Edgar Filing: MIZUHO FINANCIAL GROUP INC

FORM 6-K

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 July 2013

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- .

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:		July 30, 2013

Mizuho Financial Group, Inc.

By:		/s/ Hideyuki Takahashi
Name:		Hideyuki Takahashi
Title:		Deputy President / Group CFO

The following is an English translation of excerpt regarding Basel capital adequacy disclosure and relevant information released in our Japanese language disclosure material published in July 2013. 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			4

n Scope of consolidation			4
(1) Scope of consolidation for calculating consolidated capital adequacy ratio

n Composition of capital			5
(2) Composition of capital, etc.

n Risk-based capital			14
(3) Summary of approach to assessing capital adequacy
(4) Required capital by portfolio classification

n Credit risk			16
(5) Credit risk management
(6) Credit risk exposure, etc.

n Methods for credit risk mitigation			30
(7) Risk management regarding credit risk mitigation
(8) Credit risk mitigation by portfolio classification

n Counterparty risk in derivatives transactions and long-settlement transactions			31
(9) Management of counterparty risk in derivatives transactions and long-settlement transactions
(10) Status of counterparty risk in derivatives transactions and long-settlement transactions

n Securitization exposure			33
(11) Summary of securitization exposure and its risk management
(12) Accounting policies for securitization transactions
(13) Quantitative disclosure items for securitization exposure

n Market risk			54

n Operational risk			54

n Equity exposure in banking book			54
(14) Risk management related to equity exposure in banking book
(15) Status of equity exposure in banking book

n Compensation of directors, corporate auditors and employees			56
(16) Qualitative disclosure
(17) Quantitative disclosure items

Credit risk management			59

Market and liquidity risk management			61

Operational risk management			69

Mizuho Bank, Ltd. and Mizuho Corporate Bank, Ltd. merged as of July 1, 2013 with Mizuho Corporate Bank being the surviving entity, which changed the trade name to Mizuho Bank, Ltd. The information disclosed herein is that of the fiscal year ended March 31, 2013, and unless the context indicates otherwise, “Mizuho Bank” and “Mizuho Corporate Bank” refer to the entities before the merger.

Capital adequacy ratio highlights

The Basel 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)” (the FSA Notice No. 15 of 2007).

We have adopted (a) the advanced internal ratings-based approach as a method to calculate the amount of credit risk weighted assets and (b) the advanced measurement approach as a method to calculate the amount equivalent to the operational risk.

Mizuho Financial Group, Mizuho Corporate Bank and Mizuho Trust & Banking calculate their capital adequacy ratios based on the revised FSA Notices (“Standards for Determining the Status of Capital Adequacy for banks, in accordance with Banking Law Article 14-2” (the FSA Notice No. 19 of 2006), as amended, and “Standards for Determining the Status of Capital Adequacy for bank holding companies, in accordance with Banking Law Article 52-25” (the FSA Notice No. 20 of 2006), as amended (the “FSA Notice No. 20”) from the fiscal year ended March 31, 2013.

The tables for the fiscal year ended March 31, 2012 and 2013, set forth under the heading “Status of Capital Adequacy,” are calculated based on the Basel II and Basel III Framework, respectively.

n Capital adequacy ratio highlights



Mizuho Financial Group (Consolidated)
	(Billions of yen)
	As of March 31, 2012 (Basel II)
Consolidated capital adequacy ratio (BIS standard)		15.50	%
Tier 1 capital ratio		12.76	%

Tier 1 capital		6,398.9
Tier 2 capital		1,745.1
Deductions for total risk-based capital		368.9

Total risk-based capital		7,775.0

Risk weighted assets		50,144.9


	(Billions of yen)
	As of March 31, 2013 (Basel III)
Total capital ratio (International standard)		14.18	%
Tier 1 capital ratio		11.02	%
Common equity Tier 1 capital ratio		8.16	%

Total capital		8,344.5

Tier 1 capital		6,487.4
Common equity Tier 1 capital		4,803.8

Risk weighted assets		58,823.5


(Reference)

Mizuho Corporate Bank (Consolidated)
	(Billions of yen)
	As of March 31, 2012 (Basel II)
Consolidated capital adequacy ratio (BIS standard)		17.83	%
Tier 1 capital ratio		15.87	%

Tier 1 capital		4,430.8
Tier 2 capital		682.8
Deductions for total risk-based capital		137.2

Total risk-based capital		4,976.4

Risk weighted assets		27,910.1


	(Billions of yen)
	As of March 31, 2013 (Basel III)
Total capital ratio (International standard)		13.89	%
Tier 1 capital ratio		11.03	%
Common equity Tier 1 capital ratio		8.65	%

Total capital		5,130.0

Tier 1 capital		4,071.3
Common equity Tier 1 capital		3,195.0

Risk weighted assets		36,908.3


Mizuho Corporate Bank (Non-consolidated)
	(Billions of yen)
	As of March 31, 2012 (Basel II)
Non-consolidated capital adequacy ratio (BIS standard)		20.19	%
Tier 1 capital ratio		16.34	%

Tier 1 capital		4,135.2
Tier 2 capital		1,013.5
Deductions for total risk-based capital		41.3

Total risk-based capital		5,107.4

Risk weighted assets		25,296.0


	(Billions of yen)
	As of March 31, 2013 (Basel III)
Total capital ratio (International standard)		15.33	%
Tier 1 capital ratio		12.18	%
Common equity Tier 1 capital ratio		9.16	%

Total capital		5,007.7

Tier 1 capital		3,979.9
Common equity Tier 1 capital		2,993.0

Risk weighted assets		32,663.9


Mizuho Bank (Consolidated)
	(Billions of yen)
	As of March 31, 2012 (Basel II)
Consolidated capital adequacy ratio (Domestic standard)		15.52	%
Tier 1 capital ratio		11.39	%

Tier 1 capital		2,428.1
Tier 2 capital		977.6
Deductions for total risk-based capital		98.9

Total risk-based capital		3,306.8

Risk weighted assets		21,299.9


	(Billions of yen)
	As of March 31, 2013 (Basel II)
Consolidated capital adequacy ratio (Domestic standard)		15.04	%
Tier 1 capital ratio		11.66	%

Tier 1 capital		2,381.8
Tier 2 capital		920.8
Deductions for total risk-based capital		231.5

Total risk-based capital		3,071.2

Risk weighted assets		20,412.3


Mizuho Bank (Non-Consolidated)
	(Billions of yen)
	As of March 31, 2012 (Basel II)
Non-consolidated capital adequacy ratio (Domestic standard)		15.62	%
Tier 1 capital ratio		11.51	%

Tier 1 capital		2,379.6
Tier 2 capital		978.7
Deductions for total risk-based capital		131.0

Total risk-based capital		3,227.2

Risk weighted assets		20,656.9


	(Billions of yen)
	As of March 31, 2013 (Basel II)
Non-consolidated capital adequacy ratio (Domestic standard)		15.46	%
Tier 1 capital ratio		11.49	%

Tier 1 capital		2,294.1
Tier 2 capital		920.1
Deductions for total risk-based capital		126.9

Total risk-based capital		3,087.3

Risk weighted assets		19,959.0


Mizuho Trust & Banking (Consolidated)
	(Billions of yen)
	As of March 31, 2012 (Basel II)
Consolidated capital adequacy ratio (BIS standard)		18.26	%
Tier 1 capital ratio		14.02	%

