business foundation was insufficient.
From FY 2022 onward, we will expand investments in branches, IT, and branding to put the bank on a sustainable growth trajectory and strengthen the business platform, especially in the retail sector. We will also continue to focus on strengthening the auto business, which is one of Bank Danamon's strengths. In addition, we will focus on creating new profit source and expanding our business platform by enhancing our collaboration with Home Credit Indonesia and acquiring Mandala Multifinance, which was recently announced. Next is VietinBank and Security Bank. Both banks are equity method affiliates and rank third and tenth in Vietnam and the Philippines, respectively, in terms of total assets, and both performed well in FY 2022, with record-high net profits. Their contribution to net profits is steadily increasing.
MUFG will focus on supporting the growth of the two banks by sharing know-how, strengthening collaboration with digital-related investees, and promoting collaboration through events. Next, let me explain the various measures being undertaken by GCB. We are focusing on capturing growth in Asia and opportunities for collaboration with partner banks by investing in digital finance companies. Most recently, we announced the acquisition of Home Credit's subsidiaries in the Philippines and Indonesia, and completed our investment in Akulaku and DMI Finance, and the establishment of Garuda Fund. In Indonesia, for example, we are investing in digital finance companies as part of our comprehensive strategy to capitalize on the growth of Asia, including the expansion from the traditional commercial banking model to an online and offline ecosystem in terms of channels and to the unbanked segments that have been unreachable in terms of customer base.
Let me explain the promotion of sustainable finance. The amount of sustainable finance by our partner banks has been increasing in response to the growing need for sustainable finance in the respective countries. In FY 2022, we helped Krungsri issue a large green bond and also helped Bank Danamon close its first sustainability-linked loan. We will continue to focus on our collaboration and knowledge transfer from MUFG. As shown on the right side, MUFG and its partner banks have been successful in closing unique deals that combine their customer bases and products. Going forward, we will continue to leverage our commercial banking platform network as one of MUFG's strengths to provide customers with services that only MUFG can offer. FY 2023 is the final year of our MTBP. Although the business environment remains uncertain, we will steadily implement measures to achieve our ROE target.
We are committed to empowering a brighter future for Asia and the world. Thank you very much for your kind attention.
I am Nakahama, Group Head, Global Corporate & Investment Banking Business Group. I will cover GCIB's progress of the MTBP and key strategies for FY 2023. Let me start with review of fiscal year 2022. Net operating profits was up JPY 77.6 billion from FY 2021. ROE increased by 1.5 percentage points to 8.5%. Despite the sluggish capital markets, we were able to improve ROE for four main reasons. First, was rise in foreign currency interest rates, interest margin improved by ensuring balance sheet optimization. Second, progress in institutional financing. Third, increase in loan underwriting commissions in the project finance area. Fourth, capturing flow businesses such as derivatives, foreign exchange, and deposits. Non-interest fee exceeded JPY 230 billion in FY 2022. We believe there is still room for improvement in the non-interest fee ratio.
Based on the above, let me take you through our key strategies for FY 2023. Please see bottom right. When I took the position of Group Head last fiscal year, I highlighted three points as management policy: simplicity, empowerment, and client delivery. In my second year, promoting culture reform, I'm getting good response. Simplicity is about simplifying the internal reporting line and various procedures. By combining simplicity with empowerment or delegating of authorities, decision-making will pick up speed. This will be reflected in client delivery. In other words, increase contact points with customers and enhance the quality of deliverables so that customers will see us not as a lender, but as a banking partner. This is critical. To make this happen, I have been calling on MDs and associates around the world to play where you can win.
Under this management policy, I have four key strategies to share with you. Let me take you through each one from the next page. First is profitability improvement of business portfolio. On the left is our focus of portfolio management based on QUAD analysis. Average ROE in each of the quadrant has improved. Medium, it moved to top right from last year, and profitability per company in the portfolio is improving steadily. Please turn to top right. Percentage of assets below GCIB's ROE target is declining steadily. In value terms, $1.6 billion reduction in two years or JPY 2 trillion. Lending spread improved from 1.15% to 1.36%, up 21 basis points. Since GCIB average loan balance is approximately JPY 20 trillion, impact of lending spread on revenue is more than JPY 40 billion, contributing significantly to ROE improvement.
