Mizuho releases full-year results for FY3/2024

Strong Financial Performance and Robust FY24 Plan

Mizuho Financial Group (MFG) delivered impressive financial results for FY23, exceeding its interim revised forecast. Key highlights include:

• Consolidated Gross Profits: Strong growth driven by increasing net interest margin (NIM), solution and investment banking (IB)-related income, and ALM/Treasury income, despite realizing mark-to-market (MTM) losses related to the securities portfolio.
• Consolidated Net Business Profits: Reached JPY 1 trillion, driven by the strongest profit from client-related business since applying the line-of-business structure.
• Net Income Attributable to FG: Increased by 22.2% YoY, surpassing the interim revised forecast of JPY 640 billion.
• Consolidated ROE: Significant increase to 7.6%, reflecting profit growth and efficiency improvements.

MFG’s FY24 plan demonstrates a continued focus on disciplined financial management and growth:

• Consolidated Net Business Profits: Projected to reach JPY 1.07 trillion, a 6.4% YoY increase.
• Ordinary Profits: Estimated to reach JPY 1.05 trillion, a 13.6% YoY increase.
• Net Income Attributable to FG: Forecast to reach JPY 750 billion, a 71.1% YoY increase.
• Shareholder Return: Continued commitment to progressive dividends, with a forecast for a fourth consecutive annual increase.

Enhancing Corporate Value: Building a Foundation for Sustainable Growth

MFG outlines its strategy for enhancing corporate value, focusing on several key areas:

• Improving ROE: MFG aims to increase capital efficiency and improve ROE above 8% to drive P/B ratio improvement beyond 1x.
• Disciplined Cost Management: MFG plans to manage the expense ratio close to 60% in FY25 through continued disciplined cost control and productivity enhancements.
• Steady Profit Growth: MFG achieved its Medium-term business plan profit target of JPY 1–1.1 trillion in FY24, one year ahead of schedule. Continued growth in focus areas is expected.
• Improving Asset Profitability: MFG is redeploying capital from low-profit assets (e.g., residential mortgages, cross-shareholdings) to high-profit assets (e.g., M&A finance, SI, Global CIB business), demonstrating a commitment to capital allocation based on profitability.
• Effective Capital Use: MFG has executed profitable growth investments while maintaining strong capital adequacy and enhancing shareholder return, resulting in a four-year consecutive increase in dividends.

Driving Growth through Strategic Business Focus Areas

MFG outlines its business strategy, focusing on five key areas:

• Improving Customer Experience: MFG aims to be the most user-friendly and trusted partner for mass retail customers, creating a seamless experience across all channels (face-to-face, online, remote) through optimized network, digitalization, and data integration.
• Asset & Wealth Management in Japan: MFG aims to be the most reliable brand in asset and wealth management, increasing AUM sustainably through strengthening face-to-face consulting capabilities and enhancing product line-up.
• Enhancing the Competitiveness of Japanese Companies: MFG aims to be a professional institution delivering value-added solutions for business creation and growth, leveraging its strengths in syndicated loans, sustainable finance, ECM, M&A, and risk money provision to start-ups.
• Sustainability & Innovation: MFG actively promotes sustainable finance and value-cocreation, supporting clients’ initiatives through the Transition Investment Facility, value-cocreation investments, and a commitment to net-zero emissions by 2050.
• Global CIB Business: MFG aims to be a top 10 global CIB, leveraging its banking and sales & trading capabilities to provide comprehensive solutions to clients, focusing on IG DCM/LCM and expanding its global reach through the recent acquisition of Greenhill.

Reinforcing Organizational Platform: People as the Source of Value

MFG recognizes the importance of its people as the foundation for its success and outlines its strategy for strengthening its human capital and fostering a supportive and innovative work environment:

• Strengthening Human Capital: MFG is transitioning to a new HR framework, “CANADE,” to provide employees with a supportive working environment, opportunities for self-fulfillment, and a workplace of choice.
• Promoting DEI: MFG is enhancing diversity in management and decision-makers, aiming to leverage diverse talents and create a more inclusive work environment.
• Corporate Culture Transformation: MFG is promoting employee-driven cultural reform, encouraging behavior changes through initiatives like the “GCEO Challenge” and revitalizing communication through reverse mentoring, mentoring programs, and events like the Mizuho NISA Café.
• Building a Diverse Talent Portfolio: MFG is focusing on talent acquisition, including mid-career hires, new graduate hires, and engagement with alumni to secure a diverse pool of talents.
• Maintaining Stable Business Operations: MFG is implementing measures to prevent major system failures, including preventive maintenance, clear recovery procedures, and enhanced cybersecurity.
• Promoting IT Reform: MFG is enhancing IT capabilities to expedite the execution of its business strategies, including system optimization, talent and organizational strengthening, and product and service review.

Conclusion: A Strong Foundation for Continued Growth

MFG’s investor presentation demonstrates a strong commitment to its purpose and strategic direction. The company has achieved significant results in FY23, exceeding its interim revised forecast and positioning itself for sustained growth in FY24 and beyond. The presentation highlights MFG’s disciplined financial management, effective capital allocation, strategic growth initiatives, and focus on creating a strong organizational platform. MFG is well-positioned to capture opportunities in a changing world, leveraging its unique strengths to drive corporate value and deliver on its promise of “Proactively innovating together with its clients for a prosperous and sustainable future.”

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