Mizuho Profit Doubles From Six-Year Low on Stock Sale Gains

(Bloomberg) -- Mizuho Financial Group Inc.’s third-quarter profit more than doubled from a six-year low, driven by gains on sales of its stock holdings.

• Net income climbed to 116.3 billion yen ($1.1 billion) in the three months ended Dec. 31 from 50.6 billion yen a year earlier, according to Bloomberg calculations based on nine-month figures released Friday.

Key Insights

• Gains on stock sales more than tripled, as Mizuho continued its policy of offloading stakes in client companies to bolster corporate governance. A stock-market rally in the period may have helped.
• The results compare favorably with the same quarter a year earlier, when it lost money on bond trading and a slumping equity market dented the bank’s profit from sales of shareholdings.
• Bad-loan costs fell, easing any concerns that credit quality may worsen.
• Lending profit rose 1.4%, even as negative interest rates continued to squeeze margins. Rival Sumitomo Mitsui Financial Group Inc. also reported higher net interest income yesterday.

Market Reaction

• Shares of Mizuho slipped 0.1% before the results were published, taking this year’s decline to 3.5%.

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• Mizuho has now achieved 85% of its 470 billion yen full-year profit target. That goal compares with just 96.6 billion yen earned in the previous fiscal year, when the bank booked impairment charges stemming from its information systems and foreign bonds.
• For more on the results, click here.
• Click here for Mizuho’s results presentation.

To contact the reporters on this story: Taiga Uranaka in Tokyo at turanaka@bloomberg.net;Yuki Hagiwara in Tokyo at yhagiwara1@bloomberg.net

To contact the editors responsible for this story: Marcus Wright at mwright115@bloomberg.net, Russell Ward

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