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Mizuho Financial Group 6-K 2011
Form 6-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of February 2011

Commission File Number 001-33098

Mizuho Financial Group, Inc.

(Translation of registrant’s name into English)

5-1, Marunouchi 2-chome

Chiyoda-ku, Tokyo 100-8333

Japan

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  x    Form 40-F  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ¨

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ¨    No  x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-                    .

 

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date:   February 14, 2011
Mizuho Financial Group, Inc.
By:  

/s/ Takeo Nakano

Name:   Takeo Nakano
Title:   Managing Director / CFO


1. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS

(1) CONSOLIDATED BALANCE SHEET

 

     Millions of yen  
     As of December 31, 2010  

Assets

        

Cash and Due from Banks

   ¥         *2      4,649,090   

Call Loans and Bills Purchased

           254,320   

Receivables under Resale Agreements

           7,932,190   

Guarantee Deposits Paid under Securities Borrowing Transactions

           6,886,666   

Other Debt Purchased

           1,793,569   

Trading Assets

      *2      14,523,698   

Money Held in Trust

           94,523   

Securities

      *2,*4      41,842,149   

Loans and Bills Discounted

      *1,*2      61,645,762   

Foreign Exchange Assets

           835,691   

Derivatives other than for Trading Assets

           6,213,925   

Other Assets

      *2      2,695,760   

Tangible Fixed Assets

      *2,*3      937,399   

Intangible Fixed Assets

           431,983   

Deferred Tax Assets

           496,375   

Customers’ Liabilities for Acceptances and Guarantees

           3,600,112   

Reserves for Possible Losses on Loans

           (781,681

Reserve for Possible Losses on Investments

           (21
        

Total Assets

           154,051,514   
        

Liabilities

        

Deposits

           74,875,478   

Negotiable Certificates of Deposit

           10,935,213   

Debentures

           928,750   

Call Money and Bills Sold

           5,095,721   

Payables under Repurchase Agreements

           11,429,875   

Guarantee Deposits Received under Securities Lending Transactions

           6,562,737   

Commercial Paper

           85,388   

Trading Liabilities

           8,573,080   

Borrowed Money

           9,373,604   

Foreign Exchange Liabilities

           287,802   

Short-term Bonds

           514,297   

Bonds and Notes

           5,063,364   

Due to Trust Accounts

           1,073,432   

Derivatives other than for Trading Liabilities

           5,427,625   

Other Liabilities

           3,280,706   

Reserve for Bonus Payments

           15,337   

Reserve for Employee Retirement Benefits

           36,165   

Reserve for Director and Corporate Auditor Retirement Benefits

           2,114   

Reserve for Possible Losses on Sales of Loans

           1,840   

Reserve for Contingencies

           14,259   

Reserve for Reimbursement of Deposits

           13,940   

Reserve for Reimbursement of Debentures

           12,317   

Reserves under Special Laws

           1,378   

Deferred Tax Liabilities

           14,305   

Deferred Tax Liabilities for Revaluation Reserve for Land

           98,495   

Acceptances and Guarantees

           3,600,112   
        

Total Liabilities

           147,317,346   
        

Net Assets

        

Common Stock and Preferred Stock

           2,181,375   

Capital Surplus

           937,680   

Retained Earnings

           1,141,079   

Treasury Stock

           (3,196
        

Total Shareholders’ Equity

           4,256,938   
        

Net Unrealized Gains on Other Securities, net of Taxes

           45,303   

Net Deferred Hedge Gains, net of Taxes

           90,824   

Revaluation Reserve for Land, net of Taxes

           137,823   

Foreign Currency Translation Adjustments

           (103,108
        

Total Valuation and Translation Adjustments

           170,843   
        

Stock Acquisition Rights

           2,776   

Minority Interests

           2,303,610   
        

Total Net Assets

           6,734,168   
        

Total Liabilities and Net Assets

   ¥              154,051,514   
        


(2) CONSOLIDATED STATEMENT OF INCOME

 