Tier 1 capital		334.5
Tier 2 capital		103.5
Deductions for total risk-based capital		2.4

Total risk-based capital		435.7

Risk weighted assets		2,386.0


	(Billions of yen)
	As of March 31, 2013 (Basel III)
Total capital ratio (International standard)		17.22	%
Tier 1 capital ratio		13.24	%
Common equity Tier 1 capital ratio		13.24	%

Total capital		447.5

Tier 1 capital		344.2
Common equity Tier 1 capital		344.2

Risk weighted assets		2,598.0



Mizuho Trust & Banking (Non-consolidated)
	(Billions of yen)
	As of March 31, 2012 (Basel II)
Non-consolidated capital adequacy ratio (BIS standard)		18.42	%
Tier 1 capital ratio		14.13	%

Tier 1 capital		332.4
Tier 2 capital		103.1
Deductions for total risk-based capital		2.3

Total risk-based capital		433.1

Risk weighted assets		2,351.6



	(Billions of yen)
	As of March 31, 2013 (Basel III)
Total capital ratio (International standard)		17.44	%
Tier 1 capital ratio		13.46	%
Common equity Tier 1 capital ratio		13.46	%

Total capital		446.3

Tier 1 capital		344.5
Common equity Tier 1 capital		344.5

Risk weighted assets		2,559.4



(Reference) Mizuho Bank (Consolidated)
	As of March 31, 2013 (Basel III)
Total capital ratio (International standard)		14.08	%
Tier 1 capital ratio		10.13	%
Common equity Tier 1 capital ratio		8.90	%

Total capital		3,258.6

Tier 1 capital		2,343.8
Common equity Tier 1 capital		2,060.5

Risk weighted assets		23,128.6



(Reference) Mizuho Bank (Non-Consolidated)
	As of March 31, 2013 (Basel III)
Total capital ratio (International standard)		13.95	%
Tier 1 capital ratio		9.93	%
Common equity Tier 1 capital ratio		8.86	%

Total capital		3,162.9

Tier 1 capital		2,251.5
Common equity Tier 1 capital		2,008.8

Risk weighted assets		22,668.0

Status of Mizuho Financial Group’s consolidated capital adequacy

n Scope of consolidation

(1) Scope of consolidation for calculating consolidated capital adequacy ratio

(A) Difference from the companies included in the scope of consolidation based on consolidation rules for preparation of consolidated financial statements (the “scope of accounting consolidation”)

None as of March 31, 2012 and 2013

(B) Number of consolidated subsidiaries


	As of March 31, 2012		As of March 31, 2013
Consolidated subsidiaries		149		145

Our major consolidated subsidiaries are Mizuho Corporate Bank, Ltd., Mizuho Bank, Ltd., Mizuho Trust & Banking Co., Ltd. and Mizuho Securities Co., Ltd.

The following table sets forth information with respect to our principal consolidated subsidiaries as of March 31, 2013:

Name

Country of
organization

Main business

Proportion of
ownership
interest
(%)

Proportion of
voting
interest
(%)

Domestic

Mizuho Corporate Bank, Ltd.

Japan

Banking

100.0

Mizuho Bank, Ltd.

Japan

Banking

100.0

Mizuho Trust & Banking Co., Ltd.

Japan

Trust and
banking

100.0

Mizuho Securities Co., Ltd.

Japan

Securities

95.8

Trust & Custody Services Bank, Ltd.

Japan

Trust and
banking

54.0

Mizuho Asset Management Co., Ltd.

Japan

Investment
management

98.7

Mizuho Research Institute Ltd.

Japan

Research and
consulting

98.6

Mizuho Information & Research Institute Inc.

Japan

Information
technology

91.5

Mizuho Financial Strategy Co., Ltd.

Japan

Consulting

100.0

Mizuho Private Wealth Management Co., Ltd.

Japan

Consulting

100.0

Mizuho Factors, Limited

Japan

Factoring

100.0

Mizuho Credit Guarantee Co., Ltd.

Japan

Credit
guarantee

100.0

Mizuho Capital Co., Ltd.

Japan

Venture
capital

50.0

Defined Contribution Plan Services Co., Ltd.

Japan

Pension
plan-related
business

60.0

Overseas

Mizuho Bank (Switzerland) Ltd

Switzerland

Trust and
banking

100.0

Mizuho Capital Markets Corporation

U.S.A.

Derivatives

100.0

Mizuho Corporate Bank (China), Ltd.

China

Banking

100.0

Mizuho Corporate Bank (USA)

U.S.A.

Banking

100.0

Mizuho Corporate Bank Nederland N.V.

Netherlands

Banking and
securities

100.0

Mizuho International plc

U.K.

Securities
and banking

100.0

Mizuho Securities USA Inc.

U.S.A.

Securities

100.0

Mizuho Trust & Banking (Luxembourg) S.A.

Luxembourg

Trust and
banking

100.0

Mizuho Trust & Banking Co. (USA)

U.S.A.

Trust and
banking

100.0

PT. Bank Mizuho Indonesia

Indonesia

Banking

99.0


Note:

		Mizuho Securities Co., Ltd. and Mizuho Investors Securities Co., Ltd. merged in January, 2013.

(C) Corporations providing financial services for which Article 9 of the FSA Notice No. 20 is applicable

None as of March 31, 2012 and 2013.

(D) Companies that are in the bank holding company’s corporate group but not included in the scope of accounting consolidation and companies that are not in the bank holding company’s corporate group but included in the scope of accounting consolidation

None as of March 31, 2012 and 2013.

(E) Restrictions on transfer of funds or capital within the bank holding company’s corporate group

None as of March 31, 2012 and 2013.

n Composition of capital

(2) Composition of capital, etc.

(A) Composition of capital disclosure

(As of March 31, 2012 (Basel II))

Summary table of consolidated capital adequacy ratio (BIS standard)


				(Billions of yen)
				As of March 31, 2012
Tier 1 capital	Common stock and preferred stock				2,254.9

	Non-cumulative perpetual preferred stock				—

	Advance payment for new shares				—
	Capital surplus				1,109.7
	Retained earnings				1,405.4
	Less: Treasury stock				7.0
	Advance payment for treasury stock				—
	Less: Dividends (estimate), etc				76.3
	Less: Unrealized losses on other securities				—
	Foreign currency translation adjustments				(102.8	)
	Stock acquisition rights				2.1

	Minority interest in consolidated subsidiaries				1,941.4

	Preferred securities issued by overseas SPCs				1,859.6

	Less: Goodwill equivalent				60.5
	Less: Intangible fixed assets recognized as a result of a merger				38.3
	Less: Capital increase due to securitization transactions				4.5
	Less: 50% of excess of expected losses relative to eligible reserves by banks adopting internal ratings-based approach				25.0
	Total of Tier 1 capital before deduction of deferred tax assets (total of the above items)				6,398.9
	Deduction for deferred tax assets				—

	Total	(A	)		6,398.9

	Preferred securities with a step-up interest rate provision	(B	)		524.0
	Ratio to Tier 1 = (B) / (A) X 100				8.18	%


Tier 2 capital	45% of unrealized gains on other securities				45.1
	45% of revaluation reserve for land				102.5
	General reserve for possible losses on loans				4.2
	Excess of eligible reserves relative to expected losses by banks adopting internal ratings-based approach				—

