interim results for fy2016 - mizuho financial group · net income attributable to fg: 59% progress...

November 2016

Interim Results for FY2016

1

Important Notice

This presentation contains statements that constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995,including estimates, forecasts, targets and plans. Such forward-looking statements do not represent any guarantee by management of future performance.In many cases, but not all, we use such words as “aim,” “anticipate,” “believe,” “endeavor,” “estimate,” “expect,” “intend,” “may,” “plan,” “probability,” “project,” “risk,” “seek,”“should,” “strive,” “target” and similar expressions in relation to us or our management to identify forward-looking statements. You can also identify forward-looking statementsby discussions of strategy, plans or intentions. These statements reflect our current views with respect to future events and are subject to risks, uncertainties and assumptions.We may not be successful in implementing our business strategies, and management may fail to achieve its targets, for a wide range of possible reasons, including, withoutlimitation: incurrence of significant credit-related costs; declines in the value of our securities portfolio; changes in interest rates; foreign currency fluctuations; decrease in themarket liquidity of our assets; revised assumptions or other changes related to our pension plans; a decline in our deferred tax assets; the effect of financial transactions enteredinto for hedging and other similar purposes; failure to maintain required capital adequacy ratio levels; downgrades in our credit ratings; our ability to avoid reputational harm;our ability to implement our Medium-term Business Plan, realize the synergy effects of “One MIZUHO”, and implement other strategic initiatives and measures effectively; theeffectiveness of our operational, legal and other risk management policies; the effect of changes in general economic conditions in Japan and elsewhere; and changes toapplicable laws and regulations.Further information regarding factors that could affect our financial condition and results of operations is included in “Item 3.D. Key Information—Risk Factors” and “Item 5.Operating and Financial Review and Prospects” in our most recent Form 20-F filed with the U.S. Securities and Exchange Commission (“SEC”), which is available in the FinancialInformation section of our web page at www.mizuho-fg.com/index.html and also at the SEC’s web site at www.sec.gov.We do not intend to update our forward-looking statements. We are under no obligation, and disclaim any obligation, to update or alter our forward-looking statements,whether as a result of new information, future events or otherwise, except as may be required by the rules of the Tokyo Stock Exchange.Mizuho Financial Group, Inc. is a specified business company under "Cabinet Office Ordinance on Disclosure of Corporate Information, etc." Article 17-15 clause 2 and preparesthe interim consolidated and interim non-consolidated financial statements in the second quarter.

DefinitionsFG: Mizuho Financial Group, Inc. BK: Mizuho Bank, Ltd. TB: Mizuho Trust & Banking Co., Ltd. SC: Mizuho Securities Co., Ltd.RBC: Retail & Business Banking Company CIC: Corporate & Institutional CompanyGCC: Global Corporate Company GMC: Global Markets CompanyAMC: Asset Management Company

Net Income Attributable to FG: Profit Attributable to Owners of Parent 2 Banks: Aggregate figures for BK and TB on a non-consolidated basis

(Figures of BK up to 1Q FY2013 are simple aggregate figures of former Mizuho Bank and former Mizuho Corporate Bank before the merger in Jul. 2013)Group aggregated: Aggregate figures for BK, TB, SC, Asset Management One and other major subsidiaries on a non-consolidated basisCompany managerial basis: Managerial figure of the respective in-house company (managerial figures based on results of former business units up to FY2015)

Forward-looking Statements

Unless otherwise specified, the financial figures used in this presentation are based on Japanese GAAP This presentation does not constitute a solicitation of an offer for acquisition or an offer for sale of any securities

2

Holding Company

TrustBanking Securities Other Major Subsidiaries

Trust & Custody Services Bank

Mizuho Financial Group

Mizuho Trust & Banking

Mizuho Securities

Mizuho Bank Mizuho Private Wealth

Management

*1: Also comprised of other departments such as BK Industry Research Dept. and TB Consulting Dept. *2: Top 200 corporations from Forbes Global 2000 (excl. financial institutions)

S&P Moody’s Fitch R&I JCR

FG A- A1 A- A+ AA-

BK / TB A A1 A- AA- AA

(As of Nov. 14, 2016)

One of the BroadestCustomer Bases among

Japanese Financial Institutions

Comprehensive Securities Accounts

1.65M

SMEBorrowers, etc.

100K

Coverage of Listed Companies in Japan

70%

Forbes Global 200*2

(Non-Japanese Corporate Customers)

80%

IndividualCustomers

24M

Credit Ratings

(Rounded Figures)

Mizuho Group

Asset Management

Asset Management

One

Research & Consulting

Mizuho Research Institute

Mizuho Information & Research

Institute

*1

3

1. Interim Results for FY2016 – Executive Summary - Highlights P. 5- Overview of 1H FY2016 P. 6- Key Points of the Financial Results P. 7- Impact of the Negative Interest Rate Policy P. 8- Measures Against Effects of Negative Interest Rate Policy P. 9- Non-interest Income from Customer Groups P. 10- Securities Portfolio (Bond) P. 11- Securities Portfolio (Stock) P. 12- Credit Portfolio P. 13- Revised Earnings Plan of FY2016 P. 14- Net Business Profits by In-house Company P. 15

2. Progressive Development of “One MIZUHO” - Summary of the New Medium-term Business Plan P. 17- Progress Against Financial Targets of P. 18

the Medium-term Business Plan- KPI (Key Performance Indicators) P. 19- League Tables P. 20- Effects of Introduction of the In-house Company System P. 21 Initiatives of Each In-house Company

- Retail & Business Banking Company P. 23- Corporate & Institutional Company P. 25- Global Corporate Company P. 27- Asset Management Company P. 29- Global Markets Company P. 31- Global Products Unit P. 32- Research & Consulting Unit P. 33

Contents

Enhancement of Balance Sheet Control- Balance Sheet Control Strategies P. 35- Foreign Currency ALM (Liquidity Management) P. 37- Cross-shareholdings Disposal P. 38 Pursue Operational Excellence

- Pursue Operational Excellence P. 40- Initiatives to Reduce Expenses P. 41- Transition to Next-Generation IT Systems P. 42- Responding to FinTech Developments P. 43- Creation of New Business P. 44- Embedding a Corporate Culture that Encourages P. 45

Active Participation of Our Workforce Capital Management

- Capital Management P. 47 Future Direction for Financial Institutions Towards “Society 5.0”

- Financial Institutions in the Near Future P. 49

3. Interim Financial Results for FY2016- Overview of Financial Results P. 51- Net Interest Income from Customer Groups P. 52- G&A Expenses P. 55- Overseas Loan Portfolio P. 56- Exposure to Resource Sectors P. 57

4. Initiatives related to ESG- Initiatives Related to ESG: Environment P. 59- Initiatives Related to ESG: Society P. 60- Initiatives Related to ESG: Corporate Governance P. 61- Initiatives for Governance System Enhancement P. 62

4

2. Progressive Development of “One MIZUHO”

1. Interim Results for FY2016 – Executive Summary

3. Interim Financial Results for FY2016

4. Initiatives related to ESG

5

Highlights

Steady start-up of the Medium-term Business Plan accompanied by results in various areas

Net Income Attributable to FG: 59% progress against FY2016 plan

– Penetration of the integrated group strategy based on customer segments under the in-house company system

– Development in efforts to improve risk-return and cost-return under in-house company ROE management. Progress shown in balance sheet control through credit risk management and cross-shareholdings disposal, etc.

– Promotion of operational excellence with an aim to increase added value in customer services

– Net Income Attributable to FG was JPY 358.1Bn marking a 59% progress against the FY2016 plan of JPY 600.0Bn

– Consolidated Net Business Profits showed a steady trend marking a 53% progress against the original FY2016 plan (JPY 750.0Bn) supported by market operations appropriately capturing market volatility and an increase in domestic Non-interest Income

– Profits associated with the restructuring of SC overseas corporate structure contributed to Net Income Attributable to FG

1

2

The above information includes forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. See “Forward-looking Statements” on P.1 of this presentation

6

(JPY Bn) 1H FY2016 YoY

Difference 122.9 42.7

SC (consol idated)*4 131.3 92.6

Major Overseas Subs idiaries (BK)*4 18.1 6.0

Mizuho Credi t Guarantee 15.6 2.5

Other subsidiaries & consolidation adjustment -42.1 -58.4

(JPY Bn) YoY

1,089.6 -42.1

403.2 -43.4 750.0 53%

13.5 9.5 -80.0

60.8 -53.9 150.0

420.9 -153.6 810.0 51%

358.1 -26.0 600.0 59%

122.9 42.7 205.0

131.3 92.6

303.8 -62.5 595.0 51%

768.1 -54.8

-464.3 -7.7

312.0 -129.7 545.0 57%

235.2 -68.7 395.0 59%

1H FY2016 FY2016Original Plan

ProgressConsolidated

Gross Profits

Net Business Profits*1

Credit-related Costs

Net Gains (Losses) related to Stocks*2

Ordinary Profits

Net Income Attributable to FG

Difference b/w consolidated and 2 Banks*3

SC (Consol idated)*4

2 Banks (JPY Bn)

Net Income

Net Business Profits

Gross Profits

G&A Expenses(excl. Non-Recurring Losses)

Ordinary Profits

Differences in Net Income b/w Consolidated and 2 Banks

Overview of 1H FY2016

*1: Consolidated Gross Profits - G&A Expenses (excluding Non-Recurring Losses) + Equity in Income from Investments in Affiliates and certain other consolidation adjustments*2: Including Net Gains related to ETF of JPY 1.7Bn (-JPY 24.6Bn YoY) *3: Net Income Attributable to FG – Net Income of 2 Banks*4: Mizuho Securities USA Inc. became the Major Subsidiary of BK after the establishment of the US Bank Holding Company in Jul. 2016. Net Income of Mizuho Securities USA Inc.: JPY 3.7Bn (Jul. to Sep. 2016). *5: Fully-effective basis

Highlights of 1H FY2016

*3

Sufficient Common Equity Tier 1 Capital Ratio: 10.99%*5

- Common Equity Tier 1 Capital Ratio excluding Net Unrealized Gains on Other Securities improved to 9.14%*5

Net Income Attributable to FG:59% progress against FY2016 plan

- Credit-related Costs: a reversal of JPY 13.5Bn, below original FY2016 plan- Although Net Gains (Losses) related to Stocks decreased mainly due to

a decrease in Net Gains related to ETF, net gains secured through steady progress in cross-shareholding disposal

- At SC, investment banking and markets mainly led to steady results. Tax effects contributed to widen differences in Net Income between Consolidated and 2 banks

Consolidated Net Business Profits: 53% progress against FY2016 plan

- Decrease in Gross Profits, mainly due to the implementation of the Negative Interest Rate Policy and JPY appreciation, was offset to some extent by an increase in domestic Non-interest Income and market operations appropriately managing market volatility

- Although Consolidated Net Business Profits decreased by JPY 43.4Bn YoY, it marked a steady 53% progress against the original FY2016 plan

o/w JPY 45.1Bn is intragroup transaction not affecting the consolidated results


7

Impact of the Negative Interest Rate Policy (NIRP)

By striving against the difficult external environment, such as the negative interest rate policy, Consolidated Ordinary Profits recorded JPY 420.9Bn, 120% progress against our 1H target

Steady Progress

Securities Portfolio

Non-interest Income

Credit-related Costs

Growthmomentumcontinues

WithinExpectations

StablePerformance

Kept at alow level

StocksJGBs

1,847.11,798.9

-48.115.610.3

Ave. Remaining Period (yrs)

Balance (JPY Bn)

2.5 2.7

(JPY Bn)

Net Gains/Lossesrelated to Bonds

JPY 101.5Bn

LoansMarketDerivativesDeposits

-JPY 30Bn-JPY 15Bn

+JPY 20Bn

-JPY 40BnTotal

Annual impact on BK Gross Profits(estimate at the beginning of the fiscal year) - Compensated the decline

in sales of investment products by capturing large-size transactions utilizing our group integrated strategy

(Consolidated)(2 Banks)

1H FY15 1H FY16

428

Forex

421

10

+13.5

FY16 PlanOriginal Plan

Revised Plan -60.0

-80.0

(Group aggregated)

Key Points of the Financial Results

-JPY 15Bn

Impact on our 1H results was slightly less than 50% of fiscal year estimate

- Impact on profits due to the appreciation of Japanese Yen was approximately JPY 10Bn

YoY increase, after excluding the impact of changes in exchange rates

(1H FY16)Net Gains/Lossesrelated to Stocks

JPY 60.8Bn(1H FY16)

Appropriate market operation adjusting to market volatility

Mar. 16 Sep. 16 Mar. 16 Sep. 16

Balance (JPY Tn)

(JPY Bn) (Consolidated)

1H FY16

Maintained a resilient balance sheet

- Recorded a reversal, due to of our prudent forward-looking management. There was no large credit cost either inside or outside Japan

- Revised the fiscal year plan, considering the 1H result


8

(Reference) Breakdown of JPY Loans and Deposits

Impact of the Negative Interest Rate Policy (NIRP)

Floating

Short-term prime-rate

Fixed, etc.