     Millions of yen  
     For the nine months ended
December 31, 2010
 

Ordinary Income

   ¥              2,087,201   

Interest Income

           1,086,525   

Interest on Loans and Bills Discounted

           675,443   

Interest and Dividends on Securities

           259,606   

Fiduciary Income

           34,307   

Fee and Commission Income

           404,189   

Trading Income

           226,432   

Other Operating Income

           269,578   

Other Ordinary Income

        *1         66,167   
        

Ordinary Expenses

           1,530,715   

Interest Expenses

           264,106   

Interest on Deposits

           83,625   

Interest on Debentures

           5,488   

Fee and Commission Expenses

           77,642   

Other Operating Expenses

           112,066   

General and Administrative Expenses

           954,297   

Other Ordinary Expenses

        *2         122,601   
        

Ordinary Profits

           556,486   
        

Extraordinary Gains

        *3         40,280   
        

Extraordinary Losses

        *4         9,571   
        

Income before Income Taxes and Minority Interests

           587,195   
        

Income Taxes:

        

Current

           17,738   

Deferred

           74,945   

Total Income Taxes

           92,684   
        

Income before Minority Interests

           494,510   
        

Minority Interests in Net Income

           72,438   
        

Net Income

   ¥              422,072   
        


(3) CONSOLIDATED STATEMENT OF CASH FLOWS

 

     Millions of yen  
     For the nine months
ended
December 31, 2010
 

Cash Flow from Operating Activities

  

Income before Income Taxes and Minority Interests

   ¥ 587,195   

Depreciation

     121,939   

Losses on Impairment of Fixed Assets

     3,138   

Equity in Loss (Gain) from Investments in Affiliates

     2,622   

Increase (Decrease) in Reserves for Possible Losses on Loans

     (90,281

Increase (Decrease) in Reserve for Possible Losses on Investments

     (8

Increase (Decrease) in Reserve for Possible Losses on Sales of Loans

     (11,976

Increase (Decrease) in Reserve for Contingencies

     (549

Increase (Decrease) in Reserve for Bonus Payments

     (31,861

Increase (Decrease) in Reserve for Employee Retirement Benefits

     2,012   

Increase (Decrease) in Reserve for Director and Corporate Auditor Retirement Benefits

     2   

Increase (Decrease) in Reserve for Reimbursement of Deposits

     (808

Increase (Decrease) in Reserve for Reimbursement of Debentures

     1,492   

Interest Income - accrual basis

     (1,086,525

Interest Expenses - accrual basis

     264,106   

Losses (Gains) on Securities

     (147,704

Losses (Gains) on Money Held in Trust

     5   

Foreign Exchange Losses (Gains) - net

     525,064   

Losses (Gains) on Disposition of Fixed Assets

     3,364   

Decrease (Increase) in Trading Assets

     (944,428

Increase (Decrease) in Trading Liabilities

     1,285,421   

Decrease (Increase) in Derivatives other than for Trading Assets

     718,580   

Increase (Decrease) in Derivatives other than for Trading Liabilities

     (1,053,895

Decrease (Increase) in Loans and Bills Discounted

     (283,614

Increase (Decrease) in Deposits

     (745,441

Increase (Decrease) in Negotiable Certificates of Deposit

     836,236   

Increase (Decrease) in Debentures

     (589,047

Increase (Decrease) in Borrowed Money (excluding Subordinated Borrowed Money)

     (259,072

Decrease (Increase) in Due from Banks (excluding Due from Central Banks)

     (562,669

Decrease (Increase) in Call Loans, etc.

     (1,027,650

Decrease (Increase) in Guarantee Deposits Paid under Securities Borrowing Transactions

     (1,141,765

Increase (Decrease) in Call Money, etc.

     (193,735

Increase (Decrease) in Commercial Paper

     85,388   

Increase (Decrease) in Guarantee Deposits Received under Securities Lending Transactions

     (52,775

Decrease (Increase) in Foreign Exchange Assets

     (154,742

Increase (Decrease) in Foreign Exchange Liabilities

     115,204   

Increase (Decrease) in Short-term Bonds (Liabilities)

     21,900   

Increase (Decrease) in Bonds and Notes

     487,782   

Increase (Decrease) in Due to Trust Accounts

     48,001   

Interest and Dividend Income - cash basis

     1,138,455   

Interest Expenses - cash basis

     (271,601

Other - net

     (515,871
        

Subtotal

     (2,918,109
        

Cash Refunded (Paid) in Income Taxes

     (22,943
        

Net Cash Provided by (Used in) Operating Activities

   ¥ (2,941,053
        


     Millions of yen  
     For the nine months
ended
December 31, 2010
 

Cash Flow from Investing Activities

        

