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Feature on Efforts to Facilitate Corporate Finance

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Demonstration of the intermediary function of financing by adhering closely to the Small and Medium–Sized Enterprise Finance Facilitation Law

Demonstrate the Intermediary Function of Financing

Streamline Systems to Further Facilitate Corporate Finance

To assist small and medium–sized enterprises (SMEs) that suffer from cash management and individuals who have difficulty in repayment of housing loans, the Act concerning Temporary Measures to Facilitate Financing for Small and Medium–Sized Enterprises, etc. (the "Small and Medium–Sized Enterprise Finance Facilitation Law"), was implemented on December 4, 2009. Mizuho had already endeavored to proactively provide the financial intermediary function based on a belief that the smooth supply of financing is a social responsibility of financial institutions. Given the harsh economic climate in recent years and the enforcement of this law, Mizuho has strengthened its group–wide efforts to facilitate finance.

Mizuho Financial Group, the holding company, Mizuho Bank and Mizuho Corporate Bank (the "Three Group Banks") of the Mizuho Group have streamlined group–wide relevant organizations and systems for finance facilitation management in a unified manner.

Specifically, the Three Group Banks newly established the Finance Facilitation Management Committee, an intra–group organ consisting of related officers as committee members, for deliberation and coordination on the management of corporate finance facilitation. They also designated their respective officers in charge of the Risk Management Group as the Chief Officers for Finance Facilitation Management. In addition, to appropriately handle customer complaints and consultations, the Three Group Banks have established the dedicated Complaint & Consultation Window regarding finance facilitation. Accordingly, actual complaints and consultations from customers are handled by the specialist departments of the Three Group Banks. The specialist departments will immediately consult with each other on the treatment of the complaints and record the conditions of their treatment and process in the minutes.

Strengthen Financial Services from the Standpoint of Finance Facilitation

The Three Group Banks have reinforced systems to quickly and courteously handle customers' consultations by appointing someone Responsible for Finance Facilitation Promotion at business promotion divisions and branches, in addition to establishing the aforementioned specialist departments.

For example, Mizuho Bank, for which major customers are SMEs, middle–market corporations and individuals, established the Financial Services Support Office, a specialist department within the Credit Department, in November 2009 to promote changes in loan conditions and thoroughly disseminate those changes to the Credit Department and business promotion divisions and branches nationwide.

In addition, Mizuho Bank established the Corporate Banking Planning Division, a specialty section in the Corporate Business Department, in January 2010 to strengthen its management consulting functions such as management consultation for and support to SMEs and middle–market corporations by taking advantage of the information capabilities and the network of the Mizuho Group. The Corporate Banking Planning Division is active in promoting the management consulting service from the standpoint of finance facilitation with the unified management of support conditions thereat in collaboration with relevant head office departments, which actually assume the role of offering solutions such as management analysis, business matching and M&A. Mizuho Bank intends to aggressively provide management support tailored to the respective life cycles of client companies for promising growth fields such as the environment, agriculture and elderly nursing care; the creation of business and new business centering on IPO support; business continuity and expansion; and business restructuring.

Based on the belief that the "active use of the finance intermediary function contributes to the sound development of the customer and the economy, thereby leading to ensuring the soundness and propriety of bank business operations," Mizuho will address the reinforcement of corporate finance facilitation with group–wide efforts to perform its social responsibility as a financial institution.

Streamline Systems to Further Facilitate Corporate Finance

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Consultations on the Changes in Loan Conditions

Aim to Seriously Handle Every Case of Loans from the Standpoint of a Customer

Pursuant to the implementation of the Small and Medium–Sized Enterprise Finance Facilitation Law, it has become compulsory for financial institutions to address changes in loan conditions to be more favorable to the applicant if the loan applicant is an SME, an individual or a housing loan borrower. Financial institutions must adjust their organizations to perform this compulsory duty and report the implemented status to the Financial Services Agency.

Considering that promoting finance facilitation may provide an opportunity to further strengthen its primary retail banking, Mizuho Bank has adjusted its systems accordingly.

