Promoting Sound Management
Bearing in mind the public nature and influence of financial institutions, we are promoting sound management in order to maintain orderly credit conditions and ensure protection for depositors.
Summary of Income Analysis
Consolidated Net Business Profits
Consolidated Gross Profits for fiscal 2010 increased by JPY 36.6 billion on a year–on–year basis to JPY 2,033.2 billion.
Gross Profits of the banking subsidiaries increased by JPY 26.3 billion on a year–on–year basis. This was due to a year–on–year increase in income from Customer Groups (JPY 24.2 billion) arising mainly from non–interest income, accompanied by an increase in income from the Trading segment derived from flexible and timely operations properly interpreting market trends, and by other factors.
G&A Expenses of the banking subsidiaries decreased by JPY 30.0 billion on a year–on–year basis mainly due to continued overall cost reduction efforts.
Aggregated Consolidated Gross Profits (Net Operating Revenues) of our two securities subsidiaries (Mizuho Securities and Mizuho Investors Securities) decreased by JPY 54.9 billion on a year–on–year basis.
As a result, Consolidated Net Business Profits amounted to JPY 741.7 billion, a year–on–year increase of JPY 39.0 billion.
Consolidated Net Income
Credit–related Costs of the 3 Banks amounted to a net reversal of JPY 16.0 billion, a year–on–year improvement of JPY 173.1 billion. This was primarily due to our efforts to implement appropriate credit management while responding to our customers' financing needs. On a consolidated basis, Credit–related Costs were also maintained at a low level of a cost of JPY 16.6 billion.
Net Losses related to Stocks of the 3 Banks amounted to JPY 76.2 billion. This was mainly due to recording impairment losses reflecting a decline in stock prices.
As a result, Consolidated Net Income for fiscal 2010 increased by JPY 173.8 billion on a year–on–year basis to JPY 413.2 billion.
Financial Soundness
The balance of Disclosed Claims under the Financial Reconstruction Law (3 Banks) amounted to JPY 1,208.0 billion, a decrease of JPY 111.9 billion. NPL Ratio was 1.72%, an improvement of 0.18% from that of March 31, 2010.
Unrealized Gains on Other Securities amounted to JPY 0.6 billion, mainly due to a decrease in Unrealized Gains associated with a decline in stock prices and increases in both domestic and overseas interest rates.
Our Consolidated Capital Adequacy Ratio was 15.30%, an improvement of 1.84% from that of March 31, 2010.
| FY2008 Results | FY2009 Results | FY2010 Results | ||
|---|---|---|---|---|
| Capital Adequacy Ratio (%) | 10.53 | 13.46 | 15.30 | |
| Tier 1 Capital Ratio (%) | 6.37 | 9.09 | 11.93 | |
Disciplined Capital Management
We continue to pursue "strengthening of stable capital base" and "steady returns to shareholders" as our "disciplined capital management" policy. However, considering the ongoing global discussions with respect to capital, uncertainty over the economy and market trends, and other factors, we are placing a higher priority on "strengthening of stable capital base."
In the last fiscal year, we strengthened our capital base mainly as a result of earning JPY 413.2 billion of Consolidated Net Income and issuing common stock in July 2010 (the number of shares issued: 6 billion shares, total amount paid in: JPY 751.6 billion). As a result, our financial base was significantly improved. Our Consolidated Tier 1 Capital Ratio was 11.93% as of March 31, 2011, a year–on–year improvement of 2.84%.
Amid the ongoing global discussions on the revision of capital regulations, we aim to increase, as our medium–term target, our Consolidated Tier 1 Capital Ratio (under Basel II) to 12% or above and our Common Equity Capital Ratio* (under Basel III) as of the end of fiscal 2012, when the new capital regulations are scheduled to be implemented, to the mid–8% level.
We announced Mizuho's Transformation Program in May 2010, and continue to work to improve profitability and enhance our financial base. We will strive to strengthen further our financial base mainly by accumulating retained earnings and improving asset efficiency through the steady implementation of the Program. Accordingly, we believe we will be able to sufficiently meet the new capital regulations.
- *The calculation of our Common Equity Capital Ratio includes the outstanding balance of the Eleventh Series Class XI Preferred Stock that will be mandatorily convertible in July 2016. Meanwhile, as of today, details — such as the calculation method for the capital adequacy ratio under the new capital regulations — have yet to be determined. Therefore, our Common Equity Capital Ratio is the estimated figure that Mizuho Financial Group calculates based on the publicly–available materials which have been issued as of today.
- (Note)The outstanding balance of the Eleventh Series Class XI Preferred Stock as of March 31, 2011 (excluding treasury stock) was JPY 416.8 billion (the rest of the balance, 55.8% of the initial amount issued of JPY 943.7 billion, had already been converted into common stock).
- Net Business Profits*
- *Net Business Profits are the aggregate total for the three banks: Mizuho Bank, Mizuho Corporate Bank, and Mizuho Trust & Banking.
- Consolidated Net Income
- Consolidated Net Assets and Consolidated Capital Adequacy Ratio
This section examines and reports on the outline of the results (summary of income analysis, Group's comprehensive profitability, and capital management) and the earnings plan.