Payments for Purchase of Securities

   ¥              (70,910,005

Proceeds from Sale of Securities

           63,809,729   

Proceeds from Redemption of Securities

           9,011,617   

Payments for Increase in Money Held in Trust

           (34,015

Proceeds from Decrease in Money Held in Trust

           58,880   

Payments for Purchase of Tangible Fixed Assets

           (49,272

Payments for Purchase of Intangible Fixed Assets

           (83,941

Proceeds from Sale of Tangible Fixed Assets

           89   

Proceeds from Sale of Intangible Fixed Assets

           9   
        

Net Cash Provided by (Used in) Investing Activities

           1,803,091   
        

Cash Flow from Financing Activities

        

Repayments of Subordinated Borrowed Money

           (10,000

Payments for Redemption of Subordinated Bonds

           (321,364

Proceeds from Issuance of Common Stock

           761,354   

Proceeds from Investments by Minority Shareholders

           919   

Cash Dividends Paid

           (133,822

Cash Dividends Paid to Minority Shareholders

           (59,042

Payments for Repurchase of Treasury Stock

           (2

Proceeds from Sale of Treasury Stock

           3   
        

Net Cash Provided by (Used in) Financing Activities

           238,045   
        

Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents

           (27,751
        

Net Increase (Decrease) in Cash and Cash Equivalents

           (927,668
        

Cash and Cash Equivalents at the beginning of the period

           4,678,783   
        

Cash and Cash Equivalents at the end of the period

   ¥         *1      3,751,115   
        


(CHANGES OF FUNDAMENTAL AND IMPORTANT MATTERS FOR THE PREPARATION OF QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS)

For the nine months ended December 31, 2010

1. Changes in the Scope of Consolidation

 

(1) Changes in the Scope of Consolidation

From the first quarter, Mountain Capital CLO III Ltd. and three other companies were newly consolidated according to “PITF No. 18 Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements,” as they were consolidated in the consolidated financial statements of a foreign subsidiary under US GAAP.

From the second quarter, Mizuho Securities India Private Limited was newly consolidated upon its establishment.

From the third quarter, Mizuho Corporate Bank (Malaysia) Berhad and one other company were newly consolidated upon their establishment.

From the first quarter, Tokyo Valuation Research Co., Ltd. and three other companies were excluded from the scope of consolidation as they ceased to be subsidiaries of MHFG as a result of a merger and other factors.

From the third quarter, Mountain Capital CLO III Ltd. and six other companies were excluded from the scope of consolidation as they ceased to be subsidiaries of MHFG as a result of the disposal and other transactions of the financial advisory agreement and other factors.

 

(2) Number of consolidated subsidiaries after the change: 158

2. Changes in the Application of the Equity Method

 

(1) Affiliates under the Equity Method

 

LOGO Changes in affiliates under the Equity Method

From the second quarter, Orient Corporation was newly included in the scope of the equity method as an affiliate as a result of the exercise of the right to request acquisition of preferred shares.

From the second quarter, Mitoyo Securities Co., Ltd. was excluded from the scope of the equity method as a result of the sale of stocks.

 

LOGO Number of affiliates under the equity method after the change: 21

3. Changes in the Standards of Accounting Method

 

(1) Accounting Standard for Equity Method of Accounting for Investments and Practical Solution on Unification of Accounting Policies Applied to Associates Accounted for Using the Equity Method

Mizuho Financial Group has applied “Accounting Standard for Equity Method of Accounting for Investments” (ASBJ Statement No. 16, March 10, 2008) and “Practical Solution on Unification of Accounting Policies Applied to Associates Accounted for Using the Equity Method” (PITF No. 24, March 10, 2008) beginning with the first quarter of fiscal 2010.

This application does not affect the quarterly consolidated financial statements.

 

(2) Adoption of Accounting Standard for Asset Retirement Obligations

Mizuho Financial Group has applied “Accounting Standard for Asset Retirement Obligations” (ASBJ Statement No. 18, March 31, 2008) and “Guidance on Accounting Standard for Asset Retirement Obligations” (ASBJ Guidance No. 21, March 31, 2008) beginning with the first quarter of fiscal 2010.