	Debt capital, etc.				1,593.2

	Perpetual subordinated debt and other debt capital				262.6
	Dated subordinated debt and redeemable preferred stock				1,330.6

	Total				1,745.1

	Tier 2 capital included as qualifying capital	(C	)		1,745.1


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	)		368.9


Total risk-based capital	(A) + (C) + (D) – (E)	(F	)		7,775.0


Risk weighted assets	Credit risk-weighted assets	(G	)		45,144.4

	On-balance-sheet items				37,640.5
	Off-balance-sheet items				7,503.9

	Market risk equivalent assets [(I)/8%]	(H	)		2,083.3
	(Reference) Market risk equivalent	(I	)		166.6
	Operational risk equivalent assets [(K)/8%]	(J	)		2,917.1
	(Reference) Operational risk equivalent	(K	)		233.3
	Adjusted amount for credit risk-weighted assets	(L	)		—
	Adjusted amount for operational risk equivalent	(M	)		—

	Total [(G) + (H) + (J) + (L) +(M)]	(N	)		50,144.9

Consolidated capital adequacy ratio (BIS standard) = (F) / (N) X 100					15.50	%

Tier 1 capital ratio = (A) / (N) X 100					12.76	%


Notes:

1.		The above figures are calculated based on the BIS standard applied on a consolidated basis under the FSA Notice No. 20. For the figures, we did not apply the exception to the FSA Notice No. 20 (the 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 Practical Guideline 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 amount of net deferred tax assets was ¥340.7 billion 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 was ¥1,279.7 billion.

5.		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 FSA Notice No. 20 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 FSA Notice No. 20 over the required capital under the advanced measurement approach.

(As of March 31, 2013 (Basel III))

Composition of capital disclosure (International standard)


			(Millions of yen)
			As of March 31, 2013
					Amounts excluded under transitional arrangements		Basel III template
Common equity Tier 1 capital: instruments and reserves	(1	)
Directly issued qualifying common share capital plus related stock surplus and retained earnings				4,720,405		/	1a+2-1c-26
of which: capital and stock surplus				2,987,127		/	1a
of which: retained earnings				1,814,331		/	2
of which: treasury stock	(-	)		4,661		/	1c
of which: national specific regulatory adjustments (earnings to be distributed)	(-	)		76,392		/	26
of which: other than above				—		/
Subscription rights to common shares				2,687		/	1b
Accumulated other comprehensive income and other disclosed reserves				—		752,533	3
Common share capital issued by subsidiaries and held by third parties (amount allowed in group CET1)				11,042		/	5
Total of items included in common equity Tier 1 capital: instruments and reserves subject to phase-out arrangements				69,685		/
of which: amount allowed in group CET1 capital subject to phase-out arrangements on common share capital issued by subsidiaries and held by third parties				69,685		/
Common equity Tier 1 capital: instruments and reserves	(A	)		4,803,820		/	6
Common equity Tier 1 capital: regulatory adjustments	(2	)
Total intangible assets (net of related tax liability, excluding those relating to mortgage servicing rights)				—		399,235	8+9
of which: goodwill (net of related tax liability, including those equivalent)				—		128,902	8
of which: other intangibles other than goodwill and mortgage servicing rights (net of related tax liability)				—		270,332	9
Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liability)				—		21,662	10
Deferred gains or losses on derivatives under hedge accounting				—		84,634	11
Shortfall of eligible provisions to expected losses				—		31,327	12
Securitization gain on sale				—		3,837	13
Gains and losses due to changes in own credit risk on fair valued liabilities				—		—	14
Defined-benefit pension fund net assets (prepaid pension costs)				—		270,563	15
Investments in own shares (excluding those reported in the net assets section)				—		2,589	16
Reciprocal cross-holdings in common equity				—		—	17
Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the bank does not own more than 10% of the issued share capital (amount above the 10% threshold)				—		248,376	18
Amount exceeding the 10% threshold on specified items				—		—	19+20+21
of which: significant investments in the common stock of financials				—		—	19
of which: mortgage servicing rights				—		—	20
of which: deferred tax assets arising from temporary differences (net of related tax liability)				—		—	21
Amount exceeding the 15% threshold on specified items				—		—	22
of which: significant investments in the common stock of financials				—		—	23
of which: mortgage servicing rights				—		—	24
of which: deferred tax assets arising from temporary differences (net of related tax liability)				—		—	25
Regulatory adjustments applied to common equity Tier 1 due to insufficient additional Tier 1 and Tier 2 to cover deductions				—		/	27
Common equity Tier 1 capital: regulatory adjustments	(B	)		—		/	28


Common equity Tier 1 capital (CET1)
Common equity Tier 1 capital (CET1) ((A)-(B))	(C)	4,803,820	/	29
Additional Tier 1 capital: instruments	(3)
Directly issued qualifying additional Tier 1 instruments plus related stock surplus of which: classified as equity under applicable accounting standards and the breakdown		—	/	31a	30
Subscription rights to additional Tier 1 instruments		—	/	31b	30
Directly issued qualifying additional Tier 1 instruments plus related stock surplus of which: classified as liabilities under applicable accounting standards		—	/	32	30
Qualifying additional Tier 1 instruments plus related stock surplus issued by special purpose vehicles and other equivalent entities		—	/		30
Additional Tier 1 instruments issued by subsidiaries and held by third parties (amount allowed in group AT1)		12,037	/	34-35
Eligible Tier 1 capital instruments subject to phase-out arrangements included in additional Tier 1 capital: instruments		1,874,825	/	33+35
of which: directly issued capital instruments subject to phase out from additional Tier 1		1,874,825	/	33
of which: instruments issued by subsidiaries subject to phase out		—	/	35
Total of items included in additional Tier 1 capital: instruments subject to phase-out arrangements		(90,329)	/
of which: foreign currency translation adjustments		(90,329)	/
Additional Tier 1 capital: instruments	(D)	1,796,533	/	36
Additional Tier 1 capital: regulatory adjustments
Investments in own additional Tier 1 instruments		—	—	37
Reciprocal cross-holdings in additional Tier 1 instruments		—	—	38
Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the bank does not own more than 10% of the issued common share capital of the entity (amount above 10% threshold)		—	3,352	39
Significant investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation (net of eligible short positions)		—	77,938	40
Total of items included in additional Tier 1 capital: regulatory adjustments subject to phase-out arrangements		112,904	/
of which: goodwill equivalent		57,686	/
of which: intangible fixed assets recognized as a result of a merger		34,953	/
of which: capital increase due to securitization transactions		3,837	/
of which: 50% of excess of expected losses relative to eligible reserves by banks adopting internal ratings-based approach		16,428	/
Regulatory adjustments applied to additional Tier 1 due to insufficient Tier 2 to cover deductions		—	/	42
Additional Tier 1 capital: regulatory adjustments	(E)	112,904	/	43
Additional Tier 1 capital (AT1)
Additional Tier 1 capital ((D)-(E))	(F)	1,683,628	/	44
Tier 1 capital (T1 = CET1 + AT1)
Tier 1 capital (T1 = CET1 + AT1) ((C)+(F))	(G)	6,487,449	/	45


