Form 6-K
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of January 2011

Commission File Number 001-33098

Mizuho Financial Group, Inc.

(Translation of registrant’s name into English)

5-1, Marunouchi 2-chome

Chiyoda-ku, Tokyo 100-8333

Japan

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  x    Form 40-F  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ¨

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ¨    No  x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-                    .

 

 

 


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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date:   January 28, 2011
Mizuho Financial Group, Inc.
By:  

/s/ Takeo Nakano

Name:   Takeo Nakano
Title:   Managing Director / CFO


Table of Contents

The following is an English translation of excerpt regarding Basel II capital adequacy disclosure and relevant information released in our Japanese language disclosure material published in January 2011. The capital adequacy disclosure and other financial information included herein are based on Japanese GAAP pursuant to Japanese regulatory requirements.

In this report, “we,” “us,” and “our” refer to Mizuho Financial Group, Inc. and, unless the context indicates otherwise, its consolidated subsidiaries. “Mizuho Financial Group” refers to Mizuho Financial Group, Inc.

Status of Capital Adequacy

 

 

Capital adequacy ratio highlights

     2   

n    Capital adequacy ratio highlights

  

Status of Mizuho Financial Group’s consolidated capital adequacy

     3   

n     Consolidated capital adequacy ratio

     3   

(1)    Summary table of consolidated capital adequacy ratio (BIS standard)

  

n    Risk-based capital

     14   

(2)    Required capital by portfolio classification

  

n    Credit risk

     16   

(3)    Credit risk exposure, etc.

  

n    Methods for credit risk mitigation

     31   

(4)    Credit risk mitigation by portfolio classification

  

n     Counterparty risk in derivatives transactions and long-settlement transactions

     32   

(5)    Status of counterparty risk in derivatives transactions and long-settlement transactions

  

n    Securitization exposure

     34   

(6)    Quantitative disclosure items for securitization exposure

  

n    Market risk

     41   

n    Equity exposure in banking book

     42   

(7)    Status of equity exposure in banking book

 

  

 

 

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Table of Contents

Capital adequacy ratio highlights

The Basel II Framework, based on the “International Convergence of Capital Measurement and Capital Standards: A Revised Framework” issued by the Basel Committee on Banking Supervision, requires the disclosure of capital adequacy information to ensure the enhanced effectiveness of market discipline. Our disclosure is made under the “Matters Separately Prescribed by the Commissioner of the Financial Services Agency Regarding Capital Adequacy Conditions, etc. pursuant to Article 19-2, Paragraph 1, Item 5, Subitem (d), etc. of the Ordinance for Enforcement of the Banking Law (Ministry of Finance Ordinance No. 10 of 1982)” (FSA Notice No. 15 of 2007).

As a method to calculate the amount of credit risk-weighted assets under the Basel II Framework, we have adopted the advanced internal ratings-based approach. In addition, as a method to calculate the amount equivalent to the operational risk, we have adopted the advanced measurement approach.

n Capital adequacy ratio highlights

Mizuho Financial Group (Consolidated)

 

     (Billions of yen)  
     As of September 30, 2009     As of September 30, 2010  

Consolidated capital adequacy ratio (BIS standard)

     12.89     15.40

Tier 1 capital ratio

     8.69     11.78

Tier 1 capital

     5,147.4        6,260.1   

Tier 2 capital

     2,733.4        2,262.9   

Deductions for total risk-based capital

     250.8        342.4   

Total risk-based capital

     7,630.0        8,180.7   

Risk-weighted assets

     59,170.0        53,121.1   

(Reference)

Mizuho Corporate Bank (Consolidated)

 

     (Billions of yen)  
     As of September 30, 2009     As of September 30, 2010  

Consolidated capital adequacy ratio (BIS standard)

     14.53     17.15

Tier 1 capital ratio

     11.44     14.38

Tier 1 capital

     3,784.5        4,128.3   

Tier 2 capital

     1,205.3        926.9   

Deductions for total risk-based capital

     184.3        134.1   

Total risk-based capital

     4,805.6        4,921.1   

Risk-weighted assets

     33,072.0        28,694.0   

Mizuho Corporate Bank (Non-consolidated)

 

     (Billions of yen)  
     As of September 30, 2009     As of September 30, 2010  

Non-consolidated capital adequacy ratio (BIS standard)

     15.60     18.87

Tier 1 capital ratio

     10.39     14.18

Tier 1 capital

     3,136.8        3,633.3   

Tier 2 capital

     1,659.5        1,250.0   

Deductions for total risk-based capital

     89.4        49.6   

Total risk-based capital

     4,707.0        4,833.7   

Risk-weighted assets

     30,165.4        25,608.9   

Mizuho Bank (Consolidated)

 

     (Billions of yen)  
     As of September 30, 2009     As of September 30, 2010  

Consolidated capital adequacy ratio (Domestic standard)

     12.77     13.01

Tier 1 capital ratio

     7.49     8.40

Tier 1 capital

     1,836.2        1,972.8   

Tier 2 capital

     1,355.9        1,174.0   

Deductions for total risk-based capital

     63.0        90.5   

Total risk-based capital

     3,129.2        3,056.4   

Risk-weighted assets

     24,493.7        23,482.6   

(Reference) Consolidated capital adequacy ratio (BIS standard)

     12.75     12.91

Mizuho Bank (Non-Consolidated)

 

     (Billions of yen)  
     As of September 30, 2009     As of September 30, 2010  

Non-consolidated capital adequacy ratio (Domestic standard)

     12.99     13.09

Tier 1 capital ratio

     7.64     8.52

Tier 1 capital

     1,797.3        1,931.5   

Tier 2 capital

     1,355.0        1,173.3   

Deductions for total risk-based capital

     99.2        136.2   

Total risk-based capital

     3,053.1        2,968.6   

Risk-weighted assets

     23,502.3        22,670.0   

(Reference) Non-consolidated capital adequacy ratio (BIS standard)

     12.93     12.97

 

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Status of Mizuho Financial Group’s consolidated capital adequacy

n Consolidated capital adequacy ratio

(1) Summary table of consolidated capital adequacy ratio (BIS standard)

 

            (Billions of yen)  
            As of September 30, 2009     As of September 30, 2010  
Tier 1 capital   Common stock and preferred stock       1,805.5        2,181.3   
                   
 

Non-cumulative perpetual preferred stock

      —          —     
                   
  Advance payment for new shares       —          —     
  Capital surplus       552.1        937.6   
  Retained earnings       696.0        1,060.6   
  Less: Treasury stock       5.1        3.1   
  Advance payment for treasury stock       —          —     
  Less: Dividends (estimate), etc       —          —     
  Less: Unrealized losses on other securities       —          —     
  Foreign currency translation adjustments       (93.2     (100.3
  Stock acquisition rights       2.3        2.7   
                   
  Minority interest in consolidated subsidiaries       2,296.4        2,279.7   
                   
 

Preferred securities issued by overseas SPCs

      1,937.1        1,919.1   
                   
  Less: Goodwill equivalent       —          —     
 

Less: Intangible fixed assets recognized as a result of a merger

      42.9        40.4   
 

Less: Capital increase due to securitization transactions

      7.1        5.9   
 

Less: 50% of excess of expected losses relative to eligible reserves by banks adopting internal ratings-based approach

      56.5        52.0   
 

Total of Tier 1 capital before deduction of deferred tax assets (total of the above items)

      5,147.4        6,260.1   
  Deduction for deferred tax assets       —          —     
                   
  Total   (A)     5,147.4        6,260.1   
                   
 

Preferred securities with a step-up interest rate provision

  (B)     524.0        524.0   
 

Ratio to Tier 1 = (B) / (A) X 100

      10.17     8.37
                   
Tier 2 capital   45% of unrealized gains on other securities       73.1        48.4   
  45% of revaluation reserve for land       112.1        106.4   
  General reserve for possible losses on loans       5.6        4.5   
 

Excess of eligible reserves relative to expected losses by banks adopting internal ratings-based approach

      —          —     
                   
  Debt capital, etc.       2,542.5        2,103.4   
                   
 

Perpetual subordinated debt and other debt capital

      629.6        366.0   
 

Dated subordinated debt and redeemable preferred stock

      1,912.8        1,737.4   
                   
  Total       2,733.4        2,262.9   
                   
 

Tier 2 capital included as qualifying capital

  (C)     2,733.4        2,262.9   
                   
Tier 3 capital   Short-term subordinated debt       —          —     
                   
 

Tier 3 capital included as qualifying capital

  (D)     —          —     
                   
Deductions for total risk-based capital   Deductions for total risk-based capital   (E)     250.8        342.4   
                   
Total risk-based capital   (A) + (C) + (D) – (E)   (F)     7,630.0        8,180.7   
                   
Risk-weighted assets   Credit risk-weighted assets   (G)     53,869.9        48,297.1   
                   
 

On-balance-sheet items

      44,084.7        39,658.3   
 

Off-balance-sheet items

      9,785.2        8,638.7   
                   
  Market risk equivalent assets [(I)/8%]   (H)     1,384.1        1,335.3   
  (Reference) Market risk equivalent   (I)     110.7        106.8   
  Operational risk equivalent assets [(K)/8%]   (J)     3,915.8        3,488.7   
  (Reference) Operational risk equivalent   (K)     313.2        279.1   
  Adjusted floor amount   (L)     —          n.a.   
 

Adjusted amount for credit risk-weighted assets

  (M)     n.a.        —     
 

Adjusted amount for operational risk equivalent

  (N)     n.a.        —     
                   
  Total [(G) + (H) + (J) + (L) + (M) + (N)]   (O)     59,170.0        53,121.1   
                   

Consolidated capital adequacy ratio (BIS standard) = (F) / (O) X 100

    12.89     15.40
                   

Tier 1 capital ratio = (A) / (O) X 100

      8.69     11.78
                   

 

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Notes:   
1.    The above figures are calculated based on the BIS standard applied on a consolidated basis under the “Standards for Determining the Status of Capital Adequacy in consideration of assets held by a bank holding company and by its subsidiaries, in accordance with Banking Law Article 52-25” (FSA Notice No. 20 of 2006 (the “Notice”)). For the figures as of September 30, 2009 and 2010, we did not apply the exception to the Notice (FSA Notice No. 79 of 2008).
2.    As it is not possible to break down Mizuho Financial Group’s common stock and preferred stock according to classes of stock, non-cumulative perpetual preferred stock is not stated separately from capital.
3.    In calculating the consolidated capital adequacy ratio, we underwent an examination following the procedures agreed with Ernst & Young ShinNihon LLC, on the basis of “Treatment in implementing examination by agreed-upon procedures for calculating capital adequacy ratio” (Industry Committee Report No. 30 of the Japanese Institute of Certified Public Accountants). Note that this is not a part of the accounting audit performed on our consolidated financial statements. This consists of an examination under agreed-upon procedures performed by Ernst & Young ShinNihon LLC on a portion of the internal control structure concerning the calculation of the capital adequacy ratio and a report of the results to us. As such, they do not represent an opinion regarding the capital adequacy ratio itself nor the internal controls related to the calculation of the capital adequacy ratio.
4.    The amounts of net deferred tax assets as of September 30, 2009 and 2010 were ¥615.1 billion and ¥447.0 billion, respectively, and the maximum amounts of deferred tax assets that can be recorded without diminishing the amount of Tier 1 capital for the purpose of calculating capital adequacy ratio as of September 30, 2009 and 2010 were ¥1,029.4 billion and ¥1,252.0 billion, respectively.
5.    The “adjusted floor amount” is the amount obtained by multiplying (i) 12.5 by (ii) the excess, if any, of the required capital under the advanced internal rating-based approach and the gross profit allocation approach multiplied by the rate prescribed in the Notice over the required capital under the advanced internal ratings-based approach and the advanced measurement approach. The “adjusted amount for credit risk-weighted assets” is the amount obtained by multiplying (i) 12.5 by (ii) the excess, if any, of the required capital under the foundation internal ratings-based approach multiplied by the rate prescribed in the Notice over the required capital under the advanced internal ratings-based approach; and the “adjusted amount for operational risk equivalent” is the amount obtained by multiplying (i) 12.5 by (ii) the excess, if any, of the required capital under the basic indicator approach multiplied by the rate prescribed in the Notice over the required capital under the advanced measurement approach.
6.    Among our group companies that were subject to the calculation of consolidated capital adequacy ratio pursuant to Article 3 of the Notice, the numbers of consolidated subsidiaries were 164 and 163 as of September 30, 2009 and 2010, respectively. There was no company that was subject to the deductions for total risk-based capital forth in Article 8, Paragraph 1, Item 2, Subitem (a) through (c) of the Notice as of September 30, 2009 and 2010.