As a result, Income before Income Taxes and Minority Interests for the nine months ended December 31, 2010 decreased by ¥3,482 million. The change in Asset Retirement Obligations (which is in “Other Liabilities”) due to commencement of application of the accounting standards is ¥7,454 million.


(SIMPLIFIED ACCOUNTING METHODS)

For the nine months ended December 31, 2010

 

1. Depreciation

As for tangible fixed assets that are depreciated by the declining-balance method, the depreciation expense is computed by the proportional distribution of the depreciation expense for the fiscal year.

 

2. Reserves for Possible Losses on Loans

For the claims mentioned below, reserves for possible losses on loans are maintained at the estimated rate of losses for the second quarter of fiscal 2010.

 

  a. The claims other than the claims extended to “Bankrupt Obligors” and “Substantially Bankrupt Obligors”

 

  b. The claims other than the claims extended to “Intensive Control Obligors” for which reserves are provided for the losses estimated for each individual loan

(NOTES TO CONSOLIDATED BALANCE SHEET)

Notes as of December 31, 2010

 

1. Loans and Bills Discounted include the following:

 

Loans to Bankrupt Obligors:

   ¥ 57,903 million   

Non-Accrual Delinquent Loans:

   ¥ 670,034 million   

Loans Past Due for Three Months or More:

   ¥ 23,185 million   

Restructured Loans:

   ¥ 518,463 million   

The above amounts are gross amounts before deduction of amounts for the Reserves for Possible Losses on Loans.

 

2. The following assets were pledged as collateral:

 

Cash and Due from Banks:

   ¥ 130 million   

Trading Assets:

   ¥ 6,199,331 million   

Securities:

   ¥ 12,241,345 million   

Loans and Bills Discounted:

   ¥ 8,209,866 million   

Other Assets:

   ¥ 9,812 million   

Tangible Fixed Assets:

   ¥ 136 million   

In addition to the above, the settlement accounts of foreign and domestic exchange transactions or derivatives transactions and others were collateralized, and margins for futures transactions were substituted by Cash and Due from Banks of ¥14,210 million, Trading Assets of ¥135,454 million, Securities of ¥2,261,496 million and Loans and Bills Discounted of ¥16,288 million. Other Assets includes guarantee deposits of ¥107,130 million, collateral pledged for derivatives transactions of ¥326,245 million, margins for futures transactions of ¥43,074 million and other guarantee deposits of ¥42,588 million.

 

3. Accumulated Depreciation of Tangible Fixed Assets amounted to ¥798,530 million.

 

4. Liabilities for guarantees on corporate bonds included in Securities, which were issued by private placement (Article 2, Paragraph 3 of the Financial Instruments and Exchange Law), amounted to ¥1,075,706 million.


(NOTES TO CONSOLIDATED STATEMENT OF INCOME)

For the nine months ended December 31, 2010

 

1. Other Ordinary Income includes gains on sales of stocks of ¥44,357 million.

 

2. Other Ordinary Expenses includes losses on write-offs of loans of ¥44,786 million, losses on impairment “devaluation” of stocks of ¥26,555 million, and losses on sales of stocks of ¥24,881 million.

 

3. Extraordinary Gains includes gains on recovery of written-off claims of ¥34,214 million.

 

4. Extraordinary Losses includes losses on disposal of fixed assets of ¥3,401 million, losses on impairment of fixed assets of ¥3,138 million, and losses of ¥3,031 million at the beginning of the period by the adoption of Accounting Standard for Asset Retirement Obligations described in “Changes in the Standards of Accounting Method.”

(NOTES TO CONSOLIDATED STATEMENT OF CASH FLOWS)

For the nine months ended December 31, 2010

 

1. Cash and Cash Equivalents at the end of the quarterly period on the consolidated statement of cash flows reconciles to Cash and Due from Banks on the quarterly consolidated balance sheet as follows:

 

As of December 31, 2010    Millions of yen  

Cash and Due from Banks

   ¥ 4,649,090   

Due from Banks excluding central banks

     (897,974
        

Cash and Cash Equivalents

   ¥ 3,751,115   
        

(INFORMATION FOR SHAREHOLDERS’ EQUITY)

1. Types and number of issued shares and of treasury stock are as follows:

 

     Thousands of Shares  
     As of December 31, 2010  

Issued shares

  

Common stock

     21,585,203   

Eleventh Series Class XI Preferred Stock

     914,752   

Thirteenth Series Class XIII Preferred Stock

     36,690   
        

Total

     22,536,645   
        

Treasury stock

  

