Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Tokyo  >  Mizuho Financial Group, Inc.    8411   JP3885780001

SummaryChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets 

Top Japanese Banks Book Losses

share with twitter share with LinkedIn share with facebook
share via e-mail
0
11/14/2012 | 12:06pm CEST

--Big Japanese banks suffer combined Y534 billion loss in the fiscal first half related to equity holdings

--MUFG reports a 58% tumble in net profit for first half

--Mizuho's net profit tumbles 28% on year, while SMFG's gains 5%

TOKYO--Japan's top three banks booked combined write-downs of over Y600 billion ($7.5 billion) in the fiscal first half ended Sept. 30 from their equity holdings especially in the country's struggling electronics makers, though continued gains from bond trading softened the blow.

While Sumitomo Mitsui Financial Group Inc. (>> Sumitomo Mitsui Financial Group, Inc.) still managed to post a moderate gain in first-half net earnings, net profits at Mitsubishi UFJ Financial Group Inc. (>> Mitsubishi UFJ Financial Group Inc.) and Mizuho Financial Group Inc. (>> Mizuho Financial Group, Inc.) dropped, as spiraling losses at the country's electronics makers sent the value of their shares sharply lower.

Japan's largest bank, MUFG, which has about a 22% stake in Morgan Stanley (>> Morgan Stanley), reported a 58.3% tumble in its group net profit to Y290.48 billion for the six-month period. That compared with a Y696.09 billion profit in the same period a year earlier. The fall was also ascribed to a high basis of comparison a year earlier, when MUFG enjoyed a one-time gain from the conversion of its holdings of preferred shares in Morgan Stanley into common shares.

Weak financial market conditions weighed on MUFG's profits, forcing it to book a write-down of Y186.9 billion from its equity holdings.

The other two banks' profits were also dented by write-downs from equity holdings. Mizuho reported a 27.6% fall in net profit on year for the half, to Y184.28 billion. SMFG managed to rack up a 5.5% on-year gain in net profit to Y331.04 billion, as a decline in valuation reserves related to deferred tax assets at its core banking unit helped cancel out losses on equity holdings.

The results underscore how Japanese banks' profitability is sensitive to market volatility, although they remain relatively unscathed from the euro-zone crisis and the global economic downturn.

As Japanese banks have traditionally held big stakes in their affiliates and clients to cement ties, they are vulnerable to stock market declines, which could force them to book valuation losses on their holdings.

The Nikkei Stock Average dropped about 12% during the April-September period, in part due to concerns over global market instability sparked by the European debt crisis.

The Tokyo market has continued to tumble since the end of September. During the fiscal first half, a slump in Japan's once-vaunted consumer electronics industry deepened, and major companies such as Panasonic Corp. (>> Panasonic Corporation), Sharp Corp. (>> Sharp Corporation) and Sony Corp. (>> TAMURA CORPORATION) suffered from hefty losses, challenged by a stronger yen and tougher competition with Asian rivals.

"It's not about one electronics maker, but the consumer electronics industry as a whole has been quite damaged," said MUFG President, Katsunori Nagayasu. He noted that the sector was slow to restructure and failed to respond to changes in the business environment, although he said his bank continues to support the industry.

The three banks are making efforts to reduce cross-share holdings, a long-standing tradition among big Japanese companies.

"We've been making efforts to reduce share-holdings," said Mizuho President Yasuhiro Sato. "How we reduce them is an important mission for us," he added, noting that care was needed in selling the shares of clients so as not to undermine their share prices.

Although major banks continued to post gains from bond-trading activities, which have been a key contributor to profits in recent years, the gains will likely tamper off. SMFG President Koichi Miyata said his bank doesn't expect significant gains from bond-trading in the second half.

A more promising area for Japanese banks is overseas operations. The executives of all three banks said they expect a continued rise in overseas lending, particularly in Asia, amid growing demand for loans for such things as infrastructure.

All of the banks' earnings are based on Japanese accounting standards.

Write to Atsuko Fukase at [email protected]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on MIZUHO FINANCIAL GROUP, IN
04/18 [FINTECH] MIZUHO SIGNS CAPITAL PARTI : 30) (html) (pdf/183kb)
04/18 PARTIAL REVISION TO POLICIES REGARDI : 00) (html) (pdf/72kb)
04/13 MIZUHO FINANCIAL : Islamic Corporation for the Development of the Private Sector
04/13 MIZUHO FINANCIAL : The Islamic Corporation for the Development of the Private Se..
04/12 MIZUHO FINANCIAL : The Islamic Corporation for the Development of the Private Se..
04/12 MIZUHO FINANCIAL : ICD signs Islamic credit facility agreement with Mizuho Bank ..
04/12 MIZUHO FINANCIAL : ICD, Mizuho Bank in $300m Murabaha deal
04/12 MIZUHO FINANCIAL : ICD signs Islamic credit facility agreement with Mizuho Bank ..
04/11 MIZUHO : Continues Investment Banking Build with Senior West Coast Healthcare Hi..
04/11 MIZUHO FINANCIAL : The Islamic Corporation for the Development of the Private Se..
More news
Sector news : Banks - NEC
04/29 SHAW COMMUNICATIONS EXPLORES SELLING : sources
04/28DJCREDIT SUISSE : Shareholders Approve Bonus Packages
04/28 FTSE in biggest one-month fall since November
04/28 Strongest week since December for European shares as investors pile in
04/28 CREDIT SUISSE : bosses grilled over bonuses after 2016 losses
More sector news : Banks - NEC
News from SeekingAlpha
04/24 After Hours Gainers / Losers
03/31 MIZUHO : From Megabank To Global Financial Consultant
03/14 SUMITOMO MITSUI TRUST : Are Japanese Megabanks Back?
2016 FINANCIALS - TOP 5 GAINERS / LOSERS : 15 pm
2016 Is Kuroda's Operation Twist Really A Windfall For Banks?
Advertisement
Financials ( JPY)
Sales 2017 2 998 106 M
EBIT 2017 693 120 M
Net income 2017 622 419 M
Debt 2017 -
Yield 2017 3,68%
P/E ratio 2017 8,28
P/E ratio 2018 9,02
Capi. / Sales 2017 1,72x
Capi. / Sales 2018 1,71x
Capitalization 5 168 652 M
More Financials
Chart MIZUHO FINANCIAL GROUP, IN
Duration : Period :
Mizuho Financial Group, In Technical Analysis Chart | 8411 | JP3885780001 | 4-Traders
Full-screen chart
Technical analysis trends MIZUHO FINANCIAL ...
Short TermMid-TermLong Term
TrendsNeutralNeutralBullish
Technical analysis
Income Statement Evolution
More Financials
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 18
Average target price 234  JPY
Spread / Average Target 15%
Consensus details
EPS Revisions
More Estimates Revisions
Managers
NameTitle
Yasuhiro Sato President, Group CEO & Director
Daisaku Abe COO, Chief Information Officer & EVP
Koichi Iida Director, Chief Financial & Accounting Officer
Mitsuo Ohashi Outside Director
Shusaku Tsuhara Chief Compliance Officer & Director
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
MIZUHO FINANCIAL GROUP..-2.63%46 337
JPMORGAN CHASE & CO.0.82%310 761
WELLS FARGO & CO-2.30%269 408
INDUSTRIAL AND COMMRCL..10.66%247 676
BANK OF AMERICA CORP5.61%233 679
CHINA CONSTRUCTION BAN..9.56%203 772
More Results