 

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Summary of preferred securities

We have included each of the following preferred securities issued by our overseas special purpose companies as Tier 1 capital for the purposes of our consolidated capital adequacy ratios.

Preferred securities issued by SPCs of Mizuho Financial Group

 

Issuer   Mizuho Preferred Capital (Cayman) 1 Limited (as “MPC1,” and the preferred securities described below are referred to as the “MPC1 Preferred Securities.”)  
Type of securities   Non-cumulative perpetual preferred securities  
Mandatory redemption date   None  
Optional redemption   Optionally redeemable on each dividend payment date falling in or after June 2012 (subject to prior approval from regulatory authorities)  
Dividends   Floating dividend rate (No dividend rate step-up. As stated in “Dividend suspension events” below, dividend payments that are suspended are non-cumulative.)  
Dividend payment date   Last business day of June in each year  
Total amount issued   ¥171.0 billion  
Issue date   February 14, 2002  
Dividend suspension events  

If any of the following events arise, dividend payments are suspended on a non-cumulative basis:

 

(1)    when Mizuho Financial Group issues to MPC 1 a Loss Absorption Certificate(1);

 

(2)    when dividends on Mizuho Financial Group’s Preferred Stock(2) are suspended;

 

(3)    when Mizuho Financial Group issues to MPC 1 a Distributable Amounts Limitation Certificate(4) stating that there are no Available Distributable Amounts(3); and

 

(4)    when the dividend payment date is not a Mandatory Dividend Payment Date(5), and Mizuho Financial Group issues to MPC 1 a dividend instruction instructing it not to pay any dividends on such dividend payment date.

 
Mandatory dividend event   If Mizuho Financial Group pays any dividends on its common stock with respect to a fiscal year, full dividends must be paid on Parity Preferred securities(6) in June of the calendar year in which such fiscal year ends. However, it is subject to the following conditions: (1) no Loss Absorption Certificate(1) has been issued; (2) no preferred stock dividend limitation has arisen with respect thereto (partial dividend payments are made to the extent applicable); and (3) no Distributable Amounts Limitation Certificate(4) has been issued with respect thereto (partial dividends are paid to the extent applicable).  
Distributable amounts limitation   When Mizuho Financial Group issues a Distributable Amounts Limitation Certificate(4) to MPC1, dividends are limited to the Available Distributable Amounts(3).  
Dividend limitations   When dividends on Mizuho Financial Group’s Preferred Stock(2) are reduced, dividends on Parity Preferred Securities(6) are also reduced by an equal percentage.  
Claims on residual assets   Same priority as Mizuho Financial Group’s Preferred Stock(2)  

 

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Issuer   Mizuho Capital Investment (USD) 1
Limited (“MCI (USD) 1,” and the
preferred securities described below are
referred to as “MCI (USD) 1 Preferred
Securities.”)
  Mizuho Capital Investment (EUR) 1
Limited (“MCI (EUR) 1,” and the
preferred securities described below are
referred to as “MCI (EUR) 1 Preferred
Securities.”)
Type of securities   Non-cumulative perpetual preferred securities   Non-cumulative perpetual preferred securities
Mandatory redemption date   None   None
Optional redemption   Starting from the dividend payment date falling in June 2016, optionally redeemable on each dividend payment date in five-year intervals (subject to prior approval from regulatory authorities)   Starting from the dividend payment date falling in June 2011, optionally redeemable on each dividend payment date in five-year intervals (subject to prior approval from regulatory authorities)
Dividends   Fixed dividend rate for the first ten years (although a floating dividend rate is applied with respect to dividend payment dates after June 2016. No dividend rate step-up. Dividend payments that are suspended are non-cumulative.)   Fixed dividend rate for the first five years (although a floating dividend rate is applied with respect to dividend payment dates after June 2011. No dividend rate step-up. Dividend payments that are suspended are non-cumulative.)
Dividend payment date   June 30th and December 30th of each year   June 30th of each year until June 2011, and June 30th and December 30th of each year thereafter
Total amount issued   US$600 million   €500 million
Issue date   March 13, 2006   March 13, 2006
Dividend suspension events  

(Mandatory dividend suspension or reduction event)

 

(1)    When a Liquidation Event(7), Reorganization Event(8), Insolvency Event(9) or Governmental Action(10) has occurred to Mizuho Financial Group;

 

(2)    when Mizuho Financial Group’s Available Distributable Amounts(11) is insufficient, or dividends on its preferred stock(13) are suspended or reduced;

 

(Optional dividend suspension or reduction event)

 

(3)    when the capital adequacy ratio of Mizuho Financial Group or its Tier 1 capital ratio fails to meet the minimum requirement, or would fall short as a result of the dividend payments on the MCI (USD) 1 Preferred Securities, and Mizuho Financial Group issues a dividend suspension notice to MCI (USD) 1; and

 

(4)    when Mizuho Financial Group fails to pay dividends on its common stock and issues a dividend suspension notice to MCI (USD) 1.

 

(Mandatory dividend suspension or reduction event)

 

(1)    When a Liquidation Event(7), Reorganization Event(8), Insolvency Event(9) or Governmental Action(10) has occurred to Mizuho Financial Group;

 

(2)    when Mizuho Financial Group’s Available Distributable Amounts(12) is insufficient, or dividends on its preferred stock(13) are suspended or reduced;

 

(Optional dividend suspension or reduction event)

 

(3)    when the capital adequacy ratio of Mizuho Financial Group or its Tier 1 capital ratio fails to meet the minimum requirement, or would fall short as a result of the dividend payments on the MCI (EUR) 1 Preferred Securities, and Mizuho Financial Group issues a dividend suspension notice to MCI (EUR) 1; and

 

(4)    when Mizuho Financial Group fails to pay dividends on its common stock and issues a dividend suspension notice to MCI (EUR) 1

Mandatory dividend event   If Mizuho Financial Group pays any dividends on its common stock with respect to a fiscal year, dividend payments for the full amount of MCI (USD) 1 Preferred Securities must be made on the dividend payment dates during the subsequent fiscal year; provided that no event for the mandatory suspension or reduction of dividends has occurred and that no dividend suspension notice has been issued in conjunction with the occurrence of an optional dividend suspension or reduction event.   If Mizuho Financial Group pays any dividends on its common stock with respect to a fiscal year, dividend payments for the full amount of MCI (EUR) 1 Preferred Securities must be made on dividend payment dates during the subsequent fiscal year; provided that no event for the mandatory suspension or reduction of dividends has occurred and that no dividend suspension notice has been issued in conjunction with the occurrence of an optional dividend suspension or reduction event.
Distributable amounts limitation   Dividends for the MCI (USD) 1 preferred securities are paid to the extent of Mizuho Financial Group’s Available Distributable Amounts(11).   Dividends for the MCI (EUR) 1 preferred securities are paid to the extent of Mizuho Financial Group’s Available Distributable Amounts(12).
Dividend limitations   When dividends on Mizuho Financial Group’s Preferred Stock(13) are reduced, dividends on MCI (USD) 1 Preferred Securities are also reduced by an equal percentage.   When dividends on Mizuho Financial Group’s Preferred Stock(13) are reduced, dividends on MCI (EUR) 1 Preferred Securities are also reduced by an equal percentage.
Claims for residual assets   Same priority as Mizuho Financial Group’s Preferred Stock(13)   Same priority as Mizuho Financial Group’s Preferred Stock(13)

 

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Issuer   Mizuho Capital Investment
(JPY) 1 Limited (“MCI (JPY)
1,” and the preferred securities
described below are referred to
as “MCI (JPY) 1 Preferred
Securities.”)
  Mizuho Capital Investment
(JPY) 2 Limited (“MCI (JPY)
2,” and the preferred securities
described below are referred to
as “MCI (JPY) 2 Preferred
Securities.”)
  Mizuho Capital Investment
(JPY) 3 Limited (“MCI (JPY)
3,” and the preferred securities
described below (Series A and
Series B) are collectively
referred to as “MCI (JPY) 3
Preferred Securities.”)
Type of securities   Non-cumulative perpetual preferred securities   Non-cumulative perpetual preferred securities   Non-cumulative perpetual preferred securities
Mandatory redemption date   None   None   None
Optional redemption   Starting from the dividend payment date falling in June 2016, optionally redeemable on each dividend payment date in five -year intervals (subject to prior approval from regulatory authorities)   Starting from the dividend payment date falling in June 2018, optionally redeemable on each dividend payment date (subject to prior approval from regulatory authorities)   Starting from the dividend payment date falling in June 2019, optionally redeemable on each dividend payment date (subject to prior approval from regulatory authorities)
Dividends   Fixed dividend rate for the first ten years (although a floating dividend rate is applied with respect to dividend payment dates after June 2016. No dividend rate step-up. Dividend payments that are suspended are non-cumulative.)  

Fixed dividend rate for the first ten years (although a floating dividend rate is applied with respect to dividend payment dates after June 2018. Dividend rate step-up is applied.

Dividend payments that are suspended are non-cumulative.)

 

Series A

Fixed dividend rate for the first ten years (although a floating dividend rate is applied with respect to dividend payment dates after June 2019. Dividend rate step-up is applied. Dividend payments that are suspended are non-cumulative.)

 

Series B

Fixed dividend rate for the first ten years (although a floating dividend rate is applied with respect to dividend payment dates after June 2019. No dividend rate step-up.

Dividend payments that are suspended are non-cumulative.)