We will continue to keep pace in working on balance sheet optimization to allocate resources to strengthen sectors and products where we had advantage to further improve profitability of our balance sheet. Next, on GCIB and Global Markets, which is about integrated management of GCIB Global Market sales and trading. Collaboration between GCIB and Global Markets started from the previous MTBP. Integrated management started under the current MTBP to further enhance collaboration in sales and trading. We are in the third year and steadily producing results. Graph on the left shows our business domain and focus areas. Basic direction of our strategy has not changed from last fiscal year. Number five, direct lending, will be explained on the next page. Please look at the right side. One of the focus areas, finance for institutional investors, is growing steadily.
We will continue to grow our portfolio, but not in a perfunctory way. We will focus on areas where we have strength in, such as infrastructure and renewables, to name a few, and provide services to meet investors' needs. Next is loans, bonds underwriting, and secondary trading. Last year, with rise in geopolitical risks and interest rates, lending bond wallet decreased. Non-IG market decreased significantly from 2021. We expect the market environment to remain challenging this fiscal year. Importance of asset turnover to improve ROE remains intact. While further upgrading underwriting and sales risk management, we will further strengthen cooperation with Morgan Stanley and between primary and secondary to increase non-interest fee income when market conditions recover. Next is strategy of the Americas.
End of last year, MUFG sold the retail and commercial banking business of MUFG Union Bank to U.S. Bank, which I'm sure many of you are familiar with. As a matter of fact, a part of middle-market wholesale banking owned by MUFG Union Bank was not sold, instead transferred to GCIB. As a result, we have a broad coverage in the United States from startups, medium to large companies. The Americas, with a large accessible wallet, is a strategic region for GCIB. We will continue to allocate resources while paying attention to risk management. Graph on the bottom left shows the direction of our Americas strategy. The direction remains unchanged, but the strategy will be deepened in the United States. Please look at the right side for details. We will strengthen business relationship with institutional investors-led middle-market clients to increase assets with high-risk return.
To realize this strategy, a team specialized in direct lending was set up in August last year. Team size has increased to 33. To further boost relationship with emerging and middle-market technology companies, 25 bankers experienced in business development and screening were hired from Silicon Valley Bank in April this year. We will work to become the primary bank in Silicon Valley, focusing on businesses with high-growth potential, including startups. M&A advisory boutique, Intrepid, originally under Union Bank, has been brought under GCIB. With this addition, we will be able to offer M&A-related management and financial strategy support to clients we've built relationships with through direct lending and emerging tech teams. We are working to introduce MARS AI technology, which I will cover on the next page, to our U.S. business.
Thus, we are now equipped with commercial banking functions, such as lending and deposits, and advisory functions with focus on M&A. We have been able to build a structure to offer optimal services that meet the growth stage of companies in the U.S. startup and middle-market ecosystem. In the United States, by executing these strategies, we will be covering startups to large businesses in the commercial banking area, while in the investment banking area, conduct business more efficiently through integrated management with Global Markets Business Group and enhanced alliance with Morgan Stanley. We aim to build an all-weather business portfolio that is resilient to interest rates and capital market volatilities, and to achieve stable net operating profit and ROE growth. In closing, let me cover investment in new business for growth. Left side of the page shows growth track record of MARS.
Mars Growth Capital, jointly launched with Liquidity Capital of Israel in 2020, has so far funded 33 companies in Funds I and II. Total investment reached JPY 50 billion at the end of March this year. With business growth comes high IRR. Various new initiatives are underway. Still on the left, heading to further expansion of funds business, MARS Europe and MARS Japan have been launched to expand our footprint. MARS NEXI Collaboration Fund invites outside investors. Left-hand side, heading 3, capture IPO deals through alliance with Morgan Stanley. MARS customers are linked to Morgan Stanley to offer broader services, such as IPO and M&A, to meet customer needs, depending on their growth stage, and for us to capture fee income opportunities. Number 4, AI-based financing model for new business and efficiency.