Corporate etc.Individual

Loans

Loans

CorporateIndividual

LiquidDeposits

TimeDeposits

TimeDeposits

LiquidDeposits

NCDs

Deposits

Negative Interest Policy Impact for FY2016: approx. -JPY 40Bn

1H FY16 Results: less than 1/2 of fiscal year estimate

Domestic Loans(excl. loans to the Japanese Government , etc.)

JPY 48Tn

JGBs (Other Securities and

Bonds Held to Maturity)

JPY 18Tn

Current Accountat Bank of Japan

JPY 25Tn

DomesticDeposits

JPY 85Tn

Others

(Mar. 2016)

Decrease inLoan Margin

-JPY 30Bn

Decrease inMarket Related

Investment Return

-JPY 15Bn

The outstanding balance mainly consists

of Basic Balance(with +0.1% interest)

Decrease inDeposit Funding

Cost+JPY 20Bn

Decrease in Non-interest

Income(e.g. derivative transactions)

-JPY 15Bn

(Mar. 2016)

Impact of Negative Interest Rates BK, managerial accounting, rounded figures

Expected impact of the negative interest rate policy to be JPY 40Bn for FY2016 1H results were less than 1/2 of the fiscal year estimate

Impact

BK, Markets Unit managerial basis


9

Measures Against Effects of Negative Interest Rate Policy (NIRP)

Assets Liabilities

Net Assets

Investment Securities

Retirement Benefit Liability

Cash/Deposits, etc.

Borrowings/Corporate Bonds

Accumulated Other Comprehensive

Income

Fixed Assets

Cash/Deposits Individual Loans

Investment Products

Individuals

Corporates

- Ultra-long term funding

- Subordinated funding

Review of funding method BK TB

Reconsider Pension Strategy

- Review pension asset management

- Change of corporate pension plan

BK TB

Review Capital Strategy

- Returns to shareholders taking into consideration the Corporate Governance Code

BK TB SC

Low Interest Rate and Pursuit of Convenience

- Digital Channels

- New type of borrowing utilizing FinTech

BK

- Low risk type investment

- Cross-border M&A

- Return to shareholders

Efficiently Use Surplus Funds BK TB SC AM*

- Cross-shareholdings disposal

Respond to Market Fluctuation Risk BK TB SC

- Low risk investment products

- Investment products according to risk appetite

Low Risk Type Investment BK TB SC AM*

“shift from savings to investment/asset

building ”

- Carve out non-profitable operations

- Review real estate portfolio

Pursuit of Capital Efficiency BK TB SC

Create new business opportunities through the integration of bank, trust, securities and asset management functions as a Financial Services Consulting Group

Measures

Total Debt Restructuring

SC

* Asset Management

10

84 93 99

60 64 62

84 110 96

149

161 164

377

428 421

1H FY14 1H FY15 1H FY16

Banking (Japan)Banking (Overseas)Trust/Asset Management RelatedSecurities Related

9 17 6

6769

71

3232

23

4143

64

149 161 164

1H FY14 1H FY15 1H FY16

190 190

130 130

200 230

340 340

860 890

FY14 FY15

*1

-JPY 7Bn(excl. impact of changes in exchange rate JPY +3Bn)

BK Domestic Non-interest Income

Non-interest Income from Customer Groups

(JPY Bn)

*2Non-interest Income Group aggregated, managerial accounting, rounded figures

(JPY Bn)

BK, managerial accounting, rounded figures

Figures in ( ) represent YoY

Others

Settlement & Foreign Exchange

Investment Trust & Annuities

Solution Business-related

Syndicated Loans: JPY 23Bn (+9Bn)Investment Banking related: JPY 22Bn (+6Bn)Securities-related Fees: JPY 9Bn (+2Bn)

Investment Trusts: JPY 9Bn (-7Bn)Individual Annuities: JPY 14Bn (-2Bn)

Settlement: JPY 35Bn (+0Bn)Foreign Exchange: JPY 37Bn (+2Bn)

Annual Results

Investment Products2 Banks (left)

SC (right)

(JPY Tn)

*3

*4

*1: Due to the changes in managerial accounting, the figures are recalculated. The original figures before the recalculation that changed were FY14 : total JPY 870Bn, Trust / Asset Management Related JPY 120Bn, Securities Related JPY 210Bn. FY15: total JPY 910Bn, Securities Related JPY 210Bn. Other figures are unchanged. *2: Due to the changes in managerial accounting, the figures are recalculated. The original figures before the recalculation that changed were 1H FY14: Solution Business-related JPY 42Bn, others JPY 11Bn, 1H FY15: others JPY 20Bn. Other figures are unchanged.

*3: Retail & Business Banking Division *4: Total of Individual Annuities, investment Trusts (excl. MMF) and foreign currency deposits

0.49 0.55 0.49 0.34 0.27 0.61 0.63 0.67 0.33

25.8 27.0 26.6

1H FY14 1H FY15 1H FY16

Amount of Equity Investment Trusts SoldAmount of Japanese Bonds SoldAmount of Foreign Bonds SoldAssets Under Management

0.50 0.41 0.18

0.26 0.30

0.23

5.61 5.75 5.63

1H FY14 1H FY15 1H FY16

Amount of Individual Annuities SoldAmount of Investment Trusts Sold (excl. MMF)Balance of Investment Products

11

15.413.8 14.4

8.3

1.1

0.7 0.6

0.6

5.2

2.6 0.5

1.3

21.8

17.215.6

10.3

2.4yrs 2.6yrs 2.5yrs 2.7yrs

Mar. 14 Mar. 15 Mar. 16 Sep. 16

Treasury Discount BillsFloating-rate NotesMedium & Long-term BondsAve. Remaining Period

Mar. 14 Mar. 15 Mar. 16 Sep. 16

Japanese Stocks 1,108.2 2,132.1 1,603.9 1,429.8

Japanese Bonds 31.3 44.1 136.5 88.3

Other -49.3 303.0 114.7 113.7

Total 1,090.2 2,479.3 1,855.1 1,631.9

Nikkei 225 (JPY) 14,694 19,197 16,897 16,737

JGB 10Y 0.64% 0.40% -0.05% -0.08%

USTB 10Y 2.72% 1.94% 1.78% 1.60%

33.9

75.8

142.6

101.5

FY13 FY14 FY15 1H FY16

Unrealized Gains/Losses on Other Securities

JGB Portfolio

*1: Other Securities which have readily determinable fair values *2: The base amount to be recorded directly to Net Assets after tax and other necessary adjustments *3: Based on the quoted average market price of the respective month for Japanese stocks and Nikkei 225. For others, calculated based on the quoted market price if available, or other reasonable value, at the respective

period end *4: Foreign government bonds, fund investments, and securitization products, etc. *5: Including bonds with remaining period of one year or less *6: Excluding floating-rate notes *7: Determined at reasonably calculated prices

Securities Portfolio (Bond)

Consolidated

(JPY Bn)

*4

*5

*6

Unrealized Gains/Losses*2 *3

o/w Floating-rate Notes*7

JPY 13.3BnJPY 3.2Bn JPY 0.7Bn

JPY 95.8BnJPY 5.0Bn

2 Banks, acquisition cost basis

JPY 53.9BnJPY 6.0Bn

2 Banks, acquisition cost basis*1

*1 *2 *3

(JPY Bn) (JPY Tn)

Net Gains/Losses related to Bonds

(Reference) Foreign Bond Portfolio

JPY 22.5Bn

*1

Mar. 14 Mar. 15 Mar. 16 Sep. 16

Foreign Bonds (JPY Tn) 9.1 9.7 9.4 8.6

Unrealized Gains/Losses (JPY Bn) -170.2 38.3 38.2 45.4

2 Banks

12

FY13 FY14 FY15 1H FY16

-1.7 -0.6 -9.0 -1.2

57.6

96.1

181.4

65.3

2,003.8

1,962.9

1,847.1

1,798.9

Mar. 14 Mar. 15 Mar. 16 Sep. 16

Reduce JPY 550.0Bn by Mar. 2019 (from Mar. 2015 balance) (Reduce approx. JPY 250Bn by Mar. 2017)

Unrealized Gains/Losses on Japanese Stocks Disposing of Cross-shareholdings

Japanese Stock Portfolio

Securities Portfolio (Stock)

*1: Other Securities which have readily determinable fair values (the base amounts to be recorded directly to Net Assets after tax and other necessary adjustments). Based on the average market price of the respective month

*2: Other Securities which have readily determinable fair values*3: Managerial basis (BK, TB and SC)

Consolidated, acquisition cost basis2 Banks *2

Consolidated*1

Net Gains/Losses related to Stocks

-JPY 163.9Bn

Consolidated

Impairmentof Stocks

Med-termBusinessPlan

Mar. 14 Mar. 15 Mar. 16 Sep. 16

Japanese Stocks (JPY Bn) 1,108.2 2,132.1 1,603.9 1,429.8

Nikkei 225 (JPY) 14,694 19,197 16,897 16,737

Disposed Amount in 1H FY16(Amount Sold)*3 (JPY 47.9Bn)

JPY 48.1Bn

(JPY Bn) (JPY Bn)

13

-7.8<0bps> -26.7

<3bps>

+116.6<reversal>

-0.4<0bps>

+9.4<reversal>

0

3

6

9Global averageMizuho average

1.21% 1.20% 1.00% 0.98%

0

0.5

1

1.5

2

Mar. 14 Mar. 15 Mar. 16 Sep. 16

0.9 1.00.8 0.7

Claims with Collection RiskClaims for Special Attention

Claims against Bankrupt and Substantially Bankrupt Obligors

Net NPL Ratio

FY13 FY14 FY15 1H FY15 1H FY16

Expenses related to Portfolio Problems -18.1 -82.4 -44.6 -12.0 -15.8

Reversal of (Provision for) General Reserve for Possible Losses on Loans ‐ ‐ 0.8 ‐ 8.6

Gains on Reversal of Reserves for Possible Losses on Loans, and others 134.8 74.5 17.0 11.5 16.5

Credit-related Costs Disclosed Claims under the Financial Reconstruction Act

Credit Portfolio

Figures in < > represent Credit-related Costs Ratio *1

*1: Ratio of Credit-related Costs (annualized) against Total Claims (period-end balance, based on the Financial Reconstruction Act)

2 Banks, banking account + trust account

(JPY Bn)

FY13 FY14 FY15 1H FY161H FY15 (Reference) EDF by Moody’s Analytics*2

Other Watch Obligors

*2: EDF: Expected Default Frequency (measure of the probability that a firm will default calculated by Moody’s Analytics based on stock price and financial data)Average (no. of firms basis) of whole global listed companies and Mizuho’s Japanese and non-Japanese listed customers based on data provided by Moody’s AnalyticsResource related is an aggregate of mining, oil refining and oil, gas & coal exploration/production

(%)

Showing the soundness of Mizuho’s credit portfolio

Probability of Default

low

2 Banks, banking account

2 Banks, banking account + trust account

Balance (JPY Tn) 2.6 1.5 1.6 1.5Reserve Ratio 6.34% 3.72% 3.66% 3.56%

(JPY Tn)

