MIZUHO SECURITIES CO 
By
To whom it may concern:
April 27, 2012
Mizuho Securities Co., Ltd.
Mizuho Securities Co., Ltd. (hereinafter the "Company") has
been implementing initiatives based on the "Business
Foundation Restructuring Program" since October 2011 aimed at
improving profits as soon as possible. Through steady
implementation of the said Program, the Company was able to
establish a foundation for future improvement in profits,
with one of the grounds being the drastic cost reduction by
7.6 billion yen (approximately 21%) year-on-year in selling,
general and administrative expenses (excluding
trading-related expenses, non-consolidated basis), achieved
in the fourth quarter of fiscal year 2011. As improvement
effects such as the aforementioned have been confirmed, the
Program was concluded on
March 31, 2012, based on the judgment that its objectives had
largely been achieved.
Moving into fiscal year 2012, assuming the continuation of
severe business conditions and based on the fact that this
fiscal year marks the beginning of the "Substantive One Bank"
framework within the Mizuho Group, the Company has decided to
implement the "Business Foundation Strengthening Program" and
other initiatives, to further accelerate efforts to improve
profits by continuing to reduce expenses and at the same time
further enhancing earnings capabilities.
By steadily implementing this Program, and as a result of
further improvements to revenue structure through rapid
generation of synergy effects, including in expenses, from
the merger planned for the first half of this fiscal year (*)
with Mizuho Investors Securities Co., Ltd. (hereinafter
"Mizuho Investors Securities"), the Company will proceed with
efforts to build a framework capable of responding to changes
in market environment.
Note
The Company will continue to promote its business model
centering on client business and aim to restore and
strengthen top line earnings capabilities.
In the investment banking business (equity and fixed income
underwriting, M&A advisory, etc.), the Company will enhance
its coverage framework and increase focus on proposal of
compound products, including products combined with those of
other divisions and other group companies.
In the markets and products business, the Company will make
increased efforts to expand networks with both domestic and
international institutional investors, improve the quality of
sector analysts, and diversify trading strategies, while at
the same time striving to expand the retail business
flow.
In the retail business, the Company will improve its
fine-tuned strategy catering to each client segment and will
strive to improve customer satisfaction. In addition, the
Company will further promote assets under management-based
business focusing on high net worth clients, through the
development of a product lineup which meets client needs. In
terms of corporate business through branches, the Company
will enhance integrated management with the markets and
products business and focus on training and reallocation of
professional human resources.
The retail business is the area where the synergy effects of
the merger with Mizuho Investors Securities are expected to
be most apparent, and the two companies are planning to
deliberate on bringing forward implementation of initiatives
to produce synergies.
"Mizuho" is the sole Japanese banking group with its own
banks (including trust bank) and securities companies. It
aims to further improve customer convenience and increase
earnings capabilities, by establishing a new corporate
structure to utilize each of the functions of the group to
the fullest, and by maximizing collaboration between each of
the respective companies. In order to realize these
objectives, Mizuho Bank, Ltd. and Mizuho Corporate Bank, Ltd.
commenced operations under a "Substantive One Bank" structure
on April 1, 2012, as a prelude to a legal merger. To realize
more extensive and more
efficient collaboration with the banks in the group under the
"Substantive One Bank" structure, the Company will proceed
with measures including organizational changes, in order to
ensure that preparations are in
place to facilitate the maximization of collaboration.
Further, as part of collaboration with Mizuho Trust & Banking
Co., Ltd. (hereinafter "Mizuho Trust & Banking"), Mizuho
Trust & Banking and the Company made the decision today that
the European custody business offered by Mizuho Trust &
Banking's subsidiary in Luxembourg - Mizuho Trust & Banking
(Luxembourg) S.A., and the Company's subsidiary in the United
Kingdom - Mizuho International plc, will be consolidated into
Mizuho Trust & Banking (Luxembourg) S.A., while the
securities lending business for institutional investors,
which is an auxiliary business of the above-mentioned custody
business, will be consolidated into Mizuho International plc.
This is an initiative aimed at improving efficiency and
service levels through the unification of functions within
the Group, with the deepening of collaboration between
"Mizuho" companies facilitating provision of higher quality
service to clients.
Global matrix management, which was introduced on a full scale mainly in front office divisions in fiscal year 2011, will be expanded to corporate divisions, where it will be implemented more thoroughly and further enhanced, leading to a more agile operational management framework on a global basis, enhanced profitability in each product area, more efficient operations, and enhanced risk management.
(4) Continuous cost reductions aiming toward securing consistent profits
In addition to the various measures which were carried out in
fiscal year 2011 (including the streamlining of personnel
through a voluntary retirement program and relocation of some
of the Company's offices) the Company will work to further
reduce a variety of expenses through such measures as the
closure and consolidation of branches (scheduled for
April-May 2012), assuming the continuation of the severe
business environment.
Deliberations on the development of a "One Securities"
framework by the upcoming merger with Mizuho Investors
Securities will also proceed with attention being given to
reducing expenses, including allocation of branches and
personnel.
Mindful of scheduled upcoming moves towards tighter capital regulations, the Company will continue to take a multifaceted approach to improving capital efficiency, including carrying out measures such as prioritized asset allocation.
2. Reductions in executive remuneration
Mindful of the need to further reduce various expenses, with
the aim of securing consistent profits through the
implementation of the Business Foundation Strengthening
Program outlined above, remuneration of executives will be
cut until the end of the first half of the current fiscal
year. This will include a 30% cut in the monthly salary of
the President.
By implementing this program as soon as is practicable, and
through the building of a robust framework as a result of the
merger with Mizuho Investors Securities, the Company will
strive to rapidly restore and
enhance its earnings capabilities, and will continue to
approach business with a sense of urgency. We kindly request
the ongoing cooperation and continued support of everyone
involved.
(*) Subject to approval of the shareholders' meetings etc. of
each of the companies concerned, filing of notifications with
relevant authorities in the countries concerned, and receipt
of licenses and authorization, etc..
End.
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