Together with Liquidity Capital, we will explore diverse ways to leverage AI technologies utilized over the years in MARS. Moving to the right, MUFG Ganesha Fund aimed to capture growth in India and utilize digital capabilities, have executed three investments so far. In April this year, we invested in DMI Finance, a digital lender in India, jointly with GCB and DS Business Groups. To further enhance corporate value, MUFG is united in supporting the growth of the company. Bottom right, transition support and business addressing societal challenges. By leveraging on our strengths with the world's largest social loan origination and renewable energy project finance, we have been able to enhance both our capabilities and presence. Our initiatives have been given credit and had the pleasure of being awarded the Best Sustainable Finance Adviser, Asia Pacific by The Asset and Global Bank of the Year for project finance.
Lately, by utilizing the blended finance method that mixes public and private funds, initiatives for decarbonization in Asia are being accelerated. MOU was signed with NEXI in June this year. We are dedicating our efforts to yield positive results soon. Economic environment is changing, and market volatility is rising, but we will strive to increase net operating profit and further improve profitability by ensuring balance between risk management and risk-taking. Much for me on GCIB key strategies. Thank you for watching till the end.
I am Seki, Head of Global Markets Business Group. Today, I would like to review our performance in FY 2022 and explain our key strategies for FY 2023, the final year of our MTBP. As you can see on the upper left, net operating profits for FY 2022 was JPY 143.4 billion, and ROE was 3%, both of which declined year-on-year. This was mainly due to our treasury operations, in particular, where we worked to curb the deterioration of unrealized losses on our foreign bond portfolio, including hedging operations, under a difficult environment where interest rates in the U.S. and Europe rose significantly.
As shown on the upper right, sales and trading operations achieved a significant profit increase through stronger collaboration and integrated operations with domestic and overseas customer business units under extremely volatile conditions in the FX and other markets. In particular, in the sales operations, we implemented initiatives to thoroughly increase the amount of activities and succeeded in steadily capturing customer flows, and in the trading operations, we succeeded in generating record profits by ensuring profitability through flexible position management with effective asset turnover. In treasury operations, we actively utilized various hedging tools, such as bear funds, to dispose foreign bonds with unrealized losses and gave top priority to controlling unrealized losses and improving the holding value of the portfolio.
We also utilized the held-to-maturity account to replace and purchase bonds, which enabled us to both control the deterioration in unrealized gains and losses of the portfolio and gain financial income. As for challenges, first, in the sales and trading business, we see an accelerating trend of various market transactions becoming oligopolistic on a global basis, along with the rapid shift to online and technological developments. We need to further improve our customer service, especially by leveraging our leading-edge FX platform. We realize the need to further strengthen our capability to respond to the normalization of yen interest rates. In treasury and other operations, we recognize the need to continue to improve the soundness of both yen and foreign currency portfolios, strengthen the management of non-Japanese yen liquidity, and continue to expand our long-term diversified portfolio.
Based on the recognition of these issues, we will promote the three key strategies, one through three, and especially the seven strategies, A through G, in red circles in FY 2023, as shown on the lower right. Before I explain these strategies, I would like to reiterate our recently announced Alliance 2.0, which will further strengthen and deepen the global strategic alliance between MUFG and Morgan Stanley. Please turn to the next page. As shown on the left side, since MUFG and Morgan Stanley entered into our global strategic alliance in 2008, throughout the 15 years of deep mutual understanding and trust, we have expanded the scope of our collaboration, centering on our Japan Securities joint venture business and investment banking in Japan and overseas, to wealth management and asset management, providing our clients with the unique value from this alliance.
We will continue to pursue the global strategic alliance between MUFG and Morgan Stanley, called Alliance 2.0, and deepen it into an even stronger partnership that will last for the coming decades. The two Japan Securities JVs will work together to become Japan's top securities company and provide better services to their services. The launch of Alliance 2.0, we have entered into MOU to engage in strategic alliances and collaborations in the two new areas indicated by red squares 1 and 2 on the bottom left. Implementation is targeted in the first half of 2024, subject to regulatory approval. The red square 1 on the upper right shows the collaboration between MUFG Bank and Morgan Stanley in the foreign exchange trading business.
The purpose of this collaboration is to enable MUFG Bank and Morgan Stanley to respond more precisely and promptly to the increasingly sophisticated and diverse needs of our clients, based on our respective strength and complementary nature in the FX business. To this end, MUFG Bank, through Morgan Stanley MUFG Securities, one of Japan's securities JVs, will utilize Morgan Stanley's world-leading FX trading platform for its trading business, so that both companies will benefit from the economy of scale, further enhance their pricing capability, and expand their product and service lineups. Sales to clients are not included in the scope of this collaboration, the points of contact in each company will remain unchanged. Details of the collaboration are explained on the next page.
