UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 20-F(Mark One)‘ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2017
OR
‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
‘ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
For the transition period fromtoCommission file number 001-33098

Kabushiki(Exact
KaishaMizuho Financial Group
name of Registrant as specified in its charter)
Mizuho Financial Group, Inc.
(Translation of Registrant’s name into English)
Japan(Jurisdiction of incorporation or organization)
1-5-5 Otemachi
Chiyoda-ku, Tokyo 100-8176
Japan(Address of principal executive offices)

Masahiro Kosugi, +81-3-5224-1111, +81-3-5224-1059, address is same as above(Name, Telephone, Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each className of each exchange on which registered

Common Stock, without par value
American depositary shares, each of which represents twoshares of common stock
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None

The New York Stock Exchange*
The New York Stock Exchange(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
(Title of Class)
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
At March 31, 2017, the following shares of capital stock were issued: 25,386,307,945 shares of common stock (including 6,705,604 shares of common stock heldby the registrant as treasury stock).
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes È No ‘
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Yes ‘ No È
Note—checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their
obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes È No ‘
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to besubmitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files).
Yes È No ‘
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of“large accelerated filer, “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer È

Accelerated filer ‘

Non-accelerated filer ‘

Emerging growth company ‘

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use theextended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ‘† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification
after April 5, 2012.
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP È

International Financial Reporting Standards as issued by the International Accounting Standards Board ‘

Other ‘If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
Item 17 ‘ Item 18 ‘
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ‘ No È
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by a court.
‘ Yes ‘ No
* Not for trading, but only in connection with the registration and listing of the ADSs.

MIZUHO FINANCIAL GROUP, INC.
ANNUAL REPORT ON FORM 20-F
Table of Contents
Page

Presentation of Financial and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 1.
Identity of Directors, Senior Management and Advisers . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 2.
Offer Statistics and Expected Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 3.
Key Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.A. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.B.
Capitalization and Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.C.
Reasons for the Offer and Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.D. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 4.
Information on the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.A. History and Development of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.B.
Business Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.C.
Organizational Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.D. Property, Plant and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 4A. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 5.
Operating and Financial Review and Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 6.
Directors, Senior Management and Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.A. Directors and Senior Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.B.
Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.C.
Board Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.D. Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.E.
Share Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 7.
Major Shareholders and Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.A. Major Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.B.
Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.C.
Interests of Experts and Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 8.
Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.A. Consolidated Statements and Other Financial Information . . . . . . . . . . . . . . . . . . . . .
8.B.
Significant Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 9.
The Offer and Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.A. Listing Details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.B.
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.C.
Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.D. Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.E.
Dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.F.
Expenses of the Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 10.
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.A. Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.B. Memorandum and Articles of Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.C. Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.D. Exchange Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.E. Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.F. Dividends and Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.G. Statement by Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.H. Documents on Display . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.I. Subsidiary Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1

3
3
5
5
6
6
11
11
11
21
21
22
48
50
50
51
104
104
124
130
134
135
137
137
137
137
138
138
138
139
139
140
140
141
141
141
142
142
142
154
154
155
161
161
161
161

Page

ITEM 11.
ITEM 12.

Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of Securities Other than Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12.A. Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12.B. Warrants and Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12.C. Other Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12.D. American Depositary Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 13.
Defaults, Dividend Arrearages and Delinquencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 14.
Material Modifications to the Rights of Security Holders and Use of Proceeds . . . . . . . . . . .
ITEM 15.
Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 16A. Audit Committee Financial Expert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 16B. Code of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 16C. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 16D. Exemptions from the Listing Standards for Audit Committees . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 16E. Purchase of Equity Securities by the Issuer and Affiliated Purchasers . . . . . . . . . . . . . . . . . .
ITEM 16F. Change in Registrant’s Certifying Accountant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 16G. Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 16H. Mine Safety Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 17.
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 18.
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 19.
Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selected Statistical Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Index to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

162
184
184
184
184
184
185
185
185
186
186
186
187
188
188
188
190
191
191
191
A-1
F-1

PRESENTATION OF FINANCIAL AND OTHER INFORMATIONIn this annual report, the terms “Mizuho Financial Group,” the “Group,” “we,” “us” and “our” generally
refer to Mizuho Financial Group, Inc. and its consolidated subsidiaries, but from time to time as appropriate to
the context, those terms refer to Mizuho Financial Group, Inc. as an individual legal entity. Furthermore, unlessthe context indicates otherwise, these references are intended to refer to us as if we had been in existence in ourcurrent form for all periods referred to herein.
On July 1, 2013, a merger between the former Mizuho Bank, Ltd. and the former Mizuho Corporate Bank,
Ltd. came into effect with the former Mizuho Corporate Bank as the surviving entity, which was renamed
Mizuho Bank upon the merger. In this annual report, “Mizuho Bank” refers to the post-merger entity, while the“former Mizuho Bank” and the “former Mizuho Corporate Bank” refer to pre-merger Mizuho Bank andpre-merger Mizuho Corporate Bank, respectively.
In this annual report, “our principal banking subsidiaries” refer to Mizuho Bank and Mizuho
Trust & Banking Co., Ltd. (or with respect to references as of a date, or for periods ending, before July 1, 2013,
to the former Mizuho Bank, the former Mizuho Corporate Bank and Mizuho Trust & Banking).
In this annual report, references to “U.S. dollars,” “dollars” and “$” refer to the lawful currency of theUnited States and those to “yen” and “¥” refer to the lawful currency of Japan.
In this annual report, yen figures and percentages have been rounded to the figures shown. However, insome cases, figures presented in tables have been adjusted to match the sum of the figures with the total amount,and such figures may also be referred to in the related text. In addition, yen figures and percentages in “Item 3.A.
Key Information—Selected Financial Data—Japanese GAAP Selected Consolidated Financial Information” andothers that are specified have been truncated to the figures shown.
Our fiscal year end is March 31. References to years not specified as being fiscal years are to calendar years.
Unless otherwise specified, for purposes of this annual report, we have presented our financial informationin accordance with accounting principles generally accepted in the United States, or U.S. GAAP. Unlessotherwise stated or the context otherwise requires, all amounts in our financial statements are expressed in yen.
We usually hold the ordinary general meeting of shareholders of Mizuho Financial Group in June of eachyear in Chiyoda-ku, Tokyo.
FORWARD-LOOKING STATEMENTS
We may from time to time make written or oral forward-looking statements. Written forward-looking
statements may appear in documents filed with the Securities and Exchange Commission, including this annual
report, and other reports to shareholders and other communications.
The U.S. Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking
information to encourage companies to provide prospective information about themselves. We rely on this safe
harbor in making these forward-looking statements.
This annual report contains forward-looking statements regarding the intent, belief, current expectations andtargets of our management with respect to our financial condition and future results of operations. In many cases,
but not all, we use such words as “aim,” “anticipate,” “believe,” “endeavor,” “estimate,” “expect,” “intend,”“may,” “plan,” “probability,” “project,” “risk,” “seek,” “should,” “strive,” “target” and similar expressions inrelation to us or our management to identify forward-looking statements. You can also identify forward-looking
3statements by discussions of strategy, plans or intentions. These statements reflect our current views with respect
to future events and are subject to risks, uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect, our actual results may varymaterially from those we currently anticipate. Potential risks and uncertainties include, without limitation, thefollowing:•

increase in allowance for loan losses and incurrence of significant credit-related costs;•

declines in the value of our securities portfolio, including as a result of the declines in stock markets andthe impact of the dislocation in the global financial markets;•changes in interest rates;•

foreign exchange rate fluctuations;•decrease in the market liquidity of our assets;•

revised assumptions or other changes related to our pension plans;•a decline in our deferred tax assets;•

the effect of financial transactions entered into for hedging and other similar purposes;•

failure to maintain required capital adequacy ratio levels;•

downgrades in our credit ratings;•

our ability to avoid reputational harm;•

our ability to implement our Medium-term Business Plan and other strategic initiatives and measureseffectively;•

the effectiveness of our operation, legal and other risk management policies;•

the effect of changes in general economic conditions in Japan and elsewhere; and•amendments and other changes to the laws and regulations that are applicable to us.

Our forward-looking statements are not guarantees of future performance and involve risks anduncertainties. Actual results may differ from those in the forward-looking statements as a result of various
factors. We identify in this annual report in “Item 3.D. Key Information—Risk Factors,” “Item 4.B. Informationon the Company—Business Overview,” “Item 5. Operating and Financial Review and Prospects” and elsewhere,
some, but not necessarily all, of the important factors that could cause these differences.
We do not intend to update our forward-looking statements. We are under no obligation, and disclaim any
obligation, to update or alter our forward-looking statements, whether as a result of new information, future
events or otherwise.

4

PART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.

5

ITEM 3. KEY INFORMATION
3.A. Selected Financial Data
The following tables set forth our selected consolidated financial data.
The first table below sets forth selected consolidated financial data of Mizuho Financial Group as of and forthe fiscal years ended March 31, 2013, 2014, 2015, 2016 and 2017 derived from the audited consolidated
financial statements of Mizuho Financial Group prepared in accordance with U.S. GAAP.
The second table below sets forth selected consolidated financial data of Mizuho Financial Group as of andfor the fiscal years ended March 31, 2013, 2014, 2015, 2016 and 2017 derived from Mizuho Financial Group’s
consolidated financial statements prepared in accordance with accounting principles generally accepted in Japan,
or Japanese GAAP.
The consolidated financial statements of Mizuho Financial Group as of and for the fiscal years ended
March 31, 2015, 2016 and 2017 prepared in accordance with U.S. GAAP have been audited in accordance withthe standards of the Public Company Accounting Oversight Board (United States) by Ernst & Young ShinNihon
LLC, independent registered public accounting firm.
You should read the U.S. GAAP selected consolidated financial information presented below together with
the information included in “Item 5. Operating and Financial Review and Prospects” and the audited
consolidated financial statements, including the notes thereto, included in this annual report. The information
presented below is qualified in its entirety by reference to that information.

6

U.S. GAAP Selected Consolidated Financial Information
As of and for the fiscal years ended March 31,
2013
2014
2015
2016
2017
(in millions of yen, except per share data, share number information and percentages)

Statement of income data:
Interest and dividend income . . . ¥Interest expense . . . . . . . . . . . . . .

1,423,375 ¥
412,851

1,422,799 ¥
401,565

1,457,659 ¥
411,982

1,500,171 ¥495,407

1,509,030
601,7121,010,524

1,021,234

1,045,677

1,004,764

907,318

139,947(126,230)(60,223)

34,56037,668Net interest income after
provision (credit) for loan
losses . . . . . . . . . . . . . . . . . . . .
Noninterest income . . . . . . . . . . .
Noninterest expenses . . . . . . . . . .

870,577
1,439,419
1,424,816

1,147,464
1,082,834
1,503,955

1,105,900
1,801,215
1,639,462

970,204
1,883,894
1,657,493

869,650
1,368,032
1,757,307

Income before income tax
expense . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . .

885,180
4,024

726,343
226,108

1,267,653
437,420

1,196,605
346,542

480,375
91,244

881,156

500,235

830,233

850,063

389,131

5,744

1,751

27,185(429)

26,691

875,412 ¥498,484 ¥

803,048 ¥

850,492 ¥362,440

Net interest income . . . . . . . . . . .
Provision (credit) for loan
losses . . . . . . . . . . . . . . . . . . . .

Net income . . . . . . . . . . . . . . . . .
Less: Net income (loss)
attributable to noncontrollinginterests . . . . . . . . . . . . . . . . . .
Net income attributable to
MHFG shareholders . . . . . . . . ¥Net income attributable tocommon shareholders . . . . . . . ¥867,191 ¥491,739 ¥
798,138 ¥848,062 ¥362,440
Amounts per share:
Basic earnings per commonshare—net income attributable
to common shareholders . . . . . ¥36.05 ¥
20.33 ¥
32.75 ¥
34.19 ¥
14.33
Diluted earnings per commonshare—net income attributable
to common shareholders . . . . . ¥34.47 ¥
19.64 ¥
31.64 ¥
33.50 ¥
14.28
Number of shares used to
calculate basic earnings percommon share (inthousands) . . . . . . . . . . . . . . . .
24,053,282
24,189,670
24,368,116
24,806,161
25,285,899
Number of shares used to
calculate diluted earnings percommon share (inthousands) . . . . . . . . . . . . . . . .
25,365,229
25,371,252
25,381,047
25,387,033
25,380,302
Cash dividends per share (1)(2):Common stock . . . . . . . . . . . ¥6.00 ¥
6.50 ¥
7.50 ¥
7.50 ¥
7.50$
0.06 $
0.06 $
0.06 $
0.07 $
0.07
Eleventh series class XI
preferred stock(3) . . . . . . . ¥20.00 ¥
20.00 ¥
20.00 ¥
20.00 ¥—$
0.21 $
0.19 $
0.17 $
0.18 $—
Thirteenth series class XIII
preferred stock(4) . . . . . . . ¥30.00 ¥
— ¥
— ¥
— ¥
—
$
0.32 $
— $
— $
— $
—

7

As of and for the fiscal years ended March 31,
2013
2014
2015
2016
2017
(in millions of yen, except per share data, share number information and percentages)

Balance sheet data:
Total assets . . . . . . . . . . . . . ¥178,744,794(5) ¥175,697,452(5) ¥190,114,354(5) ¥193,810,151(5) ¥200,456,304
Loans, net of allowance . . . .
69,060,526
72,858,777
77,528,017
77,104,122
81,804,233
Total liabilities . . . . . . . . . . 172,887,699(5) 169,076,081(5) 181,924,510(5) 185,626,960(5) 191,684,247
Deposits . . . . . . . . . . . . . . . . 100,221,556
102,610,154
114,206,441
117,937,722
131,184,953
Long-term debt . . . . . . . . . .
8,800,023(5)9,852,048(5) 14,576,861(5) 14,765,527(5) 14,529,414
Common stock . . . . . . . . . . .
5,460,821
5,489,295
5,590,396
5,703,144
5,826,149
Total MHFG shareholders’equity . . . . . . . . . . . . . . . .
5,728,120
6,378,470
7,930,338
8,014,551
8,261,357
Other financial data:
Return on equity and assets:
Net income attributable tocommon shareholders as apercentage of total
average assets . . . . . . . . .
0.50%
0.27%
0.42%
0.43%
0.18%
Net income attributable tocommon shareholders as apercentage of average
MHFG shareholders’equity . . . . . . . . . . . . . . . .
18.76%
9.64%
13.86%
13.33%
5.25%
Dividends per commonshare as a percentage ofbasic earnings percommon share . . . . . . . . .
16.64%
31.97%
22.90%
21.94%
52.34%
Average MHFG
shareholders’ equity as apercentage of total
average assets . . . . . . . . .
2.67%
2.84%
3.04%
3.23%
3.38%
Net interest income as apercentage of total
average interest-earning
assets . . . . . . . . . . . . . . . .
0.66%
0.64%
0.63%
0.58%
0.51%
Notes:(1) Yen amounts are expressed in U.S. dollars at the rate of ¥94.16 = $1.00, ¥102.98 = $1.00, ¥119.96 = $1.00,¥112.42= $1.00 and ¥111.41= $1.00 for the fiscal years ended March 31, 2013, 2014, 2015, 2016 and 2017,
respectively. These rates are the noon buying rates on the respective fiscal year-end dates in New York City
for cable transfers in yen as certified for customs purposes by the Federal Reserve Bank of New York.
(2) Figures represent cash dividends per share with respect to the applicable fiscal year. Dividends with respect
to a fiscal year include year-end dividends and interim dividends. Declaration and payment of dividends are
conducted during the immediately following fiscal year, in the case of year-end dividends, or immediately
following interim period, in the case of interim dividends.
(3) On July 1, 2016, we acquired ¥75.1 billion of eleventh series class XI preferred stock, in respect of which arequest for acquisition was not made by June 30, 2016, and delivered shares of our common stock, pursuant
to Article 20, Paragraph 1 of our articles of incorporation and a provision in the terms and conditions of thepreferred stock concerning mandatory acquisition in exchange for common stock. On July 13, 2016, wecancelled all of our treasury shares of eleventh series class XI preferred stock.
(4) On July 11, 2013, we acquired and subsequently cancelled all of the thirteenth series class XIII preferredstock.
(5) Total assets, total liabilities and long-term debt have been recalculated to reflect the retrospective adoptionof ASU No.2015-03. See Note 2 to our consolidated financial statements included elsewhere in this annual
report.
8Japanese GAAP Selected Consolidated Financial Information
2013

Statement of income data:
Interest income . . . . . . . . . . . . . ¥Interest expense . . . . . . . . . . . . .
Net interest income . . . . . . . . . .
Fiduciary income . . . . . . . . . . . .
Net fee and commission
income . . . . . . . . . . . . . . . . . .
Net trading income . . . . . . . . . .
Net other operating income . . . .
General and administrative
expenses . . . . . . . . . . . . . . . .
Other income . . . . . . . . . . . . . . .
Other expenses . . . . . . . . . . . . .
Income before income
taxes(1) . . . . . . . . . . . . . . . . . .
Income taxes:
Current(2) . . . . . . . . . . . . . .
Deferred . . . . . . . . . . . . . . .
Profit(1) . . . . . . . . . . . . . . . . . . . .
Profit attributable tonon-controlling interests(1) . . .
Profit attributable to owners ofparent(1) . . . . . . . . . . . . . . . . . ¥As of and for the fiscal years ended March 31,
2014
2015
2016
(in millions of yen, except per share data and percentages)

2017

1,421,609 ¥
345,710

1,417,569 ¥
309,266

1,468,976 ¥
339,543

1,426,256 ¥
422,574

1,445,555
577,737

1,075,898
48,506

1,108,303
52,014

1,129,433
52,641

1,003,682
53,458867,818
50,627507,378
215,033
324,899

560,768
187,421
126,774

593,360
262,963
209,340

607,551
310,507
246,415

603,542
325,332
245,419

1,244,647
198,063407,299

1,258,227
344,275
135,962

1,351,611
301,652
207,147

1,349,593
365,036
228,807

1,467,221
438,042
279,368

717,832

985,366

990,632

1,008,252

784,193

50,4007,461
659,970

137,010
77,960770,396

260,268
44,723
685,640

213,289
69,260725,702

196,535(58,800)
646,457

99,454

81,98073,70554,75942,913

560,516 ¥688,415 ¥

611,935 ¥

670,943 ¥

603,544

Net income per share:
Basic . . . . . . . . . . . . . . . . . . . . . ¥22.96 ¥
28.18 ¥
24.91 ¥
26.94 ¥
23.86
Diluted . . . . . . . . . . . . . . . . . . . .
22.05
27.12
24.10
26.42
23.78
Balance sheet data:
Total assets . . . . . . . . . . . . . . . . ¥177,411,062 ¥175,822,885 ¥189,684,749 ¥193,458,580 ¥200,508,610
Loans and bills discounted(3) . . .
67,536,882
69,301,405
73,415,170
73,708,884
78,337,793
Securities . . . . . . . . . . . . . . . . . .
53,472,399
43,997,517
43,278,733
39,505,971
32,353,158
Deposits(4) . . . . . . . . . . . . . . . . .
99,568,737 101,811,282 113,452,451 117,456,604 130,676,494
Net assets . . . . . . . . . . . . . . . . . .
7,736,230
8,304,549
9,800,538
9,353,244
9,273,361
Risk-adjusted capital data
(Basel III)(5):
Common Equity Tier 1
capital . . . . . . . . . . . . . . . . . . ¥ 4,802,418 ¥ 5,304,412 ¥ 6,153,141 ¥ 6,566,488 ¥ 7,001,664
Tier 1 capital . . . . . . . . . . . . . . .
6,486,068
6,844,746
7,500,349
7,905,093
8,211,522
Total capital . . . . . . . . . . . . . . . .
8,344,554
8,655,990
9,508,471
9,638,641
10,050,953
Risk-weighted assets . . . . . . . . .
58,790,617
60,274,087
65,191,951
62,531,174
61,717,158
Common Equity Tier 1 capitalratio . . . . . . . . . . . . . . . . . . . .
8.16%
8.80%
9.43%
10.50%
11.34%
Tier 1 capital ratio . . . . . . . . . . .
11.03
11.35
11.50
12.64
13.30
Total capital ratio . . . . . . . . . . .
14.19
14.36
14.58
15.41
16.28

9

Notes:(1) We have applied “Revised Accounting Standard for Business Combinations” (ASBJ Statement No.21,
September 13, 2013) and others and presentation of Net Income and others has been changed andpresentation of Minority Interests has been changed to Non-controlling Interests from the fiscal year ended
March 31, 2016.
(2) Includes refund of income taxes.
(3) Bills discounted refer to a form of financing in Japan under which promissory notes obtained bycorporations through their regular business activities are purchased by banks prior to their payment dates at
a discount based on prevailing interest rates.
(4) Includes negotiable certificates of deposit.
(5) Risk-adjusted capital data are calculated on a Basel III basis from the fiscal year ended March 31, 2013. We
adopted the advanced internal ratings-based approach (the “AIRB approach”) for the calculation of riskweighted assets associated with credit risk from the fiscal year ended March 31, 2009. We also adopted theadvanced measurement approach (the “AMA”) for the calculation of operational risk from the fiscal year
ended March 31, 2010. For more details on capital adequacy requirements set by the Bank for International
Settlements (“BIS”), and the guideline implemented by the Financial Services Agency in compliance
thereto, see “Item 5. Operating and Financial Review and Prospects—Capital Adequacy.”
There are certain differences between U.S. GAAP and Japanese GAAP. The differences between
U.S. GAAP and Japanese GAAP applicable to us primarily relate to the accounting for derivative financial
instruments and hedging activities, investments, loans, allowances for loan losses and off-balance-sheet
instruments, premises and equipment, land revaluation, business combinations, pension liabilities, consolidationof variable interest entities, deferred taxes and foreign currency translation. See “Item 5. Operating and Financial
Review and Prospects—Reconciliation with Japanese GAAP.”

10

Exchange Rate Information
The following table sets forth, for each period indicated, the noon buying rate in New York City for cabletransfers in yen as certified for customs purposes by the Federal Reserve Bank of New York, expressed in yen
per $1.00. The exchange rates are reference rates and are not necessarily the rates used to calculate ratios or the
rates used to convert yen to U.S. dollars in the financial statements contained in this annual report.
Fiscal years ended (ending) March 31,

High2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 (through May 31) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Low
Average(1)(yen per dollar)

Periodend¥ 96.16105.25
121.50125.58118.32114.19¥ 77.4192.96
101.26111.30100.07108.40¥ 83.26
100.46110.78120.13108.31111.08¥ 94.16102.98119.96112.42111.41110.71¥117.68
114.34115.02111.52114.19¥112.72111.74110.48108.40110.68

—
—
—
—
—

—
—
—
—
—

Calendar year 2017

January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Note:(1) Calculated by averaging the exchange rates on the last business day of each month during the respective
periods. The noon buying rate as of May 31, 2017 was ¥110.71 = $1.00.
3.B. Capitalization and Indebtedness
Not applicable.
3.C. Reasons for the Offer and Use of Proceeds
Not applicable.
3.D. Risk Factors
Investing in our securities involves a high degree of risk. You should carefully consider the risks described
below as well as the other information in this annual report, including our consolidated financial statements andrelated notes, “Item 5. Operating and Financial Review and Prospects,” “Item 11. Quantitative and Qualitative
Disclosures about Market Risk” and “Selected Statistical Data.”
Our business, financial condition and operating results could be materially adversely affected by any of thefactors discussed below. The trading price of our securities could decline due to any of these factors. This annual
report also contains forward-looking statements that involve risks and uncertainties. Our actual results could
differ materially from those anticipated in these forward-looking statements as a result of various factors,
including the risks faced by us described below and elsewhere in this annual report. See “Forward-Looking
Statements.”

11

Risks Relating to Our BusinessWe may be required to increase allowance for loan losses and/or incur significant credit-related and othercosts in the future due to problem loans.
We are the primary bank lender for a large number of our corporate customers, and the amount of our loans
and other claims to each of our major customers is significant. In addition, while we have made efforts todiversify our credit exposure along industry lines, the proportion of credit exposure to customers in the
manufacturing, banks and other financial institutions and real estate industries is relatively high. We manage ourcredit portfolio by regularly monitoring the credit profile of each of our customers, the progress made on
restructuring plans and credit exposure concentrations in particular industries or corporate groups, and we alsoutilize credit derivatives for hedging and credit risk mitigation purposes. We provide an allowance for loan losses
taking into consideration the borrower’s situation, the value of relevant collateral and guarantee, which weperiodically re-evaluate, and economic trends based on our self-assessment standards as well as applicablecharge-off and allowance standards. However, depending on trends in the domestic and global economic
environment, the business environment in particular industries and other factors, the amount of our problem
loans and other claims could increase significantly, including as a result of the deterioration in the credit profile
of customers for which we are the primary bank lender, other major customers or customers belonging toindustries to which we have significant credit exposure, and the value of collateral and guarantees could decline.
There can be no assurance that credit-related and other costs, including provision for loan losses and charge-offs
of loans, will not increase in the future as a result of the foregoing or otherwise.
Our equity investment portfolio exposes us to market risks that could adversely affect our financial
condition and results of operations.
We hold substantial investments in marketable equity securities, mainly common stock of Japanese listedcompanies. We have established the “Policy Regarding Cross-holding of Shares of Other Listed Companies”
and, in light of the potential material adverse impact on our financial position associated with stock market
volatility risk, we have decided to hold the shares of other companies as cross–shareholdings only when theseholdings are meaningful, and we have accordingly sold a portion of such investments. In addition, in order tolower the risk of stock market volatility, we have been applying partial hedges as we deem necessary. However,significant declines in Japanese stock prices in the future would lead to unrealized losses, losses on impairment
and losses from sales of equity securities. In addition, net unrealized gains and losses on such investments, basedon Japanese GAAP, are taken into account when calculating the amount of capital for purposes of the calculationof our capital adequacy ratios, and as a result, a decline in the value of such investments would negatively affectsuch ratios. Accordingly, our financial condition and results of operations could be materially and adversely
affected.
Changes in interest rates could adversely affect our financial condition and results of operations.
We hold a significant amount of bonds, consisting mostly of Japanese government bonds, and other
instruments primarily for the purpose of investment. As a result of such holdings, an increase in interest rates,
primarily yen interest rates, could lead to unrealized losses of bonds or losses from sales of bonds. In addition,
due mainly to differences in maturities between financial assets and liabilities, changes in interest rates could
have an adverse effect on our average interest rate spread. We manage interest rate risk under our risk
management policies, which provide for adjustments in the composition of our bond portfolio and the utilizationof derivatives and other hedging methods to reduce our exposure to interest rate risk. However, in the event ofsignificant changes in interest rates, including as a result of a change in Japanese monetary policy, increased
sovereign risk due to deterioration of public finances and market trends, our financial condition and results ofoperations could be materially and adversely affected.

12

Our financial condition and results of operations could be adversely affected by foreign exchange rate
fluctuations.
A portion of our assets and liabilities is denominated in foreign currencies, mainly the U.S. dollar. The
difference between the amount of assets and liabilities denominated in foreign currencies leads to foreign
currency translation gains and losses in the event of fluctuations in foreign exchange rates. Although we hedge a
portion of our exposure to foreign exchange rate fluctuation risk, our financial condition and results of operations
could be materially and adversely affected if future foreign exchange rate fluctuations significantly exceed our
expectations.
We may incur further losses relating to decreases in the market liquidity of assets that we hold.
The market liquidity of the various marketable assets that we hold may decrease significantly due to turmoil
in financial markets and other factors, and the value of such assets could decline as a result. If factors such as
turmoil in global financial markets or the deterioration of economic or financial conditions cause the market
liquidity of our assets to decrease significantly, our financial condition and results of operations could bematerially and adversely affected.
Our pension-related costs could increase as a result of revised assumptions or changes in our pension
plans.
Our pension-related costs and projected benefit obligations are calculated based on assumptions regarding
projected returns on pension plan assets and various actuarial assumptions relating to the plans. If actual results
differ from our assumptions or we revise our assumptions in the future, due to changes in the stock markets,
interest rate environment or otherwise, our pension-related costs and projected benefit obligations could increase.
In addition, any future changes to our pension plans could also lead to increases in our pension-related costs andprojected benefit obligations. As a result, our financial condition and results of operations could be materiallyand adversely affected.
A decrease in deferred tax assets, net of valuation allowance, due to a change in our estimation of futuretaxable income or change in Japanese tax policy could adversely affect our financial condition and resultsof operations.
We recorded deferred tax assets, net of valuation allowance, based on a reasonable estimation of futuretaxable income in accordance with applicable accounting standards. Our financial condition and results ofoperations could be materially and adversely affected if our deferred tax assets decrease due to a change in ourestimation of future taxable income, a change in tax rate as a result of tax system revisions or other factors.
Because we consider the sale of available-for-sale securities to be a qualifying tax-planning strategy, turmoil infinancial markets such as significant declines in stock prices could lead to a decrease in our estimated futuretaxable income.
Financial transactions entered into for hedging and other similar purposes could adversely affect our
financial condition and results of operations.
The accounting and valuation methods applied to credit and equity derivatives and other financialtransactions that we enter into for hedging and credit risk mitigation purposes are not always consistent with theaccounting and valuation methods applied to the assets that are being hedged. Consequently, in some cases, due
to changes in the market or otherwise, losses related to such financial transactions during a given period may
adversely affect net income, while the corresponding increases in the value of the hedged assets do not have aneffect on net income for such period. As a result, our financial condition and results of operations could bematerially and adversely affected during the period.

13

Failure to maintain capital adequacy ratios above minimum required levels, as a result of thematerialization of risks or regulatory changes, could result in restrictions on our business activities.
We endeavor to maintain sufficient levels of capital adequacy ratios, which are calculated pursuant tostandards set forth by Japan’s Financial Services Agency and based on Japanese GAAP, taking into account ourplans for investments in risk-weighted assets, the efficiency of our capital structure and other factors. However,
our capital adequacy ratios could decline in the future, including as a result of the materialization of any of therisks enumerated in these “Risk Factors” and changes to the methods we use to calculate capital adequacy ratios.
Also, there are regulatory adjustments such as goodwill and other intangibles, deferred tax assets, investments inthe capital of banking, financial and insurance entities etc., that are deducted from our regulatory capital undercertain conditions. Our or our banking subsidiaries’ regulatory capital and capital adequacy ratios could decline
due to such regulations.
In addition, if the framework set by the Basel Committee on Banking Supervision, upon which the Financial
Services Agency’s rules concerning banks’ capital adequacy ratios are based, is changed or if the Financial
Services Agency otherwise changes its banking regulations, we might not be able to meet the minimum
regulatory requirements for capital adequacy ratios. For example, in December 2010, the Basel Committee on
Banking Supervision issued its Basel III rules text, which presents the details of global regulatory standards onbank capital adequacy and liquidity. In March 2012, the Financial Services Agency published revisions to its
capital adequacy guidelines which generally reflect rules in the Basel III text and began phasing them in fromMarch 31, 2013. Furthermore, we have been named one of the global systemically important banks (“G-SIBs”)
and have become subject to additional capital requirements since March 2016. The group of G-SIBs will be
updated annually and published by the Financial Stability Board (“FSB”) each November. The FSB publishedthe final standard requiring G-SIBs to maintain total loss-absorbing capacity (“TLAC”) in November 2015. In
addition, the Financial Service Agency published a policy to develop a framework in connection with suchrequirements in Japan in April 2016. Accordingly, we may become subject to such regulations beginning in
2019.
If the capital adequacy ratios of us and our banking subsidiaries fall below specified levels, the Financial
Services Agency could require us to take corrective actions, including, depending on the level of deficiency, thesubmission of an improvement plan that would strengthen our capital base, a restriction on the outflow of capital,a reduction of our total assets or a suspension of a portion of our business operations. In addition, some of ourbanking subsidiaries are subject to capital adequacy regulations in foreign jurisdictions such as the United States,and our business could be adversely affected if their capital adequacy ratios fall below specified levels.
Downgrades in our credit ratings could have negative effects on our funding costs and business operations.
Credit ratings are assigned to Mizuho Financial Group, our banking subsidiaries and a number of our othersubsidiaries by major domestic and international credit rating agencies. The credit ratings are based on
information furnished by us or obtained by the credit rating agencies from independent sources and are also
influenced by credit ratings of Japanese government bonds and general views regarding the Japanese financial
system as a whole. The credit ratings are subject to revision, suspension or withdrawal by the credit rating
agencies at any time. A downgrade in our credit ratings could result in, among other things, the following:•

increased funding costs and other difficulties in raising funds;•

the need to provide additional collateral in connection with financial market transactions; and•the termination or cancellation of existing agreements.

As a result, our business, financial condition and results of operations could be materially and adversely
affected.
For example, the additional collateral requirement in connection with our derivative contracts, absent otherchanges, assuming a downgrade occurred on March 31, 2017, would have been approximately ¥5.5 billion for a
one-notch downgrade and approximately ¥8.0 billion for a two-notch downgrade.
14

Our business will be adversely affected if we encounter difficulties in raising funds.
We rely principally on deposits and bonds as our funding sources. In addition, we also raise funds in thefinancial markets. Our efforts to maintain stable funding, such as setting maximum limits on financial market
funding and monitoring our liquidity position to apply appropriate funding policies, may not be sufficient toprevent significant increases in our funding costs or, in the case mainly of foreign currencies, cash flow problems
if we encounter difficulties in attracting deposits or otherwise raising funds. Such difficulties could result, among
other things, from any of the following:•

adverse developments with respect to our financial condition and results of operations;•downgrading of our credit ratings or damage to our reputation; or•a reduction in the size and liquidity of the debt markets due for example to the decline in the domestic
and global economy, concerns regarding the financial system or turmoil in financial markets and otherfactors.

Our Medium-term Business Plan and other strategic initiatives and measures may not result in the
anticipated outcome.
We have been implementing strategic initiatives and measures in various areas. In May 2016, we announced
our Medium-term Business Plan for the three fiscal years ending March 31, 2019, in which we established anumber of key targets that we aim to achieve by the end of the fiscal year ending March 31, 2019.
However, we may not be successful in implementing such initiatives and measures, or even if we aresuccessful in implementing them, the implementation of such initiatives and measures may not have theiranticipated effects. In addition, we may not be able to meet the key targets announced in the Medium-term
Business Plan due to these or other factors, including, but not limited to, differences in the actual economic
environment compared to our assumptions underlying the Medium-term Business Plan, as well as the risks
enumerated in these “Risk Factors.”
For further information of our Medium-term Business Plan, see “Item 4. Business Overview—General—
Progressive Development of “One MIZUHO”—The Path to a Financial Services Consulting Group.”
We will be exposed to new or increased risks as we expand the range of our products and services.
We offer a broad range of financial services, including banking, trust, securities and other services. As theneeds of our customers become more sophisticated and broader in scope, and as the Japanese financial industry
continues to be deregulated, we have been entering into various new areas of business, including through various
business and equity alliances, which expose us to new risks. While we have developed and intend to maintainrisk management policies that we believe are appropriate to address such risks, if a risk materializes in a manneror to a degree outside of our expectations, our business, financial condition and results of operations could bematerially and adversely affected.
We are subject to various laws and regulations, and violations could result in penalties and otherregulatory actions.
Our business and employees in Japan are subject to various laws and regulations, including those applicableto financial institutions as well as general laws applicable to our business activities, and we are under the
regulatory oversight of the Financial Services Agency. Our businesses outside of Japan are also subject to thelaws and regulations of the jurisdictions in which they operate and are subject to oversight by the regulatory
authorities of those jurisdictions.
Our compliance and legal risk management structures are designed to prevent violations of such laws andregulations, but they may not be effective in preventing all violations.
15Violations of laws and regulations could result in regulatory action and harm our reputation, and ourbusiness, financial condition and results of operations could be materially and adversely affected.
Employee errors and misconduct could subject us to losses and reputational harm.
Because we process a large number of transactions in a broad range of businesses, we are subject to the riskof various operational errors and misconduct, including those caused by employees. Our measures to reduce
employee errors, including establishment of operational procedures, regular reviews regarding compliance withthese procedures, employee training and automation of our operations, may not be effective in preventing all
employee errors and misconduct. Significant operational errors and misconduct could result in losses, regulatory
actions or harm to our reputation. As a result, our business, financial condition and results of operations could bematerially and adversely affected.
Problems relating to our information technology systems could significantly disrupt our business
operations.
We depend significantly on information technology systems with respect to almost all aspects of ourbusiness operations. Our information technology systems network, including those relating to bank accounting
and cash settlement systems, interconnects our branches and other offices, our customers and various clearing
and settlement systems located worldwide. Our efforts to sustain stable daily operations and development ofcontingency plans for unexpected events, including the implementation of backup and redundancy measures, aswell as recently implemented measures to protect customers and our group from the rising threat of cyber attacks,
illegal money transfers, targeted attacks and other risks, may not be effective in preventing significant disruptions
to our information technology systems caused by, among other things, human error, accidents, cyber attacks, anddevelopment and renewal of computer systems. In the event of any such disruption, our business, financial
condition and results of operations could be materially and adversely affected due to information leaks,
malfunctions or disruptions in our business operations, liability to customers and others, regulatory actions orharm to our reputation.
Our reputation could be harmed and we may be subject to liabilities and regulatory actions if we areunable to protect personal and other confidential information.
We handle various confidential or non-public information, including those of our individual and corporate
customers, in the ordinary course of our business. The information management policies we maintain and enforce
to prevent information leaks and improper access to such information, including those that we require of ouroutside contractors and those designed to meet the strict requirements of the Personal Information Protection
Law of Japan, may not be effective in preventing all such problems. Leakage of important information in the
future could result in liabilities and regulatory actions and may also lead to significant harm to our reputation. As
a result, our business, financial condition and results of operations could be materially and adversely affected.
Our business would be harmed if we are unable to attract and retain skilled employees.
Many of our employees possess skills and expertise that are important to maintain our competitiveness andto operate our business efficiently. We may not be successful in attracting and retaining sufficient skilledemployees through our hiring efforts and training programs aimed to maintain and enhance the skills andexpertise of our employees, in which event our competitiveness and efficiency could be significantly impaired.
As a result, our business, financial condition and results of operations could be materially and adversely affected.
Our failure to establish, maintain and apply adequate internal controls over financial reporting could
negatively impact investor confidence in the reliability of our financial statements.
As a New York Stock Exchange-listed company and an SEC registrant, we have developed disclosure
controls and procedures and internal control over financial reporting pursuant to the requirements of the16

Sarbanes-Oxley Act of 2002 and rules and regulations of the SEC promulgated pursuant thereto. Our
management reports on, and our independent registered public accounting firm attests to, the effectiveness of ourinternal controls over financial reporting, as required, in our annual report on Form 20-F. In addition, ourmanagement is required to report on our internal control over financial reporting, and our independent registeredpublic accounting firm is required to provide its opinion concerning the report of our management, in accordancewith the Financial Instruments and Exchange Act of Japan. To the extent any issues are identified through theforegoing processes, there can be no assurance that we will be able to address them in a timely manner or at all.
Furthermore, even if our management concludes that our internal control over financial reporting are effective,
our independent registered public accounting firm may still be unable to issue a report that concludes that ourinternal control over financial reporting are effective. In either case, we may lose investor confidence in thereliability of our financial statements.
We are subject to risk of litigation and other legal proceedings.
As a financial institution engaging in banking and other financial businesses in and outside of Japan, we aresubject to the risk of litigation for damages and other legal proceedings in the ordinary course of our business.
Adverse developments related to legal proceedings could have a material adverse effect on our financial
condition and results of operations.
Our risk management policies and procedures may not adequately address unidentified or unanticipatedrisks.
We devote significant resources to strengthen our risk management policies and procedures. Despite this,and particularly in light of the rapid evolution of our operations, our policies and procedures designed to identify,
monitor and manage risks may not be fully effective. Some of our methods of managing risks are based upon ouruse of observed historical market behavior. As a result, these methods may not accurately predict future risk
exposures, which could be significantly greater than the historical measures indicate. If our risk management
policies and procedures do not function effectively, our financial condition and results of operations could bematerially and adversely affected.
Transactions with counterparties in Iran and other countries designated by the U.S. Department of Stateas state sponsors of terrorism may lead some potential customers and investors to avoid doing businesswith us or investing in our securities or have other adverse effects.
U.S. law generally prohibits U.S. persons from doing business with countries designated by the U.S.
Department of State as state sponsors of terrorism (the “Designated Countries”), which currently includes Iran,
Sudan and Syria and we maintain policies and procedures to comply with applicable U.S. laws. Our non-U.S.
offices engage in transactions relating to the Designated Countries on a limited basis and in compliance withapplicable laws and regulations, including trade financing with respect to our customers’ export or importtransactions and maintenance of correspondent banking accounts. In addition, we maintain a representative officein Iran. We do not believe our operations relating to the Designated Countries are material to our business,financial condition or results of operations. We maintain policies and procedures to ensure compliance withapplicable Japanese and U.S. laws and regulations.
The laws and regulations applicable to dealings involving the Designated Countries are subject to further
strengthening or changes. If the U.S. government considers that our compliance measures are inadequate, we
may be subject to regulatory action which could materially and adversely affect our business. In addition, we
may become unable to retain or acquire customers or investors in our securities, or our reputation may suffer,potentially having adverse effects on our business or the price of our securities.
We may be subject to risks related to dividend distributions.
As a holding company, we rely on dividend payments from our banking and other subsidiaries for almost allof our income. As a result of restrictions, such as those on distributable amounts under Japan’s Companies Act,17

or otherwise, our banking and other subsidiaries may decide not to pay dividends to us. In addition, we may
experience difficulty in making, or become unable to make, dividend payments to our shareholders and dividend
or interest payments on capital securities issued by our group due to the deterioration of our results of operations
and financial condition and/or the restrictions under the Companies Act or due to the strengthening of bankcapital regulations. For more information on restrictions to dividend payments under the Companies Act andbank capital regulations, see “Item 10.B. Additional Information—Memorandum and Articles of Association”
and “Item 4.B. Business Overview—Supervision and Regulation—Japan.”
We may be adversely affected if economic or market conditions in Japan or elsewhere deteriorate.
We conduct a wide variety of business operations in Japan as well as overseas, including in the UnitedStates, Europe and Asia. If general economic conditions in Japan or other regions were to deteriorate or if thefinancial markets become subject to turmoil, we could experience weakness in our business, as well as
deterioration in the quality of our assets. We are currently facing significant uncertainties in the economic
environment such as the introduction of the Bank of Japan’s new monetary policy, the negotiation for thewithdrawal of the UK from the EU and the inauguration of the new administration of the United States.
Significant changes in general economic conditions or financial markets due to the effect of changes in acountry’s fiscal policy, political turmoil and manifestations of geopolitical risks could materially and adversely
affect our financial condition and results of operations.
Amendments and other changes to the laws and regulations that are applicable to us could have an
adverse effect on us.
We are subject to general laws, regulations and accounting rules applicable to our business activities in andoutside of Japan. We are also subject to various laws and regulations applicable to financial institutions such as
the Banking Act, including capital adequacy requirements, in and outside of Japan. If the laws and regulations
that are applicable to us are amended or otherwise changed, such as in a way that restricts us from engaging inbusiness activities that we currently conduct, our business, financial condition and results of operations could bematerially and adversely affected.
The Basel Committee on Banking Supervision is currently discussing a review of the standardized approach,internal ratings-based approach and capital floors in calculating the capital adequacy ratio. There is a risk that ourcapital adequacy ratio will decrease if the review results in an increase in the amount of the denominator related
to our capital adequacy ratio calculation.
Moreover, future applications of or changes in other financial regulations that are continually underdiscussion, including liquidity standards such as the Net Stable Funding Ratio (NSFR) and leverage ratio
regulations, could result in restrictions in our ability to conduct our businesses as well as the need to incur
additional information technology development expenses.
Intensification of competition in the market for financial services in Japan could have an adverse effect on
us.
We offer comprehensive financial services globally, centered on Banking, Trust Banking and Securities andare subject to intense competition both domestically and internationally with large financial institutions,non-bank financial institutions and others. In addition, as a result of technological advances called “FinTech,” anincreasing number of companies have recently been crossing industry lines and entering the field of finance, and
it is possible that the competitive environment surrounding us may further intensify. Moreover, due to thereforms to financial regulations made in recent years, it may become difficult to differentiate strategies between
us and our competitors, resulting in the intensification of competition in specific businesses.

