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Financial Results for FY2020 -Fixed Income Investors Presentation

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Financial Results for FY2020 -Fixed Income Investors Presentation Financial Results for FY2020 -Fixed Income Investors Presentation- June 2021 Table of Contents Group Overview 5-Year Business Plan ‐ Mizuho Group P. 3 ‐ 5-Year Business Plan P. 44 ‐ Key Figures for FY2020 P. 4 ‐ Key Metrics in the 5-Year Business Plan P. 45 ‐ Quantitative Image of Structural Reform P. 46 Financial Results for FY2020 ‐ Executive summary of financial results P. 6 Management policy for FY2021 ‐ Financial highlights P. 7 ‐ Management policy for FY2021 P. 48 ‐ Financial results by In-house Company P. 10 ‐ Economic outlook P. 49 ‐ Overview of Income Statement P. 11 ‐ Consolidated Net Business Profits P. 50 ‐ Overview of Balance Sheet P. 12 ‐ Expenses P. 51 ‐ Consolidated Gross Profits P. 13 ‐ Credit-related costs P. 52 ‐ Loans P. 16 ‐ Shareholdings P. 53 ‐ Reference: Outlook of Loans P. 19 ‐ Current CET1 capital ratio and future outlook P. 54 ‐ Non-interest Income P. 20 ‐ Revision of the basic policy on capital strategy and the ‐ General and Administrative Expenses P. 21 shareholder return policy P. 55 ‐ Securities Portfolio P. 22 ‐ Asset Quality P. 25 Sustainability initiatives ‐ Loan Portfolio Outside Japan P. 26 ‐ Sustainability-centered business promotion P. 57 ‐ Exposure in specific sectors and products P. 27 ‐ Creating business and strengthening risk management through engagement P. 58 ‐ Credit portfolio soundness P. 28 ‐ Progress on sustainability KPIs / targets P. 59 Capital and Funding ‐ Merging strengths in non-financial business area P. 61 ‐ Corporate foundations supporting the promotion of sustainability P. 62 ‐ Basel Regulatory Disclosures P. 30 ‐ TCFD Report 2021 improvements and expansions P. 63 ‐ Summary of Senior Notes issued by FG P. 32 ‐ Employee engagement leading to Mizuho’s sustainable growth P. 66 ‐ Yearly decrease of TLAC eligible securities P. 33 ‐ Summary of Additional Tier 1Capital & Tier 2 Capital Securities P. 34 Appendix ‐ Outstanding Senior Bonds Issued by FG (TLAC Eligible) P. 35 ‐ Outstanding Additional Tier 1 Capital Securities P. 38 ‐ Outstanding Tier 2 Capital Securities P. 39 ‐ HoldCo – OpCo Bank Rating Comparison P. 42 1 Group Overview Mizuho Group Mizuho Financial Group Asset Research & Other major Banking Trust Securities Management Consulting1 subsidiaries In-house COMPANIES Retail & Business Banking MHPW 1 Corporate & Institutional Global Corporate Global Markets Asset Management AM One UNITS Mizuho Bank Global Products Mizuho Securities CBJ 2 Mizuho Trust & Banking Trust Mizuho Research & Consulting RT (rounded figures) Credit Ratings (as of June 1, 2021) SME, middle Coverage of listed Forbes Global 200 Individual Securities FG BK/TB market companies in (Non-Japanese3 customers accounts S&P A- A borrowers, etc. Japan corporate clients) Moody’s A1 A1 Fitch A- A- 23M 1.8M 100K 70% 80% R&I A+ AA- JCR AA- AA 1. Mizuho Private Wealth Management. 2. Custody Bank of Japan, Ltd. 3. Top 200 corporations from Forbes Global 2000 3 Key Figures for FY2020 Net Income Attributable to FG Loan Portfolio Capital Position JPY 581B Total Capital Before one-time losses Ratio 16.87% JPY B 18.85% JPY 448B 471 0.89% 17.25% NPL Ratio1 0.75% 2 0.70% 10.84% 11.00% CET1 Ratio 10.46% JPY 96B FY18 FY19 FY20 Mar-19 Mar-20 Mar-21 Mar-19 Mar-20 Mar-21 3 Leverage Ratio Liquidity Coverage Ratio External TLAC ratio TLAC ratio 22.18% 21.95% (RWA basis) 4.83% 144.3% 4.42% 137.3% 135.8% 21.42% 4.08% Mar-19 Mar-20 Mar-21 FY18 4Q FY19 4Q FY20 4Q Mar-19 Mar-20 Mar-21 1. Consolidated, banking account + trust account 2. Excluding Net Unrealized Gains (Losses) on Other Securities 3. Due to the amendment of the notification of Japan FSA, deposits to BoJ have been excluded from Total Exposure since Mar. 2021 (before exclusion: Mar-21: 4.03%) 4 Financial Results for FY2020 Executive summary of financial results (JPY B) 1 FY20 YoY Net Business Profits + Strong performance in both Customer Groups and Markets contributed Net Gains (Losses) related 799.7 +127.1 to YoY increase in Net Business Profits to ETFs and others 1 Lower expenses YoY with structural reforms offsetting increase in +135.7 Net Business Profits 797.7 expenses due to investment in focus areas Maintained Credit-related Costs around the estimated level, recording Credit-related Costs -204.9 -33.2 additional reserves from a forward-looking perspective to prepare for future credit risk Net Gains (Losses) related to Steadily reduced cross-shareholdings, in addition to reversing Stocks – Net Gains (Losses) 10.0 -116.4 related to ETFs and others1 impairment losses recorded in H1 -5.8 +35.8 Impairment loss on Stocks Improved hedging price for bear funds in light of rising stock