BrandWikiReturn

Mizuho Financial Group

The Mizuho Financial Group, Inc. (株式会社みずほフィナンシャルグループ), known from 2000 to 2003 as Mizuho Holdings and abbreviated as MHFG or simply Mizuho, is a Japanese banking holding company headquartered in the Ōtemachi district of Chiyoda, Tokyo, Japan. The group was formed in 2000–2002 by merger of Dai-Ichi Kangyo Bank, Fuji Bank, and Industrial Bank of Japan. The name mizuho (瑞穂) literally means "abundant rice" in Japanese and "harvest" in the figurative sense.

Mizuho Financial Group is the parent holding of Mizuho Bank, Mizuho Trust & Banking, Mizuho Securities, and Mizuho Capital, and the majority owner of Asset Management One. The group offers a range of financial services, including banking, securities, trust and asset management services, employing more than 59,000 people[2] throughout 880 offices.[3] It is listed on the Tokyo Stock Exchange—where it is a constituent of the Nikkei 225 and TOPIX Core30 indices—and in the New York Stock Exchange in the form of American depositary receipts.

Upon its founding, Mizuho was the largest bank in the world by assets.[4] Following further consolidation, it has become the third-largest of Japan's so-called megabanks with total assets of $1.9 trillion at end-March 2023, behind Mitsubishi UFJ Financial Group ($2.9 trillion) and SMBC Group ($2.0 trillion).[5] Mizuho was the 15th largest banking institution in the world by total assets as of December 2018,[6] and the 90th largest company in the world according to Forbes rankings as of May 2017.[7] It has been consistently listed as a systemically important bank by the Financial Stability Board.

History

The history of the banks that formed Mizuho combines multiple threads of Japanese financial history, going back to the early Meiji era and particularly the establishment in 1873 of Dai-Ichi Bank, Japan's first modern bank and joint-stock company led by Shibusawa Eiichi, if not even earlier with the foundation of trading house Yasuda-ya in 1864. In addition to Dai-Ichi (whose name literally means "number one"), Mizuho also incorporates several of the subsequent National Banks in Meiji Japan which were numbered in accordance with their chronological date of establishment until 1880:

The group's predecessors also include Nippon Kangyo Bank (est. 1897) and Industrial Bank of Japan (est. 1902), two institutions founded as policy banks in the Meiji era and converted into commercial banks after World War II.

  • the 3rd National Bank, licensed in 1873 with a view to establish a bank in Osaka, then established in Tokyo in 1876 after the previous plan was shelved; merged 1923 with multiple other banks to form Yasuda Bank, which in 1948 was renamed Fuji Bank;
  • the 6th National Bank, est. 1877 in Fukushima, relocated 1892 to Tokyo, merged 1907 into the 9th Bank (below);
  • the 9th National Bank, est. 1877 in Kumamoto, absorbed the 6th Bank in 1907 and became the Higo Bank which in 1923 merged with the 3rd Bank and others to form the Yasuda Bank;
  • the 20th National Bank, est. 1877 in Tokyo, merged 1912 into Dai-Ichi Bank;
  • the 22nd National Bank, est. 1877 in Okayama, another participant in the 1923 merger that formed Yasuda Bank;
  • the 36th National bank, est. 1878 in Hachiōji, acquired 1942 by Nihon Chuya Bank which merged into Yasuda Bank in 1943;
  • the 40th National Bank, est. 1878 in Tatebayashi, merged 1918 with the 41st Bank to form Tokai Bank (namesake of but different from the later Tokai Bank) which itself merged into Dai-Ichi Bank in 1927;
  • the 41st National Bank, est. 1878 in Tochigi, merged 1918 with the 40th Bank;
  • the 44th National Bank, est. 1878 in Tokyo, merged 1882 into the 3rd National Bank;
  • the 58th National Bank, est. 1878 in Osaka, merged 1909 into the 130th Bank (see below);
  • the 64th National Bank, est. 1878 in Ōtsu, renamed Otsu Bank in 1898 and merged 1908 into Omi Bank which collapsed in 1928 and was absorbed by Showa Bank, itself merged 1944 into Yasuda Bank;
  • the 82nd National Bank, est. 1878 in Tottori, merged 1897 into the 3rd Bank;
  • the 84th National Bank, est. 1878 in Daishōji, acquired 1928 by Showa Bank;
  • the 87th National Bank, est. 1878 in Ōhashi, merged 1902 into the 130th Bank;
  • the 103rd National Bank, est. 1878 in Iwakuni, acquired 1893 by the Bank of Japan which merged 1923 into Yasuda Bank;
  • the 118th National Bank, est. 1878 in Tokyo, merged 1880 into the 136th National Bank (see below);
  • the 130th National Bank, est. 1879 in Osaka, merged 1923 into Yasuda Bank;
  • the 136th National Bank, est. 1879 in Handa, merged 1898 into the 130th Bank.