18

If we are unable to respond effectively to current or future competition, our business, financial condition andresults of operations could be adversely affected. In addition, intensifying competition and other factors could
lead to reorganization within the financial services industry, and this could have an adverse effect on ourcompetitive position or otherwise adversely affect the price of our securities.
Our business could be significantly disrupted due to natural disasters, accidents or other causes.
Our headquarters, branch offices, information technology centers, computer network connections and otherfacilities are subject to the risk of damage from natural disasters such as earthquakes and typhoons as well asfrom acts of terrorism and other criminal acts. In addition, our business could be materially disrupted as a resultof an epidemic such as new or reemerging influenza infections. Our business, financial condition and results ofoperations could be adversely affected if our recovery efforts, including our implementation of contingency plansthat we have developed such as establishing back-up offices, are not effective in preventing significant
disruptions to our business operations caused by such natural disasters and criminal acts. Additionally, massive
natural disasters such as the March 2011 Great East Japan Earthquake may have various adverse effects,
including a deterioration in economic conditions, declines in the business performance of many of our corporate
customers and declines in stock prices. As a result, our financial condition and results of operations could bematerially and adversely affected due to an increase in the amount of problem loans and credit-related costs aswell as an increase in unrealized losses on, or losses from sales of, equity securities and financial products.
Negative rumors about us could have an adverse effect on us.
Our business depends on maintaining the trust of depositors and other customers and market participants.
Negative rumors about us, spread through media coverage, communications between market participants,
Internet postings or otherwise, could lead to our customers and market participants believing factually incorrect
information about us and harm our reputation. In the event we are unable to dispel such rumors or otherwise
restore our reputation, our business, financial condition, results of operations and the price of our securities could
be materially and adversely affected.
Risks Related to Owning Our Shares
Rights of shareholders under Japanese law may be more limited than under the law of other jurisdictions.
Our articles of incorporation, our regulations of board of directors and Japan’s Companies Act govern our
corporate affairs. Legal principles relating to such matters as the validity of corporate procedures, directors’ andofficers’ fiduciary duties and shareholders’ rights may be different from or less clearly defined than those thatwould apply if we were incorporated in another jurisdiction. For example, under the Companies Act, only holders
of 3% or more of the total voting rights or total outstanding shares are entitled to examine our accounting books
and records. Shareholders’ rights under Japanese law may not be as extensive as shareholders’ rights under thelaw of jurisdictions within the United States or other countries. For more information on the rights ofshareholders under Japanese law, see “Item 10.B. Additional Information—Memorandum and Articles of
Association.”
It may not be possible for investors to effect service of process within the United States upon us or our
directors, executive officers or senior management, or to enforce against us or those persons judgments
obtained in U.S. courts predicated upon the civil liability provisions of the federal securities laws of theUnited States.
We are a joint stock corporation incorporated under the laws of Japan. Almost all of our directors, executive
officers and senior management reside outside the United States. Many of the assets of us and these persons arelocated in Japan and elsewhere outside the United States. It may not be possible, therefore, for U.S. investors toeffect service of process within the United States upon us or these persons or to enforce, against us or these
persons, judgments obtained in the U.S. courts predicated upon the civil liability provisions of the federal
19securities laws of the United States. We believe that there is doubt as to the enforceability in Japan, in originalactions or in actions to enforce judgments of U.S. courts, of claims predicated solely upon the federal securities
laws of the United States.
Risks Related to Owning Our ADSs
As a holder of ADSs, you have fewer rights than a shareholder and you must act through the depositary to
exercise these rights.
The rights of our shareholders under Japanese law to take actions such as voting their shares, receiving
dividends and distributions, bringing derivative actions, examining our accounting books and records andexercising appraisal rights are available only to shareholders of record. Because the depositary, through its
custodian, is the record holder of the shares underlying the ADSs, a holder of ADSs may not be entitled to thesame rights as a shareholder. In your capacity as an ADS holder, you are not able to bring a derivative action,
examine our accounting books and records or exercise appraisal rights, except through the depositary.
Foreign exchange rate fluctuations may affect the U.S. dollar value of our ADSs and dividends payable toholders of our ADSs.
Market prices for our ADSs may fall if the value of the yen declines against the U.S. dollar. In addition, theU.S. dollar amount of cash dividends and other cash payments made to holders of our ADSs would be reduced if
the value of the yen declines against the U.S. dollar.

20

ITEM 4. INFORMATION ON THE COMPANY
4.A. History and Development of the Company
The Mizuho Group
The Mizuho group was created on September 29, 2000 through the establishment of Mizuho Holdings, Inc.
as a holding company of our three predecessor banks, The Dai-Ichi Kangyo Bank, The Fuji Bank and The
Industrial Bank of Japan. On October 1, 2000, the respective securities subsidiaries of the predecessor banks
merged to form Mizuho Securities Co., Ltd. and the respective trust bank subsidiaries merged on the same date toform Mizuho Trust & Banking.
A further major step in the Mizuho group’s development occurred in April 2002 when the operations of ourthree predecessor banks were realigned through a corporate split and merger process under Japanese law into awholesale banking subsidiary, the former Mizuho Corporate Bank, and a banking subsidiary serving primarily
retail and small and medium-sized enterprise customers, the former Mizuho Bank. As an additional step for
realigning the group structure, Mizuho Financial Group was established on January 8, 2003 as a corporation
organized under the laws of Japan, and on March 12, 2003, it became the holding company for the Mizuho groupthrough a stock-for-stock exchange with Mizuho Holdings, which became an intermediate holding company
focused on management of the Mizuho group’s banking and securities businesses. The legal and commercialname of the company is Mizuho Financial Group, Inc.
In May 2003, we initiated a project to promote early corporate revitalization of customers in need ofrevitalization or restructuring and to separate the oversight of restructuring borrowers from the normal credit
origination function. In July 2003, our three principal banking subsidiaries, the former Mizuho Corporate Bank,
the former Mizuho Bank and Mizuho Trust & Banking each transferred loans, equity securities and other claims
outstanding relating to approximately 950 companies to new subsidiaries that they formed. In October 2005,
based on the significant reduction in the balance of impaired loans held by these new subsidiaries, which we callthe “revitalization subsidiaries,” we deemed the corporate revitalization project to be complete, and each of therevitalization subsidiaries was merged into its respective banking subsidiary parent.
In the fiscal year ended March 31, 2006, we realigned our entire business operations into a Global Corporate
Group, Global Retail Group and Global Asset and Wealth Management Group. In October 2005, in connection
with this realignment, we established Mizuho Private Wealth Management Co., Ltd., a private banking
subsidiary, and converted Mizuho Holdings on October 1, 2005 from an intermediate holding company into
Mizuho Financial Strategy Co., Ltd., an advisory company that provides advisory services to financial
institutions.
In May 2009, Mizuho Securities and Shinko Securities Co., Ltd. conducted their merger, with the aim of
improving our service-providing capabilities to our clients and to offer competitive cutting-edge financial
services on a global basis.
In September 2011, Mizuho Trust & Banking became a wholly-owned subsidiary of Mizuho Financial
Group, Mizuho Securities became an unlisted subsidiary of the former Mizuho Corporate Bank and Mizuho
Investors Securities became a wholly-owned subsidiary of the former Mizuho Bank, through their respective
stock-for- stock exchanges. The purpose of these stock-for-stock exchanges is to further enhance the “groupcollective capabilities” by integrating group-wide business operations and optimizing management resources
such as workforce and branch network.
In January 2013, Mizuho Securities and Mizuho Investors Securities merged in order to provide integrated
securities services as the full-line securities company of the Mizuho group. Mizuho Securities aims to further
strengthen collaboration among banking, trust banking and securities businesses of the group, expand thecompany’s customer base to enhance the domestic retail business, and rationalize and streamline management
infrastructure.
21

In April 2013, we turned Mizuho Securities, a consolidated subsidiary of Mizuho Financial Group, into a
directly-held subsidiary of Mizuho Financial Group, whereby we moved to a new group capital structure, placingbanking, trust banking, securities and other major group companies under the direct control of the holding
company.
In July 2013, the former Mizuho Bank and the former Mizuho Corporate Bank merged, and the former
Mizuho Corporate Bank, the surviving company, changed its trade name to Mizuho Bank, Ltd. The purpose of
the merger is to become able to provide directly and promptly diverse and functional financial services to boththe former Mizuho Bank and the former Mizuho Corporate Bank customers, utilizing the current “strengths” and“advantages” of the former Mizuho Bank and the former Mizuho Corporate Bank, and to continue to improvecustomer services by further enhancing group collaboration among the banking, trust and securities functions
and, at the same time, to realize further enhancement of the consolidation of group-wide business operations andoptimization of management resources, such as workforce and branch network, by strengthening group
governance and improving group management efficiency.
In July 2016, with consideration of the rule of the Board of Governors of the Federal Reserve System (the“Federal Reserve Board”) regarding the operations of foreign banking organizations with U.S. operations, weestablished a bank holding company and has its primary U.S.-based banking, securities and institutional custody
services (trust banking) entities together under the holding company, with the aim to proactively strengthen
corporate governance and expand our profit base through the consistent implementation of our collaborative
corporate and investment banking, securities and institutional custody services strategy in the United States inline with the global operation of our new in-house company system.
In October 2016, with a view to strengthening the respective asset management businesses, we and The
Dai-ichi Life Insurance Company, Limited integrated the asset management functions of both groups, namely,
DIAM Co., Ltd., the asset management function of Mizuho Trust & Banking, Mizuho Asset Management Co.,
Ltd. and Shinko Asset Management Co., Ltd. and formed a new company named Asset Management One Co.,
Ltd., a consolidated subsidiary of Mizuho Financial Group.
In March 2017, we, Sumitomo Mitsui Trust Holdings, Inc., Resona Bank, Limited, a subsidiary of Resona
Holdings, Inc., and The Dai-ichi Life Insurance Company, Limited, a subsidiary of Dai-ichi Life Holdings, Inc.,
have executed a memorandum of understanding to commence detailed analysis and negotiations in preparation
for the management integration of Japan Trustee Services Bank, Ltd. and Trust & Custody Services Bank, Ltd, aconsolidated subsidiary of Mizuho Financial Group. The purposes of the integration are to seek economies ofscale, to realize more stable and higher quality operations and to contribute to further growth of the domestic
securities settlement market and to the enhancement of the domestic investment chain by concentrating bothcompanies’ managerial resources and expertise.
Other Information
Our registered address is 1-5-5, Otemachi, Chiyoda-ku, Tokyo 100-8176, Japan, and our telephone number
is 81-3-5224-1111.
4.B. Business Overview
GeneralWe engage in banking, trust, securities and other businesses related to financial services.
We launched our three-year medium-term business plan, the “Progressive Development of “OneMIZUHO”—The Path to a Financial Services Consulting Group,” formulated for the three years beginning the22fiscal year ended March 31, 2017. The two foundations of this plan are: the reinforcement of the “customerfocused” perspective that we promoted in the previous medium-term business plan; and the pursuit of“operational excellence” as part of our effort to promote greater business improvement and efficiency. The plan
aims to further develop the “One MIZUHO” strategy by establishing a new business model as a “financial
services consulting group.”
We are positioning our asset management function and our research and consulting functions as new pillars
that supplement the banking, trust and securities functions, and by striving to provide the best possible andoptimal services to customers for their improved satisfaction, we aim to become an indispensable partner forachieving sustainable growth of corporate customers and securing a promising future of retail customers.
With the aim of establishing this new business model, we have set forth five basic policies in the mediumterm business plan. The five basic policies are supported by ten basic strategies, which are classified intobusiness strategies, financial strategies and management foundations.
Our Objectives Under the Medium-Term Business PlanBy establishing a customer-focused business platform, we will form deeper relationships with our customers
via our financial intermediary functions and our ability to take highly measured risks and build a future ineconomies and communities as a trusted financial partner in providing solutions for our customers. In the interestof building this new business model, we have established the following objectives in the medium-term business
plan.
A Financial Services Consulting Group—The most trusted partner in solving problems and supporting thesustainable growth of customers and communities
Five Basic Policies•

Introduction of the in-house company system•

Selecting and focusing on certain areas of business•

Establishment of a resilient financial base•

Proactive involvement in financial innovation•

Embedding a corporate culture that encourages the active participation of our workforce to support astronger Mizuho

Ten Basic Strategies
Business strategies•

Strengthening our non-interest business model on a global basis•

Responding to the shift from savings to investment•

Strengthening our research and consulting functions•

Responding to FinTech•

Promoting the “Area One MIZUHO” strategy (i.e., the implementation of the One MIZUHO strategy ineach geographical area through collaboration of banking, trust and securities functions, under which thebusiness offices independently design and implement their respective strategies)

23

Financial strategies•

Controlling the balance sheet and reforming the cost structure•

Disposing of cross-shareholdings

Management foundations•

Completing implementation of the next generation IT systems•

Fundamental reforms of HR management•

Continued initiatives towards embedding a corporate culture to support the creation of a stronger
organization

In the fiscal year ended March 31, 2017, the first year of the medium-term business plan, we adopted“strengthening the foundation for ensuring a sustainable competitive advantage” as our operational policy andworked together as a group in this direction.
First, we introduced an in-house company system to reinforce the “customer-focused” perspective. The
system enhances our capability to provide financial services that closely match customer needs with increased
strength and speed, by developing consistent strategies tailored to each customer segment from the formulationof strategies to their execution.
Moreover, we established Asset Management One Co., Ltd., into which our group’s asset management
functions have been integrated. We also established the Research & Consulting Unit, into which our group’s
research and consulting functions have been consolidated, and thereby enhanced our consulting function on agroup-wide basis.
In addition, we have reinforced our customer-first business management by establishing a specializedorganization dedicated to promoting the concept of fiduciary duties and holding an advisory committee meeting
to which external scholars and experts were invited. Moreover, we adopted the Principles for Customer-Oriented
Business Conduct, which was published on March 30, 2017 by Japan’s Financial Services Agency, on the same
date.
Secondly, with respect to “operational excellence,” we have streamlined head office operations andimproved our products and services in order to increase productivity. At the same time, we have advanced ourefforts to consolidate overlapping operations and improve business processes through the utilization of digitaltechnology.
Furthermore, with respect to our efforts to expand new business areas and enhance and streamline
operations and services through the utilization of digital technology, such as artificial intelligence and big data,
we have steadily proceeded with demonstration experiments, technical verifications and pre-marketing studies,while actively collaborating with other companies through open innovation (an approach to creating innovative
services and businesses by not relying exclusively on internal resources but also bringing in external technologies
and ideas).
With respect to the corporate governance system, Mizuho Financial Group, as a Company with Three
Committees, has established a system that will be able to sufficiently fulfill its obligations to its shareholders. We
have continued the effort to improve the productivity and efficiency of discussions, enhance the use of outside
directors’ knowledge and reflect such knowledge in the performance of duties, in order to further improve theeffectiveness of the Board of Directors.
In addition, in an effort to further enhance risk governance, we developed an autonomous control structure
under which the first line, which is responsible for the execution of business operations, itself takes on risk
24management and compliance as an integral part of business operations, in accordance with the “Three Lines of
Defense” concept set forth in the “Corporate governance principles for banks,” published by the BaselCommittee on Banking Supervision.
With respect to legal compliance, in conjunction with further enhancing our framework for the severance oftransactions with anti-social elements, we have intensified various efforts, including countermeasures againstmoney laundering and terrorist financing.
At the same time, in order to contribute to the sustainable development of society and to create newcorporate value, we have pursued a CSR initiative addressing social, environmental and other global issues. We
have also continued to offer our combined group strength to assist in reviving the industries and economies ofregions affected by the Great East Japan Earthquake of 2011 and the Kumamoto Earthquake of 2016.
As the second year of the medium-term business plan, we position the fiscal year ending March 31, 2018 as
the year in which we will endeavor to realize our objective of becoming a “financial services consulting group”
based on the management policy of accelerating the One MIZUHO strategy through the further enhancement of acustomer-first business approach and fundamentally improved productivity.
We will work to advance the business plan based on the five basic policies set out in the medium-termbusiness plan by placing emphasis on the points described below.
Enhance Operation of the In-House Company System
We will work to enhance the operation of the in-house company system to promote our customer-firstbusiness approach and achieve the further integration of group-wide operation across banking, trust, securities
and other business areas. We will further enhance our front-line capabilities, accelerate decision making,streamline group management, and work to strengthen non-interest businesses on a group-wide basis.
Selecting and Focusing on Certain Areas of BusinessWe will reallocate resources from the low-priority areas to the high-priority areas as identified based on our
strategic focus. We will thereby make efficient use of the limited resources to help enhance our earnings
capacity.
Establishment of a Resilient Financial BaseWe will strengthen balance sheet control by optimizing risk and return, managing risk-weighted assets andcontrolling liquidity proactively and flexibly based on our understanding of future external changes. We will
pursue operational excellence and thoroughly address issues faced by the front-lines or found in existing work
procedures to improve productivity and cost structure.
Proactive Involvement in Innovation
Our Chief Digital Innovation Officer (CDIO) is in charge of promoting digital innovation across the group.
Under this structure, we will accelerate our efforts in taking initiatives in digital technology, such as artificial
intelligence and big data, and will endeavor to create next generation businesses and improve business processes.
Embedding a Corporate Culture That Encourages the Active Participation of the Workforce to Support aStronger Mizuho
We will continuously strive to improve our human resource management systems and to establish a
corporate culture that encourages all employees to take initiative.
25

Major reforms in our human resource management aim to continuously increase employee engagement,
creating a virtuous cycle of growth between employees and the organization, and to establish a competitive
advantage for us in terms of workforce. We will encourage the active participation of employees by promoting
the “Health and Productivity Management” initiative so that every employee can exercise their potential abilities
and continue to actively contribute to the group. We will further promote our “work-life balance” initiative toprovide flexible and diverse work arrangements.
To establish a corporate culture that encourages all employees to take initiatives, we will continue toenhance various initiatives such as encouraging each office to set their own goals and work toward achieving
them.
Completing Implementation of the Next Generation IT Systems
As the most important and largest systems project of ours, we will take measures to complete the nextgeneration IT systems in a safe and steady manner.
Signing of Memorandum of Understanding for the Integration of Trust Banks Specializing in Asset
Administration Services
As announced in March 2017, Mizuho Financial Group, Sumitomo Mitsui Trust Holdings, Inc., Resona
Bank, Limited and The Dai-ichi Life Insurance Company, Limited have signed a memorandum of understanding
to commence detailed analysis and negotiations in preparation for the management integration of Trust &Custody Services Bank, Ltd. (a consolidated subsidiary of ours) and Japan Trustee Services Bank, Ltd. The
integration is aimed at (i) leveraging the benefits of scale through the concentration of both companies’
managerial resources and expertise related to asset custody services, (ii) improving the stability and quality ofoperations, and (iii) contributing to the further growth of securities settlement market and investment chain in
Japan. The integrated company will aim to become the top trust bank in Japan specializing in asset administration
services that meet a wide variety of customer needs.
We will also continue to consider the possibility of consolidation between Mizuho Bank and Mizuho
Trust & Banking.
In addition to the foregoing efforts, we will also proceed with the following efforts to respond to changes inthe business environment such as tightening of regulations.
Upgrading Risk Appetite Framework
We have introduced a risk appetite framework, with the aim of enhancing corporate value through the
integrated group-wide operation of business strategies, financial strategies and risk controls. We determine ourresource allocation and profit plans in light of the types and the level of risk that we are required to take inrealizing our strategy. We monitor operational status and take other necessary measures to balance risk versus
return.
We have also established the “Action Guideline for Risk” for the purpose of promoting the values andprinciples that must be shared in confronting risk and raised the awareness of all officers and employees in thisregard through training, etc. We will continuously strive to nurture a sound risk culture through these actions toenhance the effectiveness of our risk appetite framework.
Strengthening of Corporate Governance on a Group Basis
Each of our principal banking subsidiaries and Mizuho Securities changed its corporate governance systemfrom “Company with Board of Company Auditors” structure to “Company with Audit and Supervisory
Committee.”26

Each of these subsidiaries aims to realize a higher level of supervision by the respective board of directors
and swifter decision-making, in order to perform its roles more effectively under the group’s in-house company
system. We will thereby continue to further enhance our corporate governance on a group basis.
Fulfillment of Fiduciary Duties
We have established policies, as well as action plans for each group company, for fulfilling fiduciary duties
with respect to the asset management-related business in order to continue to be the customers’ most trusted
financial services group as their long-term partner. In line with such policies and action plans, we will establish
appropriate incentive frameworks for group companies and a corporate culture that encourages all employees andofficers to constantly fulfill their fiduciary duties.
Disposing of Cross-shareholdings
As stated in the “Corporate Governance Report” that we filed with the Tokyo Stock Exchange, as a basic
policy, we will not hold listed shares for strategic reasons “unless we consider these holdings to be meaningful.”
We will continue to strive to dispose of cross-shareholdings in order to decrease the potential impact on our
financial position due to fluctuations in stock prices and to be able to fully perform financial intermediaryfunctions even in periods of stress.
Establishment of Strong Mizuho Brand
We aim to establish a strong brand by positioning the medium-term business plan as the action plan for theestablishment of the Mizuho brand and by achieving our goal of becoming a “financial services consulting
group.” While being the most trusted partner in solving problems and supporting the sustainable growth ofcustomers and communities, as set out in the medium-term business plan, we will continue to improve the valueof the Mizuho brand through initiatives, including those aimed at realizing effective brand communication.
Group Operations
Group Management Structure
We operate our group through five in-house companies, which determine and promote strategies group-wide
across banking, trust, securities and other business areas according to the attributes of customers, and two units
that support all of the in-house companies.
Retail & Business Banking Company
The Retail & Business Banking Company is in charge of the services for individual customers, small- andmedium-sized enterprises and middle-market firms.
For individual customers, the Retail & Business Banking Company will strive to improve our capacity toprovide consulting services, including asset management and asset succession, while working on thedevelopment and provision of convenient services by leveraging advanced technologies and forming allianceswith other companies and institutions.
While fulfilling our fiduciary duties, to promote the change “from savings to investments” and in addition to
the consulting services that combine banking, trust and securities functions, we offer our customers asset
formation support that utilizes advanced technologies, such as AI-powered asset management advisory services
and asset management support utilizing remote channels, etc. Accordingly, in conjunction with the expansion of
the scope of personal defined contribution pension plans, called “iDeCo,” based on the amended Fixed
Contribution Pension Law, we made efforts to introduce new plans to support customers and to strengthen
financial education through seminars.
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Furthermore, to support the smooth asset succession, we provide services such as inheritance distribution
service and testamentary-trust that utilize trust function. We have also expanded our line of products such as
family trusts and annual fund giving trusts.
With respect to the loan business, we have expanded our line of housing loan and card loan products andoffer various products and services in response to each customer’s life stage, including the development of new
internet-based services.
We also provide products/services to officers and employees of our corporate clients, such as opening
account for payrolls, providing housing loans, management of retirement payments, etc.
In addition, in an effort to increase customer convenience, we have expanded our branch network
throughout Japan (Mizuho Bank: 466; Mizuho Trust & Banking: 57; Mizuho Securities: 273; each as ofMarch 31, 2017) and our ATM network (approximately 6,900 locations as of March 31, 2017, including ATMs
shared with AEON Bank). We also have 165 of Mizuho Securities “Planet Booths,” which are located in the
branches and offices of Mizuho Bank, and 20 of Mizuho Trust & Banking “Trust Lounges,” which are located in
the branches and offices of Mizuho Bank, as of March 31, 2017.
We have also made efforts to enhance customer convenience by offering new services that utilize advanced
scientific and digital technologies, as well as by enhancing the quality of our internet and smart phone services.
Further, we undertake the business related to lottery tickets, such as the sales of lottery tickets issued by
prefectures and ordinance-designated cities.
For small- and medium-sized enterprises and middle-market firms, the Retail & Business Banking Company
provides solutions with respect to both types of needs: management issues such as business development, andpersonal issues of customers who are business owners, such as asset inheritance and management, etc.
Starting from consulting services, we offer multi-layered solutions in response to the various development
stages of our customers’ businesses through the combined strength of our banking, trust, securities, asset
management and research and consulting functions, based on a customer-focused approach.
Specifically, we offer syndicated loans, advisory services related to overseas expansions, mergers andacquisitions-related services, and business matching services, depending on the customers’ business strategies, inaddition to brokering financial products and expanding the customer base for trustee business for defined
contribution pension plans, combining traditional financial services and advanced advisory services.
Furthermore, due to the aging of Japanese business owners, business succession and asset inheritance has
become a matter of urgency. Using our succession and property know-how, we offer positive solutions for
optimal and smooth business succession and asset inheritance, including the inheritance of business ownershipand corporate stock as well as corporate reorganization, addressing both individual and corporate needs.
Moreover, we leverage our existing customer base to support the growth of innovative companies that show
future promise by means of finance and other solutions.
In this manner, we aim to grow with our customers into a “financial services consulting company.”
Corporate & Institutional Company
The Corporate & Institutional Company engages in relationship management for our customers that arelarge corporations, financial institutions and public sector businesses in Japan.

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For large corporate customers, based on our solid customer relationships and utilizing our global industry
knowledge, we offer group-wide financial solutions that are tailored for each customer, such as syndicate loans,bonds and M&A advisory, etc., on a global basis to meet their needs in fund-raising, investment, management
and financial strategies.
Mizuho Bank and Mizuho Securities have introduced the dual-hat structure in several offices in Japan. They
collaborate to provide our customers with solutions based on their capital management, business strategy andfinancial strategy on a global basis.
Mizuho Bank and Mizuho Trust & Banking together provide solutions related to real estate, where we havea leading track record in the industry in Japan. They also work together in the areas of pension, asset
securitization, securities management, stock transfer agent, consulting, etc., in response to our customers’
diversified needs for investment and asset optimization.
We are also strengthening business structures across the group by increasing personnel and reframing thebusiness structure of Mizuho Securities, as well as strengthening the consulting functions of Mizuho Trust &Banking.
Further, we are proactively providing risk money to develop next-generation industries and growthindustries.
For financial institutions, we offer advisory services and solutions, such as advice on financial strategy andproposals on various investment products, by concentrating our various financial expertise from each groupcompany to meet the increasingly sophisticated and diversified needs of customers.
For public sector customers, as a leading bank with a wealth of experience and a solid track record, we
provide optimal financial services group-wide that include funding support as a trustee and underwriter of publicbonds and services as a designated financial institution. In addition, in the field of revitalizing rural regions inJapan, an important matter to the Japanese economy, we engage in Public Private Partnerships/Private FinanceInitiatives (PPP and PFI) projects in collaboration with regional financial institutions, national and regional
government entities and their affiliates.
Through these endeavors, we aim to be our customers’ most trusted partner.
Global Corporate Company
The Global Corporate Company works with non-Japanese companies and Japanese companies operating
outside Japan.
For our Japanese corporate customers, we provide unified support both in and outside Japan to help them
expand their overseas operations. We offer highly specialized services that use our advanced financial
technologies and expertise. Particularly in the Asia region, we support Japanese corporate customers developing
new markets by offering advisory and other services.
We are also expanding business with non-Japanese corporate customers, including U.S. and European
global companies developing business in Asia as well as Asian multinational enterprises expanding within Asia,
through our global network. With respect to our non-Japanese corporate customers, we are proceeding with ourstrategy of focusing on blue-chip customers. Taking the characteristics of each industry sector into consideration,
we take a focused approach based on our know-how and knowledge of the business and financial perspectives,
and through a close relationship with top management, we aim to construct long-term relationships withcustomers and achieve sustained growth together with them. Our market presence within the United States
continues to grow, including in the area of investment-grade corporate debt underwriting, based on our sectorbased approach and the enhanced sophistication in the collaboration between our banking and securities
functions.
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Meanwhile, we are enhancing our support to clients by expanding our overseas office network andstrengthening our business support framework for our customers outside Japan. We have recently opened Mizuho
Bank Mexico in Mexico and the Phnom Penh Branch in Cambodia.
We are also working with government-affiliated institutions and financial institutions of various countries,
forming business alliances as necessary, to provide up-to-date local information and other entry support to ourcustomers interested in starting business in new markets. We are enhancing our service framework to address thediverse needs of customers, who also need post-entry support.
As we see major changes in the global economy and the regulatory framework, we aim to achievesustainable growth by improving our business portfolio, promoting cross-selling and strengthening our businessand management base.
Global Markets Company
In addition to asset liability management and investment business with respect to bonds and equities, theGlobal Markets Company provides sales and trading business to meet the risk hedging and investment needs of awide range of customers, from individuals to institutional investors, by offering a comprehensive range ofmarket-related products.
With respect to the sales and trading business, through a management structure based on customer
segments, we offer detailed products and services to meet the diverse needs of our customers and support theirglobal business by integrating our banking, trust and securities functions and utilizing our global network.
Specifically, we are strengthening our contact with customers at branches for our customers that are small
and medium-sized enterprises and middle market firms, and we are providing ideas that reflect market
perspectives for transactions involving large corporations and financial institutions. For investors such as hedge
funds and asset managers, we use our comprehensive strength in the banking and securities to provide productsthat meet our customers’ needs.
In addition, with respect to asset liability management and investment business, we combine our early
warning control and diversified investments to manage market fluctuations so that our portfolio is more soundand stable.
The Global Markets Company is aiming to become a top-class Asian player in the global market by utilizing
its capacity to offer a wide range of products based on the collaboration among the banking, trust and securities
functions.
Asset Management Company
The Asset Management Company works with our banking, trust and securities functions as well as AssetManagement One, one of the largest asset management companies in Japan and Asia, to meet the needs of a wide
range of customers, from individuals to institutional investors, by providing products and services while fulfilling
its fiduciary duties.
For individual customers, we offer investment products to contribute to their medium- to long-term asset
formation.

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For institutional investors such as pension funds, we offer consulting functions to meet their diversified andsophisticated asset management needs.
We offer our customers investment products that are most suited to them through Mizuho Alternative
Investments, our New York-based hedge fund manager, Mizuho Global Alternative Investments, our Tokyobased financial gatekeeper, Eurekahedge, our Singapore-based hedge fund database provider and researcher, andMatthews Asia, an independent, privately owned firm and the largest dedicated Asia investment specialist in theU.S.
In addition, we develop global financial products by collaborating with BlackRock, Inc. and arrange andoffer products related to private equity and infrastructure funds by collaborating with Partner Group AG.
The Asset Management Company aims to contribute to the revitalization of domestic financial assets
through the foregoing approaches.
Global Products Unit
The Global Products Unit cooperates with each of the in-house companies in providing solutions tocustomers, such as advice on business and financial strategies, financing support, domestic and foreign exchange
and settlement, by making full use of its expertise.
In the investment banking business we provide sophisticated financial solutions mainly in the business areasof mergers and acquisitions, real estate, asset finance, project finance and corporate finance.
In the mergers and acquisitions business, with an aim to increase the corporate value of our customers, weoffer sophisticated solutions mainly the areas of cross-border mergers and acquisitions, business succession andmanagement buyouts.
In the real estate business, by taking full advantage of our knowledge and skills developed through thevarious deals we have arranged over the years and in collaboration with our group companies, we offer various
real estate-backed financing methods and real estate-related investment strategies.
In the asset finance business, by strengthening the collaboration between banking, trust and securities
functions and by arranging customers’ asset securitization, we satisfy their demands such as diversification offund-raising sources and improvement of financial indices achieved by removing assets from their balance sheet.
In the project finance business, we provide various financial products and services such as long-term loan
facilities for large-scale mining, power generation, infrastructure and renewable energy-related projects andarrangement of PFI/PPP deals for financing transportation and other types of public infrastructure. In addition,
we offer investment opportunities to institutional investors through our managed infrastructure debt funds.
In the corporate finance business, we proactively provide a wide variety of fund raising solutions in the
syndicated loan market, debt capital markets and equity capital markets.
In the transaction business we provide solutions related to domestic exchange settlement, foreign exchange,
cash management, trade finance, yen correspondence settlement and yen securities custody, global custody, asset
management and stock transfer agent services.
For our corporate customers, we offer various financial services and products such as online banking, cash
management solutions, Renminbi-denominated services and trade finance on a global basis.
For financial institutions and institutional investors, we promote custody, global custody and yen
correspondence settlement, asset management and stock transfer agent services.
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In addition, we are further expanding our range of services in collaboration with our group companies andleveraging latest technological innovations.
The Global Products Unit aims to support the group-wide goal of becoming a “financial services consulting
group” by building a solid products platform.
Research & Consulting Unit
The Research & Consulting Unit, as the fifth pillar for achieving the aim of the mid- term business plan, tobecome a “financial services consulting group,” launched “One Think Tank” in April 2016, which combines ourresearch with consulting functions.
In the research field, we conduct deep investigations and analyses widely ranging from macro-economics toindustry and business trends, and we also offer public policy advice based on such investigations and analyses.
In the consulting field, we also offer a wide range of functions to help solve various issues that companies
face, including those regarding management/financial strategy, business/asset succession and IT systems, as wellas the social issues of the public sector, including the environment, energy, infrastructure and health care.
Research and consulting functions of the unit endeavor to meet the rising expectations of our customers as
uncertainties arise amid the global economy, the financial markets and the social environment. To meet further
client needs, we focus on the following four points:
1) “ to Advance Utility Functions” through collaboration among our in-house companies to addressincreasingly complicated business issues for clients
2) “ to Enhance ‘One Think Tank’ brand value” through proactively promoting our advanced knowledge/know-how.
3) “ to Advance Global Solutions to our clients” in the midst of rising uncertainty in the global businessenvironment.
4) “ to Promote the Market-in Approach” from the viewpoint of “Client first.”
In addition to the points above, we aim to be the best team of experts, the “No. 1 Think Tank” in Japan, byleveraging digital technologies to offer useful solutions based on our leading-edge and experienced knowledge/know-how regarding wide-ranging business issues in order to support our clients’ growth.
Competition
We engage in banking, trust banking, securities and other businesses related to financial services and facestrong competition in all of those areas of businesses partly due to deregulation of the Japanese financial
industry.
Our major competitors in Japan include:•

Japan’s other major banking groups: Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial
Group.

•

Other banking institutions: These include city banks, trust banks, regional banks, shinkin banks (orcredit associations), credit cooperatives, agricultural cooperatives, foreign banks and retail-oriented
online banks.

•

Securities companies and investment banks: These include both domestic securities companies and theJapanese affiliates of global investment banks.
32•Government financial institutions: These include Japan Finance Corporation, Japan Post Bank,
Development Bank of Japan and Japan Bank for International Cooperation.

•

Non-bank finance companies: These include credit card issuers, installment shopping credit companies
and other non-bank finance companies.

•

Asset management companies.

•

Other financial services providers: We also compete with financial services providers that utilize“FinTech.”

In global markets, we face competition with other commercial banks and other financial institutions,particularly major global banks and the leading local banks in those financial markets outside Japan in which we
conduct business.
Japanese Banking and Securities Industry
Private banking institutions in Japan are normally classified into two categories (the following numbers are
based on information published by the Financial Services Agency, available as of June 27, 2017): (i) ordinarybanks, of which there were 124, not including foreign commercial banks with banking operations in Japan; and(ii) trust banks, of which there were 16, including Japanese subsidiaries of foreign financial institutions andsubsidiaries of Japanese financial institutions.
Ordinary banks consist mainly of city banks and regional banks. City banks, including Mizuho Bank, arebased in large cities, operate domestically on a nation-wide scale through networks of branch offices and havestrong links with large corporate customers in Japan. In light of deregulation and other competitive factors,
however, many of these banks have placed increasing emphasis on other markets, including retail banking, small
and medium-sized enterprise banking, international operations and investment banking. Regional banks are basedin one of the prefectures of Japan and are generally much smaller in terms of total assets than city banks. In
recent years, as a consequence of changes in the business environment, the number of regional banks that
integrate their businesses with other regional banks is increasing. Customers of regional banks, other than local
retail customers, include mostly regional enterprises and local public utilities, although regional banks also lend
to large corporations. In addition to these types of banks, new retail-oriented banks have emerged in recent years,
including Internet banks and banks specializing in placing their ATMs in convenience stores and supermarkets
without maintaining a branch network.
Trust banks, including Mizuho Trust & Banking, are engaged in trust services in relation to, among others,money trust, pension trust and real estate trust services, in addition to banking business.
Based on information published by the Financial Services Agency, available as of June 27, 2017, there were
53 foreign banks operating banking businesses in Japan. These banks are subject to a statutory framework similar
to the regulations applicable to Japanese domestic banks. Their principal sources of funds come from theiroverseas head offices or other branches.
A number of government financial institutions, organized in order to supplement the activities of the privatebanking institutions, have been in the process of business and organizational restructuring in recent years. In
October 2008, some of the government financial institutions were consolidated to form Japan FinanceCorporation, which mainly provides financing for small and medium-sized enterprises and those engaged inagriculture, forestry and fishery, and also provides export financing for Japanese corporations. In October 2008,
Development Bank of Japan, which mainly engages in corporate financing, and Shoko Chukin Bank, whichmainly engages in financing for small and medium-sized enterprises, were transformed into joint stock
corporations. Japan Housing Finance Agency supports housing loans of private institutions through thesecuritization of such loans.