Tier 2 capital: instruments and provisions	(4)
Directly issued qualifying Tier 2 instruments plus related stock surplus of which: classified as equity under applicable accounting standards and the breakdown		—	/	46
Subscription rights to Tier 2 instruments		—	/	46
Directly issued qualifying Tier 2 instruments plus related stock surplus of which: classified as liabilities under applicable accounting standards		—	/	46
Tier 2 instruments plus related stock surplus issued by special purpose vehicles and other equivalent entities		—	/	46
Tier 2 instruments issued by subsidiaries and held by third parties (amount allowed in group Tier 2)		3,902	/	48-49
Eligible Tier 2 capital instruments subject to phase-out arrangements included in Tier 2: instruments and provisions		1,518,354	/	47+49
of which: directly issued capital instruments subject to phase out from Tier 2		153,207	/	47
of which: instruments issued by subsidiaries subject to phase out		1,365,147	/	49
Total of general allowance for loan losses and eligible provisions included in Tier 2		5,080	/	50
of which: general allowance for loan losses		5,080	/	50a
of which: eligible provisions		—	/	50b
Total of items included in Tier 2 capital: instruments and provisions subject to phase-out arrangements		503,197	/
of which: 45% of unrealized gains on other securities		402,252	/
of which: 45% of revaluation reserve for land		100,945	/
Tier 2 capital: instruments and provisions	(H)	2,030,535	/	51
Tier 2 capital: regulatory adjustments
Investments in own Tier 2 instruments		—	—	52
Reciprocal cross-holdings in Tier 2 instruments		—	—	53
Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the bank does not own more than 10% of the issued common share capital of the entity (amount above the 10% threshold)		—	224,779	54
Significant investments in the capital banking, financial and insurance entities that are outside the scope of regulatory consolidation (net of eligible short positions)		—	—	55
Total of items included in Tier 2 capital: regulatory adjustments subject to phase-out arrangements		173,475	/
of which: investments in the capital banking, financial and insurance entities		157,047	/
of which: 50% of excess of expected losses relative to eligible reserves by banks adopting internal ratings-based approach		16,428	/
Tier 2 capital: regulatory adjustments	(I)	173,475	/	57
Tier 2 capital (T2)
Tier 2 capital (T2) ((H)-(I))	(J)	1,857,060	/	58
Total capital (TC = T1 + T2)
Total capital (TC = T1 + T2) ((G) + (J))	(K)	8,344,509	/	59


Risk weighted assets	(5)
Total of items included in risk weighted assets subject to phase-out arrangements		1,190,628	/
of which: intangible assets (net of related tax liability, excluding those relating to mortgage service rights)		235,379	/
of which: deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liability)		21,662	/
of which: defined-benefit pension fund net assets (prepaid pension costs)		270,563	/
of which: investments in the capital banking, financial and insurance entities		663,022	/
Risk weighted assets	(L)	58,823,585	/	60
Capital ratio (consolidated)
Common equity Tier 1 capital ratio (consolidated) ((C)/(L))		8.16%	/	61
Tier 1 capital ratio (consolidated) ((G)/(L))		11.02%	/	62
Total capital ratio (consolidated) ((K)/(L))		14.18%	/	63
Regulatory adjustments	(6)
Non-significant investments in the capital of other financials that are below the thresholds for deduction (before risk weighting)		467,127	/	72
Significant investments in the common stock of financials that are below the thresholds for deduction (before risk weighting)		152,796	/	73
Mortgage servicing rights that are below the thresholds for deduction (before risk weighting)		—	/	74
Deferred tax assets arising from temporary differences that are below the thresholds for deduction (before risk weighting)		323,447	/	75
Provisions included in Tier 2 capital: instruments and provisions	(7)
Provisions (general allowance for loan losses)		5,080	/	76
Cap on inclusion of provisions (general allowance for loan losses)		48,948	/	77
Provisions eligible for inclusion in Tier 2 in respect of exposures subject to internal ratings-based approach (prior to application of cap) (if the amount is negative, report as “nil”)		—	/	78
Cap for inclusion of provisions in Tier 2 under internal ratings-based approach		277,776	/	79
Capital instruments subject to phase-out arrangements	(8)
Current cap on AT1 instruments subject to phase-out arrangements		1,874,825	/	82
Amount excluded from AT1 due to cap (excess over cap after redemptions and maturities) (if the amount is negative, report as “nil”)		208,313	/	83
Current cap on T2 instruments subject to phase-out arrangements		1,518,354	/	84
Amount excluded from T2 due to cap (excess over cap after redemptions and maturities) (if the amount is negative, report as “nil”)		168,706	/	85


Notes:

1.		The above figures are calculated based on International standard applied on a consolidated basis under the FSA Notice No. 20.

2.		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 Practical Guideline 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.

(B) Explanation of (A) Composition of capital disclosure (As of March 31, 2013)

Reconciliation between “Consolidated balance sheet” and items of consolidated balance sheet and “Composition of capital disclosure”


	(Millions of yen)			Cross- reference to Appended template	Reference # of Basel III template under the Composition of capital disclosure
Items	Consolidated balance sheet as in published financial statements			Cross- reference to Appended template
	Amount
(Assets)
Cash and due from banks		12,333,997
Call loans and bills purchased		530,541
Receivables under resale agreements		9,025,049
Guarantee deposits paid under securities borrowing transactions		5,543,914
Other debt purchased		1,279,964
Trading assets		14,076,928		6-a
Money held in trust		96,014
Securities		53,472,399		2-b, 6-b
Loans and bills discounted		67,536,882		6-c
Foreign exchange assets		1,412,601
Derivatives other than for trading assets		4,475,055		6-d
Other assets		2,599,553		3, 6-e
Tangible fixed assets		901,085
Intangible fixed assets		477,546		2-a
Deferred tax assets		165,299		4-a
Customers’ liabilities for acceptances and guarantees		4,224,259
Reserves for possible losses on loans		(739,990	)
Reserve for possible losses on investments		(40	)

Total assets		177,411,062

(Liabilities)
Deposits		84,241,955
Negotiable certificates of deposit		15,326,781
Call money and bills sold		6,126,424
Payables under repurchase agreements		17,451,041
Guarantee deposits received under securities lending transactions		11,325,439
Commercial paper		472,718
Trading liabilities		7,686,442		6-f
Borrowed money		7,699,440		8-a
Foreign exchange liabilities		182,473
Short-term bonds		477,400
Bonds and notes		5,141,746		8-b
Due to trust accounts		1,120,696
Derivatives other than for trading liabilities		4,404,754		6-g
Other liabilities		3,501,064
Reserve for bonus payments		45,754
Reserve for employee retirement benefits		38,632
Reserve for director and corporate auditor retirement benefits		1,612
Reserve for possible losses on sales of loans		48
Reserve for contingencies		16,859
Reserve for reimbursement of deposits		16,464
Reserve for reimbursement of debentures		35,417
Reserves under special laws		1,203
Deferred tax liabilities		54,221		4-b
Deferred tax liabilities for revaluation reserve for land		81,977		4-c
Acceptances and guarantees		4,224,259

Total liabilities		169,674,832

(Net assets)
Common stock and preferred stock		2,254,972		1-a
Capital surplus		1,109,508		1-b
Retained earnings		1,814,782		1-c
Treasury stock		(4,661	)	1-d

Total shareholders’ equity		5,174,601

Net unrealized gains (losses) on other securities		615,883
Deferred gains or losses on hedges		84,634		5
Revaluation reserve for land		142,345
Foreign currency translation adjustment		(90,329	)

Total accumulated other comprehensive income		752,533			3

Stock acquisition rights		2,687			1b
Minority interests		1,806,407		7

Total net assets		7,736,230

Total liabilities and net assets		177,411,062

Note:

The regulatory scope of consolidation is the same as the accounting scope of consolidation.