Dividend payment date   June 30th and December 30th of each year   June 30th and December 30th of each year   June 30th and December 30th of each year
Total amount issued   ¥400 billion   ¥274.5 billion  

Series A ¥249.5 billion

Series B ¥53.5 billion

Issue date   January 12, 2007   January 11, 2008   July 11, 2008
Dividend suspension events  

(Mandatory dividend suspension or reduction event)

 

(1)    When a Liquidation Event(7), Reorganization Event(8), Insolvency Event(9) or Governmental Action(10) has occurred to Mizuho Financial Group;

 

(2)    when Mizuho Financial Group’s Available Distributable Amounts(14) is insufficient, or dividends on its preferred stock(13) are suspended or reduced;

 

(Mandatory dividend suspension or reduction event)

 

(1)    When a Liquidation Event(7), Reorganization Event(8), Insolvency Event(9) or Governmental Action(10) has occurred to Mizuho Financial Group;

 

(2)    when Mizuho Financial Group’s Available Distributable Amounts(15) is insufficient, or dividends on its preferred stock(13) are suspended or reduced;

 

(Mandatory dividend suspension or reduction event)

 

(1)    When a Liquidation Event(7), Reorganization Event(8), Insolvency Event(9) or Governmental Action(10) has occurred to Mizuho Financial Group;

 

(2)    when Mizuho Financial Group’s Available Distributable Amounts(16) is insufficient, or dividends on its preferred stock(13) are suspended or reduced;

 

(Optional dividend suspension or reduction event)

 

(Optional dividend suspension or reduction event)

 

(Optional dividend suspension or reduction event)

 

(3)    when the capital adequacy ratio of Mizuho Financial Group or its Tier 1 capital ratio fails to meet the minimum requirement, or would fall short as a result of the dividend payments on the MCI (JPY) 1 Preferred Securities and when Mizuho Financial Group issues a dividend suspension notice to MCI (JPY) 1; and

 

(3)    when the capital adequacy ratio of Mizuho Financial Group or its Tier 1 capital ratio fails to meet the minimum requirement, or would fall short as a result of the dividend payments on the MCI (JPY) 2 Preferred Securities and when Mizuho Financial Group issues a dividend suspension notice to MCI (JPY) 2; and

 

(3)    when the capital adequacy ratio of Mizuho Financial Group or its Tier 1 capital ratio fails to meet the minimum requirement, or would fall short as a result of the dividend payments on the MCI (JPY) 3 Preferred Securities and when Mizuho Financial Group issues a dividend suspension notice to MCI (JPY) 3; and

 

(4)    when Mizuho Financial Group fails to pay dividends on its common stock and issues a dividend suspension notice to MCI (JPY) 1

 

(4)    when Mizuho Financial Group fails to pay dividends on its common stock and issues a dividend suspension notice to MCI (JPY) 2

 

(4)    when Mizuho Financial Group fails to pay dividends on its common stock and issues a dividend suspension notice to MCI (JPY) 3

 

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Mandatory dividend event   If Mizuho Financial Group
pays any dividends on its
common stock to holders of
record as of a prescribed
record date in the immediately
preceding fiscal year, dividend
payments for the full amount
of MCI (JPY) 1 Preferred
Securities must be made on
dividend payment dates during
the subsequent fiscal year;
provided that no event for the
mandatory suspension or
reduction of dividends has
occurred and that no dividend
suspension notice has been
issued in conjunction with the
occurrence of an optional
dividend suspension or
reduction event.
  If Mizuho Financial Group pays
any dividends on its common
stock to holders of record as of
a prescribed record date in the
immediately preceding fiscal
year, dividend payments for the
full amount of MCI (JPY) 2
Preferred Securities must be
made on dividend payment
dates during the subsequent
fiscal year; provided that no
event for the mandatory
suspension or reduction of
dividends has occurred and that
no dividend suspension notice
has been issued in conjunction
with the occurrence of an
optional dividend suspension or
reduction event.
  If Mizuho Financial Group pays
any dividends on its common
stock to holders of record as of
a prescribed record date in the
immediately preceding fiscal
year, dividend payments for the
full amount of MCI (JPY) 3
Preferred Securities must be
made on dividend payment
dates during the subsequent
fiscal year; provided that no
event for the mandatory
suspension or reduction of
dividends has occurred and that
no dividend suspension notice
has been issued in conjunction
with the occurrence of an
optional dividend suspension or
reduction event.
Distributable amounts limitation   Dividends for the MCI (JPY) 1 preferred securities are paid to the extent of Mizuho Financial Group’s Available Distributable Amounts(14).   Dividends for the MCI (JPY) 2 preferred securities are paid to the extent of Mizuho Financial Group’s Available Distributable Amounts(15).   Dividends for the MCI (JPY) 3 preferred securities are paid to the extent of Mizuho Financial Group’s Available Distributable Amounts(16).
Dividend limitations   When dividends on Mizuho Financial Group’s Preferred Stock(13) are reduced, dividends on MCI (JPY) 1 Preferred securities are also reduced by an equal percentage.   When dividends on Mizuho Financial Group’s Preferred Stock(13) are reduced, dividends on MCI (JPY) 2 Preferred securities are also reduced by an equal percentage.   When dividends on Mizuho Financial Group’s Preferred Stock(13) are reduced, dividends on MCI (JPY) 3 Preferred securities are also reduced by an equal percentage.
Claims for residual assets   Same priority as Mizuho Financial Group’s Preferred Stock(13)   Same priority as Mizuho Financial Group’s Preferred Stock(13)   Same priority as Mizuho Financial Group’s Preferred Stock(13)
Issuer   Mizuho Capital Investment (JPY) 4 Limited (“MCI (JPY) 4,” and the preferred securities described below are referred to as “MCI (JPY) 4 Preferred Securities.”)   Mizuho Capital Investment (USD) 2 Limited (“MCI (USD) 2,” and the preferred securities described below are referred to as “MCI (USD) 2 Preferred Securities.”)   Mizuho Capital Investment (JPY) 5 Limited (“MCI (JPY) 5,” and the preferred securities described below (Series A, Series B and Series C) are collectively referred to as “MCI (JPY) 5 Preferred Securities.”)
Type of securities   Non-cumulative perpetual preferred securities   Non-cumulative perpetual preferred securities   Non-cumulative perpetual preferred securities
Mandatory redemption date   None   None   None
Optional redemption   Starting from the dividend payment date falling in June 2015, optionally redeemable on each dividend payment date (subject to prior approval from regulatory authorities)   Starting from the dividend payment date falling in June 2014, optionally redeemable on each dividend payment date (subject to prior approval from regulatory authorities)  

Series A

Starting from the dividend payment date falling in June 2014, optionally redeemable on each dividend payment date (subject to prior approval from regulatory authorities)

 

Series B

Starting from the dividend payment date falling in June 2015, optionally redeemable on each dividend payment date (subject to prior approval from regulatory authorities)

 

Series C

Starting from the dividend payment date falling in June 2015, optionally redeemable on each dividend payment date (subject to prior approval from regulatory authorities)

 

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Dividends   Fixed dividend rate for the first
seven years (although a floating
dividend rate is applied with
respect to dividend payment
dates after June 2015. No
dividend rate step-up. Dividend
payments that are suspended are
non-cumulative.)
  Fixed dividend rate for the first
five years (although a floating
dividend rate is applied with
respect to dividend payment
dates after June 2014. No
dividend rate step-up. Dividend
payments that are suspended are
non-cumulative.)
 

Series A

Fixed dividend rate for the first
five years (although a floating
dividend rate is applied with
respect to dividend payment
dates after June 2014. No
dividend rate step-up. Dividend
payments that are suspended
are non-cumulative.)

 

Series B

Fixed dividend rate for the first
six years (although a floating
dividend rate is applied with
respect to dividend payment
dates after June 2015. No
dividend rate step-up. Dividend
payments that are suspended
are non-cumulative.)

 

Series C

Fixed dividend rate for the first
six years (although a floating
dividend rate is applied with
respect to dividend payment
dates after June 2015. No
dividend rate step-up. Dividend
payments that are suspended
are non-cumulative.)

Dividend payment date   March 31, 2009 and June 30th and December 30th of each year   June 30th and December 30th of each year   June 30th and December 30th of each year
Total amount issued   ¥355 billion   $850 million  

Series A ¥139.5 billion

Series B ¥72.5 billion

Series C ¥25.0 billion

Issue date   December 29, 2008   February 27, 2009  

Series A June 30, 2009

Series B August 31, 2009

Series C September 29, 2009

Dividend suspension events  

(Mandatory dividend suspension or reduction event)

 

(1)    When a Liquidation Event(7), Reorganization Event(8), Insolvency Event(9) or Governmental Action(10) has occurred to Mizuho Financial Group;

 

(2)    when Mizuho Financial Group’s Available Distributable Amounts(17) is insufficient, or dividends on its preferred stock(13) are suspended or reduced;

 

(Mandatory dividend suspension or reduction event)

 

(1)    When a Liquidation Event(7), Reorganization Event(8), Insolvency Event(9) or Governmental Action(10) has occurred to Mizuho Financial Group;

 

(2)    when Mizuho Financial Group’s Available Distributable Amounts(18) is insufficient, or dividends on its preferred stock(13) are suspended or reduced;

 

(Mandatory dividend suspension or reduction event)

 

(1)    When a Liquidation Event(7), Reorganization Event(8), Insolvency Event(9) or Governmental Action(10) has occurred to Mizuho Financial Group;

 

(2)    when Mizuho Financial Group’s Available Distributable Amounts(19) is insufficient, or dividends on its preferred stock(13) are suspended or reduced;

 

(Optional dividend suspension or reduction event)

 

(Optional dividend suspension or reduction event)

 

(Optional dividend suspension or reduction event)

 

 

(3)    when the capital adequacy ratio of Mizuho Financial Group or its Tier 1 capital ratio fails to meet the minimum requirement, or would fall short as a result of the dividend payments on the MCI (JPY) 4 Preferred Securities and when Mizuho Financial Group issues a dividend suspension notice to MCI (JPY) 4; and

 

(3)    when the capital adequacy ratio of Mizuho Financial Group or its Tier 1 capital ratio fails to meet the minimum requirement, or would fall short as a result of the dividend payments on the MCI (USD) 2 Preferred Securities and when Mizuho Financial Group issues a dividend suspension notice to MCI (USD) 2; and

 

(3)    when the capital adequacy ratio of Mizuho Financial Group or its Tier 1 capital ratio fails to meet the minimum requirement, or would fall short as a result of the dividend payments on the MCI (JPY) 5 Preferred Securities and when Mizuho Financial Group issues a dividend suspension notice to MCI (JPY) 5; and

 

(4)    when Mizuho Financial Group fails to pay dividends on its common stock and issues a dividend suspension notice to MCI (JPY) 4

 

(4)    when Mizuho Financial Group fails to pay dividends on its common stock and issues a dividend suspension notice to MCI (USD) 2

 

(4)    when Mizuho Financial Group fails to pay dividends on its common stock and issues a dividend suspension notice to MCI (JPY) 5

 

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Table of Contents

 

Mandatory dividend event   If Mizuho Financial Group pays any dividends on its common stock to holders of record as of a prescribed record date in the immediately preceding fiscal year, dividend payments for the full amount of MCI (JPY) 4 Preferred Securities must be made on dividend payment dates during the subsequent fiscal year; provided that no event for the mandatory suspension or reduction of dividends has occurred and that no dividend suspension notice has been issued in conjunction with the occurrence of an optional dividend suspension or reduction event.   If Mizuho Financial Group pays any dividends on its common stock to holders of record as of a prescribed record date in the immediately preceding fiscal year, dividend payments for the full amount of MCI (USD) 2 Preferred Securities must be made on dividend payment dates during the subsequent fiscal year; provided that no event for the mandatory suspension or reduction of dividends has occurred and that no dividend suspension notice has been issued in conjunction with the occurrence of an optional dividend suspension or reduction event.   If Mizuho Financial Group pays any dividends on its common stock to holders of record as of a prescribed record date in the immediately preceding fiscal year, dividend payments for the full amount of MCI (JPY) 5 Preferred Securities must be made on dividend payment dates during the subsequent fiscal year; provided that no event for the mandatory suspension or reduction of dividends has occurred and that no dividend suspension notice has been issued in conjunction with the occurrence of an optional dividend suspension or reduction event.
Distributable amounts limitation   Dividends for the MCI (JPY) 4 preferred securities are paid to the extent of Mizuho Financial Group’s Available Distributable Amounts(17).   Dividends for the MCI (USD) 2 preferred securities are paid to the extent of Mizuho Financial Group’s Available Distributable Amounts(18).   Dividends for the MCI (JPY) 5 preferred securities are paid to the extent of Mizuho Financial Group’s Available Distributable Amounts(19).
Dividend limitations   When dividends on Mizuho Financial Group’s Preferred Stock(13) are reduced, dividends on MCI (JPY) 4 Preferred securities are also reduced by an equal percentage.   When dividends on Mizuho Financial Group’s Preferred Stock(13) are reduced, dividends on MCI (USD) 2 Preferred securities are also reduced by an equal percentage.   When dividends on Mizuho Financial Group’s Preferred Stock(13) are reduced, dividends on MCI (JPY) 5 Preferred securities are also reduced by an equal percentage.
Claims for residual assets   Same priority as Mizuho Financial Group’s Preferred Stock(13)   Same priority as Mizuho Financial Group’s Preferred Stock(13)   Same priority as Mizuho Financial Group’s Preferred Stock(13)

 

Notes:

 

  

(1)

   Loss Absorption Certificate
  

 

Refers to a certificate that Mizuho Financial Group delivers to the issuer (in case of the loss absorption event set forth in clause (iv) below, the issuance thereof is at our discretion) upon any of the following events with respect to Mizuho Financial Group: (i) liquidation event that shall be deemed to occur where a liquidation proceeding is commenced by or against Mizuho Financial Group or a competent court in Japan shall have (a) adjudicated Mizuho Financial Group to be subject to bankruptcy proceedings or (b) approved a preparation of a reorganization plan for abolishment of all business of Mizuho Financial Group; (ii) reorganization event that shall be deemed to occur if a competent court in Japan shall have adjudicated (a) the commencement of a corporate reorganization proceeding of Mizuho Financial Group under the Corporate Reorganization Law or (b) the commencement of a civil rehabilitation proceeding of Mizuho Financial Group under the Civil Rehabilitation Law; (iii) governmental action that shall be deemed to occur if the government authority in Japan (a) publicly declares Mizuho Financial Group is not able to pay its debts as they become due, (b) publicly declares Mizuho Financial Group’s liabilities exceed its assets, (c) publicly declares Mizuho Financial Group to be under public management or (d) issues an order that Mizuho Financial Group be transferred to a third party; (iv) inadequate ratio event that shall be deemed to occur if capital adequacy ratio or Tier 1 capital ratio fails to meet the minimum requirement or would fall short as a result of a dividend payment on the relevant preferred securities; (v) default event that shall be deemed to occur if Mizuho Financial Group is not able to pay its debts as they become due or would not be able to do so as a result of a dividend payment on the relevant preferred securities; or (vi) insolvency event shall be deemed to occur if the liabilities of Mizuho Financial Group exceeds its assets or would exceed its assets as a result of a dividend payment on the relevant preferred securities.

(2)

   Preferred Stock
  

Refers to preferred stock of Mizuho Financial Group qualifying as Tier 1 capital and ranking most senior compared to other preferred stock of Mizuho Financial Group as to dividend payments. It includes such preferred stocks that are issued in the future.

 

(3)

  

Available Distributable Amounts

 

  

Refers to the maximum amount available for dividends (“Distributable Amounts”) calculated based on the immediately preceding fiscal year’s financial statements, less the aggregate amount of dividends paid previously during the current fiscal year and scheduled to be paid thereafter in respect of such fiscal year in respect of any Preferred Stock (provided that each interim dividend payment on Preferred Stock to be paid during such current Fiscal Year shall be excluded in calculating Available Distributable Amounts). Notwithstanding the foregoing, if there are securities issued by a company other than Mizuho Financial Group of which the rights to dividends and the rights at the time of liquidation, etc., are determined by reference to the financial condition and results of operation of Mizuho Financial Group and which rank, in relation to MPC1, equal in point of subordination as the Parity Preferred Securities(6) (“Parallel Preferred Securities”), the Available Distributable Amounts are adjusted as follows:

 

  

Available Distributable Amounts after the adjustment = Available Distributable Amounts x (Total of full dividend payment amount for Parity Preferred Securities(6) in such fiscal year) / (Total of full dividend payment amount for Parity Preferred Securities(6) in such fiscal year + Total amount of full dividend payment amount for Parallel Securities in such fiscal year)

 

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Table of Contents

(4)

   Distributable Amounts Limitation Certificate
   Refers to a certificate issued by Mizuho Financial Group on or before the annual general meeting of shareholders to issuers if Available Distributable Amounts falls short of total dividends to be paid on the dividend payment date, which shall set forth the Available Distributable Amounts of such fiscal year.

(5)

   Mandatory Dividend Payment Date
   Refers to a dividend payment date in June of a calendar year when a fiscal year of Mizuho Financial Group ends with respect to which it paid dividends on its common stock.

(6)

   Parity Preferred Securities
   Refers to the collective designation for preferred securities and MPC1 Preferred Securities issued by MPC1 which are perpetual and the dividend payment dates and the use of proceeds are the same as that of the relevant MPC1 Preferred Securities. (As to MPC1, for example, Parity Preferred Securities are the collective designation of MPC1 Preferred Securities as well as other preferred securities that satisfy the above conditions if newly issued in the future.)

(7)

   Liquidation Event
   Shall be deemed to occur where a liquidation proceeding is commenced by or against Mizuho Financial Group or a competent court in Japan shall have (i) adjudicated Mizuho Financial Group to be subject to bankruptcy proceedings or (ii) approved a preparation of a reorganization plan for abolishment of all business of Mizuho Financial Group.

(8)

   Reorganization Event
   Shall be deemed to occur if a competent court in Japan shall have adjudicated (i) the commencement of a corporate reorganization proceeding of Mizuho Financial Group under the Corporate Reorganization Law or (ii) the commencement of a civil rehabilitation proceeding of Mizuho Financial Group under the Civil Rehabilitation Law.

(9)

   Insolvency Event
   Shall be deemed to occur if (i) Mizuho Financial Group is not able to pay its debts as they become due or would not be able to do so as a result of a dividend payment on the relevant preferred securities, or (ii) if the liabilities of Mizuho Financial Group exceeds its assets or would exceed its assets as a result of a dividend payment on the relevant preferred securities.

    (10)

   Governmental Action
   Shall be deemed to occur if the government authority in Japan (i) publicly declares Mizuho Financial Group is not able to pay its debts as they become due, (ii) publicly declares Mizuho Financial Group’s liabilities exceed its assets, (iii) publicly declares Mizuho Financial Group to be under public management or (iv) issues an order that Mizuho Financial Group be transferred to a third party.

    (11)

   Available Distributable Amounts for MCI (USD) 1 Preferred Securities
  

(i)     Amount available in June

   Refers to Distributable Amounts of Mizuho Financial Group calculated based on the financial statements for the immediately preceding fiscal year, less the amount of dividend payments on Preferred Stock(13) (excluding interim dividend payments), pro-rated between the full dividend amount on MCI (USD) 1 Preferred Securities and the full dividend amount on preferred securities that are equivalently subordinated in nature with MCI (USD) 1 Preferred Securities (“Equivalent Securities”) to which dividends are paid in whole or in part or declared to be paid on or prior to the relevant dividend payment date of MCI (USD) 1 Preferred Securities.
  

(ii)    Amount available in December

   Refers to Distributable Amounts of Mizuho Financial Group calculated based on the financial statements for the immediately preceding fiscal year, less (A) the amount of dividend payments on Preferred Stock(13) (excluding interim dividend payments), (B) the amount of dividend payments on MCI (USD) 1 Preferred Securities made or declared to be made on or prior to the dividend payment date falling in June and (C) the dividends on Equivalent Securities paid or declared to be paid on or prior to the dividend payment date falling in June, pro-rated between full dividends on MCI (USD) 1 Preferred Securities for the dividend payment date falling in December and full dividends on Equivalent Securities paid in whole or in part or declared to be paid from the day after the dividend payment date of MCI (USD) 1 Preferred Securities falling in June up to the dividend payment date falling in December.

    (12)

   Available Distributable Amounts for MCI (EUR) 1 Preferred Securities
   (Up to the dividend payment date falling in June 2011)
  

 

Refers to Distributable Amounts of Mizuho Financial Group calculated based on the financial statements for the immediately preceding fiscal year, less the amount of dividend payments on Preferred Stock(13) (excluding interim dividend payments), pro-rated between the full dividend payment amount on MCI (EUR) 1 Preferred Securities and the full dividend payment amount on preferred securities for the then current fiscal year that are equivalently subordinated in nature with MCI (EUR) 1 Preferred Securities (“Equivalent Securities”).

   (From the dividend payment date falling in December 2011)
  

(i)     Amount available in June

   Refers to Distributable Amounts of Mizuho Financial Group calculated based on the financial statements for the immediately preceding fiscal year, less the amount of dividend payments on Preferred Stock(13) (excluding interim dividend payments), pro-rated between the full dividend payment amount on MCI (EUR) 1 Preferred Securities and the full dividend amount on Equivalent Securities to which dividends are paid in whole or in part or declared to be paid on or prior to the relevant dividend payment date of MCI (EUR) 1 Preferred Securities.
  

(ii)    Amount available in December

   Refers to Distributable Amounts of Mizuho Financial Group calculated based on the financial statements for the immediately preceding fiscal year, less (A) the amount of dividend payments on Preferred Sock(13) (excluding interim dividend payments), (B) the amount of dividend payments on MCI (EUR) 1 Preferred Securities made or declared to be made on or prior to the dividend payment date falling in June and (C) the dividends on Equivalent Securities paid or declared to be paid on or prior to the dividend payment date falling in June, pro-rated between full dividends on MCI (EUR) 1 Preferred Securities for the dividend payment date falling in December and full dividends on Equivalent Securities paid in whole or in part or declared to be paid from the day after the dividend payment date of MCI (EUR) 1 Preferred Securities falling in June up to the dividend payment date falling in December.

    (13)

   Preferred Stocks
   Refers to preferred stock of Mizuho Financial Group qualifying as Tier 1 capital and ranking most senior compared to other preferred stock of Mizuho Financial Group as to dividend payments and claims to residual assets.

 

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Table of Contents
    (14)    Available Distributable Amounts for the MCI (JPY) 1 Preferred Securities
  

(i)     Amount available in June

   Refers to Distributable Amounts of Mizuho Financial Group calculated based on the financial statements for the immediately preceding fiscal year, less the amount of dividend payments on Preferred Stock(13) (excluding interim dividend payments), pro-rated between the full dividend amount on MCI (JPY) 1 Preferred Securities and the full dividend amount on preferred securities that are equivalently subordinated in nature with MCI (JPY) 1 Preferred Securities (“Equivalent Securities”) to which dividends are paid in whole or in part or declared to be paid on or prior to the relevant dividend payment date of MCI (JPY) 1 Preferred Securities.
  

(ii)    Amount available in December

   Refers to Distributable Amounts of Mizuho Financial Group calculated based on the financial statements for the immediately preceding fiscal year, less (A) the amount of dividend payments on Preferred Stock(13) (excluding interim dividend payments), (B) the amount of dividend payments on MCI (JPY) 1 Preferred Securities made or declared to be made on or prior to the dividend payment date falling in June and (C) the dividends on Equivalent Securities paid or declared to be paid on or prior to the dividend payment date in June, pro-rated between full dividends on MCI (JPY) 1 Preferred Securities for the dividend payment date falling in December and full dividends on Equivalent Securities paid in whole or in part or declared to be paid from the day after the dividend payment date of MCI (JPY) 1 Preferred Securities falling in June up to the dividend payment date falling in December.
    (15)    Available Distributable Amounts for the MCI (JPY) 2 Preferred Securities
  

(i)     Amount available in June

   Refers to Distributable Amounts of Mizuho Financial Group calculated based on the financial statements for the immediately preceding fiscal year, less the amount of dividend payments on Preferred Stock(13) (excluding interim dividend payments), pro-rated between the full dividend amount on MCI (JPY) 2 Preferred Securities and the full dividend amount on preferred securities that are equivalently subordinated in nature with MCI (JPY) 2 Preferred Securities (“Equivalent Securities”) to which dividends are paid in whole or in part or declared to be paid on or prior to the relevant dividend payment date of MCI (JPY) 2 Preferred Securities.
  