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Another distinctive element of the Japanese banking system is the role of the postal savings system. Postal
savings deposits are gathered through the network of governmental post offices scattered throughout Japan, andtheir balance of deposits totaled over 200 trillion yen in the past. In recent years, the governmental postal
business has been in the process of organizational restructuring. In 2003, the governmental postal business wastransferred to Japan Post, a government-owned entity established in the same year, and in 2007, Japan Post wastransformed into a government-owned joint stock corporation holding four operating companies including Japan
Post Bank, which currently operates as an ordinary bank. In November 2015, the shares of three main companiesof the Japan Post group were listed on the Tokyo Stock Exchange, with Japan Post Holdings disposing ofapproximately 11% of its ownership in the two subsidiaries, while the Japanese government disposed ofapproximately 11% of its ownership in Japan Post Holdings. Japan Post Holdings plans to initially dispose of its
two subsidiaries shares gradually down to approximately 50% ownership.
In the Japanese securities market, a large number of registered entities are engaged in securities businesses,
such as sales and underwriting of securities, investment advisory and investment management services. As
deregulation of the securities market progressed, several of the country’s banking groups have entered into thismarket through their subsidiaries. In addition, foreign financial institutions have been active in this market.
Supervision and Regulation
Japan
Pursuant to the Banking Act (Ginkou Hou) (Act No. 59 of 1981, as amended), the Prime Minister of Japan
has authority to supervise banks in Japan and delegates certain supervisory control over banks in Japan to theCommissioner of the Financial Services Agency. The Bank of Japan also has supervisory authority over banks inJapan, based primarily on its contractual agreements and transactions with the banks.
Financial Services Agency
Although the Prime Minister has supervisory authority over banks in Japan, except for matters prescribed bygovernment order, this authority is generally entrusted to the Commissioner of the Financial Services Agency.
Additionally, the position of Minister for Financial Services was established by the Cabinet to direct theCommissioner of the Financial Services Agency and to support the Prime Minister.
Under the Banking Act, the Prime Minister’s authority over banks and bank holding companies in Japan
extends to various areas, including granting and cancellation of licenses, ordering the suspension of business inwhole or in part and requiring submission of business reports or materials. Under the prompt corrective action
system, the Financial Services Agency, acting on behalf of the Prime Minister, may take corrective action in thecase of failure to meet the minimum capital adequacy ratio of banks, their subsidiaries and companies having
special relationships prescribed by the cabinet order. See “Capital Adequacy” below. These actions include
requiring a financial institution to formulate and implement reform measures, requiring it to reduce assets or takeother specific actions and issuing an order to suspend all or part of its business operations.
In addition, under the capital distribution constraints system introduced in March 2016, the Financial
Services Agency, acting on behalf of the Prime Minister, may order a bank holding company or bank to submit
and carry out a capital distribution constraints plan. See “Capital Adequacy” below. The capital distribution
constraints plan is required to be considered reasonable to restore the capital buffer and include restrictions on
capital distributions, such as dividends, share buybacks and bonuses payments, up to a certain amount as
determined depending on the level of the capital buffer.
Under the prompt warning system introduced in December 2002, the Financial Services Agency may takeprecautionary measures to maintain and promote the sound operations of financial institutions, even before thosefinancial institutions become subject to the prompt corrective action system. These measures require a financial
institution to reform profitability, credit risk management, stability and cash flow.
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The Bank of JapanThe Bank of Japan is Japan’s central bank and serves as the principal instrument for the execution ofJapan’s monetary policy. The principal measures by which the Bank of Japan implements monetary policy are
the adjustment of its discount rate, its operations in the open market and the imposition of deposit reserve
requirements. Banks in Japan are allowed to obtain borrowings from, and rediscount bills with, the Bank ofJapan. Moreover, most banks in Japan maintain current accounts under agreements with the Bank of Japanpursuant to which the Bank of Japan is entitled to supervise, examine and audit the banks. The supervisory
functions of the Bank of Japan are intended to enable it to ensure smooth settlement of funds among banks andother financial institutions, thereby contributing to the maintenance of an orderly financial system, whereas thesupervisory practices of the Prime Minister or the Commissioner of the Financial Services Agency are intended
to maintain the sound operations of banks and promote the security of depositors.
Examination of Banks
The Banking Act authorizes the Prime Minister to inspect banks and bank holding companies in Japan at
any time. By evaluating banks’ systems of self-assessment, auditing their accounts and reviewing theircompliance with laws and regulations, the Financial Services Agency monitors the financial soundness of banks,
including the status and performance of their control systems for business activities. The inspection of banks is
performed pursuant to a Financial Inspection Manual published by the Financial Services Agency. Currently, theFinancial Services Agency takes the “better regulation” approach in its financial regulation and supervision. Thisconsists of four pillars: optimal combination of rules-based and principles-based supervisory approaches; timely
recognition of priority issues and effective response; encouraging voluntary efforts by financial institutions andplacing greater emphasis on providing them with incentives; and improving the transparency and predictability of
regulatory actions, in pursuit of improvement of the quality of financial regulation and supervision. In addition toindividual financial institutions, the Financial Services Agency also supervises financial groups as financial
conglomerates based on its Guidelines for Financial Conglomerates Supervision that focus on management,
financial soundness and operational appropriateness of a financial conglomerate as a whole.
The Bank of Japan also conducts examinations of banks similar to those undertaken by the Financial
Services Agency. The examinations are normally conducted once every few years, and involve such matters as
examining asset quality, risk management and reliability of operations. Through these examinations, the Bank ofJapan seeks to identify problems at an early stage and give corrective guidance where necessary.
In addition, the Securities and Exchange Surveillance Commission examines banks in connection with theirfinancial instruments business activities in accordance with the Financial Instruments and Exchange Act of Japan(Kinyu Shouhin Torihiki Hou) (Act No. 25 of 1948, as amended).
Examination and Reporting Applicable to Shareholders
Under the Banking Act, a person who intends to hold 20% (in certain exceptional cases, 15%) or more of
the voting rights of a bank is required to obtain prior approval of the Commissioner of the Financial Services
Agency. In addition, the Financial Services Agency may request reports or submission of materials from, or
inspect, any principal shareholder who holds 20% (in certain exceptional cases, 15%) or more of the voting rights
of a bank, if necessary in order to secure the sound and appropriate operation of the business of such bank. Under
limited circumstances, the Financial Services Agency may order such principal shareholder to take suchmeasures as the Financial Services Agency deems necessary.
Furthermore, under the Banking Act, any person who becomes a holder of more than 5% of the voting rights
of a bank holding company or bank must report its ownership of voting rights to the director of the relevant local
finance bureau within five business days. In addition, a similar report must be made in respect of any subsequentchange of 1% or more in any previously reported holding or any change in material matters set forth in reports
previously filed, with some exceptions.
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Deposit Insurance System
Under the Deposit Insurance Act (Yokin Hoken Hou) (Act No. 34 of 1971, as amended), depositors areprotected through the Deposit Insurance Corporation in cases where financial institutions fail to meet their
obligations. The Deposit Insurance Corporation is supervised by the Prime Minister and the Minister of Finance.
Subject to limited exceptions, the Prime Minister’s authority is entrusted to the Commissioner of the Financial
Services Agency.
The Deposit Insurance Corporation receives annual insurance premiums from insured banks. The effective
premium rate from April 2017, which is the weighted average of the rates for deposits that bear no interest, areredeemable upon demand and are used by depositors primarily for payment and settlement purposes, and forother deposits, is 0.037%.
The insurance money may be paid out in case of a suspension of deposit repayments, banking license
revocation, dissolution or bankruptcy of the bank. Pay outs are generally limited to a maximum of ¥10 million ofprincipal amount, together with any interest accrued with respect to each depositor. Only non-interest bearing
deposits, redeemable on demand and used by depositors primarily for payment and settlement functions areprotected in full.
Participation in the deposit insurance system is compulsory for city banks (including Mizuho Bank),
regional banks, trust banks (including Mizuho Trust & Banking), credit associations and co-operatives, laborbanks and other financial institutions.
Governmental Measures to Treat Troubled Institutions
Under the Deposit Insurance Act, a Financial Reorganization Administrator can be appointed by the Prime
Minister if the bank is unable to fully perform its obligations with its assets or may suspend or has suspended
repayment of deposits. The Financial Reorganization Administrator will take control of and dispose of the assetsof the bank and search for another institution willing to take over its business. Its business may also betransferred to a “bridge bank” established by the Deposit Insurance Corporation for the purpose of the temporary
maintenance and continuation of operations of these types of institutions, and the bridge bank will seek totransfer the bank’s assets to another financial institution or dissolve the bank. The financial aid provided by the
Deposit Insurance Corporation to assist another financial institution with succeeding the failed bank’s businessmay take the form of a monetary grant, loan or deposit of funds, purchase of assets, guarantee or assumption ofdebts, subscription of preferred stock or subordinated bonds, lending of subordinated loans, or loss sharing.
Where the Prime Minister recognizes that the failure of a bank which falls into any of (i) through (iii) below
may cause an extremely grave problem in maintaining the financial order in Japan or the region where such bankis operating (“systemic risk”), without taking any of the measures described in (i) through (iii) below, the Prime
Minister may confirm (nintei) to take any of the following measures, after the deliberation at the Financial Crisis
Management Meeting: (i) if the bank does not fall into either of the banks described in (ii) or (iii), the Deposit
Insurance Corporation may subscribe for shares or subordinated bonds of, or lend subordinated loans to the bank,or subscribe for shares of the bank holding company of the bank, in order to enhance capital adequacy of thebank (item 1 measures (dai ichigo sochi)); (ii) if the bank is likely to suspend or has suspended repayment ofdeposits or is unable to fully perform its obligations with its assets, financial aid exceeding the pay-off cost may
be available to such bank (item 2 measures (dai nigo sochi)); and (iii) if the bank is likely to suspend or hassuspended repayment of deposits and is unable to fully perform its obligations with its assets, and the systemicrisk cannot be avoided by the measure mentioned in (ii) above, the Deposit Insurance Corporation may acquire
all of the bank’s shares (item 3 measures (dai sango sochi)). The expenses for implementation of the abovemeasures will be borne by the bank industry, with an exception under which the Government of Japan may
provide partial subsidies for such expenses.

36New orderly and effective resolution regimes for financial institutions have been discussed internationallyand “Key Attributes of Effective Resolution Regimes for Financial Institutions” was published by the Financial
Stability Board in November 2011 and endorsed by the G20 leaders at the Cannes summit held in November
2011. Reflecting this global trend, pursuant to certain amendments to the Deposit Insurance Act that were
promulgated in June 2013 and became effective on March 6, 2014, a new resolution regime was introduced inJapan.
Under the new resolution regime stipulated in the amendments to the Deposit Insurance Act andimplementing ordinances thereunder, which became effective on March 6, 2014, financial institutions, includingbanks, insurance companies and securities companies and their holding companies, are subject to the regime.
Further, under the new resolution regime, among other things, where the Prime Minister recognizes that the
failure of a financial institution which falls into either (a) or (b) below may cause significant disruption in thefinancial markets or other financial systems in Japan without taking any of the measures described in (a)(specified item 1 measures)(tokutei dai ichigo sochi) stipulated in Article 126-2, Paragraph 1, Item 1 of the
Deposit Insurance Act or the measures described in (b) (specified item 2 measures)(tokutei dai nigo sochi)
stipulated in Article 126-2, Paragraph 1, Item 2 of the Deposit Insurance Act, the Prime Minister may confirm(specified confirmation)(tokutei nintei) to take any of the following measures, after the deliberation at the
Financial Crisis Management Meeting; (a) if the financial institution does not fall into a financial institution
which is unable to fully perform its obligations with its assets, the Deposit Insurance Corporation shall supervise
the operation of the business of and the management and disposal of assets of that financial institution (tokubetsu
kanshi), and may provide it with loans or guarantees necessary to avoid the risk of significant disruption in thefinancial systems in Japan (shikin no kashitsuke tou), or subscribe for shares or subordinated bonds of, or lendsubordinated loans to the financial institutions (tokutei kabushiki tou no hikiuke tou) , in each case to be taken asnecessary taking into consideration of the financial conditions of the financial institution; and (b) if the financial
institution is or is likely to be unable to fully perform its obligations with its assets or has suspended or is likely
to suspend repayment of its obligations, the Deposit Insurance Corporation shall supervise that financial
institution (tokubetsu kanshi), and may provide financial aid necessary to assist merger, business transfer,
corporate split or other reorganization in respect to such failed financial institution (tokutei shikin enjo). The
expenses for implementation of the measures under this regime will be borne by the financial industry, with an
exception under which the Government of Japan may provide partial subsidies for such expenses. If a measure
set out in (b) above is determined to be taken with respect to a financial institution, the Prime Minister may orderthat the financial institution’s operation and assets be under the special control (tokutei kanri) of the Deposit
Insurance Corporation. The business or liabilities of the financial institution subject to the special supervision(tokubetsu kanshi) or special control (tokutei kanri) by the Deposit Insurance Corporation as set forth above may
also be transferred to a “bridge bank” established by the Deposit Insurance Corporation for the purpose of thetemporary maintenance and continuation of operations of, or repayment of the liabilities of, such financial
institutions, and the bridge bank will seek to transfer the bank’s business or liabilities to another financial
institution or dissolve the bank. The financial aid provided by the Deposit Insurance Corporation to assist merger,
business transfer, corporate split or other reorganization in respect to the financial institution set out in (b) above
may take the form of a monetary grant, loan or deposit of funds, purchase of assets, guarantee or assumption ofdebts, subscription of preferred stock or subordinated bonds, lending of subordinated loan, or loss sharing.
If the Deposit Insurance Corporation has provided such financial assistance, the Prime Minister may
designate the movable assets and claims of the failed financial institution as not subject to attachment under
Article 126-16 of the Deposit Insurance Act, and such merger, business transfer, corporate split or otherreorganization may be conducted outside of the court-administrated insolvency proceedings.
If the financial institution subject to the special supervision or the special control by the Deposit Insurance
Corporation as set forth above is or is likely to be unable to fully perform its obligations with its assets or hassuspended or is likely to suspend repayment of its obligations, the financial institution may transfer all or amaterial portion of its business or all or a portion of shares of its subsidiaries or implement corporate split or37certain other corporate actions with court permission in lieu of any shareholder resolutions under Article 126-13of the Deposit Insurance Act which permission may be granted by the court in accordance with the Deposit
Insurance Act if (i) the financial institution is under special supervision by, or under special control of, theDeposit Insurance Corporation pursuant to the Deposit Insurance Act and (ii) the financial institution is, or is
likely to be, unable to fully perform its obligations with its assets, or the financial institution has suspended, or is
likely to suspend, repayment of its obligations. In addition, the Deposit Insurance Corporation must request otherfinancial institution creditors of the failed financial institution to refrain from exercising their rights against thefailed financial institution until measures necessary to avoid the risk of significant disruption to the financial
system in Japan have been taken, if it is recognized that such exercise of their rights is likely to make it difficult
to conduct an orderly resolution of the failed financial institution.
According to the announcement made by the Financial Services Agency in March 2014, (i) Additional
Tier 1 instruments and Tier 2 instruments under Basel III issued by a bank must be written down or converted
into common shares when the Prime Minister confirms that item 2 measures (dai nigo sochi), item 3 measures(dai sango sochi) or specified item 2 measures (tokutei dai nigo sochi) need to be applied to the bank, and(ii) Additional Tier 1 instruments and Tier 2 instruments under Basel III issued by a bank holding company must
be written down or converted into common shares when the Prime Minister confirms that specified item 2
measures (tokutei dai nigo sochi) need to be applied to the bank holding company.
Recovery and Resolution Plan
In November 2016, the Financial Stability Board published the latest list of G-SIBs. The list is annually
updated by the Financial Stability Board each November, and the list as of November 2016 includes us. A
recovery and resolution plan must be put in place for each G-SIB and be regularly reviewed and updated. In
Japan, under the Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc., aspart of crisis management, financial institutions identified as G-SIBs must prepare and submit a recovery plan,
which includes the triggers to implement the recovery plan and an analysis of recovery options, to the Financial
Services Agency, and the Financial Services Agency must prepare a resolution plan for each G-SIB.
Capital Injection by the Government
The Strengthening Financial Functions Act (Kinyu Kinou no Kyouka no tame no Tokubetsu Sochi ni kansuru
Houritsu) (Act No. 128 of 2004) was enacted on June 18, 2004 in order to establish a scheme of public money
injection into financial institutions and thereby enhance the soundness of such financial institutions on or prior to
March 31, 2008 and revitalize economic activities in the regions where they do business. On December 17, 2008,
certain amendments to the Strengthening Financial Functions Act took effect. These amendments relaxed certain
requirements for public money injection into Japanese banks and bank holding companies and other financial
institutions under the prior scheme and extended the period of application therefor, which had expired on
March 31, 2008, to March 31, 2012. These amendments aim to promote not only the soundness of such financial
institutions but also the extension of loans or other forms of credit to small and medium-sized enterprises in orderto revitalize local economies. In response to the Great East Japan Earthquake, the law was amended in June 2011
to extend the period for application to March 31, 2017 and to include special exceptions for disaster-affectedfinancial institutions. In 2016, the law was further amended to extend the period for application to March 31,
2022. None of the financial institutions within the Mizuho group are subject to such special exceptions.
Bank Holding Companies
Under the amendments to the Banking Act, which became effective from April 2017, a bank holding
company is required to administrate the businesses of the bank holding company group and is, in principle,
prohibited from carrying out businesses other than administrating such businesses and matters incidental to suchbusinesses; however, a bank holding company may, with prior approval of the Prime Minister, carry out certain
common operations of its group companies so as to improve the efficiency of their operations. Business activities
for subsidiaries of bank holding companies are limited to finance-related businesses and incidental businesses.
38

The Anti-Monopoly Act (Shiteki Dokusen no Kinshi oyobi Kousei Torihiki no Kakuho ni kansuru Houritsu)(Act No. 54 of 1947, as amended) prohibits a bank from holding more than 5% of another company’s voting
rights. This does not apply to a bank holding company, although the bank holding company is subject to generalshareholding restrictions under the Anti-Monopoly Act. The Banking Act does, however, in principle, prohibit abank holding company and its subsidiaries, on an aggregate basis, from holding more than 15% (in contrast to
5% in the case of a bank and its subsidiaries) of the voting rights of certain types of companies not permitted to
become subsidiaries of bank holding companies. Despite the foregoing shareholding restrictions, under theamendments to the Banking Act, which became effective from April 2017, bank holding companies and banks,with prior approval of the Prime Minister, can acquire and own voting rights of companies whose businesses
contribute or are expected to contribute to the increased sophistication of the banking business or theenhancement of customer convenience by utilizing information and communication technology that exceed thethreshold of the voting rights described above.
Financial Instruments and Exchange Act
The Financial Instruments and Exchange Act (Kinyu Shouhin Torihiki Hou) requires Mizuho Financial
Group to file with the Director General of the Kanto Local Finance Bureau an annual securities report including
consolidated and non-consolidated financial statements in respect of each financial period, supplemented byquarterly and extraordinary reports.
Under the Financial Instruments and Exchange Act, registered Financial Instruments Business Operators(kinyu-shouhin torihiki gyousha), such as Mizuho Securities, as well as Registered Financial Institutions (touroku
kinyu kikan), such as Mizuho Bank and Mizuho Trust & Banking, are required to provide customers with detailed
disclosure regarding the financial products they offer and take other measures to protect investors, including adelivery of explanatory documents to such customers prior to and upon the conclusion of transactional
agreements.
Financial Instrument Business Operators and Registered Financial Institutions are subject to the supervisionof the Financial Services Agency pursuant to delegation by the Prime Minister of Japan. Some of the supervisory
authority of the Financial Services Agency is further delegated to the Securities and Exchange SurveillanceCommission, which exercises its supervisory power over such registered institutions by conducting site
inspections and requesting information necessary for such inspections. Non-compliance or interference with suchinspection may result in such registrants being subject to criminal penalty under the Financial Instruments andExchange Act.
Certain amendments to the Financial Instruments and Exchange Act and the Banking Act, which came into
effect on June 1, 2009, revamped the firewall regulations regarding the holding of concurrent offices or posts
among banks, securities firms and insurance firms and required banks, securities firms and insurance firms toestablish systems for managing conflicts of interest in order to protect customers’ interests and expanded thetypes of business services that banks and certain other financial firms can provide.
Sales of Financial Products
As a result of financial deregulation, more financial products, including highly structured and complicatedproducts, can now be more freely marketed to customers. In response to this, the Act of Sales of Financial
Products (Kinyu Shouhin no Hanbai tou ni kansuru Houritsu) (Act No. 101 of 2000, as amended), effective from
April 2001, introduced measures to protect financial service customers by: requiring financial service providers
to provide customers with certain important information, including risks with respect to deficit of principal
associated with the financial products they offer and any restrictions on the period for exercising rights or theperiod for rescission, unless the customers fall within the ambit of professional investors or express their intent tothe contrary; and holding financial service providers liable for damages caused by a failure to follow thoserequirements. The amount of loss of principal is refutably presumed to be the amount of damages. Additionally,
the law requires financial service providers to follow certain regulations on solicitation measures as well as toendeavor to solicit customers in an appropriate manner and formulate and publicize a solicitation policy.
39

Self-Assessment and Reserves
The prompt corrective action system requires financial institutions to establish a self-assessment programthat complies with the Inspection Manual issued by the Financial Services Agency and related laws such as the
Financial Reconstruction Act (Kinyu Kinou no Saisei no tameno Kinkyu Sochi ni kansuru Houritsu) (Act No. 132
of 1998, as amended). Financial institutions are required to analyze their assets, giving due consideration toaccounting principles and other applicable rules and to classify their assets into four categories according to asset
recovery risk and risk of impairment based on the classification of the obligor (normal obligors, watch obligors,
intensive control obligors, substantially bankrupt obligors and bankrupt obligors) taking into account thelikelihood of repayment and the risk of impairment to the value of the assets. The results of self-assessment
should be reflected in the write-off and allowance according to the standard established by financial institutions
pursuant to the guidelines issued by the Japanese Institute of Certified Public Accountants and Inspection Manualissued by the Financial Services Agency. Based on the results of the self-assessment, financial institutions may
establish reserve amounts for their loan portfolio as may be considered adequate at the relevant balance sheet
date, even if all or part of such reserves may not be immediately tax deductible under Japanese tax law.
Based on the accounting standards for banks issued by the Japanese Bankers Association, a bank is required
to establish general reserves, specific reserves and reserves for probable losses on loans relating to restructuring
countries.
Credit Limits
The Banking Act restricts the aggregate amount of exposure to any single customer or customer group forthe purposes of avoiding excessive concentration of credit risks and promoting the fair and extensive utilizationof bank credit. The limits applicable to a bank holding company and bank with respect to their aggregate
exposure to any single customer or customer group are established by the Banking Act and regulations
thereunder. The Banking Act and the related regulations were amended, which became effective from December
2014, to tighten the previous restrictions to meet international standards. As a result of these amendments, thecurrent credit limit for a single customer or a customer group is 25% of the total qualifying capital, with certain
adjustments, of the bank holding company or bank and its subsidiaries and affiliates.
Restriction on Shareholdings
The Act Concerning Restriction on Shareholdings by Banks (Ginkou tou no Kabushiki tou no Hoyu no
Seigen tou ni kansuru Houritsu) (Act No. 131 of 2001, as amended) requires Japanese banks (including bankholding companies) and their subsidiaries to limit the aggregate market value (excluding unrealized gains, if any)of their holdings in equity securities to an amount equal to 100% of their Tier 1 capital in order to reduce
exposure to stock price fluctuations.
Share Purchase Program
The Banks’ Shareholdings Purchase Corporation was established in January 2002 in order to purchaseshares from banks and other financial institutions until September 30, 2006 pursuant to the Act Concerning
Restriction on Shareholdings by Banks. The Bank’s Shareholdings Purchase Corporation is allowed to resumepurchases of shares held by financial institutions as well as shares of financial institutions held by non-financial
institutions, up to a maximum amount of ¥20 trillion between March 12, 2009 and March 31, 2022. The Bank’s
Shareholdings Purchase Corporation purchased ¥1,305.3 billion of shares during the period from March 12, 2009
through March 31, 2017. The Bank’s Shareholdings Purchase Corporation will dispose of the purchased sharesby March 31, 2032 by taking into consideration the effects on the stock market.
The Bank of Japan also purchased ¥387.8 billion of shares held by banks and other financial institutions
during the period from February 23, 2009 through April 30, 2010. The Bank of Japan generally will not sell thepurchased shares until March 31, 2016. The Bank of Japan will dispose of the purchased shares by March 31,2026 by taking into consideration the effects on the stock market.
40

Capital Adequacy
The capital adequacy guidelines applicable to Japanese banks and bank holding companies withinternational operations supervised by the Financial Services Agency closely follow the risk-adjusted approach
proposed by the Bank for International Settlements and are intended to further strengthen the soundness andstability of Japanese banks. Under the risk-based capital framework of these guidelines, balance sheet assets andoff-balance-sheet exposures are assessed according to broad categories of relative risk, based primarily on thecredit risk of the counterparty, country transfer risk and the risk regarding the category of transactions.
In December 2010, the Basel Committee on Banking Supervision issued its Basel III rules text, which builds
on the International Convergence of Capital Measurement and Capital Standards document (“Basel II”), tostrengthen the regulation, supervision, and risk management of the banking sector. Basel III text presents thedetails of global regulatory standards on bank capital adequacy and liquidity. The rules text sets out higher andbetter-quality capital, better risk coverage, the introduction of a leverage ratio as a backstop to the risk-based
requirement, measures to promote the build-up of capital that can be drawn down in periods of stress, and theintroduction of two global liquidity standards. For further information of the leverage ratio and the two global
liquidity standards, see “Leverage Ratio” and “Liquidity” below, respectively.
The Financial Services Agency’s revisions to its capital adequacy guidelines became effective fromMarch 31, 2013, which generally reflect rules in the Basel III text that have been applied from January 1, 2013.
Under the revised guidelines, the minimum capital adequacy ratio is 8% on both a consolidated andnon-consolidated basis for banks with international operations, such as Mizuho Bank, and Mizuho Trust &Banking or on a consolidated basis for bank holding companies with international operations, such as Mizuho
Financial Group. Within the minimum capital adequacy ratio, the Common Equity Tier 1 capital requirement is
4.5% and the Tier 1 capital requirement is 6.0%.
Japanese banks with only domestic operations and bank holding companies the subsidiaries of which
operate only within Japan are subject to the revised capital adequacy guidelines that have been applied fromMarch 31, 2014, and those banks and bank holding companies are required to have a minimum Core Capital ratio
of 4%. However, those banks and bank holding companies that apply the internal rating based approach arerequired to have a minimum Common Equity Tier 1 ratio of 4.5% on both a consolidated and non-consolidated
basis, calculated on the assumption that the banks and bank holding companies are those with international
operations.
Under the revised capital adequacy guidelines based on the Basel III rules that have been applied to banks
and bank holding companies each with international operations from March 31, 2013, there are regulatory
adjustments such as goodwill and other intangibles, deferred tax assets, investments in the capital of banking,financial and insurance entities etc. shall be deducted under certain conditions for the purpose of calculating
capital adequacy ratios, and the requirements of regulatory adjustments were enhanced under the revised capital
adequacy guidelines. For example, under the capital adequacy guidelines prior to the revision thereto under the
Basel III rules, the maximum amount of net deferred tax assets under Japanese GAAP that major Japanese banks,
including bank holding companies, could record without diminishing the amount of Tier 1 capital for purposes ofcalculating capital adequacy ratio was 20% of Tier 1 capital. Under the revised capital adequacy guidelines basedon the Basel III rules, deferred tax assets that arise from temporary differences will be recognized as part ofCommon Equity Tier 1 capital, with recognition capped at 10% of Common Equity Tier 1 capital under certain
conditions, while other deferred tax assets, such as those relating to net loss carryforwards, will be deducted infull from Common Equity Tier 1 capital net of deferred tax liabilities. These regulatory adjustments based on the
Basel III rules began at 20% of the required deductions in the calculation of Common Equity Tier 1 capital in
March 2014 and will be increased by 20% increments per year through March 2018 when the regulatory
adjustments reach 100%.
In November 2015, the Financial Services Agency published revised capital adequacy guidelines and related
ordinances to introduce the capital buffer requirements under the Basel III rules for Japanese banks and bank41

holding companies with international operations, which include the capital conservation buffer, thecountercyclical buffer and the additional loss absorbency requirements for G-SIBs and domestic systemicallyimportant banks (“D-SIBs”). These guidelines have become effective on March 31, 2016. The capitalconservation buffer, the countercyclical capital buffer and the additional loss absorption capacity requirement for
G-SIBs and D-SIBs must be met with Common Equity Tier 1 capital under the revised guidelines, and if suchbuffer requirements are not satisfied, a capital distribution constraints plan is required to be submitted to the
Financial Services Agency and carried out. The capital conservation buffer is being phased in starting in March
2016 at 0.625% until becoming fully effective in March 2019 at 2.5%. In addition, subject to national discretionby the respective regulatory authorities, if the relevant national authority judges a period of excess credit growth
to be leading to the build-up of system-wide risk, a countercyclical capital buffer ranging from 0% to 2.5%
would also be imposed on banking organizations. The countercyclical capital buffer is a weighted average of thebuffers deployed across all the jurisdictions to which the banking organization has credit exposures. Further, wewere designated as both a G-SIB and D-SIB, and the additional loss absorption capacity requirement applied to
us was 1.0%. The additional loss absorption capacity requirement was the same as that imposed by the Financial
Stability Board, which is being phased in starting in March 2016 at 0.25% until becoming fully effective inMarch 2019 at 1.0%.
Under the capital adequacy guidelines, banks and bank holding companies each with international
operations are required to measure and apply capital charges with respect to their credit risks, market risks andoperational risks.
Under the guidelines, banks and bank holding companies have several choices for the methodologies tocalculate their capital requirements for credit risk, market risk and operational risk. Approval of the Financial
Services Agency is necessary to adopt advanced methodologies for calculation, and Mizuho Financial Groupstarted to apply the AIRB approach for the calculation of credit risk from the fiscal year ended March 31, 2009
and also apply the AMA for the calculation of operational risk from September 30, 2009.
As part of its ongoing review of the calculation of risk-weighted assets, in December 2014, the BaselCommittee on Banking Supervision (“BCBS”) published two consultative documents on revisions to thestandardized approach for credit risk (later revised in December 2015) and on the design of a capital floor
framework based on the standardized, non-internal modeled approach. The revised proposals are part of a rangeof policy and supervisory measures that aim to enhance reliability and comparability of risk-weighted capitalratios across banks. The proposal on the revisions to the standardized approach includes, among other things, todecrease mechanistic reliance on external credit rating agencies by introducing grade classification and due
diligence requirements to the determination of risk weights. The proposal on the capital floor framework seeks toreplace the current transitional capital floor based on the Basel I standard with a capital floor based on the revised
standardized approach, which is currently under review as described above. Furthermore, in March 2016, theBCBS published a consultative document on the reduction of variation in credit risk-weighted assets. The
document presented proposals which would remove the option to use the internal-ratings based approaches for
credit risk for certain exposures, adopt exposure level and model-parameter floors for portfolios where theinternal-ratings based approaches remain available, and provide greater specification of parameter estimation
practices for portfolios where the internal-ratings based approaches remain available. The various proposals areintended to be complementary to one another, with the goal of reducing excessive variability in risk-weighted
assets across banks. The schedule of implementation of the various proposals has not been stated explicitly.
For further information regarding capital adequacy, see “Item 5. Operating and Financial Review andProspects—Capital Adequacy—Regulatory Capital Requirements.”
Leverage Ratio
The leverage ratio framework is critical and complementary to the risk-based capital framework that will
help ensure broad and adequate capture of both on- and off-balance sheet sources of banks’ leverage. This42

simple, non-risk-based measure will restrict the build-up of excessive leverage in the banking sector to avoid
destabilizing deleveraging processes that can damage the broader financial system and the economy. In April
2016, the BCBS released a consultative document regarding proposed revisions to the design and calibration of
the Basel III leverage ratio framework including an additional leverage ratio requirement applicable to G-SIBs.
Any final adjustments to the definition and calibration of the leverage ratio will be made by the BCBS by 2017,with a view to migrate to a Pillar 1 (minimum capital requirements) treatment on January 1, 2018, based on
appropriate review and calibration.
For further information regarding the leverage ratio, see “Item 5. Operating and Financial Review andProspects—Capital Adequacy—Regulatory Capital Requirements.”
Liquidity
Two minimum standards for funding liquidity will be introduced. The liquidity coverage ratio (“LCR”) isintended to promote resilience to potential liquidity disruptions over a thirty-day horizon and help ensure that
global banks have sufficient, unencumbered, high-quality liquid assets (“HQLA”) to offset the net cash outflows
it could encounter under an acute short-term stress scenario. The Group of Governors and Heads of Supervisionagreed on a revised LCR standard on January 6, 2013, and the BCBS issued the text of the revised LCR standard
on January 7, 2013. The LCR guidelines of the Financial Services Agency, which reflect the rules in such text,
have been applied to banks and bank holding companies with international operations from March 31, 2015,
under the LCR guidelines, LCR is defined as the ratio obtained by dividing the sum of the amounts of HighQuality liquid assets by the amount of net cash outflows, each as defined in and calculated pursuant to suchguidelines. In accordance with the LCR standard under the LCR guidelines, the stock of unencumbered HQLA is
to constitute “level 1” assets, which include cash, central bank reserves and certain marketable securities backed
by sovereigns and central banks, and “Level 2” assets, which include certain government securities coveredbonds, corporate debt securities and, to a limited extent, lower-rated corporate bonds, residential mortgagebacked securities and equities that meet certain conditions. “Level 2” assets are subject to certain haircuts basedon types of securities and credit ratings. The minimum LCR under the LCR guidelines is 100% on both aconsolidated and non-consolidated basis for banks with international operations or on a consolidated basis forbank holding companies with international operations. LCR is subject to phase-in arrangements pursuant towhich the LCR rises in equal annual steps of 10 percentage points to reach 100% on January 1, 2019, with aminimum requirement of 80% during the period from January 1 to December 31, 2017. The BCBS issued final
requirements for LCR-related disclosures on January 12, 2014, and the LCR disclosure guidelines of the
Financial Services Agency, which reflect such requirements, have been applied to banks and bank holding
companies with international operations from June 30, 2015. The LCR disclosure guidelines require such banks
and bank holding companies to disclose their LCR in common templates starting from information as of June 30,
2015.
The net stable funding ratio (“NSFR”) requires a minimum amount of stable sources of funding at a bankrelative to the liquidity profiles of the assets, as well as the potential for contingent liquidity needs arising from
off-balance sheet commitments, over a one-year horizon. The BCBS finalized the NSFR framework in October
2014, and the NSFR is scheduled to be introduced as a minimum standard by the Financial Services Agency.
Total Loss Absorbing Capacity
Related to regulatory capital requirements, in November 2015, the FSB issued the final TLAC standard for
G-SIBs. The TLAC standard has been designed so that failing G-SIBs will have sufficient loss-absorbing andrecapitalization capacity available in resolution for authorities to implement an orderly resolution. G-SIBs will be
required to meet the TLAC requirement alongside the minimum regulatory requirements set out in the Basel III
framework. Specifically, G-SIBs will be required to meet a Minimum TLAC requirement of at least 16% of the43

resolution group’s risk-weighted assets as from January 1, 2019 and at least 18% as from January 1, 2022.
Minimum TLAC must also be at least 6% of the Basel III leverage ratio denominator from January 1, 2019, andat least 6.75% from January 1, 2022.
Following the publication of the final TLAC standards for G-SIBs by the FSB, in April 2016, the Financial
Services Agency published an explanatory paper outlining its approach for the introduction of the TLAC
framework in Japan. According to the Financial Services Agency’s approach, which is subject to change basedon future international discussions, the preferred resolution strategy for G-SIBs in Japan is Single Point of Entry(“SPE”), resolution, in which resolution powers are applied to the top of a group by a single national resolution
authority, although the actual measures to be taken will be determined on a case-by-case basis considering theactual condition of the relevant Japanese G-SIB in crisis. To implement this SPE resolution strategy effectively,
the Financial Services Agency plans to require bank holding companies of Japanese G-SIBs, which will be theresolution entities, to (i) meet the minimum external TLAC requirements provided under the FSB’s TLAC
standard, and (ii) cause their material subsidiaries that are designated as systemically important by the Financial
Services Agency, including but not limited to certain material sub-groups as provided in the FSB’s TLAC
standard, to maintain a certain level of capital and debt recognized by the Financial Services Agency as having
loss-absorbing and recapitalization capacity, or Internal TLAC. In addition, under the approach, Japanese G-SIBs
would be allowed to count the Japanese Deposit Insurance Fund Reserves in an amount equivalent to 2.5% of
their consolidated risk-weighted assets from 2019 and 3.5% of their consolidated risk-weighted assets from 2022
as their external TLAC.
Protection of Personal Information
The Personal Information Protection Act (Kojin Jouhou no Hogo ni kansuru Houritsu) (Act No. 57 of 2003,
as amended) and related guidelines impose various requirements on businesses, including us, that use databases
containing personal information, such as appropriate custody of such information and restrictions on information
sharing with third parties. Non-compliance with the order issued by the Personal Information Protection
Commission to take necessary measures to comply with the law will subject us to criminal and/or administrative
sanctions.
Prevention of Money Laundering
Under the Act Preventing Transfer of Profits Generated from Crime (Hanzai ni yoru Syueki no Iten Boushi
ni kansuru Houritsu) (Act No. 22 of 2007, as amended), which addresses money laundering and terrorism
concerns, financial institutions and other entities such as credit card companies are required to perform customer
identification, submit suspicious transaction reports and maintain records of transactions. Certain amendments tothe law became effective in April 2013, which tightened, among other things, customer identification
requirements. Further amendments to the law were promulgated in November 2014 and became effective on
October 1, 2016 for clarification of the judgment method of suspicious transactions, strict verification at the timeof the conclusion of correspondence contracts and expansion of the obligation for business operators to makeefforts to develop necessary systems.
Act Concerning Protection of Depositors from Illegal Withdrawals Made by Forged or Stolen Cards
The Act Concerning Protection of Depositors from Illegal Withdrawals Made by Forged or Stolen Cards(Gizou Kaado tou oyobi Tounan Kaado tou wo Mochiite Okonawareru Fuseina Kikaishiki Yochokin
Haraimodoshi tou karano Yochokinsha no Hogo tou ni kansuru Houritsu) (Act No. 94 of 2005, as amended)
requires financial institutions to establish internal systems to prevent illegal withdrawals of deposits using forgedor stolen bank cards. The law also requires financial institutions, among other matters, to compensate depositors
for any amount illegally withdrawn using forged bankcards, unless the financial institution can verify that it acted
in good faith without negligence and that there was gross negligence on the part of the relevant account holder.