Appended template

1. Shareholders’ equity

(1) Consolidated balance sheet


	(Millions of yen)
Consolidated balance sheet items	Amount			Remarks	Ref.
Common stock and preferred stock		2,254,972		Including eligible Tier 1 capital instruments subject to phase-out arrangements	1-a
Capital surplus		1,109,508		Including eligible Tier 1 capital instruments subject to phase-out arrangements	1-b
Retained earnings		1,814,782			1-c
Treasury stock		(4,661	)		1-d
Total shareholders’ equity		5,174,601

(2) Composition of capital

	(Millions of yen)			Remarks	Basel III template
Composition of capital disclosure	Amount			Remarks	Basel III template
Directly issued qualifying common share capital plus related stock surplus and retained earnings		4,796,797		Shareholders’ equity attributable to common shares (before adjusting national specific regulatory adjustments (earnings to be distributed))
of which: capital and stock surplus		2,987,127			1a
of which: retained earnings		1,814,331			2
of which: treasury stock (-)		4,661			1c
of which: other than above		—
Directly issued qualifying additional Tier 1 instruments plus related stock surplus of which: classified as equity under applicable accounting standards and the breakdown		—		Shareholders’ equity attributable to preferred shares with a loss absorbency clause upon entering into effectively bankruptcy	31a

2. Intangible fixed assets

(1) Consolidated balance sheet

	(Millions of yen)
Consolidated balance sheet items	Amount			Remarks	Ref.
Intangible fixed assets		477,546			2-a
Securities		53,472,399			2-b
of which: share of goodwill of companies accounted for using the equity method		71,216		Share of goodwill of companies accounted for using the equity method
Income taxes related to above		(149,527	)

(2) Composition of capital

	(Millions of yen)			Remarks	Basel III template
Composition of capital disclosure	Amount			Remarks	Basel III template
Goodwill (net of related tax liability, including those equivalent)		128,902			8
Other intangibles other than goodwill and mortgage servicing rights (net of related tax liability)		270,332		Software and other	9
Mortgage servicing rights (net of related tax liability)		—
Amount exceeding the 10% threshold on specified items		—			20
Amount exceeding the 15% threshold on specified items		—			24
Mortgage servicing rights that are below the thresholds for deduction (before risk weighting)		—			74


3. Defined-benefit pension fund net assets (prepaid pension costs)
(1) Consolidated balance sheet
	(Millions of yen)
Consolidated balance sheet items	Amount			Remarks	Ref.
Other assets		2,599,553			3
of which: defined-benefit pension fund net assets (prepaid pension costs)		418,846
Income taxes related to above		(148,283	)
(2) Composition of capital
Composition of capital disclosure	(Millions of yen)			Remarks	Basel III template
Composition of capital disclosure	Amount			Remarks	Basel III template
Defined-benefit pension fund net assets (prepaid pension costs)		270,563			15
4. Deferred tax assets
(1) Consolidated balance sheet
	(Millions of yen)
Consolidated balance sheet items	Amount			Remarks	Ref.
Deferred tax assets		165,299			4-a
Deferred tax liabilities		54,221			4-b
Deferred tax liabilities for revaluation reserve for land		81,977			4-c
Tax effects on intangible fixed assets		149,527
Tax effects on defined-benefit pension fund net assets (prepaid pension costs)		148,283
(2) Composition of capital
Composition of capital disclosure	(Millions of yen)			Remarks	Basel III template
Composition of capital disclosure	Amount			Remarks	Basel III template
Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liability)		21,662		This item does not agree with the amount reported on the consolidated balance sheet due to offsetting of assets and liabilities.	10
Deferred tax assets that rely on future profitability arising from temporary differences (net of related tax liability)		323,447		This item does not agree with the amount reported on the consolidated balance sheet due to offsetting of assets and liabilities.
Amount exceeding the 10% threshold on specified items		—			21
Amount exceeding the 15% threshold on specified items		—			25
Deferred tax assets arising from temporary differences that are below the thresholds for deduction (before risk weighting)		323,447			75
5. Deferred gains or losses on derivatives under hedge accounting
(1) Consolidated balance sheet
	(Millions of yen)
Consolidated balance sheet items	Amount			Remarks	Ref.
Deferred gains or losses on hedges		84,634			5
(2) Composition of capital
Composition of capital disclosure	(Millions of yen)			Remarks	Basel III template
Composition of capital disclosure	Amount			Remarks	Basel III template
Deferred gains or losses on derivatives under hedge accounting		84,634			11


6. Items associated with investments in the capital of financial institutions
(1) Consolidated balance sheet
	(Millions of yen)
Consolidated balance sheet items	Amount		Remarks	Ref.
Trading assets		14,076,928	Including trading account securities and derivatives for trading assets	6-a
Securities		53,472,399		6-b
Loans and bills discounted		67,536,882	Including subordinated loans	6-c
Derivatives other than for trading assets		4,475,055		6-d
Other assets		2,599,553	Including money invested	6-e
Trading liabilities		7,686,442	Including trading account securities sold	6-f
Derivatives other than for trading liabilities		4,404,754		6-g
(2) Composition of capital
	(Millions of yen)			Basel III
Composition of capital disclosure	Amount		Remarks	template
Investments in own capital instruments		2,589
Common equity Tier 1 capital		2,589		16
Additional Tier 1 capital		—		37
Tier 2 capital		—		52
Reciprocal cross-holdings in the capital of banking, financial and insurance entities		—
Common equity Tier 1 capital		—		17
Additional Tier 1 capital		—		38
Tier 2 capital		—		53
Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold)		943,637
Common equity Tier 1 capital		248,376		18
Additional Tier 1 capital		3,352		39
Tier 2 capital		224,779		54
Non-significant investments in the capital of other financials that are below the thresholds for deduction (before risk weighting)		467,127		72
Significant investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions		230,734
Amount exceeding the 10% threshold on specified items		—		19
Amount exceeding the 15% threshold on specified items		—		23
Additional Tier 1 capital		77,938		40
Tier 2 capital		—		55
Significant investments in the common stock of financials that are below the thresholds for deduction (before risk weighting)		152,796		73
7. Minority interests
(1) Consolidated balance sheet
	(Millions of yen)
Consolidated balance sheet items	Amount		Remarks	Ref.
Minority interests		1,806,407		7
(2) Composition of capital
	(Millions of yen)			Basel III
Composition of capital disclosure	Amount		Remarks	template
Common share capital issued by subsidiaries and held by third parties (amount allowed in group CET1)		11,042	After reflecting amounts eligible for inclusion (minority interest after adjustments)	5
Qualifying additional Tier 1 instruments plus related stock surplus issued by special purpose vehicles and other equivalent entities		—	After reflecting amounts eligible for inclusion (minority interest after adjustments)	30-31ab-32
Additional Tier 1 instruments issued by subsidiaries and held by third parties (amount allowed in group AT1)		12,037	After reflecting amounts eligible for inclusion (minority interest after adjustments)	34-35
Tier 2 instruments plus related stock surplus issued by special purpose vehicles and other equivalent entities		—	After reflecting amounts eligible for inclusion (minority interest after adjustments)	46
Tier 2 instruments issued by subsidiaries and held by third parties (amount allowed in group Tier 2)		3,902	After reflecting amounts eligible for inclusion (minority interest after adjustments)	48-49


