Annual Report (April 2002~March 2003) Corporate Structure
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Annual Report (April 2002~March 2003) Corporate Structure Mizuho Financial Group, Inc. (MHFG: financial holding company) Banking and Securities Business Sector Corporate Revitalization Mizuho Holdings, Inc. Financial subsidiaries for (MHHD: intermediate holding company for banks corporate revitalization The Mizuho Financial Group precisely and swiftly meets its customers’ diverse financial and securities subsidiaries) needs through the expertise possessed by and the close collaboration of its group Mizuho Corporate, companies, including Mizuho Corporate Bank, which primarily serves large Ltd. corporations and overseas corporations, and Mizuho Bank, which deals primarily with Mizuho Corporate Mizuho Securities Bank, Ltd. (MHCB) Co., Ltd. (MHSC) individuals, small, medium-sized, and middle market enterprises as well as securities, Mizuho Global, Ltd. trust banking and asset management companies. Shinko Securities Co., Ltd. Mizuho Investors Mizuho Bank, Ltd. Securities Co., Ltd. Mizuho Project, Ltd. (MHBK) (MHIS) History Trust and Asset Management Sector 2003 June Mizuho Advisory established as the group’s advisory company for corporate revitalization. Mizuho Trust & Banking Co., Ltd. (MHTB) Mizuho Asset, Ltd. May Mizuho Corporate, Mizuho Global, Mizuho Project, and Mizuho Asset established as the group’s financial subsidiaries for corporate revitalization. March Implementation of the group’s business reorganization. Trust & Custody Services Bank, Ltd. (TCSB) • Mizuho Holdings was reformed as an intermediate holding company to manage the banking and Advisory company for securities business sector. corporate revitalization • Mizuho Securities became a subsidiary of Mizuho Corporate Bank. • Mizuho Investors Securities became a subsidiary of Mizuho Bank. • Mizuho Trust & Banking and Mizuho Asset Trust & Banking were merged to create Mizuho Trust & Banking. Asset management companies • Strategic subsidiaries such as the group's credit card company, asset management company, Dai-Ichi Kangyo Asset Management Co., Ltd. (DKA) Mizuho Advisory, Inc. and IT-related companies that are the backbone of the entire group's management infrastructure, Fuji Investment Management Co., Ltd. (FIMCO) were made direct subsidiaries or affiliates of Mizuho Financial Group. DLIBJ Asset Management Co., Ltd. (DIAM) January Mizuho Financial Group, Inc. established. 2002 April Mizuho Corporate Bank and Mizuho Bank start operations. Credit card company 2000 October Mizuho Securities and Mizuho Trust & Banking start operations. UC Card Co., Ltd. September Mizuho Holdings established. Research institution Mizuho Research Institute Information & technology DKB Information Systems Inc. (DKIS) Fuji Research Institute Corporation (FRIC) IBJ Systems, Limited (KSD) Venture capital Mizuho Capital Co., Ltd. 1 Financial Highlights (Consolidated) Financial Highlights (Consolidated) The consolidated results for the fiscal year ended March 31, 2003 are for MHFG. The results for the fiscal year ended March 31, 2002 are for MHHD. 2003 MHHD 2002 For the Fiscal Years ended March 31, Millions of yen Thousands of U.S. dollars Millions of yen Total Income ¥ 3,441,810 $ 28,634,030 ¥ 5,315,591 Total Expenses 5,703,982 47,454,101 6,740,762 Loss before Income Taxes and Minority Interests (2,262,172) (18,820,071) (1,425,170) Net Loss (2,377,172) (19,776,805) (976,044) Cash Dividends* 22,147 184,256 54,985 *Non-consolidated basis. 2003 MHHD 2002 At March 31, Millions of yen Thousands of U.S. dollars Millions of yen Total Assets ¥ 134,032,747 $ 1,115,081,090 ¥ 151,312,427 Securities 23,816,574 198,141,219 24,108,931 Loans and Bills Discounted 69,210,035 575,790,644 84,593,656 Deposits 72,222,642 600,853,928 85,606,236 Total Shareholders' Equity ¥ 2,861,066 $ 23,802,554 ¥ 4,731,420 2003 MHHD 2002 For the Fiscal Years ended March 31, yen U.S. dollars yen Per Share of Common Stock Net Loss (Common Stock) ¥ (254,524.65) $ (2,117.51) ¥ (108,003.27) Cash Dividends per Share* Common Stock ——3,500 Preferred Stock First Series Class I Preferred Stock 22,500 187.19 22,500 Second Series Class II Preferred Stock 8,200 68.22 8,200 Third Series Class III Preferred Stock 14,000 116.47 14,000 Fourth Series Class IV Preferred Stock 47,600 396.01 47,600 Fifth Series Class V Preferred Stock //— Sixth Series Class VI Preferred Stock 42,000 349.42 42,000 Seventh Series Class VII Preferred Stock 11,000 91.51 11,000 Eighth Series Class VIII Preferred Stock 8,000 66.56 8,000 Ninth Series Class IX Preferred Stock 17,500 145.59 17,500 Tenth Series Class X Preferred Stock 5,380 44.76 5,380 Eleventh Series Class XI Preferred Stock 165 1.37 / Twelfth Series Class XI Preferred Stock 21 0.17 / Thirteenth Series Class XIII Preferred Stock 247 2.05 / *Non-consolidated basis. At March 31, 2003 MHHD 2002 Capital Adequecy Risk-based Capital Ratio (BIS Capital Ratio) 9.53% 10.56% Ratings R&I JCR Moody's Standard & Poor's Fitch At March 31, 2003 Long Term Short Term Long Term Short Term Long Term Short Term Long Term Short Term Long Term Short Term Mizuho Financial Group, Inc. — a–1 —— —— —— —— Mizuho Holdings A– a–1 —— —— —— —— Mizuho Corporate Bank A– a–1 —— A3 P–1 BBB A–3 BBB+ F2 Mizuho Bank A– a–1 —— A3 P–1 BBB A–3 BBB+ F2 Mizuho Securities A– a–1 — J–1 —— —— —— Mizuho Trust & Banking A– a–1A– — Baa1 P–2 BBB — BBB+ F2 (as of July 31, 2003) 2 2003 Mizuo Financial Group Annual Report 4 A Message from the President & CEO of Mizuho Financial Group, Inc. 6 Management Reform of Mizuho Resolving Financial Issues and Reinforcing Capital Base Evolution of the Mizuho Financial Group's Business Model Business Strategies of the Mizuho Financial Group Thorough Cost Structure Reforms Strengthen Corporate Governance and Reinforce the Merit-Based Remuneration System The Mizuho Financial Group's “Corporate Revitalization Project” Financial Highlights of Mizuho Financial Group for Fiscal 2002 18 Business Strategy of Mizuho Business Outline of Mizuho Business Strategy of Mizuho Corporate Bank Business Strategy of Mizuho Bank Securities Business Strategy Trust and Asset Management Business Strategy Business Results Highlights of Mizuho 45 Community Activities and Environmental Awareness of Mizuho 47 Management Structure of Mizuho 50 Internal Control Systems of Mizuho 63 Financial Analysis of Mizuho 99 Financial Data of Mizuho Financial Group, Inc. 139 Consolidated Financial Statements of Mizuho Holdings for Fiscal 2001 and 2000 165 Non-Consolidated Financial Statements of Mizuho Financial Group, Inc. and Four Subsidiaries 174 Senior Executive Officers of Mizuho Office Network of Mizuho Investor Information on Mizuho Financial Group, Inc. Disclosure Policy of Mizuho 3 A Message from the President & CEO of Mizuho Financial Group, Inc. On behalf of the Mizuho Financial Group, I would like to take this opportunity to extend my sincere gratitude to our shareholders and cus- tomers for your continued support. Last fiscal year, we took speedy and decisive actions for our manage- ment reform, including the recent reorganization of our new corporate structure and execution of measures to resolve all major financial issues. In the current fiscal year, we are making every effort in further improv- ing our customer services and enhancing competitiveness and profitabil- ity. I would like to assure you that we aim to make this year a year of achievement for Mizuho in response to your support and expectations. Completion of Our New Corporate Structure On April 1, 2002, the Mizuho Financial Group launched two banks, namely, Mizuho Corporate Bank, which primarily serves large corporations and overseas corporations, and Mizuho Bank, which deals primarily with individuals and domestic small, medium-sized and middle market enterprises, hence creating a corporate structure under a holding company with four core subsidiaries consist- ing of these two banks and Mizuho Securities and Mizuho Trust & Banking. I would also like to take this opportunity to express my deepest apologies for the computer systems problems that occurred at the launching of the two banks mentioned above and affected our domestic services such as delays in automatic debit transactions and problems in ATM services. We immediately established a preventive structure in order not to repeat similar problems and we are undertaking further improvement of our customer services. Since the group's inauguration, we have aggressively adopted and implemented various measures to carry out management reform. In March of this year, we further reviewed our corporate strategies and instituted the reorganization of our corporate structure in order to further reinforce our comprehensive financial services capabilities and secure stable profitability. Specifically, we strengthened the collaboration between the banking and securities subsidiaries based on customer segmentation. Moreover, Mizuho Trust & Banking and Mizuho Asset Trust & Banking were merged to unify the group's trust banking business. We also set up a new financial holding company, Mizuho Financial Group, Inc., to directly manage strategically important group subsidiaries, including a credit card company, asset management companies and IT-related companies. Furthermore, in order to concurrently promote an early achievement of our corporate customers' revitalization and a further reinforce- ment of our credit creation function, we initiated the “Corporate Revitalization Project” in the current fiscal year. In this project, we newly established four financial subsidiaries specializing in corporate revitalization and an advisory company with cutting-edge