Common stock

     5,652   

Eleventh Series Class XI Preferred Stock

     441,746   
        

Total

     447,398   
        


2. Stock acquisition rights and treasury stock acquisition rights are as follows:

 

     

Category

   Class of shares to be
issued or transferred upon
exercise of stock
acquisition rights
     Number of shares to
be issued or
transferred upon
exercise of stock
acquisition rights
(Shares)
    Balance as of
December 31,
2010

(Millions of
yen)
 

MHFG

   Stock acquisition rights      —           —          —     
   (Treasury stock acquisition rights)         (—       (—  
                            
  

Stock acquisition rights as stock option

     —          1,786   
                   

Consolidated subsidiaries

     —          990   

(Treasury stock acquisition rights)

       (—  
                   
  

Total

     —          2,776   
          (—  
                   

3. Cash dividends distributed by MHFG are as follows:

 

Resolution

  

Types

   Cash
Dividends

(Millions
of yen)
     Cash
Dividends
per Share

(Yen)
    

Record

Date

   Effective Date   

Resource of
Dividends

 

June 22, 2010

     Common Stock      123,880         8       March 31, 2010    June 22, 2010    Retained earnings
LOGO  

Ordinary

General

  LOGO    Eleventh Series Class XI Preferred Stock      9,985         20       March 31, 2010    June 22, 2010    Retained earnings
 

Meeting of

Shareholders

     Thirteenth Series Class XIII Preferred Stock      1,100         30       March 31, 2010    June 22, 2010    Retained earnings

4. Significant changes in the amount of shareholders’ equity

 

     Millions of yen  
     Common Stock and
Preferred Stock
     Capital Surplus      Retained Earnings     Treasury Stock     Total
Shareholders’
Equity
 

Balance as of March 31, 2010

     1,805,565         552,135         854,703        (5,184     3,207,219   

Changes for the nine months ended December 31, 2010

            

Issuance of New Shares

     375,810         385,544         —          —          761,354   

Cash Dividends

     —           —           (134,966     —          (134,966

Net Income (Accumulated Period)

     —           —           422,072        —          422,072   

Repurchase of Treasury Stock

     —           —           —          (2     (2

Disposition of Treasury Stock

     —           —           (1,314     1,990        675   

Transfer from Revaluation Reserve for Land, net of Taxes

     —           —           585        —          585   

Total Changes for the nine months ended December 31, 2010

     375,810         385,544         286,376        1,987        1,049,718   

Balance as of December 31, 2010

     2,181,375         937,680         1,141,079        (3,196     4,256,938   


(BUSINESS SEGMENT INFORMATION)

1. Summary of reportable segments

The MHFG Group’s operating segments are based on the nature of the products and services provided, the type of customer and the Group’s management organization.

The reportable segment information, set forth below, is derived from the internal management reporting systems used by management to measure the performance of the Group’s operating segments. The management measures the performance of each of the operating segments primarily in terms of “net business profits” (excluding the amounts of credit costs of trust accounts, before reversal of (provision for) general reserve for losses on loans) in accordance with internal managerial accounting rules and practices.

MHFG manages its business portfolio through the three Global Groups: the Global Corporate Group; the Global Retail Group; and the Global Asset & Wealth Management Group. The Global Corporate Group consists primarily of MHCB and MHSC, the Global Retail Group consists primarily of MHBK and MHIS, and the Global Asset & Wealth Management Group consists primarily of MHTB.

Operating segments of MHCB and MHBK are aggregated within each entity based on customer characteristics and functions. Operating segments of MHCB are aggregated into three reportable segments, domestic, international, and trading and others. Operating segments of MHBK are also aggregated into three reportable segments, retail banking, corporate banking, and trading and others. In addition to the three Global Groups, subsidiaries which provide services to a wide range of customers and which do not belong to a specific Global Group are aggregated as Others.

[The Global Corporate Group]

[MHCB LOGO ]

MHCB is the main operating company of the Global Corporate Group and provides banking and other financial services to large corporations, financial institutions, public sector entities, foreign corporations, including foreign subsidiaries of Japanese corporations, and foreign governmental entities.