8. Other capital instruments
(1) Consolidated balance sheet
	(Millions of yen)
Consolidated balance sheet items	Amount		Remarks	Ref.
Borrowed money		7,699,440		8-a
Bonds and notes		5,141,746		8-b
Total		12,841,187
(2) Composition of capital
	(Millions of yen)		Remarks	Basel III template
Composition of capital disclosure	Amount		Remarks	Basel III template
Directly issued qualifying additional Tier 1 instruments plus related stock surplus of which: classified as liabilities under applicable accounting standards		—		32
Directly issued qualifying Tier 2 instruments plus related stock surplus of which: classified as liabilities under applicable accounting standards		—		46


Note:

		Amounts in the “Composition of capital disclosure” are based on those before considering amounts under transitional arrangements and include “Amounts excluded under transitional arrangements” disclosed in “(A) Composition of capital disclosure” as well as amounts included as regulatory capital. In addition, items for regulatory purposes under transitional arrangements are excluded from this table.

n Risk-based capital

(3) Summary of approach to assessing capital adequacy

In order to ensure that risk-based capital is sufficiently maintained in light of the risk held by us, we regularly conduct the following assessment of capital adequacy in addition to adopting a suitable and effective capital adequacy monitoring structure.

Maintaining a sufficient BIS capital ratio

We confirm our maintenance of a high level of financial soundness by conducting regular evaluations to examine whether our risk-based capital is adequate in qualitative as well as quantitative terms, in light of our business plans and strategic targets to match the increase in risk-weighted assets acquired for growth, in addition to maintaining common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio (capital adequacy ratio for the financial institution subject to domestic standard) that exceed the minimum requirements.

Balancing risk and capital

On the basis of the framework for allocating risk capital, after obtaining the clearest possible grasp of the group’s overall risk exposure, we endeavor to control risk so as to keep it within the range of our business capacity by means of allocating capital that corresponds to the amount of risk to the business groups and units of our banking subsidiaries, etc., within the bounds of our capital, and we conduct regular assessments to ensure that a sufficient level of capital is maintained for our risk profile. When making these assessments, we examine whether an appropriate return on risk is maintained in addition to considering the effects that interest rate risk related to our banking book, credit concentration risk and stress tests have on our capital.

(4) Required capital by portfolio classification


	(Billions of yen)
	As of March 31, 2012				As of March 31, 2013
	EAD		Required capital		EAD		Required capital
Credit risk		171,425.4		4,733.5		178,644.9		5,296.4

Internal ratings-based approach		163,265.5		4,482.3		169,424.6		4,712.8
Corporate (except specialized lending)		51,022.9		2,517.0		55,688.5		2,562.1
Corporate (specialized lending)		2,407.6		242.5		2,840.3		281.0
Sovereign		77,555.3		63.1		77,606.5		72.8
Bank		5,521.7		123.1		6,658.8		159.3
Retail		13,652.5		623.7		13,649.5		609.2
Residential mortgage		10,529.9		418.2		10,477.7		399.1
Qualifying revolving loan		346.3		31.0		372.6		32.8
Other retail		2,776.2		174.4		2,799.0		177.2
Equities		3,357.6		353.0		3,833.6		425.6
PD/LGD approach		964.4		97.7		1,107.3		123.6
Market-based approach (simple risk weight method)		274.2		75.6		364.4		97.4
Market-based approach (internal models approach)		—		—		—		—
Transitional measure applied		2,118.8		179.6		2,361.8		204.6
Regarded-method exposure		1,261.8		270.5		1,402.6		292.1
Purchase receivables		1,834.9		54.2		1,842.6		61.5
Securitizations		3,818.1		74.0		3,317.8		60.3
Others		2,832.6		160.8		2,583.8		188.3

Standardized approach		8,159.8		251.2		9,220.3		313.2
Sovereign		4,273.0		4.2		4,263.0		4.7
Bank		1,159.0		24.1		1,362.1		30.1
Corporate		2,064.2		164.5		2,939.9		221.9
Residential mortgage		—		—		—		—
Securitizations		37.0		24.4		22.9		12.1
Others		626.5		33.7		632.2		44.2

CVA risk		n.a.		n.a.		n.a.		256.3

Central counterparty-related		n.a.		n.a.		n.a.		13.9

Market risk		n.a.		166.6		n.a.		190.3

Standardized approach		n.a.		68.4		n.a.		74.0
Interest rate risk		n.a.		38.5		n.a.		50.2
Equities risk		n.a.		22.2		n.a.		17.1
Foreign exchange risk		n.a.		4.2		n.a.		4.0
Commodities risk		n.a.		3.3		n.a.		2.5
Option transactions		n.a.		—		n.a.		—

Internal models approach		n.a.		98.2		n.a.		116.3

Operational risk		n.a.		233.3		n.a.		228.2

Advanced measurement approach		n.a.		192.5		n.a.		178.0
Basic indicator approach		n.a.		40.8		n.a.		50.2

Total required capital (consolidated)		n.a.		4,011.5		n.a.		4,705.8


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) deductions 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, including real estate non-recourse loan, ship finance and project finance, 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 loan) and other individual consumer loans and loans to business enterprises with total credit amount of less than ¥100 million, etc. (other retail).

Equities		Capital stock, preferred securities, perpetual subordinated debt, etc. (excluding trading assets) The transitional measure (Article 13 of supplementary provision of the FSA Notice No. 20) 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.

Purchase receivables		Receivables purchased from third parties excluding securities (excluding securitizations)

Securitizations		Transactions in the form of “non-recourse” and having a “senior/subordinated structure,” etc. (excluding specialized lending).


7.		With the start of the application of Basel III, we have been recognizing credit risk-weighted assets in relation to CVA risk and central counterparty-related exposure (Article 130, Paragraph 1(c) and (d) of the FSA Notice No. 20) from the fiscal year ended March 31, 2013.

8.		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.

n Credit risk

(5) Credit risk management

— Summary of credit risk management

See pages 59 to 60 for a summary of our credit risk management policies and procedures.

We apply the advanced internal ratings-based approach to calculate credit risk-weighted assets under Basel Framework. With regard to some business units or asset classes that are deemed to be immaterial for purposes of calculating credit risk-weighted assets, we apply the standardized approach. Among the business units to which we apply the standardized approach, we plan to apply the advanced internal ratings-based approach to Mizuho Corporate Bank Nederland N.V. starting at the end of March 2015.

We use our estimates of PD (probability of default) and LGD (loss given default) in calculating credit risk-weighted assets. In accordance with regulations, we estimate PD by using long-term averages of actual defaults, to which conservative adjustments are made, based on internal data, and make adjustments to LGD taking into account recessionary periods. We regularly perform verifications of PD and LGD through back testing and other methods. We also utilize these estimates for measuring credit risks for internal use, allocating risk capital and other purposes.

— Status of portfolios to which the standardized approach is applied

Eligible external credit assessment institutions used for determining the risk weight for portfolios to which the standardized approach is applied are Rating and Investment Information, Inc. (R&I) in Japan and Standard & Poor’s Ratings Services (S&P) overseas.