17/10/10 10時31分

14

Consolidated

(JPY Bn)1H FY2016

Resul tsvs Origina l

Plan

Consolidated NetBusiness Profits 852.8 403.2 730.0 -20.0

Credit-related Costs -30.4 13.5 -60.0 +20.0

　Net Gains (Losses)related to Stocks 205.6 60.8 150.0 -

Ordinary Profits 997.5 420.9 770.0 -40.0

Net Income Attributable to FG 670.9 358.1 600.0 -

Difference in Net Income b/wConsolidated and 2 Banks 140.2 122.9 220.0 +15.0

2 Banks

(JPY Bn)1H FY2016

Resul tsvs Origina l

Plan

Net Business Profits 688.4 303.8 575.0 -20.0

Credit-related Costs -26.7 9.4 -55.0 +15.0

　Net Gains (Losses)related to Stocks 181.4 65.3 130.0 +5.0

Ordinary Profits 762.9 312.0 525.0 -20.0

Net Income 530.6 235.2 380.0 -15.0

FY2015Results

FY2016Revised

Plan

FY2015Results

FY2016Revised

Plan

ItemOriginal

Earnings PlanRevised

Earnings Plan

O/N Rate -0.1% -0.1%

3M TIBOR 0.05% 0.05%

10Y JGB 0.08% -0.15%

Nikkei 225 JPY 17,000 JPY 16,000

Foreign ExchangeRate (USD/JPY) JPY 115 JPY 102

Assumptions of Earnings Plan

Revised Earnings Plan of FY2016

*1: Consolidated Gross Profits - G&A Expenses (excluding Non-Recurring Losses) + Equity in Income from Investments in Affiliates and certain other consolidation adjustments

*2: Net Income Attributable to FG – Net Income of 2 Banks

Common Stock: JPY 7.5 per share(dividend payout ratio: 31.6%) (interim cash dividend payments: JPY 3.75)

Annual Cash Dividends for FY2016 (Estimates)

Net Income Attributable to FG for FY2016: Estimated Figure

*1

*2


15

　Retail & Business Banking Company 16.0 87.0 -28.0 10.0 -4.0 67.0 -14.0 -14.0

　Corporate & Institutional Company 253.0 276.0 130.0 142.0 238.0 261.0 +8.0 +8.0

　Global Corporate Company 170.0 192.0 77.0 83.0 163.0 182.0 +12.0 +13.0

　Global Markets Company 398.0 428.0 240.0 255.0 335.0 365.0 +16.0 +16.0

　Asset Management Company 22.0 22.0 9.0 9.0 19.0 19.0 -1.0 -1.0

Total of In-house Companies 859.0 1,005.0 429.0 499.0 752.0 893.0 +22.0 +21.0

Consolidated Net Business Profits 853.0 - 403.0 - 730.0 - -20.0 -

FY2015 ResultsFY2016

Revised Plan

(JPY Bn)Before head

office expensededuction

Before headoffice expense

deduction


deduction


deduction

1H FY16 Results vs Original Plan

Net Business Profits by In-house Company

Net Business Profits by In-house Company Rounded figures, group aggregated, managerial accounting

*

* Consolidated Gross Profits - G&A Expenses (excluding Non-Recurring Losses) + Equity in Income from Investments in Affiliates and certain other consolidation adjustments


16





The following section of this presentation includes forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. See “Forward-looking Statements” on P.1

17

Summary of the New Medium-term Business Plan

Financial Services Consulting Group- The most trusted partner in solving problems and supporting the sustainable growth of customers and communities -

Mizuho’sObjectives

10 Basic Strategies

BusinessStrategies

FinancialStrategies

ManagementFoundations

Promoting the “Area One MIZUHO” strategy

Strengthening our non-interest income business focused model on a global basis

Responding to FinTech

Strengthening our research & consulting functions

Responding to the shift from savings to investment

Controlling the balance sheet strategically and reforming the cost structure

Completing implementation of the next generation IT system

Fundamental reforms of HR management Continued initiatives towards embedding a corporate culture to support a stronger organization

Disposing of cross-shareholdings

Selecting and focusing business areas

Establishment of a resilient financial base

Proactive involvement in financial innovation

Introduction of the in-house company system

5 Basic Policies

Embedding a corporate culture that encourages the active participation of our workforce to support a stronger Mizuho

1

2

3

4

5

6

7

8

9

10

Fully Implement the Customer First Principle(Customer-Focused) Pursue Operational Excellence

18

1,962.91,798.9

Mar. 15 Sep. 16 Mar. 17 Mar. 19

Financial Targets for FY2018

CET1 Capital Ratio*1

Approx. 10%< 9.14% >

Consolidated ROE*2

Approx. 8%< 10.2% >

Group Expense Ratio*3

Approx. 60%Excluding expenses related to

the next-generation IT Systems, etc.: high 50% level

FY20: aim for the mid 50% range

Cross-shareholdings Reduction Amount JPY 550Bn*4

RORA(Net Income Attributable

to Owners of FG)

Approx. 0.9%< 1.1% >

Progress Against the Major Financial Targets

CET1 Capital Ratio Cross-shareholding Disposal

Proportion of Non-interest Income

54%46%

1H FY16

FY18Approx.60%

FY15

54% 46%

Non-interest Income

55%

60%

65%

< > 1H FY16 Results

(JPY Bn)

Expense Ratio

62.1%60.0%

Reduction Amount

JPY 550Bn

Progress Against Financial Targets of the Medium-term Business Plan

*1: Basel 3 fully-effective basis (based on current regulations), excluding Net Unrealized Gains on Other Securities *2: Excluding Net Unrealized Gains on Other Securities *3: Group aggregated *4: Shares listed on Japanese stock market, acquisition cost basis, cumulative amount from FY15 to FY18

(Excluding Net Unrealized Gains on Other Securities )

8.77%

Mar. 16 Sep. 16 Mar. 19

9.14%

Approx.10% -JPY 163.9Bn

NetInterest Income

Non-interest Income

NetInterest Income

FY15 1H FY16 FY18

Approx.60% level

Reduction Amount Approx.

JPY 250Bn


19

35 35

45

Mar. 16 Sep. 16 Mar. 19

FY15 1H FY16 FY18

Mar. 16 Sep. 16 Mar. 19

FY15 1H FY16 FY18FY15 1H FY16 FY18FY15 1H FY16 FY18

FY15 1H FY16 FY18

Business Promotion to InvestorsShift from Savings to Investment/Asset BuildingStrengthen Ancillary Transactions

One MIZUHO Strategy

KPI (Key Performance Indicators)

No.10 or above

Balance Sheet Control

RBC CIC CIC

+10%*4

RBC CIC GCC

0.8

1.2

300

BK, managerial accounting

Group aggregate, GCC managerial basis,rounded figures

Net increase in publicly offered equityinvestment trusts (excl. ETFs), rounded figures

GMC managerial accounting,rounded figures

Underwriting amount basis

Underwriting amount basis

GCC GCC AMC GMC

No.3

M&A*2 ECM*3 Foreign Currency-denominated Customer Deposits

U.S.DCM*7 Sales & Trading Profits

No.2

Shift from Savings to Investment/Asset Building

RBC

RBC managerial basis,rounded figures

JPY 10Tn

*1: Aggregate of individual and corporate customers *2: Source: Thomson Reuters (Any Japanese involvement, excl. real estate deals) *3: Source: Thomson Reuters (Total Domestic and Cross-border Equities). Deals including initial public offering, public offering, convertible bonds and REITs *4: Foreign currency-denominated customer deposits, planned amount versus Mar. 16 estimate *5: Excl. Commitment Fees and Guarantee Fees, etc.

*6: Progress versus FY16 plan *7: Source: Dealogic. Bonds with issuance amount of USD 250M and above issued by investment grade U.S. corporations*8: FY15 and 1H FY16: Simple aggregate figures for Mizuho Asset Management, DIAM and Shinko Asset Management, FY18: Planned figure for Asset Management One

1.4

(JPY Tn)

(USD Bn) (JPY Tn)

+25%(JPY Bn)

No.3

+30%

0.7 No.9 No.9 0.3

JPY 0.4Tn

180

One MIZUHO Strategy

One MIZUHO Strategy

Mar. 16estimate

180.5168.5

Progress 47%*6 Progress 58%*6

Progress 32%*6

(USD Bn)

Overseas Non-interest Income*5

Balance of Investment Products*1

Publicly Offered Investment Trusts*8

LargeCorporations

SMEs andMiddle market

Corporations

No.1 amongthe three Japanesemega-banks

No.1

No.5 or above

FY181H FY16

No.1 amongthe three Japanese

mega-banks(No. of deals)

No. of deals:No.1

Amount: No.1


20

Rank Company Name U/W Amount

(USD M)Market Share

(%)

1 JPMorgan 58,120 12.7

2 Bank of America Merrill Lynch 54,130 11.9

3 Citi 40,495 8.9

4 Goldman Sachs 36,804 8.1

5 Wells Fargo Securities 32,007 7.0

6 Barclays 28,587 6.3

7 Deutsche Bank 27,490 6.0

8 Morgan Stanley 25,905 5.7

9 Mizuho Financial Group 18,889 4.1

10 HSBC 16,250 3.6

Rank Company Name Amount(USD M)

Market Share(%)

1 Bank of America Merrill Lynch 234,679 9.1

2 JPMorgan 215,555 8.4

3 Citi 155,039 6.0

4 Wells Fargo & Co 139,296 5.4

5 Mizuho Financial Group 130,013 5.0

6 Mitsubishi UFJ FG 116,634 4.5

7 Barclays 81,619 3.2

8 Deutsche Bank 78,456 3.0

9 Sumitomo Mitsui FG 72,660 2.8

10 BNP Paribas SA 64,381 2.5

Rank Company Name Amount(JPY Bn)

Deals

1 Mizuho Financial Group 5,178.6 107

2 Nomura Securities 1,806.1 60

3 Sumitomo Mitsui FG 1,503.8 55

4 Daiwa Securities Group 1,265.7 35

5 Plutus Consulting 257.4 26

Rank Company Name Amount(JPY Bn)

Market Share(%)

1 Mizuho Financial Group 5,981.4 46.9

2 Sumitomo Mitsui FG 2,914.2 22.8

3 Mitsubishi UFJ FG 2,494.4 19.5

4Sumitomo Mitsui TrustHoldings

179.5 1.4

5 Development Bank of Japan 110.0 0.9


(JPY Bn)Market Share

(%)

1 Mizuho Securities 1,820.1 20.9

2Mitsubishi UFJ MorganStanley Securities

1,697.8 19.5

3 Nomura Securities 1,553.9 17.9

4 SMBC Nikko Securities 1,548.6 17.8

5 Daiwa Securities 1,336.7 15.4


(JPY Bn)Market Share

(%)

1 Nomura Securities 321.7 25.1

2 Sumitomo Mitsui FG 230.3 18.0

3 Mizuho Financial Group 194.2 15.2

4 Morgan Stanley 182.6 14.3

5 Daiwa Securities Group 134.3 10.5

Global Syndicated Loans*4

M&A Advisory (Japan Corporations)*3

League Tables

Publicly-offered Bonds (Japan)*2Syndicated Loans (Japan)*1

*1: Apr.16 - Sep.16. bookrunner basisSource: Prepared by BK based on data from Thomson Reuters

U.S. Debt Capital Market (DCM)*5 Total Domestic and Cross-border Equities*6

*2: Apr.16 - Sep.16, deals including Straight bonds, Investment Corporation bonds, Municipal bonds (lead manager method only), Samurai bonds, Preferred securities and excluding self-led bonds. Source: Prepared by SC based on data from I-N Information Systems

*3: Apr.16 – Sep.16, including publicly-disclosed deals involving Japanese corporations and deals where the parent company is a Japanese corporation, excluding real estate dealsSource: Prepared by SC based on data from Thomson Reuters

*6: Apr.16- Sep.16, deals including Initial public offerings, Public offerings, Convertible bonds and REITs.Source: Prepared by SC based on data from Thomson Reuters

*4: Jan.16 - Sep.16, Global Loan (R1), bookrunner basisSource: Thomson Reuters

*5: Jan.16 - Sep.16, bonds issued by investment grade U.S. corporations,bookrunner basisSource: Dealogic

21

Full-fledged introduction of the customer segment based in-house company system allows quick and flexible execution of strategies

