Business

Japan’s Mizuho forecasts four-fold recovery after weakest earnings in 10 years

Japan’s Mizuho forecasts four-fold recovery after weakest earnings in 10 years

TOKYO: Japan’s Mizuho Financial Group  forecast a more than  four-fold profit rebound this financial year after posting its weakest annual results in a decade, hit by the cost of closing domestic branches and restructuring its securities portfolio.

Mizuho, like its rivals, is grappling with ultra-low interest rates, which weigh on lending income, as well as a declining population, underscoring the tough outlook for banks in the world’s third-largest economy.

Mizuho, Japan’s second-largest bank by assets, expects net profit of 470 billion yen ($4.29 billion) for the year ending March 2020, it said.

That would come after profit totalled 96.6 billion yen in the just-ended year, tumbling 83% from 577 billion yen in the previous year. That was its weakest performance since the global financial crisis, when it fell to a loss in the year to March 2009.

The results were widely expected after Mizuho slashed its outlook in March for the just-ended year by 86%.

The bank also unveiled a five-year business plan saying it needed to be able to respond quickly to structural changes, including Japan’s low birthrate and the industry’s increased use of technology.

It also said it would target consolidated net profit of 900 billion yen by 2023.

Copyright Reuters, 2019