We apply a risk weight of 100% for all of our corporate exposure.

— Summary of our internal rating system

See pages 59 for a summary of our internal rating system and rating assignment procedures.

The following table sets forth information with respect to the definition of 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.

Non-investment grade zone

D1–D3

Obligors whose current certainty of debt fulfillment poses no problems, however, their resistance to future changes in business environment is low.

Obligors who require close watching going forward because there are problems with their borrowing conditions, 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.

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

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.

Obligors who have already gone bankrupt, from both a legal and/or formal perspective.

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

(6) 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 fiscal years ended March 31, 2012 and 2013.

— Status of credit risk exposure

(A) Breakdown by geographical area


	(Billions of yen)
	As of March 31, 2012
	Loans, commitments and other non-derivative off-balance-sheet exposures		Securities		Derivatives		Others		Total
Domestic		77,828.0		40,146.5		1,842.3		7,323.2		127,140.2

Overseas		17,071.5		8,465.3		2,054.8		3,453.5		31,045.2

Asia		4,363.0		996.8		148.4		981.9		6,490.2
Central and South America		2,258.9		144.2		201.5		8.8		2,613.7
North America		5,825.6		6,029.2		595.1		1,922.0		14,372.0
Eastern Europe		29.2		—		0.9		6.2		36.5
Western Europe		3,222.0		1,140.7		992.9		474.0		5,829.6
Other areas		1,372.5		154.2		115.7		60.3		1,702.9

Total		94,899.5		48,611.9		3,897.1		10,776.7		158,185.4

Exempt portion		n.a.		n.a.		n.a.		n.a.		8,122.8


	(Billions of yen)
	As of March 31, 2013
	Loans, commitments and other non-derivative off-balance-sheet exposures		Securities		Derivatives		Others		Total
Domestic		75,213.7		39,317.3		1,618.3		8,929.6		125,079.0

Overseas		21,064.4		11,487.6		2,279.1		4,793.6		39,624.9

Asia		5,508.6		1,453.1		235.2		1,330.6		8,527.6
Central and South America		2,584.5		146.1		157.4		20.4		2,908.5
North America		7,387.9		7,883.8		638.3		2,651.4		18,561.7
Eastern Europe		30.8		—		1.2		20.5		52.6
Western Europe		3,582.3		1,814.5		1,100.6		531.8		7,029.4
Other areas		1,970.0		189.9		146.2		238.7		2,544.9

Total		96,278.2		50,805.0		3,897.5		13,723.3		164,704.0

Exempt portion		n.a.		n.a.		n.a.		n.a.		9,197.4


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.

(B) Breakdown by industry


	(Billions of yen)
	As of March 31, 2012
	Loans, commitments and other non-derivative off-balance-sheet exposures		Securities		Derivatives		Others		Total
Manufacturing		13,808.8		2,080.9		537.5		249.9		16,677.2
Construction		1,374.8		188.3		18.6		4.1		1,585.8
Real estate		6,752.2		439.8		53.1		33.2		7,278.4
Service industries		3,575.2		2,136.7		123.5		60.5		5,896.1
Wholesale and retail		7,474.5		593.3		457.2		512.4		9,037.6
Finance and insurance		9,899.3		2,549.1		2,014.7		1,057.5		15,520.7
Individuals		11,907.2		—		0.1		14.3		11,921.8
Other industries		15,769.1		5,946.2		681.1		5,690.6		28,087.1
Japanese Government; Bank of Japan		24,338.1		34,677.4		11.0		3,153.9		62,180.5

Total		94,899.5		48,611.9		3,897.1		10,776.7		158,185.4

Exempt portion		n.a.		n.a.		n.a.		n.a.		8,122.8


	(Billions of yen)
	As of March 31, 2013
	Loans, commitments and other non-derivative off-balance-sheet exposures		Securities		Derivatives		Others		Total
Manufacturing		15,249.1		2,033.2		456.6		290.2		18,029.2
Construction		1,371.2		155.5		10.2		3.9		1,540.8
Real estate		7,190.5		457.2		56.4		32.7		7,736.9
Service industries		3,775.5		2,972.1		92.7		21.2		6,861.7
Wholesale and retail		7,794.3		654.0		233.7		636.0		9,318.0
Finance and insurance		10,547.0		2,578.5		2,371.6		1,489.9		16,987.1
Individuals		11,986.3		—		0.1		13.9		12,000.4
Other industries		18,190.6		8,085.1		662.3		6,204.2		33,142.3
Japanese Government; Bank of Japan		20,173.3		33,869.1		13.6		5,030.9		59,087.1

Total		96,278.2		50,805.0		3,897.5		13,723.3		164,704.0

Exempt portion		n.a.		n.a.		n.a.		n.a.		9,197.4


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.

(C) Breakdown by residual contractual maturity


	(Billions of yen)
	As of March 31, 2012
	Loans, commitments and other non-derivative off-balance-sheet exposures		Securities		Derivatives		Others		Total
Less than one year		29,665.1		13,917.9		536.9		1,897.0		46,017.1
From one year to less than three years		12,628.3		12,704.9		1,606.1		43.9		26,983.4
From three years to less than five years		11,347.2		11,449.5		937.4		27.8		23,762.1
Five years or more		28,158.3		7,156.6		746.9		1.8		36,063.7
Other than above		13,100.3		3,382.8		69.7		8,806.0		25,358.9

Total		94,899.5		48,611.9		3,897.1		10,776.7		158,185.4

Exempt portion		n.a.		n.a.		n.a.		n.a.		8,122.8


	(Billions of yen)
	As of March 31, 2013
	Loans, commitments and other non-derivative off-balance-sheet exposures		Securities		Derivatives		Others		Total
Less than one year		30,751.0		13,704.3		813.1		2,543.7		47,812.3
From one year to less than three years		13,665.5		9,768.9		1,518.1		46.9		24,999.6
From three years to less than five years		13,052.4		14,290.9		807.7		3.8		28,155.1
Five years or more		27,314.7		9,199.5		679.8		5.3		37,199.4
Other than above		11,494.3		3,841.2		78.5		11,123.3		26,537.4

Total		96,278.2		50,805.0		3,897.5		13,723.3		164,704.0

Exempt portion		n.a.		n.a.		n.a.		n.a.		9,197.4


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.

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

(D) Breakdown by geographical area


	(Billions of yen)
	As of March 31, 2012
	Loans, commitments and other non-derivative off-balance-sheet exposures		Securities		Derivatives		Others		Total
Domestic		1,439.5		20.5		82.3		59.0		1,601.4

Overseas		197.0		0.5		17.7		14.5		229.9

Asia		41.7		0.0		0.1		3.9		45.8
Central and South America		59.0		0.0		9.5		0.0		68.7
North America		8.0		0.5		0.0		8.4		17.0
Eastern Europe		0.4		—		—		—		0.4
Western Europe		66.5		—		8.0		1.6		76.2
Other areas		21.2		—		—		0.4		21.6

Total		1,636.5		21.1		100.1		73.6		1,831.4

Exempt portion		n.a.		n.a.		n.a.		n.a.		1.1


	(Billions of yen)
	As of March 31, 2013
	Loans, commitments and other non-derivative off-balance-sheet exposures		Securities		Derivatives		Others		Total
Domestic		1,373.7		16.6		34.7		46.8		1,471.9