Next, the red square 2 on the bottom right shows the collaboration between the two Japan Securities JVs, Mitsubishi UFJ Morgan Stanley Securities, and Morgan Stanley MUFG Securities in the Japanese equity business for institutional investors. The purpose of this collaboration is for the two Japan Securities JVs to further integrate their strength in various aspects of this business, such as client relationships, coverage, and business platforms, and to work more closely together to meet the increasingly sophisticated and diverse needs of our clients. The JVs will work as one team to become the top securities company in Japan in the Japanese equity business. To this end, the joint ventures will integrate their sales, corporate access, part of execution, and research functions on Japanese equities for institutional investors into Morgan Stanley MUFG Securities, and optimize their underwriting structure to further leverage Morgan Stanley's global platform.
Mitsubishi UFJ Morgan Stanley Securities will continue to provide services to business corporations, wealth management, and some financial institutions. That concludes the explanation of Alliance 2.0. In the following slides, I will explain the key strategies of our business group as presented on the previous page. Please turn to the next page. This slide shows the key strategy 1: Further strengthening sales and trading business. First is our recognition of the business environment and key strategies on the upper left. This fiscal year, in order to meet the needs of our customers against the backdrop of the business environment shown here, we will pursue the key strategies outlined in red circles A through C, aiming to achieve revenue in excess of JPY 470 billion for the sales and trading business as a whole. Next is by strategy.
First, we will promote A, further strengthening of FX business on the lower left, aiming to achieve revenue of JPY 200 billion or more in this area. In particular, given the severe competitive environment in which the FX market is rapidly becoming oligopolistic on a global basis, along with the rapid shift to online and technological trading, as part of the strategy A, we will promote collaboration between MUFG Bank and Morgan Stanley in the FX trading business, which is the Alliance 2.0 collaboration, to further improve customer service and respond more accurately and promptly to increasingly sophisticated and diverse needs.
More specifically, MUFG Bank will establish a framework to utilize Morgan Stanley's FX trading platform through Morgan Stanley MUFG Securities, one of Japan's securities JVs, even in a severely competitive environment, thereby enabling MUFG Bank and Morgan Stanley to further strengthen their business relationship, as shown in the lower part of this chart. In addition, both companies will benefit from the economies of scale and further improve their services provided to customers, such as faster price quotations and expanded currency pair coverage, thereby further enhancing their pricing capability as well as the product and service lineup. Next, upper right, B, GCIB and Global Markets. We see a continuous trend of institutional investors reviewing their investment strategies and corporate customers diversifying their financing methods.
In order to respond to this, we will first review and strengthen our various business infrastructures and platforms, as shown in the bottom line of the chart on the right, and then, while increasing the volume of activities, promote secured finance, loans, and corporate bond underwriting, and various ancillary transactions in order to maintain revenue of JPY 120 billion and combined ROE of over 8%. Finally, lower right, C, top domestic market share in derivatives. Japanese and domestic customers continue to face needs, such as preparing for diversifying business risks, review of financial strategies, and responding to green and digital, while yen interest rate is expected to rise.
In order to respond to these needs, we will promote the development of new products, as shown in the bottom line of the chart on the right, as well as the establishment of various business infrastructure and platforms, while increasing the amount of activities to provide hedging instruments, support for managing surplus funds, promote ESG-related derivatives transactions, and provide various solutions, and thereby maintain revenue of JPY 86 billion. Please turn to the next page. This slide shows our key strategy 2: treasury operation in response to changes in business environment. First, the upper left chart shows our recognition of the environment and our key strategies.
In FY 2023, against the backdrop of the business environment I've described, we will further raise our awareness of capital and non-Japanese yen liquidity constraints and take into account the fact that the inverted yield curve of foreign currency interest rates remain high and continue to pursue strategies D and E, circled in red, to achieve both profitability and soundness. Red circle D, enhance market risk management. As shown in D1 on the lower left, from the perspective of profitability, we will combine domestic and foreign bond and equities, actively utilize hedging tools, take a flexible approach to operate our positions, and dynamically change asset allocation. Through timely and appropriate risk-taking, we will take on the challenge of offsetting the unprecedented deterioration in income gain with capital gains, thereby securing overall financial income and returns.
