Mitsubishi UFJ Financial Group (MUFJ) said that its annual net profit passed the one trillion yen mark, a first for any Japanese lender, while top rivals Mizuho and Sumitomo saw their bottom line shrink.

The whopping earnings for the fiscal year to March - $8.6 billion - saw Japan's biggest bank cash in on an expansion of its business overseas and the purchase of a Thai bank, countering sluggish lending at home.

Mitsubishi's gains were "mainly due to increases in net interest income from overseas loan businesses and net fees and commissions from sales of investment products and investment banking," it said.

The bank, which said it would spend 100 billion yen ($837 million) on a share buyback, also cited the impact of its acquisition of Thailand's Bank of Ayudhya for the boost to its earnings.

Toyota, the world's biggest carmaker, is the only other Japanese firm to have surpassed the 1trn yen profit mark, according to the Nikkei Business Daily, but Mitsubishi said its earnings were likely to shrink back to 950 billion yen ($7.9 billion) this year.

MUFJ's profits linked to securities trading were smaller than those in the previous fiscal year as Tokyo's benchmark Nikkei 225 index rallied a hefty 57 per cent in 2013 - its best annual performance in decades.

The rise came as the yen weakened sharply on the back of Japanese Prime Minister Shinzo Abe's policies to revive the economy, dubbed "Abenomics," which enticed retail customers into the stock market.

But last year, the Nikkei climbed a more modest 7.1 per cent.

Japanese banks hold vast stock holdings which have allowed them to get involved in management of their borrowers and benefitted them when overseas investors poured billions of dollars into the long-overlooked market.-Reuters