Founding merger

Mizuho was established in 2000 as Mizuho Holdings, Inc. by the merger of Dai-Ichi Kangyo Bank, Fuji Bank, and the Industrial Bank of Japan, first announced in 1999.[12][13][14] It was the first financial holding company structure created among major Japanese banks.[15]

On 2002/04/01, DKB, Fuji and IBJ were officially and legally combined into two banks,[16] Mizuho Bank, Ltd. and Mizuho Corporate Bank, Ltd.,[17][18] through a split and merger process reorganizing the three legacy banks.[19] Initially Mizuho traded under the ticker symbol MHHD on the London Stock Exchange.[20] Mizuho Corporate Bank focused on large corporations, financial institutions and public sector entities in Japan and overseas,[21] whereas Mizuho Bank focused on individuals and small and medium-sized companies in Japan.[22]

The merger resulted in the world's first trillion-dollar banking group, with its $1.2 trillion in assets, surpassing the next largest bank by about $480 billion. The move has been considered to have formed one of the first "mega-institutions" in the financial industry, beginning a trend in the industry of large-scale bank mergers referred to in Japan as the consolidation movement during the 2000s.[23] While other mega-institutions were composed of one major player and several minor ones, Mizuho was composed of three relatively equal institutions in terms of their size and influence.[24] It remained the largest mega-bank in the world until 2005.[16]

The name "Mizuho" means "new, bountiful, and rich harvest of rice" in Japanese.[25] The original structure saw the founding of the Mizuho Bank, focusing on individuals and SMEs, and the Mizuho Corporate Bank, which focuses on corporate entities.[26] The initial strategy of the company was to expand its lending operations with individuals and SMEs, and begin to offer fee-based services including securitizations, merger and acquisitions support, security-based investment banking, and syndicated loans. At the time, Mizuho controlled about 50% of the syndicated loans market.[27] Mizuho also launched one of the first Internet-based securities products in 2000.[28]

In 2003, Mizuho Financial Group, Inc. took over the operations of Mizuho Holdings.[16] On 1 October 2005, all subsidiaries of Mizuho Holdings were transferred to the direct control of Mizuho Financial Group.[16] Mizuho Holdings, no longer a bank holding company, was then renamed Mizuho Financial Strategy, which now focuses on providing advisory services.[29] Mizuho Financial Group was in turn listed on the New York Stock Exchange under the stock symbol MFG in 2006.[30]

Subsequent development

Mizuho Corporate Bank engaged in steady expansion overseas, opening twenty overseas offices between 2005 and 2010,[31] particularly in China, as well as in the Americas, Europe and Middle East. In 2006, Mizuho Corporate Bank became the first Japanese bank to obtain financial holding company status in the U.S.,[32] and Mizuho Financial Group listed its ADRs on the New York Stock Exchange.[33]

Mizuho, through its operations in New York, became involved in the subprime mortgage crisis and lost seven billion dollars on the sale of collateralized debt obligations backed by subprime mortgages. It is the Asian bank which suffered the most losses due to the crisis.[34] In 2012 Mizuho Financial Group acquired 100% of the assets from the Brazilian bank Banco WestLB do Brasil S.A.[35]

On 2013/07/0, the group structure was simplified by a merger of Mizuho Bank and Mizuho Corporate Bank into a single banking entity that retained the name Mizuho Bank.[36]

In 2014 the company underwent a board of directors reform to further streamline its corporate culture into a more of a single identity, although its original board founded in 2002 was consistent with Japanese banking protocols.[24] In 2016 they opened their global transactions banking headquarters in Singapore, and have offices for this unit in China, Hong Kong, Tokyo, London, and New York City.[37] That year they also began a partnership with Cognizant, to develop block-chain methods of securing the banks private records.[38]