(ii)    Amount available in December

   Refers to Distributable Amounts of Mizuho Financial Group calculated based on the financial statements for the immediately preceding fiscal year, less (A) the amount of dividend payments on Preferred Stock(13) (excluding interim dividend payments), (B) the amount of dividend payments on MCI (JPY) 2 Preferred Securities made or declared to be made on or prior to the dividend payment date falling in June and (C) the dividends on Equivalent Securities paid or declared to be paid on or prior to the dividend payment date in June, pro-rated between full dividends on MCI (JPY) 2 Preferred Securities for the dividend payment date falling in December and full dividends on Equivalent Securities paid in whole or in part or declared to be paid from the day after the dividend payment date of MCI (JPY) 2 Preferred Securities falling in June up to the dividend payment date falling in December.
    (16)    Available Distributable Amounts for the MCI (JPY) 3 Preferred Securities
  

(i)     Amount available in June

   Refers to Distributable Amounts of Mizuho Financial Group calculated based on the financial statements for the immediately preceding fiscal year, less the amount of dividend payments on Preferred Stock(13) (excluding interim dividend payments), pro-rated between the full dividend amount on MCI (JPY) 3 Preferred Securities and the full dividend amount on preferred securities that are equivalently subordinated in nature with MCI (JPY) 3 Preferred Securities (“Equivalent Securities”) to which dividends are paid in whole or in part or declared to be paid on or prior to the relevant dividend payment date of MCI (JPY) 3 Preferred Securities.
  

(ii)    Amount available in December (except for the amount available in December 2008)

   Refers to Distributable Amounts of Mizuho Financial Group calculated based on the financial statements for the immediately preceding fiscal year, less (A) the amount of dividend payments on Preferred Stock(13) (excluding interim dividend payments), (B) the amount of dividend payments on MCI (JPY) 3 Preferred Securities made or declared to be made on or prior to the dividend payment date falling in June and (C) the dividends on Equivalent Securities paid or declared to be paid on or prior to the dividend payment date in June, pro-rated between full dividends on MCI (JPY) 3 Preferred Securities for the dividend payment date falling in December and full dividends on Equivalent Securities paid in whole or in part or declared to be paid from the day after the dividend payment date of MCI (JPY) 3 Preferred Securities falling in June up to the dividend payment date falling in December.
  

(iii)  Amount available in December 2008

   Refers to Distributable Amounts of Mizuho Financial Group calculated based on the financial statements for the immediately preceding fiscal year, less (A) the amount of dividend payments on Preferred Stock(13) (excluding interim dividend payments) and (B) the dividends on Equivalent Securities paid or declared to be paid from April 1, 2008 to June 30, 2008, pro-rated between full dividends on MCI (JPY) 3 Preferred Securities for the dividend payment date falling in December 2008 and full dividends on Equivalent Securities paid in whole or in part or declared to be paid from the day after June 30, 2008 up to the dividend payment date falling in December 2008.
    (17)    Available Distributable Amounts for the MCI (JPY) 4 Preferred Securities
  

(i)     Amount available in March 2009

   Refers to Distributable Amounts of Mizuho Financial Group calculated based on the financial statements for the fiscal year ended March 31, 2008, less (A) the amount of dividend payments on Preferred Stock(13) (excluding interim dividend payments) and (B) the dividends on Equivalent Securities paid or declared to be paid from April 1, 2008 to December 30, 2008, pro-rated between the full dividend amount on MCI (JPY) 4 Preferred Securities and the full dividend amount on preferred securities that are equivalently subordinated in nature with MCI (JPY) 4 Preferred Securities (“Equivalent Securities”) to which dividends are paid in whole or in part or declared to be paid from the day after December 30, 2008 up to the dividend payment date falling in March 2009.
  

(ii)    Amount available in June

   Refers to Distributable Amounts of Mizuho Financial Group calculated based on the financial statements for the immediately preceding fiscal year, less the amount of dividend payments on Preferred Stock(13) (excluding interim dividend payments), pro-rated between the full dividend amount on MCI (JPY) 4 Preferred Securities and the full dividend amount on Equivalent Securities to which dividends are paid in whole or in part or declared to be paid on or prior to the relevant dividend payment date of MCI (JPY) 4 Preferred Securities.
  

(iii)  Amount available in December

  

Refers to Distributable Amounts of Mizuho Financial Group calculated based on the financial statements for the immediately preceding fiscal year, less (A) the amount of dividend payments on Preferred Stock(13) (excluding interim dividend payments), (B) the amount of dividend payments on MCI (JPY) 4 Preferred Securities made or declared to be made on or prior to the dividend payment date falling in June and (C) the dividends on Equivalent Securities paid or declared to be paid on or prior to the dividend payment date in June, pro-rated between full dividends on MCI (JPY) 4 Preferred Securities for the dividend payment date falling in December and full dividends on Equivalent Securities paid in whole or in part or declared to be paid from the day after the dividend payment date of MCI (JPY) 4 Preferred Securities falling in June up to the dividend payment date falling in December.

 

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    (18)    Available Distributable Amounts for the MCI (USD) 2 Preferred Securities
  

(i)     Amount available in June

   Refers to Distributable Amounts of Mizuho Financial Group calculated based on the financial statements for the immediately preceding fiscal year, less the amount of dividend payments on Preferred Stock(13) (excluding interim dividend payments), pro-rated between the full dividend amount on MCI (USD) 2 Preferred Securities and the full dividend amount on preferred securities that are equivalently subordinated in nature with MCI (USD) 2 Preferred Securities (“Equivalent Securities”) to which dividends are paid in whole or in part or declared to be paid on or prior to the relevant dividend payment date of MCI (USD) 2 Preferred Securities.
  

(ii)    Amount available in December

   Refers to Distributable Amounts of Mizuho Financial Group calculated based on the financial statements for the immediately preceding fiscal year, less (A) the amount of dividend payments on Preferred Stock(13) (excluding interim dividend payments), (B) the amount of dividend payments on MCI (USD) 2 Preferred Securities made or declared to be made on or prior to the dividend payment date falling in June and (C) the dividends on Equivalent Securities paid or declared to be paid on or prior to the dividend payment date in June, pro-rated between full dividends on MCI (USD) 2 Preferred Securities for the dividend payment date falling in December and full dividends on Equivalent Securities paid in whole or in part or declared to be paid from the day after the dividend payment date of MCI (USD) 2 Preferred Securities falling in June up to the dividend payment date falling in December.
    (19)    Available Distributable Amounts for the MCI (JPY) 5 Preferred Securities
  

(i)     Amount available in June

   Refers to Distributable Amounts of Mizuho Financial Group calculated based on the financial statements for the immediately preceding fiscal year, less the amount of dividend payments on Preferred Stock(13) (excluding interim dividend payments), pro-rated between the full dividend amount on MCI (JPY) 5 Preferred Securities and the full dividend amount on preferred securities that are equivalently subordinated in nature with MCI (JPY) 5 Preferred Securities (“Equivalent Securities”) to which dividends are paid in whole or in part or declared to be paid on or prior to the relevant dividend payment date of MCI (JPY) 5 Preferred Securities.
  

(ii)    Amount available in December (except for the amount available in December 2009)

   Refers to Distributable Amounts of Mizuho Financial Group calculated based on the financial statements for the immediately preceding fiscal year, less (A) the amount of dividend payments on Preferred Stock(13) (excluding interim dividend payments), (B) the amount of dividend payments on MCI (JPY) 5 Preferred Securities made or declared to be made on or prior to the dividend payment date falling in June and (C) the dividends on Equivalent Securities paid or declared to be paid on or prior to the dividend payment date in June, pro-rated between full dividends on MCI (JPY) 5 Preferred Securities for the dividend payment date falling in December and full dividends on Equivalent Securities paid in whole or in part or declared to be paid from the day after the dividend payment date of MCI (JPY) 5 Preferred Securities falling in June up to the dividend payment date falling in December.
  

(iii)  Amount available in December 2009

   Refers to Distributable Amounts of Mizuho Financial Group calculated based on the financial statements for the fiscal year ended March 31, 2009, less (A) the amount of dividend payments on Preferred Stock(13) (excluding interim dividend payments) and (B) the dividends on Equivalent Securities paid or declared to be paid from April 1, 2009 to June 30, 2009, pro-rated between full dividends on MCI (JPY) 5 Preferred Securities for the dividend payment date falling in December 2009 and full dividends on Equivalent Securities paid in whole or in part or declared to be paid from the day after June 30, 2009 up to the dividend payment date falling in December 2009.

.

 

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n Risk-based capital

(2) Required capital by portfolio classification

 

     (Billions of yen)  
     As of September 30, 2009      As of September 30, 2010  
     EAD      Required capital      EAD      Required capital  

Credit risk

     153,459.9         5,981.0         154,714.2         5,347.8   
                                   

Internal ratings-based approach

     145,097.7         5,714.1         146,497.4         5,080.6   

Corporate (except specialized lending)

     52,284.2         3,444.0         48,548.0         2,940.0   

Corporate (specialized lending)

     2,880.1         324.8         2,707.1         316.9   

Sovereign

     55,956.0         65.7         62,418.9         57.5   

Bank

     5,441.8         190.5         4,934.9         144.7   

Retail

     13,147.3         568.2         13,835.1         649.8   

Residential mortgage

     10,590.0         381.1         10,743.4         425.4   

Qualifying revolving loans

     336.1         30.0         345.5         30.7   

Other retail

     2,221.0         157.0         2,746.1         193.6   

Equities, etc.

     3,830.5         455.1         3,461.6         365.6   

PD/LGD approach

     899.8         155.6         941.5         99.4   

Market-based approach (simple risk weight method)

     265.1         73.4         274.6         75.8   

Market-based approach (internal models approach)

     —           —           —           —     

Transitional measure applied

     2,665.5         226.0         2,245.4         190.4   

Regarded-method exposure

     988.1         306.9         1,114.9         287.8   

Purchased receivables

     2,081.6         99.7         1,959.9         65.4   

Securitizations

     5,200.0         74.2         4,503.0         79.5   

Others

     3,287.5         184.7         3,013.4         172.9   
                                   

Standardized approach

     8,362.2         266.9         8,216.8         267.1   

Sovereign

     3,787.5         5.7         3,817.9         3.7   

Bank

     1,614.6         28.8         1,587.1         27.7   

Corporate

     2,341.4         162.8         2,208.8         167.3   

Residential mortgage

     0.0         0.0         0.0         0.0   

Securitizations

     35.5         34.5         40.9         35.4   

Others

     583.0         34.9         562.0         32.9   
                                   

Market risk

     n.a.         110.7         n.a.         106.8   
                                   

Standardized approach

     n.a.         77.4         n.a.         79.1   

Interest rate risk

     n.a.         54.9         n.a.         55.9   

Equities risk

     n.a.         13.4         n.a.         14.2   

Foreign exchange risk

     n.a.         2.5         n.a.         2.9   

Commodities risk

     n.a.         6.4         n.a.         6.0   

Option transactions

     n.a.         —           n.a.         —     
                                   

Internal models approach

     n.a.         33.3         n.a.         27.6   
                                   

Operational risk

     n.a.         313.2         n.a.         279.1   
                                   

Advanced measurement approach

     n.a.         248.5         n.a.         230.0   
                                   

Gross profit allocation approach

     n.a.         n.a.         n.a.         n.a.   
                                   

Basic indicator approach

     n.a.         64.6         n.a.         49.0   
                                   

Total required capital (consolidated)

     n.a.         4,733.6         n.a.         4,249.6   
                                   

 

14


Table of Contents

 

Notes:

 

1.

