Mizuho Financial Group

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For criticism see Criticism of Mizuho_Financial_Group
Mizuho Financial Group, Inc.
TypePublic (TYO: 8411, NYSE: MFG)
Founded2001 (from merger)
HeadquartersFlag of Japan Tokyo, Japan
Key peopleTerunobu Maeda, President & CEO
IndustryFinancial Services
Revenue¥4,523.510 billion JPY (FY 2007)
Net income¥311.224 billion JPY (FY 2007)
Employees68,919 (2005)
SubsidiariesMizuho Bank
Mizuho Corporate Bank
Mizuho Trust & Banking
SloganChannel to Discovery
Websitewww.mizuho-fg.co.jp
Image:Mizuho Bank Ginza Chuo Branch.jpg
Mizuho Bank branch in Ginza

Mizuho Financial Group, Inc. (株式会社みずほフィナンシャルグループ Kabushiki-gaisha Mizuho Finansharu Gurūpu?), abbreviated as MHFG, or simply called Mizuho is a banking holding company headquartered in the Ōtemachi district of Chiyoda, Tokyo, Japan. The name "mizuho (瑞穂?)" means "abundant rice" in Japanese.

It holds assets in excess of $1.44 trillion US dollars through its control of Mizuho Bank, Mizuho Corporate Bank, and other operating subsidiaries. The company's combined holdings form the second largest financial services group in Japan, and the ninth largest in the world by market capitalisation.[1] It is the 59th largest company in the world according to Forbes Global 2000 rankings. Its shares have a primary listing on the Tokyo Stock Exchange.

Mizuho offers a range of financial services, including banking, securities, trust and asset management services, employing more than 68,000 people in 30 countries . It also functions as one of the main companies of the DKB Group and the Fuyo Group.

Contents

Divisions and brands

Image:Mizuho Financial Group income by division.png
Mizuho annual income by division (2005).
1. Mizuho Bank
2. Mizuho Corporate Bank
3. Mizuho Trust
4. Mizuho Securities

Mizuho splits its business into four distinct divisions, on a global basis:

Retail Group

Mizuho is active in retail banking with 515 branches and over 11,000 ATM machines. Mizuho Bank is the only bank to have branches in every prefecture in Japan. It serves over 26 million Japanese households, 90,000 SME customers, and retail brokerage clients under the name Mizuho Investors Securities nationwide.

Global Corporate Group

Mizuho predecessors, the Dai-Ichi Kangyo Bank (“DKB”), the Fuji Bank (“Fuji”) and the Industrial Bank of Japan (“IBJ”), had great control over many Japanese companies through keiretsu system. The three banks led the DKB Group, Fuyo Group and the IBJ Group respectively. The Fuyo Group traces its history as far back as the old Yasuda zaibatsu. Even now, seven out of ten companies listed on the Tokyo Stock Exchange have dealings with Mizuho.[2]

Global Wealth and asset management

  • Mizuho Trust
  • Mizuho Private Wealth Management
  • Mizuho Asset Management
  • DIAM

Strategy affiliates

Offices

Mizuho Financial Group (headquarters).jpg

Mizuho Financial Group headquarters, formerly Fuji Bank head office, in Ōtemachi, Tokyo.

Mizuho Bank, Ltd. (head office).jpg

Mizuho Bank head office in Uchisaiwaicho, Tokyo (see also Mizuho Bank Head Office Building)

Mizuho Corporate Bank Head Office.jpg

Mizuho Corporate Bank head office, formerly the Industrial Bank of Japan head office, bordering MHFG HQ in Ōtemachi, Tokyo

Otemachi First Square, Tokyo, Japan.jpg

Mizuho Securities Co. occupies Ōtemachi First Square, bordering MHFG HQ, in Ōtemachi, Tokyo

Sponsorship

History

Mizuho was established originally as Mizuho Holdings, Inc. by the merger of Dai-Ichi Kangyo Bank, Fuji Bank and the Industrial Bank of Japan in 2000.

Mizuho Financial Group, Inc. was established in January 2003 to become the parent company to Mizuho Holdings, Inc. in preparation for its restructuring of businesses. Subsequently, through a share exchange on March 12, 2003, Mizuho Financial Group became the sole shareholder of Mizuho Holdings, which in turn served as the holding company of all of the group's banking and securities units.

On October 1, 2005, all subsidiaries of Mizuho Holdings were transferred to the direct control of Mizuho Financial Group. Mizuho Holdings, no longer a bank holding company, was then renamed Mizuho Financial Strategy, which now focuses on providing advisory services.