(Domestic LOGO )

This segment consists of the following three units of MHCB: corporate banking, global investment banking, and global transaction banking. This segment provides a variety of financial products and services to large corporations, financial institutions and public sector entities in Japan. The products and services it offers include commercial banking, advisory services, syndicated loan arrangements and structured finance.

(International LOGO )

This segment primarily offers commercial banking and foreign exchange transaction services to foreign corporations, including foreign subsidiaries of Japanese corporations, through MHCB’s overseas network.

(Trading and others LOGO )

This segment consists of the global markets unit, and the global asset management unit. This segment supports the domestic and international segments in offering derivatives and other risk hedging products to satisfy MHCB’s customers’ financial and business risk control requirements. It is also engaged in MHCB’s proprietary trading, such as foreign exchange and bond trading, and asset and liability management. This segment also includes costs incurred by headquarters functions of MHCB.

[MHSC LOGO ]

Mizuho Securities is the securities arm of the Global Corporate Group and provides full-line securities services to corporations, financial institutions, public sector entities and individuals.

The former Mizuho Securities and Shinko Securities merged to form the new Mizuho Securities in May, 2009.

[Others LOGO ]

This segment consists of MHCB’s subsidiaries other than MHSC. These subsidiaries offer financial products and services in specific areas of business or countries mainly to customers of the Global Corporate Group.


[The Global Retail Group]

[MHBK LOGO ]

MHBK is the main operating company of the Global Retail Group. MHBK provides banking and other financial services primarily to individuals, SMEs and middle-market corporations through its domestic branch and ATM network.

(Retail banking LOGO )

This segment offers banking products and services, including housing and other personal loans, credit cards, deposits, investment products, and consulting services, to MHBK’s individual customers through its nationwide branch and ATM network, as well as telephone and Internet banking services.

(Corporate banking LOGO )

This segment provides loans, syndicated loan arrangements, structured finance, advisory services, other banking services, and capital markets financing to SMEs, middle-market corporations, local governmental entities, and other public sector entities in Japan.

(Trading and others LOGO )

This segment supports the retail banking and corporate banking segments in offering derivatives and other risk hedging products to satisfy MHBK’s customers’ financial and business risk control requirements. It is also engaged in MHBK’s proprietary trading, such as foreign exchange and bond trading, and asset and liability management. This segment also includes costs incurred by headquarters functions of MHBK.

[MHIS LOGO ]

MHIS offers securities services to individuals and corporate customers of the Global Retail Group and provides those corporate customers with support in procuring funds through capital markets.

[Others LOGO ]

This segment consists of MHBK’s subsidiaries other than MHIS. These subsidiaries, such as Mizuho Capital and Mizuho Business Financial Center, offer financial products and services in specific areas of business to customers of the Global Retail Group.

[The Global Asset & Wealth Management Group]

[MHTB LOGO ]

MHTB is the main operating company of the Global Asset & Wealth Management Group and offers products and services related to trust, real estate, securitization and structured finance, pension and asset management, and stock transfers.

[Others LOGO ]

This segment includes companies other than MHTB which are part of the Global Asset & Wealth Management Group. These companies include Trust & Custody Service Bank, Mizuho Asset Management and Mizuho Private Wealth Management. They offer products and services related to private banking, trust and custody, and asset management.

[Others LOGO ]

This segment consists of MHFG and its subsidiaries that do not belong to a specific Global Group but provide their services to a wide range of customers. Under this segment, the MHFG Group offers non-banking services including research and consulting services through Mizuho Research Institute, information technology-related services through Mizuho Information & Research Institute and advisory services to financial institutions through Mizuho Financial Strategy.


2. Gross profits (excluding the amounts of credit costs of trust accounts) and Net business profits or losses (excluding the amounts of credit costs of trust accounts, before reversal of (provision for) general reserve for losses on loans) by business segment

For the nine months ended December 31, 2010

 

     Millions of yen  
    Global Corporate Group     Global Retail Group     Global Asset
& Wealth
Management Group
             
          MHCB                       MHBK                                            
          LOGO     Domestic
LOGO
    Inter-
national

LOGO
    Trading
and
others
LOGO
    MHSC
LOGO
    Others
LOGO
          LOGO     Retail
banking
LOGO
    Corporate
banking
LOGO
    Trading
and
others
LOGO
    MHIS
LOGO
    Others
LOGO
          MHTB
LOGO
    Others
LOGO
    Others
LOGO
    Total  