    EAD: Exposure at default.

2.

    PD: Probability of default.

3.

    LGD: Loss given default.

4.

    Required capital: For credit risk, the sum of (i) 8% of credit risk-weighted assets, (ii) expected losses and (iii) deduction from   capital. For market risk, the market risk equivalent amount. For operational risk, the operational risk equivalent amount.

5.

    Total required capital (consolidated): 8% of the denominator of the capital adequacy ratio.

6.

    The major exposures included in each portfolio classification of internal ratings-based approach are as follows:

 

Corporate (excluding specialized lending)    Credits to corporations and sole proprietors (excluding credits to retail customers)
Corporate (specialized lending)    Credits which limit interest and principal repayment sources to cash flow derived from specific real estate, chattel, businesses, etc.

Sovereign

   Credits to central governments, central banks and local governmental entities

Bank

   Credits to banks and securities companies, etc.

Retail

   Housing loans (residential mortgage), credit card loans (qualifying revolving retail loans) and other individual consumer loans and loans to business enterprises with total credit amount of less than ¥100 million (other retail), etc.

Equities, etc.

  

Capital stock, preferred securities, perpetual subordinated debt, etc. (excluding trading assets)

 

* The transitional measure applies to those held from September 30, 2004 or earlier, and others are applied either the PD/LGD approach or the market-based approach.

Regarded-method exposure

   Investment trusts and funds, etc.

Purchased receivables

   Receivables purchased from third parties excluding securities (excluding securitizations)

Securitizations

   Transactions in the form of “non-recourse” or having a “senior/subordinated structure” (excluding specialized lending)

 

7.  

EAD calculated using the standardized approach for credit risk represents the amount before the deduction of specific reserve for possible losses on loans, reserve for possible losses on loans to restructuring countries and partial direct write-offs.

 

15


Table of Contents

n Credit risk

(3) Credit risk exposure, etc.

We exclude regarded-method exposure and securitization exposure from the amount of credit risk exposure.

The outstanding balance is based on exposure at default.

No significant difference exists between period-end credit risk position and the average credit risk position during the twelve months ended September 30, 2009 and 2010.

Status of credit risk exposure

(A) Breakdown by geographical area

 

     (Billions of yen)  
     As of September 30, 2009  
     Loans,
commitments and other
non-OTC derivative
off-balance-sheet
exposures
     Securities      OTC
derivatives
     Others      Total  

Domestic

     75,327.1         30,428.3         2,504.2         5,893.4         114,153.2   
                                            

Overseas

     14,661.8         4,888.8         2,696.7         2,508.8         24,756.2   
                                            

Asia

     2,609.4         474.4         119.7         467.0         3,670.7   

Central and South America

     1,895.8         147.7         224.0         4.2         2,271.9   

North America

     5,158.2         2,316.6         814.7         1,684.3         9,974.0   

Eastern Europe

     65.2         —           0.4         1.0         66.7   

Western Europe

     3,637.1         1,788.3         1,441.6         278.7         7,145.9   

Other areas

     1,295.7         161.6         96.0         73.3         1,626.7   
                                            

Total

     89,988.9         35,317.2         5,200.9         8,402.2         138,909.4   
                                            

Exempt portion

     n.a.         n.a.         n.a.         n.a.         8,326.6   
                                            

 

Notes:   
1.    Exempt portion represents the amount before the deduction of specific reserve for possible losses on loans, reserve for possible losses on loans to restructuring countries and partial direct write-offs, calculated using the standardized approach for business units and asset classes that are immaterial for the purpose of calculating credit risk-weighted assets.
2.    Exposure to non-Japanese residents is included in “Overseas.”
3.    “Others” include cash, deposits, call loans, other debt purchased, money held in trust, foreign exchange assets, other assets, etc.

 

     (Billions of yen)  
     As of September 30, 2010  
     Loans,
commitments and other
non-OTC derivative
off-balance-sheet
exposures
     Securities      OTC
derivatives
     Others      Total  

Domestic

     73,774.3         34,547.9         2,385.9         5,176.1         115,884.3   
                                            

Overseas

     13,594.2         7,171.9         2,157.4         2,071.0         24,994.7   
                                            

Asia

     3,024.6         554.2         125.7         577.8         4,282.5   

Central and South America

     1,870.9         165.5         248.5         2.8         2,287.9   

North America

     4,343.7         4,331.5         648.3         1,067.7         10,391.3   

Eastern Europe

     60.5         —           0.1         1.6         62.2   

Western Europe

     3,199.9         1,977.6         1,022.7         326.1         6,526.5   

Other areas

     1,094.4         142.9         111.9         94.8         1,444.1   
                                            

Total

     87,368.6         41,719.8         4,543.4         7,247.2         140,879.1   
                                            

Exempt portion

     n.a.         n.a.         n.a.         n.a.         8,175.9   
                                            

 

Notes:   
1.    Exempt portion represents the amount before the deduction of specific reserve for possible losses on loans, reserve for possible losses on loans to restructuring countries and partial direct write-offs, calculated using the standardized approach for business units and asset classes that are immaterial for the purpose of calculating credit risk-weighted assets.
2.    Exposure to non-Japanese residents is included in “Overseas.”
3.    “Others” include cash, deposits, call loans, other debt purchased, money held in trust, foreign exchange assets, other assets, etc.

 

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Table of Contents

(B) Breakdown by industry

 

     (Billions of yen)  
     As of September 30, 2009  
     Loans,
commitments and other
non-OTC derivative
off-balance-sheet
exposures
     Securities      OTC
derivatives
     Others      Total  

Manufacturing

     14,374.2         2,350.0         704.4         157.2         17,586.0   

Construction

     1,647.5         235.2         22.1         9.7         1,914.6   

Real estate

     7,581.9         561.7         56.4         52.4         8,252.5   

Service industries

     4,661.2         1,263.1         219.5         93.0         6,237.0   

Wholesale and retail

     7,491.3         605.6         827.7         350.5         9,275.4   

Finance and insurance

     10,053.7         1,312.3         2,637.9         829.0         14,833.1   

Individuals

     11,970.2         —           0.3         15.5         11,986.0   

Other industries

     14,071.3         4,581.2         725.7         5,419.2         24,797.6   

Japanese Government; Bank of Japan

     18,137.3         24,407.7         6.5         1,475.3         44,026.8   
                                            

Total

     89,988.9         35,317.2         5,200.9         8,402.2         138.909.4   
                                            

Exempt portion

     n.a.         n.a.         n.a.         n.a.         8,326.6   
                                            

 

Notes:

 

  

1.

   Exempt portion represents the amount before the deduction of specific reserve for possible losses on loans, reserve for possible losses on loans to restructuring countries and partial direct write-offs, calculated using the standardized approach for business units and asset classes that are immaterial for the purpose of calculating credit risk-weighted assets.

2.

   “Others” include cash, deposits, call loans, other debt purchased, money held in trust, foreign exchange assets, other assets, etc.

 

     (Billions of yen)  
     As of September 30, 2010  
     Loans,
commitments and other
non-OTC derivative
off-balance-sheet
exposures
     Securities      OTC
derivatives
     Others      Total  

Manufacturing

     13,248.3         2,146.0         683.9         215.2         16,293.5   

Construction

     1,475.5         186.1         24.7         3.5         1,689.9   

Real estate

     6,943.9         521.3         64.2         45.0         7,574.6   

Service industries

     4,004.9         1,872.4         188.0         88.2         6,153.7   

Wholesale and retail

     7,056.3         586.3         736.6         426.9         8,806.3   

Finance and insurance

     9,634.0         1,808.1         2,075.0         889.9         14,407.1   

Individuals

     12,092.8         —           0.3         14.4         12,107.5   

Other industries

     13,400.7         5,809.2         761.0         4,629.0         24,600.0   

Japanese Government; Bank of Japan

     19,511.7         28,790.2         9.2         934.7         49,246.0   
                                            

Total

     87,368.6         41,719.8         4,543.4         7,247.2         140,879.1   
                                            

Exempt portion

     n.a.         n.a.         n.a.         n.a.         8,175.9   
                                            

 

Notes:

 

  

1.

   Exempt portion represents the amount before the deduction of specific reserve for possible losses on loans, reserve for possible losses on loans to restructuring countries and partial direct write-offs, calculated using the standardized approach for business units and asset classes that are immaterial for the purpose of calculating credit risk-weighted assets.

2.

   “Others” include cash, deposits, call loans, other debt purchased, money held in trust, foreign exchange assets, other assets, etc.

 

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Table of Contents

(C) Breakdown by residual contractual maturity

 

     (Billions of yen)  
     As of September 30, 2009  
     Loans,
commitments and other
non-OTC  derivative
off-balance-sheet
exposures
     Securities      OTC
derivatives
     Others      Total  

Less than one year

     29,765.1         11,954.0         536.7         1,192.8         43,448.8   

From one year to less than three years

     15,389.9         9,961.6         2,237.5         26.8         27,616.0   

From three years to less than five years

     9,779.3         4,998.3         1,297.2         6.5         16,081.4   

Five years or more

     21,450.4         4,550.6         1,041.6         25.9         27,068.7   

Other than above

     13,604.1         3,852.4         87.7         7,150.1         24,694.4   
                                            

Total

     89,988.9         35,317.2         5,200.9         8,402.2         138,909.4   
                                            

Exempt portion

     n.a.         n.a.         n.a.         n.a.         8,326.6   
                                            

 

Notes:

 

  

1.

   Exempt portion represents the amount before the deduction of specific reserve for possible losses on loans, reserve for possible losses on loans to restructuring countries and partial direct write-offs, calculated using the standardized approach for business units and asset classes that are immaterial for the purpose of calculating credit risk-weighted assets.
2.    “Others” include cash, deposits, call loans, other debt purchased, money held in trust, foreign exchange assets, other assets, etc.

 

     (Billions of yen)  
     As of September 30, 2010  
     Loans,
commitments and other
non-OTC  derivative
off-balance-sheet
exposures
     Securities      OTC
derivatives
     Others      Total  

Less than one year

     29,157.4         15,044.1         498.0         1,358.5         46,058.1   

From one year to less than three years

     14,570.6         9,091.1         1,787.2         15.6         25,464.7   

From three years to less than five years

     8,668.2         7,720.8         1,147.3         24.9         17,561.4   

Five years or more

     23,625.0         6,495.6         1,026.8         0.1         31,147.6   

Other than above

     11,347.2         3,368.1         83.8         5,847.8         20,647.0   
                                            

Total

     87,368.6         41,719.8         4,543.4         7,247.2         140,879.1   
                                            

Exempt portion

     n.a.         n.a.         n.a.         n.a.         8,175.9   
                                            

 

Notes:

 

  

1.