At the same time, as shown in D2 on the upper right, we will remain conscious of soundness and continue controlling the deterioration of unrealized losses, especially in foreign bonds, and improving the soundness of the portfolio. We will actively utilize various hedging tools, such as bear funds, to dispose foreign bonds with unrealized losses and improve the portfolio's holding value, and also continue to replace and purchase bonds to a certain extent by utilizing the held-to-maturity account. Second is strengthen non-Japanese yen liquidity management on the lower right. Under the full-fledged quantitative tightening of the U.S. dollar, we will operate and manage each item on both sides of the balance sheet with a focus on soundness, including strict control of the upper limit of loan-to-deposit gap, as shown in the red square, as well as other items indicated in the boxes. Please turn to the next page.
Finally, on this slide, let me explain our key strategy 3: challenges for new business areas. We will continue to work on new businesses that are not limited to existing areas. First is F, long-term diversified portfolio expansion on the left side. Since FY 2021, which is two years ago, we have continuously built up our portfolio under the basic policy of producing sustainable and stable profits, and achieving 8% ROE over the medium to long term, including responding to the rising interest rate environment. In FY 2023, as shown in the pie chart in the middle, we will continue to accumulate mainly floating rate and highly rated products, as well as further expand credit and alternative investments.
In addition, with the aim of making this business area one of the earnings pillars of our business group, we will further enhance collaboration between BK and TB in practical terms, and work towards the development and materialization of the MUFG Credit Alternative Investment Strategy, a future investment strategy for the entire MUFG Group. Next is G, initiatives for carbon credit on the upper right. We have begun to invest in global forest investment funds as part of our support for forestry projects. We will continue to make further investments, and we'll also accelerate various efforts to invigorate the market through the trading of carbon credits received from the fund.
In addition, as shown on the lower right, in other areas, we will actively pursue inclusion and diversity, and the recruitment and training of human resources, as well as new business areas, such as responding to the GX Economy Transition Bonds and participating in the NFT business. Alliance 2.0 and the key strategies of our business group, as I explained, will be implemented in response to significant structural changes in the business environment. As I mentioned last year, we cannot fully control the changes themselves. All we can do is to be at the forefront of change. In other words, unless we are at the forefront, we will not be able to survive in the market. With this in mind, we will renew our commitment to the management of the global market business with strong determination and focus on results. That concludes my explanation.
I am Yasuda, Group Head of Asset Management and Investor Services Business Group. I will give an update of our progress against MTBP and key strategies for FY 2023. Progress of the midterm business plan or MTBP. Top left, FY 2022 results. Net operating profits was JPY 97.2 billion, down JPY 6 billion year-over-year. Expense ratio was up 1% at 70%. Bottom left, changes in ROE. In AM, or asset management, business volume increased by offering products that meet customer needs and leaping to number one position in Japan in public offering equity investment trust balance, excluding ETF. IS, or investor services, grew due to expansion of high value-added services in Japan and abroad. In pension business, asset building horizon was expanded through DC app, dCANVAS. There were achievements in all business areas. Profits were down due to weak market conditions.
ROE was 28%, down 3% year-over-year. Review of fiscal year 2022, top right. As I mentioned earlier, in Domestic AM, we become number one in Japan in publicly offered equity investment trust balance, excluding ETF. In Domestic IS, The Master Trust Bank of Japan became number one in assets under management by differentiating from competitors. In Global AM, we maintained high performance even in a volatile market. In global IS, increased sales and profits due to expansion of high value-added services. In the meantime, decrease in profit from weak market is a challenge. We will strive to strengthen our business base by beefing up alternative investment capabilities and flexible product offering, and expand one-stop services in IS business. From the next page, I will go through our key strategies in AM, IS, ESG, and digital. Let me start with AM business.
