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

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

SummaryChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector news 

Top Japanese Banks Book Losses

share with twitter share with LinkedIn share with facebook
share via e-mail
0
11/14/2012 | 06:06am EDT

--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 atsuko.fukase@dowjones.com

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
09/29 CHANGES OF EXECUTIVE OFFICERS (10 : 30) (html) (pdf/104kb)
09/28 MIZUHO FINANCIAL : Hires Subhathra Pavan to Expand Securitized Products Distribu..
09/28 MIZUHO FINANCIAL GROUP, INC. : ex-dividend day for interim dividend
09/22 UNB mandates banks for potential bond issue
09/22 Union National Bank plans bond issue
09/20 MIZUHO FINANCIAL : African Development Bank Signs Letter of Intent With Mizuho B..
09/08 ICBC to Offer Offshore CNY Bonds in Tokyo
09/06DJASIA MARKETS : Asian Markets Rise, But Aussie Stocks Buck Trend After RBA Stands..
09/06DJASIA MARKETS : Asian Markets Rise, But Aussie Stocks Buck Trend After RBA Stands..
09/05DJAsian Shares Mixed; Japan Stocks Gain Further
More news
Sector news : Banks - NEC
09/30DJDEUTSCHE BANK : What to Know
09/30DJDEUTSCHE BANK : Gold Weakens as Market Weighs European Banking Woes, Fed Rate Ex..
09/30DJJPMORGAN CHASE : New York Fed's Overnight Repo Takes in $412.5 Billion at Quarte..
09/30DJDEUTSCHE BANK : Hedge Funds Gain by Betting Against Deutsche Bank -- 2nd Update
09/30DJREGIONS FINANCIAL : U.S. Consumer Spending Flat in August -- 2nd Update
More sector news : Banks - NEC
News from SeekingAlpha
09/24 Is Kuroda's Operation Twist Really A Windfall For Banks?
09/21 FINANCIALS - TOP 5 GAINERS / LOSERS : 00 pm
08/23 ZOMBIE BANKS : Low Price/Book Ratios Characterize The Walking Dead
08/16 CONSTRUCTING A PURE ALPHA JAPAN PORT : Money Market Funding Crunch Means More Do..
08/15 WALL STREET BREAKFAST : M&A Buzz Hits The Street
Advertisement
Financials ( JPY)
Sales 2017 3 129 120 M
EBIT 2017 709 990 M
Net income 2017 591 508 M
Debt 2017 -
Yield 2017 4,46%
P/E ratio 2017 7,18
P/E ratio 2018 7,50
Capi. / Sales 2017 1,37x
Capi. / Sales 2018 1,38x
Capitalization 4 280 132 M
More Financials
Chart MIZUHO FINANCIAL GROUP, IN
Duration : Period :
Mizuho Financial Group, In Technical Analysis Chart | 8411 | JP3885780001 | 4-Traders
Full-screen chart
Technical analysis trends MIZUHO FINANCIAL ...
Short TermMid-TermLong Term
TrendsNeutralBullishBearish
Technical analysis
Income Statement Evolution
More Financials
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 20
Average target price 203  JPY
Spread / Average Target 20%
Consensus details
EPS Revisions
More Estimates Revisions
Managers
NameTitle
Yasuhiro Sato President, Group CEO & Director
Daisaku Abe COO, Chief Information Officer & EVP
Junichi Shinbo CFO, Director & Managing Executive Officer
Mitsuo Ohashi Outside Director
Shusaku Tsuhara Chief Compliance Officer & Director
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
MIZUHO FINANCIAL GROUP..-29.88%42 223
JPMORGAN CHASE & CO.0.85%240 522
INDUSTRIAL AND COML BA..-3.06%233 356
WELLS FARGO & CO-18.54%223 417
CHINA CONSTRUCTION BAN..-10.55%185 602
BANK OF AMERICA CORP-7.01%159 705
More Results