   Exempt portion represents the amount before the deduction of specific reserve for possible losses on loans, reserve for possible losses on loans to restructuring countries and partial direct write-offs, calculated using the standardized approach for business units and asset classes that are immaterial for the purpose of calculating credit risk-weighted assets.
2.    “Others” include cash, deposits, call loans, other debt purchased, money held in trust, foreign exchange assets, other assets, etc.

 

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Table of Contents

Status of exposure past due three months or more or in default

(D) Breakdown by geographical area

 

     (Billions of yen)  
     As of September 30, 2009  
     Loans,
commitments and other
non-OTC derivative
off-balance-sheet
exposures
     Securities      OTC
derivatives
     Others      Total  

Domestic

     1,756.1         67.4         38.0         81.1         1,942.7   
                                            

Overseas

     295.9         0.6         0.1         25.9         322.7   

Asia

     47.8         0.0         0.0         4.4         52.4   

Central and South America

     20.9         0.0         —           0.0         20.9   

North America

     86.5         0.6         0.0         16.1         103.4   

Eastern Europe

     6.3         —           —           0.0         6.3   

Western Europe

     103.1         —           0.0         4.5         107.8   

Other areas

     31.0         —           0.0         0.6         31.6   
                                            

Total

     2,052.0         68.1         38.2         107.0         2,265.4   
                                            

Exempt portion

     n.a.         n.a.         n.a.         n.a.         5.5   
                                            

 

Notes:

  

1.

   Exempt portion represents the amount before the deduction of specific reserve for possible losses on loans, reserve for possible losses on loans to restructuring countries and partial direct write-offs, calculated using the standardized approach for business units and asset classes that are immaterial for the purpose of calculating credit risk-weighted assets.

2.

   Exposure to non-Japanese residents is included in “Overseas.”

3.

   “Others” include deposits, call loans, other debt purchased, money held in trust, foreign exchange assets, other assets, etc.

 

     (Billions of yen)  
     As of September 30, 2010  
     Loans,
commitments and other
non-OTC derivative
off-balance-sheet
exposures
     Securities      OTC
derivatives
     Others      Total  

Domestic

     1,719.5         38.4         52.5         80.6         1,891.1   
                                            

Overseas

     191.2         2.0         1.2         21.2         215.7   

Asia

     34.0         0.0         0.1         3.9         38.2   

Central and South America

     12.3         1.5         0.7         0.0         14.5   

North America

     25.3         0.5         0.0         15.1         41.0   

Eastern Europe

     10.8         —           —           0.0         10.8   

Western Europe

     63.3         —           0.2         1.7         65.3   

Other areas

     45.2         —           0.0         0.3         45.6   
                                            

Total

     1,910.8         40.4         53.7         101.8         2,106.9   
                                            

Exempt portion

     n.a.         n.a.         n.a.         n.a.         3.1   
                                            

 

Notes:

  

1.

   Exempt portion represents the amount before the deduction of specific reserve for possible losses on loans, reserve for possible losses on loans to restructuring countries and partial direct write-offs, calculated using the standardized approach for business units and asset classes that are immaterial for the purpose of calculating credit risk-weighted assets.

2.

   Exposure to non-Japanese residents is included in “Overseas.”

3.

   “Others” include deposits, call loans, other debt purchased, money held in trust, foreign exchange assets, other assets, etc.

 

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Table of Contents

(E) Breakdown by industry

 

     (Billions of yen)  
     As of September 30, 2009  
     Loans,
commitments and other
non-OTC  derivative
off-balance-sheet
exposures
     Securities      OTC
derivatives
     Others      Total  

Manufacturing

     397.8         6.1         5.5         21.4         430.9   

Construction

     118.3         10.9         0.7         2.9         132.9   

Real estate

     423.7         2.4         0.7         11.1         438.0   

Service industries

     274.9         4.7         3.6         7.7         291.1   

Wholesale and retail

     262.5         10.4         12.8         34.9         320.8   

Finance and insurance

     98.4         0.9         0.5         17.8         117.8   

Individuals

     149.7         —           —           1.4         151.2   

Other industries

     326.4         32.3         14.1         9.4         382.4   
                                            

Total

     2,052.0         68.1         38.2         107.0         2,265.4   
                                            

Exempt portion

     n.a.         n.a.         n.a.         n.a.         5.5   
                                            

 

Notes:   

1.

   Exempt portion represents the amount before the deduction of specific reserve for possible losses on loans, reserve for possible losses on loans to restructuring countries and partial direct write-offs, calculated using the standardized approach for business units and asset classes that are immaterial for the purpose of calculating credit risk-weighted assets.

2.

   “Others” include deposits, call loans, other debt purchased, money held in trust, foreign exchange assets, other assets, etc.

 

     (Billions of yen)  
     As of September 30, 2010  
     Loans,
commitments and other
non-OTC  derivative
off-balance-sheet
exposures
     Securities      OTC
derivatives
     Others      Total  

Manufacturing

     414.9         9.2         14.1         17.0         455.4   

Construction

     96.5         10.3         0.4         1.4         108.7   

Real estate

     323.2         7.9         0.4         5.2         336.8   

Service industries

     239.9         3.3         5.2         7.0         255.5   

Wholesale and retail

     264.5         3.0         26.8         37.7         332.1   

Finance and insurance

     46.8         1.8         0.5         17.5         66.6   

Individuals

     241.8         —           —           1.6         243.4   

Other industries

     282.9         4.6         6.1         14.1         307.9   
                                            

Total

     1,910.8         40.4         53.7         101.8         2,106.9   
                                            

Exempt portion

     n.a.         n.a.         n.a.         n.a.         3.1   
                                            

 

Notes:

  

1.

   Exempt portion represents the amount before the deduction of specific reserve for possible losses on loans, reserve for possible losses on loans to restructuring countries and partial direct write-offs, calculated using the standardized approach for business units and asset classes that are immaterial for the purpose of calculating credit risk-weighted assets.

2.

   “Others” include deposits, call loans, other debt purchased, money held in trust, foreign exchange assets, other assets, etc.

 

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Table of Contents

Status of reserves for possible losses on loans

The amounts associated with regarded-method exposure and securitization exposure are excluded.

(F) Period-end balances of reserves for possible losses on loans and changes during the six-month period

  (after partial direct write-offs)

 

     (Billions of yen)  
     As of, or for
the six months ended,
September 30, 2009
     As of, or for
the six months ended,
September 30, 2010
 

General reserve for possible losses on loans

     

Beginning balance

     583.2         563.8   

Increase during the six-month period

     584.5         533.2   

Decrease during the six-month period

     583.2         563.8   

Ending balance

     584.5         533.2   
                 

Specific reserve for possible losses on loans

     

Beginning balance

     299.5         317.7   

Increase during the six-month period

     350.9         306.0   

Decrease during the six-month period

     299.5         317.7   

Ending balance

     350.9         306.0   
                 

Reserve for possible losses on loans to restructuring countries

     

Beginning balance

     0.5         0.1   

Increase during the six-month period

     0.4         0.0   

Decrease during the six-month period

     0.5         0.1   

Ending balance

     0.4         0.0   
                 

Total

     

Beginning balance

     883.4         881.8   

Increase during the six-month period

     935.8         839.3   

Decrease during the six-month period

     883.4         881.8   

Ending balance

     935.8         839.3   
                 

 

Note:   

General reserve for possible losses on loans in the above table represents the amount recorded in our consolidated balance sheet, and the amounts associated with regarded-method exposure and securitization exposure are not excluded.

 

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Table of Contents

(G) Specific reserve for possible losses on loans by geographical area and industry

 

     (Billions of yen)   
     As of March 31, 2009      As of September 30, 2009      Change  

Domestic

     218.6         286.0         67.4   

Manufacturing

     16.1         14.4         (1.6

Construction

     5.4         6.2         0.7   

Real estate

     51.8         50.7         (1.0

Service industries

     34.2         26.0         (8.2

Wholesale and retail

     35.0         36.9         1.9   

Finance and insurance

     2.8         11.3         8.5   

Individuals

     58.7         61.3         2.6   

Others

     14.3         78.7         64.4   
                          

Overseas

     74.5         54.8         (19.6
                          

Exempt portion

     6.4         9.9         3.5   
                          

Total

     299.5         350.9         51.3   
                          

 

Notes:   

1.

   Exempt portion represents the amount calculated using the standardized approach for business units and asset classes that are immaterial for purposes of calculating credit risk-weighted assets.

2.

   Following the revision of the Japan Standardized Industrial Classification in November 2007, partial amendment has been made to the industry classification of the six-month period ended September 30, 2009. Such amendment is also reflected in the figures as of March 31, 2009.

 

     (Billions of yen)  
     As of March 31, 2010      As of September 30, 2010      Change  

Domestic

     274.8         272.8         (2.0

Manufacturing

     24.7         25.5         0.8   

Construction

     6.4         6.8         0.4   

Real estate

     30.2         27.1         (3.0

Service industries

     22.5         16.4         (6.1

Wholesale and retail

     29.0         31.8         2.8   

Finance and insurance

     9.4         6.5         (2.8

Individuals

     71.1         78.7         7.5   

Others

     81.2         79.6         (1.6
                          

Overseas

     36.2         27.7         (8.5
                          

Exempt portion

     6.7         5.4         (1.2
                          

Total

     317.7         306.0         (11.7
                          

 

Note:

 
  Exempt portion represents the amount calculated using the standardized approach for business units and asset classes that are immaterial for purposes of calculating credit risk-weighted assets.

(H) Write-offs of loans by industry

 

     (Billions of yen)  
     For the six months  ended
September 30, 2009
     For the six months  ended
September 30, 2010
 

Manufacturing

     6.3         5.7   

Construction

     1.3         1.2   

Real estate

     11.9         2.3   

Service industries

     3.5         4.6   

Wholesale and retail

     15.8         9.5   

Finance and insurance

     0.2         0.3   

Individuals

     1.0         0.5   

Others

     28.9         4.7   
                 

Exempt portion

     0.3         0.0   
                 

Total

     69.5         29.4   
                 

 

Notes:   
1.    The above table shows the breakdown of losses on write-offs of loans recorded in our consolidated statement of income after excluding the amounts associated with regarded-method exposure and securitization exposure.
2.    Exempt portion represents the amount calculated using the standardized approach for business units and asset classes that are immaterial for purposes of calculating credit risk-weighted assets.
3.    “Others” include overseas and non-Japanese resident portions.

 

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Table of Contents

Status of exposure to which the standardized approach is applied

(I) Exposure by risk weight category after applying credit risk mitigation

 

     (Billions of yen)  
     As of September 30, 2009  
     On-balance
sheet
     Off-balance
sheet
     Total                
                     With external
rating
 

Risk weight

              

0%

     791.7         2,872.4         3,664.1              75.1   

10%

     2.7         —           2.7              —     

20%

     347.4         1,260.5         1,608.0              33.9   

35%

     0.0         —           0.0              —     

50%

     32.7         20.3         53.0              16.2   

100%

     2,069.7         928.7         2,998.4              50.0   

150%

     0.0         0.0         0.0              0.0   

350%

     —           —           —                —     

625%

     —           0.0         0.0              —     

937.5%

     —           —           —                —     

1,250%

     —           0.0         0.0              —     
                                        

Total

     3,244.6         5,082.0         8,326.6              175.3   
                                        

 

Notes:   
    1.    The amounts in the above table are before the deduction of specific reserve for possible losses on loans, reserve for possible losses on loans to restructuring countries and partial direct write-offs.
    2.    Off-balance-sheet exposure shows credit equivalent amount.

