Summary Results for the Third Quarter of FY2008

Consolidated Gross Profits for the nine months ended Dec 31, 2008 increased by JPY 67.5 billion on a year-on-year basis, due to the recovery in performance of Mizuho Securities which had recorded significant losses for the same period of the previous fiscal year. Gross Profits of the banking subsidiaries decreased mainly because of, despite increased income from our business with individual customers, decreases in income related to the business with domestic corporate customers (SMEs), fee and commission income in overseas businesses which were affected by the turmoil in the global financial markets, and income from trust and asset management business of Mizuho Trust & Banking which was affected by the domestic real estate market conditions.

Consolidated Net Business Profits for the same period increased by JPY48.9 billion on a year-on-year basis to JPY 481.8 billion, despite an increase in G&A expenses, mainly those associated with employee retirement benefits.

Consolidated Net Income for the nine months ended Dec 31, 2008 decreased by JPY 443.5 billion from the same period of the previous fiscal year to JPY -50.5 billion. This was mainly due to, together with the aforementioned factors, increased Credit-related Costs primarily associated with an increase in domestic corporate bankruptcies, devaluation of a portion of our stock portfolio triggered by the declines in the stock markets (devaluation of JPY 300.5 billion for the 3 Banks; of which JPY 204.9 billion was recorded for the third quarter (from October to December)), and continuously recorded losses on securitization products and others resulting from the global financial market dislocation.

As for the effect from our securitization products and others due to the global market dislocation, the consolidated P&L impact for the nine months ended Dec 31, 2008 was a loss of approximately JPY 97.0 billion (of which approximately JPY 25.0 billion arose in the third quarter (from October to December)).

Regarding the average loan balance for the three-month period from October to December 2008, the balance of domestic branches largely increased mainly driven by the growth in corporate lending, while that of overseas branches decreased mainly due to foreign exchange translation impact.

The domestic loan-and-deposit rate margin for the same period, against the backdrop of the increase in Return on Loans and Bills Discounted at Mizuho Corporate Bank, increased by 0.01% compared with the first half of fiscal 2008.
(From 2Q of FY 2008 to 3Q of FY 2008: +0.02%)

Net Interest Income of the 3 Banks for the nine months ended Dec 31, 2008 remained almost flat (a year-on-year decrease of JPY 2.2 billion), amounting to JPY 689.3 billion.

Net Fee and Commission Income of the 3 Banks for the nine months ended Dec 31, 2008 amounted to JPY 207.9 billion, a year-on-year decrease of JPY 43.9 billion.

As for our business with individual customers, fee income associated with sales of investment trusts and individual annuities decreased from the same period of the previous fiscal year, due to stagnant stock market conditions and other factors.

As for our business with corporate customers, although fee and commission income associated with domestic syndicated loans increased year-on-year, that primarily from solution-related business for SMEs, foreign exchange business, and overseas business decreased. Profits from trust and asset management business of Mizuho Trust & Banking also decreased.

1. *2Figures in brackets are the balances of Mizuho Securities including its overseas subsidiaries (all of which are held in trading accounts).

[Reference] Summary of the impact of the dislocation in the global financial markets on our foreign currency denominated exposures (the group in total) (PDF/182KB)

In Dec 2008, we issued JPY 355.0 billion of non-dilutive preferred debt securities through an overseas special purpose subsidiary to further strengthen our group's capital base in light of the current financial market turmoil.

Regarding offsetting the potential dilutive effect of our common shares from the conversion of preferred stock (the Eleventh Series Class XI Preferred Stock, JPY 943.7 billion in aggregate issue amount), while our basic policy to "address the potential dilutive effects, based on market conditions, our earnings trend and other factors" remains unchanged, considering the importance of capital under the recent circumstances, we put more priority on strengthening our capital base in this second half of fiscal 2008.