44

United States
As a result of our operations in the United States, we are subject to extensive U.S. federal and statesupervision and regulation. We engage in U.S. banking activities through Mizuho Bank’s New York, Chicago,
Los Angeles and Park Avenue (New York) branches and Houston, Atlanta and San Francisco representative
offices. We also own one bank in the United States, Mizuho Bank (USA), as well as controlling interests inseveral other subsidiaries, including Mizuho Trust & Banking Co. (USA), which is engaged primarily in the trustand custody business, and Mizuho Securities USA LLC, a U.S. broker dealer engaged in the securities business.
The USA PATRIOT Act of 2001 (the “PATRIOT Act”) contains measures to prevent, detect and prosecute
terrorism and international money laundering by imposing significant compliance and due diligence obligations,creating new crimes and penalties and expanding the extraterritorial jurisdiction of the United States. In recent
years, federal and state regulatory and law enforcement authorities have closely scrutinized the compliance byfinancial institutions with the Bank Secrecy Act and anti-money laundering rules.
Mizuho Financial Group, Mizuho Bank and Mizuho Americas are financial holding companies (“FHCs”)
within the meaning of the U.S. Bank Holding Company Act of 1956, as amended (the “BHCA”), and are subject
to regulation and supervision thereunder by the “Federal Reserve Board”. As a matter of law, these threecompanies are required to act as a source of financial strength to Mizuho Bank (USA) and Mizuho Trust &Banking Co. (USA). The BHCA generally prohibits us from acquiring, directly or indirectly, the ownership orcontrol of more than 5% of any class of voting shares of any company engaged in the United States in activities
other than banking or activities that are financial in nature or incidental or complementary to financial activity.
This general prohibition is subject to certain exceptions, including an exception that permits us to acquire up to
100% of the voting interests in any company engaged in nonfinancial activities that we do not routinely manage,
generally for a period of up to 10 years, under our merchant banking authority. In addition, U.S. regulatory
approval is generally required for us to acquire more than 5% of any class of voting shares of a U.S. bank,savings association or bank holding company.
Mizuho Financial Group and the former Mizuho Corporate Bank, now Mizuho Bank, became FHCs in
December 2006, and Mizuho Americas became an FHC in July 2016. FHC status under the BHCA permitsbanking groups in the United States to engage in comprehensive investment banking businesses, such as theunderwriting of and dealing in corporate bonds, equities and other types of securities. FHC status enables ourgroup to promote our investment banking business on a broader basis in the United States.
As a financial holding company, we are also subject to additional regulatory requirements. For example, weand each of our U.S. insured depository institution subsidiaries with operations in the United States must be“well capitalized,” meaning a Tier 1 risk-based capital ratio of at least 6%, a total risk-based capital ratio of atleast 10% and a leverage ratio of at least 5%. We and each of our U.S. insured depository institution subsidiaries
must also be “well managed,” including that they maintain examination ratings that are at least satisfactory.
Further, Mizuho Financial Group and Mizuho Bank must also meet such capital standards as calculated under
their home country standards (which must be comparable to the capital required for a U.S. bank) and must be
well managed under standards comparable to those required for a U.S. bank. Failure to comply with suchrequirements would require us to prepare a remediation plan, and we would not be able to undertake new
business activities or acquisitions based on our status as a financial holding company during any period of
noncompliance without the prior approval of the Federal Reserve Board, and divestiture or termination of certain
business activities, or termination of our U.S. branches and agencies, may be required as a consequence of failingto correct such conditions within 180 days.
U.S. branches, agencies and representative offices of foreign banks must be licensed, and are alsosupervised and regulated, by either a state banking authority or by the Office of the Comptroller of the Currency,
the U.S. federal bank regulatory agency that charters and regulates national banks and federal branches andagencies of foreign banks. Each branch and representative office in the United States of Mizuho Bank is state45

licensed. Under U.S. federal banking laws, state-licensed branches and agencies of foreign banks may engage
only in activities that would be permissible for their federally-licensed counterparts, unless the Federal Reserve
Board determines that the additional activity is consistent with sound practices. U.S. federal banking laws also
subject state-licensed branches and agencies to the single-borrower lending limits that apply to federal branches
and agencies, which generally are the same as the lending limits applicable to national banks, but are based on
the capital of the entire foreign bank.
The New York branch of Mizuho Bank is subject to supervision, examination and regulation by the New
York State Department of Financial Services as well as by the Federal Reserve Board. Except for a prohibition
on such branch accepting retail deposits, a state-licensed branch generally has the same powers as a statechartered bank in such state. New York State has an asset pledge requirement for branches equal to the greater of
1% of average total liabilities for the previous month or $2 million, provided that an institution designated as a“well-rated foreign banking corporation” is permitted to maintain a reduced asset pledge with a cap of$100 million. The New York State Department of Financial Services may require higher amounts for supervisory
reasons. Each U.S. branch and representative office of Mizuho Bank is subject to regulation and examination by
the state banking authority of the state in which it is located.
Mizuho Bank (USA) is a state-chartered bank that is a member of the Federal Reserve System whose
deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”). As such, Mizuho Bank (USA) is
subject to regulation, supervision and examination by the Federal Reserve Board and the New York State
Department of Financial Services, as well as to relevant FDIC regulation.
Mizuho Trust & Banking Co. (USA) is a state-chartered bank and trust company that is not a member of theFederal Reserve System, but whose deposits are insured by the FDIC. As such, Mizuho Trust & Banking Co.
(USA) is subject to regulation, supervision and examination by the FDIC and the New York State Department of
Financial Services.
In the United States, U.S.-registered broker-dealers are regulated by the U.S. Securities and Exchange
Commission (the “SEC”). As a U.S.-registered broker-dealer, Mizuho Securities USA is subject to regulations
that cover all aspects of the securities business, including sales methods, trade practices among broker-dealers,
use and safekeeping of customers’ funds and securities, capital structure, recordkeeping, the financing ofcustomers’ purchases and the conduct of directors, officers and employees.
In the United States, comprehensive financial regulatory reform legislation, titled the Dodd-Frank WallStreet Reform and Consumer Protection Act (the “Dodd Frank Act”), was signed into law by President Obamaon July 21, 2010. Among other things, the Dodd-Frank Act directs the federal banking regulators to establish
minimum leverage and risk-based capital requirements for insured depository institutions and depository
institution holding companies.
The Dodd-Frank Act provides regulators with tools to impose greater capital, leverage and liquidity
requirements and other prudential standards, particularly for financial institutions that pose significant systemicrisk and bank holding companies with $50 billion or more in consolidated assets. In imposing such heightened
prudential standards on foreign banking organizations such as Mizuho Bank, the Federal Reserve Board isdirected to take into account the principle of national treatment and equality of competitive opportunity, and theextent to which the foreign bank holding organization is subject to comparable home country standards. On
February 18, 2014, the Federal Reserve Board finalized requirements under Regulation YY that impose enhanced
prudential standards on certain large foreign banking organizations having a U.S. presence, such as Mizuho
Bank. In particular, large foreign banking organizations, including us, and their U.S. operations are subject to risk
management requirements, risk-based capital and leverage limits, capital stress testing requirements, liquidity
requirements and, in certain circumstances, asset management requirements. Additionally, the Federal Reserve
Board expects to finalize single counterparty credit limits and early remediation requirements for foreign banking
organizations at a later date. In addition, foreign banking organizations with consolidated U.S. assets of46

$50 billion or more (excluding the assets of U.S. branches and agencies) will be required to create a separately
capitalized top-tier U.S. intermediate holding company (“IHC”) that will hold all of its U.S. subsidiaries and be
subject to certain capital, liquidity and other enhanced prudential standards on an IHC consolidated basis. In
consideration of certain enhanced prudential requirements under the Federal Reserve Board’s Regulation YY, weestablished a new U.S. bank holding company, Mizuho Americas which is a wholly owned direct subsidiary ofMizuho Bank and brought our U.S. bank subsidiaries, Mizuho Bank (USA) and Mizuho Trust & Banking Co.
(USA), and our U.S. securities broker dealer, Mizuho Securities USA LLC, together as subsidiaries under theholding company. The establishment of Mizuho Americas was part of a larger internal corporate reorganization,
which was taken with the aim of, among other things, strengthening corporate governance practices andoperations.
Under Section 619 of the Dodd-Frank Act, also known as the so-called “Volcker Rule,” any insured
depository institution; any insured depository institution holding company; any non-U.S. bank with branches in
the United States, such as Mizuho Bank; and any affiliate or subsidiary of such entities (each, a “banking entity”)
is prohibited from engaging in proprietary trading or from investing in or sponsoring private equity or hedge
funds, subject to certain limited exceptions. U.S. financial regulators approved final rules implementing
Section 619 of the Dodd-Frank Act on December 10, 2013. For investments in and relationships with certain
funds that were in place prior to December 31, 2013, the Federal Reserve has granted a set of extensions that givebanking entities until July 21, 2017 to comply with the Volcker Rule. All investments in and relationships withfunds covered by the Volcker Rule made after December 31, 2013 must have been divested or restructured by
July 21, 2015.
The current regulatory environment in the United States may be impacted by future legislative
developments, such as amendments to key provisions of the Dodd-Frank Act. On January 20, 2017,
Mr. Donald J. Trump became President of the United States. The full scope of President Trump’s short-term
legislative agenda is not yet fully known, but it may include certain deregulatory measures for the U.S. financial
services industry, including changes to the Volcker Rule, capital requirements and other aspects of the DoddFrank Act.
Disclosure Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act
Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 (“Section 219”) added
Section 13(r) to the U.S. Securities Exchange Act of 1934, requiring each SEC reporting issuer to disclose in its
annual and, if applicable, quarterly reports whether it or any of its affiliates have knowingly engaged in specified
activities, transactions or dealings relating to Iran or with the Government of Iran or certain designated persons or
entities involved in terrorism or the proliferation of weapons of mass destruction during the period covered bysuch filing. Section 219 requires disclosure even of certain activities not prohibited by U.S. or other law and evenif such activities were conducted outside the United States by non-U.S. affiliates in compliance with local law.
Our affiliate Mizuho Bank is our only affiliate to have engaged in activity that is relevant for this purpose.
Mizuho Bank maintains compliance policies and procedures to conform its operations to all applicable economic
sanctions laws and regulations, and is increasing resources dedicated to this effort. In that context, and only after
confirming that such transactions did not involve prohibited or sanctionable activity under U.S. or othereconomic sanctions, non-U.S. branches of Mizuho Bank engaged in a limited number of activities reportable
under Section 219 during the period covered by this annual report, as described below. No U.S. branches ofMizuho Bank were involved in any of these activities.
Legacy guarantees
During the period covered by this disclosure, Mizuho Bank exited from one but remains a party to anotherof two legacy counter guarantees that were opened in connection with activities of its customers for the benefit of
Iranian banks. When such guarantees were entered into, the banks in question, which are related to the47

Government of Iran, had not been designated under U.S. Executive Orders (“E.O.”) 13224 or 13382, although
they were subsequently so designated. Mizuho Bank maintained these guarantees post-designation only after
confirming that such transactions did not involve prohibited or sanctionable activity under U.S. or othereconomic sanctions. As contractual obligations, these guarantees cannot be exited by Mizuho Bank unilaterally.
In the fiscal year ended March 31, 2017, Mizuho Bank received fees of less than ¥1 million attributable to theseguarantees and net profits of less than that amount. Mizuho Bank continues to seek to terminate the counter
guarantee to the extent permitted under applicable laws.
Activities through correspondent banking accounts
In the fiscal year ended March 31, 2017, Mizuho Bank conducted a limited number of fund transfers
through accounts it maintains for or at a limited number of Iranian banks related to the Government of Iran and abank designated under E.O. 13224, or through other correspondent banking accounts on behalf of such Iranianbanks. These transfers were mainly associated with requests by our customers after the relaxation of applicablesanctions pursuant to the Joint Comprehensive Plan of Action. Mizuho Bank has policies and procedures toprocess transfers through these accounts only after confirming that such transactions do not involve prohibited or
sanctionable activity under U.S. or other economic sanctions and obtaining licenses issued by Japan’s Ministry of
Finance where necessary. Estimated gross revenue to Mizuho Bank in the fiscal year ended March 31, 2017attributable to fees for these activities was less than ¥10 million, with a net profit of less than that amount.
Mizuho Bank intends to continue engaging in this activity but will process transfers through these accounts only
under the limited circumstances where Mizuho Bank believes the transfer would conform to its compliancepolicies and procedures, applicable international sanctions laws, and after obtaining a license issued by Japan’s
Ministry of Finance where necessary.
Other Jurisdictions
Our operations elsewhere in the world are subject to regulation and control by local supervisory authorities,
including local central banks.
4.C. Organizational Structure
The following diagram shows our basic corporate structure as of March 31, 2017:
Holding Company
Mizuho Financial Group, Inc.

Banking

Trust Banking

Securities

Asset
Management

Research &Consulting

Core Group
Companies

MizuhoBank, Ltd.

Mizuho Trust& BankingCo., Ltd.

MizuhoSecurities
Co., Ltd.

Asset
Management
One Co., Ltd.

Mizuho ResearchInstitute Ltd.

Trust & Custody
Services Bank, Ltd.

MizuhoInformation &Research Institute,Inc.

Mizuho Private
WealthManagement Co.,
Ltd.

Core Group
Company
MizuhoAmericas
LLC

48

The following table sets forth information with respect to our principal consolidated subsidiaries as ofMarch 31, 2017:

Name

Domestic
Mizuho Bank, Ltd. . . . . . . . . . . . . . . . . . . .
Mizuho Trust & Banking Co., Ltd. . . . . . .
Mizuho Securities Co., Ltd. . . . . . . . . . . . .
Mizuho Research Institute Ltd. . . . . . . . . .
Mizuho Information & Research Institute,
Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset Management One Co., Ltd. . . . . . . .
Trust & Custody Services Bank, Ltd. . . . .
Mizuho Private Wealth Management Co.,
Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mizuho Credit Guarantee Co., Ltd. . . . . . .
Mizuho Realty Co., Ltd. . . . . . . . . . . . . . . .
Mizuho Factors, Limited . . . . . . . . . . . . . .
Simplex Investment Advisors Inc. . . . . . . .
Defined Contribution Plan Services Co.,
Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mizuho-DL Financial Technology Co.,
Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Proportion of Proportion ofownershipvotinginterest
interest(%)(%)

Country oforganization

Main business

Japan
Japan
Japan
Japan

Banking
Trust and banking
Securities
Research and consulting

100.0%
100.0%
95.8%
98.6%

100.0%
100.0%
95.8%
98.6%

Japan
Japan
Japan

Information technology
Investment management
Trust and banking

91.5%
70.0%
54.0%

91.5%
51.0%
54.0%

Japan
Japan
Japan
Japan
Japan

Consulting
Credit guarantee
Real estate agency
Factoring
Holding company

100.0%
100.0%
100.0%
100.0%
100.0%

100.0%
100.0%
100.0%
100.0%
100.0%

Japan

Pension plan-related
business

60.0%

60.0%

Japan

Application andSophistication of
Financial Technology
Credit card

60.0%

60.0%

51.0%

51.0%

Subcontracted
calculation services,
softwaredevelopment
Venture capital

50.0%

50.0%

50.0%

50.0%

100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%

100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%

100.0%
100.0%
100.0%
100.0%
100.0%
99.0%

100.0%
100.0%
100.0%
100.0%
100.0%
99.0%

UC Card Co., Ltd. . . . . . . . . . . . . . . . . . . .
Mizuho Trust Systems Company,
Limited . . . . . . . . . . . . . . . . . . . . . . . . . .

JapanMizuho Capital Co., Ltd. . . . . . . . . . . . . . .

Japan

Japan

Overseas
Mizuho Americas LLC . . . . . . . . . . . . . . .
U.S.A.
Holding company
Mizuho Bank (China), Ltd. . . . . . . . . . . . .
China
BankingMizuho International plc . . . . . . . . . . . . . .
U.K.
Securities and banking
Mizuho Securities Asia Limited . . . . . . . .
China
Securities
Banco Mizuho do Brasil S.A. . . . . . . . . . .
BrazilBankingMizuho Securities USA LLC . . . . . . . . . . .
U.S.A.
Securities
Mizuho Bank Europe N.V. . . . . . . . . . . . . . Netherlands Banking and securities
Mizuho Trust & Banking (Luxembourg)
S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Luxembourg Trust and banking
Mizuho Bank (USA) . . . . . . . . . . . . . . . . .
U.S.A.
BankingMizuho Bank (Switzerland) Ltd . . . . . . . . . Switzerland Trust and banking
Mizuho Trust & Banking Co. (USA) . . . . .
U.S.A.
Trust and banking
Mizuho Capital Markets Corporation . . . .
U.S.A.
Derivatives
PT. Bank Mizuho Indonesia . . . . . . . . . . . . Indonesia Banking

49

4.D. Property, Plant and Equipment
The following table shows the breakdown of our premises and equipment at cost as of March 31, 2016 and2017:
At March 31,
2016
2017
(in millions of yen)

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 552,205 ¥ 575,054
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
827,458
807,312Equipment and furniture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
463,205
485,407
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
88,19593,967
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,65623,093
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,086,124
1,308,292
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Accumulated depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . .

3,037,843
1,199,853

3,293,125
1,251,852

Premises and equipment—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,837,990¥2,041,273

Our head office is located at 1-5-5 Otemachi, Chiyoda-ku, Tokyo, Japan. The headquarter buildings ofMizuho Financial Group and Mizuho Bank are each leased from a third party.
The total area of land related to our material office and other properties at March 31, 2017 wasapproximately 697,000 square meters for owned land and approximately 15,000 square meters for leased land.
Our owned land and buildings are primarily used by our branches. Most of the buildings and land owned by
us are free from material encumbrances.
ITEM 4A. UNRESOLVED STAFF COMMENTS
None.

50

ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion and analysis should be read in conjunction with “Item 3.A. Key Information—
Selected Financial Data,” “Selected Statistical Data” and our consolidated financial statements, including thenotes thereto, included elsewhere in this annual report.
Table of Contents for Item 5.
Page

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Critical Accounting Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business Segments Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Geographical Segment Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liquidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Off-balance-sheet Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tabular Disclosure of Contractual Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recent Accounting Pronouncements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reconciliation with Japanese GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

51
59
62
73
78
81
92
94
98
99
99
100

Overview
The Mizuho GroupWe provide a broad range of financial services in domestic and overseas markets. The principal activities
and subsidiaries are the following:•Mizuho Bank provides a wide range of financial products and services mainly in relation to deposits,
lending and exchange settlement to individuals, SMEs, large corporations, financial institutions, public
sector entities and foreign corporations, including foreign subsidiaries of Japanese corporations;•Mizuho Trust & Banking provides products and services related to trust, real estate, securitization andstructured finance, pension and asset management and stock transfer agency; and•Mizuho Securities provides full-line securities services to individuals, corporations, financial institutions
and public sector entities.

We also provide products and services such as those related to trust and custody, asset management, privatebanking, research services, information technology-related services and advisory services for financial
institutions through various subsidiaries and affiliates.
In April 2016, we introduced an in-house company system based on the group’s diverse customer segments.
The aim of this system is to leverage our strengths and competitive advantage, which is the seamless integrationof our banking, trust and securities functions under a holding company structure, to speedily provide high-quality
financial services that closely match customer needs.
In October 2016, with a view to strengthening the respective asset management businesses, we and The
Dai-ichi Life Insurance Company, Limited integrated the asset management functions of both groups, namely,
DIAM Co., Ltd., the asset management function of Mizuho Trust & Banking, Mizuho Asset Management Co.,
Ltd. and Shinko Asset Management Co., Ltd., and formed a new company named Asset Management One Co.,
Ltd., a consolidated subsidiary of Mizuho Financial Group.
51

For a further discussion of our business and group organization, see “Item 4.B. Information on the
Company—Business Overview.”
Principal Sources of Income and Expenses
Net Interest Income
Net interest income arises principally from the lending and deposit-taking and securities investment
activities of our banking subsidiaries and is a function of:•

the amount of interest-earning assets and interest-bearing liabilities;•

the average interest rate spread (the difference between the average yield of interest earned on interestearning assets and the average rate of interest paid on interest-bearing liabilities); and•the general level of interest rates.

Principal items constituting interest-earning assets include loans, investments, trading account assets,
receivables under resale agreements and receivables under securities borrowing transactions. Principal items
constituting interest-bearing liabilities include deposits, trading account liabilities, short-term borrowings (suchas payables under repurchase agreements and payables under securities lending transactions) and long-term debt.
Provision (Credit) for Loan Losses
Provision (credit) for loan losses is charged against (or credited to) income to keep the allowance for loan
losses at a level that is appropriate to absorb probable losses inherent in the credit portfolio. For a description of
the approach and methodology used to establish the allowance for loan losses, see “—Financial Condition—
Allowance for Loan Losses.”Noninterest Income
Noninterest income consists mainly of fee and commission, investment gains (losses)—net, trading accountgains (losses)—net and foreign exchange gains (losses)—net.
Fee and commission include the following:•

fee and commission from securities-related business, including brokerage fee and commission related tosecurities underwriting, fee and commission related to investment trusts and individual annuities andother securities-related activities;•

fee and commission from deposits and lending business, which consist mostly of fee and commission
related to our loan businesses, including fees related to the arrangement of syndicated loans and otherfinancing transactions such as arrangement fees related to management buy-out transactions and fees
related to deposits such as account transfer charges;•

fee and commission from remittance business, including service charges for domestic and international
funds transfers and collections;•trust fees, including trust fees earned primarily through fiduciary asset management and administration
services for corporate pension plans and investment funds; and•fees for other customer services, including fees related to our agency businesses, such as administration
fees related to Japan’s principal public lottery program, as well as guarantee fees and others.

Investment gains (losses)—net primarily include net gains and losses on sales of marketable securities, suchas equity and bond investments. In addition, impairment losses are recognized when management concludes thatdeclines in the fair value of investments are other-than-temporary.
52

Trading account gains (losses)—net include gains and losses from transactions undertaken for trading
purposes, including both market making for customers and proprietary trading, or transactions through which weseek to capture gains arising from short-term changes in market value. Trading account gains (losses)—net also
include gains and losses related to changes in the fair value of derivatives and other financial instruments not
eligible for hedge accounting under U.S. GAAP that are utilized to offset mainly interest rate risk related to ourvarious assets and liabilities, as well as gains and losses related to changes in the fair value of foreign currencydenominated available-for-sale securities that are elected for fair value treatment under ASC 825. For further
information on the fair value option, see note 28 to our consolidated financial statements included elsewhere inthis annual report.
Foreign exchange gains (losses)—net mainly include translation gains and losses related to our foreign
currency-denominated assets and liabilities and gains and losses related to foreign exchange trading activities,
including market making for customers and proprietary trading.
Noninterest Expenses
Noninterest expenses primarily include salaries and employee benefits, general and administrative expenses,
occupancy expenses and fee and commission expenses.
Salaries and employee benefits include expenses incurred for salaries, bonuses and compensation to
directors and employees. They also include expenses related to pension and other employee retirement benefit
plans.
The principal items included in general and administrative expenses are amortization of software, tax
expenses such as consumption tax and property tax that are not income taxes and other expenses, including
premiums for deposit insurance.
The principal items included in occupancy expenses are expenses related to premises and equipment,
including depreciation, losses on disposal and lease expenses.
The principal items included in fee and commission expenses are fee and commission expenses for
remittance services, which mainly include commission expenses paid in connection with remittance transactions
and the securities-related businesses, which mainly include transactions costs such as brokerage fees paid.
Operating Environment
We operate principally in Japan, and our performance has generally tracked the macro economy of Japan.
As to the recent economic environment, the gradual recovery in the global economy has continued, while
weaknesses in the recovery have been seen in some regions. This recovery is expected to continue particularly in
the United States, but it remains necessary to monitor such risks of a downturn as the United States’ policy
direction under its new presidency, political concerns in Europe, the economic outlook for China and increasing
geopolitical risks. In the United States, the economy continued to recover due to such factors as generally
improved employment conditions, steady consumer spending and increase in exports. It is expected that thegradual recovery in the economy will continue, supported by policies under the new presidency. However,increasing uncertainty about the effect of monetary and trade policies under the new administration requires
continued monitoring. In Europe, the economy continued to recover gradually as consumer spending and exports
picked up. Although the gradual economic recovery of the region is expected to continue, the political situationin Europe, including negotiations regarding the United Kingdom’s withdrawal from the European Union,
elections in some countries and the effect of debt problems in southern Europe require further monitoring. In
Asia, the economy of China remained stable, due partly to the effect of government policies. This economic
condition in China is likely to continue with the successive support through fiscal policies, including investment
in infrastructure and tax reductions. The economies in emerging countries are picking up because of China’s
enduring economy and increase in resource prices. In the coming year, it is expected that the growth of their53

economies will remain gradual due to such factors of concern as the depreciation of currencies in emerging
countries and the increasing pressure of capital outflows. In Japan, following the improvement of overseas
economies, the economy has gradually been recovering mainly in the areas of exports and business investment.
As for the future outlook of the Japanese economy, it is expected to continue on its gradual recovery path, with
the improved environment for exports and the effect of economic measures by the government. However,increasing uncertainty in overseas economies requires continued monitoring.
Key indicators of Japanese economic conditions in recent periods include the following:•

The following chart shows the growth rates of Japan’s gross domestic product on a year-on-year basis
and Japan’s core nationwide consumer price indices from the first quarter of 2014 through the firstquarter of 2017:

Japan’s real gross domestic product on a year-on-year basis decreased by 0.5% in the fiscal year ended
March 31, 2015 and increased by 1.2% in each of the fiscal years ended March 31, 2016 and 2017.
Japan’s real gross domestic product on a quarterly basis, compared to the corresponding period of theprevious year, decreased consecutively from the second quarter of calendar year 2014 through the firstquarter of calendar year 2015 and increased consecutively from the second quarter of calendar year
2015 through the first quarter of calendar year 2017. Japan’s core nationwide consumer price index
increased by 2.8% in the fiscal year ended March 31, 2015, was unchanged in the fiscal year ended
March 31, 2016 and decreased by 0.2% in the fiscal year ended March 31, 2017.
•

In September 2016, the Bank of Japan decided to introduce “quantitative and qualitative monetaryeasing with yield curve control” by strengthening the two previous policy frameworks, “quantitative andqualitative monetary easing (“QQE”)” and “QQE with a negative interest rate.” The new policy
framework consists of two major components: (1) “yield curve control” in which the Bank of Japan willcontrol short-term and long-term interest rates; and (2) an “inflation-overshooting commitment” inwhich the Bank of Japan commits itself to expanding the monetary base until the year-on-year rate ofincrease in the observed consumer price index exceeds the price stability target of 2% and stays above54

the target in a stable manner. Under the new policy framework, the Bank of Japan decided to set theguideline for market operations under which, regarding short-term interest rates, the Bank of Japan will
apply a negative interest rate of minus 0.1% to certain excess balance in current accounts held byfinancial institutions at the Bank of Japan, while for long-term interest rates, it would purchase Japanese
government bonds so that the yield of 10-year Japanese government bonds will remain around 0% tocontrol long-term interest rates. In addition, the Bank of Japan decided to introduce the following new
tools of market operations so as to control the yield curve smoothly: (i) outright purchases of Japanese
government bonds with yields designated by the Bank of Japan; and (ii) fixed-rate funds-supplying
operations for a period of up to ten years (extending the longest maturity of the operation of one year).
The following chart shows movements in long-term interest rates from January 2014 to May 2017,
represented by the yield on newly issued 10-year Japanese government bonds, and in short-term interest
rates during the same period, represented by the uncollateralized overnight call rate used in theinterbank market:•

According to Teikoku Databank, a Japanese research institution, there were 9,044 corporatebankruptcies in the fiscal year ended March 31, 2015, involving approximately ¥1.9 trillion in total
liabilities, 8,408 corporate bankruptcies in the fiscal year ended March 31, 2016, involving
approximately ¥1.9 trillion in total liabilities, and 8,153 corporate bankruptcies in the fiscal year ended
March 31, 2017, involving approximately ¥1.9 trillion in total liabilities. The number of corporatebankruptcies decreased from a year earlier for the eighth consecutive year, but the amount of total
liabilities increased by approximately ¥0.04 trillion from the previous fiscal year.

55

•The following chart shows the daily closing price of the Nikkei Stock Average from January 2014 to
May 2017:

The Nikkei Stock Average, which is an average of the price of 225 stocks listed on the Tokyo Stock
Exchange, increased by 29.5% to ¥19,206.99 during the fiscal year ended March 31, 2015, followed by
a 12.7% decrease to ¥16,758.67 during the fiscal year ended March 31, 2016 and a 12.8% increase to¥18,909.26 during the fiscal year ended March 31, 2017. Thereafter, the Nikkei Stock Averageincreased to ¥19,650.57 as of May 31, 2017.
•

The following chart shows the yen/dollar spot rate of 5 p.m. Tokyo time published by the Bank of Japan
from January 2014 to May 2017:

The yen to U.S. dollar spot exchange rate, according to the Bank of Japan, was ¥120.21 to $1.00 as ofMarch 31, 2015, ¥112.43 to $1.00 as of March 31, 2016, and ¥111.80 to $1.00 as of March 31, 2017.
Thereafter, the yen strengthened to ¥110.96 to $1.00 as of May 31, 2017.
•

According to the Ministry of Land, Infrastructure, Transport and Tourism of Japan, housing starts inJapan decreased by 10.8% in the fiscal year ended March 31, 2015, increased by 4.6% and 5.8% in thefiscal years ended March 31, 2016 and 2017, respectively.
56

•

According to the Ministry of Land, Infrastructure, Transport and Tourism of Japan, the average
published housing land prices in Japan decreased by 0.4% and 0.2% in calendar years 2014 and 2015,
respectively, and was unchanged in calendar year 2016.

Capital Improvements
All yen figures and percentages in this subsection are truncated.
We have been implementing disciplined capital management by pursuing the optimal balance between
strengthening of stable capital base and steady returns to shareholders as described below.
Strengthening of Stable Capital BaseIn the fiscal year ended March 31, 2017, we strengthened our capital base mainly as a result of earning¥603.5 billion of profit attributable to owners of parent (under Japanese GAAP).
With respect to redemptions of previously issued securities, since April 2016, we have redeemed various
securities that are eligible Tier 1/Tier 2 capital instruments subject to phase-out arrangements under Basel III
upon their respective initial optional redemption dates or their respective maturity dates. With respect to Tier 1
capital, in June 2016, we redeemed $600.0 million and ¥400.0 billion of non-dilutive Tier 1 preferred securities
issued by our overseas special purpose companies in March 2006 and January 2007, respectively. In addition, on
July 1, 2016, we acquired ¥75.1 billion of eleventh series class XI preferred stock, in respect of which a request
for acquisition was not made by June 30, 2016 and delivered 265,433,368 shares of our common stock, pursuant
to Article 20, Paragraph 1 of our articles of incorporation and a provision in the terms and conditions of thepreferred stock concerning mandatory acquisition in exchange for common stock. On July 13, 2016, wecancelled all of our treasury shares of eleventh series class XI preferred stock. With respect to Tier 2 capital, in
November 2016, we redeemed ¥60.0 billion of dated subordinated bonds issued by our subsidiary bank. In April
2017, we redeemed ¥50.0 billion of dated subordinated bonds issued by our subsidiary bank.
With respect to Additional Tier 1 capital new issuances, in July 2016, we issued ¥460.0 billion of Additional
Tier 1 perpetual subordinated bonds with optional-redemption clause and write-down clause through public
offerings to wholesale investors in Japan. With respect to Tier 2 capital new issuances, in June 2016, January
2017 and June 2017, we issued ¥155.0 billion, ¥180.0 billion and ¥114.0 billion, respectively, of dated
subordinated bonds with a write-down feature that are Basel III-eligible Tier 2 capital instruments through public
offerings to retail investors in Japan.
Our Common Equity Tier 1 capital ratio under Basel III was 10.50% and 11.34% as of March 31, 2016 and2017, respectively.
Steady Returns to Shareholders
Annual cash dividends for the fiscal year ended March 31, 2017 were ¥7.5 per share of common stock(including interim dividend payments of ¥3.75 per share), which was the same amount as the annual cash
dividend per share of the previous fiscal year.
We continuously consider the optimal balance between strengthening of stable capital base and steadyreturns to shareholders. We will comprehensively consider the business environment such as the Mizuho group’sbusiness results, profit base, capital, and domestic and international regulation trends such as the Baselframework and determine cash dividend payments for each term.

57

Business Trends
See “Item 4.B. Information on the Company—Business Overview,” “Item 5. Operating and Financial
Review and Prospects—Operating Results” and “Item 5. Operating and Financial Review and Prospects—Financial Condition.”
OthersStrengthening our Research & Consulting Functions
In April 2016, in order to provide customers with solutions and support our aim of becoming a “financial
services consulting group,” we consolidated our research and consulting functions into “One Think-tank,” andwe established the new Research & Consulting Unit. The Unit is made up of Mizuho Bank’s Industry Research
Department, Mizuho Trust & Banking’s Consulting Department, Mizuho Securities’ Research and Consulting
Unit, Mizuho Information & Research Institute, Mizuho Research Institute and Mizuho-DL Financial
Technology. In addition to research and analysis on a wide range of topics ranging from macroeconomics toindustry trends, the research function offers policies based on such research and analysis.
Establishing Our U.S. Bank Holding Company
In July 2016, with consideration of the Federal Reserve Board’s proposed rule that came into effect on
July 1, 2016 regarding the operations of foreign banking organizations with U.S. operations, we established a
U.S. Bank Holding Company (“BHC”), Mizuho Americas, which is wholly owned by Mizuho Bank, and brought
its primary U.S.-based banking, securities and institutional custody services (trust banking) entities together
under the holding company.
Creation of New Business based on FinTech
In September 2016, Mizuho Bank and SoftBank Corp. agreed to set up a 50/50 joint company to provide
FinTech-based personal lending services. Afterwards, in November 2016, Mizuho Bank and SoftBankannounced that they established the joint company named “J. Score CO., LTD.” and will begin operations asJapan’s first score-based lending business in the first half of the fiscal year ending March 31, 2018. The
establishment of the company represents our enhanced efforts in the field of FinTech, through which we aim todevelop a new approach to lending and offer customers ever more attractive financial services.
Improvement for Advanced and Efficient Operations Utilizing Blockchain
Mizuho Bank, Fujitsu Limited and Fujitsu Laboratories Ltd. jointly conducted an operational trial using
blockchain technology and completed proof of concept. The goal was to enable low-cost, low-risk cross-bordersecurities transactions by building a system utilizing blockchain technology that can almost instantly share
matched trade information in the post-trade process as data that cannot be tampered with, but without building alarge-scale settlement system from scratch. This would thereby shorten the time from trade execution to final
settlement from the previous three days to the same day.
In April 2017, we announced two joint projects to analyze the results of actual trade transactions conductedusing blockchain technology with the aim of providing increased efficiency in the field of trade finance. In thefirst joint project, IBM Japan, Ltd., Mizuho Bank and we will work together to apply blockchain technology
developed by IBM to actual trade transactions and analyze the results. In the second joint project, R3CEV LLC(“R3”), Cognizant Japan KK, Mizuho Bank and we will utilize a distributed ledger platform developed by R3 to
conduct trace transactions to assess the possible implications and applications to trade finance. One of the key
features of blockchain is the ability to quickly and securely share data among participants. We anticipate that theapplication of blockchain technology to trade transactions will enable the digitalization of the documents
involved in trade finance as well as the fast and secure exchange of information. We also anticipate that this58

system and platform will reduce the time and operational costs associated with trade transactions by simplifying
the process of creating and exchanging documents, in addition to enabling all involved parties to share and viewthe most recent status of the transaction.
Signing of Memorandum of Understanding for the Integration of Trust Banks Specializing in Asset
Administration Service
In March 2017, we, Sumitomo Mitsui Trust Holdings, Resona Bank and The Dai-ichi Life Insurance
Company executed a memorandum of understanding to commence detailed analysis and negotiations in
preparation for the management integration of Japan Trustee Services Bank and Trust & Custody Services Bank.
The concentration of both companies’ managerial resources and expertise will have the benefit of scale, willrealize more stable and higher quality operations, and aims for further growth in the domestic securities
settlement market and contribute to the enhancement of the domestic investment chain. By meeting a wide
variety of customer needs, the integrated company will aim to be the top trust bank specializing in asset
administration services in Japan.
Disposing of Our Cross-shareholdings
Reflecting the potential impact on our financial position associated with the risk of stock price fluctuation,
as a basic policy, unless we consider holdings to be meaningful, we will not hold the shares of other companies
as cross-shareholdings. We promote cross-shareholdings disposal through initiatives to enhance capital efficiency
by implementing in-house company return on equity as an internal performance indicator. Our total Japanesestock portfolio (included within other securities which have readily determinable fair value and based on
acquisition cost) as of March 31, 2015 was approximately ¥1,962.9 billion, and we reduced such amount by¥275.3 billion as of March 31, 2017. As a result of the steady disposal, we were able to achieve our intermediatetarget of an approximately ¥250 billion reduction by March 31, 2017.
Critical Accounting Estimates
Note 1 to our consolidated financial statements included elsewhere in this annual report contains a summaryof our significant accounting policies. These accounting policies are essential to understanding our financial
condition and results of operations. Certain of these accounting policies require management to make criticalaccounting estimates that involve complex and subjective judgments and the use of assumptions, some of which
may be for matters that are inherently uncertain and susceptible to change. Such critical accounting estimates are
based on information available to us as of the date of the financial statements and could change from period toperiod. Critical accounting estimates could also involve estimates for which management could have reasonably
used another estimate for the relevant accounting period. The use of different estimates could have a material
impact on our financial condition and results of operations. The following is a discussion of significant
accounting policies for which critical accounting estimates are used.
Allowance for Loan Losses and Allowance for Losses on Off-Balance-Sheet Instruments
The allowance for loan losses is based on management’s estimate of probable credit losses existing in ourlending portfolio, and the allowance for losses on off-balance-sheet instruments is based on management’s
estimate of probable losses related to off-balance-sheet arrangements such as guarantees and commitments toextend credit.
The allowance for loan losses is categorized and evaluated using the following methods:•

Allowance based on ASC 310. In accordance with ASC 310, “Receivables” (“ASC 310”), we measure
the value of specifically identified impaired loans based on the present value of expected cash flows
discounted at the loans’ initial effective interest rate, or as a practical expedient, using the observable59

market price or the fair value of collateral if the loan is collateral dependent, when it is probable that wewill be unable to collect all amounts due according to the contractual terms of the loan agreement. The
collateral that we obtain for loans consists primarily of real estate or listed securities. In obtaining thecollateral, we evaluate the value of the collateral and its legal enforceability, and we also perform
subsequent re-evaluations at least once a year. As to collateral of loans that are collateral dependent, inthe case of real estate, valuation is generally performed by an appraising subsidiary that is independent
from our loan origination sections by using generally accepted valuation techniques such as (i) the
replacement cost approach, or (ii) the sales comparison approach or (iii) the income approach, although
in the case of large real estate collateral, we generally engage third-party appraisers to perform thevaluation. In the case of securities, such securities are typically those of listed companies and observable
market prices are used for valuation. Management identifies impaired loans through the credit quality
review process, in which the ability of borrowers to service their debt is assessed. The difference
between our evaluation of the value of the impaired loan and its principal amount is the amount of theimpairment which is recorded in the allowance for loan losses. Estimation of future cash flows is basedon a comprehensive analysis of the borrower’s ability to service the debt, any progress made on the
borrower’s rehabilitation program and the assumptions used therein.
•

Allowance based on ASC 450. In accordance with ASC 450, “Contingencies” (“ASC 450”), a formulabased allowance utilizing historical loss factors is applied to certain impaired loans which are
aggregated for purposes of measuring impairment, groups of small balance, homogeneous loans andother non-homogeneous loans that have not been identified as impaired. The determination of expected
losses is based on a statistical analysis of our historical default and loan loss data, as well as data fromthird-party sources. The estimation of the formula allowance is back-tested on a periodic basis bycomparing the allowance with the actual results subsequent to the balance sheet date.

•

Adjustment of ASC 450 Allowance. In addition to the allowance for loan losses based on historical loss
factors, the historical loss rate is adjusted, where appropriate, to reflect current factors, such as general
economic and business conditions affecting key lending areas, credit quality trends, specific industry
conditions and recent loss experience in the segments of the loan portfolio. For loans which are notdeemed to be impaired under ASC 310 but to which special isolated risks apply, management assesses
each loan individually to determine appropriate allowance amounts in lieu of mechanically applying the
ASC 450 formula-based allowance.

We assess probable loss amounts for guarantees by using the same categories and evaluation methods asloans. We similarly assess probable loss amounts for loan commitments, taking into account the probability ofdrawdowns.
The determination of the allowance for loan losses and the allowance for losses on off-balance-sheet
instruments requires a great deal of judgment and the use of estimates as discussed above. Furthermore,
information available at the time of the determination is limited, and it is not possible to eliminate uncertainty.
Significant changes in any of the factors underlying our determination of the allowances could materially affectour financial condition and results of operations. For example, if our current judgment with respect to expected
future cash flows differs from actual results, including as a result of an unexpected adverse change in theeconomic environment in Japan or a sudden and unanticipated failure of a large borrower, or if the value ofcollateral declines, we may need to increase the allowances with additional charges to earnings.

60

Valuation of Financial Instruments
ASC 820, “Fair Value Measurement” (“ASC 820”) specifies a hierarchy of valuation techniques based onwhether the inputs to those valuation techniques are observable or unobservable. The standard describes thefollowing three levels of inputs that may be used to measure fair value:
Level 1

Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include
debt and equity securities and derivative contracts that are traded in an active exchange market.

Level 2

Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities;
quoted prices in markets that are not active; or other inputs that are observable or can be corroborated
by observable market data for substantially the full term of the assets or liabilities. Level 2 assets andliabilities include debt securities with quoted prices that are traded less frequently than exchangetraded instruments. If no quoted market prices are available, the fair values of debt securities andover-the-counter derivative contracts in this category are determined using pricing models with inputs
that are observable in the market or can be derived principally from or corroborated by observable
market data.

Level 3

Unobservable inputs that are supported by little or no market activity and that are significant to thefair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose
values are determined using pricing models, discounted cash flow methodologies, or similar
techniques.

For assets and liabilities classified in Level 1 and 2 of the hierarchy, where inputs are principally based on
observable market data, there is less judgment or estimate in determining fair value, while the determination offair value of Level 3 assets and liabilities involves more significant management judgments and estimates. For
further information, including valuation methodologies and the use of management estimates and judgments inconnection therewith, see note 28 to the consolidated financial statements included elsewhere in this annual
report.
Valuation of Deferred Income Taxes
Deferred income taxes reflect the net tax effects of (1) temporary differences between the carrying amountsof assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and(2) operating loss and tax credit carryforwards. Pursuant to ASC 740, “Income Taxes” (“ASC 740”), a valuation
allowance is recognized for any portion of the deferred tax assets where it is considered more likely than not that
it will not be realized, based on projected future income, future reversals of existing taxable temporary
differences and tax-planning strategies. Because we have not opted to be subject to consolidated taxation,deferred tax assets and liabilities are calculated separately for each member of our consolidated group.
The determination of a valuation allowance is an inherently uncertain process due to the use of projected
future taxable income and subjective assessments in the effectiveness of our available tax-planning strategies
provided for under ASC 740. Variances in future projected operating performance or tax law changes could
result in a change in the valuation allowance. Variances in the net unrealized gains on available-for-salesecurities could also affect a change in the valuation allowance, because we consider the sales ofavailable-for-sale securities to be a qualifying tax-planning strategy that is a possible source of future taxable
income mainly with respect to our principal banking subsidiaries in Japan. Although we evaluate that thistax-planning strategy is prudent and feasible, it has limitations and risks such as the resulting decrease in net
unrealized gains on available-for-sale securities that are available to be utilized in the future. If we are not able torealize all or part of our net deferred tax assets in the future, an adjustment to our valuation allowance would becharged to income tax expense in the period when such determination is made, and this could materially andadversely affect our financial condition and results of operations.

61

Pension and Other Employee Benefit Plans
Mizuho Financial Group, its principal banking subsidiaries and certain other subsidiaries sponsor severance
indemnities and pension plans, which provide defined benefits to retired employees. Periodic expense andaccrued liabilities are computed based on a number of actuarial assumptions, including mortality, withdrawals,
discount rates, expected long-term rates of return on plan assets and rates of increase in future compensationlevels.
Actual results that differ from the assumptions are accumulated and amortized over future periods andtherefore generally affect future pension expenses. While management believes that the assumptions used areappropriate, differences in actual experience or changes in assumptions may adversely affect pension expenses in
the future.
In estimating the discount rates, we use interest rates on high-quality fixed-income government andcorporate bonds. The durations of such bonds closely match those of the benefit obligations. Assumed discountrates are reevaluated at each measurement date.
The expected rate of return for each asset category is based primarily on various aspects of the long-term
prospects for the economy that include historical performance and the market environment.
For further information on our pension and other employee benefits, see note 21 to the consolidated
financial statements included elsewhere in this annual report.
Operating Results
The following table shows certain information as to our income, expenses and net income for the fiscal
years ended March 31, 2015, 2016 and 2017:
Fiscal years ended March 31,
2015
2016
2017
(in billions of yen)Interest and dividend income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,458 ¥1,500 ¥ 1509
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
412
495
602
Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision (credit) for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,046
(60)

1,005
35

907
38

Net interest income after provision (credit) for loan losses . . . . . . . . . . . . . . . . . . . . . .
Noninterest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noninterest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,106
1,801
1,639

970
1,884
1,657

869
1,368
1,757

Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,268
438

1,197
347

480
91

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Net income (loss) attributable to noncontrolling interests . . . . . . . . . . . . . .

