Mizuho Financial Group(MFG) - 2025 Q4 - Annual Report

Financial Performance - Mizuho Financial Group reported net interest income of ¥1,259,999 million for the fiscal year ending March 31, 2025, an increase from ¥1,204,924 million in 2024, reflecting a growth of approximately 4.6%[31] - The company experienced a net income attributable to shareholders of ¥593,393 million in 2025, compared to ¥912,473 million in 2024, indicating a decrease of about 34.9%[31] - Noninterest income for the fiscal year 2025 was reported at ¥2,002,912 million, a decline from ¥2,743,729 million in 2024, showing a decrease of about 27%[31] - The company’s return on equity for 2025 was 6.61%, down from 10.03% in 2024, indicating a decline in profitability[32] - Cash dividends per share increased to ¥140.00 in 2025 from ¥105.00 in 2024, marking a rise of approximately 33.3%[31] - The provision for credit losses was ¥96,943 million in 2025, compared to ¥47,135 million in 2024, reflecting an increase of about 105.5%[31] - Total assets increased to ¥276,741,152 million in 2025 from ¥272,173,152 million in 2024, representing a growth of approximately 1.9%[32] - Total liabilities stood at ¥266,191,227 million in 2025, up from ¥261,741,965 million in 2024, which is an increase of approximately 1.7%[32] - The company’s long-term debt decreased to ¥14,914,120 million in 2025 from ¥16,277,331 million in 2024, a reduction of about 8.4%[32] Risks and Challenges - Climate change risks, including transition and physical risks, may adversely affect the company's financial stability and operations[42] - The company faces intense competition from both domestic and international financial institutions, which could impact its market position[44] - Significant trading account losses were recorded for the fiscal years ended March 31, 2022, 2023, and 2024 due to U.S. interest rate rises, affecting the company's bond holdings[50] - The company holds substantial investments in marketable equity securities, and declines in Japanese stock prices could lead to unrealized losses and negatively impact capital adequacy ratios[48][49] - The company may need to increase allowances for credit losses due to problem loans, particularly in the real estate and manufacturing sectors[47] - A downgrade in credit ratings could result in additional collateral requirements, estimated at approximately ¥4.1 billion for a one-notch downgrade and ¥15.2 billion for a two-notch downgrade[57] - The company is subject to capital adequacy regulations, and failure to maintain required levels could lead to corrective actions from the Financial Services Agency[58] - The leverage ratio regulations require the company to maintain certain thresholds, with potential corrective actions if these are not met[62] - Market liquidity of assets may decrease significantly due to financial market turmoil, adversely affecting the company's financial condition[52] - Pension-related costs may increase due to revised assumptions or changes in pension plans, potentially affecting financial condition and results of operations[67] - A decrease in deferred tax assets, net of valuation allowance, could adversely impact financial condition and results of operations due to changes in estimation of future taxable income or tax policy[68] - Impairment of long-lived assets could materially affect financial condition and results of operations if cash flows do not justify carrying value[69] - Disruptions in information technology systems could significantly impact business operations and financial results due to human error or system failures[72] - Cyber-attacks could jeopardize the protection of confidential information and disrupt business operations, leading to reputational damage and financial losses[74] - Employee errors and misconduct pose risks that could result in regulatory actions and harm to reputation, adversely affecting financial condition and results of operations[79] - The inability to attract and retain skilled employees could impair competitiveness and efficiency, negatively impacting financial condition and results of operations[80] - Compliance with anti-money laundering and counter-terrorism financing measures is critical, as inadequacies could lead to regulatory actions and reputational harm[84] Strategic Initiatives - The medium-term business plan announced in May 2023 may not achieve anticipated outcomes, affecting financial condition and results of operations[92] - Expansion into new product and service areas exposes the company to new risks that could materially affect financial condition and results of operations[93] - In fiscal year 2023, the company redefined its Corporate Identity and established a medium-term business plan for FY2023 to FY2025, aiming to meet the targets set in the previous 5-Year Business Plan[124] - The company has established a venture capital firm, Mizuho Innovation Frontier Co., Ltd., in April 2023 to promote business and technological advances within the group[120] - The company has integrated its asset management functions with The Dai-ichi Life Insurance Company, forming Asset Management One Co., Ltd., to strengthen asset management capabilities[115] - The company has pursued comprehensive model risk management initiatives to mitigate potential losses from model errors[97] - The company has developed internal controls over financial reporting in compliance with the Sarbanes-Oxley Act and the Financial Instruments and Exchange Act of Japan[98] - The company has faced risks related to unidentified or unanticipated risks, which may not be fully addressed by current risk management policies[99] - The company has undergone several mergers and acquisitions to enhance group capabilities, including the merger of Mizuho Securities and Shinko Securities in May 2009[108] - The company has established a new group capital structure by making Mizuho Securities a directly-held subsidiary in April 2013[111] - The company has dissolved Mizuho Private Wealth Management Co., Ltd. in December 2021, transferring its functions to Mizuho Bank, Ltd.[119] - The company has integrated its research and IT development capabilities by merging Mizuho Information & Research Institute, Inc. and Mizuho Trust Systems Company, Limited in January 2021[117] Customer Experience and Service Enhancement - In fiscal year 2024, Mizuho established "Mizuho Atelier" branches and improved the user interface of the Mizuho Direct app, enhancing customer experience[125] - Mizuho formed a strategic partnership with Golub Capital to address asset management needs, particularly with the rollout of Japan's new tax exemption scheme for investment, NISAs[125] - The company aims to double asset-based income and expand the asset formation business through NISAs, leveraging group-wide strengths[132] - Mizuho's acquisition of Greenhill in December 2023 is expected to facilitate cross-border M&A deals, enhancing global coordination[125] - The medium-term business plan from FY2023 to FY2025 focuses on co-creating value-added solutions to support clients and address social issues[130] - Mizuho's corporate culture transformation initiatives resulted in improved employee engagement and internal communication[128] - The company is enhancing its digital transformation efforts, including the development of AI-powered contact centers and IT reforms[125] Sustainability and Corporate Responsibility - Mizuho is committed to sustainability, aiming to improve corporate value while addressing environmental and social issues[136] - The Risk Appetite Framework (RAF) has been established to manage risks associated with sustainability and enhance corporate value[141] - Mizuho aims to achieve a low-carbon society by 2050, implementing initiatives based on a Net Zero Transition Plan that focuses on business opportunities, risk management, and real economy transitions[149] - The company conducts scenario analysis to assess the impact of climate change on its portfolio, enhancing the flexibility of plans and resilience of strategy[150] - Mizuho is investing in talent development and strategic human resource management to create a more inclusive organization and support employee growth[151] Business Operations and Market Strategy - The Retail & Business Banking Company is enhancing its service offerings, including AI-powered asset management advisory services and expanding housing loan products[158][160] - Mizuho has entered a strategic capital and business alliance with Rakuten Card Co., Ltd., acquiring 14.99% of its common stock to build a new retail business model[165] - The Corporate & Investment Banking Company provides tailored financial solutions for large corporate customers, including M&A advisory and risk hedging products[175] - Mizuho is expanding its Global Corporate & Investment Banking operations, focusing on approximately 300 blue-chip non-Japanese companies for LCM/DCM financing[184] - The company is enhancing its service framework to support diverse business needs of customers, including forming alliances with local financial institutions[185] - Mizuho Bank Europe N.V. merged with Mizuho Securities Europe GmbH to transition to a universal bank model, integrating banking and securities services[187] - The Global Markets Company aims to enhance its market presence and diversify its revenue base by integrating banking and securities functions, expanding its product lineup[189] - The company is focusing on improving trading capabilities and providing effective solutions by consolidating global risks and establishing electronic trading platforms[190] - The Asset Management Company is enhancing its asset management capabilities through collaboration with group companies and affiliates, targeting both individual and institutional investors[199] - Mizuho Bank plans to strengthen its operational structure in the defined contribution pension field through a merger with Defined Contribution Plan Services Co., Ltd., expected to enhance service efficiency[202] - The company is promoting sustainability across its sales, trading, investment, and fundraising functions, aiming to address ESG issues[193] - Mizuho Financial Group is examining the integration of Mizuho Bank and Mizuho Research & Technologies to enhance service offerings and add value for customers[210] - The company is expanding its transaction banking solutions to meet the sophisticated needs of corporate clients and investors, focusing on cash management and trade finance[205] - Mizuho Financial Group is collaborating with major partners like BlackRock, Inc. to develop and offer innovative investment products[200] - The company is leveraging technological advancements to enhance its infrastructure, including next-generation trading rooms and digital literacy among employees[194] - Mizuho Financial Group is facing strong competition in the financial services market, particularly from major global banks and local competitors[212]