Divisions

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 automated teller machines (ATMs).[40] Mizuho Bank is the only bank, other than Japan Post Bank, to have branches in every prefecture in Japan.[41] It serves over 26 million Japanese households,[42] 90,000 SME customers, 2500 corporations,[43] and retail brokerage clients under the name Mizuho Investors Securities nationwide, with $114 billion in retail customer assets under its management as of 2016.[44]

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.[45]

Global wealth and asset management

Asset Management One manages a number of ETFs which are listed in Japan, but some of these ETFs are very illiquid because no market maker was appointed. For example, One ETF Gold (1683:JP) frequently trades at a discount of more than 10% to the NAV.[46][47]

Strategy affiliates

Sponsorship

Mizuho is a sponsor of the Tokyo International Marathon[48] and the 2020 Olympic Games and 2020 Paralympic Games.[49]

Notable employees

  • Yoichiro Esaki, member of the House of Representatives
  • Rin Ishigaki, poet
  • Hirotaka Ishihara, member of the House of Representatives, son of Shintaro Ishihara
  • Zenkichi Kojima, mayor of Shizuoka, Shizuoka
  • Takeaki Matsumoto, member of the House of Representatives
  • Shoichi Nakagawa, Minister of Finance, Minister of State in charge of Financial Services (2008–2009)
  • Kei Ogura, singer
  • Stanley Praimnath, survivor of the destruction of the World Trade Center on 11 September 2001
  • Mitsu Shimojo, member of the House of Representatives
  • Yukio Tomioka, member of the House of Councillors

Controversies

In September 2013, a routine regulatory control unveiled that Mizuho enabled loans of up to $1.9 million to the yakuza (Japanese mafia). It also appeared that loans to the mob had been approved through its affiliate credit company Orient Corp. This scandal led to the resignation of the group's CEO Takashi Tsukamoto.[50][51]

In December 2019, a report named Mizuho as the top private lender to coal developers between January 2017 and September 2019.[52] In March 2020, Japanese NGO Kiko Network filed the first climate related shareholder resolution with a Japanese company proposing Mizuho align its investments with the goals of the Paris Agreement,[53] which was followed by investor support for the resolution.[54] In response, Mizuho has agreed not to finance any further coal projects, and to end all existing loans for coal projects by the year 2050.[55]