Introductionof the In-house

Company System

Effects of Introduction of the In-house Company System

Execution of strategies beyond boundaries among legal entities led by the holding company (Heads of In-house Companies)1

Accelerated decision-making processes through delegation of authority to Heads of In-house Companies2

Strengthened initiatives to improve risk-return and cost-return through the introduction of in-house company ROE3

RobustNon-interest

Income

Efficient Risk-weighted Assets

Managementbased on ROE

Maintain SoundLoan Portfolio

Consistent Market Operations

Forward-looking ALM

Cross-shareholdingDisposal

from P. 23 to 33 P. 35, 36 P.13 P. 31 P.37 P. 35, 36

Effects of Transition to the In-house Company System

Steady progress toward the establishment of a resilient financial structure

Cost Reductionand FinTech

P. 38 P. 41 P.43

Operational ExcellenceBalance Sheet Control Balance Sheet Control Balance Sheet Control Balance Sheet Control

Strengthened Profitability Strengthened ProfitabilityStrengthened Profitability Strengthened Profitability

Progress in 1H FY2016

22

Initiatives of Each In-house Company

23

80

100

120

140

160

180

1,800

2,000

2,200

2,400

2,600

Sep. 15 Mar. 16 Sep. 160

1

2

3

Sep. 15 Mar. 16 Sep. 16

Retail & Business Banking Company

Support the trend of “shift from savings to investment/asset building” through highly specialized consultation services of banking, trust and securities functions

Shift from Savings to

Investment

*1: Aggregate figures for BK, TB and SC, RBC managerial basis *2: individuals, RBC managerial basis

Strengthen initiatives related to shift from savings to investment / asset building

Initiatives regarding fiduciary duty (FD)

Balance of banking and securities collaborated investment products*2No. of investment customers *1

(K) (JPY Tn)No..of banking and securities collaborated customers (right axis)

0 0

JPY 2.8Tn

BKTB SC

Group-wide integrated proposal

BranchesProducts

Further progress in the joint branch modelTransform all branches into joint banking, trust and securities branches with a target timeline of 2 years (incl. remote channel)

HR

Optimize the allocation of HR on a group basis

HR seconded from BK

Develop and increase talents with a high level of expertise

Develop and increase talents with a high level of expertise

Build a group-wide products provision framework

Promote sales collaboration in line with the role of each entity Customers of one company are customers of the entire Mizuho group

Wide range of product offering from not only inside but also outside the group

Increased collaboration with Asset Management One

<Trust banking products>

Trust agency business

Provide expertise mainly in succession and real estate

Improved customer baseDiscover potential needs and foster core/upper customer segments

Provide highly specialized consultation mainly in investments

“Area One MIZUHO” promotion project

Disclosed handling fees for life insurance (specified insurance contracts)Voluntary disclosed fees Mizuho receives from insurance companies to allow customers to make further appropriate decisions upon contract

Appropriate framework for performance measurementDeveloped an appropriate framework for performance measurement to value initiatives that truly address the needs and interests of our customers

Banking, trust and securities branches in the same “area” jointly provide financial services consulting in the region

Promote area based strategies based on the characteristics of the regionEach area autonomously plans and executes integrated strategy among banking, trust and securities functions in the “area”

<Securities products>

Branch and assist intermediary services

Feb. 2016: Announced the Policies Regarding Mizuho’s FDEstablished a product sales system which truly address the needs and interests of customers

24

Rank Company Name DealsMarketShare

1 Mizuho Securities 9 22%

1 Daiwa Securities 9 22%

3 Nomura Securities 8 20%

3 SMBC Nikko Securities 8 20%

5 SBI Securities 5 12%0

2

4

6

8

1H FY15 1H FY160

10

20

30

40

50

1H FY15 1H FY16

Further address needs for overseas business expansion and M&A for business expansion following the business strategy of customers

*1: No. of SME M&As (RBC customers only) *2: Profits from BK and TB collaboration profits (RBC customers only)*3: Apr.2016 to Sep. 2016 Source: Prepared by SC based on data from CAPITAL EYE, excluding REIT and global offerings *4: Apr.2016 to Sep. 2016 based on disclosure materials of each company, excluding REIT, ETF and PRO MARKET

Retail & Business Banking Company

Support business origination and expansion of innovative companies and strengthen business matching service as well as prospect for addressing future IPO related needs

Further development of the integrated support of growth strategies for both SMEs and their owners starting with consulting

Supporting Growth

Strategies

Support smooth succession by providing highly specialized business and asset succession consultationAddress real estate transactions and business divestiture needs duringbusiness and asset successionAlso address M&A and IPO needs of succession to person outside of the owner’sfamily

Solve customers’ financial challenges related to their financial results and other issues such as real estate due to high prices of the real estate orrevision in tax laws, etc.

Support growth strategies by discovering potential needs Strengthen support toward innovative companies

Provide risk money to innovative companies through funds

(JPY Bn)(No. of deals) JPY 6.6Bn48

Address needs through business strategy discussions

Strengthen business/asset succession consulting capabilities

Promote financial consulting

Expansion of membership services for IPO support

Funding support through growth support funds

FundingEducation Mentor

Business Develop-

ment

From seed to middle stages Supporting CompaniesMentor

Venture CapitalMizuho Group Companies

InnovativeCompanies

Eco-systemSupporters

No. of IPO arranger*3 No. of IPO stock transfer agent*4No. of SME M&A deals*1

Rank Company Name DealsMarketShare

1Mizuho Trust &Banking

13 39%

2Sumitomo MitsuiTrust Bank

12 36%

3Mitsubishi UFJTrust and Banking

8 24%

Real estate related profits*2

25

Improve pension system(Implementation of the third structure of pension, DC, etc.)

Dispose of real estate and securities, etc.

事例を出す

Corporate & Institutional Company

Pursue profit maximization through creating a chain reaction of profit opportunities (value chain business)

Value Chain Business

Value chain in M&A

Business strategy

discussions

BK

M&Aadvisory

SC

クロボM&A

Cross-border M&A(incl. restructuring / carveouts)

Currencyswaps

BK

Acquisitionfinance

DCMECM

↓Distribution to

investors

SC

PMI*

BK

A

B

E C

BKD

F

Thoroughly pursue value chain business through demonstrating industry leading financial services consulting functions

Pension Assets ProjectedBenefit

Obligation

(PBO)Unfunded obligations

Decrease in return

Decrease in discount rate

→ increase in PBO

Corporate financechallenges

－Decrease in Net Income－Decrease in Capital－Additional funding needs

Increase in unfunded obligations

Financial strategydiscussions

Review asset management

Address unfunded obligations Improve Net Income

BK TB

Review investment products Open retirement benefit trusts

Initiative using corporate pension as an opportunity

* Post Merger Integration

26

400

500

600

700

800

Mar.14 Mar.15 Mar.16 Sep.160

200 companies 18 employees

事例を出す

Corporate & Institutional Company

Achievement of initiatives to capture business opportunity considering the changes in the external environment such as negative interest rates and Corporate Governance (CG) Code implementation

Respond to changes in the environment

Hybrid Finance (HBF)

– Achieve a good balance between ROE and external ratings

– Make the financial strategies flexible

– Funding at a low interest rate

Global Offering

Total DebtRestructuring

Issuers' needs

– Difficulty in fund management under the negative interest environment

– Expanding range of investors

– Spreading HBF

Investor’s environmental changes

Acquired highly profitable transactions which secured margins and related ancillary transactions mainly from companies with high credit ratings

Expertiseas the market leader

Historical Trends in Hybrid Finance Balance (JPY Bn)

BK

Note: Hybrid Loans for industrial corporations and privately placed Hybrid Securities

13 companies (10.7% of the issued stocks)

Existing shareholders

Sales of stocks held

Respond to the CG Code

- Avoid impact on share prices

- Expand the range of shareholders

Global Offering

200 companies 19 employees

SC Investor Coverage

Europe/ Middle

East

Asia

Japan North America

Organize strong sales structure which fully cover the major investors in each region

Upper row : No. of investors (rounded figures)Lower row : No. of sales personnel

Largely contributed to raise the presence of SC among Overseas ECM

Co-Global Coordinator

Active Bookrunner both in and outside Japan

Gained top class order amount in

Overseas Tranche*

*: Comparing the total order amount gathered by each securities company

JPY 719.0Bn

300 companies 86 employees 500 companies

41 employees

New Shareholders

Domestic and global institutional investors /

individual investors

(As of Oct. 1, 2016)

27

1,123 1,154

654

3.60% 3.31% 3.31%

FY14 FY15 1H FY16

590

Buyer

2 Anheuser-Busch InBev Consumer4 Charter Communications TMT6 Dell TMT7 Energy Transfer Equity Energy8 HJ Heinz Consumer9 Anthem Healthcare

10 Cheung Kong Conglomerate11 Teva Healthcare13 Avago Technologies TMT15 Shire Healthcare16 Aetna Healthcare19 MPLX Energy

GTBSingapore

(HO)

GTB(LDN) GTB

(NY)GTB(China)

GTB(Tokyo)

GTB(HK)

RORA

Gross Profits

*1: BK (including banking subsidiaries), GCC managerial basis including synergy effects with securities functions, etc. *2: 2015, Source: prepared by GCC based on data from Dealogic

Global 300 Profitability(USD M)

Advisory & Solutions Business Promotion

Continue and expand the strategy focusing on blue-chip non-Japanese CompaniesExpand non-interest income through advisory & solutions business promotion utilizing group capabilities

Global Corporate Company

OverseasBusiness

Major M&A Deal Participation*1

CloseRelationship

with TopManagement

HighCredit Profile

Expansion ofTransaction

Types

Long term Commitment throughSharing of Business Strategy Over

250Approx.

300

FY2018FY2015

No. of Company Groups

Super 30/50 Global 300

*2

Further Promote Sector Based Approach

Strengthening Transaction Banking Business

Began one stop business promotion on a global basis- Placed key personnel to promote transaction banking in HO as

well as each regional office of Global Transaction Banking Department (“GTB”, HO: Singapore)

- Strengthened product development such as supply chain finance

1H FY16 Gross Profits increased YoY Participated in 12 of top 20 deals

Bookrunner

Global 300 Strategy

Focus on sectors undergoing reorganization through M&A

Media & Telecom

Healthcare ConsumerFocused Sectors

Global expansion of team supporting advisory & solutions business promotion- Each regional team supports the promotion of advisory & solution

services based on the business/financial strategies of the respective customers

28

10

15

20

5

10

15

20

5

Expanded non-interest income and customer base, after acquiring North American loan portfolio as well as personnel from RBS, promoting the integrated management of banking, trust and securities functions

U.S. Business

Advancement in Capital Markets League Table

Establishment of Bank Holding Company (BHC)

Effectively promoting in-house company system as a group

Impact of acquiring the N. American loan portfolio from RBS

Number of Top Tier Customers

0

50

100

Before RBS After RBS

Strengthened Solution Providing Capabilities

Remarkable Transaction with Global 300 customer

July 2016

USD 6,150,000,000Senior Notes

Active Bookrunner

- First time to be mandated as active bookrunner for Verizon (BoAML, DB, GS, Mizuho)

- Won the transaction by demonstrating Mizuho’s strong capability in DCM, on top of the strengthened relationship (uptier) after the RBS transaction

- By leveraging this transaction, Mizuho subsequently participated in the initial securitizationtransaction for Verizon which followed

Transition in the DCM League Table Transition in the ECM League Table

FGBK

GCCGMCAMCGPU

U.S. branch of BK

Operation in the U.S.

U.S. subsidiary of BK

U.S. subsidiary of TB

U.S. subsidiary of SC

BHC

Mizuho

MUFG

SMFG

9th

US Banks

2014 2015 2016(Jan.-Sep.)

2014 2015 2016(Jan.-Sep.)