Overseas		342.6		0.6		33.8		10.2		387.3

Asia		47.7		0.0		0.7		3.7		52.2
Central and South America		183.8		0.0		24.3		0.1		208.3
North America		7.4		0.6		0.0		3.5		11.6
Eastern Europe		0.4		—		—		—		0.4
Western Europe		77.0		—		8.6		1.8		87.5
Other areas		26.0		—		0.1		0.8		27.0

Total		1,716.3		17.2		68.6		57.0		1,859.2

Exempt portion		n.a.		n.a.		n.a.		n.a.		3.6


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

(E) Breakdown by industry


	(Billions of yen)
	As of March 31, 2012
	Loans, commitments and other non-derivative off-balance-sheet exposures		Securities		Derivatives		Others		Total
Manufacturing		386.7		8.0		35.1		16.6		446.6
Construction		53.7		2.7		0.2		1.1		58.0
Real estate		251.1		5.3		0.0		0.8		257.4
Service industries		205.6		3.4		5.6		6.2		221.0
Wholesale and retail		268.2		0.8		41.6		31.1		341.9
Finance and insurance		21.2		0.2		3.0		10.5		35.0
Individuals		236.2		—		0.0		1.3		237.5
Other industries		213.3		0.3		14.2		5.7		233.7

Total		1,636.5		21.1		100.1		73.6		1,831.4

Exempt portion		n.a.		n.a.		n.a.		n.a.		1.1


	(Billions of yen)
	As of March 31, 2013
	Loans, commitments and other non-derivative off-balance-sheet exposures		Securities		Derivatives		Others		Total
Manufacturing		415.3		7.3		13.8		14.3		450.9
Construction		47.0		2.5		0.0		0.8		50.5
Real estate		255.1		4.4		0.0		0.6		260.3
Service industries		170.0		0.7		5.4		5.0		181.3
Wholesale and retail		216.9		0.8		16.7		24.9		259.4
Finance and insurance		25.1		0.3		2.7		5.6		33.7
Individuals		210.8		—		0.0		1.3		212.1
Other industries		375.7		1.0		29.7		4.2		410.7

Total		1,716.3		17.2		68.6		57.0		1,859.2

Exempt portion		n.a.		n.a.		n.a.		n.a.		3.6


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

— Status of reserves for possible losses on loans

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

(F) Fiscal year-end balances of reserves for possible losses on loans and changes during the fiscal year

(after partial direct write-offs)


	(Billions of yen)
	As of, or for the fiscal year ended, March 31, 2012		As of, or for the fiscal year ended, March 31, 2013
General reserve for possible losses on loans
Beginning balance		501.4		447.5
Increase during the fiscal year		447.5		503.0
Decrease during the fiscal year		501.4		447.5
Ending balance		447.5		503.0

Specific reserve for possible losses on loans
Beginning balance		259.1		243.9
Increase during the fiscal year		243.9		235.7
Decrease during the fiscal year		259.1		243.9
Ending balance		243.9		235.7

Reserve for possible losses on loans to restructuring countries
Beginning balance		0.0		0.0
Increase during the fiscal year		0.0		1.0
Decrease during the fiscal year		0.0		0.0
Ending balance		0.0		1.0

Total
Beginning balance		760.5		691.5
Increase during the fiscal year		691.5		739.8
Decrease during the fiscal year		760.5		691.5
Ending balance		691.5		739.8


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.

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


	(Billions of yen)
	As of March 31, 2011		As of March 31, 2012		Change
Domestic		220.0		187.4		(32.5	)
Manufacturing		27.0		26.8		(0.1	)
Construction		18.6		6.0		(12.5	)
Real estate		19.7		20.3		0.6
Service industries		17.0		14.1		(2.9	)
Wholesale and retail		39.0		39.7		0.6
Finance and insurance		0.5		0.8		0.2
Individuals		84.2		67.3		(16.9	)
Other industries		13.5		12.0		(1.5	)

Overseas		34.2		50.4		16.1

Exempt portion		4.8		6.0		1.2

Total		259.1		243.9		(15.1	)


	(Billions of yen)
	As of March 31, 2012		As of March 31, 2013		Change
Domestic		187.4		171.3		(16.0	)
Manufacturing		26.8		35.1		8.2
Construction		6.0		7.0		0.9
Real estate		20.3		24.9		4.5
Service industries		14.1		12.3		(1.8	)
Wholesale and retail		39.7		38.2		(1.5	)
Finance and insurance		0.8		0.1		(0.6	)
Individuals		67.3		41.8		(25.4	)
Other industries		12.0		11.6		(0.3	)

Overseas		50.4		57.8		7.4

Exempt portion		6.0		6.4		0.3

Total		243.9		235.7		(8.2	)


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 fiscal year ended March 31, 2012		For the fiscal year ended March 31, 2013
Manufacturing		7.1		18.3
Construction		1.1		1.1
Real estate		1.7		0.7
Service industries		3.4		5.3
Wholesale and retail		7.5		7.2
Finance and insurance		0.0		—
Individuals		12.2		10.0
Other industries		5.0		6.7

Exempt portion		0.1		0.1

Total		38.5		49.7


Notes:

1.		The above table represents 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.		“Other industries” include overseas and non-Japanese resident portions.

— 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 March 31, 2012

Risk weight	On-balance sheet		Off-balance sheet		Total		With external rating
0%		452.3		3,702.0		4,154.3		139.1
10%		67.4		0.1		67.5		—
20%		288.5		796.1		1,084.7		8.7
35%		—		—		—		—
50%		4.4		1.0		5.4		2.0
100%		2,144.8		665.7		2,810.5		42.8
150%		0.1		—		0.1		—
250%		—		—		—		—
350%		—		—		—		—
625%		—		0.0		0.0		—
937.5%		—		—		—		—
1,250%		—		0.0		0.0		—

Total		2,957.8		5,165.0		8,122.8		192.8


	(Billions of yen)
	As of March 31, 2013

Risk weight	On-balance sheet		Off-balance sheet		Total		With external rating
0%		2,660.4		1,462.2		4,122.7		195.8
10%		111.2		0.0		111.2		—
20%		314.0		892.0		1,206.0		8.0
35%		—		—		—		—
50%		20.0		1.3		21.4		3.3
100%		2,455.3		1,235.1		3,690.5		44.0
150%		0.0		—		0.0		—
250%		45.3		—		45.3		—
350%		—		—		—		—
625%		—		0.0		0.0		—
937.5%		—		0.0		0.0		—
1,250%		—		—		—		—

Total		5,606.5		3,590.8		9,197.4		251.3


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.

(J) Deduction from capital / amount of exposure to which a risk weight of 1,250% is applied


	(Billions of yen)
	As of March 31, 2012
Deduction from capital		21.9


	As of March 31, 2013
Amount of exposure to which a risk weight of 1,250% is applied		9.8

— 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)
Risk weight	As of March 31, 2012		As of March 31, 2013
50%		—		—
70%		13.1		19.8
90%		—		6.1
95%		84.0		75.4
115%		15.5		15.9
120%		2.4		19.4
140%		41.9		24.6
250%		236.7		124.6
Default		7.1		32.4

Total		400.9		318.5

(L) Equity exposure under simple risk weight method of market-based approach by risk weight category


	(Billions of yen)
Risk weight	As of March 31, 2012		As of March 31, 2013
300%		204.9		298.9
400%		69.2		65.5

Total

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents