Mizuho Financial Group(MFG) - 2019 Q4 - Annual Report

Financial Performance - Mizuho Financial Group reported net interest income of ¥893,967 million for the fiscal year ended March 31, 2019, a slight increase from ¥871,950 million in 2018[38]. - Noninterest income decreased to ¥1,222,371 million in 2019 from ¥1,604,663 million in 2018, reflecting a decline of approximately 23.7%[38]. - The net income attributable to MHFG shareholders for the fiscal year 2019 was ¥84,471 million, a significant drop from ¥577,608 million in 2018, representing a decrease of about 85.3%[38]. - Total assets as of March 31, 2019, were ¥197,611,195 million, down from ¥204,255,642 million in 2018, indicating a decrease of approximately 3.3%[39]. - The return on equity for common shareholders was 1.11% in 2019, a decline from 8.26% in 2018[39]. - Cash dividends per share remained consistent at ¥7.50 for the fiscal years 2015 through 2019[38]. - The total liabilities of Mizuho Financial Group decreased to ¥188,109,702 million in 2019 from ¥194,751,942 million in 2018, a reduction of about 3.4%[39]. - The provision for loan losses in 2019 was ¥32,459 million, a significant improvement compared to a provision of ¥(126,362) million in 2018[38]. - The number of shares used to calculate basic earnings per common share was approximately 25,362,376 thousand in 2019, slightly down from 25,366,345 thousand in 2018[38]. - Mizuho Financial Group's long-term debt decreased to ¥11,529,400 million in 2019 from ¥12,955,230 million in 2018, a decline of about 11%[39]. - The company's profit attributable to owners of the parent fell to ¥96.6 billion in 2019, down from ¥576.5 billion in 2018, representing a decline of approximately 83.2%[1]. - Net interest income decreased to ¥762.5 billion in 2019 from ¥807.4 billion in 2018, reflecting a decline of approximately 5.2%[1]. - General and administrative expenses were ¥1,430.9 billion in 2019, a decrease from ¥1,488.9 billion in 2018, representing a reduction of about 3.9%[1]. Capital and Financial Stability - The Common Equity Tier 1 capital ratio improved to 12.76% in 2019 from 12.49% in 2018, indicating a strengthening of capital adequacy[1]. - The Tier 1 capital ratio increased to 15.94% in 2019 from 15.44% in 2018, indicating improved financial stability[1]. - Capital adequacy ratios must be maintained above minimum required levels, with potential corrective actions required if they fall below specified thresholds[66]. - Total Loss Absorbing Capacity (TLAC) regulations require G-SIBs to maintain a minimum TLAC, with full application scheduled for March 31, 2022[70]. Business Strategy and Reforms - The company plans to revise its future earnings plans and branch network strategy as part of its new Five-Year Business Plan[45]. - The company aims to implement feasible measures early to eliminate structural issues and solidify a stable profit base[138]. - The new 5-Year Business Plan focuses on transitioning to the next generation of financial services, starting from the fiscal year ending March 31, 2020[140]. - The business plan is divided into two phases: Phase 1 focuses on structural reforms and building foundations, while Phase 2 aims to achieve growth effects[143]. - The company achieved its targets for the consolidated Common Equity Tier 1 capital (CET1) ratio but fell short on consolidated ROE, RORA, and group expense ratio due to structural reform losses[132]. - The company is implementing financial structure reforms to transition to a flexible earnings structure that can better respond to changes in the business environment[153]. Risk Management and Compliance - Cyber attacks pose significant risks to the protection of confidential information and could disrupt business operations, leading to reputational damage and financial losses[75]. - Non-compliance with information protection regulations could result in regulatory proceedings, litigation, and fines, adversely affecting financial condition and results of operations[79]. - The company has developed a system to comply with anti-money laundering and counter-terrorism financing regulations, but there is no assurance that these measures will prevent all violations, which could adversely affect its business and financial condition[80]. - Transactions with countries designated as state sponsors of terrorism may deter potential customers and investors, although the company believes these operations are not material to its overall business[81]. - The company is subject to various laws and regulations, and violations could result in regulatory actions and reputational harm, potentially impacting its financial condition and results of operations[83]. Market and Economic Conditions - Deteriorating economic or market conditions in Japan or elsewhere could negatively impact the company's business and asset quality[98]. - The company faces intense competition in the financial services market, which could adversely affect its competitive position and financial results[103]. - Natural disasters and other disruptions could materially affect the company's operations and financial condition, as seen in past events like the Great East Japan Earthquake[106]. Digitalization and Innovation - The company is enhancing its digitalization initiatives and collaborating with external partners to create new value beyond conventional financial services[144]. - The company is enhancing its digital services and collaborating with other firms to meet changing customer needs due to ongoing digitalization[167]. - The company is advancing early warning control and decision-making through digitalization and AI technology to improve sales and trading services[197]. Product and Service Development - The company is focusing on expanding noninterest income business globally and disposing of cross-shareholdings[132]. - The Retail & Business Banking Company aims to enhance consulting services for individual customers, focusing on asset management and succession, leveraging advanced technologies[160]. - The Corporate & Institutional Company has increased its ability to offer solutions by making IBJ Leasing Company an equity method affiliate, enhancing service offerings for large corporate customers[178]. - Mizuho is actively providing risk capital to renewable energy companies and startups to foster next-generation industries and promote collaboration among businesses[181]. - The Global Corporate Company is pursuing the Global 300 Strategy, focusing on approximately 300 blue-chip companies worldwide to develop long-term relationships[188]. - The company is focusing on developing investment products in collaboration with partners like BlackRock and aims to enhance capital efficiency in asset management[203]. - The Global Products Unit provides a wide range of solutions, including M&A and project finance, to meet diverse customer needs in investment banking and transaction banking[206]. - The company is committed to aligning with customers' changing needs and providing solutions based on high-level expertise, particularly in mergers and acquisitions and real estate[208]. - The Research & Consulting Unit aims to enhance its research functions and consulting business to create new value for customers in a rapidly changing economic environment[210].