US Banks

MizuhoMUFG

SMFG

12th

Investment Grade, Bookrunner basisSource: Dealogic

Business Advancement in the United States

- Enhanced the product capability of the bank and securities, by acquiring approx.100 personnel from RBS who ran the bank-securities integrated business model at RBS

- Improved business process, etc., to support the rapid business expansion

Materializing the synergy effect from the integration with RBS: Improved the customer base as well as solution providing capabilities Investment Grade, Bookrunner basis

Source: Dealogic

No. of companies which recognize Mizuho as their Top Tier Bank

29

1 Asset Management One 222 SMTH 183 MUFG 134 Blackrock 125 State Street 8

Mizuho Trust Bank(AM functions)

To Become Global Top 20 in AUM from Asia No.1

Aim to become a global top level asset management company as the “4th Pillar” of the One MIZUHO Strategy

AssetManagement

One

Establishment of Asset Management One Direction of Business Development

Evaluation of AM serviceAsset Under Management (AUM)

Shinko AssetManagement

Mizuho Asset Management

DIAM

Provide investment products through, but not limited to, group-wide channelas a “Product Development Function” in line with Mizuho’s asset management (AM) strategy

Source: The Investment Trusts Association, Japan and Japan Investment Advisers Association as of Mar. 16

(JPY Tn) AUM of the AM companies in Japan

Retail

Corporate

Pensions

Entrusted AMs from GPIF

Awards received from external institutions

Asian InvestorFund House of the Year (Japan) 2016

(Reference) Mizuho’s initiatives regarding fiduciary duties

Source: Government Pension Investment Fund (GPIF) website as of Mar. 16

Fulfill the fiduciary duties and contribute to customers by supporting their asset building

(JPY Tn)

Focus on publicly offered investment trusts utilizing advanced capabilities developed for pensions and institutional investors

Meeting various needs under the difficult environment in managing assets

Meeting needs to replace JGBs by increasingly sophisticated asset management capability under the NIRP environment

Give top priority to addressing the customer’s interests and offer products and services which truly meet the needs and interests of the customers

Voluntarily disclose the handling fees from insurance companies so that the customers can make more appropriate decisions when contracting life insurance

Feb

Aug

Announced the Policies Regarding Mizuho’s FD

Disclosed the Life Insurance Commission Disclosure Regime

1 Asset Management One 522 Nomura Asset Management 393 Blackrock Japan 224 Daiwa Asset Management 155 Nikko Asset Management 156 Mitsubishi UFJ Kokusa i AM 137 State Street 128 Sumitomo Mitsui AM 129 PIMCO 11

10 Nissay Asset Management 10

Asset Management Company

and more

30

Quickly respond to new systems and external environment changes SolutionProviding

Long term and low cost support from subscription to receipt of pension

Comprehensive consulting to address changing and diverse customer needs

AM One* TB

Diversification of asset classSophistication of investment strategy

Corporates Financial Institutions

Negative Interest Rates

NPOs

After 60 yrs oldSubscription

Education Program Robot Advisor(SMART FOLIO)

Telecommunication

1 Most reasonable and thought out product lineup 2 Adequate

support 3 Competitive fee

Privately placed investment trustsInvestment discretion etc.

Pension Trust etc.

Increase in pension liability

Self-employed,Corporate Employees(w/o corporate pensions)

3.7million

Civil Servants, Full-time Homemakers, Corporate Employees(with corporate pensions)

6.7million

Existing After Jan. 17

Basic Policy

- Address the diversified way of working

- Encourage individuals to build assets on their own

Initiative to Address the Increase of iDeCo* Eligible Individuals

*iDeCo: Individual-type Defined Contribution (DC) Pension Plan

Revision of the DC Law

Self-employed,Corporate Employees(w/o corporate pensions)

Materializing the “Shift from saving to investment/asset building” trend as the market leader in the DC business

Providing Solutions to Address the Negative Interest Rates Environment

Necessity for an alternative investment opportunity due to the decline in domestic bond yields

(Decline in discount rates Increase in projected benefit obligation)

Asset Management Solution

Comprehensive Pension Consulting

Revision of portfolio, pension plan/management

Asset Management Company

* Asset Management One

Substantial increase iniDeCo Eligible Individuals

31

0

5

10

15

-0.4

-0.2

0

0.2

(JPY Tn)(%) JGBs (right axis)10 Year JGB Yield3 Year JGB Yield15.6

10.5

Mar. 16 Jun. 16 Sep. 16

10.3

Global markets

GMC: precise early warning control of market volatilityFG: consistent investment strategy development

Secure both profitability and risk management capability through comprehensive group-wide “One Responsibility” structure

Introductionof the In-house

Company System

Global Markets Company

Share market outlook and investment strategies among subsidiaries

Group-wide fixed income portfolio management appropriately capturing market volatility

JGB Investments Strengthening Sales & Trading (S&T)

FG

Execution aligned with GMC policies

GMC Strategy Meeting

JGB Yield Trends and JGB Portfolio 2 Banks, acquisition cost basis Strengthen market-related profits by identifying customer needs

BK SCTB

¥

Increase market-related profits utilizing customer needs obtained from the whole group

Individuals Corporate and Financial Institutions

Shared market outlook and planned customer segment based strategies

In-house company based management

Provide optimal product and solution corresponding to customer segments

Operations utilizing customer money flow

Sales Sales Sales

Trading Trading Trading

FGS&T GM Mtg

Investors(hedge funds, etc.)

BK TB SC

32

Contribute to the realization of becoming a “Financial Services Consulting Group” by providing optional solutions

Professional Group

Global Products Unit

Realize Customer First Market-driven Approach Case 1：LBO Value Chain Transaction through PE Fund

Case 2：Value Chain Transaction with prospective IPO companies

Prospective IPO companies

Supplier Buyer(PE Fund)

M&A EXIT

IPO

Customers

BK TB SCAcquisition

Finance

Real Estate Finance

Project Finance

Syndicated Loans

Domestic and overseas

transactions -Cash Management-FX・Global Transaction-Trade Finance

Custody(for overseas customers)

Asset Finance

Real Estate Brokerage

Real Estate Trust・Asset

Management

SecuritizationBusiness

UsingIndividuals’

Funds

Custody(for domestic customers)

Trust Solutions

Stock TransferAgency

M&A Advisory

Real Estate Private Fund Arrangement

Debt Capital Markets (Bonds Underwriting)

Equity Capital Markets(Equity

Underwriting)

Asset Finance Arrangements

IPO Consulting

SC

Also focus on acquiring following transactions through value chain sales

Increase level of expertise and offer wide range solutions using functions across in-house companies

Trade Sales

Shareholder Policies Proposal

TBVC Investments

Mizuho Capital

IPO Lead Manager

SCStock Transfer Agency

TBConsulting services for listing related process

TB

FA

BK・SCLBO

BK

Stock Transfer Agency/Lead Manager

TB・SC

Finance/FA (Buyer)

BK・SC

33

Gathering research and consulting functions into “One Think Tank”

Aim to be the most experienced team of experts dedicated to addressing the various challenges Mizuho’s customers may face, as the first full-fledged Research & Consulting Unit (One Think Tank) as a Japanese bank

Research & Consulting Unit

OneThinkTank

Initiatives to Establish the One Think Tank

Provide optimal solutions to a wide range of customers from private to public sectors

<Mizuho> One Think Tank & Nikkei 2020 Forum

Start the enhancement of our membership function. Consider the establishment of an unified platform gathering various expertise within Mizuho, with an aim to materialize “members to invite other members structure”

Published reports featuring the outlook of Japanese industries, Brexit and US presidential election utilizing the expertise within the Unit

Held Unit-wide forum focusing on Tokyo 2020 Olympic Games in conjunction with third party

TB Consulting Dept.

Mizuho-DLFinancial Technology

BK Industry Research Dept.

Mizuho Research Institute

Mizuho Information &Research Institute

SC Research & Consulting Unit

MizuhoOne Think Tank Navi

Customers

Published One Think Tank Reports

Enhanced membership function

Launching the Research & Consulting Unit

Visualize One Think Tank functions on the intranet

Image

34

Enhancement of Balance Sheet Control

35

Establish a resilient financial structure through sophisticated control of the balance sheet Balance SheetControl

Initiatives to Improve Risk-Return

Infrastructure Project Institutional Investor

Risk/return analysis according to customer segment Thorough early warning control utilizing risk maps

In-house CompanyFG

Formation of Management Strategy

ROE Management

Profit Management

Profitability Data

ROE Target

by Transactionby Customerby Customer Group

RAF*

Profit PlanReduce Low-profitability Assets

Portfolio Plan* Risk Appetite Framework

ROE Improve Profitability

“Autonomous”Improvement of Efficiency

Balance Sheet Control Strategies

Consolidated Total AssetsJPY 193Tn (Mar. 2016)

DepositsandNCD

Liability Control

- Shift from deposits to investment products

Capital AdequacyImprovement

- Steady accumulation of retained earnings

- Deliberate issuance of capital eligible securities and TLAC eligible securities

Improve leverage ratio and RORA

Improve CET1 ratio and leverage ratio

- Decrease marketbased funding and repo transactions

- Decrease non-customer assets / decrease fund-credit investments

Market RelatedEfforts

Strengthen Asset Turnover

- Reduce low profitability assets



- Appropriate control of foreign currency denominated assets

- Disposal of cross-shareholdings

Improve leverage ratio and RORA Loans

JPY 73Tn

JPY 117Tn

Securities

JPY 39Tn

Net Assets

JPY 9Tn

Develop a Resilient Balance Sheet through both “Offensive” and “Defensive” Measures

Initiatives to Rotate Assets


Fund

¥

BK

$Receivables

Investment to BK ownedinfrastructure projectrelated receivables

Investment

MGAI*

Investmentadvisory

Launched Japan’s first fund with a size of JPY 10.0Bn in Jul. 2016 that invests in loan for infrastructure projects

Mizuho will be able to reduce long term foreign currency-denominated assets, while providing a new investment opportunity to investors

Starting the Business Portfolio Analysis Incorporating cost/return perspective in addition to risk/return analysis

to further promote the “selecting and focusing of business areas” hereafter

* Mizuho Global Alternative Investments Ltd.

36

Loans


Total Assets: JPY 192Tn (-JPY 0.7Tn)

Net Assets

JGB: JPY 13Tn (-JPY 5.6Tn)*3

Loans:

Securities:

Deposits,Negotiable Certificatesof Deposit (NCD):

Other Liabilities:Other Assets:

Stock: JPY 3Tn (-JPY 0.2Tn)

JPY 73Tn

JPY 119Tn

JPY 32Tn

JPY 86Tn

JPY 8Tn

JPY 63Tn

ROE based balance sheet control initiatives produced results in various areas Toward Strong Financial Base

Overview of Balance Sheet (as of Sep. 16) Strengthened Balance Sheet Control- Asset rebalancing emphasizing the improvement of risk-return

which is based on in-house company ROE management- Flexible ALM operations appropriately managing market volatility- Capital enhancement through accumulating internal reserves

- Despite lagging domestic funding demand, progress seen in rebalancing from low-profitability to high-profitability assets

- Maintain the quality of loan assets through comprehensive early warning control of risk factors

Securities- Decrease in JGB balance through market operations appropriately capturing

market volatility- Initiatives to improve risk-return supported cross-shareholdings disposal

Deposits- Addressed increased volatility of the financial market through a stable funding

structure supported by the increase in foreign currency-denominated customer deposits

Other Assets- BK and TB managed to avoid negative interest rate payments due to appropriate

controls despite BOJ deposits increasing from the sale of JGBs and increase in Yen deposits

Net Assets- CET 1 ratio increased to 10.99%*5 through steady accumulation of

internal reserves (CET1 ratio excluding Net Unrealized Gains on Other Securities: 9.14%*5)

Liquidity Coverage Ratio (LCR): 137.4% (Average from Jul. to Sep. 2016)

Leverage Ratio: 4.05%

Domestic Loan: JPY 50Tn (-JPY 1.5Tn)*1

Overseas Loan: USD 205.1Bn (+USD 1.5Bn)*2

(-JPY 0.6Tn)

(+JPY 2.2Tn)

(-JPY 6.8Tn)

(+JPY 6.7Tn)(-JPY 2.6Tn)

(-JPY 0.3Tn)

Foreign Currency-denominated Customer Deposits: USD 180.5Bn (+USD 12.0Bn)*4

Cash and Due from Banks: JPY 42Tn(+JPY 6.3Tn)