830
27

850
—

389
27

Net income attributable to MHFG shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 803

¥ 850

¥ 362

The following is a discussion of major components of our net income attributable to MHFG shareholders forthe fiscal years ended March 31, 2015, 2016 and 2017.

62

Net Interest Income
The following table shows the average balances of interest-earning assets and interest-bearing liabilities,
interest amounts and the average interest rates on such assets and liabilities for the fiscal years ended March 31,
2015, 2016 and 2017:
Fiscal years ended March 31,
2015
2016
2017
Average Interest Interest Average Interest Interest Average Interest Interest
balance amount ratebalance amount ratebalance amount rate
(in billions of yen, except percentages)

Domestic:
Interest-bearing deposits in otherbanks . . . . . . . . . . . . . . . . . . . . . . . . ¥ 15,900 ¥ 20
Call loans and funds sold, andreceivables under resale agreements
and securities borrowing
transactions . . . . . . . . . . . . . . . . . . .
4,771
8
Trading account assets . . . . . . . . . . . . .
6,755
32
Investments . . . . . . . . . . . . . . . . . . . . .
31,690127
Loans . . . . . . . . . . . . . . . . . . . . . . . . . .
54,207593

0.12% ¥ 29,485 ¥30

0.10% ¥ 37,389 ¥

27

0.07%

0.17
0.47
0.40
1.09

4,309
5,262
25,62552,866

10
16
88
565

0.22
0.31
0.34
1.07

5,079
4,408
20,35753,930

18
27
78
510

0.35
0.62
0.38
0.95

Total interest-earning assets . . . . . .

113,323780

0.69

117,547709

0.60

121,163660

0.54

Deposits . . . . . . . . . . . . . . . . . . . . . . . .
Short-term borrowings(1) . . . . . . . . . . .
Trading account liabilities . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . .

77,126
17,342
2,629
11,727

50
24
14
175

0.06
0.14
0.52
1.49

81,09015,1392,092
14,236

60
22
13
176

0.07
0.15
0.61
1.23

83,293
14,177
1,697
14,523

51
27
14
178

0.06
0.19
0.82
1.22

Total interest-bearing liabilities . . . .

108,824263

0.24

112,557271

0.24

113,690270

0.24

Net . . . . . . . . . . . . . . . . . . . . . .

4,499

517

0.45

4,990

438

0.36

7,473

390

0.30

Foreign:Interest-bearing deposits in otherbanks . . . . . . . . . . . . . . . . . . . . . . . .
Call loans and funds sold, andreceivables under resale agreements
and securities borrowing
transactions . . . . . . . . . . . . . . . . . . .
Trading account assets . . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . .
Loans . . . . . . . . . . . . . . . . . . . . . . . . . .

5,689

29

0.51

6,639

38

0.57

7,671

48

0.63

10,862
11,9502,850
21,634

33
142
79
395

0.30
1.19
2.77
1.83

10,465
11,602
3,058
24,279

50
135
102
466

0.48
1.16
3.34
1.92

9,213
10,335
3,915
25,412

79
136
87
499

0.85
1.31
2.24
1.96

Total interest-earning assets . . . . . .

52,985678

1.28

56,043791

1.41

56,546849

1.50

Deposits . . . . . . . . . . . . . . . . . . . . . . . .
Short-term borrowings(1) . . . . . . . . . . .
Trading account liabilities . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . .

19,801
20,326
1,692
268

100
28
17
4

0.51
0.14
1.05
1.66

20,95818,982
1,195
1,441

154
58
8
4

0.73
0.31
0.69
0.26

23,173
17,112
1,049
655

214
109
7
2

0.92
0.63
0.71
0.32

Total interest-bearing liabilities . . . .

42,087149

0.36

42,576224

0.53

41,989332

0.79

Net . . . . . . . . . . . . . . . . . . . . . .

10,898529

0.92

13,467567

0.88

14,557517

0.71

Total:
Total interest-earning assets . . . . . . . .
Total interest-bearing liabilities . . . . . .

166,308
150,911

1,458
412

0.88
0.27

173,590
155,133

1,500
495

0.86
0.32

177,709
155,679

1,509
602

0.85
0.39

Net . . . . . . . . . . . . . . . . . . . . . . ¥ 15,397 ¥1,046

0.61¥ 18,457 ¥1,005

0.54¥ 22,030 ¥ 907

0.46

Note:
(1) Short-term borrowings consist of due to trust accounts, call money and funds purchased, payables under repurchaseagreements and securities lending transactions and other short-term borrowings.

63

Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016
Interest and dividend income increased by ¥9 billion, or 0.6%, from the previous fiscal year to¥1,509 billion in the fiscal year ended March 31, 2017. Domestic interest and dividend income accounted for¥660 billion of the total amount, a decrease of ¥49 billion from the previous fiscal year, and foreign interest anddividend income accounted for ¥849 billion, an increase of ¥58 billion from the previous fiscal year.
Due to the monetary policies of the Bank of Japan, such as continuous monetary easing and the negativeinterest rate policy that began in February 2016, our domestic loan and deposit rate margin has become narrower.
Reflecting a decline in short-term interest rate levels of the yen, the average yield on domestic loans decreased by
0.12 percentage points from the previous fiscal year to 0.95% in the fiscal year ended March 31, 2017, and theaverage rate on domestic interest-bearing deposits decreased by 0.01 percentage points from the previous fiscal
year to 0.06% in the fiscal year ended March 31, 2017. Our domestic funding structure is stable, primarily
consisting of individual customer deposits. The average yield on foreign loans increased by 0.04 percentage
points from the previous fiscal year to 1.96% in the fiscal year ended March 31, 2017, and the average rate on
foreign interest-bearing deposits increased by 0.19 percentage points from the previous fiscal year to 0.92% in
the fiscal year ended March 31, 2017. We place further emphasis on the importance of profitability in the lending
business and look to counter the effects of negative impact of negative interest rates and others.
The decrease in domestic interest and dividend income was due mainly to a decrease in interest income
from domestic loans. The decrease in interest income from domestic loans was due mainly to a decrease in the
average yield, reflecting a decline in yen interest rate levels. Changes in the average yields on domestic interestearning assets contributed to an overall decrease in interest and dividend income of ¥46 billion, and changes in
the average balances of domestic interest-earning assets contributed to an overall decrease in interest anddividend income of ¥3 billion, resulting in the ¥49 billion decrease in domestic interest and dividend income.
The increase in foreign interest and dividend income was due mainly to increases in interest income fromforeign loans and in interest income from foreign call loans and funds sold, and receivable under resaleagreements and securities borrowing transactions. The increase in interest income from foreign loans was due
mainly to an increase in the average balance as well as an increase in the average yields. The increase in interest
income from foreign call loans and funds sold, and receivable under resale agreements and securities borrowing
transactions was due mainly to an increase in the average yield. Changes in the average yields on foreigninterest-earning assets contributed to an overall increase in interest and dividend income of ¥31 billion, andchanges in the average balance of foreign interest-earning assets contributed to an overall increase of ¥27 billion,
resulting in the ¥58 billion increase in foreign interest and dividend income.
Interest expense increased by ¥107 billion, or 21.6%, from the previous fiscal year to ¥602 billion in thefiscal year ended March 31, 2017. Domestic interest expense accounted for ¥270 billion of the total amount, adecrease of ¥1 billion from the previous fiscal year, and foreign interest expense accounted for ¥332 billion of
the total amount, an increase of ¥108 billion from the previous fiscal year.
The changes in the average interest rates on domestic interest-bearing liabilities contributed to an overall
decrease in interest expense of ¥3 billion, and the changes in the average balance of domestic interest-bearing
liabilities contributed to an overall increase in interest expense of ¥2 billion, resulting in the ¥1 billion decreasein domestic interest expense.
The increase in foreign interest expense was due mainly to increases in interest expense on foreign deposits
and foreign short-term borrowings. The increase in foreign interest expense on foreign deposits was due mainly
to an increase in the average rates, reflecting a rise in short-term interest rate levels of the U.S. dollar as well as
an increase in the average balance of foreign deposits. The increase in foreign interest expense on foreign shortterm borrowings was due mainly to an increase in the average rates, reflecting a rise in short-term interest ratelevels of the U.S. dollar. The changes in the average interest rates on foreign interest-bearing liabilities
64contributed to an overall increase in interest expense of ¥99 billion, and the changes in the average balance of
foreign interest-bearing liabilities contributed to an overall increase in interest expense of ¥9 billion, resulting inthe ¥108 billion increase in foreign interest expense.
As a result of the foregoing, net interest income decreased by ¥98 billion, or 9.8%, from the previous fiscal
year to ¥907 billion. The average interest rate spread declined by 0.08 percentage points from the previous fiscal
year to 0.46% in the fiscal year ended March 31, 2017. The decline of the average interest rate spread was not
significant because both the average yields on total interest-earning assets and the average interest rates on totalinterest-bearing liabilities generally leveled out between these periods.
Fiscal Year Ended March 31, 2016 Compared to Fiscal Year Ended March 31, 2015
Interest and dividend income increased by ¥42 billion, or 2.9%, from the previous fiscal year to¥1,500 billion in the fiscal year ended March 31, 2016. Domestic interest and dividend income accounted for¥709 billion of the total amount, a decrease of ¥71 billion from the previous fiscal year, and foreign interest anddividend income accounted for ¥791 billion, an increase of ¥113 billion from the previous fiscal year.
Due to the monetary policies of the Bank of Japan, such as continuous monetary easing and the negativeinterest rate policy that began in February 2016, our domestic loan and deposit rate margin has become narrower.
Reflecting a decline in short-term interest rate levels of the yen, the average yield on domestic loans decreased by
0.02 percentage points from the previous fiscal year to 1.07% in the fiscal year ended March 31, 2016, while theaverage rate on domestic interest-bearing deposits increased by 0.01 percentage points from the previous fiscal
year to 0.07% in the fiscal year ended March 31, 2016. Our domestic funding structure is stable, primarily
consisting of individual customer deposits. The average yield on foreign loans increased by 0.09 percentage
points from the previous fiscal year to 1.92% in the fiscal year ended March 31, 2016, and the average rate on
foreign interest-bearing deposits increased by 0.22 percentage points from the previous fiscal year to 0.73% in
the fiscal year ended March 31, 2016. We continue initiatives to increase foreign currency-denominated deposits.
We place further emphasis on the importance of profitability in the lending business and look to counter theeffects of negative impact of negative interest rates and others.
The decrease in domestic interest and dividend income was due mainly to decreases in interest and dividend
income from domestic investments and in interest income from domestic loans. The decreases in interest anddividend income from domestic investments and in interest income from domestic loans were due to decreases in
the average balances as well as decreases in the average yields, reflecting a decline in yen interest rate levels.
Changes in the average yields on domestic interest-earning assets contributed to an overall decrease in interestand dividend income of ¥40 billion, and changes in the average balances of domestic interest-earning assets
contributed to an overall decrease in interest and dividend income of ¥31 billion, resulting in the ¥71 billion
decrease in domestic interest and dividend income.
The increase in foreign interest and dividend income was due mainly to increases in interest income fromforeign loans and in interest and dividend income from foreign investments. The increase in interest income fromforeign loans was due mainly to an increase in the average balance, especially in Western Europe, as well as anincrease in the average yields. The increase in interest and dividend income from foreign investments was due toan increase in the average balance, reflecting an increase in U.S. treasury bond holdings, as well as an increase in
the average yield. Changes in the average yields on foreign interest-earning assets contributed to an overall
increase in interest and dividend income of ¥56 billion, and changes in the average balance of foreign interestearning assets contributed to an overall increase of ¥57 billion, resulting in the ¥113 billion increase in foreigninterest and dividend income.
Interest expense increased by ¥83 billion, or 20.1%, from the previous fiscal year to ¥495 billion in thefiscal year ended March 31, 2016. Domestic interest expense accounted for ¥271 billion of the total amount, an
increase of ¥8 billion from the previous fiscal year, and foreign interest expense accounted for ¥224 billion of thetotal amount, an increase of ¥75 billion from the previous fiscal year.
65

The increase in domestic interest expense was due mainly to increases in interest expense on domestic
deposits and long-term debt. The increase in domestic deposits was due to an increase in the average rates as wellas an increase in the average balance. The increase in domestic long-term debt was due to an increase in the
average balance, offset in part by a decrease in the average rates reflecting a decline in interest rate levels of yen.
The changes in the average interest rates on domestic interest-bearing liabilities contributed to an overall
decrease in interest expense of ¥20 billion, and the changes in the average balance of domestic interest-bearing
liabilities contributed to an overall increase in interest expense of ¥28 billion, resulting in the ¥8 billion increasein domestic interest expense.
The increase in foreign interest expense was due mainly to increases in interest expense on foreign deposits
and foreign short-term borrowings. The increase in foreign interest expense on foreign deposits was due mainly
to an increase in the average rates, reflecting a rise in short-term interest rate levels of the U.S. dollar as well as
an increase in the average balance of foreign deposits. The increase in foreign interest expense on foreign shortterm borrowings was due mainly to an increase in the average rates, reflecting a rise in short-term interest ratelevels of the U.S. dollar. The changes in the average interest rates on foreign interest-bearing liabilities
contributed to an overall increase in interest expense of ¥72 billion, and the changes in the average balance of
foreign interest-bearing liabilities contributed to an overall increase in interest expense of ¥3 billion, resulting inthe ¥75 billion increase in foreign interest expense.
As a result of the foregoing, net interest income decreased by ¥41 billion, or 3.9%, from the previous fiscal
year to ¥1,005 billion. The average interest rate spread declined by 0.07 percentage points from the previous
fiscal year to 0.54% in the fiscal year ended March 31, 2016. The decline of the average interest rate spread was
not significant because both the average yields on total interest-earning assets and the average interest rates on
total interest-bearing liabilities generally leveled out between these periods with respect to domestic assets andliabilities and increased by similar rates with respect to foreign assets and liabilities.
Provision (Credit) for Loan Losses
Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016
Provision for loan losses increased by ¥3 billion from March 31, 2016 to ¥38 billion at March 31, 2017.
Although obligor categories improved as a whole, reflecting the gradual recovery in the economic environment,
provision for loan losses increased due mainly to the deterioration of credit status of certain borrowers.
Fiscal Year Ended March 31, 2016 Compared to Fiscal Year Ended March 31, 2015
We recorded a provision for loan losses of ¥35 billion in the fiscal year ended March 31, 2016 compared toa credit for loan losses of ¥60 billion in the previous fiscal year. We recorded a modest level of provision for loan
losses in the fiscal year ended March 31, 2016, reflecting how the Japanese economy was in a “leveling off”
phase, whereas we recorded a credit for loan losses in the fiscal year ended March 31, 2015, reflecting how theJapanese economy was in a “gradual recovery” phase.

66

Noninterest Income
The following table shows a breakdown of noninterest income for the fiscal years ended March 31, 2015,2016 and 2017:
Fiscal years ended March 31,
2015
2016
2017
(in billions of yen)

Fee and commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fee and commission from securities-related business . . . . . . . . . . . . . . . . . . . . . .
Fee and commission from deposits and lending business . . . . . . . . . . . . . . . . . . .
Fee and commission from remittance business . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trust fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees for other customer services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange gains (losses)—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account gains (losses)—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment gains (losses)—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment gains (losses) related to bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment gains (losses) related to equity securities . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings (losses) of equity method investees—net . . . . . . . . . . . . . . . . . . . .
Gains on disposal of premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other noninterest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total noninterest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 716 ¥ 743
172
176
131
144
110
110
50
50
253
263
(35)
114
690
559
271
264
104
66
163
192
4
6
18
29
3
10
138
165
¥1,801 ¥1,884

¥ 747
166
165
108
47
261
69
(42)
333
61
272
—
27
6
228
¥1,368

Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016
Noninterest income decreased by ¥516 billion, or 27.4%, from the previous fiscal year to ¥1,368 billion in
the fiscal year ended March 31, 2017. The decrease was due mainly to trading account losses—net of ¥42 billion
compared to trading account gains—net of ¥559 billion in the previous fiscal year, offset in part by an increase ininvestment gains—net of ¥69 billion.
Fee and commission
Fee and commission increased by ¥4 billion, or 0.5%, from the previous fiscal year to ¥747 billion in thefiscal year ended March 31, 2017. The increase was due mainly to an increase in fee and commission from
deposits and lending business of ¥21 billion, offset in part by a decrease in fee and commission from securitiesrelated business of ¥10 billion.
Foreign exchange gains (losses)—net
Foreign exchange gains—net decreased by ¥45 billion, or 39.5%, from the previous fiscal year to¥69 billion in the fiscal year ended March 31, 2017. The change was due mainly to fluctuations in foreignexchange rates in the fiscal year ended March 31, 2017.
Trading account gains (losses)—net
Trading account gains (losses)—net was a loss of ¥42 billion in the fiscal year ended March 31, 2017
compared to a gain of ¥559 billion in the previous fiscal year. The change in trading account gains (losses)—net
was due mainly to an increase in losses related to a reduction in market value of receive-fixed, pay-variableinterest-rate swaps reflecting a rise in long-term interest rates, and an increase in losses related to changes in thefair value of foreign currency-denominated securities for which the fair value option was elected, reflecting an
increase in losses of foreign currency-denominated bonds due to the effect of a rise in long-term interest rates.
For further information on the fair value option, see note 28 to our consolidated financial statements included
elsewhere in this annual report.
67

Investment gains (losses)—net
Investment gains—net increased by ¥69 billion, or 26.1 %, from the previous fiscal year to ¥333 billion in
the fiscal year ended March 31, 2017. The increase was due mainly to an increase in investment gains related toequity securities of ¥80 billion, or 41.7%, from the fiscal year to ¥272 billion in the fiscal year ended March 31,
2017. The increase in investment gains related to equity securities was due mainly to an increase in gains on salesof investment account equity securities in the fiscal year ended March 31, 2017, reflecting our continued efforts
to decrease our cross-shareholdings. We continue our reallocation of management resources to key strategies
while mitigating the risk of stock price fluctuation.
Fiscal Year Ended March 31, 2016 Compared to Fiscal Year Ended March 31, 2015
Noninterest income increased by ¥83 billion, or 4.6%, from the previous fiscal year to ¥1,884 billion in thefiscal year ended March 31, 2016. The increase was due mainly to foreign exchange gains—net of ¥114 billion
compared to foreign exchange losses—net of ¥35 billion in the previous fiscal year and an increase in fees andcommissions income of ¥27 billion, offset in part by a decrease in trading account gains—net of ¥131 billion anda decrease in investment gains—net of ¥7 billion.
Fee and commission
Fee and commission increased by ¥27 billion, or 3.8%, from the previous fiscal year to ¥743 billion in thefiscal year ended March 31, 2016. The increase was due mainly to an increase in fee and commission from
deposits and lending business of ¥13 billion and an increase in fees for other customer services of ¥10 billion.
The increase in fee and commission from deposits and lending business was due mainly to an increase indomestic lending transactions, and the increase in fees for other customer services was due mainly to an increasein fees related to derivative transactions.
We aim to develop into a Financial Services Consulting Group both in Japan and overseas by using ourgroup strengths to provide customers with financial solutions, improving our presence in targeted business areas
and obtaining additional financial transaction business. We are pursuing deepened collaboration among banking,trust, securities and asset management functions to strengthen fee businesses and to increase and enhance
non-interest income. We seek to realize customer needs and observe fiduciary duties at the highest level andutilize our strength as a group and support the “shift from savings to investment” and contribute to theinvigoration of individuals’ financial assets. We also aim to minimize the negative impact from the negativeinterest rate policy of the Bank of Japan on income by strengthening non-interest income through measures suchas strengthening investment products sales by capturing the ongoing flow from savings to investments among
retail customers.
Foreign exchange gains (losses)—net
Foreign exchange gains (losses)—net was a gain of ¥114 billion in the fiscal year ended March 31, 2016
compared to a loss of ¥35 billion in the previous fiscal year. The change was due mainly to fluctuations inforeign exchange rates in the fiscal year ended March 31, 2016.
Trading account gains (losses)—net
Trading account gains (losses)—net decreased by ¥131 billion, or 19.0%, from the previous fiscal year to¥559 billion in the fiscal year ended March 31, 2016. The decrease was due mainly to a decrease in gains related
to changes in the fair value of foreign currency-denominated securities for which the fair value option waselected, reflecting a decrease in foreign currency-denominated bonds due to sales and redemptions and the effectof a lower decline in long-term interest rates than in the previous fiscal year, and a decrease in gains related tochanges in the fair value of domestic equity securities reflecting declines in stock market prices, especially in our68consolidated investment funds, offset in part by an increase in gains related to changes in the fair value ofderivative financial instruments used to hedge market risks, mainly interest rate risks, that are not eligible forhedge accounting under U.S. GAAP.
Investment gains (losses)—net
Investment gains—net decreased by ¥7 billion, or 2.6 %, from the previous fiscal year to ¥264 billion in thefiscal year ended March 31, 2016. The decrease was due mainly to a decrease in investment gains related tobonds of ¥38 billion, or 36.5 %, from the fiscal year ended March 31, 2015 to ¥66 billion in the fiscal year ended
March 31, 2016, offset in part by an increase in investment gains related to equity securities of ¥29 billion, or
17.8%, from the fiscal year ended March 31, 2015 to ¥192 billion in the fiscal year ended March 31, 2016. The
decrease in investment gains related to bonds was due mainly to a decrease in gains on sales of bonds in thefiscal year ended March 31, 2016, reflecting a decrease in the amount of bonds sold. The increase in investment
gains related to equity securities was due mainly to an increase in gains on sales of investment account equity
securities in the fiscal year ended March 31, 2016, reflecting our continued efforts to decrease our crossshareholdings. We continue our reallocation of management resources to key strategies while mitigating the riskof stock price fluctuation.
Noninterest Expenses
The following table shows a breakdown of noninterest expenses for the fiscal years ended March 31, 2015,2016 and 2017:
Fiscal years ended March 31,
2015
2016
2017
(in billions of yen)

Salaries and employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Occupancy expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fee and commission expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision (credit) for losses on off-balance-sheet instruments . . . . . . . . . . . . . . . . . . .
Other noninterest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total noninterest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 605 ¥
530
—
189
134
(3)
184
¥1,639

634 ¥
548
6
196
146
(16)
143

¥1,657

663
571
—
195
148
19
161

¥1,757

Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016
Noninterest expenses increased by ¥100 billion, or 6.0%, from the previous fiscal year to ¥1,757 billion in
the fiscal year ended March 31, 2017. The increase was due mainly to provision for losses on off-balance-sheet
instruments of ¥19 billion compared to credit for losses on off-balance-sheet instruments of ¥16 billion in theprevious fiscal year, an increase in salaries and employee benefits of ¥29 billion and an increase in general andadministrative expenses of ¥23 billion.
As the result of an increase in expenses associated with strategic investments and an increase in domesticsalaries and employee benefits, our costs and expenses exceeded our plan for the fiscal year ended March 31,
2017. Going forward, we aim to promote further structural reform by strengthening cost competitiveness throughfundamental structural reform such as reviewing branch strategies, improvements to achieve advanced andefficient operations utilizing technology, streamlining and optimizing the organization, and information systems
structural reform.

69

Salaries and employee benefits
Salaries and employee benefits increased by ¥29 billion, or 4.6%, from the previous fiscal year to¥663 billion in the fiscal year ended March 31, 2017 due mainly to an increase in personnel expenses and anincrease in employee retirement benefit expenses. The increase in personnel expenses was due mainly to anincrease in domestic personnel expenses. The increase in employee retirement benefit expenses was due mainly
to an increase in the amortization of net actuarial losses. Additional information regarding pension and other
employee benefit plans is included in note 21 to our consolidated financial statements included elsewhere in thisannual report.
Provision (credit) for losses on off-balance-sheet instruments
Provision (credit) for losses on off-balance-sheet instruments was a provision of ¥19 billion in the fiscal
year ended March 31, 2017 compared to a credit of ¥16 billion in the previous fiscal year. The change was due
mainly to an increase in allowance for losses on guarantees.
Fiscal Year Ended March 31, 2016 Compared to Fiscal Year Ended March 31, 2015
Noninterest expenses increased by ¥18 billion, or 1.1%, from the previous fiscal year to ¥1,657 billion in thefiscal year ended March 31, 2016. The increase was due mainly to an increase in salaries and employee benefit
expenses of ¥29 billion, offset in part by an increase in credit for losses on off-balance-sheet instruments of¥13 billion.
Our costs and expenses were generally flat, compared with the previous fiscal year. Going forward, we aim
to absorb an expected increase in expenses associated with forward looking strategic investments and nextgeneration IT systems through the realization of investment effects and cost structure reform impacts as well as
pursuit of operational efficiencies. In pursuit of operational efficiencies, we aim to improve productivity andeliminate waste thereby securing necessary resources to further generate added value for our customers, andenhance operations by allocating management resources to further improve cost competitiveness.
Salaries and employee benefits
Salaries and employee benefits increased by ¥29 billion, or 4.8%, from the previous fiscal year to¥634 billion in the fiscal year ended March 31, 2016 due mainly to an increase in personnel expenses, offset inpart by a decrease in employee retirement benefit expenses. The increase in personnel expenses was due mainly
to an increase in overseas personnel expenses, including strategic expenses related to overseas expansion. The
increase in strategic expenses related to overseas expansion was absorbed by strict cost control and fluctuations
in exchange rates. The decrease in employee retirement benefit expenses was due mainly to a decrease in theamortization of net actuarial loss, which primarily reflects past recoveries of the fair value of plan assets.
Provision (credit) for losses on off-balance-sheet instruments
Credit for losses on off-balance-sheet instruments increased by ¥13 billion from the previous fiscal year to¥16 billion in the fiscal year ended March 31, 2016 due mainly to a decrease in allowance for losses on
guarantees and reimbursement of debentures.

70

Income Tax Expense
The following table shows the components of income tax expense (benefit) for the fiscal years ended
March 31, 2015, 2016 and 2017:
Fiscal years ended March 31,
2015
2016
2017
(in billions of yen)

Current:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥184
72

¥163
61

¥ 130
68

Total current tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

256

224

198

187
(5)

127
(4)

(100)
(7)

Total deferred tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

182

123

(107)

Total income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥438

¥347

¥ 91

Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016
Income tax expense decreased by ¥256 billion, or 73.8%, from the previous fiscal year to ¥91 billion in thefiscal year ended March 31, 2017, due to a decrease in current tax expense of ¥26 billion and deferred tax benefitof ¥107 billion compared to deferred tax expense of ¥123 billion in the previous fiscal year. The decrease incurrent tax expense was due mainly to a decrease in the taxable income of a principal banking subsidiary. Thechange in deferred tax expense (benefit) was due mainly to an increase in deferred tax assets in principal banking
subsidiaries and an increase in deferred tax assets related to security subsidiary’s net operating loss carryforwards
resulting mainly from organizational restructuring of certain foreign security subsidiaries in the fiscal year ended
March 31, 2017.
We consider the sales of available-for-sale securities to be a qualifying tax-planning strategy that is apossible source of future taxable income to the extent necessary in the future mainly with respect to our principal
banking subsidiaries in Japan. The reliance on this tax-planning strategy of our subsidiaries in Japan wasincreased from at immaterial levels to approximately one-third of overall deferred tax assets during the fiscal
year ended March 31, 2017.
Fiscal Year Ended March 31, 2016 Compared to Fiscal Year Ended March 31, 2015
Income tax expense decreased by ¥91 billion, or 20.8%, from the previous fiscal year to ¥347 billion in thefiscal year ended March 31, 2016, due to a decrease in current tax expense of ¥32 billion and a decrease indeferred tax expense of ¥59 billion. The decrease in current tax expense was due mainly to a decrease in the
taxable income of a principal banking subsidiary. The decrease in deferred tax expense was due mainly todecreases in the temporary differences of our principal banking subsidiaries.
We consider the sales of available-for-sale securities to be a qualifying tax-planning strategy that is apossible source of future taxable income to the extent necessary in the future mainly with respect to our principal
banking subsidiaries in Japan. The reliance on this tax-planning strategy of our subsidiaries in Japan was at
immaterial levels of overall deferred tax assets at both March 31, 2015 and March 31, 2016, while the reliance
was reduced from approximately one-fifth to immaterial levels of overall deferred tax assets during the fiscal
year ended March 31, 2015.

71

The following table shows components of deferred tax assets (liabilities) as of March 31, 2015, 2016 and2017:
As of March 31,
2015
2016
2017
(in billions of yen)

Deferred tax assets:
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 576
225
—
9
—
392
198

¥ 522
179
—
—
—
342
170

¥ 498
184
31
14
4
452
190

Gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,400

1,213

1,373

Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(389)

(340)

(438)

Deferred tax assets, net of valuation allowance . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities:
Available-for-sale securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid pension cost and accrued pension liabilities . . . . . . . . . . . . . . . . . . . . . . .
Undistributed earnings of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,011

873

935

910
218
28
—
39
3
49

711
175
12
57
23
1
39

724
195
17
—
—
—
75

Gross deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,247

1,018

1,011

Net deferred tax assets (liabilities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (236) ¥ (145) ¥ (76)Net Income (Loss) Attributable to Noncontrolling Interests
Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016
Net income (loss) attributable to noncontrolling interests increased by ¥27 billion from the previous fiscal
year to ¥27 billion in the fiscal year ended March 31, 2017.
Fiscal Year Ended March 31, 2016 Compared to Fiscal Year Ended March 31, 2015
Net income (loss) attributable to noncontrolling interests decreased by ¥27 billion from the previous fiscal
year to ¥0 billion in the fiscal year ended March 31, 2016. The decrease was due mainly to deconsolidation ofcertain investment funds.
Net Income Attributable to MHFG Shareholders
Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016
As a result of the foregoing, net income attributable to MHFG shareholders decreased by ¥488 billion, or
57.4%, from the previous fiscal year to ¥362 billion in the fiscal year ended March 31, 2017.
Fiscal Year Ended March 31, 2016 Compared to Fiscal Year Ended March 31, 2015
As a result of the foregoing, net income attributable to MHFG shareholders increased by ¥47 billion, or
5.9%, from the previous fiscal year to ¥850 billion in the fiscal year ended March 31, 2016.
72

Business Segments Analysis
We have introduced an in-house company system based on our diverse customer segments as of April 2016.
The aim of this system is to leverage our strengths and competitive advantage, which is the seamless integrationof our banking, trust and securities functions under a holding company structure, to speedily provide high-quality
financial services that closely match customer needs.
Specifically, the company system is classified into the following five in-house companies, each based on acustomer segment: the Retail & Business Banking Company, the Corporate & Institutional Company, the Global
Corporate Company, the Global Markets Company, and the Asset Management Company. We regard thesecustomer segments as our operating segments.
In line with the aforementioned system, the reportable segments have been changed from those based on therelevant principal consolidated subsidiaries to the five in-house companies.
For a brief description of our each business segment, see note 32 to our consolidated financial statements
included elsewhere in this annual report.
Results of Operations by Business Segment
Consolidated Results of Operations
Consolidated gross profits for the fiscal year ended March 31, 2017 were ¥2,092.7 billion, a decrease of¥128.9 billion compared to the fiscal year ended March 31, 2016. Consolidated general and administrative
expenses for the fiscal year ended March 31, 2017 were ¥1,420.5 billion, an increase of ¥75.5 billion comparedto the fiscal year ended March 31, 2016. Consolidated net business profits for the fiscal year ended March 31,2017 were ¥663.4 billion, a decrease of ¥189.5 billion compared to the fiscal year ended March 31, 2016.

Fiscal year ended March 31, 2016(1):Mizuho Financial Group (Consolidated)
Retail &Business Corporate &GlobalGlobalAsset
Banking Institutional Corporate Markets Management
Company
Company
Company Company
Company
Others(3)(in billions of yen)

Total

Gross profits . . . . . . . . . . . . . . . . . . . . . . .
General and administrative expenses . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥676.4661.2—¥434.9183.2—¥403.8232.7—¥577.7
178.9
—

¥52.1
30.1
—

¥ 76.7 ¥2,221.6
58.9
1,345.0(23.7)(23.7)Net business profits (losses)(2) . . . . . . . . . .

¥ 15.2¥251.7¥171.1¥398.8¥22.0¥ (5.9) ¥ 852.9

Fiscal year ended March 31, 2017:

Mizuho Financial Group (Consolidated)
Retail &Business Corporate &GlobalGlobalAsset
Banking Institutional Corporate Markets Management
Company
Company
Company Company
Company
Others(3)(in billions of yen)

Total

Gross profits . . . . . . . . . . . . . . . . . . . . . . .
General and administrative expenses . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥646.1678.3—¥445.1
186.7—¥386.5237.8—¥539.4
200.9
—

¥49.6
29.3
—

¥ 26.0 ¥2,092.7
87.5
1,420.5
(8.8)
(8.8)

Net business profits (losses)(2) . . . . . . . . . .

¥ (32.2)¥258.4¥148.7¥338.5¥20.3¥(70.3) ¥ 663.4

Notes:(1) Following the introduction of an in-house company system based on customer segments in April 2016, segment
information for the fiscal year ended March 31, 2016 was restated to reflect the relevant changes as transaction data on a73

customer segment basis had been maintained. Due to such data not being available, it is impracticable to restate segment
information for the fiscal year ended March 31, 2015.
(2) Net business profits is used in Japan as a measure of the profitability of core banking operations, and is defined as grossprofits (or the sum of net interest income, fiduciary income, net fee and commission income, net trading income and net
other operating income) less general and administrative expenses. Measurement of net business profits is required forregulatory reporting to the Financial Services Agency.
(3) “Others” includes items which should be eliminated as internal transactions between each segment on a consolidated
basis.

Before the introduction of the in-house company system, business segment information was disclosed basedon the relevant principal consolidated subsidiaries such as Mizuho Bank, Mizuho Trust & Banking, and Mizuho
Securities. Segment information based on the relevant principal consolidated subsidiaries for the fiscal years
ended March 31, 2015, 2016 and 2017 is as follows:
MizuhoMizuhoTrust&
MizuhoFinancial
Banking
Securities
Group(Consolidated) (Consolidated) Others (Consolidated)

Mizuho Bank (Consolidated)
Mizuho Bank (Non-consolidated)

Fiscal year ended March 31, 2015(1)(2):

Total

Total

OthersFinancial
Corporate
Institutions
Banking& Public
Inter- Trading
Personal Retail(LargeCorporate
Sectornational andBanking Banking Corporations) Banking
Business Banking others
(a)
(b)
(c)
(d)
(e)
(f)
(g)

(h)

(i)

(j)

(k)

Total

(in billions of yen)

Gross profits:
Net interest income . . . . . . . . . . . . . . . . ¥1,087.3 ¥ 934.9 ¥213.4 ¥ 77.6
Net noninterest income . . . . . . . . . . . . .
598.4
560.6
48.7
53.7

¥179.5128.0¥ 99.6
79.8

¥33.3
27.4

¥147.1 ¥184.4 ¥152.4
164.9
58.1 37.8¥ 39.4
122.6

¥

1.8
335.8

¥ 0.9
61.5

¥1,129.4
1,118.3

Total . . . . . . . . . . . . . . . . . . . . . . . 1,685.7 1,495.5
General and administrative expenses . . . . . .
904.7
833.7
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(43.2)
—

131.3
118.4
—

307.5
94.4
—

179.4
76.5
—

60.7
30.3
—

312.0
92.6
—

242.5 190.2
188.0 71.0—
(43.2)

162.0
94.5
(3.7)

337.6
268.0
—

62.4
54.0
(2.7)

2,247.7
1,321.2(49.6)Net business profits(3) . . . . . . . . . . . . . . ¥ 737.8 ¥ 661.8 ¥ 28.6 ¥ 12.9

¥213.1¥102.9¥30.4¥219.4 ¥ 54.5 ¥ 76.0

¥ 63.8¥ 69.6¥ 5.7¥ 876.9

262.1
233.5
—

MizuhoMizuhoTrust&
MizuhoFinancial
Banking
Securities
Group(Consolidated) (Consolidated) Others (Consolidated)

Mizuho Bank (Consolidated)
Mizuho Bank (Non-consolidated)

Fiscal year ended March 31, 2016(2):

Total

Total

OthersFinancial
Corporate
Institutions
Banking& Public
Inter- Trading
Personal Retail(LargeCorporate
Sectornational andBanking Banking Corporations) Banking
Business Banking others
(a)
(b)
(c)
(d)
(e)
(f)
(g)

(h)

(i)

(j)

(k)

Total

(in billions of yen)

Gross profits:
Net interest income . . . . . . . . . . . . . . . . ¥ 959.4 ¥ 830.1 ¥214.8 ¥ 75.7
Net noninterest income . . . . . . . . . . . . .
675.3
633.7
45.0
53.1

¥173.0143.7¥ 97.5
77.5

¥32.5
31.8

¥175.5 ¥ 61.1 ¥129.3
185.1
97.5 41.6¥ 36.1
130.7

¥

5.4
343.8

¥ 2.8
68.1

¥1,003.7
1,217.9

Total . . . . . . . . . . . . . . . . . . . . . . . 1,634.7 1,463.8
General and administrative expenses . . . . . .
903.3
833.3
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(22.1)
—

128.8
118.6
—

316.7
91.9
—

175.0
75.2
—

64.3
29.8
—

360.6
122.1
—

158.6 170.9
161.3 70.0—
(22.1)

166.8
99.1
(4.2)

349.2
279.3
—

70.9
63.3
2.5

2,221.6
1,345.0(23.8)Net business profits (losses) (3) . . . . . . . ¥ 709.3 ¥ 630.5 ¥ 25.4 ¥ 10.2

¥224.8¥ 99.8¥34.5¥238.5 ¥ (2.7)¥ 78.8

¥ 63.5¥ 69.9¥10.1¥ 852.8

259.8
234.4
—

74

MizuhoMizuhoTrust &
MizuhoFinancial
Banking
Securities
Group(Consolidated) (Consolidated) Others (Consolidated)

Mizuho Bank(Consolidated)
Mizuho Bank
(Non-consolidated) Others
Fiscal year ended March 31, 2017(2)(4):Total(a)-(g)
Total

(h)

(i)

(j)

(k)

Total

(in billions of yen)

Gross profits:
Net interest income (expense) . . . . . . . . . . . . ¥ 836.5
Net noninterest income . . . . . . . . . . . . . . . . .
686.7¥ 719.8600.6¥116.786.1¥ 30.2121.8¥ (1.5)
333.1

¥ 2.6
83.3

¥ 867.8
1,224.9

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative expenses . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,523.2
982.7
(8.7)

1,320.4
866.6
—

202.8
116.1
(8.7)

152.0
101.6
(5.2)

331.6
257.5
0.1

85.9
78.7
5.0

2,092.7
1,420.5(8.8)

Net business profits(3) . . . . . . . . . . . . . . . . . . . ¥ 531.8¥ 453.8¥ 78.0¥ 45.2¥ 74.2¥12.2¥ 663.4

Notes:(1) Beginning on April 1, 2015, new allocation methods have been applied to the calculation of “Gross profits” and “General andadministrative expenses” for reportable segments of Mizuho Bank. Figures for the fiscal year ended March 31, 2015 have been restated
for the new allocation methods.
(2) “Others (h)” and “Others (k)” include the elimination of transactions between consolidated subsidiaries.
(3) Net business profits is used in Japan as a measure of the profitability of core banking operations, and is defined as gross profits (or thesum of net interest income, fiduciary income, net fee and commission income, net trading income and net other operating income) lessgeneral and administrative expenses. Measurement of net business profits is required for regulatory reporting to the Financial Services
Agency.
(4) Segment information based on the relevant principal consolidated subsidiaries for the fiscal year ended March 31, 2017 is presented forcomparability purposes. Due to system limitations, it is impracticable to present the details of Mizuho Bank (Non-consolidated).

Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016
Retail & Business Banking Company
Gross profits for the fiscal year ended March 31, 2017 were ¥646.1 billion, a decrease of ¥30.3 billion, or
4.5%, compared to the fiscal year ended March 31, 2016. The decrease was attributable mainly to a decrease of
net interest income as a result of the effects of the negative interest rate policy in Japan and a decrease in income
related to investment products.
General and administrative expenses for the fiscal year ended March 31, 2017 increased by ¥17.1 billion, or
2.6%, compared to the fiscal year ended March 31, 2016 to ¥678.3 billion. The increase was attributable mainly
to an increase in personnel expenses, including employee retirement benefit expenses.
As a result, we recorded net business losses of ¥32.2 billion for the fiscal year ended March 31, 2017
compared to net business profits of ¥15.2 billion for the fiscal year ended March 31, 2016.
Corporate & Institutional Company
Gross profits for the fiscal year ended March 31, 2017 were ¥445.1 billion, an increase of ¥10.2 billion, or
2.3%, compared to the fiscal year ended March 31, 2016. The increase was attributable mainly to an increase in
non-interest income, reflecting an improvement in our solution-related business.
General and administrative expenses for the fiscal year ended March 31, 2017 increased by ¥3.5 billion, or
1.9%, compared to the fiscal year ended March 31, 2016 to ¥186.7 billion.
As a result, net business profits for the fiscal year ended March 31, 2017 increased by ¥6.7 billion, or 2.7%,
compared to the fiscal year ended March 31, 2016 to ¥258.4 billion.
75

Global Corporate Company
Gross profits for the fiscal year ended March 31, 2017 were ¥386.5 billion, a decrease of ¥17.3 billion, or4.3%, compared to the fiscal year ended March 31, 2016. The decrease was attributable mainly to theappreciation of the yen against the dollar and other major currencies and the slowdown in business related to
non-Japanese customers in Asia, which reflected regional economic trends.
General and administrative expenses for the fiscal year ended March 31, 2017 increased by ¥5.1 billion, or2.2%, compared to the fiscal year ended March 31, 2016 to ¥237.8 billion. The increase was attributable mainly
to an increase in premiums for deposit insurance of foreign branches of Mizuho Bank.
As a result, net business profits for the fiscal year ended March 31, 2017 decreased by ¥22.4 billion, or
13.1%, compared to the fiscal year ended March 31, 2016 to ¥148.7 billion.
Global Markets Company
Gross profits for the fiscal year ended March 31, 2017 were ¥539.4 billion, a decrease of ¥38.3 billion, or6.6%, compared to the fiscal year ended March 31, 2016. The decrease was attributable mainly to the decrease inincome related to the selling of foreign bonds under a volatile market environment.
General and administrative expenses for the fiscal year ended March 31, 2017 increased by ¥22.0 billion, or
12.3%, compared to the fiscal year ended March 31, 2016 to ¥200.9 billion.
As a result, net business profits for the fiscal year ended March 31, 2017 decreased by ¥60.3 billion, or
15.1%, compared to the fiscal year ended March 31, 2016 to ¥338.5 billion.
Asset Management Company
Gross profits for the fiscal year ended March 31, 2017 were ¥49.6 billion, a decrease of ¥2.5 billion, or4.8%, compared to the fiscal year ended March 31, 2016. The decrease was attributable mainly to the sluggish
growth of assets under management, reflecting weakness in market conditions.
General and administrative expenses for the fiscal year ended March 31, 2017 decreased by ¥0.8 billion, or
2.7%, compared to the fiscal year ended March 31, 2016 to ¥29.3 billion.
As a result, net business profits for the fiscal year ended March 31, 2017 decreased by ¥1.7 billion, or 7.7%,
compared to the fiscal year ended March 31, 2016 to ¥20.3 billion.
Fiscal Year Ended March 31, 2016 Compared to Fiscal Year Ended March 31, 2015
Mizuho Bank
Gross profits for the fiscal year ended March 31, 2016 were ¥1,463.8 billion, a decrease of ¥31.7 billion, or
2.1%, compared to the fiscal year ended March 31, 2015. The decrease was attributable mainly to a decrease inincome from trading and others due mainly to the appreciation of the yen against the dollar and other major
currencies. This decrease was offset in part by increases in gross profits related to our customer groups due to anincrease in income mainly in the Americas in international banking and noninterest income from derivativetransactions in corporate banking (large corporations).
General and administrative expenses for the fiscal year ended March 31, 2016 decreased by ¥0.4 billion, or
0.0%, compared to the fiscal year ended March 31, 2015 to ¥833.3 billion. The decrease was due mainly to theeffects of the appreciation of the yen against the dollar and other major currencies which were generally offset by
an increase in strategic expenses related to overseas expansion.
76

As a result, net business profits for the fiscal year ended March 31, 2016 decreased by ¥31.3 billion, or
4.7%, compared to the fiscal year ended March 31, 2015 to ¥630.5 billion.
Mizuho Trust & Banking
Gross profits for the fiscal year ended March 31, 2016 were ¥166.8 billion, an increase of ¥4.8 billion, or
3.0%, compared to the fiscal year ended March 31, 2015. The increase was attributable to an increase innoninterest income due mainly to gains on sales of Japanese government bonds.
General and administrative expenses for the fiscal year ended March 31, 2016 increased by ¥4.6 billion, or
4.9%, compared to the fiscal year ended March 31, 2015 to ¥99.1 billion. The increase was attributable mainly to
an increase in personnel expenses and tax expenses.
As a result mainly of the foregoing, net business profits for the fiscal year ended March 31, 2016 decreasedby ¥0.3 billion, or 0.5%, compared to the fiscal year ended March 31, 2015 to ¥63.5 billion.
Mizuho Securities
Gross profits for the fiscal year ended March 31, 2016 were ¥349.2 billion, an increase of ¥11.6 billion, or
3.4%, compared to the fiscal year ended March 31, 2015. The increase was attributable mainly to an increase in
trading income and fee and commission income related to underwriting and selling of equity securities andbonds, which reflected our involvement in large business transactions both inside and outside of Japan.
General and administrative expenses for the fiscal year ended March 31, 2016 increased by ¥11.3 billion, or4.2%, compared to the fiscal year ended March 31, 2015 to ¥279.3 billion. The increase was due mainly to anincrease in personnel expenses and information technology systems-related costs.
As a result, net business profits for the fiscal year ended March 31, 2016 increased by ¥0.3 billion, or
0.4%, compared to the fiscal year ended March 31, 2015 to ¥69.9 billion.

77

Geographical Segment Analysis
The following table presents consolidated income statement and total assets information by major
geographic area. Foreign activities are defined as business transactions that involve customers residing outside ofJapan. However, as our operations are highly integrated globally, we have made estimates and assumptions forthe allocation of assets, liabilities, income and expenses among the geographic areas.
Americas

UnitedStatesJapan

Fiscal year ended March 31, 2015:
Total revenue(1) . . . . . . . . . . . . . . ¥Total expenses(2) . . . . . . . . . . . . .

2,397
1,460

Income before income tax
expense . . . . . . . . . . . . . . . . . .

937

Net income . . . . . . . . . . . . . ¥566

Total assets at end of fiscal
year . . . . . . . . . . . . . . . . . . . . . ¥127,467
Fiscal year ended March 31, 2016:
Total revenue(1) . . . . . . . . . . . . . . ¥ 2,288
Total expenses(2) . . . . . . . . . . . . .
1,534
Income before income tax
expense . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . ¥Net income . . . . . . . . . . . . . ¥¥465

Total assets at end of fiscal
year . . . . . . . . . . . . . . . . . . . . . ¥138,832

¥ 102
24

113

78
¥

76

¥

212
134

¥

78
¥

74

224
162

Total

¥

62
¥

34

3,259
1,991
1,268

¥

830

¥31,075¥4,871¥10,881¥15,820¥190,114

¥

¥

¥

¥

¥

434
282
152

¥

137

46
29
17

¥

15

188
126
62

¥

51

428
216
212

¥

182

3,384
2,187
1,197

¥

850

¥28,985¥4,228¥11,617¥15,824¥193,810

¥

¥

¥

¥

¥

500
303

36
6

324
211

80

754

Total assets at end of fiscal
year . . . . . . . . . . . . . . . . . . . . . ¥133,156
Fiscal year ended March 31, 2017:
Total revenue(1) . . . . . . . . . . . . . . ¥ 1,748
Total expenses(2) . . . . . . . . . . . . .
1,712
Income before income tax
expense . . . . . . . . . . . . . . . . . .

¥OthersEurope(in billions of yen)

Asia/Oceania
excludingJapan,and others

197
¥

168

¥30,262

70
29
41

¥

39

¥4,203

191
136
55

¥

39

¥10,629

368
216
152

¥

137

¥16,530

2,877
2,396
481

¥

389

¥200,456

Notes:(1) Total revenue includes interest and dividend income and noninterest income.
(2) Total expenses include interest expense, provision (credit) for loan losses and noninterest expenses.
Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31, 2016
In the fiscal year ended March 31, 2017, 1.6% of our net income was derived from Japan, 43.2% from theUnited States, 10.0% from the Americas excluding the United States, 10.0% from Europe and 35.2% from Asia/
Oceania excluding Japan, and others. At March 31, 2017, 69.3% of total assets were allocated to Japan, 15.1% to
the United States, 2.1% to the Americas excluding the United States, 5.3% to Europe and 8.2% to Asia/Oceania
excluding Japan, and others.
In Japan, total revenue decreased by ¥540 billion from the previous fiscal year due primarily to a decrease in
trading account gains—net. The decrease in trading account gains—net was due mainly to a decrease in gains
78

related to changes in the fair value of derivative financial instruments with interest rate swap received/fixed andpaid/floating, which resulted from increases in market interest rates. Total expenses increased by ¥178 billion
from the previous fiscal year due mainly to an increase in provision for loan losses. In addition, income tax
expense decreased by ¥259 billion from the previous fiscal year to ¥30 billion in the fiscal year ended March 31,
2017, reflecting the decline in taxable income. As a result, net income in Japan decreased by ¥459 billion. Total
assets in Japan increased by ¥5,676 billion due primarily to increases in interest-bearing deposits in other banks
and domestic loans, offset in part by a decrease in investment securities.
In the United States, total revenue increased by ¥66 billion due primarily to increases in interest income
from loans, resale agreements and securities lending transactions. The increase in interest income from loans andresale agreements was due mainly to an increase in market interest rates. Total expenses increased by ¥21 billion
due mainly to increases in expenses on payables under resale agreements and securities lending transactions anddeposits, offset in part by a decrease in provision for loan losses. As a result, net income in the United States
increased by ¥31 billion. Total assets in the United States increased by ¥1,277 billion due primarily to an increase
in interest bearing deposits.
In the Americas excluding the United States, total revenue increased by ¥24 billion due primarily to anincrease in other noninterest income, including foreign exchange gains (losses)—net while total expenses were
flat. As a result, net income in the Americas excluding the United States increased by ¥24 billion. Total assets in
the Americas excluding the United States decreased by ¥25 billion due primarily to a decrease in loans.
In Europe, total revenue increased by ¥3 billion due primarily to increases in interest from loans and trading
account assets, offset in part by a decrease in other noninterest income including foreign exchange gains(losses)—net. Total expenses increased by ¥10 billion due mainly to an increase in expenses on deposits. As aresult, net income in Europe decreased by ¥12 billion. Total assets in Europe decreased by ¥988 billion due
primarily to a decrease in trading account assets, offset in part by an increase in interest bearing deposits in otherbanks.
In Asia/Oceania excluding Japan, and others, total revenue decreased by ¥60 billion due primarily to adecrease in other noninterest income, including foreign exchange gains (losses)—net while total expenses were
flat. As a result, net income in Asia/Oceania excluding Japan, and others decreased by ¥45 billion. Total assets in
Asia/Oceania excluding Japan, and others increased by ¥706 billion due primarily to an increase in interest
bearing deposits in other banks.
Fiscal Year Ended March 31, 2016 Compared to Fiscal Year Ended March 31, 2015
In the fiscal year ended March 31, 2016, 54.7% of our net income was derived from Japan, 16.1% from theUnited States, 1.8% from the Americas excluding the United States, 6.0% from Europe and 21.4% from Asia/
Oceania excluding Japan, and others. At March 31, 2016, 68.7% of total assets were allocated to Japan, 14.9% to
the United States, 2.2% to the Americas excluding the United States, 6.0% to Europe and 8.2% to Asia/Oceania
excluding Japan, and others.
In Japan, total revenue decreased by ¥109 billion from the previous fiscal year due primarily to a decrease in
trading account gains—net, and to a decrease in interest and dividend income. The decrease in trading accountgains—net was due mainly to a decrease in gains related to changes in the fair value of foreign currencydenominated securities for which the fair value option was elected, reflecting a decrease in the balance of foreign
currency-denominated bonds due to sales and redemptions and the effect of a lower decline in long-term interest
rates than in the previous fiscal year, offset in part by an increase in gains related to changes in the fair value ofderivative financial instruments used to hedge market risks, mainly interest rate risks, that are not eligible forhedge accounting under U.S. GAAP. The decrease in interest and dividend income was due mainly to a decrease
in interest income from domestic loans and investments, which in turn was due mainly to a decrease in the
average balance as well as a decrease in the average yield. Total expenses increased by ¥74 billion from the79

previous fiscal year due mainly to a decrease in credit for loan losses. In addition, income tax expense decreasedby ¥82 billion from the previous fiscal year to ¥289 billion in the fiscal year ended March 31, 2016. As a result,net income in Japan decreased by ¥101 billion. Total assets in Japan increased by ¥5,689 billion due primarily to
an increase in interest-bearing deposits in other banks, offset in part by a decrease in investment securities.
In the United States, total revenue increased by ¥110 billion due primarily to increases in interest anddividend income and fee and commission. The increase in interest and dividend income was due mainly to anincrease in interest income from loans, which in turn was due mainly to an increase in the average balance. The
increase in fee and commission was due mainly to an increase in fees related to loan related business. Total
expenses increased by ¥71 billion due mainly to increases in provision for loan losses, interest expense on
payables under repurchase agreements and securities lending transactions and salaries and employee benefits. As
a result, net income in the United States increased by ¥57 billion. Total assets in the United States decreased by¥2,090 billion due primarily to a decrease in trading account assets.
In the Americas excluding the United States, total revenue decreased by ¥56 billion due primarily to adecrease in trading account gains—net. Total expenses increased by ¥5 billion due mainly to an increase inimpairment of goodwill. As a result, net income in the Americas excluding the United States decreased by¥61 billion. Total assets in the Americas excluding the United States decreased by ¥643 billion due primarily to adecrease in other assets.
In Europe, total revenue decreased by ¥24 billion due primarily to decreases in investment gains—net andinterest income from trading account assets, offset in part by increases in fee and commission and interest income
from loans. Total expenses decreased by ¥8 billion due mainly to a decrease in other noninterest expenses. As aresult, net income in Europe decreased by ¥23 billion. Total assets in Europe increased by ¥736 billion due
primarily to an increase in loans, offset in part by a decrease in interest-bearing deposits in other banks.
In Asia/Oceania excluding Japan, and others, total revenue increased by ¥204 billion due primarily to anincrease in other noninterest income including foreign exchange gains (losses)—net. Total expenses increased by¥54 billion due mainly to increases in interest expense on interest-bearing deposits in other banks, and salaries
and employee benefits. As a result, net income in Asia/Oceania excluding Japan, and others increased by¥148 billion. Total assets in Asia/Oceania excluding Japan, and others increased by ¥4 billion due primarily toincreases in trading account assets and investment securities, offset in part by a decrease in loans.

80Financial Condition
AssetsOur assets as of March 31, 2016 and 2017 were as follows:
As of March 31,
Increase2016
2017(decrease)(in billions of yen)

Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing deposits in other banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call loans and funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables under resale agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables under securities borrowing transactions . . . . . . . . . . . . . . . . . . . . .
Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,323 ¥ 1,592 ¥ 269
35,32745,995
10,668
894
1,038
144
7,806
8,968
1,162
3,407
3,350
(57)
30,021
24,998(5,023)30,88524,969(5,916)77,55582,284
4,729
(451)
(480)
(29)

Loans, net of allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premises and equipment—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due from customers on acceptances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

77,104
1,838
110
273
19
49
57
4,697

81,804
2,041
184
271
95
94
64
4,993

4,700
203
74
(2)
76
45
7
296

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥193,810¥200,456¥ 6,646

Total assets increased by ¥6,646 billion from March 31, 2016 to ¥200,456 billion as of March 31, 2017.
This increase was due mainly to an increase of ¥10,668 billion in interest-bearing deposits in other banks and anincrease of ¥4,700 billion in loans, net of allowance, offset in part by a decrease of ¥5,916 billion in investments
and a decrease of ¥5,023 billion in trading account assets.

81

LoansLoans outstanding
The following table shows our loans outstanding as of March 31, 2016 and 2017 based on classifications bydomicile and industry segment:
As of March 31,
Increase2016
2017(decrease)(in billions of yen, except percentages)

Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 8,345
Construction and real estate . . . . . . . . . . . . . . . . . . . . .
7,734
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,656
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,409
Transportation and communications . . . . . . . . . . . . . .
3,268
Banks and other financial institutions . . . . . . . . . . . . .
3,632
Government and public institutions . . . . . . . . . . . . . . .
3,395
Other industries(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,619
Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,514Mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,590
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
924

10.7% ¥ 8,741
9.9
7,654
6.0
4,759
7.0
5,142
4.2
3,491
4.7
4,006
4.4
8,532
5.9
4,427
14.8
10,905
13.6
9,965
1.2
940

10.6% ¥ 396 (0.1)%
9.3(80) (0.6)
5.8103 (0.2)
6.2(267) (0.8)
4.2
223 —
4.9
374 0.2
10.3
5,137 5.9
5.4(192) (0.5)13.2(609) (1.6)
12.1(625) (1.5)
1.1
16 (0.1)

Total domestic . . . . . . . . . . . . . . . . . . . . . . .
Foreign:
Commercial and industrial . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . . .
Government and public institutions . . . . . . . . . . . . . . .
Other(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52,572

67.6

57,657

69.9

5,085

2.3

17,320
6,382
1,175
274

22.3
8.2
1.5
0.4

16,872
6,760
960
191

20.5
8.2
1.2
0.2

(448) (1.8)
378 —(215) (0.3)(83) (0.2)

Total foreign . . . . . . . . . . . . . . . . . . . . . . . . .

25,151

32.4

24,78330.1(368) (2.3)

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . .

77,723100.0% 82,440

100.0% 4,717

Less: Unearned income and deferred loan fees—net . . . . . .

(168)

(156)

12

Total loans before allowance for loan losses . . . . . . . . . . . .

¥77,555¥82,284¥4,729—Note:(1) “Other industries” within domestic and “other” within foreign include trade receivables and leasereceivables of consolidated variable interest entities.
Total loans before allowance for loan losses increased by ¥4,729 billion from March 31, 2016 to¥82,284 billion as of March 31, 2017. Loans to domestic borrowers increased by ¥5,085 billion to¥57,657 billion due mainly to an increase in loans to government and public institutions, offset in part by adecrease in mortgage loans for individuals.
Loans to foreign borrowers decreased by ¥368 billion from March 31, 2016 to ¥24,783 billion as ofMarch 31, 2017. The decrease in loans to foreign borrowers was due mainly to decreases in loans to commercial
and industrial, and government and public institutions.
Within our loan portfolio, the proportion of loans to domestic borrowers against gross total loans increased
from 67.6% to 69.9% while that of loans to foreign borrowers against gross total loans decreased from 32.4% to30.1%, and loans to foreign borrowers were regionally diversified.

82

Impaired Loans
General
In accordance with our group’s credit risk management policies, we use an internal rating system thatconsists of credit ratings and pool allocations as the basis of our risk management infrastructure. Credit ratings
consist of obligor ratings which represent the level of credit risk of the obligor, and transaction ratings which
represent the ultimate possibility of incurring losses on individual loans by taking into consideration various
factors such as collateral or guarantees involved. In principle, obligor ratings are applied to all obligors except
those to which pool allocations are applied, and are subject to regular review at least once a year as well as
special review which is required whenever the obligor’s credit standing changes. Pool allocations are applied togroups of small balance, homogeneous loans. We pool loans with similar risk characteristics, and the risk isassessed and managed according to such pools. We generally review the appropriateness and effectiveness of theapproach to obligor ratings and pool allocations once a year in accordance with predetermined policies andprocedures. The table below presents our definition of obligor ratings used by Mizuho Bank and Mizuho Trust &Banking:
Obligor category

Obligor rating

Definition

NormalA

Obligors whose certainty of debt fulfillment is very high, hence their level ofcredit risk is very low.
Obligors whose certainty of debt fulfillment poses no problems for theforeseeable future, and their level of credit risk is low.
Obligors whose certainty of debt fulfillment and their level of credit risk pose
no problems for the foreseeable future.
Obligors whose current certainty of debt fulfillment poses no problems,
however, their resistance to future economic environmental changes is low.
Obligors that require observation going forward because of either minor
concerns regarding their financial position, or their somewhat weak or
unstable business conditions.
Obligors that require special observation going forward because of problems
with their borrowings such as reduced or suspended interest payments,
problems with debt fulfillment such as failure to make principal or interest
payments, or problems with their financial position as a result of their weak or
unstable business conditions.
Obligors that are not yet bankrupt but are in financial difficulties and are
deemed likely to become bankrupt in the future because of insufficient
progress in implementing their management improvement plans or othermeasures (including obligors that are receiving ongoing support from financial
institutions).
Obligors that have not yet become legally or formally bankrupt but aresubstantially insolvent because they are in serious financial difficulties and are
deemed to be incapable of being restructured.
Obligors that have become legally or formally bankrupt.

B
C
D
Watch(1)E1
E2Intensive control

F

Substantiallybankrupt

G

Bankrupt

HNote:(1) Special attention obligors are watch obligors with debt in troubled debt restructuring or 90 days or moredelinquent debt. Loans to such obligors are considered impaired.
We consider loans to be impaired when it is probable that we will be unable to collect all the scheduled
payments of principal and interest when due according to the contractual terms of the loans. We classify loans to
special attention, intensive control, substantially bankrupt and bankrupt obligors as impaired loans, and all of our
impaired loans are designated as nonaccrual loans. We do not have any loans to borrowers that cause
management to have serious doubts as to the ability of such borrowers to comply with the present loan repayment
terms for the periods presented other than those already designated as impaired loans. See “Item 11. Quantitativeand Qualitative Disclosures about Market Risk—Credit Risk Management” for descriptions of our selfassessment procedures and our internal credit rating system.
83

Our credit management activities consist of activities such as efforts to provide management consultation to
support borrowers’ business initiatives, to increase the quantity and enhance the quality of loan collateral, and toadjust loan balances to an appropriate level, when the borrower’s credit quality is showing a decline. These
activities can lead to improvements in obligor classifications through improvements in the business and financial
condition of borrowers and, as a result, a reduction in allowance for loan losses.
We endeavor to remove impaired loans from our balance sheet within three years from the time when they
are categorized through methods such as collection, charge-offs, disposal and improving the borrowers’ credit
rating through restructuring efforts.
Loan modifications
Restructuring efforts are made through our various business revitalization support measures conductedbased on requests from borrowers that are in a weakened state that require some form of support. Whenconfronted with the decision of whether to agree to business revitalization support, which includes forgiveness ofdebt (including debt to equity swaps), reductions in stated interest rates to below market levels and postponementof payment of principal and/or interest (other than insignificant extensions), we carefully consider whether it isbeneficial to our shareholders and depositors based on various factors such as whether (i) a legal reorganization
process would significantly damage the obligor’s business value so that there is a fear that the obligor will not beable to restructure its business, (ii) the restructuring plan is appropriate and is economically rational from theviewpoint of minimizing Mizuho’s losses compared to other processes, (iii) both the management andshareholders of the obligor will clearly bear responsibility, and (iv) the allocation of losses among creditors isrational and highly justifiable. The triggers and factors that we review to identify restructured loans are
modifications imposed by law or a court of law and alterations based on agreement with the borrower such as the
reduction of the stated interest rate and forgiveness of debt (including debt to equity swaps), and we consider
restructured loans, with respect to which concessions that it would not otherwise consider were granted to
obligors in financial difficulty, as “troubled debt restructuring.” We consider the relevant obligor to be infinancial difficulty when its rating based on our internal rating system is E2 or below. The types of concessions
that we would not otherwise consider include the various forms of business revitalization support describedabove. In general, troubled debt restructurings will return to non-impaired loans, as well as accrual status, when
we determine that the borrower poses no problems regarding current certainty of debt fulfillment, i.e., theborrower qualifies for a rating of D or above based on our internal rating system. Based on our historicalexperience, it typically takes approximately 1.5 years for the troubled debt restructuring loans in nonaccrual
status to be returned to accrual status.
We determine whether restructured loans other than troubled debt restructurings are impaired loans based on
the application of our internal rating system as we do generally with respect to all obligors. We determine
whether restructured loans are past due or current by comparing the obligors’ payments with the modified
contract terms. The effect of the restructuring on the obligors is considered in developing the allowance based on
the restructuring’s effect on the estimation of future cash flows of such loans. At March 31, 2017, the balance ofrestructurings that are troubled debt restructurings was ¥500 billion, and the balance of restructurings that are nottroubled debt restructurings was ¥40 billion. Also, no charge-offs were recorded as a result of troubled debt
restructurings that were made during the fiscal year ended March 31, 2017.
While we maintain basic guidelines covering restructured loans, we do not have any standardized
modification programs. Instead, we apply various modifications as is appropriate for the specific circumstancesof the obligor in question. We do not have a policy that specifically limits the number of modifications that canbe performed for a specific loan.

84

Balance of impaired loans
The following table shows our impaired loans as of March 31, 2016 and 2017 based on classifications bydomicile and industry segment:
As of March 31,
2016
2017
Increase (decrease)
Ratio to grossRatio to grossRatio to gross
Impaired total loans by Impaired total loans by Impaired total loans byloans
industryloans
industryloans
industry(in billions of yen, except percentages)

Domestic:
Manufacturing . . . . . . . . . . . . . . .
Construction and real estate . . . . .
Services . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . .
Transportation andcommunications . . . . . . . . . . . .
Banks and other financial
institutions . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . .
Individuals . . . . . . . . . . . . . . . . . .

¥374
77
66
147

4.5%
1.0
1.4
2.7

¥379
57
66
147

4.3%
0.8
1.4
2.9

29

0.9

23

3
4
123

0.1
0.0
1.1

Total domestic . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . .

823
167

Total impaired loans . . . . . . . . . . .

¥990

¥

5
(20)
—
—

(0.2)%
(0.2)
—
0.2

0.6

(6)

(0.3)

6
7
105

0.2
0.1
1.0

3
3
(18)

0.1
0.1
(0.1)

1.6
0.7

790
191

1.4
0.8

(33)
24

(0.2)
0.1

1.3

¥981

1.2

¥ (9)

(0.1)

Impaired loans decreased by ¥9 billion from March 31, 2016 to ¥981 billion as of March 31, 2017. Impairedloans to domestic borrowers decreased by ¥33 billion due primarily to a decrease in construction and real estateand individuals. Impaired loans to foreign borrowers increased by ¥24 billion due primarily to downgrades
related to some borrowers, and the relative impact of foreign currency fluctuations on the increase was
immaterial.
Reflecting the aforementioned change, the percentage of impaired loans within gross total loans decreased
from 1.3% as of March 31, 2016 to 1.2% as of March 31, 2017 due to a decrease in impaired loans. The
percentage of impaired loans net of allowance for loan losses to gross total loans net of allowance for loan losses
decreased from 0.70% as of March 31, 2016 to 0.61% as of March 31, 2017 due to a decrease in impaired loans,
whereas gross total loans and allowance for loan losses increased.
Allowance for Loan Losses
Calculation of allowance for loan losses
Our self-assessment and credit-rating procedures serve as the basis for determining the amount of theallowance for loan losses. The specific methods of calculating the allowance for each category of obligors are as
follows:
Normal and watch obligors . . . . . . . . . . . A formula allowance is calculated separately for obligors with smallbalance, homogeneous loans and for each credit rating category ofcorporate obligors by multiplying the loan balance with the applicable
default ratio (based on internal historical data as well as data provided
by third-party credit rating agencies) and the applicable average
impairment ratio on defaulted loans (based on internal historicaldata).
85

Special attention obligors . . . . . . . . . . . . The allowance for special attention obligors is generally calculated
individually based on the present value of expected future cash flows
discounted at the loan’s initial effective interest rate. A formula
allowance for certain special attention obligors is calculated bygrouping the loans to such obligors and applying the formula
described above for normal and watch obligors but using the default
ratio and average impairment ratio specific to this category.
Intensive control obligors . . . . . . . . . . . . The allowance for intensive control obligors is generally calculated
individually based on the present value of expected future cash flows
discounted at the loan’s initial effective interest rate, based on the
loan’s observable market price, or based on the fair value of thecollateral if the loan is collateral dependent. The allowance for certain
intensive control obligors is calculated by grouping the loans to suchobligors and multiplying the amount of loans less estimated collateralvalue by the default ratio and average impairment ratio specific to thiscategory.
Substantially bankrupt and bankrupt
obligors . . . . . . . . . . . . . . . . . . . . . . . . The allowance is calculated individually and is equal to loan balance,
less estimated collateral value.
Balance of allowance for loan losses
The following table summarizes the allowance for loan losses by component and as a percentage of thecorresponding loan balance as of March 31, 2016 and 2017:
As of March 31,
Increase2016
2017(decrease)(in billions of yen, except percentages)

Allowance for loan losses on impaired loans(1) (A) . . . . . . . . . . . . . . . . . . .
Allowance for loan losses on non-impaired loans (B) . . . . . . . . . . . . . . . . .

¥

289
162

¥

303
177

¥

14
15

Total allowance for loan losses (C) . . . . . . . . . . . . . . . . . . . . . . . . . . .

451

480

29

Impaired loans requiring an allowance for loan losses (D) . . . . . . . . . . . . .
Impaired loans not requiring an allowance for loan losses (E) . . . . . . . . . .
Non-impaired loans(2) (F) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

861
129
76,733851
130
81,459

(10)
1
4,726

Gross total loans (G) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥77,723¥82,440¥4,717

Percentage of allowance for loan losses on impaired loans against thebalance of impaired loans requiring an allowance (A)/(D) x100 . . . . . . .
Percentage of allowance for loan losses on non-impaired loans against thebalance of non-impaired loans (B)/(F) x100 . . . . . . . . . . . . . . . . . . . . . . .
Percentage of total allowance for loan losses against gross total loans(C)/(G) x100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33.59%

35.55%

1.96%

0.21

0.22

0.01

0.58

0.58

—

Notes:(1) The allowance for loan losses on impaired loans includes the allowance for groups of small balance,
homogeneous loans totaling ¥348 billion and ¥302 billion as of March 31, 2016 and 2017 which werecollectively evaluated for impairment, in addition to the allowance for those loans that were individually
evaluated for impairment.
(2) Non-impaired loans refer to loans categorized as “normal obligors” and “watch obligors (excluding special
attention obligors)” under our internal rating system.
86

Allowance for loan losses increased by ¥29 billion from March 31, 2016 to ¥480 billion as of March 31,2017 due to increases in allowance for loan losses on both impaired loans and non-impaired loans. As a result,the percentage of allowance for loan losses on impaired loans against the balance of impaired loans requiring anallowance increased by 1.96 percentage points to 35.55%, whereas the percentage of total allowance for loan
losses against gross total loans and the percentage of allowance for loan losses on non-impaired loans against thebalance of non-impaired loans were at the same level compared to that of March 31, 2016.
In the fiscal year ended March 31, 2017, impaired loans decreased by 0.9% due mainly to a decrease indomestic impaired loans. Allowance for loan losses on impaired loans increased by 4.6%.
The coverage ratio for impaired loans increased by 3.3% as of March 31, 2017 compared to the previous
fiscal year. The increase was due to how impaired loans decreased while gross total loans and allowance for loan
losses increased.
Provision (credit) for loan losses
The following table summarizes changes in our allowance for loan losses, including a breakdown of chargeoffs and recoveries by domicile and industry segment, in the fiscal years ended March 31, 2016 and 2017:
Fiscal years ended March 31, Increase
2016
2017
(decrease)(in billions of yen)

Allowance for loan losses at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . .
Provision (credit) for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge-offs:
Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction and real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transportation and communications . . . . . . . . . . . . . . . . . . . . . . . . . .
Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 520
35

¥451
38

¥ (69)
3

(37)
(2)
(4)
(14)
(5)
(8)

(2)
(1)
(3)
(6)
(1)
(7)

35
1
1
8
4
1

Total domestic charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(70)
(42)

(20)
(11)

50
31

Total charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(112)

(31)

81

Recoveries:
Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction and real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transportation and communications . . . . . . . . . . . . . . . . . . . . . . . . . .
Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2
1
2
8
1
2

1
2
1
5
4
3

(1)
1
(1)
(3)
3
1

Total domestic recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16
5

16
10

—

Total recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21

26

5

Net charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(91)
(13)

(5)
(4)

86
9

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 451

¥480

¥ 29

87

5

Note:(1) “Others” includes primarily foreign exchange translation.
Provision for loan losses increased by ¥3 billion from March 31, 2016 to ¥38 billion at March 31, 2017.
Although obligor categories improved as a whole, reflecting the gradual recovery in the economic environment,
provision for loan losses increased due mainly to the deterioration of credit status of certain borrowers.
Charge-offs decreased by ¥81 billion from the previous fiscal year to ¥31 billion for the fiscal year ended
March 31, 2017. The decrease was due to a decrease in charge-offs of domestic loans mainly in connection withthe restructuring of certain domestic borrowers.
Investments
The majority of our investments are available-for-sale and held-to-maturity securities, which at March 31,
2016 and 2017 were as follows:
As of March 31,
2016

2017
Increase (decrease)
Net
Net
Net
unrealized
unrealized
unrealized
Amortized Fair
gains
Amortized Fair
gains
Amortized Fair
gains
cost
value
(losses)cost
value(losses)cost
value(losses)(in billions of yen)
Available-for-sale securities:
Debt securities . . . . . . . . . . . . . . . . .
Japanese government bonds . . . . .
Other than Japanese government
bonds . . . . . . . . . . . . . . . . . . . .
Equity securities (marketable) . . . . .

¥21,516
15,672¥21,672
15,763¥ 156
91¥16,684
10,257¥16,756
10,263

5,844
1,664

5,909
3,781

65
2,117

6,427
1,530

6,493
3,801

66
2,271

Total . . . . . . . . . . . . . . . . . . . . . . .

¥23,180¥25,453¥2,273¥18,214¥20,557¥2,343

Held-to-maturity securities:
Debt securities:
Japanese government bonds . . . . .
Agency mortgage-backed
securities . . . . . . . . . . . . . . . . . .

3,760

3,817

57

3,060

3,097

37

(700)

(720)

(20)

1,059

1,056

(3)

757

750

(7)

(302)

(306)

(4)

Total . . . . . . . . . . . . . . . . . . . . . . .

¥ 4,819¥ 4,87354¥ 3,817¥ 3,847¥(1,002) ¥(1,026)¥ (24)

¥

¥

72
6

¥

30

¥(4,832) ¥(4,916)(5,415) (5,500)
583
(134)

¥ (84)
(85)

584
20

1
154

¥(4,966) ¥(4,896)¥ 70

Available-for-sale securities measured at fair value decreased by ¥4,896 billion from March 31, 2016 to¥20,557 billion at March 31, 2017. This decrease was due primarily to a decrease in Japanese government bonds
due to the sales and redemptions as a result of our risk management activities related to our bond portfolio.
Held-to-maturity securities measured at amortized cost decreased by ¥1,002 billion from March 31, 2016 to¥3,817 billion at March 31, 2017. See note 4 to our consolidated financial statements included elsewhere in thisannual report for details of other investments included within investments.
The amount of our funding through deposits significantly exceeds our total loans. As a result, we allocate asignificant portion of such excess among investments in debt securities, including Japanese government bonds
and investments in equity securities consisting mainly of common stock of Japanese listed company customers.
We will continue our efforts to dispose of cross-shareholdings in order to decrease the potential impact on our
financial position due to fluctuations in stock prices, and to be able to fully perform financial intermediaryfunctions even under periods of stress.
Fluctuations in long-term interest rates lead to changes in the fair value of our portfolio of debt securities, avast majority of which consists of Japanese government bonds. As of March 31, 2017, we had a total of88¥16,756 billion of available-for-sale debt securities within our investments, of which ¥10,263 billion was
Japanese government bonds. We had ¥21,672 billion and ¥16,756 billion of available-for-sale debt securities
measured at fair value as of March 31, 2016 and 2017, respectively, and net unrealized gains of ¥156 billion and¥72 billion were reflected in accumulated other comprehensive income, net of tax as of such dates, respectively.
As the negative interest rate policy of the Bank of Japan started in February 2016 and the resulting fluctuations ininterest rates may have a substantial impact on the value of our Japanese government bond portfolio, in order toprepare for the risk of sudden and significant future interest rate change, we continue to manage our Japanese
government bond portfolio conservatively by managing the average remaining period of our portfolio andstrengthening risk management, including through the use of internal stress tests. Average remaining period of
our Japanese government bond portfolio as of March 31, 2017 was approximately 2.4 years.
Risk management related to our securities portfolio continues to be a key focus in light of the increase ininstability and uncertainty in the global economy in recent years.
Trading Account Assets
Trading account assets decreased by ¥5,023 billion from March 31, 2016 to ¥24,998 billion at March 31,
2017. The decrease was due to a reduction in market value of receive-fixed, pay-variable interest-rate swaps
reflecting a rise in long-term interest rates and decreases in U.S. treasury bonds and other foreign government
bonds for which the fair value option was elected due to sales and redemptions.
Cash and Due from Banks
Cash and due from banks increased by ¥269 billion from March 31, 2016 to ¥1,592 billion at March 31,
2017. The increase was due to net cash provided by financing activities of ¥11,870 billion and net cash provided
by operating activities of ¥1,213 billion offset in part by net cash used in investing activities of ¥12,802 billion.
Liabilities
The following table shows our liabilities as of March 31, 2016 and 2017:
As of March 31,
Increase2016
2017(decrease)(in billions of yen)

Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due to trust accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call money and funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under repurchase agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under securities lending transactions . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bank acceptances outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥117,937
4,467
2,521
16,8332,845
2,080
17,111
110
97
202
181
14,766
6,477¥131,185
4,123
1,255
17,9701,919
1,477
13,592
184
74
140
209
14,5295,027¥13,248(344)(1,266)
1,137
(926)
(603)
(3,519)
74
(23)
(62)
28
(237)
(1,450)Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥185,627¥191,684¥ 6,057

Total liabilities increased by ¥6,057 billion from March 31, 2016 to ¥191,684 billion at March 31, 2017.
This increase was due primarily to an increase of ¥13,248 billion in deposits, offset in part by a decrease of¥3,519 billion in trading account liabilities and a decrease of ¥2,002 billion in short-term borrowings. We
89analyze short-term borrowings, consisting of due to trust accounts, call money and funds purchased, payables
under repurchase agreements, payables under securities lending transactions and other short-term borrowings, on
a combined basis.
Deposits
The following table shows a breakdown of our deposits as of March 31, 2016 and 2017:
As of March 31,
Increase2016
2017(decrease)(in billions of yen)Domestic:
Noninterest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 16,108
79,596¥ 19,064
87,359¥ 2,956
7,763

Total domestic deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

95,704

106,423

10,719Foreign:
Noninterest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,601
20,632

1,996
22,766395
2,134

Total foreign deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,23324,762

2,529

Total deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥117,937¥131,185¥13,248

Deposits increased by ¥13,248 billion from March 31, 2016 to ¥131,185 billion at March 31, 2017.
Domestic deposits increased by ¥10,719 billion from March 31, 2016 to ¥106,423 billion at March 31, 2017.
Domestic interest-bearing deposits increased by ¥7,763 billion from March 31, 2016 to ¥87,359 billion atMarch 31, 2017 due mainly to an increase in ordinary deposits, offset in part by decreases in time deposits andcertificates of deposit, and domestic noninterest-bearing deposits increased by ¥2,956 billion to ¥19,064 billion atMarch 31, 2017 due mainly to increases in current accounts and non-interest-bearing ordinary deposits. Foreigndeposits increased by ¥2,529 billion from March 31, 2016 to ¥24,762 billion at March 31, 2017 due mainly to anincrease in time deposits, offset in part by a decrease in certificates of deposit.
Short-term Borrowings
The following table shows a breakdown of our short-term borrowings as of March 31, 2016 and 2017:
As of March 31,
2016
Domestic Foreign
Due to trust accounts . . . . . . . . . . . . . . . . . . . . . . . ¥ 4,467
Call money and funds purchased, and payables
under repurchase agreements and securities
lending transactions . . . . . . . . . . . . . . . . . . . . .
7,182
Other short-term borrowings . . . . . . . . . . . . . . . . .
981
Total short-term borrowings . . . . . . . . . . . . . ¥12,630¥—
15,017
1,099

2017
Increase (decrease)
Domestic Foreign Total Domestic Foreign Total(in billions of yen)
¥ 4,467 ¥ 4,123 ¥ — ¥ 4,123 ¥ (344) ¥ —¥ (344)
Total

22,199
2,080

5,727
587

¥16,116 ¥28,746 ¥10,437

15,417890

21,144
1,477(1,455)
(394)

400
(209)

(1,055)(603)¥16,307 ¥26,744¥(2,193)¥ 191¥(2,002)

Short-term borrowings decreased by ¥2,002 billion from March 31, 2016 to ¥26,744 billion at March 31,
2017. Domestic short-term borrowings decreased by ¥2,193 billion due mainly to decreases in call money andfunds purchased, and securities lending transactions. Foreign short-term borrowings increased by ¥191 billion
due mainly to an increase in payables under repurchase agreements, offset in part by a decrease in other shortterm borrowings and call money and funds purchased.