Gross profits: (excluding the amounts of credit costs of trust accounts)

                                     

Net interest income (expense)

    338,586        293,300        125,200        63,000        105,100        (7,223     52,510        456,803        424,813        185,400        197,900        41,513        385        31,605        32,106        31,403        702        (5,078     822,418   

Net non-interest income

    415,624        238,938        81,500        40,400        117,038        132,916        43,769        230,667        188,868        23,100        90,500        75,268        36,651        5,147        100,018        66,985        33,033        (1,511     744,799   
                                                                                                                                                       

Total

    754,211        532,238        206,700        103,400        222,138        125,692        96,280        687,471        613,682        208,500        288,400        116,782        37,036        36,753        132,125        98,388        33,736        (6,589     1,567,218   
                                                                                                                                                       

General and administrative expenses (excluding Non-Recurring Losses)

    347,041        171,991        66,800        46,800        58,391        120,483        54,565        455,659        418,339        179,800        168,800        69,739        30,670        6,648        94,612        65,519        29,092        (5,723     891,589   
                                                                                                                                                       

Others

    (42,373     —          —          —          —          —          (42,373     (11,790     —          —          —          —          —          (11,790     (1,790     —          (1,790     (8,871     (64,825
                                                                                                                                                       

Net business profits (excluding the amounts of credit costs of trust accounts, before reversal of (provision for) general reserve for losses on loans)

    364,797        360,246        139,900        56,600        163,746        5,208        (658     220,021        195,342        28,700        119,600        47,042        6,365        18,313        35,722        32,869        2,853        (9,737     610,803   

Notes:

(1) Gross profits (excluding the amounts of credit costs of trust accounts) is reported instead of sales reported by general corporations.
(2) “Others LOGO ”, “Others LOGO ”, and “Others LOGO ” include elimination of transactions between companies within the Global Corporate Group, the Global Retail Group, and the Global Asset & Wealth Management Group, respectively. “Others LOGO ” includes elimination of transactions between the Global Groups.

3. The difference between total Net business profits (excluding the amounts of credit costs of trust accounts, before reversal of (provision for) general reserve for losses on loans) and Net Income recorded in the Consolidated Statement of Income, and the contents of the difference.

The total amount of the above net business profits (excluding the amounts of credit costs of trust accounts, before reversal of (provision for) general reserve for losses on loans) derived from internal management reporting and the amount of Net Income recorded in the Consolidated Statement of Income are not the same amount. The contents of the difference for the nine months ended December 31, 2010 are as follows:

 

      Millions of yen  

Net business profits

(excluding the amounts of credit costs of trust accounts,

before reversal of (provision for) general reserve for losses on loans)

   Amount  

Total amount of the above segment information

     610,803   

Credit Costs of Trust Accounts

     —     

General and Administrative Expenses (non-recurring Losses)

     (62,708

Expenses related to Portfolio Problems

     (45,793

Net Gains (Losses) related to Stocks

     (7,468

Net Extraordinary Gains (Losses)

     30,709   

Others

     61,653   
        

Net Income recorded in Consolidated Statement of Income

     587,195   
        

(Additional Information)

Mizuho Financial Group has applied “Accounting Standard for Disclosures about Segments of an Enterprise and Related information (ASBJ Statement No. 17, March 27, 2009)” and “Guidance on the Accounting Standard for Disclosures about Segments of an Enterprise and Related information (ASBJ Guidance No. 20, March 21, 2008)” from the first quarter of this fiscal year.


(NOTES TO SECURITIES)

Notes as of December 31, 2010

In addition to “Securities” on the (quarterly) consolidated balance sheet, NCDs in “Cash and Due from Banks,” certain items in “Other Debt Purchased” and certain items in “Other Assets” are also included.

 

1. Bonds Held to Maturity which have readily determinable fair value:

 

     Millions of yen  

As of December 31, 2010

   Amount on
Consolidated
BS
     Fair Value      Unrealized
Gains/Losses

(Net)
 

Japanese Government Bonds

   ¥ 1,050,606       ¥ 1,058,779       ¥ 8,172   

Japanese Corporate Bonds

   ¥ 2,411       ¥ 2,419       ¥ 7   
                          

Total

   ¥ 1,053,018       ¥ 1,061,198       ¥ 8,180   
                          

Note: Fair value is primarily based on the market price at the consolidated balance sheet date.