*1: 2 Banks, excluding loans to FG and the Japanese Government, etc.*2: BK (including subsidiaries in China, the US, the Netherlands, Indonesia, Malaysia, Russia and Brazil) *3: 2 Banks *4: BK (including subsidiaries in China, the US, the Netherlands, Indonesia, etc.) , including foreign currency deposits (domestic) *5: Fully-effective basis

Figures in ( ) represent change from Mar. 16

37

0

50

100

150

200

Mar. 15 Jun. 15 Sep. 15 Dec. 15 Mar. 16 Jun. 16 Sep. 16

(USD Bn) MUFGSMFGMizuho

0

100

200

Foreign Currency Loans

60%

71%77%

Proportion of Deposit to Loan

0

20

40

60

80

100

(bp)

USD/JPY Currency Basis Swap (1year)

Mar. 16 Sep. 16Sep. 15Mar. 15

Responded appropriately to the external environment by focusing on ALM with thorough early warning control, not only for Japanese Yen but also for foreign currencies mainly through increasing foreign currency denominated deposits

Foreign Currency Liquidity

Foreign Currency ALM (Liquidity Management)

Foreign Currency Loans and Deposits

Foreign Currency Balance Sheet Control/Liquidity Management

Respond to the external environment appropriately and execute foreign currency liquidity measures such as securing deposits

(Reference) Funding from US Prime MMF

(Reference) Historical Trend of Currency Swap Rates

Appropriate foreign currency balance sheet management towards a sustainable foreign currency based business

Plan foreign currency liquidity policies based on the market trend

FG Portfolio Plan by each In-House Company

Foreign CurrencyBalance Sheet Plan

Group companies

Foreign Currency Customer Deposits

(USD Bn)

Mar. 15 Mar. 16 Sep. 16

Source: Office of Financial Research

BK (including the banking subsidiaries in China, the US, the Netherlands and Indonesia, etc.), managerial accounting

Source: Bloomberg

*1: Including foreign currency loans and deposits (domestic) *2: New managerial accounting rules have been applied in 2016. Figures for Mar.15 and Mar. 16 were recalculated based on the new rules.

213.4

129.1

237.7

168.5

235.0

180.5

*1 *2

*1

38

Reflecting the potential impact on our financial position associated with the risk of stock price fluctuation, unless we consider holdings to be meaningful, we will not hold the shares of other companies as cross–shareholdings

Annual assessment of the objective of holdings(e.g. compare the profitability of each customer to our hurdle rate)

Cross-shareholdings Disposal

Promote cross-shareholdings disposal through initiatives to enhance capital efficiency by implementing in-house company ROE

Cross-shareholdings

Disposal

Basic policy of cross-shareholdings

* Other Securities which have readily determinable fair values. Acquisition cost basis

Cross-shareholdings Disposal Plan

Assessment of the objective of holdings

Reduction amount approx.

JPY 250Bn

(Target)

JPY 1,962.9Bn

Mar.15 Mar.17 Mar.19

Reduction amount

JPY 550Bn

(Target)

Japanese Stocks*

Sep.16(Result)

JPY 1,798.9Bn

(Result)

-JPY 163.9Bn

consolidated

Japanese Stocks, Acquisition Cost Basis, FY15-FY18 aggregate

Reduction Amount: JPY 550Bn

Aim to reduce approx. JPY 250Bn by Mar. 17


39

Pursue Operational Excellence

40

FinTech

Top-down exercise of measures including FinTech, etc.

Measures for Problem Solving Type

Cost reduction effect (estimate)

Pursue Operational Excellence

Improve “operation,” the execution capabilities of the strategies, and along with the differentiation of strategies centered on “customer-focused" approach, lead to establishing a sustainable competitive advantage and to enhancing added value of customer services

Add Value

- Downsize head office functions

- Revisit products and services

- Revision of domestic channels and networks

- Reduction of operations by front-line personnel

Approx.200 measures

Exercise PDCA based on a detailed action plan

Measures for Structural Reform Type

Substantially improve productivity through discontinuous thinking

e.g.- Review the business operation

based on the clarification through selection and focus

- Integration of group business by using the revision of Banking Act as an opportunity

- New business using big dataeffectively

- Replacing routine work using AI/Robotics

- Fundamental reform of business process using blockchain

Structural Reform Type

Problem Solving Type

EfficiencyEnhancem

ent

JPY 50.0Bn～

(FY18 - FY15)

Operational ExcellencePromotion Committee(Chairman: Group-CEO)

Heads of In-houseCompanies / Units / Groups

Review the progress of measures

Monitoring KPIs

PromotionStructure


41

Strengthening expense control through selective investment for strategic expenses and promotion of operational excellence

ExpenseReduction

ExpenseRatio

Investment decision based on management environment

(JPY Bn)

Expenses Plan for the Medium-term Business Plan

FY2020: Aim for mid 50% range60.0% FY2018 (Plan): Approx. 60% level (excl. next-generation systems related: higher 50% level)

ExpenseAmount

rounded figures, group aggregate, managerial accounting

JPY 1.26Tn

60～

50～

50～

FY2018 (Plan)FY2015 (Result) FY2020(Illustrative Purposes)

Increase /decrease factors for FY2018 plan in comparison with FY2015

StrategicExpenses

Next-generationIt systems, etc. Operational

excellenceeffects

50～Core expenses

Investment Policy for Strategic Expenses

Considering cost-return as a corefor selective investment which helps

1) Growth in short/medium term2) Expansion of business base In the future

Initiatives to Reduce Expenses

Front Office related1) Reform channel strategy2) Optimize investments/revision of

outsourcing3) Centralize overseas middle/back office

operation4) Integrate group-wide purchase/

Globally centralize contracts

Operational Expense Effects (examples)

Head Office related1) Centralize group-wide common operation2) Reform working style by utilizing

tablet device, etc.3) Shift products/services to focus areas4) Reform system structure/IT operation

processes

1H FY16 resultJPY 8.0Bn

1H FY16 result JPY 2.5bn

FY16 Targetover JPY 10bn

Mainly caused by increase in tax, etc., and impact of changes in currency rates


42

Transition to Next-Generation IT Systems

For the next-generation IT Systems, the highest priority is placed on ensuring quality and launching the system safely.Thorough tests are currently being conducted

As it is a very large scale development, multiple checks need to be conducted across various fields. Although some items may still be outstanding as of December 2016, full understanding of the current status is secured and highest priority will be placed on ensuring the quality

The most critical point is a safe and steady transition, thus the preparation will be carefully conducted. The next-generation IT systems migration is planned to be implemented gradually, after migration rehearsals, etc. are prudently conducted (during the migration period, current and next-generation IT systems will be concurrently operated)

Unification of Core Banking Systems offormer BK/former CB/TB- Downsize and streamline IT systems- Improve response to potential system failure

Independent components by business and function- Improve flexibility through simple structure- Enable flexible adaptation to new services- Shorten the lead time and reduce costs for new

development Cutting edge “Next-Generation”

Core Banking Systems- Strengthen infrastructure for providing services- Improve operations processing speed

投資額(概算)： 3,000億円台前半

(Existing Systems) Outline of the Next-Generation IT Systems

TB

BK

Former BKSystem Platform for

Banking Business

Former CBSystem Platform for

Banking Business

System Platform forBanking Business

Unification of IT System

s

Customer

ChannelSystem

sCore Banking System

sInform

ationM

gtSystem

s

InternalTerminals

Systems for External

Connections, etc.Internet

Banking, etc.

Common Operational Infrastructure(in operation since FY13)

Systems related to Core Information Management

・・・Deposit Remittance Credit Transactions

ForeignExchange

TrustBusiness

Component Systems related to Products

Next-Generation IT Systems ahead of Competitors <Transition to the Next-Generation IT Systems (Conceptual Illustration)>

Investment amount (estimate):Higher JPY 300Bn range

(Conduct additional test, etc. to improve quality)


43

Responding to FinTech Developments

Cover most business areas related to FinTech by effectively utilizing technologies such as Blockchain and AI Pursue profit increase and cost reduction

Future Direction

Mizuho’s InitiativesFinTech Business Areas Effects Anticipated

Creation of new business

Enhancement of business operation

Blockchain

Financial Management/AM Advisory

Big Data

Financial Information

Lending

Remittance/Settlement

Other Routine Operation

AI Robotics, etc.

Cost reduction

Profit increase

Utilized Technologies Proof of Concept

Financial Management

Asset Management /Advisory

Financial Information

Financial Management

Settlement Syndicated Loan Overseas Remittance

Cross-Border SecuritiesTransaction Settlement

Lending

Balance Enquiry Enquiry and Navigation Call Center Encryption and sharingrecords, etc. Support for Start-ups

44

Enhancing business operation and creating new business by utilizing FinTechFinTech

Cross-border Settlement utilizing Blockchain

Able to share details of the transaction among the parties

Merits

FinTech Lending Business

Unable to share details of the transaction

No administrator

1 Shortening the time for settlement (3 days → same day)

2 Decrease the risk of failed transaction

3 Lower cost

1Improve user experience utilizing pre-scoring and smartphone

2

3 Lower cost of operation by not requiring branches

Completed Proof of Concept

- 24 million individual customers

- Expertise in finance

- 43 million subscribers (accumulated basis)

- Expertise in AI

Finance Technology

Scoring system utilizing Big Data and A.I.Interest rates and size of facility are decided by the score

Foreign investors

Foreign Security Company

Domestic Account Administration Agent


Foreign investors

Foreign Security Company



Agreement Settlement

Settlement order

Settlement order

Agreement Settlement

Settlement order

Settlement order

Register transaction information

on Blockchain

Creation of New Business

Planning to launch in 1H of 2017

New business model clearly differentiated from traditional consumer finance

MeritsExpand high quality customer base by increasingly sophisticated credit assessment capability

45

Management positions outside Japan 7%

3%

10%

22%

34% 30%

30%

20%

10%

10%

New graduates(Generalist track)

Reform HR management, the key to realizing the group strategy, and thoroughly differentiate from peers- Support the reform of our corporate culture through fundamental reform of HR management that will change the

way of thinking and the way of working for all employees

Development-type HR management system that respects the individuality of each and every employee, helping them to grow - An evaluation system that doesn’t discouragepeople from challenging aggressively

Multilateral-type HR managementthat respects various career plans

Providing opportunities to all employees to develop skills regardless of their employment type

HR Management whichrespects individuality

Establish workplace where people can succeed irrespective of culture, sex, and nationality

Create new values by aggressively utilizing innovative/diverse views and ideas

Develop talent through training programs in order to promote non-Japanese and women to management roles

Diversity & Inclusion (D&I)

Fundamental reform to establish a comfortable work environment for all staff, increasing long-term commitment- A supporting system targeting zero turnover due

to nursing care- Fundamental implementation of telecommuting- Compensation plan for employees who support

the people who have to limit their work- 100% of male employees to take child care leave

Work Life Balance

Percentage of women

64%

1.5%

Percentage of paid time off taken by employees and eligible male employees who take childcare leave

33%

Percentage of locally hired staff in management roles

2.2%

Percentage of employees with disabilities

50%

70%

100%

2.3%

TargetResults

A virtuous cycle between all employees’ success/growth + Realization of Mizuho’s goal = Full engagement of employees

Shift from “Diversity” to “D&I”Provide opportunities to grow and succeed to all employees

Embedding a Corporate Culture that Encourages Active Participation of Our Workforce

Fundamental Reform of HR Management

Introduction of Mizuho’s Next-generation Leadership Training Program

Selected the candidates for future leaders from group-wide and global-wide talent pool

Thoroughly strengthen each person’s mentality (commitment and courage) to run the company, and skills to design and envision the big picture

Development of Future Leaders

Develop leaders who can make changes

Diversity & Inclusion (Numerical Targets)

Realization of productive and efficient way of working

General Manager-equivalent

Manager-equivalent or above

Assistant Manager-equivalent or above

Managementpositions outside Japan

Employees who take paid time off

Eligible male employees who take childcare leave

Employees with disabilities

Overseas

Domestic


46

Capital Management

47

6.5

7.5 7.5 7.5

FY13 FY14 FY15 FY16(estimated)Dividend

payout ratio23% 30% 28% 32%

Steady Returns to Shareholders

Capital Management

Strengthening the Capital Base towards the target of the mid-term business plan and continuing steady returns to shareholders

*1: Basel 3 fully-effective basis (based on current regulations), excluding Net Unrealized Gains on Other Securities. Including Eleventh Series Class XI Preferred Stock (the balance as of Mar. 2016: JPY 98.9Bn, mandatory conversion date: Jul. 1, 2016) up to Mar.2016

*2: Assuming Net Income Attributable to FG of JPY 600.0Bn

(JPY)

*2

Strengthening of Stable Capital Base

CET1 Capital Ratio*1(excluding Net Unrealized Gains on Other Securities) Cash Dividend per Share of Common Stock

Aim: steady dividend payout policy with a dividend payout ratio on a consolidated basis of approx. 30% as a guide for our consideration

Dividend Policy

Target CET1 Capital Ratio of approx. 10% (at March 2019)

Mid-term Business Plan

Announced current dividend policy in May 2014

Capital Management

7.84% 7.76%8.77% 9.14%

Mar. 14 Mar. 15 Mar. 16 Sep. 16Incl. Net Unrealized Gains

on Other Securities9.08% 10.46% 10.85% 10.99%


48

Future Direction for Financial Institutions Towards “Society 5.0”

49

Solve social issues -> Realize Society 5.0

Search for a new

solution model

Use of technology

Social issues

Future Direction for Financial Institutions

Changing times

Direction of financial institutions' efforts to realize "Society 5.0"Society 5.0

Shift from the Age of Certainty to the Age of Uncertainty

Aging population

Declining birthrate

Limited natural resources

Environmental issues

Limited gov’t resources(funds for

social security costs)Regional exhaustion Disparity/Poverty Aging infrastructure

IoT AI Biotech Robotics Drones Automated vehicles BlockchainBig data

Expand new business areas

Creating new value by utilizing accumulated dataTransforming face-to-face

customer interactionReducing transaction

costs- Comprehensive consulting- New microfinancing- Robo advisory ...etc.

