Mizuho to Book $300 Million Writedown on Plunging Stock Prices

(Bloomberg) -- Mizuho Financial Group Inc. will book a 32.9 billion yen ($306 million) charge on its securities holdings in the just-completed quarter due to the coronavirus-fueled stock market rout.

The writedown stems from a “significant decline” in the fair value of some securities held by the group’s lending, trust banking and securities units, Tokyo-based Mizuho said in a statement on Wednesday. It left its earnings projection and dividend estimate for the year ended March 31 unchanged.

Japan’s main banking industry group warned last month that lenders may have to book writedowns on their stock holdings if the market turmoil persists. The benchmark Topix index fell 18% last quarter, the most since the global financial crisis in 2008.

The country’s banks own more than 8 trillion yen of shares in corporate clients even after reducing their so-called cross shareholdings in recent years, Bank of Japan figures show. Gains from selling such stakes have become a key part of banks’ profits as low interest rates crimp lending income.

Declining shares overseas are also taking a toll. Mitsubishi UFJ Financial Group Inc. is booking an impairment charge of about 360 billion yen on its holdings in three Southeast Asian banks.

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