90

Trading Account Liabilities
Trading account liabilities decreased by ¥3,519 billion from March 31, 2016 to ¥13,592 billion at March 31,
2017. The decrease was due to an increase in market value of receive-variable, pay-fixed interest-rate swaps
reflecting a rise in long-term interest rates.
EquityThe following table shows a breakdown of equity as of March 31, 2016 and 2017:
As of March 31,
Increase2016
2017(decrease)(in billions of yen)

MHFG shareholders’ equity:
Preferred stock(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income, net of tax . . . . . . . . . . . . . . . . . . . .
Treasury stock, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total MHFG shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥99 ¥ —
5,703
5,826
747
919
1,469
1,521
(4)
(5)
8,014
8,261
169
511
¥8,183 ¥8,772¥ (99)
123
172
52
(1)
247
342
¥589

Note:
(1) In July 2016, all shares of the eleventh series class XI preferred stock were converted into common stockand cancelled.
Equity increased by ¥589 billion from March 31, 2016 to ¥8,772 billion due mainly to increases innoncontrolling interests and retained earnings.
Common stock increased by ¥123 billion from March 31, 2016 to ¥5,826 billion at March 31, 2017
primarily as a result of the issuance of new shares of common stock related to the conversion of preferred stock
to common stock.
Retained earnings increased by ¥172 billion from March 31, 2016 to ¥919 billion at March 31, 2017. This
increase was due to net income attributable to MHFG shareholders for the fiscal year ended March 31, 2017 of¥362 billion offset in part by dividend payments of ¥190 billion.
Accumulated other comprehensive income, net of tax increased by ¥52 billion from March 31, 2016 to¥1,521 billion at March 31, 2017 due to an increase in net unrealized gains on available-for-sale securities of¥52 billion, an increase in pension liability adjustments of ¥12 billion and a decrease in foreign currencytranslation adjustments of ¥12 billion.
Treasury stock, at cost as of March 31, 2017 was the same level compared to that as of March 31, 2016.
Noncontrolling interests increased by ¥342 billion from March 31, 2016 to ¥511 billion at March 31, 2017.
The increase was due mainly to a new consolidation of certain investment funds.

91

Liquidity
We continuously endeavor to enhance the management of our liquidity profile to meet our customers’ loan
demand and deposit withdrawals and respond to unforeseen situations such as adverse movements in stock,foreign currencies, interest rates and other markets or changes in general domestic or international conditions.
We manage our liquidity profile through the continuous monitoring of our cash flow situation, the enforcementof upper limits on funds raised in financial markets and other means as further set forth in “Item 11. Quantitativeand Qualitative Disclosures about Market Risk—Market and Liquidity Risk Management—Liquidity Risk
Management Structure.”
Deposits, based on our broad customer base and brand recognition in Japan, have been our primary sourceof liquidity. Our total deposits increased by ¥13,248 billion, or 11.2%, from the end of the previous fiscal year to¥131,185 billion as of March 31, 2017. Our average balance of deposits for the fiscal year ended March 31, 2017of ¥126,097 billion exceeded our average balance of loans for the same period by ¥46,755 billion. We invested
the excess portion primarily in marketable securities and other high liquidity assets.
Secondary sources of liquidity include short-term borrowings such as call money and funds purchased andpayables under repurchase agreements. We also issue long-term debt, including both senior and subordinateddebt, as additional sources for liquidity. We utilize short-term borrowings to diversify our funding sources and to
manage our funding costs. We raise subordinated long-term debt for the purpose of improving our capital
adequacy ratios, which also enhances our liquidity profile. We believe we are able to access such sources ofliquidity on a stable and flexible basis based on our current credit ratings. The following table shows credit
ratings assigned to us and to our principal banking subsidiaries by S&P and Moody’s as of May 31, 2017:
As of May 31, 2017
S&P

Mizuho Financial Group . . . . . . . . . .
Mizuho Bank . . . . . . . . . . . . . . . . . .
Mizuho Trust & Banking . . . . . . . . .

Long-term

Short-term

AA
A

—
A-1
A-1

Moody’sStand-alone
credit profile—aaLong-term

Short-term

Baseline credit
assessment

A1
A1
A1

P-1
P-1
P-1

—
baa1
baa1

We source our funding in foreign currencies primarily from corporate customers, foreign governments,
financial institutions and institutional investors, through short-term and long-term financing, under terms andpricing commensurate with our credit ratings above, and customer deposits. In the event of future declines in ourcredit quality or that of Japan in general, we expect to be able to purchase foreign currencies in sufficientamounts using the yen funds raised through our domestic customer base. As further measures to support ourforeign currency liquidity, we hold foreign debt securities, maintain credit lines and swap facilities denominatedin foreign currencies and pledge collateral to the U.S. Federal Reserve Bank to support future credit extensions.
In order to maintain appropriate funding liquidity, our principal banking subsidiaries hold highly liquid
investment assets such as Japanese government bonds as liquidity reserve assets. We monitor the amount ofliquidity reserve assets and report such amount to the Risk Management Committee, the Balance SheetManagement Committee, the Executive Management Committee and the President & Group CEO on a regularbasis. Minimum regulatory reserve amounts, or the reserve amount deposited with the Bank of Japan pursuant toapplicable regulations that is calculated as a specified percentage of the amount of deposits held by our principal
banking subsidiaries, are excluded in connection with our management of liquidity reserve asset levels. We
established and apply classifications for the cash flow conditions affecting the group, including the amount ofliquidity reserve assets, that range from “Normal” to “Anxious” and “Crisis” categories, and take appropriate
actions based on such conditions. As of March 31, 2017, the balance of Japanese government bonds included
within our investments was ¥10.3 trillion (excluding held-to-maturity securities), and a majority of this amount,which has historically not fluctuated significantly over the course of a fiscal year, was classified as the principal
component of liquidity reserve assets.
92

Related to regulatory liquidity requirements, the liquidity coverage ratio (“LCR”) standard has been
introduced in Japan. The minimum LCR under the LCR guidelines is 100% on both a consolidated andnon-consolidated basis for banks with international operations or on a consolidated basis for bank holding
companies with international operations, while it is subject to phase-in arrangements pursuant to which the LCR
rises in equal annual steps of 10 percentage points to reach 100% on January 1, 2019, with a minimum
requirement of 80% applicable for the period between January 1 and December 31, 2017. The LCR disclosure
guidelines of the Financial Service Agency requires banks and bank holding companies with international
operations to disclose the three-month averages of daily LCR from the fourth quarter of the fiscal year ended
March 31, 2017, as opposed to the disclosure of three-month averages of end-of-month LCR that began onJune 30, 2015 as a transitional arrangement. Set forth below are the averages of the daily-end balances of
consolidated LCR data of Mizuho Financial Group, and consolidated and non-consolidated LCR data of ourprincipal banking subsidiaries, for the fourth quarter of the fiscal year ended March 31, 2017. All yen figures inthis table are truncated.
Fourth Quarter of Fiscal Year
Ended March 31, 2017
(in billions of yen,
except percentages)

Mizuho Financial Group (Consolidated)
Total high-quality liquid assets (“HQLA”) allowed to be included in thecalculation (weighted) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash outflows (weighted) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LCR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mizuho Bank (Consolidated)
Total HQLA allowed to be included in the calculation (weighted) . . . . . . . . . . . .
Net cash outflows (weighted) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LCR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mizuho Bank (Non-consolidated)
Total HQLA allowed to be included in the calculation (weighted) . . . . . . . . . . . .
Net cash outflows (weighted) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LCR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mizuho Trust and Banking (Consolidated)
Total HQLA allowed to be included in the calculation (weighted) . . . . . . . . . . . .
Net cash outflows (weighted) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LCR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mizuho Trust and Banking (Non-consolidated)
Total HQLA allowed to be included in the calculation (weighted) . . . . . . . . . . . .
Net cash outflows (weighted) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LCR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥59,034
45,611129.4%¥52,705
36,509144.4%¥52,127
35,538146.7%¥ 2,432
1,827
133.5%¥ 2,4101,816
133.0%For more information on LCR, see “Item 4. Information on the Company—Supervision andRegulation—Liquidity.”

93

Capital Adequacy
All yen figures and percentages in this subsection are truncated. Accordingly, the total of each column offigures may not be equal to the total of the individual items.
Regulatory Capital Requirements
Mizuho Financial Group and its principal banking subsidiaries are subject to regulatory capital requirements
administered by the Financial Services Agency in accordance with the provisions of the Banking Act and related
regulations. Failure to meet minimum capital requirements may initiate certain mandatory actions by regulators
that, if undertaken, could have a direct material effect on our financial condition and results of operations.
The capital adequacy guidelines applicable to Japanese banks and bank holding companies withinternational operations supervised by the Financial Services Agency closely follow the risk-adjusted approach
proposed by BCBS and are intended to further strengthen the soundness and stability of Japanese banks. In
December 2010, BCBS issued the Basel III rules text (later revised in June 2011, January 2013 and October2014), which presents the details of global regulatory standards on bank capital adequacy and liquidity agreed by
the Governors and Heads of Supervision, which is the oversight body of BCBS, and endorsed by the G20
Leaders at the Seoul summit in November 2010. The rules text sets out higher and better-quality capital, betterrisk coverage, the introduction of a leverage ratio as a backstop to the risk-based requirement, and theintroduction of the capital conservation buffer and countercyclical capital buffer as measures to promote thebuild-up of capital that can be drawn down in periods of stress, and the introduction of two global liquidity
standards. The Financial Services Agency’s revisions to its capital adequacy guidelines became effective fromMarch 31, 2013, which generally reflect the rules in the Basel III rules text that have been applied fromJanuary 1, 2013. The framework of Basel III is based on the following three pillars: minimum capitalrequirements; supervisory review; and market discipline. Under the first pillar, the capital ratio is calculated by
dividing regulatory capital, or risk-based capital, by risk-weighted assets. Under the second pillar, banks are
required to maintain adequate capital to support all of the major risks in their business and are encouraged todevelop and use better risk management techniques in monitoring and managing such risks. Under the third
pillar, banks are required to enhance disclosure, including disclosure of details of the capital adequacy ratio, theamount of each type of risk and the method of calculation used so that the market may make more effective
evaluations.
With regard to risk-based capital, the guidelines based on Basel III set out higher and better-quality capital
standards compared to those under Basel II, which had been effective until Basel III was applied. The guidelines
based on Basel III require a target minimum standard capital adequacy ratio of 8%, Tier 1 capital ratio of 6% andCommon Equity Tier 1 capital ratio of 4.5%, on both a consolidated and non-consolidated basis for banks withinternational operations, such as Mizuho Bank and Mizuho Trust & Banking, or on a consolidated basis for bankholding companies with international operations, such as Mizuho Financial Group.
Risk-based capital, calculated from financial statements prepared under Japanese GAAP, is classified into thefollowing two tiers: Tier 1 capital; and Tier 2 capital. Tier 1 capital consists of Common Equity Tier 1 capital and
Additional Tier 1 capital. Common Equity Tier 1 capital generally consists of common stock, capital surplus,
retained earnings, accumulated other comprehensive income and other disclosed reserves and others less any
regulatory adjustments. Additional Tier 1 capital generally consists of instruments issued by a bank or its holding
company that meet the criteria for inclusion in Additional Tier 1 capital and others less any regulatory adjustments.
Tier 2 capital generally consists of instruments issued by a bank or its holding company such as subordinated debt
that meet the criteria for inclusion in Tier 2 capital, general reserve for possible losses on loans (equaling the sum of(i) the excess of the amount of qualified reserves over the amount of expected losses and (ii) the amount of generalreserves calculated based on the standardized approach) and others less any regulatory adjustments.
Under Basel III, capital instruments that no longer qualify as Additional Tier 1 capital or Tier 2 capital arebeing phased out beginning March 2013 by increments of 10% until becoming fully effective in March 2022.
Our existing preferred securities (the amounts thereof included within Additional Tier 1 capital as of March 31,
94

2017 being ¥577.5 billion) and existing subordinated debt issued before March 2013 (the amounts thereof
included within Tier 2 capital as of March 31, 2017 being ¥842.1 billion) are subject to the phase-out
arrangements.
In November 2011, the Financial Stability Board (“FSB”) published policy measures to address the systemic
and moral hazard risks associated with systemically important financial institutions. The policy measures include
requirements for G-SIBs to have additional loss absorption capacity tailored to the impact of their default,
ranging from 1% to 2.5% of risk-weighted assets, to be met with Common Equity Tier 1 capital, which would bein addition to the 7.0% Common Equity Tier 1 capital requirement (including capital conservation buffer). The
requirements began phasing in from January 2016 and will be fully implemented by January 2019. We were
included in the list of G-SIBs updated in November 2016 and were allocated to the category that would require
1.0% of additional loss absorbency.
In November 2015, the Financial Services Agency published the revised capital adequacy guidelines tointroduce the Basel III rules text regarding the capital conservation buffer, the countercyclical capital buffer andthe additional loss absorption capacity requirement for G-SIBs and domestic systemically important banks(“D-SIBs”). These guidelines became effective on March 31, 2016. The capital conservation buffer, thecountercyclical capital buffer and the additional loss absorption capacity requirement for G-SIBs and D-SIBs
must be met with Common Equity Tier l capital under the revised guidelines, and if such buffer and requirement
are not satisfied, a capital distribution constraints plan is required to be submitted to the Financial Services
Agency and carried out. The capital conservation buffer is being phased in starting in March 2016 at 0.625%
until becoming fully effective in March 2019 at 2.5%. In addition, subject to national discretion by the respective
regulatory authorities, if the relevant national authority judges a period of excess credit growth to be leading to
the build-up of system-wide risk, a countercyclical capital buffer ranging from 0% to 2.5% would also be
imposed on banking organizations. The countercyclical capital buffer is a weighted average of the buffers
deployed across all the jurisdictions to which the banking organization has credit exposures.
In December 2015, the Financial Services Agency published a capital adequacy guideline regarding thedesignation of G-SIBs and D-SIBs in Japan. We were designated as both a global systemically important bank(“G-SIB”) and a domestic systemically important bank (“D-SIB”), and the additional loss absorption capacity
requirement applicable to us was 1.0% on a fully effective basis. The additional loss absorption capacity
requirement was the same as that imposed by the FSB, which is being phased in starting in March 2016 at 0.25%
until becoming fully effective in March 2019 at 1.0%.
The Leverage Ratio framework is critical and complementary to the risk-based capital framework that will
help ensure broad and adequate capture of both on- and off-balance sheet sources of banks’ leverage. This
simple, non-risk-based measure is intended to restrict the build-up of excessive leverage in the banking sector to
avoid destabilizing deleveraging processes that can damage the broader financial system and the economy.
Implementation of the leverage ratio requirements began with bank-level reporting to national supervisors of theleverage ratio and its components, and public disclosure is required from January 2015. Basel III’s leverage ratio
is defined as the “capital measure” (numerator) divided by the “exposure measure” (denominator) and isexpressed as a percentage. The capital measure is currently defined as Tier 1 capital, and the minimum leverage
ratio is currently defined as 3%. BCBS will monitor banks’ leverage ratio data in order to assess whether thedesign and calibration of a minimum Tier 1 leverage ratio of 3% is appropriate. Any final adjustments to thedefinition and calibration of the leverage ratio will be made by 2017, with a view to migrate to a Pillar 1(minimum capital requirements) treatment on January 1, 2018, based on appropriate review and calibration.
Regulatory adjustments such as goodwill and other intangibles, and defined benefit pension fund assets andliabilities, are to be applied mainly to the calculation of Common Equity Tier 1 capital in the form of thedeductions. The regulatory adjustments began at 20% of the required deductions in the calculation of Common
Equity Tier 1 capital in March 2014 and will be increased by 20% increments per year through March 2018 when
the regulatory adjustments reach 100%. During this transition period, the remainder not deducted from capitalwill continue to be subject to existing national treatments.
95

The capital requirements and regulatory adjustments are being phased in over a transitional period as
follows (italicized percentages indicate those still in transition periods):
March March March
2016
2017
2018

March
2019

March
2020

March
2021

March
2022

Minimum Common Equity Tier 1 capital . . . . . . . . . . . . .
4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5%
Minimum Tier 1 capital . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0%
Minimum total capital . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.0% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0%
Capital conservation buffer . . . . . . . . . . . . . . . . . . . . . . . . 0.625% 1.25% 1.875% 2.5% 2.5% 2.5% 2.5%
Phase out of recognition of capital instruments that nolonger qualify as capital . . . . . . . . . . . . . . . . . . . . . . . . 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0%
Phase-in of deductions from capital . . . . . . . . . . . . . . . . . 60.0% 80.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Additional loss absorbency requirements for G-SIBs and
D-SIBs(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.25% 0.50% 0.75% 1.0% 1.0% 1.0% 1.0%
Note:(1) Figures assume that the additional loss absorbency requirements applied to us as a G-SIB and D-SIB
continue to be 1.0% on a fully effective basis.
If the capital adequacy ratio of a financial institution falls below the required level, the Financial Services
Agency may, depending upon the extent of capital deterioration, take certain corrective action, including
requiring the financial institution to submit an improvement plan to strengthen its capital base, reduce its total
assets, restrict its business operations or other actions that could have a material effect on its financial condition
and results of operations.
Unless otherwise specified, the regulatory capital information set forth in this “—Capital Adequacy” isbased on the current Basel III rules.
Consolidated Capital Adequacy Ratios
Our capital adequacy ratios as of March 31, 2016 and 2017, calculated in accordance with Japanese GAAPand the guidelines established by the Financial Services Agency, were as set forth in the following table:
As of March 31,
Increase2016
2017(decrease)(in billions of yen, except percentages)

Common Equity Tier 1 capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional Tier 1 capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 6,566.4
1,338.6¥ 7,001.6
1,209.8¥ 435.1(128.7)

Tier 1 capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier 2 capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,905.0
1,733.5

8,211.5
1,839.4

306.4
105.8

Total capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 9,638.6¥10,050.9¥ 412.3

Risk-weighted assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common Equity Tier 1 capital ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Required Common Equity Tier 1 capital ratio(1) . . . . . . . . . . . . . . . . . . . . . . .
Tier 1 capital ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Required Tier 1 capital ratio(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total capital ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Required total capital ratio(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leverage ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥62,531.1 ¥61,717.1 ¥(814.0)
10.50%
11.34%
0.84%
5.375
6.25
0.875
12.64
13.30
0.66
6.875
7.75
0.875
15.41
16.28
0.87
8.875
9.75
0.875
3.98
3.95
(0.03)Note:(1) The required ratios disclosed above, at March 31, 2016 and 2017, include the transitional capitalconservation buffer of 0.625% and 1.25%, respectively, and the transitional additional loss absorbency
96requirements for G-SIBs and D-SIBs of 0.25% and 0.5%, respectively, which are both in addition to theregulatory minima. The respective required amounts are determined by applying the ratios to the sum of therisk weighted assets and certain other risk amounts. These buffer and additional loss absorbency
requirements are applied to us but not to our banking subsidiaries.
Our total capital ratio as of March 31, 2017 was 16.28%, an increase of 0.87 percentage points compared toMarch 31, 2016. Our Tier 1 capital ratio as of March 31, 2017 was 13.30%, an increase of 0.66 percentage points
compared to March 31, 2016. Our Common Equity Tier 1 capital ratio as of March 31, 2017 was 11.34%, anincrease of 0.84 percentage points compared to March 31, 2016. The increases in each ratio were due mainly to adecrease in risk-weighted assets and to an increase in Common Equity Tier 1 capital. Our Common Equity Tier 1
capital increased due mainly to an increase in retained earnings. Our risk-weighted assets decreased due mainly
to a decrease in credit risk assets. We believe that we were in compliance with all capital adequacy requirements
to which we were subject as of March 31, 2017.
Principal Banking Subsidiaries
Capital adequacy ratios of our principal banking subsidiaries, on a consolidated basis, as of March 31, 2016
and 2017, calculated in accordance with Japanese GAAP and the guidelines established by the Financial Services
Agency, were as set forth in the following table:
As of March 31,
2016
2017

Mizuho Bank
Common Equity Tier 1 capital ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier 1 capital ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total capital ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leverage ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mizuho Trust & Banking
Common Equity Tier 1 capital ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier 1 capital ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total capital ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leverage ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Increase(decrease)10.81%
12.75
15.46
4.19

11.16%
13.34
16.20
4.16

0.35%
0.59
0.74
(0.03)

18.21
18.21
19.52
5.86

18.73
18.73
19.47
6.74

0.52
0.52
(0.05)
0.88

We believe each of our principal banking subsidiaries was in compliance with all capital adequacy
requirements to which it was subject as of March 31, 2017.
Our securities subsidiaries in Japan are also subject to the capital adequacy requirement under the Financial
Instruments and Exchange Act. Under this requirement, securities firms must maintain a minimum capital
adequacy ratio of 120% calculated as a percentage of capital accounts less certain assets, as determined inaccordance with Japanese GAAP, against amounts equivalent to market, counterparty and basic risks. Specificguidelines are issued as a ministerial ordinance that details the definition of essential components of the capitalratios, including capital, disallowed assets and risks, and related measures. Failure to maintain a minimum capitalratio will trigger mandatory regulatory actions. A capital ratio of less than 140% will call for regulatory reporting
and a capital ratio of less than 100% may lead to a temporary suspension of all or part of the business operations
and further, to the cancellation of the license to act as a securities broker and dealer. We believe, as of March 31,
2017, that our securities subsidiaries in Japan were in compliance with all capital adequacy requirements towhich they were subject.

97Off-balance-sheet Arrangements
We engage in various types of off-balance-sheet arrangements in the ordinary course of our business to meetthe financing needs of our customers. These arrangements include various guarantees and commitments. The
following tables show the contractual or notional amounts of our guarantees and undrawn commitments as ofMarch 31, 2016 and 2017:
As of March 31,
Increase2016
2017(decrease)(in billions of yen)

Guarantees:
Performance guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Guarantees on loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Guarantees on securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Guarantees for the repayment of trust principal . . . . . . . . . . . . . . . . . . . . . . .
Liabilities of trust accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,110
297
203
1,571
1,141
12,747
15,792¥ 2,243
278
175
1,823
730
15,177
14,415

¥

133
(19)
(28)
252
(411)
2,430
(1,377)

As of March 31,
Increase2016
2017(decrease)(in billions of yen)

Commitments:
Commitments to extend credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial letters of credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥75,742448¥76,678
522

¥ 936
74

Total commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥76,190¥77,200¥1,010See note 24 to our consolidated financial statements included elsewhere in this annual report for thedescription of the nature of the various types of guarantees and commitments.
The contractual or notional amounts of these instruments generally represent the maximum potential
amounts of future payments without consideration of possible recoveries under recourse provisions or fromcollateral held. For example, the amount under commitments to extend credit does not necessarily equal theimpact that such commitment will have on our future cash flow, because many of these commitments expire
without our making actual credit extensions up to the full commitment amount or at all. Also, many of theagreements related to the commitments to extend credit include terms that allow us to refuse, or reduce theamount of, credit extensions based on changes in the financial environment, declines in the obligor’s credit
quality and other reasons. Finally, we receive collateral such as real estate and securities at the time of thecontract as we deem necessary, and we regularly review the credit quality of the customer based on the internal
guidelines and revise the terms of the contract as we deem necessary to manage credit risks.
Some of our off-balance-sheet arrangements are related to activities of special purpose entities, most ofwhich are variable interest entities. For further information, see note 25 to our consolidated financial statements
included elsewhere in this annual report.

98

Tabular Disclosure of Contractual Obligations
In the normal course of business, we enter into contractual obligations that require future cash payments.
The following table sets forth a summary of our contractual cash obligations as of March 31, 2017:
Due in one
year or lessDue from
one year to
two years

Due from
Due from
Due from
two years to three years to four years to
three years
four years
five years(in billions of yen)Time deposits . . . . . . . . . . .
Certificates of deposit . . . .
Long-term debt . . . . . . . . . .
Capitalized leases . . . . . .
Operating leases . . . . . . . . .

¥37,565
10,4201,614
11
52¥2,113
95
3,127
10
46

¥1,213
56
1,734
9
41

¥ 350
60
1,841
6
35

Total(1)(2) . . . . . . . . . . .

¥49,651¥5,381¥3,044¥2,286

Due after
five years

Total

¥ 347
—
1,195
3
31

¥ 142
—
5,018
2
58

¥41,730
10,631
14,52941
263¥1,573¥5,218¥67,153

Notes:(1) A contribution paid to our pension plans, which is not included in the above table, is expected to beapproximately ¥51 billion in the fiscal year ending March 31, 2018, based on the current funded status andexpected asset return assumptions. For further information, see note 21 to our consolidated financial
statements included elsewhere in this annual report.
(2) The amount of unrecognized tax benefits, which is not included in the above table, was ¥1.9 billion, of
which ¥0.7 billion was interest and penalties, at March 31, 2017. For further information, see note 20 to ourconsolidated financial statements included elsewhere in this annual report.
Recent Accounting Pronouncements
See note 2 to our consolidated financial statements included elsewhere in this annual report.

99

Reconciliation with Japanese GAAP
Our consolidated financial statements are prepared in accordance with accounting principles and policies assummarized in note 1 to our consolidated financial statements included elsewhere in this annual report. These
principles and policies differ in some respects from Japanese GAAP. Under Japanese banking regulations, we are
required to report our annual financial results using financial statements prepared under Japanese GAAP. In
addition, pursuant to the requirements of the Tokyo Stock Exchange, we prepare quarterly financial statements
which are also under Japanese GAAP. To show the major reconciling items between our U.S. GAAP financial
statements and our Japanese GAAP financial statements, we have provided below, with respect to our mostrecent fiscal year, a reconciliation of consolidated net income and shareholders’ equity under U.S. GAAP withthose amounts under Japanese GAAP.
As of and for the fiscal
year ended March 31, 2017
Net income
Total MHFG
attributableshareholders’to MHFGequityshareholders(in billions of yen)

U.S. GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Differences arising from different accounting for:1. Derivative financial instruments and hedging activities . . . . . . . . . . . . . . . . . .
2. Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. Allowances for loan losses and off-balance-sheet instruments . . . . . . . . . . . . .
5. Premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6. Land revaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7. Business combinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8. Pension liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9. Consolidation of variable interest entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10. Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11. Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12. Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥8,261.4¥362.4

43.4
11.6
160.8
86.0
(84.1)
181.4(72.1)
120.0
41.8(223.1)
—
(3.1)

218.9
112.2
(2.5)
13.8
(28.6)(3.0)(14.3)(34.0)
14.0(40.6)
4.8
0.4

Japanese GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥8,524.0(1)¥603.5Note:(1) Includes total accumulated other comprehensive income and stock acquisition rights
The following is a summary of the significant adjustments made to consolidated shareholders’ equity andnet income, as shown in the above table, to reconcile the U.S. GAAP results with the Japanese GAAP results.
The paragraphs below refer to the corresponding items set forth in the table above.
1.

Derivative financial instruments and hedging activities

Under U.S. GAAP, for a derivative to qualify for hedge accounting, it must be highly effective in achieving
offsetting changes in fair values or variable cash flows of the hedged items attributable to the particular risk
being hedged. The hedging relationship must be designated and formally documented at inception. Suchdocumentation must include the particular risk management objective and strategy for the hedge, theidentification of the derivative used as the hedging instrument, the hedged item and the risk exposure being
hedged and the method for assessing the hedge effectiveness. The criteria for designation and measurement ofhedge effectiveness under U.S. GAAP are more rigorous than under Japanese GAAP. As a result, most of theeligible hedge derivatives under Japanese GAAP are accounted for as trading account assets or liabilities under
U.S. GAAP with changes in fair value of the derivatives recognized in earnings.
100Requirements for bifurcation of embedded derivatives differ between Japanese GAAP and U.S. GAAP.
Embedded derivatives that are deemed to be clearly and closely related to their host contracts are not bifurcatedunder U.S. GAAP, while Japanese GAAP allows an entity to bifurcate embedded derivatives if the entity
manages the risk of the embedded derivatives and host contracts separately. Bifurcated derivatives are recordedon the balance sheet at fair value with changes in fair value recognized in earnings under both Japanese GAAP
and U.S. GAAP.
2.

Investments

The cost basis of certain investments differs between Japanese GAAP and U.S. GAAP primarily due to thefollowing reasons:Certain sales and subsequent repurchases of available-for-sale securities under Japanese GAAP do not meetsales criteria under U.S. GAAP. These sales and subsequent repurchases resulted in realized gains or losses being
recognized in earnings under Japanese GAAP. Under U.S. GAAP, these gains or losses are recognized as
unrealized gains or losses within accumulated other comprehensive income, net of tax.
Under U.S. GAAP, declines in the fair value of available-for-sale securities below cost that are deemed tobe “other-than-temporary” are recorded in earnings. Both quantitative and qualitative factors are considered todetermine whether the impairment is “other-than-temporary,” including the duration and extent of the decline,
near-term prospects of the issuer, as well as our ability and intent to hold the investments until a forecasted
recovery of fair value or maturity. Regarding debt securities, we consider additional factors such as whether wehave the intent to sell or more likely than not will be required to sell before recovery to determine whether the
impairment is “other-than-temporary.” Under Japanese GAAP, significant declines in the fair value of securities
below cost that are deemed to be “other-than-temporary” are recorded in earnings unless short term recovery isreasonably expected. A decline in the fair value of a security of 50% or more of its cost is a strong indicator of another-than-temporary decline, which requires compelling evidence to prove otherwise. A decline in the fair valueof 30% or more but less than 50% of its cost is an indicator of an other-than-temporary decline, in which case theprobability of recovery must be evaluated to determine whether an other-than-temporary decline has occurred.
Generally, if the decline in the fair value is less than 30%, it is not considered to be an other-than-temporary
decline.
Under U.S. GAAP, the election of the fair value option for financial assets and liabilities is permitted
according to ASC 825, while it is not permitted under Japanese GAAP. As we elected the fair value option forforeign currency denominated available-for-sale securities under U.S. GAAP, these securities were reclassified
as trading securities, and the entire amount of changes in their fair values are recognized in earnings, while underJapanese GAAP, only the changes attributable to movements in foreign currency exchange rates are recognizedin earnings.
3.

Loans

Under U.S. GAAP, loan origination fees, net of certain direct origination costs, are deferred and recognized
in interest income over the contractual life of the relevant loan using the interest method, while certain fees andcosts are recognized in earnings at the time the loan is originated under Japanese GAAP.
In addition, certain loan participations and sales of loans to special purpose vehicles in connection with asset
securitization transactions under Japanese GAAP do not meet sales criteria under U.S. GAAP due to different
applicable criteria, and therefore the relevant loans are recognized on the balance sheet under U.S. GAAP.
4.

Allowances for loan losses and off-balance-sheet instruments

Under both Japanese GAAP and U.S. GAAP, the allowance for loan losses for specifically identified
impaired loans is based on the present value of expected future cash flows discounted at the loan’s initial101effective interest rate or, as a practical expedient, the loan’s observable market price or the fair value of thecollateral if the loan is collateral dependent. For certain impaired loans that are aggregated for the purpose ofmeasuring impairment, pools of smaller balance homogeneous loans and other non-homogeneous loans that havenot been identified as impaired, the allowance for loan losses is determined based on a formula allowance
utilizing historical loss factors, as adjusted, considering recent trends.
The differences between Japanese GAAP and U.S. GAAP arise from the difference in the scope of the loansthat are subject to the individual and portfolio impairment analysis. In addition to these effects based on
differences between Japanese GAAP and U.S. GAAP, provision (credit) for loan losses may differ between
Japanese GAAP and U.S. GAAP due to the difference in the timing of accounting closings between ourconsolidated financial statements under U.S. GAAP and those under Japanese GAAP.
This reconciling item also includes the differences between U.S. GAAP and Japanese GAAP relating to theallowance for off-balance-sheet instruments. We generally use the same methodology to reserve for losses onthese instruments as we do for loans.
5.

Premises and equipment

Under U.S. GAAP, the fair value of a non-monetary asset acquired in exchange for another non-monetary
asset is generally deemed to be the new cost of the asset acquired in the exchange, and a gain or loss isrecognized on the exchange. Under Japanese GAAP, the cost of the asset surrendered is assigned to the newly
acquired asset in certain types of exchange transactions, resulting in no gains or losses.
With regard to internal-use software, under U.S. GAAP, the costs to develop or obtain software that allow
for access to or conversion of old data by new systems are capitalized, while they are expensed when it occurs
under Japanese GAAP. On the other hand, the general and administrative costs and the overhead costs are
expensed as the costs of internal-use software under U.S. GAAP, but they are capitalized under Japanese GAAP.
6.

Land revaluation

Under Japanese GAAP, we revalued our holdings of land during the fiscal year ended March 31, 1998
pursuant to the Act Concerning Revaluation of Land (Act No. 34 of 1998). The revaluation gains are recorded
directly in equity, and the related deferred tax liabilities are also recognized. Under U.S. GAAP, there is no
applicable provision that allows for the revaluation of land other than for impairments, and accordingly therevaluation gains are reversed.
7.

Business combinations

Under U.S. GAAP, goodwill is not amortized and an impairment loss is recorded to the extent the carrying
amount of the goodwill exceeds its estimated fair value at the measurement date. Under Japanese GAAP,
goodwill is amortized over an appropriate period not to exceed 20 years and an impairment loss is recorded only
if the effects of the goodwill are no longer expected.
8.

Pension liabilities

Under Japanese GAAP, we adopted as of April 1, 2000 pension accounting that is based on the actuarial
present value of accrued benefit obligations. The cumulative effect of the accounting change was amortized overa specified number of years, and actuarial gains and losses are amortized over a specified number of years. Under
U.S. GAAP, we recalculated the benefit obligation at April 1, 2004 and accounted for the obligation as if we had
adopted the accounting method in accordance with ASC 715, “Compensation—Retirement Benefits,” beginningin the fiscal year ended March 31, 1990, as permitted for a foreign private issuer. The cumulative effect of theaccounting change, as well as actuarial gains and losses since the adoption, had been fully amortized by April 1,
2004.
102

Under both Japanese GAAP and U.S. GAAP, an employer is required to recognize the overfunded orunderfunded status of a defined benefit plan as an asset or liability in its consolidated balance sheets. Actuarial
gains or losses and prior service costs or benefits that have not yet been recognized through earnings as net
periodic benefit cost are recognized in other comprehensive income, net of tax, until they are amortized as acomponent of net periodic benefit cost. Actuarial gains or losses are amortized based on the corridor approachaccording to ASC 715 under U.S. GAAP, while they are amortized over a specified number of years underJapanese GAAP. Due mainly to the differences in the balances of actuarial gains or losses and prior service costs
or benefits and in amortization methods, there are differences in the amounts of shareholders’ equity and net
income between U.S. GAAP and Japanese GAAP.
Under U.S. GAAP, we enhanced the calculation of the benefit obligations by refining the anticipated future
mortality rate assumption improvement in the calculation.
See note 21 to our consolidated financial statements included elsewhere in this annual report for further
discussion.
9.

Consolidation of variable interest entities

Under U.S. GAAP, variable interest entities are to be consolidated if we are deemed to be the primary
beneficiary of the variable interest entity. Under Japanese GAAP, consolidation is not based on variable interests.
We consolidate certain variable interest entities, such as entities related to asset-backed securitizations,investments in securitization products and investment funds. See note 25 to our consolidated financial statements
included elsewhere in this annual report for further discussion.
10.

Deferred taxes

Under U.S. GAAP, all available evidence, both positive and negative, must be considered to determine
whether, based on the weight of that evidence, deferred tax assets are realizable or whether a valuation allowanceis needed. Possible sources of taxable income, which are considered to determine whether deferred tax assets are
realizable, include net unrealized gains on available-for-sale securities. Under Japanese GAAP, the assessment as
to whether deferred tax assets are realizable is primarily based on estimates of future taxable income.
Additionally, differences in the carrying amount of assets and liabilities between U.S. GAAP and Japanese
GAAP create temporary differences that result in differences in deferred tax assets and liabilities.
11.

Foreign currency translation

Under Japanese GAAP, the income statement items of our foreign entities are translated into yen, ourpresentation currency, using the respective fiscal-year-end exchange rates, while under U.S. GAAP, they aretranslated into the presentation currency using the average rates of exchange for the respective fiscal years.
12.

Other
This adjustment reflects the effects of miscellaneous items.

103

ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

6.A. Directors and Senior Management
Directors
The following table provides information regarding the directors of Mizuho Financial Group as of June 30,
2017:
Name
(date of birth)

Current positions andprincipal outside positions

Yasuhiro Sato
(Apr. 15, 1952)

Member of the Board of
Directors

Business experience

Mar. 2003

Executive Officer / SeniorCorporate Officer ofInternational Banking Unit of
the former Mizuho Corporate
Bank, Ltd.

Apr. 2004

Managing Executive Officer / In
charge of business promotion

Mar. 2006

Executive Managing Director /Head of Corporate Banking
Unit

Apr. 2007

Deputy President / Chief Auditor

Apr. 2009

President & CEO (until July 2013)

June 2009

Member of the Board of Directorsof Mizuho Financial Group,
Inc.

June 2011

Member of the Board of Directorsof the former Mizuho Bank,Ltd.

President & Group CEO(Representative
Executive Officer)
Member of the Board of
Directors of Mizuho
Bank, Ltd.
Member of the Board of
Directors of Mizuho
Trust & Banking Co.,
Ltd.
Member of the Board of
Directors of Mizuho
Securities Co., Ltd.

President & Group CEO of
Mizuho Financial Group, Inc.
(until June 2014)
July 2013

President & CEO of Mizuho
Bank, Ltd.

Apr. 2014

Member of the Board of Directors(current)
Member of the Board of Directorsof Mizuho Trust & Banking
Co., Ltd. (current)
Member of the Board of Directorsof Mizuho Securities Co., Ltd.
(current)

June 2014

104

Member of the Board of Directors,
President & Group CEO of
Mizuho Financial Group, Inc.
(current)

Expiration ofcurrent term
as director

June 2018

Name(date of birth)

Current positions andprincipal outside positions

Takanori Nishiyama(May. 9, 1962)

Member of the Board of
Directors
Managing Executive
OfficerBusiness experience

Apr. 2012

General Manager of BranchBanking Division No.5 of theformer Mizuho Bank, Ltd.

Apr. 2014

Executive Officer / General
Manager of Omiya Branch ofMizuho Bank, Ltd.

Apr. 2015

Managing Executive Officer / In
charge of Corporate Banking

Apr. 2016

Managing Executive Officer / In
charge of Banking

Apr. 2017Managing Executive Officer /Head of Compliance Group of
Mizuho Financial Group, Inc.

Head of ComplianceGroup (Group CCO)
Executive Managing
Director of Mizuho
Bank, Ltd.

Expiration ofcurrent term
as director

June 2018

Executive Managing Director /Head of Compliance Group of
Mizuho Bank, Ltd. (current)

Koichi Iida
(Oct. 6, 1962)

Member of the Board of
Directors

June 2017

Member of the Board of Directors,
Managing Executive Officer /Head of Compliance Group of
Mizuho Financial Group, Inc.
(current)

Apr. 2012

General Manager of Corporate
Banking Division No.10 of theformer Mizuho Corporate Bank,Ltd.

Managing Executive
Officer

Head of Corporate Coverage
Department I of Mizuho
Securities Co., Ltd. (until
Apr. 2016)

Head of Strategic
Planning Group(Group CSO)
Executive Managing
Director of Mizuho
Bank, Ltd.

July 2013

General Manager of Corporate
Banking Division No.10 ofMizuho Bank, Ltd.

Apr. 2015

Executive Officer / General
Manager of Corporate Banking
Division No.10

Apr. 2016

Managing Executive Officer /Head of Financial Control &Accounting Group of Mizuho
Financial Group, Inc.
Executive Managing Director /Head of Financial Control &Accounting Group of Mizuho
Bank, Ltd. (until Apr. 2017)

105

June 2018

Name(date of birth)

Current positions andprincipal outside positions

Business experience

June 2016

Member of the Board of Directors,
Managing Executive Officer /Head of Financial Control &Accounting Group of Mizuho
Financial Group, Inc.

Apr. 2017

Member of the Board of Directors,
Managing Executive Officer /Head of Strategic PlanningGroup (current)

Expiration ofcurrent term
as director

Executive Managing Director /Head of Strategic PlanningGroup of Mizuho Bank, Ltd.
(current)
Makoto Umemiya(Dec. 23, 1964)

Member of the Board of
Directors
Managing Executive
Officer

Apr. 2012

General Manager of Osaka Branchof the former Mizuho Bank,
Ltd.

Apr. 2014

General Manager of Financial
Planning Division of Mizuho
Financial Group, Inc.

Head of Financial
Control & Accounting
Group (Group CFO)
Executive Managing
Director of Mizuho
Bank, Ltd.

General Manager of Financial
Planning Division of Mizuho
Bank, Ltd.
Apr. 2015

Executive Officer / General
Manager of Financial Planning
Department of Mizuho
Financial Group, Inc.
Executive Officer / General
Manager of Financial Planning
Department of Mizuho Bank,
Ltd.

Apr. 2017Managing Executive Officer /Head of Financial Control &Accounting Group of Mizuho
Financial Group, Inc.
Executive Managing Director /Head of Financial Control &Accounting Group of Mizuho
Bank, Ltd. (current)

June 2017106

Member of the Board of Directors,
Managing Executive Officer /Head of Financial Control &Accounting Group of Mizuho
Financial Group, Inc. (current)

June 2018

Name(date of birth)

Current positions andprincipal outside positions

Yasuyuki Shibata(Aug. 21, 1962)

Member of the Board of
Directors

Business experience

Apr. 2011

General Manager of Hong Kong
Treasury Department of theformer Mizuho Corporate Bank,
Ltd.

July 2013

General Manager of Hong Kong
Treasury Department of Mizuho
Bank, Ltd.

Apr. 2014

General Manager of Americas
Treasury Division

Apr. 2015

Executive Officer / General
Manager of Americas Treasury
Division

July 2016

Executive Officer / General
Manager of Risk Management
Department of Mizuho
Financial Group, Inc.