Mizuho, through its operations in New York became involved in the subprime mortgage crisis and lost 7 billion dollars on the sale of collateralized debt obligations backed by subprime mortgages. Its entry was late, in December, 2006; it did not participate in gains; only suffered losses. It is the Asian bank which suffered the most losses due to the crisis. The venture into this field has been traced to the employment of Alexander Rekeda, a specialist in this field hired away from Calyon, a unit of Credit Agricole SA. Rekeda was made "head of structured credit in the Americas" where he floated several deals that turned toxic.[3]

Timeline

  • 1864 - Yasuda-ya is founded as a private company.
  • 1883 - The Dai-Ichi Bank, Ltd. is established as the first bank in Japan.
  • 1897 - The Nippon Kangyo Bank, Ltd. and the Industrial Bank of Japan, Limited are established as a governmental institution.
  • 1912 - Yasuda-ya is incorporated and renamed Yasuda Bank.
  • 1948 - Yasuda Bank is renamed the Fuji Bank, Limited.
  • 1950 - The Nippon Kangyo Bank and IBJ are privatized.
  • 1971 - The Dai-ichi Bank and the Nippon Kangyo Bank merge to form the Dai-Ichi Kangyo Bank, Limited.
  • 1999 - DKB, Fuji and IBJ announce an agreement to consolidate the three banks' operations.
  • 2000 - DKB, Fuji and IBJ establish a holding company named Mizuho Holdings, Inc.
  • 2002 - DKB, Fuji and IBJ are officially and legally combined into two banks, Mizuho Bank, Ltd. and Mizuho Corporate Bank, Ltd.
  • 2003 - Mizuho Financial Group, Inc. takes over the operations of Mizuho Holdings virtually.
  • 2006 - Mizuho is listed on the New York Stock Exchange under the stock symbol MFG.

Trivia

On December 8, 2005 a data input error on a stock trade caused a major loss at the brokerage arm Mizuho Securities Co., Ltd.. It received a lot of publicity.

The trader at Mizuho Securities, who has not been named, fell foul of what is known in financial circles as “fat finger syndrome” where a dealer types incorrect details into his computer. He wanted to sell one share in a new telecoms company called J Com, for 600,000 yen (about £3,000).

Unfortunately, the order went through as a sale of 600,000 shares at 1 yen each.

That error alone would have been bad enough, but the consequences were much worse because 600,000 shares represents more than 40 times the total number issued by the company, and the vast discrepancy effectively created a technical shortage of shares, worth about £1.6 billion.

Despite Mizuho’s attempts to rectify the mistake, some estimates put the possible financial damage to the firm at about 60 billion yen — a figure that may be big enough to destabilise the securities arm of what is one of the four largest financial groups in the world.

Makoto Fukuda, the company’s president, said that it expected a loss of 27 billion yen, which could rise above 30 billion but would not endanger its financial health.

The slip caused immediate shockwaves in the Tokyo market as traders tried to guess which firm had made the mistake. Fearing the impact, traders sold shares in all Japanese broking houses and the sell-off led to the value of the Nikkei 225 falling 2 per cent. It was only later that Mizuho admitted that one of its traders had made the error.

The order slipped through at about 9.30am and, one CLSA broker explained, “until the culprit firm was named around tea time, investors spent the day dumping the shares of every listed brokerage in Japan, in case it had been them”.

If Mizuho has to accept the loss, it may have to sell many of its stockholdings to raise the money, creating further pressure on Japanese stocks.

The incident centred on the flotation on the Tokyo stock exchange Mothers Index of J Com, a small telecoms outsourcing and recruitment firm that was expected to be valued at £60 million. Investors who applied for shares in the float were each allocated 15 shares worth 610,000 yen each and within minutes of the market opening, one of Mizuho’s clients wanted to sell a single share at 600,000 yen.

Unfortunately, the order went through incorrectly and most of the trade was executed.

It is thought that Mizuho, once it realised its mistake, sought to buy back 550,000 shares from itself in a desperate effort to limit the damage, which is expected to run into billions of yen because J-Com’s share price soared, making the repurchase more costly.

A trader at a rival firm said: “Someone in that office had to pick up the phone to his boss and authorise the use of billions of company dollars to correct a stupendous cock-up. Not a call you want to be making a couple of weeks before Christmas bonuses.”

Mizuho said it was discussing with the Tokyo stock exchange how to deal with the matter. There is a chance that Mizuho will persuade the Tokyo exchange, which is under pressure for allowing the obviously mistaken trade to go ahead, to have it cancelled.

As if the hapless trader was not unpopular enough, the firm also cancelled its end-of-year party

Notable employees

See also

Competitors

References

  1. ^ "The Top 1000 World Banks 2006", The Banker, 3 July 2006.
  2. ^ IR Presentation at “CLSA Japan Forum 2005” 7 March 2005
  3. ^ a b Flynn, Finbarr. "Mizuho $7 Billion Loss Turned on Toxic Aardvark Made in America", Bloomberg, 2008-10-29. Retrieved on 2008-10-29. 

External links

Wikimedia Commons has media related to: Mizuho Financial Group

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Adapted from the Wikipedia article, "Mizuho Financial Group" http://en.wikipedia.org/wiki/Mizuho_Financial_Group, used under the GNU Free Documentation License.
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