- Branch as a place offering sophisticated consulting

- Revising branch strategy

-Reviewing current operations in order to improve efficiency and productivity

The unbundling and rebundling of financial services

Accumulation of various customer issues/needs with the development of CtoB business

Increased adoption and sophistication of non-face-to-face channels

Spread and progress of blockchain technology

and virtual currency

Enhancing the efficiency and sophistication of operations and services

Financial Institutions in the Near Future

Open Innovation

50




4. Enhanced Governance System

51

YoY

1 Gross Profi ts 768.1 -54.8 822.9

2 Net Interest Income 377.6 -73.2 450.8

3 Fiduciary Income 24.2 -2.4 26.7

4 Net Fee and Commission Income 195.7 -3.1 198.9

5 Net Trading Income 75.5 31.4 44.0

6 Net Other Operating Income 94.9 -7.3 102.2

7 G&A Expenses -464.3 -7.7 -456.5

8 Net Bus iness Profi ts 303.8 -62.5 366.3

9 Excluding Net Gains (Losses) related to Bonds 202.2 -87.1 289.3

1H FY16 1H FY15YoY

1 Gross Profi ts 768.1 -54.8 822.9

2 Customer Groups 590.1 -25.5 615.6

3 o/w Net Interest Income 342.7 -26.7 369.4

4 o/w Non-interest Income 279.1 -12.8 291.9

5 Trading & Others 178.0 -29.3 207.3

6 G&A Expenses -464.3 -7.7 -456.5

7 Net Bus iness Profi ts 303.8 -62.5 366.3

8 Credi t-related Costs 9.4 9.8 -0.4

9 Net Gains (Losses ) related to Stocks 65.3 -34.2 99.6

10 Net Non-Recurring Gains (Losses ) - Other -66.6 -42.8 -23.7

11 Ordinary Profi ts 312.0 -129.7 441.7

12 Net Income 235.2 -68.7 304.0

13 Consol idated Net Bus iness Profi ts *1 403.2 -43.4 446.7

14 Difference b/w Consolidated and 2 Banks *2 99.4 19.0 80.3

15 Net Income Attributable to FG 358.1 -26.0 384.1

16 Difference b/w Consolidated and 2 Banks *3 122.9 42.7 80.1

1H FY16 1H FY15

Net Gains and Losses

Overview of Financial Results

*1: Consolidated Gross Profits - G&A Expenses (excluding Non-Recurring Losses) + Equity in Income from Investment in Affiliates and certain other consolidation adjustments

*2: Consolidated Net Business Profits – Net Business Profits of 2 Banks*3: Net Income Attributable to FG – Net Income of 2 Banks

ReferencePages

SCConsolidated

BKmajor overseas

subsidiaries

Mizuho CreditGuarantee

Other subsidiaries & consolidationadjustments

(JPY Bn)

2 Banks235.2

Consolidated358.1

<+92.6>

<+6.0>

<+2.5>

<-58.4>

*4: Figures in < > represent changes from 1H FY2015

131.3

18.115.6

-42.1

P.13

P.12

P.10

P.52

P.55

Net Business Profits

Difference in Net Income b/w Consolidated and 2 Banks

Customer Groups and Trading & Others are on a managerial accounting basis 2 Banks

Difference+122.9<+42.7>

*3 *4

2 Banks

Consolidated

(JPY Bn)

52

289.8 297.1 282.3 278.3 257.6

75.9 74.2 87.0 88.8 85.1

365.7 371.2 369.3 367.0 342.7

1H FY14 2H FY14 1H FY15 2H FY15 1H FY16

OverseasDomestic

49.6 50.7 50.7 51.5 50.0

4.9 4.2 3.1 2.6 3.1

15.1 18.3 18.9 18.2 18.0

69.673.3 72.9 72.4 71.2

1H FY14 2H FY14 1H FY15 2H FY15 1H FY16

OverseasDomestic (loans to the Japanese Government, etc.)Domestic (excluding loans to the Japanese Government, etc.)

Loan BalanceNet Interest Income

Net Interest Income from Customer Groups (Overview)

*1: Domestic: Aggregate of Net Interest Income in BK Domestic Banking and TB/Overseas: Net Interest Income in BK International Banking*2: Due to the introduction of the In-House Company System, there are changes in the managerial accounting rules and FY2014 and FY2015 figures are recalculated.

The original total figures of net interest income before the recalculation were: FY2014: JPY 782.9Bn (1H: JPY 389.6Bn and 2H: JPY 393.3Bn) and FY2015: JPY 800.3Bn (1H: JPY 398.9Bn and 2H: JPY 401.3Bn)*3: Excluding loans to FG. Overseas is calculated based on an aggregate of banking and trust account basis and represents loans booked at overseas offices, including the impact of foreign exchange translation

(JPY Bn) (JPY Tn)

2 Banks, managerial accounting 2 Banks, banking account *1 *2 *3

Average Balance

736.9■ Overseas： 150.0■ Domestic： 586.9

FY14736.4

■ Overseas： 175.8■ Domestic： 560.6

FY15 FY1671.5


FY1472.6


FY15 FY16

Change from 2H FY15

<Overseas>-0.2

<Domestic>-1.0

Excluding loans to the Japanese

Government etc.-1.5

<Total>-1.2

53

1.24% 1.19%

1.14% 1.10% 1.05% 1.01%

0.94% 1.18% 1.15%

1.10% 1.05% 1.01% 0.98% 0.93%

0.05% 0.04% 0.04% 0.04% 0.04% 0.03% 0.01%

1H FY13 2H FY13 1H FY14 2H FY14 1H FY15 2H FY15 1H FY16

Return on Loans and Bills Discounted ･･･ aLoan and Deposit Rate Margin ･･･ a - bCost of Deposits and Debentures ･･･ b

0.87% 0.84% 0.82% 0.77% 0.75% 0.71% 0.70%0.60% 0.61% 0.59% 0.57% 0.54% 0.52% 0.51%


Loans to Domestic Middle Market Firms & SMEsLoans to Domestic Large Corporate Customers

49.1 49.5 49.6 50.7 50.7 51.5 50.0

5.7 5.6 4.9 4.2 3.1 2.6 3.1

54.9 55.2 54.5 54.953.9 54.2

53.2


Loans to the Japanese Government, etc.Domestic (excluding loans to the Japanese Government, etc.)

Sep. 13 Mar. 14 Sep. 14 Mar. 15 Sep. 15 Mar. 16 Sep. 16

Domestic 55.0 55.6 54.9 54.7 54.7 53.9 54.0Large Corp., etc. 23.1 23.1 22.7 22.2 21.6 21.1 22.1 (o/w Japanese Gov.) (5.6) (5.6) (4.4) (3.5) (3.1) (2.2) (3.9)

SMEs *2 19.8 20.4 20.3 20.7 21.4 21.4 20.9

Individuals *3 11.9 11.9 11.8 11.8 11.6 11.3 11.0

Domestic Loan Spread

Average Balance

Domestic Loan and Deposit Rate MarginDomestic Loan Balance

Net Interest Income from Customer Groups (Domestic)

(JPY Tn)

1Q 1.02%2Q 1.00%

3Q 0.98%4Q 0.98%

2 Banks 2 Banks *1 *4


1Q 0.95%2Q 0.92%

-JPY 1.5TnExcluding loans to

the Japanese Government, etc.

-JPY 0.7TnExcluding loans to

the Japanese Government, etc.

Period-end Balance

*1: Excluding loans to FG. Banking account *2: Calculated by deducting “Housing and Consumer Loans” from “Loans to SMEs and Individual Customers” *3: Housing and Consumer Loans *4: Domestic Operations, excluding loans to financial institutions (including FG) and the Japanese Government, etc.

54

Senior Bondsissued by FG

- - - 7.2

Senior Bonds 5.8 14.5 17.8 18.0

SubordinatedBonds

4.5 3.0 3.7 3.7

105.7129.1

168.5 180.5

Mar.14 Mar. 15 Mar. 16 Sep. 16

1.07%1.04% 1.04%

0.97%0.93%

0.91% 0.90%


Overseas Loan Spread

Foreign Currency-denominated Customer Deposit

(USD Bn)

(USD Bn)

Outstanding balance of foreign currency bonds

Net Interest Income from Customer Groups (Overseas)

Overseas Loan Balance

*3


*1: BK (including the banking subsidiaries in China, the US, the Netherlands, Indonesia, Malaysia, Russiaand Brazil)

*2: New managerial accounting rules have been applied since the beginning of FY16. Figures from 1H FY13 to 2H FY15 were recalculated based on the new rules

*3: BK (including the banking subsidiaries in China, the US, the Netherlands, Indonesia, etc.), including foreigncurrency deposits (domestic)

*4: Including foreign currency bonds issued by FG and its SPC subsidiaries, excluding bilateral non-public MTNs

*1 *2 *1 *2BK, managerial accounting

Average Balance

Period-end Balance

Period-end Balance


75.8 84.3 86.0 90.3 91.9 96.0 91.0

43.1 46.9 51.7

56.6 66.0 68.8 70.7 33.3

29.4 29.0 30.7

31.8 38.3 41.5

152.3 160.6 166.7

177.7 189.7

203.2 203.2


EuropeAmericasAsia

+USD 0Bn

+USD 13.5Bn

Sep. 13 Mar. 14 Sep. 14 Mar. 15 Sep. 15 Mar. 16 Sep. 16

154.9 162.8 166.4 186.6 192.5 203.6 205.1

+USD 1.5Bn

+USD 12.0Bn

(Reference)

*4

55

Personnel +JPY 4.7Bn (YoY)

Increase in staff and expenses related to Employee Retirement Benefits

Non-Personnel +JPY 1.2Bn (YoY)

Increase in Premium for Deposit Insurance (including overseas offices)

Miscellaneous Taxes +JPY 1.7Bn (YoY)

Increase in Size-based business Tax, etc

Total +JPY 7.7Bn (YoY)Controlled expenses almost in l ine with the plan due to OperationalExcellence effect while increase in Base Expenses related to EmployeeRetirement Benefits etc. and Strategic Expenses(The impact of appreciation of Yen: Approx. -JPY12.5Bn)

44.2 54.8 55.5 29.1 30.8

497.1 529.1 517.9

257.0 258.2

322.8324.3 337.4

170.4 175.2

FY13 FY14 FY15 1H FY15 1H FY16

Personnel Non-personnelMiscellaneous Taxes

864.2908.3 910.9

456.5 464.3

G&A Expenses

*1: Excluding non-recurring losses*2: Employee Retirement Benefit Expenses = Service Costs + Interest Expense – Expected Return on Plan Assets

