Mizuho Financial Group(MFG)2022-05-18 14:37Financial Data and Key Metrics Changes - Consolidated net business profit increased by JPY 52.4 billion year-on-year to JPY 8,521 billion, with record high revenues of JPY 127.9 billion achieved across all customer groups [7] - Net income attributable to shareholders rose by JPY 59.4 billion to JPY 430 billion, with a year-end dividend of JPY 0.40 per share, an increase from the previous year [7][24] Business Line Data and Key Metrics Changes - The company implemented a business improvement plan to address system failures, focusing on capturing signs of problems early and verifying system functions [9] - The equity investment trust balance increased to JPY 6.6 trillion, with the holding period extended from 3.9 years to 4.9 years [29] - The company aims to increase the equity investment trust balance to JPY 10 trillion and securities fund balance to JPY 1 trillion [29] Market Data and Key Metrics Changes - The company plans to maintain a conservative approach towards foreign bonds, with expectations of secure income from asset management [16] - The CET1 ratio is targeted to be around 9% in the first half of the fiscal year, with provisions set aside impacting the current ratio [66] Company Strategy and Development Direction - The company is focusing on fiscal structural reform, prioritizing quality of earnings and improvement of ROE, aiming for an ROE exceeding 8% [12][18] - Digital transformation (DX) initiatives are being emphasized to create new value and improve employee job satisfaction [14][36] - The company is pursuing capital-light businesses and expanding its presence in emerging markets in Asia [32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertainties in the external environment, including the ongoing Shanghai lockdown, which complicates future forecasts [25] - The company is committed to stable operations while being sensitive to risks and investing in management resources, talent, and IT [46][48] Other Important Information - The company has made significant progress in reducing cross-shareholdings, with a target to reduce JPY 450 billion over five years [22][109] - Sustainability efforts are being prioritized, with the company being a leader in sustainable finance among Japanese banks [37] Q&A Session Summary Question: Outlook and challenges for the current medium-term plan - Management noted that employees are eager for new initiatives and that culture and digital transformation are key focus areas moving forward [54][56] Question: Dividend and growth investment balance - The company aims for JPY 540 billion in net income and will consider share buybacks depending on the CET1 ratio and business conditions [62][66] Question: Core business and digital initiatives - Management emphasized the need to continuously verify strengths and weaknesses in core businesses and the importance of digital partnerships for growth [70][73] Question: Impact of system failures - Management indicated that while fiscal 2022 will see impacts from system failures, they are still assessing potential effects for fiscal 2023 [75] Question: Foreign bonds valuation losses - The company has significantly reduced its position in foreign bonds and believes current valuation losses are manageable [80] Question: Profit variance among mega banks - Management expressed confidence in exceeding JPY 500 billion in profits and highlighted the need for continuous evaluation of strengths in various markets [87][88] Question: Sustainability finance opportunities - The company recognizes the demand for sustainable finance and plans to leverage consultation services to capitalize on these opportunities [90]