[Company analysis] Mizuho Financial Group, Inc. (みずほフィナンシャルグループ)

「Mizuho Financial Group, Inc. (みずほフィナンシャルグループ)」has financial affiliated companies such as「Mizuho Bank」,「Mizuho Trust & Banking」and「Mizuho Securities」. It also provides banking, funds, securities, asset management, credit card, and other services through its subsidiaries. In addition,  It is one of the three megabanks in Japan(「Mitsubishi UFJ Financial Group, Inc.(三菱UFJフィナンシャル・グループ)」,「Sumitomo Mitsui Financial Group, Inc.(三井住友フィナンシャルグループ)」and「Mizuho Financial Group, Inc.(みずほフィナンシャルグループ)」). The number of consolidated employees is approximately 59,132.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Mizuho Financial Group, Inc.
Company name (Japanese)	みずほフィナンシャルグループ
Date of establishment	Wednesday, January 8, 2003
Headquarters location	〒100–8176 東京都千代田区大手町1–5–5
Capital	2,256,700
Consolidated sales	3,925,649
Consolidated operating profit	614,118
Consolidated total assets	200,792,226
Consolidated capital	9,194,038
Capital adequacy ratio	4.6%
Consolidated number of employees	59,132

 

 

 

2. Summary and Features

 
「The Mizuho Financial Group」has three predecessor banks: 「Daiichi Kangyo Bank(第一勧業銀行)」,「Fuji Bank(富士銀行)」and「The Industrial Bank of Japan(日本興業銀行)」. Until the 1990s, after the collapse of the bubble economy, the above banks all had bad debts worth up to 1 trillion yen. Until that time, the winner of Japanese bank industry were「Tokyo-Mitsubishi bank(東京三菱銀行)」, which had an excellent financial position, and「Sumitomo Bank(住友銀行)」which succeeded in improving operational efficiency.

In the case of the above three banks, they did not belong to specific Zaibatsu group and any specific resion, so they did not have financial background. However, 「Daiichi Kangyo Bank」,「Fuji Bank」and「The Industrial Bank of Japan」thought they could make up for each other's weaknesses, therefore, they decided to conduct business integration in 1999. And by this event,「Mizuho Financial Group」was established. At the time of its founding, they are the world's largest financial group, with total assets of over 140 trillion yen.

In fact, in 1996, before the business integration,「The Industrial Bank of Japan」which was under the control of the government, had a huge amount of additional tax imposed by the tax authorities without allowing tax-free for the portion of bad debts. Of course, they dissatisfied with the above tax, so filed a lawsuit against tax authorities. In December 24, 2004, they won this case, and a total of 318 billion yen was refunded to「Mizuho Bank」and their Bad debt ratio was dramatically decreased. According to this, Their financial solvency was evaluated higher than even 「Mitsubishi UFJ Financial Group」and「Sumitomo Mitsui Financial Group」in 2005.

However, Subprime mortgage crisis of 2008 critically damaged「Mizuho Financial Group」. Especially, they were directly involved in selling sub-prime related products, which caused a huge loss. This adverse effect is still continuing, and this is the reason why「Mizuho Financial Group」was understimated compared with other megabanks.

Nevertheless,「Mizuho Financial Group」is still strong in B2B transaction, considering the fact that they can cover 70% of listed companies in Japan. They also have branches in all prefectures of Japan and handle lottery tickets. as for volume of the American corporate bonds that they held, they are the top-class in Japan. However,「Mizuho Financial Group」has relatively weak presence in Asian countries compare to other megabanks. Besides, it is said that their cost efficiency is lower than other banks. In order to improve profitability, they are planning to reduce the number of branches and improve work efficiency by adopting artificial intelligence.

 

 

 

3. Major Business

 

■ Bank business

 

 

 

4. Financial information

 

※Unit is JPY million

	2016	2017	2018
Consolidate revenue	3,292,900	3,561,125	3,925,649
Consolidate gross income	737,512	782,447	614,118
Consolidated total assets	200,508,610	205,028,300	200,792,226
Consolidated net assets	9,273,361	9,821,246	9,194,038