2 Banks

Figures in ( ) are Employee Retirement Benefit Expenses*2

( “+” represents expenses, “-” represents income)

(+8.1)(-0.3) (-2.7) (-2.7)

(JPY Bn)

G&A Expenses

*1

ExpenseRatio

57.3% 55.7% 56.9% 55.4% 60.4%

(-1.3) (+0.8)

Trend of Group aggregate G&A Expenses managerial accountingrounded figures

Base Expense

StrategicExpense

OperationalExcellence

630

640

+4.5

+8-2.5

(JPY Bn)

YoY+10

o/w the impact of appreciation of Yen:

-JPY 26Bn

ExpenseRatio*3

62.1%

1H FY15 1H FY16*3: Estimate of Group aggregate Expense Ratio for FY16 is mid 60% range


56

Non-Japanese 47% Japanese 53%

0% 20% 40% 60% 80% 100%

Financial Institution

General CorporateNon-ChineseChinese

69%

75%72% 73%

1.0%0.9%

0.6%0.5%

Mar. 14 Mar. 15 Mar. 16 Sep. 16

Investment Grade Level RatioNPL Ratio

Asia44%

Americas36%

Europe21%

Japanese 31%Non-Japanese 69%

Hong Kong23%

Singapore18%

Australia9%

Thailand9%

Taiwan8%

China8%

India8%

SouthKorea

7%

Indo-nesia

3%

Others7%

Asia44%

Americas36%

Europe21%

Asia44%

Americas36%

Europe21%

Japanese 31%Non-Japanese 69%

Investment Grade Level Ratio is over 70% NPL ratio declined although loan balance

(period-end) increased

Overseas Loan Portfolio (Sep. 2016)Quality of Loan Portfolio*

Overseas Loan Portfolio

Established a stable and diversified loan portfolioDownside

Risk Tolerance

(Preliminary)

BK (including the banking subsidiary in China) GCC managerial basis

BK (including the banking subsidiaries in China, the US, the Netherlands Indonesia, Malaysia, Russia and Brazil), GCC managerial basis

ChinaUSD 7.5Bn

Asia / Oceania

USD 89.4Bn

TotalUSD 205.1Bn

* Managerial accounting rules were changed. The original figures for Investment Grade Level were 70% for Mar. 14 and 73% for Mar. 16. All other figures remain unchanged

57

Normal ObligorRatio*2 Americas Europe

Asia(excl. Japan)

CoverageAmount

Coverage Ratio

Resource Sector Total 6.7 95% 3.6 0.9 0.5 1.4 0.04 0.03 79%

Non-Japanese 5.0 94% 2.6 0.8 0.4 1.3 0.04 0.03 79%

4.2 97% 2.0 0.6 0.3 1.1 0.03 0.03 93%

2.7 96% 1.3 0.4 0.2 0.7 0.02 0.02 95%

0.3 97% 0.2 0.1 0.0 0.1 0.01 0.01 87%

1.2 100% 0.5 0.1 0.1 0.3 - - -

0.8 79% 0.5 0.3 0.1 0.2 0.01 0.00 35%

Japanese 1.7 99% 1.1 0.1 0.1 0.1 0.00 0.00 74%

1.6 100% 1.0 0.1 0.1 0.0 0.00 0.00 73%

0.1 95% 0.1 0.0 - 0.1 0.00 0.00 100%

Non-Japanese 34.9 98%

Japanese 64.0 97%

Exposure Total (Corp.) 98.9 97%

Crude oil & natural gas mining etc.

Storage & Transport

Loan Balance, etc.*3

(JPY Tn)NPL Amount*4

Energy Resource

・From this time, (1) Changed the exposure from Exposure at Default (EAD) base to total exposure base (2) Added "Storage & Transport" (JPY 0.3Tn) to the Non-Japanese resource sector・Before the aforementioned change, the Resource Sector Total was JPY 6.1Tn

Exposure*1

Petroleum refinery &products manufacturing etc.

Mineral Resource*5

Energy Resource

Mineral Resource*5

• O/w project finance that is susceptible to price decline: approx. JPY 0.5Tn• Regional breakdown of resource sector exposure:

Americas (JPY 2.5Tn), Asia, excl. Japan (JPY 1.6Tn), Europe (JPY 1.1Tn)• Exposure to non-resource related companies which is not included in the above figures*6: Non-Jap. (JPY 1.1Tn), Jap. (JPY 0.2Tn)

Exposure to Resource Sectors (Sep. 2016)

Exposure to Resource Sectors

*1: Loans, foreign exchange assets, acceptances and guarantees, commitments, etc. Resource sector excludes Japanese general trading companies, petrochemistry, iron and steel, nonferrous metal, and project finances which are not categorized as those susceptible to price decline *2: Percentage of exposure to customers having strong results and no particular problems with their financial condition

*3: Outstanding balance of loans and bills discounted, foreign exchange assets, and acceptances and guarantees *4: Disclosed Claims under the Financial Reconstruction Act (net of partial direct write-offs) *5: Metal mining, coal and coal briquette, etc. Including commodity trader *6: Exposure to non-resource related companies whose parent company falls under the relevant resource sector

BK (including banking subsidiaries in China, the US, the Netherlands, Indonesia, etc.)Managerial accounting

58





59

329.7

519.6595.4

93.4

104.474.2

46.1

42.639.4

0.5

0.50.4

469.7

667.1 709.5

Mar. 14 Mar. 15 Mar. 16

<Contents>Wind powerSolar power / thermal BiomassGeothermal Hydroelectric Proper waste disposal / recycling business

Others

UN Global Compact

Ten principles addressing matterssuch as human rights, labor, theenvironment and anti-corruption

Initiatives Related to ESG: Environment

Environment-related Finance Results

(JPY Bn)

UNEPFinance Initiative

International partnership of financial institutions concerningsustainable development

Smart City Project

UN: Principles for Responsible Investment

Principles which ensure ESG issues are incorporated into theinvestment decision-makingprocess

Aim to be the most trusted partner in solving problems and supporting the sustainable growth of customers and communities as a Financial Services Consulting Group

Environment

Participation in ESG related initiatives Social Responsibility Indices which include MIZUHO

BK

Others

All-electric housing loansFinance for environment friendlycompanies

Environment-related Project Finance

JPY 190.2BnJPY 310.8Bn

JPY 4.0BnJPY 1.5BnJPY 2.0Bn

JPY 24.1BnJPY 62.9Bn

ESGPromotion

Support growth strategies of Japanese industries from a financial standpoint through urban development projects

Structure “Japan-oriented” environmental city projects at 8 locations* around the globe

Toward the development of financial structures for the future

* Chennai, India; Tianjin, China; Hawaii, USA ; Guangzhou China;Saudi Arabia; Manchester, UK; Slovenia; Haryana, India

60

Industry Fostering Support

Diversity-related awards, etc.

ESG

Society

Initiatives to support recovery of Kyushu

Promote initiatives to contribute to the sustainable growth of the economy and society as well as regional empowerment by utilizing Mizuho’s network

17 funds invested(as of Sep. 30, 2016)

Signed the “Agreement on the Recovery Support of Kumamoto Prefecture” (Aug. 2016).Provided support in areas such as urban development or infrastructure restructuring planning not limited to finance to assist the recovery of local industries

Investing in the Sixth Industry and regional vitalizations related funds

Diversity and Inclusion Promotion

Earthquake Disaster Recovery Support

Diversity ManagementSelection 100 Nadeshiko Brand Platinum Kurumin

Realize sustainable growth through enhancing employees’ passion for self-growth in addition to creating new values by adopting ideas and opinions from diversified employees

Initiatives to support recovery of the stricken areas from the Great East Japan Earthquake

Arranged a syndicated loan transaction in collaboration with 7 local financial institutions for Mirai Ships Inc., a company established in September 2016, mainly by 4 ship builders based in Kesennuma City, Miyagi Prefecture, which were stricken by the Great East Japan Earthquake

Execute financial intermediation and consulting functions by utilizing Mizuho’s strengths such as industry knowledge and financial expertise, to support the recovery of stricken areas

Conducted proactive initiatives such as diversity management, promotion of participation by women, childcare support and else

Contribution to the recovery of Kesennuma, one of the most prominent fisheries city in Japan

Support provided in Kumamoto Prefecture recovery

Initiatives Related to ESG: Society

Illustrative Image

Ship retracted

Ship on the rack

61

Board of Directors

Managem

ent

President & Group CEO Banking (BK) Trust (TB) Securities (SC)

Companies

Units

Groups

Election of Directors

Nominating Committee

Determines the compensation

Determines the compensation for each individual executive officer

Compensation Committee

All members, in principle, shall be independent outside directors

All members, in principle, shall beindependent outside directors

The Chairman shall, in principle, be an independent outside directorNon-executive directors shall comprise a majority of the directors

Executive internal director

Non-executive internal director

Risk Committee

General Meeting of Shareholders

Determines the contents of proposals regarding the appointment and dismissal of directors

- Appoints and dismisses executive officers- Delegates decisions on business execution- Supervises the execution of duties

Supervision and Audit

Audits the execution of duties

Holding Company (FG)

Audit CommitteeMajority of members shall be independent outside directors

“Market-driven approach” based on customer segments

Further enhancement in expertiseand firm-wide utilization of functions

Planning, management and internal audit

Corporate Governance: Governance System

RBC, CIC, GCC, GMC, and AMC

Global Products, Research & Consulting Units

Strategic Planning, Financial Control & Accounting, Risk Management, Human Resources, IT & Systems, Operations, Compliance and Internal Audit

ChairmanIndependent outside director(non-executive)

Human ResourcesReview Meeting

Independent Outside Director Session

Explanatory NotesIndependent outside director (non-executive)

Non-executive internal director

Executive internal director

Determines the contents of proposals for general meeting of shareholders regarding the appointment and dismissal of directors

Determines the compensation for each individual director and executive officer

Audits the legality and appropriateness of the execution of duties by directors and executive officers

Initiatives Related to ESG: Corporate Governance

Board of Directors

Audits the legality and appropriateness of the execution of duties by executive officers

62

Addressed challenges

Initiatives for Governance System Enhancement

Initiative to Improve Effectiveness of the Board of Directors

Promote “offensive” governance reform with an aim to improve corporate valueGovernanceEnhancement

Three Lines of Defense*

FY2014

10月

1) Enhance discussions with an emphasis on corporate value maximization

2) Further vitalization of fundamental discussions

Transition into a Company with Three CommitteesConducted self evaluation mainly by independent outside directors

Conducted self evaluation based on third party evaluation

Recognizedchallenges

1) Conducted high quality discussions mainly on medium term challenges prior to the development of the new medium-term business plan

2) Focused on fewer topics and created time for deliberation. Clarified the points for discussion

Conducted interim evaluation at the Independent Outside Director Session (solely consisted of Independent Outside Directors)

Conducted third party evaluation based on questionnaire, interview among others, utilizing knowledgebase of outside specialists

FY2015

1) Further enhancement and streamlining of deliberation

2) Further usage of Independent Outside Directors’ knowledgebase and application to management

3) Share the state of dialogue with our stakeholders

Recognizedchallenges

Jun. 2014

Autonomouscontrol functions

Business promotion divisions

Supervision and Audit

Board of DirectorsAudit Committee

Management

Audit

Assessment, exam

ination,advise and rectify recom

mendations

Executive Officers

President &Group CEO

Report

AuditInternal Audit

Committee

Internal audit functions

Risk management and compliance

functions

Oversight (m

onitoring),m

easurement and

assessment

Report

Internal Audit Group

Dept. in charge of compliance

Dept. in charge of risk management

* Concept provided in the Corporate Governance Principles for Banks revised and publishedby Basel Committee on Banking Supervisions in Jul. 2015

Secure appropriateness and effectiveness of internal control through three lines of defense Further strengthen integrated management of offence and defense

at the first line level under the in-house company system

Third line Second line First line

To identify, assess and manage risks

interim results for fy2016 - mizuho financial group · net income attributable to fg: 59% progress...

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