Top left, our vision and business environment. In the industry, trend in passive investment and the growing correlation among traditional assets is giving rise to alternative investment, which is expected to account for more than a majority of the fee pool. While passive investment is increasingly oligopolized by large firms, in active investment capabilities have become the key to be chosen by clients, not size of the firm. In such an environment, by leveraging FSI's industry-leading knowledge of responsible investment, as well as by strengthening our alternative active investment capabilities and product offerings, we aim to sustainably create added value for our customers, employees, society, and shareholders over the medium to long term. Bottom left, Global AM investment in unlisted infrastructure funds. Since the acquisition of FSI in 2019, AUM of unlisted infrastructure funds has outperformed the market.
The fund management philosophy and performance are appreciated by our customers. We will continue to strive to improve performance through new product development by leveraging balance sheet and expanding area coverage of products. Top right, Global AM's acquisition of AlbaCore. On the back of strong alternative investment needs to capture high growth and to acquire complementary capability to FSI, acquisition of AlbaCore Capital Group, based in London, is in the works. As of now, acquisition is scheduled to be completed by the end of Q2. We will work hard on PMI after acquisition and further grow the global asset management business. Bottom right, Domestic AM strengthened capabilities for product offering. Mitsubishi UFJ Kokusai Asset Management, or MUKAM's, publicly offered equity investment trust balance became number one for individual investors in Japan by capturing customer needs and reflecting product offering.
The reorganization of MUKAM and MU Investments, scheduled for October 2023, will consolidate the traditional asset management know-how and product offering capabilities of the two entities, while MU Investments will specialize on real estate management. This will enable MUKAM to become an asset management company with strong presence in terms of quality and volume, and MU Investments to become an industry-leading company dedicated to real estate management. Product offering to customers will be further enhanced. Turning to investor services business, IS. Top left, our vision and business environment. Globally, we expect high growth in AUA of alternative assets. In Japan, due to the growing asset management needs of individuals and corporations, the managed balance of mutual funds has maintained high growth rate. Against this backdrop, we aim to become a global comprehensive service provider.
By capturing customer needs comprehensively and leveraging our global network, we will enhance high value-added services, such as fund finance and lending, and offer one-stop seamless service with investor services, such as fund administration. Bottom left, on global IS, enhancing one-stop services. Bundling of investor services and high value-added services will be combined with inorganic initiatives to further enrich our service offering. Efficiency improvement through reorganization of front, middle, and back offices will be combined with opening of new base to improve customer convenience. Most recently, we're planning to establish new offices in Malaysia and Australia in order to acquire a customer base in Asia-Oceania and strengthening operations across Europe, the Americas, and APAC. Top right, Domestic IS, assets under management and differentiated services.
The Master Trust Bank of Japan, responsible for investor service in Japan, became number one in AUA through collaboration with overseas subsidiaries and differentiation by offering high-quality services. One such example is the single-party NAV calculation service already offered to privately placed investment trusts as an industry first. The widespread use of this service will contribute to lowering entry barriers for new firms and facilitate incumbents to invest resources to strengthen investment capabilities, thereby stimulating healthy competition in the asset management industry. We believe that this will contribute to the development and expansion of the asset management industry as a whole, with improved investment capabilities and lower costs. Turning to ESG and digital strategy. Top left, on Net-Zero Asset Managers Initiative in responsible investment. We joined the initiative in October 2021 as MUFG AM.
An interim target towards 2030 was set in October 2022, which is to reduce 50% of GHG emissions from 2019 or 55% of assets under management. Through the three pillars of engagement, collaboration with asset owners, and development of products that contribute to net zero, we aim to achieve our interim target by 2030. Bottom left, promotion structure for responsible investment. To respond to the rise in interest for responsible investment worldwide, MUFG Asset Management Sustainable Investment was newly established this past April by leveraging MUFG's expertise in global responsible investment and hiring outside experts. Responsible investment will be pursued with speed in a group-integrated manner. Top right, digital strategy, dCANVAS. DC app dCANVAS, released in June 2021, is known for triggering behavior change for customers to recognize current situation, get noticed, and take action.
Those who had no experience in asset management before using the app, two-thirds say they started asset management after using the app. The app received Good Design Award in October 2022 for the customer experience it created, reaching 390,000 downloads. In the future, we plan to expand the behavioral change cycle of dCANVAS to health and career development by offering services that defined contribution plan participants can use to enhance their own human capital, and for corporations to use to enhance the human capital of their employees. I have covered asset management, investor services, ESG, and digital. We will strive to operate in an agile manner to seize opportunities for further growth. Thank you for your attention.