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# Mizuho's Q3/FY2025 Results
- URL: https://www.fintechobserver.com/mizuhos-q3-fy2025-results/
- Published: 2025-02-10T22:57:48.000Z
- Updated: 2025-02-10T22:57:48.000Z
- Author: Norbert Gehrke
- Tags: banking, japan, fintech

Mizuho Financial Group reported results for the third quarter of the current fiscal year, providing an assessment of its performance, strategy, and outlook. 

### **Financial Performance & Outlook**

![](https://storage.ghost.io/c/46/cb/46cbd57f-e0e8-41a4-a1e2-710103a4267b/content/images/2025/02/Screenshot-2025-02-11-at-7.53.40.png)

- **Strong Q3 FY24 Performance**
  - Consolidated net business profits + ETF gains/losses: ¥964.2 bn (+15% YoY), 82% of FY3/25 guidance, exceeding analyst expectations
  - Net profits: ¥855.4 bn (+33% YoY), 104% of FY3/25 guidance.
- **Revised Earnings Estimates**
  - Goldman Sachs increased FY3/26-3/27 net profit estimates by +4%/+4% "to factor in stronger net interest income and an increase in some operating expenses (on a weaker yen and inflation)."
- **Profitability Metrics**
  - ROE (GS Estimates): 7.0% (3/24), 8.2% (3/25E), 8.3% (3/26E), 8.7% (3/27E)
- **Net Interest Income**
  - Increased to ¥737.2 bn (+12% YoY) in Q3 FY24.
  - Domestic lending spread widened from 0.86% in 1H to 0.88% at the end of 3Q.
  - Overseas loan-deposit spread widened from 1.35% in 1H to 1.38% at the end of 3Q.
- **Loans**
  - Domestic loans outstanding were ¥56.9 tn, up ¥1.1 tn from the end of FY3/24, but loans to individuals (such as mortgages) decreased.
  - Overseas loans edged up to $237.4 bn (+$1.4 bn QoQ).
- **Impact of BOJ Rate Hikes**
  - Estimated pre-tax impact of FY3/25 BOJ rate hikes: +¥105 bn.
  - Expected pre-tax impact of FY3/26 BOJ rate hikes: +¥225 bn.
  - "Mizuho said it expects every 0.25 pp rate hike to have an impact of around +¥120 bn in annual terms."

**III. Business Segments & Strategy**

![](https://storage.ghost.io/c/46/cb/46cbd57f-e0e8-41a4-a1e2-710103a4267b/content/images/2025/02/Screenshot-2025-02-11-at-7.54.59.png)

- **Segment Performance:** Customer Groups all show YoY increases in Gross Profits in FY24 Q3\. Markets also shows positive growth.
- **Domestic Business:** Focus on investment products, individual annuities, and residential mortgages. Growth in J-Coin Pay users and affiliated merchants.
- **Overseas Exposure:** Significant exposure to the US, EMEA, and APAC regions. Overseas lending is a key driver.
- **Trust Business:** Focus on real estate, pension/asset management, and stock transfer agency.
- **Securities Business:** Increase in customer base (cash management and NISA accounts) and AUM.
- **GCIBC:** Increased non-interest income
- **Asset Quality:** Non-performing Loans based on Banking Act and Financial Reconstruction Act are detailed.

### **Investment Thesis** 

- Profit growth through resource allocation to priority areas (domestic/overseas corporate business).
- Improvement of capital efficiency and ROE by shifting resources from low-margin to high-margin assets.
- Strengthening of growth investments and shareholder returns while maintaining a CET1 ratio in the 9-9.5% range.

![](https://storage.ghost.io/c/46/cb/46cbd57f-e0e8-41a4-a1e2-710103a4267b/content/images/2025/02/Screenshot-2025-02-11-at-7.56.08.png)

- **Catalysts:** BOJ rate hikes, share buybacks, investment in Rakuten Card, CFO meeting, and updates on the midterm plan.
- **Revised Target Price:** Goldman Sachs increased their 12-months target price from ¥4,500 to ¥4,750, based on a target P/B of 1.09X and end-FY3/26E BPS estimate of ¥4,361.

### **Key Takeaways & Implications**

- Mizuho FG is demonstrating strong financial performance, exceeding expectations in Q3 FY24.
- The bank is poised to benefit from BOJ rate hikes and is focused on improving capital efficiency and ROE.
- Strategic investments and a focus on high-growth areas are expected to drive future profitability.
- Global economic conditions and geopolitical risks remain key factors to watch.

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