prices Net Income In addition to the above, Net Income Attributable to FG increased YoY +22.4 Attributable to FG 471.0 due to factors such as recording profits from the reversion of stocks from the retirement benefit trust Although CET1 capital ratio declined primarily due to increased risk- CET1 Capital Ratio -0.02% weighted assets arising from factors including providing financing 11.63 % support to clients and rising stock prices, a sufficient level of capital has been maintained excl. Net Unrealized Gains 10.46 % -0.54% (Losses) on Other Securities CET1 capital ratio (Basel III finalization basis) steadily improved to 9.1% 2 , reaching the targeted level of the lower end of the 9-10% range 1. JPY 2.0B (-JPY 8.5B YoY) 2. Excluding Net Unrealized Gains (Losses) on Other Securities. 6 Financial highlights (1) Consolidated Net Business Profits + Loan Balance and Spread P.17,18 1 Net Gains (Losses) related to ETFs and others 2 ☞ (JPY B) Group aggregate, management accounting 1 Group aggregate In Japan (avg. balance) Loan Spread in Japan BK, management accounting • Customer Groups: Strong (JPY T) 2 Banks 799.7 Loans to Middle Market performance in individual 672.5 Firms & SMEs 268.0 asset formation (RBC), lending & solutions income (CIC), and Loans to Large Corporate Banking Clients Markets 207.8 lending and capital markets 0.55% 0.54% 0.54% related income (GCC). 0.52% Expenses reduced YoY. 59.1 59.3 Customer 446.8 547.9 54.5 55.0 Groups • Markets: Strong performance 0.49% 0.49% 0.48% 0.49% in S&T, primarily outside Japan FY19 FY20 FY19 H1 H2 FY20 H1 H2 FY19 H1 H2 FY20 H1 H2 2, 3 2, 3 Customer Groups Markets Outside Japan (avg. balance) Loan Spread outside Japan (USD B) 549.6 BK, management accounting BK, management accounting S&T 42.5 446.8 Banking RBC 12.2 268.2 286.8 207.8 248.5 260.0 264.0 286.1 65.1 CIC 94.6 245.7 46.9 EMEA 54.9 59.0 59.3 0.99% 82.1 98.5 88.2 Americas 77.5 0.89% 175.1 172.2 GCC 210.0 0.82% 175.6 Asia 116.1 118.9 123.2 116.6 0.81% AMC 13.3 10.9 FY19 FY20 FY19 FY20 FY19 H1 H2 FY20 H1 H2 FY19 H1 H2 FY20 H1 H2 1. Excluding loans to FG and the Japanese Government, etc. Banking account. 2. BK (including the subsidiaries in China, the US, the Netherlands, Indonesia, Malaysia, Russia, Brazil and Mexico). 3. New management accounting rules were applied in FY20 (Figures from FY19 H1 were recalculated based on the new rules). 7 Financial highlights (2) 3 Non-interest Income ☞ P.20 5 SC Ordinary Profits Group aggregate, management accounting, rounded figures (JPY B) US-based entities aggregated basis + 62 (JPY B) - RBC: Increase in income led by 157.9 - Steadily captured profit 982 1,044 individual asset formation, with opportunities in the brisk market income from corporate solutions Americas environment. Achieved record recovering from H2 SC Consolidated 60.0 high Ordinary Income in each RBC 381 408 - CIC: Increase primarily due to division and locations outside solutions income related with Japan 58.5 nd CIC 275 293 financing support - Ranked 2 in the industry on an - GCC: Increase mainly due to 27.3 97.8 Ordinary Income basis GCC 225 247 lending-related and DCM income in the Americas/Europe and 31.2 Other 101 96 other factors FY19 FY20 FY19 FY20 G&A Expenses 1 P. 21 P.12 4 (Excl. Non-recurring Losses and others) ☞ 6 Non-JPY Funding ☞ Group aggregate, management accounting (USD B) 2 (JPY B) Loans Customer Deposits 2 1,408.6 1,411.4 Proportion of Deposits to Loans - 70% of the total loan amount - Increase in performance-linked continues to be covered by compensation (+26B) and 75% 673.1 640.6 74% customer deposits RBC amortization of IT systems in and outside Japan (+11B) were - Deposits and loans both offset by expense reductions 307.5 decreased due to management CIC 215.7 209.6 272.7 achieved via structural reforms 230.5 focused on profitability and the GCC 245.3 251.1 201.4 drop off in COVID-19-related lending GMC 202.6 218.2 AMC 33.1 32.9 FY19 FY20 Mar-20 Mar-21 1. BK (including the subsidiaries in China, the US, the Netherlands, Indonesia, Malaysia, Russia, Brazil and Mexico). 2. Including Non-JPY loans/customer deposits in Japan. New management accounting rules were applied in FY20. 8 Financial highlights (3) CET1 capital ratio and cash dividends P.25 P.30 7 Credit-related Costs ☞ 9 per share ☞ (JPY B) CET1 Capital Ratio (Basel III Finalization basis)2 -438 9.1% -132.6 - Recorded additional - Improved compared to -374 RBC: -54.1 reserves from a forward- 8.8% the end of March 2020 FY20 looking perspective to due to steady profit CIC : -112.0 -204.9 GCC: -28.9 prepare for FY21 and accumulation and -72.3 onward disciplined RWA control 8.2% - Reached the targeted Recorded reserves level of the lower end of from a forward- the 9-10% range looking perspective FY20 1 Mar-19 Mar-20 Mar-21 8 Cross-shareholdings ☞ P.
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