TOKYO: Mizuho Financial Group reported a 62 per cent jump in second-quarter net profit and lifted its annual guidance on Thursday (Nov 14), fuelled by robust lending demand and higher margins following a July interest rate hike by the Bank of Japan.
Japan’s third-largest lender by assets raised its net profit forecast to a record ¥820 billion (US$5.26 billion) from ¥750 billion for the year ending on Mar 31.
Underscoring the bumper results, Mizuho announced a share buyback of up to ¥100 billion – its first in 16 years – while lifting its previous dividend estimate by ¥15 to ¥130 for the year.
“We have entered a new stage of growth investment and strengthening shareholder returns,” CEO Masahiro Kihara told a media briefing.
Japan’s megabanks, all reporting financial results on Thursday, are set to benefit from higher interest rates after seven years of negative interest rates kept lending margins razor-thin.
The central bank raised its policy rate to 0.25 per cent in July after ending negative interest ends in March, pushing Mizuho’s loan and deposit rate margin for its domestic lending business up for the second consecutive quarter.
Mizuho estimated the financial impact from the pair of rate hikes would total ¥85 billion over the course of this financial year.
For the July-September period, it reported a group net profit of ¥77 billion yen, up from ¥170 billionec in the same quarter a year earlier. Fellow megabanks Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group report results later on Thursday.