See also

External links

References

  1. Consolidated Financial Statements for Fiscal 2022 Mizhuo Group, 10 July 2023^
  2. Mizuho Financial on the Forbes Top Regarded Companies List Forbes.com^
  3. Gregory Walton. Bank employee plunges to death in City of London Telegraph.co.uk, 27 November 2015^
  4. David Litterick. Nikkei at 16-year low Telegraph.co.uk, 23 July 2001^
  5. Yuzo Yamaguchi & Mohammad Taqi. Japanese megabanks retain top slots in ranking even as total assets drop S&P Global, 2023/06/18^
  6. "The Top 100 Banks in the World 2016", Relbanks, 30 June 2016.^
  7. "Forbes The World’s Biggest Public Companies 2016 RANKING.", Forbes, May 2016.^
  8. Yasuda Fuji Otemachi Coop Building, Tokyo Council on Tall Buildings and Urban Habitat^
  9. Peter Landers. R.I.P.: Japanese Bank Tower That Embodied Nation's Industrial Might - Building that housed lender at heart of Japan's economic rise to be felled years after it fell victim to global forces Wall Street Journal, 2016/09/29^
  10. Mizuho Marunouchi Tower ・ Japanese Bankers Association ・ Marunouchi Terrace Shinkenchiku Data, January 2021^
  11. Head Office Locations Mizuho^
  12. A super-bank in the making The Japan Times^
  13. History of Mizuho The Oriental Economist, 1966^
  14. Sir Paul Newall. Japan and the City of London A&C Black, 17 December 2013^
  15. Peter Hoflich. Asia's Banking CEOs: The Future of Finance in Asia Wiley, 2008^
  16. Suresh Padmalatha. Management Of Banking And Financial Services, 2/E Pearson Education India, 1 September 2011^
  17. Chwee Huat Tan. Dictionary of Asia Pacific Business Terms NUS Press, 1 June 2018^
  18. Allen N. Berger. The Oxford Handbook of Banking Oxford University Press, June 1, 2018, retrieved June 1, 2018^
  19. Japan's Mizuho Bank on verge of replacing crash-prone system- Nikkei Asian Review retrieved June 1, 2018^
  20. FE Investegate -Mizuho Holdings Inc Announcements - Mizuho Holdings Inc: Delisting of Stock Timetable Investegate.co.uk^
  21. Chwee Huat Tan. Dictionary of Asia Pacific Business Terms NUS Press, June 1, 2018, retrieved June 1, 2018^
  22. Kimio Kase, Tanguy Jacopin. CEOs as Leaders and Strategy Designers: Explaining the Success of Spanish Banks: Explaining the Success of Spanish Banks Springer, December 14, 2007, retrieved June 1, 2018^
  23. Julian Gaspar, Leonard Bierman, James Kolari, Richard Hise, L. Murphy Smith. Introduction to Business Cengage Learning, 18 February 2005^
  24. Christine A. Mallin. Handbook on Corporate Governance in Financial Institutions Edward Elgar Publishing, 27 May 2016^
  25. Robert E. Grosse. The Future of Global Financial Services John Wiley & Sons, 9 February 2009^
  26. Chwee Huat Tan. Dictionary of Asia Pacific Business Terms NUS Press, 1 June 2018^
  27. V. Aggarwal, S. Urata. Winning in Asia, Japanese Style: Market and Nonmarket Strategies for Success Springer, 30 April 2016^
  28. みずほフィナンシャルグループ、インターネット専業証券を本年中に設立 internet.watch.impress.co.jp^
  29. Mizuho Financial Strategy Co., Ltd.: Private Company Information - Bloomberg Bloomberg.com, 20 May 2023^
  30. The First Mover. Mizuho: From Megabank To Global Financial Consultant Seeking Alpha, Seekingalpha.com, 31 March 2017^
  31. News Release(Former Mizuho Corporate Bank) Mizuhobank.com, retrieved June 1, 2018^
  32. Financial Holding Company status obtained in the U.S. Mizuhobank.com, retrieved 1 June 2018^
  33. Mizuho Financial Group English website address has been changed Mizuho-fg.co.jp, retrieved June 1, 2018^
  34. Finbarr Flynn. Mizuho $7 Billion Loss Turned on Toxic Aardvark Made in America Bloomberg, 29 October 2008, retrieved 29 October 2008^
  35. Taiga Uranaka. Mizuho agrees to buy WestLB Brazil unit for $380 million Reuters, 20 June 2012^
  36. Mizuho Financial Group English website address has been changed. Mizuho Financial Group, retrieved June 1, 2018^
  37. Mizuho Seeks $100 Billion From Overseas Transaction Banking Bloomberg.com, Bloomberg, 8 August 2017^
  38. Mizuho financial group partners enters pact with Cognizant Times of India^
  39. Head Office Locations - Otemachi and Marunouchi Mizuho Group^
  40. Mizuho Bank gears up for new core banking system go-live Bankingtech.com, 16 November 2016^
  41. Roman Cybriwsky. Historical Dictionary of Tokyo Scarecrow Press, 18 February 2011^
  42. Mizuho Bank, LTD. Transforms online and mobile banking systems retrieved 1 June 2018^
  43. Mida, Mizuho units team up - Business News - The Star Online Thestar.com.my, 17 February 2006^
  44. Mizuho Seeks to Challenge Nomura as Japan's Top Equity Firm Bloomberg.com, 19 October 2016^
  45. IR Presentation at “CLSA Japan Forum 2005” 7 March 2005^
  46. 1683 Quote - One ETF Gold Fund Bloomberg.com^
  47. Listed Issues^
  48. Tokyo Will Be Added as Sixth Major Marathon The New York Times, 2 November 2012^
  49. Mizuho and SMFG join Tokyo 2020 Gold Partner Programme｜The Tokyo Organising Committee of the Olympic and Paralympic Games Tokyo2020.jp^
  50. Tomoko Otake. Mizuho has more loans to the mob The Japan Times, 13 November 2013, retrieved 19 July 2018^
  51. Ben McLannahan. Mizuho chairman to stand down over yakuza loans scandal Financial Times, 26 December 2013, retrieved 19 July 2018^
  52. Ryusei Takahashi. Japan's mega-banks named as world's biggest lenders for new coal plants The Japan Times, 7 December 2019, retrieved 30 January 2023^
  53. Major shareholder to support first ever climate resolution in Japan Fossil Free Japan, 16 June 2020, retrieved 30 January 2023^
  54. Aaron Sheldrick. Investors line up against Mizuho support for coal Reuters, 6 April 2020^
  55. Mizuho to stop lending to new coal power projects Reuters, 15 April 2020, retrieved 10 July 2023^