 

2. Other Securities which have readily determinable fair value:

 

     Millions of yen  

As of December 31, 2010

   Acquisition Cost      Amount on
Consolidated BS
     Unrealized
Gains/Losses

(Net)
 

Japanese Stocks

   ¥ 2,499,897       ¥ 2,715,926       ¥ 216,029   

Japanese Bonds

     31,165,546         31,192,741         27,194   

Japanese Government Bonds

     26,981,738         26,992,189         10,450   

Japanese Local Government Bonds

     220,083         221,843         1,760   

Japanese Corporate Bonds

     3,963,724         3,978,708         14,983   

Other

     7,736,718         7,575,971         (160,747

Foreign Bonds

     5,181,858         5,111,715         (70,142

Other Debt Purchased

     1,167,483         1,161,870         (5,612

Other

     1,387,377         1,302,385         (84,992
                          

Total

   ¥ 41,402,162       ¥ 41,484,639       ¥ 82,476   
                          

 

Notes:

    1.      Net Unrealized Gains include ¥5,423 million (of loss), which was recognized in the consolidated statement of income by applying the fair-value hedge method and others.
    2.      Fair value of Japanese stocks is determined based on the average quoted market price over the month preceding the consolidated balance sheet date. Fair value of securities other than Japanese stocks is determined at the quoted market price, if available, or other reasonable value at the consolidated balance sheet date.
    3.      Certain Other Securities which have readily determinable fair value are devalued to the fair value, and the difference between the acquisition cost and the fair value is treated as the loss for the third quarter (impairment (“devaluation”)), if the fair value (primarily the closing market price at the consolidated balance sheet date) has significantly deteriorated compared with the acquisition cost (including amortized cost), and unless it is deemed that there is a possibility of a recovery in the fair value. The amount of impairment (“devaluation”) for the third quarter was ¥25,710 million.
    The criteria for determining whether a security’s fair value has “significantly deteriorated” are outlined as follows:
   

Securities whose fair value is 50% or less of the acquisition cost;

Securities whose fair value exceeds 50% but is 70% or less of the acquisition cost and the quoted market price maintains a certain level or lower.


    4.     

Floating-rate Japanese Government Bonds

For Floating-rate Japanese Government Bonds within Securities, based on our determination that current market prices may not reflect fair value due to the extremely limited volume of actual transactions, our domestic consolidated banking subsidiaries and a domestic consolidated trust banking subsidiary have applied reasonably calculated prices as book value for the third quarter.

In deriving the reasonably calculated price, we used the Discounted Cash Flow Method as well as other methods. The price decision variables include the yield of 10-year Japanese Government Bonds and the volatilities of interest rate swap options for 10-year Japanese Government Bonds as underlying assets.

    5.     

Securitization Products

With respect to the credit investments in securitization products made as an alternative to loans by the European and North American offices of our domestic consolidated banking subsidiaries, given the current situation in which the volume of actual transactions is extremely limited and there exists a considerable gap between the offers and bids of sellers and buyers, we determined that valuations obtained from brokers and information vendors cannot be deemed to be the fair value, and we applied reasonably calculated prices based on the reasonable estimates of our management as fair value.

In deriving reasonably calculated prices based on the reasonable estimates of our management mentioned above, we used the Discounted Cash Flow Method. The price decision variables include default rates, recovery rates, pre-payment rates and discount rates, and the subject Securities included Residential Mortgage-Backed Securities, Collateralized Loan Obligations, Commercial Mortgage-Backed Securities and other Asset Backed Securities.

(NOTES TO MONEY HELD IN TRUST)

Notes as of December 31, 2010

 

1. Money Held in Trust Held to Maturity:

There was no Money Held in Trust held to maturity.

 

2. Other in Money Held in Trust (other than for investment purposes and held to maturity purposes)

 

     Millions of yen  

As of December 31, 2010

   Acquisition
Cost
     Amount on
Consolidated BS
     Unrealized
Gains/Losses

(Net )
 

Other in Money Held in Trust

   ¥ 1,047       ¥ 1,025       ¥ (22
                          

 

Note: Fair value of Other is determined at the quoted market price, if available, or other reasonable value at the consolidated balance sheet date and other.

(SUBSEQUENT EVENTS)

There is no applicable information.

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