In November 2009, Mizuho Bank established the Financial Services Support Office in the Credit Department to thoroughly disseminate the policies and in–house procedures to comply with relevant laws and regulations to the Credit Departments and business promotion divisions and branches. Meanwhile, the Loan Business Developing Division is in charge of promoting changes in loan conditions for housing loans to individuals.

These specialist departments have improved manuals to appropriately respond to consultations from customers regarding any changes in loan conditions and held training meetings at the related units/sections including business promotion divisions and branches. Furthermore, the status of responses is regularly surveyed and the results are thoroughly disseminated so that all staff in charge can respond quickly and properly in compliance with the Small and Medium–Sized Enterprise Finance Facilitation Law through the preparation of Q&A pamphlets and follow–up training.

The specialist departments manage all the relevant information relative to the consultations and applications gathered from customers in a unified manner and follow up on the implemented conditions, for example, how customers were treated at the business promotion divisions and branches and whether accountability has been fully reviewed even if the proposed project does not come to fruition.

Follow–Up System toward Business Promotion Divisions and Branches

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Manager's Comments

I keenly sense our grave social responsibility.

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Shunichiro Ono Joint General Manager, Financial Services Support Office, Credit Supervision Division I Mizuho Bank

Mizuho Bank actively addressed the supply of financing as part of its efforts to facilitate corporate finance even before the implementation of the Medium–Sized Enterprise Finance Facilitation Law. The law requires us to handle customers' requests as much as possible including any changes in loan conditions without limiting the supply of financing. Fully sensing the grave social responsibility expected of a bank, I intend to offer financial support to customers through the follow–up operation for business divisions and branches and the Credit Department.

Supporting Business Improvement and the Restructuring of SMEs and Middle–Market Corporations

Drawing on the Group's Information–Related Functions and Abundant Know–How

Mizuho Bank early focused efforts on the business improvement and restructuring of SMEs and middle–market corporations as an important social role to be performed by a retail bank. In April 2009, when the economic environment surrounding SMEs became tougher, the Bank established the Credit Supervision Division IV as a specialty section to support the business continuation or restructuring of SMEs and middle–market corporations and strengthen its commitment to supporting business improvement and the restructuring of SMEs.

The Credit Supervision Division IV provides management consulting, guidance for management improvement and business restructuring support to SMEs and middle–market corporations, of which business performance has become poor due to the deteriorated business environment although they have capabilities in terms of technology and/or merchantability. The expert staff of the Credit Supervision Division IV strive to thoroughly consult with the management executives of the customer and division and branch staff so that their recognition of the current situation and essential issues can be shared among them. To this end, the expert staff often visit the customer's plants and/or stores to directly understand and verify key issues of corporate management on the spot. Thus, we support business restructuring by leveraging not only Mizuho Group's information–related functions and business network but also the accumulated, abundant experience and know–how on business restructuring by reviewing the possibilities from various perspectives.

Even if the customer's single–handed restructuring is determined to be difficult, various other possible methods for restructuring are pursued, for example, "introducing sponsoring corporation(s) in collaboration with related departments in charge of the M&A business." We aim to establish better partnerships between customers and Mizuho Bank through the business continuation and/or restructuring that would be achieved with these supporting efforts.

The Credit Supervision Division IV also strives to systematize the accumulated business restructuring know–how and in–house sharing of relevant information to increase the number of management support cases in cooperation with business promotion divisions and branches.

Manager's Comments

I believe the first step to business restructuring is to become unified with the customer.

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Makoto Yamamoto Deputy General Manager (currently General Manager of Morioka Branch), Credit Supervision Division IVMizuho Bank

I support corporate development through business improvement and/or restructuring support for SMEs and middle–market corporations that are experiencing financial troubles in collaboration with business promotion divisions and branches. I personally believe the first step to business restructuring is to become unified with the customer. Accordingly, I always keep my eyes open to sharing the recognition of the targeted business through interviews with the customer or visits to its plant(s), as well as its desirable direction, and establishing a solid, trust–based relationship with every customer in collaboration with the branches.

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