 

     (Billions of yen)  
     As of September 30, 2010  
     On-balance
sheet
     Off-balance
sheet
     Total                
                     With external
rating
 

Risk weight

                

0%

     459.9         3,285.4         3,745.3              73.3   

10%

     0.7         —           0.7              —     

20%

     351.5         1,217.9         1,569.4              2.8   

35%

     0.0         —           0.0              —     

50%

     17.2         5.4         22.7              8.5   

100%

     1,970.3         866.8         2,837.2              35.3   

150%

     0.4         —           0.4              —     

350%

     —           —           —                —     

625%

     —           0.0         0.0              —     

937.5%

     —           —           —                —     

1,250%

     —           0.0         0.0              —     
                                        

Total

     2,800.2         5,375.6         8,175.9              120.0   
                                        

 

Notes:   

1.

   The amounts in the above table are before the deduction of specific reserve for possible losses on loans, reserve for possible losses on loans to restructuring countries and partial direct write-offs.

2.

   Off-balance-sheet exposure shows credit equivalent amount.

(J) Deduction from capital

 

     (Billions of yen)  
     As of September 30, 2009      As of September 30, 2010  

Deduction from capital

     34.3         34.9   

 

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Table of Contents

Status of exposure to which the internal ratings-based approach is applied

(K) Specialized lending exposure under supervisory slotting criteria by risk weight category

 

     (Billions of yen)  
     As of September 30, 2009      As of September 30, 2010  

Risk weight

     

50%

     253.5         191.7   

70%

     695.9         704.0   

90%

     159.3         266.8   

95%

     70.6         0.2   

115%

     388.8         156.6   

120%

     15.0         15.6   

140%

     13.0         15.0   

250%

     397.5         425.0   

Default

     32.6         48.2   
                 

Total

     2,026.5         1,823.6   
                 

(L) Equity exposure under simple risk weight method by risk weight category

 

     (Billions of yen)  
     As of September 30, 2009      As of September 30, 2010  

Risk weight

     

300%

     194.4         204.4   

400%

     70.7         70.1   
                 

Total

     265.1         274.6   
                 

 

Note:    Of the equity exposure under the simple risk weight method, 300% risk weight is applied for listed equities and 400% for unlisted equities.

 

24


Table of Contents

(M) Portfolio by asset class and ratings segment (Corporate, etc.)

 

    (Billions of yen, except percentages)  
    As of September 30, 2009  
                EL     Risk                                      
    PD     LGD     default     weight                                   Weighted  
    (EAD     (EAD     (EAD     (EAD                                   average of  
    weighted     weighted     weighted     weighted     EAD                       Amount of     credit  
    average)
(%)
    average)
(%)
    average
(%)
    average)
(%)
    (Billions of
yen)
          On-balance
sheet
    Off-balance
sheet
    undrawn
commitments
    conversion
factor (%)
 

Corporate

    5.14        35.87        n.a.        51.80        54,862.3          40,452.0        14,410.2        10,008.7        75.20   

Investment grade zone

    0.14        36.67        n.a.        26.37        29,242.2          19,082.1        10,160.1        7,846.9        75.21   

Non-investment grade zone

    3.94        33.19        n.a.        83.73        23,778.3          19,608.3        4,170.0        2,143.5        75.10   

Default

    100.00        57.78        54.52        43.24        1,841.7          1,761.5        80.1        18.1        81.06   
                                                                         

Sovereign

    0.01        39.15        n.a.        1.39        56,174.0          42,076.9        14,097.1        86.0        75.00   

Investment grade zone

    0.00        39.14        n.a.        1.18        56,029.8          41,937.3        14,092.5        85.6        75.00   

Non-investment grade zone

    1.28        39.13        n.a.        83.38        141.3          139.5        1.8        0.4        75.00   

Default

    100.00        99.04        96.85        29.09        2.8          0.1        2.7        —          —     
                                                                         

Bank

    1.01        37.30        n.a.        33.91        5,581.0          1,758.9        3,822.0        356.9        77.23   

Investment grade zone

    0.14        36.46        n.a.        26.86        4,767.9          1,345.4        3,422.5        270.9        78.18   

Non-investment grade zone

    1.61        39.53        n.a.        77.41        775.5          376.5        398.9        86.0        74.24   

Default

    100.00        98.07        95.79        30.27        37.5          36.9        0.5        —          —     
                                                                         

Equity exposure under PD/LGD approach

    4.07        90.00        n.a.        176.70        899.8          899.8        —          —          —     

Investment grade zone

    0.08        90.00        n.a.        116.67        644.9          644.9        —          —          —     

Non-investment grade zone

    5.45        90.00        n.a.        361.97        231.3          231.3        —          —          —     

Default

    100.00        90.00        90.00        —          23.5          23.5        —          —          —     
                                                                         

Total

    2.48        37.92        n.a.        27.81        117,517.3          85,187.8        32,329.4        10,451.7        75.27   

Investment grade zone

    0.06        38.57        n.a.        11.48        90,684.9          63,009.8        27,675.1        8,203.6        75.31   

Non-investment grade zone

    3.86        33.95        n.a.        86.12        24,926.7          20,355.8        4,570.9        2,229.9        75.07   

Default

    100.00        59.03        55.83        42.43        1,905.5          1,822.1        83.4        18.1        81.06   
                                                                         

 

Notes:   

1.

   Investment grade zone includes obligor ratings A1 to B2, non-investment grade zone includes C1 to E2 (excluding E2R), and default includes E2R to H1.

2.

   “Corporate” does not include specialized lending exposure under supervisory slotting criteria.

3.

   Each asset class includes purchased receivables.

4.

   The commitments that can be terminated at any time without condition or terminated automatically are not included in the amount of undrawn commitments and weighted average of credit conversion factor.

 

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Table of Contents

 

    (Billions of yen, except percentages)  
    As of September 30, 2010  
                EL     Risk                                      
    PD     LGD     default     weight                                   Weighted  
    (EAD     (EAD     (EAD     (EAD                                   average of  
   

weighted

average)

   

weighted

average)

   

weighted

average)

   

weighted

average)

   

EAD

(Billions of

                     

Amount of

undrawn

   

credit

conversion

 
                    On-balance     Off-balance      
    (%)     (%)     (%)     (%)     yen)           sheet     sheet     commitments     factor (%)  

Corporate

    4.68        35.64        n.a.        48.33        50,979.5          37,185.9        13,793.5        10,023.8        75.11   

Investment grade zone

    0.12        36.77        n.a.        24.41        28,839.6          18,689.7        10,149.8        8,176.6        75.13   

Non-investment grade zone

    3.61        32.52        n.a.        82.58        20,528.9          16,992.8        3,536.1        1,805.5        75.02   

Default

    100.00        55.31        52.28        40.26        1,610.9          1,503.3        107.5        41.6        75.53   
                                                                         

Sovereign

    0.01        38.78        n.a.        1.14        62,716.8          48,197.1        14,519.6        113.4        79.82   

Investment grade zone

    0.00        38.78        n.a.        1.02        62,637.9          48,120.1        14,517.7        113.1        79.83   

Non-investment grade zone

    2.24        38.77        n.a.        93.43        78.7          76.9        1.8        0.3        75.00   

Default

    100.00        68.75        64.06        62.13        0.0          0.0        —          —          —     
                                                                         

Bank

    0.80        37.67        n.a.        28.40        5,049.1          1,946.2        3,102.9        248.6        78.22   

Investment grade zone

    0.11        37.17        n.a.        24.66        4,643.6          1,806.8        2,836.7        187.1        79.28   

Non-investment grade zone

    1.59        39.19        n.a.        74.64        376.4          110.7        265.7        61.4        75.00   

Default

    100.00        98.89        96.78        27.92        29.0          28.5        0.4        —          —     
                                                                         

Equity exposure under PD/LGD approach

    0.60        90.00        n.a.        125.33        941.5          941.5        —          —          —     

Investment grade zone

    0.08        90.00        n.a.        108.55        831.0          831.0        —          —          —     

Non-investment grade zone

    1.79        90.00        n.a.        258.61        107.5          107.5        —          —          —     

Default

    100.00        90.00        90.00        —          3.0          3.0        —          —          —     
                                                                         

Total

    2.04        37.80        n.a.        23.37        119,687.0          88,270.9        31,416.1        10,385.9        75.24   

Investment grade zone

    0.04        38.54        n.a.        10.03        96,952.3          69,447.8        27,504.4        8,476.9        75.29   

Non-investment grade zone

    3.56        32.95        n.a.        83.38        21,091.7          17,288.0        3,803.6        1,867.3        75.02   

Default

    100.00        56.15        53.13        39.97        1,643.0          1,534.9        108.0        41.6        75.53   
                                                                         

 

Notes:  

1.

  Investment grade zone includes obligor ratings A1 to B2, non-investment grade zone includes C1 to E2 (excluding E2R), and default includes E2R to H1.

2.

  “Corporate” does not include specialized lending exposure under supervisory slotting criteria.

3.

  Each asset class includes purchased receivables.

4.

  The commitments that can be terminated at any time without condition or terminated automatically are not included in the amount of undrawn commitments and weighted average of credit conversion factor.

 

26


Table of Contents

(Reference) Obligor ratings

 

Obligor ratings

(major category)

           Definition of ratings           Classification  
  A1–A3               Obligors whose certainty of debt fulfillment is very high, hence their level of credit risk is excellent.         Investment grade zone   
  B1–B2               Obligors whose certainty of debt fulfillment poses no problems for the foreseeable future, hence their level of credit risk is sufficient.            
  C1–C3               Obligors whose certainty of debt fulfillment and their level of credit risk pose no problems for the foreseeable future.      
  D1–D3               Obligors whose current certainty of debt fulfillment poses no problems, however, their resistance to future changes in business environment is low.         Non-investment grade zone   
  E1               Obligors who require close watching going forward because there are problems with their borrowings, such as reduced or suspended interest payments, problems with fulfillment such as de facto postponements of principal or interest payments, or problems with their financial positions as a result of their poor or unstable business conditions.      
  E2                    
     R           
  F1               Obligors who are not yet bankrupt but are in financial difficulties and are deemed to be very likely to go bankrupt in the future because they are finding it difficult to make progress in implementing their management improvement plans (including obligors who are receiving ongoing support from financial institutions).         Default   
  G1               Obligors who have not yet gone legally or formally bankrupt but who are substantially bankrupt because they are in serious financial difficulties and are not deemed to be capable of restructuring.      
  H1               Obligors who have already gone bankrupt, from both a legal and/or formal perspective.            

 

* Including restructured loans and loans past due for three months of more

 

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Table of Contents

(N) Portfolio by asset class and ratings segment (Retail)

 

     (Billions of yen, except percentages)  
     As of September 30, 2009  
                   EL      Risk                                            
     PD      LGD      default      weight                                         Weighted  
     (EAD      (EAD      (EAD      (EAD                                         average of  
     weighted      weighted      weighted      weighted      EAD                           Amount of      credit  
     average)      average)      average)      average)      (Billions of             On-balance      Off-balance      undrawn      conversion  
     (%)      (%)      (%)      (%)      yen)             sheet      sheet      commitments      factor (%)  

Residential mortgage

     2.18         41.79         n.a.         32.26         10,590.0            10,178.4         411.5         9.6         75.00   

Non-default

     0.87         41.65         n.a.         32.26         10,449.4            10,044.2         405.1         9.6         75.00   

Default

     100.00         52.30         49.85         32.45         140.6            134.1         6.4         —           —     
                                                                                   

Qualifying revolving loans (retail)

     3.64         85.55         n.a.         73.13         336.1            233.9         102.2         1,413.4         7.23   

Non-default

     3.22       &nb