Mizuho reports 50 percent profit drop on U.S. credit woes

Thu, May 15 02:48 PM

TOKYO (AP) _ Mizuho, Japan's No. 2 banking group, took a beating from U.S. subprime credit problems, reporting on Thursday a 50 percent drop in profit for the fiscal year.

Mizuho Financial Group Inc. recorded 311.22 billion yen (US$2.97 billion; 1.92 billion) in profit for the fiscal year ended March 31, down 49.8 percent from 620.97 billion yen the previous year.

Fiscal year operating revenue climbed 10.3 percent to 4.524 trillion yen (US$43.2 billion; 28 billion), said the Tokyo-based bank. It did not break out its quarterly numbers.

Expectations had been high that subprime-linked losses at Mizuho might be the worst among Japanese lenders after it drastically reduced its fiscal year forecast last month. The bank said its money-losing Mizuho Securities Co.

had been hit hard by U.S. credit woes. Mizuho said trading losses on securitized products at Mizuho Securities totaled 413 billion yen (US$3.94 billion; 2.55 billion) for the year ended March 31.

Compared to U.S. financial groups, the exposure of Japanese banks to the U.S. subprime mortgage problem has been relatively small. For the fiscal year through March 2009, Mizuho is forecasting a profit of 560 billion yen (US$5.35 billion; 3.47 billion) on 4.3 trillion yen (US$41.07 billion; 26.6 billion) in revenue.

Mizuho shares rose 3.9 percent in Tokyo to 537,000 yen (US$5,128; 3,321). Its earnings were announced about an hour after trading ended.

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