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Thursday, Nov. 15, 2007

Subprime mess dents Mizuho pretax profit

Staff writer

Mizuho Financial Group Inc., Japan's No. 2 banking group by assets, said Wednesday its group pretax profit fell 24.7 percent to ¥399.2 billion in the six months to September, battered by the subprime mortgage crisis in the U.S.

Mizuho posted a group net April-September profit of ¥327.1 billion, down 16.6 percent, due to some ¥70 billion in losses incurred by the widening subprime loan mess.

Of the ¥70 billion, Mizuho incurred some ¥35 billion in securities products losses at Mizuho Securities Co. and about ¥2 billion at its group banks.

Mizuho Financial is made up of three core banking units — Mizuho Bank, Mizuho Corporate Bank and Mizuho Trust & Banking Co. — as well as subsidiaries and affiliates.

At the end of September, the value of Mizuho group's outstanding securitized products stood at ¥5.6 trillion, of which ¥800 billion was related to housing loans — including ¥100 billion in the U.S.

Mizuho also revised downward its forecast for its group net profit to ¥650 billion for the full year to March from ¥750 billion.

Mizuho President Terunobu Maeda said Mizuho Securities is expecting ¥65 billion in losses in the latter half of the business year over the subprime fiasco.

Mizuho's consolidated core business profit plunged to ¥414 billion — off ¥33.6 billion from the same period last year.

On a consolidated basis, Mizuho's capital adequacy ratio was 10.97 percent at the end of September, down from 12.48 percent at the end of March.

The total amount of nonperforming loans of the three banks in the financial group fell by ¥260 billion to ¥986 billion at the end of September.

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The Japan Times

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