Managing Executive
Officer
Head of Risk
Management Group(Group CRO)
Executive Managing
Director of Mizuho
Bank, Ltd.

Expiration ofcurrent term
as director

June 2018

Executive Officer / General
Manager of Risk Management
Department of Mizuho Bank,
Ltd.
June 2017

Member of the Board of Directors,
Managing Executive Officer /Head of Risk Management
Group of Mizuho Financial
Group, Inc. (current)
Executive Managing Director /Head of Risk Management
Group of Mizuho Bank, Ltd.
(current)

Ryusuke Aya(May 20, 1960)

Member of the Board of
Directors

Apr. 2012

Member of the Audit
Committee

Executive Officer / General
Manager of Risk Management
Division of Mizuho Financial
Group, Inc. (until Nov. 2013)
Executive Officer / General
Manager of Risk Management
Division of the former Mizuho
Bank, Ltd.

Member of the Risk
Committee
Member of the Board of
Directors of Mizuho
Bank, Ltd.

Executive Officer / General
Manager of Risk Management
Division of the former Mizuho
Corporate Bank, Ltd.
July 2013

107

Executive Officer / General
Manager of Risk Management
Division of Mizuho Bank, Ltd.

June 2018

Name(date of birth)

Current positions andprincipal outside positions

Business experience

Expiration ofcurrent term
as director

Nov. 2013 Managing Executive Officer /Head of Risk Management
Group of Mizuho Financial
Group, Inc.
(until June 2014)
Managing Executive Officer /Head of Risk Management
Group of Mizuho Bank, Ltd.
Managing Executive Officer / In
charge of Risk Management
Group of Mizuho Trust &Banking Co., Ltd.
Managing Executive Officer / In
charge of Risk Management
Group of Mizuho Securities
Co., Ltd.
Apr. 2014

Executive Managing Director /Head of Risk Management
Group of Mizuho Bank, Ltd.
(until June 2017)

June 2014

Member of the Board of Directors,
Managing Executive Officer /Head of Risk Management
Group of Mizuho Financial
Group, Inc.

June 2017

Member of the Board of Directors(current)
Member of the Board of Directorsof Mizuho Bank, Ltd. (current)

Nobukatsu Funaki(Mar. 30, 1959)

Member of the Board of
Directors

Mar. 2010

Audit & Supervisory Board
Member of the former Mizuho
Corporate Bank, Ltd. (until
June 2013)

Apr. 2013

Audit & Supervisory Board
Member (Outside Member) of
Mizuho Securities Co., Ltd.
(until June 2014)

June 2013

Audit & Supervisory Board
Member of Mizuho Financial
Group, Inc.

June 2014

Member of the Board of Directors(current)

Member of the Audit
Committee

108

June 2018

Name(date of birth)

Current positions andprincipal outside positions

Tetsuo Seki(1)(2)(July 29, 1938)

Member of the Board of
Directors

Apr. 1963

Joined Yawata Iron & Steel Co.,
Ltd.

Member of theNominating
Committee

June 1993

Director of Nippon SteelCorporation

Apr. 1997

Managing Director

Apr. 2000

Representative Director andExecutive Vice President

June 2003

Executive Advisor

June 2004

Senior Corporate Auditor

June 2006

Independent Director of Terumo
Corporation (until Sep. 2008)

Mar. 2007

Outside Director of Sapporo
Holdings Limited(until Sep. 2008)

June 2007

Outside Director of Tokyo
Financial Exchange Inc.
(until Sep. 2008)

Oct. 2007

Chairperson of the Japan
Corporate Auditors Association(until Oct. 2008)

Member of theCompensation
Committee
Member of the Audit
Committee
Audit & Supervisory
Board Member of
Sapporo Holdings
LimitedBusiness experience

Outside Director of Japan Post
Holdings Co., Ltd.
(until Sep. 2008)
June 2008

Executive Advisor to Nippon
Steel Corporation(until Sep. 2008)

Oct. 2008

President (Representative
Director) of the Shoko Chukin
Bank, Ltd.

June 2013

General Advisor (current)

June 2015

Member of the Board of Directorsof Mizuho Financial Group,
Inc. (current)

Mar. 2016

Audit & Supervisory Board
Member of Sapporo Holdings,
Limited (current)

109

Expiration ofcurrent term
as director

June 2018

Name(date of birth)

Current positions andprincipal outside positions

Takashi
Kawamura(1)(2)(Dec. 19, 1939)

Member of the Board of
Directors
Member of theNominating
Committee
Member of theCompensation
Committee
Outside Audit &Supervisory Board
Member of Nikkei,
Inc.
Chairman of the Board of
Directors (Outside
Director) of Tokyo
Electric Power
Company Holdings,
Inc.

Business experience

Expiration ofcurrent term
as director

Apr. 1962

Joined Hitachi, Ltd.

June 2018

June 1995

Director

June 1997

Executive Managing Director

Apr. 1999

Executive Vice President andRepresentative Director

Apr. 2003

Director (until June 2007)

June 2003

Chairman of the Board andRepresentative Executive
Officer, Hitachi Software
Engineering Co., Ltd.

June 2005

Chairman of the Board, Hitachi
Plant Engineering &Construction Co., Ltd.
(until June 2009)

June 2006

Chairman of the Board, Hitachi
Software Engineering Co., Ltd.
(until June 2007)

June 2007

Chairman of the Board, Hitachi
Maxell, Ltd. (until June 2009)

Apr. 2009

Representative Executive Officer,
Chairman, President and Chief
Executive Officer, Hitachi, Ltd.

June 2009

Representative Executive Officer,
Chairman, President and Chief
Executive Officer and Director

Apr. 2010

Representative Executive Officer,
Chairman and Director

Apr. 2011

Chairman of the Board

Apr. 2014

Director

June 2014

Advisor (until June 2016)
Member of the Board of Directorsof Mizuho Financial Group,
Inc. (current)

June 2017

110

Chairman of the Board of
Directors (Outside Director) of
Tokyo Electric Power Company
Holdings, Inc. (current)Name(date of birth)

Current positions andprincipal outside positions

Tatsuo Kainaka(1)(2)(Jan. 2, 1940)

Member of the Board of
Directors

Business experience

Apr. 1966

Appointed as Public Prosecutor

Jan. 2002

Superintending Prosecutor of theTokyo High Public Prosecutors
OfficeOct. 2002

Justice of the Supreme Court

Mar. 2010

Admitted to the Tokyo Bar
Association

Apr. 2010

Attorney-at-law at
Takusyou Sogo Law
OfficeJoined Takusyou Sogo Law Office(current)

Jan. 2011

President of the Life
Insurance
Policyholders
Protection Corporationof JapanPresident of the Life Insurance
Policyholders Protection
Corporation of Japan (current)

Nov. 2013 Member of the Board of Directorsof Mizuho Bank, Ltd. (until
June 2014)

Member of theNominating
Committee
Member of theCompensation
Committee
Member of the Audit
Committee

June 2014

Member of the Board of Directorsof Mizuho Financial Group,
Inc. (current)

Jan. 1970

Joined Tohmatsu Awoki & Co.

June 1985

Temporarily transferred to
Deloitte & Touche New York
Office (until Oct. 1992)

July 1990

Senior Partner of Tohmatsu & Co.

June 2001

CEO (until May 2007)

June 2004

Executive Member of Deloitte
Touche Tohmatsu Limited(until May 2007)

June 2007

Senior Adviser to Deloitte Touche
Tohmatsu (until Dec. 2009)

Jan. 2010

Established the Certified Public
Accountant Hirotake Abe
Office (current)

June 2010

Outside Corporate Auditor of
CONEXIO Corporation(current)

Sep. 2010

Visiting Professor, Chuo Graduate
School of International
Accounting (until Mar. 2012)

Corporate Auditor(External) of Oriental
Land Co., Ltd.
Hirotake Abe(1)(2)(Nov. 13, 1944)

Member of the Board of
Directors
Member of theCompensation
Committee
Member of the Audit
Committee
Certified Public
Accountant Hirotake
Abe OfficeOutside Corporate
Auditor of CONEXIO
Corporation

111

Expiration ofcurrent term
as director

June 2018

June 2018

Name(date of birth)

Hiroko Ota(1)(2)(Feb. 2, 1954)

Current positions andprincipal outside positions

Business experience

June 2011

Outside Corporate Auditor of
Honda Motor Co., Ltd. (until
June 2015)

Oct. 2012

Outside Audit and Supervisory
Board Member of NIPPONSTEEL & SUMITOMOMETAL CORPORATION(until June 2016)

June 2015

Member of the Board of Directorsof Mizuho Financial Group,
Inc. (current)

Apr. 1996

Member of theNominating
Committee

Associate Professor, the Graduate
School of Policy Science,
Saitama University

Oct. 1997

Professor of National
Graduate Institute for
Policy Studies

Associate Professor, National
Graduate Institute for Policy
Studies

Apr. 2001

Professor, National Graduate
Institute for Policy Studies

Outside Director of
JXTG Holdings, Inc.

Apr. 2002

Director for Economic Research,
Cabinet OfficeOutside Director ofPanasonic Corporation

Mar. 2003

Deputy Director General for
Economic Research, Cabinet
OfficeApr. 2004

Director General for Economic
Research, Cabinet OfficeMember of the Board of
Directors

Aug. 2005 Professor, National Graduate
Institute for Policy Studies
Sep. 2006

Minister of State for Economic
and Fiscal Policy

Aug. 2008 Professor, National Graduate
Institute for Policy Studies(current)
Apr. 2009

Vice-President, National Graduate
Institute for Policy Studies(until Mar. 2011)

June 2014

Member of the Board of Directorsof Mizuho Financial Group,
Inc. (current)

112

Expiration ofcurrent term
as director

June 2018

Name(date of birth)

Current positions andprincipal outside positions

Izumi Kobayashi(1)(2)(Jan. 18, 1959)

Member of the Board of
Directors

Business experience

Apr. 1981

Member of theNominating
Committee

Joined Mitsubishi Chemical
Industries, Ltd. (currently
Mitsubishi Chemical
Corporation)

June 1985

Member of the Risk
Committee

Joined Merrill Lynch Futures
Japan Inc.

Dec. 2001

President and Representative
Director, Merrill Lynch Japan
Securities Co., Ltd. (until Nov.
2008)

July 2002

Outside Director, Osaka Securities
Exchange Co., Ltd.

Outside Director of ANA
HOLDINGS INC.
Outside Director of
Mitsui & Co., Ltd.
Member of the Board ofGovernors of Japan
Broadcasting
Corporation

Expiration ofcurrent term
as director

June 2018

Nov. 2008 Executive Vice President, theMultilateral Investment
Guarantee Agency, the WorldBank Group
July 2013

Outside Director, ANA
HOLDINGS INC. (current)

Nov. 2013 Outside Director, Suntory
Holdings Limited (until Mar.
2017)
June 2014

Outside Director, Mitsui & Co.,
Ltd. (current)

July 2014

Member of the Risk Committee ofMizuho Financial Group, Inc.
(Outside Expert)

Apr. 2015

Vice Chairperson, Japan
Association of Corporate
Executives (current)

June 2016

Member of the Board ofGovernors, Japan Broadcasting
Corporation (current)

June 2017

Member of the Board of Directorsof Mizuho Financial Group,
Inc. (current)

Notes:(1) Mr. Seki, Mr. Kawamura, Mr. Kainaka, Mr. Abe, Ms. Ota and Ms. Kobayashi satisfy the requirements foran “outside director” under the Companies Act.
(2) Mr. Seki, Mr. Kawamura, Mr. Kainaka, Mr. Abe, Ms. Ota and Ms. Kobayashi are “independent directors”
required by the Tokyo Stock Exchange, Inc.

113

(3) The designation of the Chairman and the Deputy Chairman of the Board of Directors, and the designation ofcommittee members and the Chairman of each committee are as follows:
Chairman of the Board of Directors: Hiroko Ota
Deputy Chairman of the Board of Directors: Ryusuke Aya
Nominating Committee members:
Takashi Kawamura (Chairman), Tetsuo Seki, Tatsuo Kainaka, Hiroko Ota and Izumi Kobayashi
Compensation Committee members:
Tatsuo Kainaka (Chairman), Tetsuo Seki, Takashi Kawamura and Hirotake Abe
Audit Committee members:
Tetsuo Seki (Chairman), Tatsuo Kainaka, Hirotake Abe, Ryusuke Aya and Nobukatsu Funaki
Risk Committee* members:
Ryusuke Aya (Chairman), Izumi Kobayashi and Hidetaka Kawakita (Outside Expert)(* an advisory body)

114

Executive Officers
The following table provides information regarding the executive officers of Mizuho Financial Group as ofJune 30, 2017:

Name(date of birth)

Current positions andprincipal outside positions

Business experience

Expiration ofcurrent term
as executive
officer

Yasuhiro Sato
(Apr. 15, 1952)

See “—Directors.”

See “—Directors.”

June 2018

Toshitsugu Okabe(May 2, 1956)

Deputy President &Executive Officer(Representative
Executive Officer)

Apr. 2008

Executive Officer / General
Manager of Executive
Secretariat of Mizuho Financial
Group, Inc.

June 2018

Head of Retail &Business Banking
Company

Apr. 2009Managing Executive Officer ofthe former Mizuho Bank, Ltd.

Apr. 2012Managing Executive Officer /Head of Retail Banking UnitManaging Executive Officer (notfull-time) / In charge of
coordination with Retail
Banking Unit of the former
Mizuho Bank, Ltd. of theformer Mizuho Corporate Bank,
Ltd.

Apr. 2013

Deputy President & Executive
Officer / Deputy President(Personal Banking Unit andRetail Banking Unit) of Mizuho
Financial Group, Inc.
Deputy President / Deputy
President (Personal Banking
Unit and Retail Banking Unit)
and Head of Internal Audit
Group of the former Mizuho
Bank, Ltd. (until July 2013)
Deputy President & Executive
Officer / Deputy President (Incharge of coordination with
Personal Banking Unit andRetail Banking Unit of theformer Mizuho Bank, Ltd.) andHead of Internal Audit Group of
the former Mizuho Corporate
Bank, Ltd. (until July 2013)

June 2013

115

Deputy President / Deputy
President (Personal Banking
Unit and Retail Banking Unit)of Mizuho Financial Group,
Inc. (until Sep. 2013)

Name(date of birth)

Current positions andprincipal outside positions

Business experience

July 2013

Deputy President / Deputy
President (Personal Banking
Unit and Retail Banking Unit)
and Head of Internal Audit
Group of Mizuho Bank, Ltd.
(until Apr. 2014)

Sep. 2013

Deputy President / Deputy
President (Personal Banking
Unit and Retail Banking Unit)
and Head of Compliance Groupof Mizuho Financial Group,
Inc. (until Apr. 2014)

Nov. 2013

Managing Executive Officer / In
charge of Compliance Group of
Mizuho Trust & Banking Co.,Ltd.
Managing Executive Officer /In
charge of Compliance Groupof Mizuho Securities Co., Ltd.

Apr. 2014

Deputy President / Deputy
President (Head of Strategic
Planning and Management
Control (Personal Banking,Retail Banking and Corporate
Banking)) of Mizuho Financial
Group, Inc.

June 2014

Deputy President & Executive
Officer / Head of Strategic
Planning and Management
Control (Personal Banking,Retail Banking and Corporate
Banking)

Apr. 2015

Deputy President & Executive
Officer / Head of Strategic
Planning and Management
Control (Personal Banking,Retail Banking and Corporate
Banking) and Strategic
Planning (Priority Assignments)

Apr. 2016

Deputy President & Executive
Officer / Head of Retail &Business Banking Company(current)

116

Expiration ofcurrent term
as executive
officerName(date of birth)

Daisaku Abe(June 20, 1957)

Current positions andprincipal outside positions

Deputy President &Executive Officer

Business experience

Apr. 2007

Executive Officer / General
Manager of Executive
Secretariat of the former
Mizuho Corporate Bank, Ltd.

Apr. 2009Managing Executive Officer /Head of Strategic PlanningGroup, Head of IT, Systems &Operations Group and General
Manager of Group Strategic
Planning of Mizuho Financial
Group, Inc.

Apr. 2011

Managing Executive Officer /Head of Strategic PlanningGroup and Head of IT,
Systems & Operations Group

Apr. 2012Managing Executive Officer /Head of IT & Systems Groupand Head of Operations Group

Head of IT & Systems
Group (Group CIO)
Head of Operations
Group (Group COO)
Deputy President &Executive Officer ofMizuho Bank, Ltd.

Managing Executive Officer /Head of IT & Systems Groupand Head of Operations Groupof the former Mizuho Bank,
Ltd. (until Apr. 2013)
Managing Executive Officer /Head of IT & Systems Groupand Head of Operations Groupof the former Mizuho Corporate
Bank, Ltd. (until Apr. 2013)
Managing Executive Officer / In
charge of IT & Systems Groupand Operations Group of
Mizuho Trust & Banking Co.,
Ltd. (until Apr. 2014)
June 2012

Executive Managing Director /Head of IT & Systems Groupand Head of Operations Groupof Mizuho Financial Group,
Inc.

Apr. 2013

Deputy President / Head of IT &Systems Group and Head ofOperations Group(until June 2014)

117

Expiration ofcurrent term
as executive
officerJune 2018

Name(date of birth)

Current positions andprincipal outside positions

Business experience

Expiration ofcurrent term
as executive
officer

Deputy President & Executive
Officer / Head of IT & Systems
Group and Head of Operations
Group of the former Mizuho
Bank, Ltd.
Deputy President & Executive
Officer / Head of IT & Systems
Group and Head of Operations
Group of the former Mizuho
Corporate Bank, Ltd.
Managing Executive Officer / In
charge of IT & Systems Groupand Operations Group of
Mizuho Securities Co., Ltd.
(until Apr. 2014)

Kosuke Nakamura(Apr. 29, 1957)

Deputy President &Executive Officer
Head of Corporate &Institutional
Company
Deputy President &Executive Officer ofMizuho Bank, Ltd.

July 2013

Deputy President & Executive
Officer / Head of IT & Systems
Group and Head of Operations
Group of Mizuho Bank, Ltd.
(current)

June 2014

Deputy President & Executive
Officer / Head of IT & Systems
Group and Head of Operations
Group of Mizuho Financial
Group, Inc. (current)

Apr. 2008

Executive Officer, General
Manager of Singapore Branchof the former Mizuho Corporate
Bank, Ltd.

Apr. 2011

Managing Executive Officer(until July 2013)

Apr. 2012Managing Executive Officer ofthe former Mizuho Bank, Ltd.

July 2013

Managing Executive Officer ofMizuho Bank, Ltd.

Apr. 2014

Deputy President / Head ofBusiness Promotion

Apr. 2016

Deputy President & Executive
Officer / Head of Corporate &Institutional Company ofMizuho Financial Group, Inc.
(current)

118

June 2018

Name(date of birth)

Current positions andprincipal outside positions

Business experience

Expiration ofcurrent term
as executive
officer

Deputy President & Executive
Officer / In charge of Special
Missions of Mizuho Bank, Ltd.
(current)
Akira Sugano(July 25, 1959)

Deputy President &Executive Officer

Apr. 2009

Executive Officer / General
Manager of International
Coordination Division of theformer Mizuho Corporate Bank,
Ltd.

Apr. 2012Managing Executive Officer /Head of Investment Banking
Unit, Head of AssetManagement Unit and In chargeof Business Collaboration
Division (Securities & Trust
Services) of the former Mizuho
Bank, Ltd.

Head of Global
Corporate Company

Managing Executive Officer /Head of Investment Banking
Unit, Head of AssetManagement Unit and In chargeof Business Collaboration
Division (Securities & Trust
Services) of the former Mizuho
Corporate Bank, Ltd.
Apr. 2013

Managing Executive Officer /Head of International Banking
Unit and Head of AssetManagement Unit of Mizuho
Financial Group, Inc. (until
Apr. 2014)
Managing Executive Officer /Head of Asset Management
Unit and In charge of
coordination with International
Banking Unit of the former
Mizuho Corporate Bank, Ltd. ofthe former Mizuho Bank, Ltd.
Managing Executive Officer /Head of International Banking
Unit and Head of AssetManagement Unit of the former
Mizuho Corporate Bank, Ltd.

119

June 2018

Name(date of birth)

Junichi Kato
(July 30, 1957)

Current positions andprincipal outside positions

Senior Managing
Executive Officer

Business experience

July 2013

Managing Executive Officer /Head of International Banking
Unit and Head of AssetManagement Unit of Mizuho
Bank, Ltd.

Apr. 2014

Senior Managing Executive
Officer / Head of Strategic
Planning and Management
Control (International Banking,Investment Banking and AssetManagement) of Mizuho
Financial Group, Inc.

Apr. 2015

Senior Managing Executive
Officer / Head of Strategic
Planning and Management
Control (International Banking,Investment Banking,Transaction and AssetManagement) and Strategic
Planning (Priority Assignments)

Apr. 2016

Senior Managing Executive
Officer / Head of Global
Corporate Company

Apr. 2017

Deputy President & Executive
Officer / Head of Global
Corporate Company (current)

Apr. 2008

Executive Officer of Mizuho
Securities Co., Ltd. /President & CEO of Mizuho
Bank (Switzerland) Ltd.

Apr. 2009Managing Executive Officer ofthe former Mizuho Bank, Ltd.

Apr. 2012Managing Executive Officer /Joint Head of Markets Unit of
the former Mizuho Bank, Ltd.

Head of Global Markets
Company

Managing Executive Officer /Joint Head of Markets Unit of
the former Mizuho Corporate
Bank, Ltd.
July 2013

120

Managing Executive Officer /Joint Head of Markets Unit ofMizuho Bank, Ltd.

Expiration ofcurrent term
as executive
officerJune 2018

Name(date of birth)

Current positions andprincipal outside positions

Business experience

Apr. 2014

Expiration ofcurrent term
as executive
officerManaging Executive Officer /Head of Markets Unit ofMizuho Financial Group, Inc.
Managing Executive Officer /Head of Markets Unit ofMizuho Bank, Ltd.

Katsunobu
Motohashi(Nov. 11, 1957)

Senior Managing
Executive Officer
Head of AssetManagement
Company
Senior Managing
Executive Officer ofMizuho Bank, Ltd.

Apr. 2016

Senior Managing Executive
Officer / Head of Global
Markets Company of Mizuho
Financial Group, Inc. (current)

Apr. 2009

Executive Officer / General
Manager of Treasury
Department of Mizuho Trust &Banking Co., Ltd.

Apr. 2010

Managing Executive Officer

Apr. 2012Managing Executive Officer /Head of Pension Business
Unit & Asset Management Unit
(until Apr. 2014)

Apr. 2013

Managing Executive Officer /Deputy Head of AssetManagement Unit of Mizuho
Financial Group, Inc.

Apr. 2014

Managing Executive Officer /Head of Asset Management
Unit

June 2018

Managing Executive Officer /Head of Asset Management
Unit of Mizuho Bank, Ltd.
Apr. 2016

Senior Managing Executive
Officer / Head of AssetManagement Company ofMizuho Financial Group, Inc.
(current)
Senior Managing Executive
Officer / Head of AssetManagement Division ofMizuho Bank, Ltd. (current)

Keiichiro Ogushi(Aug. 20, 1960)

Senior Managing
Executive Officer

Apr. 2011

Head of Research &Consulting Unit
121

Executive Officer / General
Manager of Corporate Banking
Coordination Division of theformer Mizuho Corporate Bank,
Ltd.

June 2018

Name(date of birth)

Current positions andprincipal outside positions

Business experience

Apr. 2012

Expiration ofcurrent term
as executive
officer

Executive Officer / General
Manager of Corporate Banking
Coordination Division (Large
Corporations) of the former
Mizuho Bank, Ltd.
Executive Officer / General
Manager of Corporate Banking
Coordination Division (Large
Corporations) of the former
Mizuho Corporate Bank, Ltd.

Apr. 2013

Managing Executive Officer ofthe former Mizuho Bank, Ltd.
Managing Executive Officer ofthe former Mizuho Corporate
Bank, Ltd.

July 2013

Managing Executive Officer ofMizuho Bank, Ltd.

Apr. 2015

Managing Executive Officer /Head of Retail Banking Unit
and Head of Corporate Banking
Unit of Mizuho Financial
Group, Inc.
Managing Executive Officer /Head of Retail Banking Unit
and Head of Corporate Banking
Unit of Mizuho Bank, Ltd.

Tsutomu Nomura(May 30, 1959)

Managing Executive
Officer

Apr. 2016

Senior Managing Executive
Officer / Head of Research &Consulting Unit of Mizuho
Financial Group, Inc. (current)

Apr. 2011

Executive Officer / General
Manager of Corporate Finance
Division of the former Mizuho
Bank, Ltd.

May 2011

Executive Officer / General
Manager of Credit Supervision
Division I and Head ofFinancial Service Support
Department (until July 2013)

July 2012

Executive Officer / Joint General
Manager of Corporate Credit
Division of the former Mizuho
Corporate Bank, Ltd.

Head of Internal Audit
Group (Group CA)

122

June 2018

Name(date of birth)

Current positions andprincipal outside positions

Business experience

July 2013

Executive Officer / General
Manager of Credit Coordination
Division of Mizuho Bank, Ltd.

Apr. 2014

Managing Executive Officer /Co-Head of Credit Group of
Mizuho Bank, Ltd.

Apr. 2017Managing Executive Officer /Head of Internal Audit Group of
Mizuho Financial Group, Inc.
(current)

Expiration ofcurrent term
as executive
officer

Takanori Nishiyama(May 9, 1962)

See “—Directors.”

See “—Directors.”

June 2018

Koichi Iida
(Oct. 6, 1962)

See “—Directors.”

See “—Directors.”

June 2018

Shuji Kojima(Jan. 9, 1965)

Managing Executive
Officer

Apr. 2013

General Manager of Commercial
Finance Division for Small
Corporations of the former
Mizuho Bank, Ltd.

June 2018

Nov. 2013

General Manager of Compliance
Division of Mizuho Financial
Group, Inc.

Head of Human
Resources Group(Group CHRO)
Managing Executive
Officer of Mizuho
Bank, Ltd.

General Manager of Compliance
Division of Mizuho Bank, Ltd.
Apr. 2015

Executive Officer / General
Manager of Compliance
Division of Mizuho Financial
Group, Inc.
Executive Officer / General
Manager of Compliance
Division of Mizuho Bank, Ltd.

Apr. 2016

Managing Executive Officer /Deputy Head of Internal Audit
Group of Mizuho Financial
Group, Inc.
Managing Executive Officer /Head of Internal Audit Group of
Mizuho Bank, Ltd.

Apr. 2017

123

Managing Executive Officer /Head of Human ResourcesGroup of Mizuho Financial
Group, Inc. (current)Name(date of birth)

Current positions andprincipal outside positions

Business experience

Expiration ofcurrent term
as executive
officerManaging Executive Officer /Head of Human ResourcesGroup of Mizuho Bank, Ltd.
(current)
Shinji Taniguchi(Feb. 3, 1964)

Managing Executive
Officer
Head of Global
Products UnitManaging Executive
Officer of Mizuho
Bank, Ltd.

Apr. 2011

General Manager of East Asia
Division of the former Mizuho
Corporate Bank, Ltd.

July 2013

General Manager of East Asia
Division of Mizuho Bank, Ltd.

Apr. 2014

Executive Officer / General
Manager of Investment Banking
Coordination Division ofMizuho Financial Group, Inc.

June 2018

Executive Officer / General
Manager of Investment Banking
Coordination Division ofMizuho Bank, Ltd.
Apr. 2016

Executive Officer / General
Manager of Global Products
Coordination Department ofMizuho Financial Group, Inc.
Executive Officer / General
Manager of Global Products
Coordination Department ofMizuho Bank, Ltd.

Apr. 2017Managing Executive Officer /Head of Global Products Unitof Mizuho Financial Group,
Inc. (current)Managing Executive Officer /Head of Global Products Unitof Mizuho Bank, Ltd. (current)

Makoto Umemiya(Dec. 23, 1964)

See “—Directors.”

See “—Directors.”

June 2018

Yasuyuki Shibata(Aug. 21, 1962)

See “—Directors.”

See “—Directors.”

June 2018

No family relationship exists among any of the directors and executive officers.
6.B. Compensation
Mizuho Financial Group transformed from a Company with Audit & Supervisory Board into a Company
with Three Committees on June 24, 2014. The following provides information before and after thetransformation.
124

Before the transformation, in accordance with the Companies Act, as a Company with Audit & Supervisory
Board, compensation for directors and audit & supervisory board members, including bonuses, retirement
allowances and incentive stock options, needed to be approved at general meetings of shareholders, as the articles
of incorporation did not specify otherwise. The shareholders’ approval specified the upper limit of the aggregate
amount of compensation and included the description of benefits in kind. Compensation for a director or audit &supervisory board member was fixed by the Board of Directors or by consultation among audit & supervisoryboard members in accordance with Mizuho Financial Group’s internal regulations and practice and, in the case ofretirement allowances, generally reflected the position of the director or audit & supervisory board member at thetime of retirement, the length of his service as a director or audit & supervisory board member and his
contribution to the company’s performance.
After the transformation, in accordance with the Companies Act, as a Company with Three Committees,compensation for each individual director and executive officer as defined in the Companies Act, including
bonuses, retirement allowances, incentive stock options, performance payments and stock compensation, needs
to be determined at the Compensation Committee, which is required to consist of at least three directors and the
majority of which is required to consist of outside directors. See “Item 6. C. Board Practices” for more
information regarding Mizuho Financial Group’s corporate governance.
The aggregate compensation paid by Mizuho Financial Group and its subsidiaries to the directors andexecutive officers as defined in the Companies Act of Mizuho Financial Group for the fiscal years ended
March 31, 2017 (basic salaries and others) and March 31, 2016 (performance payments and stock compensation
paid or determined during the following fiscal year) are shown on the following table:

Classification

Directors . . . . . . . . . . .
Executive officers as
defined in the
Companies Act . . . .

Aggregate Amounts of Compensation by Type (in millions of yen)
For the fiscal year ended
For the fiscal year ended
March 31, 2017
March 31, 2016
Performance
Stock
Basic Salaries
Other
Payments
Compensation
Number of
Aggregate
NumberNumberNumberNumber
Persons Compensation
of
of
of
of
(Note 2)
(Note 3)
Persons Amount Persons Amount Persons Amount Persons Amount

8

229

8

202

7

0

—

—

2

26

21

1,332

21

830

18

1

21

251

21

249

Notes:(1) Fractions are rounded down.
(2) With respect to the number of persons, the directors and executive officers as defined in the Companies Act
who were actually paid or expected to be paid for the fiscal years ended March 31, 2016 and 2017 arestated.
(3) With respect to the amounts, the aggregate amounts for the fiscal years ended March 31, 2016 and 2017 arestated.
(4) The aggregate compensation paid to directors who concurrently serve as executive officers as defined in the
Companies Act is included in the above table as those of “Executive officers as defined in the Companies
Act.”(5) The six executive officers who resigned as of April 1, 2016 are included in the above.
(6) With respect to the performance payments for the executive officers, the amounts decided by theCompensation Committee of Mizuho Financial Group in July 2016 as the performance payments for the
fiscal year ended March 31, 2016 are stated. The portions that exceed a certain amount are expected to be
paid as deferred payments over three years from the fiscal year ending March 31, 2018.
(7) With respect to the stock compensation for the directors (excluding the outside directors) and the executive
officers, the amounts obtained by multiplying the stock ownership points granted by the Compensation
Committee of Mizuho Financial Group in July 2016 as the stock ownership points granted for the fiscal year
125

ended March 31, 2016 (one (1) point translates into one (1) share of common stock of Mizuho Financial
Group) by the book value of Mizuho Financial Group stock (158.6789 per share) are stated. The stockcompensation for the fiscal year ended March 31, 2016 is expected to be paid as deferred payments overthree years from the fiscal year ending March 31, 2018.
(8) Because the amount of the performance payments and stock compensation to be paid with respect to thefiscal year ended March 31, 2017 has not yet been determined at present, the aggregate compensation above
does not include the amount of the performance payments and stock compensation; however, the necessary
reserve is recorded for accounting purposes.
(9) The condolence money premiums and life insurance premiums subsidies concerning the fiscal year ended
March 31, 2017 are included in the above table as “Other”, both of which are based on the decision by theCompensation Committee.
Listed companies in Japan are required under Cabinet Office Ordinance on Disclosure of Corporate Affairs,
etc., to disclose the compensation provided to their directors, audit & supervisory board members and executive
officers as defined in the Companies Act for the relevant fiscal year if the aggregate annual compensation per the
director / audit & supervisory board member / executive officer as defined in the Companies Act equals or
exceeds ¥100 million (including any compensation provided by major subsidiaries of such listed company as
directors and audit & supervisory board members of such subsidiaries). The following table sets forth therelevant information that Mizuho Financial Group has disclosed pursuant to such regulations:Aggregate Amounts of Compensation by Type (in millions of yen)
Aggregate
Amount of
Name
Compensation(Classification) (in millions of yen)

Yasuhiro Sato
(Executive
officer as
defined intheCompanies
Act)

131

Company

MizuhoFinancial Group
Mizuho Bank
Mizuho Trust &BankingMizuho Securities

For the fiscal year ended
March 31, 2017
Basic
SalaryOther

For the fiscal year ended
March 31, 2016
Performance
Stock
Payments
Compensation

70
4

0
—

23
1

23
1

2
2

—
—

0
0

0
0

Note:
(1) Fractions are rounded down.

Mizuho Financial Group and some of its subsidiaries, including the former Mizuho Bank and the former
Mizuho Corporate Bank, abolished their respective retirement allowance programs for directors, audit &supervisory board members and officers. At the ordinary general meeting of shareholders held in June 2008,
Mizuho Financial Group and such subsidiaries obtained shareholders’ approval for a payment of lump sum
retirement allowances for directors and audit & supervisory board members (other than those elected after suchshareholders’ meeting) at the time of their respective retirement.
In conjunction with the abolishment of the retirement allowance program, Mizuho Financial Group obtained
shareholders’ approval for the introduction of stock acquisition rights for directors (excluding outside directors)
at the ordinary general meeting of shareholders held on June 26, 2008. On January 30, 2009, the Board of
Directors resolved to issue stock acquisition rights to directors and executive officers and subsequently allottedan aggregate of 5,409 stock acquisition rights on February 16, 2009. As the directors of Mizuho Financial Group,
the directors received 435 stock acquisition rights. Each stock acquisition right represents a right to purchase1,000 shares of the common stock at ¥1 per share of common stock. The period during which the stockacquisition rights may be exercised shall be until February 16, 2029. Their exercise is conditioned on the holder
losing his or her status as director or executive officer. The book value of each stock acquisition right was¥190,910 as of March 31, 2017.
126

On September 3, 2009, the Board of Directors resolved to issue stock acquisition rights to directors andexecutive officers and subsequently allotted an aggregate of 5,835 stock acquisition rights on September 25,
2009. As the directors of Mizuho Financial Group, the directors received 500 stock acquisition rights. Each stockacquisition right represents a right to purchase 1,000 shares of the common stock at ¥1 per share of common
stock. The period during which the stock acquisition rights may be exercised shall be until September 25, 2029.
Their exercise is conditioned on the holder losing his or her status as director or executive officer. The bookvalue of each stock acquisition right was ¥168,690 as of March 31, 2017.
On July 30, 2010, the Board of Directors resolved to issue stock acquisition rights to directors and executive
officers and subsequently allotted an aggregate of 6,808 stock acquisition rights on August 26, 2010. As the
directors of Mizuho Financial Group, the directors received 500 stock acquisition rights. Each stock acquisitionright represents a right to purchase 1,000 shares of the common stock at ¥1 per share of common stock. The
period during which the stock acquisition rights may be exercised shall be until August 26, 2030. Their exercise
is conditioned on the holder losing his or her status as director or executive officer. The book value of each stockacquisition right was ¥119,520 as of March 31, 2017.
On November 18, 2011, the Board of Directors resolved to issue stock acquisition rights to directors andexecutive officers, and subsequently allotted an aggregate of 12,452 stock acquisition rights on December 8,
2011. As the directors of Mizuho Financial Group, the directors received 500 stock acquisition rights. Each stockacquisition right represents a right to purchase 1,000 shares of the common stock at ¥1 per share of common
stock. The period during which the stock acquisition rights may be exercised shall be until December 8, 2031.
Their exercise is conditioned on the holder losing his or her status as director or executive officer. The bookvalue of each stock acquisition right was ¥91,840 as of March 31, 2017.
On July 31, 2012, the Board of Directors resolved to issue stock acquisition rights to directors and executive
officers, and subsequently allotted an aggregate of 11,776 stock acquisition rights on August 31, 2012. As the
directors of Mizuho Financial Group, the directors received 498 stock acquisition rights. Each stock acquisitionright represents a right to purchase 1,000 shares of the common stock at ¥1 per share of common stock. The
period during which the stock acquisition rights may be exercised shall be until August 31, 2032. Their exercise
is conditioned on the holder losing his or her status as director or executive officer. The book value of each stockacquisition right was ¥113,250 as of March 31, 2017.
On January 31, 2014, the Board of Directors resolved to issue stock acquisition rights to directors andexecutive officers, and subsequently allotted an aggregate of 7,932 stock acquisition rights on February 17, 2014.
As the directors of Mizuho Financial Group, the directors received 184 stock acquisition rights. Each stockacquisition right represents a right to purchase 1,000 shares of the common stock at ¥1 per share of common
stock. The period during which the stock acquisition rights may be exercised shall be until February 17, 2034.
Their exercise is conditioned on the holder losing his or her status as director or executive officer. The bookvalue of each stock acquisition right was ¥192,610 as of March 31, 2017.
On May 14, 2014, the Board of Directors determined to delegate to the President & CEO the authority todetermine to issue stock acquisition rights to directors and executive officers, provided that Mizuho Financial
Group would transform from a Company with Audit & Supervisory Board into a Company with Three
Committees. Later, on June 24, 2014, the transformation was approved at the ordinary general meeting ofshareholders.
On November 14, 2014, the President & CEO determined to issue stock acquisition rights to directors andexecutive officers and subsequently allotted an aggregate of 9,602 stock acquisition rights on December 1, 2014.
As the directors of Mizuho Financial Group, the directors received 126 stock acquisition rights. Each stockacquisition right represents a right to purchase 1,000 shares of the common stock at ¥1 per share of common
stock. The period during which the stock acquisition rights may be exercised shall be until December 1, 2034.
Their exercise is conditioned on the holder losing his or her status as director or executive officer. The bookvalue of each stock acquisition right was ¥186,990 as of March 31, 2017.
127

Mizuho Financial Group’s Compensation Committee resolved, at the meeting held on May 15, 2015, todiscontinue the incentive stock option program along with the introduction of performance payments andperformance-based stock compensation for directors and officers. For further information on the performance
payments and performance-based stock compensation, see “Mizuho Financial Group Compensation Policy”
below.
“Mizuho Financial Group Compensation Policy”
Mizuho Financial Group set out the “Mizuho Financial Group Compensation Policy” concerning thedetermination of compensation for each individual director, executive officer and specialist officer (“Directors,etc.”) of Mizuho Financial Group as well as Mizuho Bank, Mizuho Trust & Banking and Mizuho Securities(“Core Subsidiaries”).
Executive compensation for Mizuho Financial Group and the Core Subsidiaries pursuant to such policy
aims to function as incentive and compensation for each officer to exercise the designated function to the fullest
with respect to striving to realize management with consideration to value creation for various stakeholders andimprove corporate value through continuous and stable corporate growth based on our basic management
policies under our Corporate Identity.
Basic Policy
The basic policy with respect to the determination concerning the individual compensation of Directors,
etc., of Mizuho Financial Group and the Core Subsidiaries is set forth below:•

The executive compensation shall be based on the function and responsibility assigned to and theperformance of each of the Directors, etc.

•

The executive compensation shall give consideration to improving corporate value and creating value
for various stakeholders over the medium to long term.

•

The executive compensation shall reflect the management environment and business performance of ourgroup.

•The executive compensation shall enable compensation for securing expert personnel such asprofessionals with a competitive edge in the market.

•

The compensation system and standards shall be reevaluated based on such factors as the economic andsocial conditions and survey data with respect to management compensation provided by external
specialized organizations.

•

Regulations and guidelines, etc., concerning executive compensation, both in Japan and overseas, shallbe complied with.

Compensation System
The compensation system for executive officers as defined in the Companies Act (including executive
officers who are directors), executive officers as defined in our internal regulations and specialist officers, as well
as directors, executive officers, and specialist officers of the Core Subsidiaries responsible for business execution(“Officers Responsible for Business Execution”) shall be separate from that for the non-executive directors ofMizuho Financial Group and the directors of the Core Subsidiaries responsible for management supervision(“Non-Executive Officers Responsible for Management Supervision”).
The basic compensation system for Officers Responsible for Business Execution shall consist of basic
salaries in the form of fixed compensation as well as variable compensation consisting of performance payments
and performance-based stock compensation. The ratio of fixed compensation to variable compensation, the range128

of variable compensation based on business performance and the payment method shall be designated in light ofsound incentivization for sustainable growth and restraint on excessive risk taking, while our taking into accountregulations and guidelines as well as research data, etc., both in Japan and overseas, concerning executive
compensation. In principle, the ratio of fixed to variable compensations shall be 6 to 4 and the ratio of
performance payments to performance-based stock compensation shall be 1 to 1, based on which the standard
amount shall be calculated for each position. The variable compensation shall reflect each officer’s performancewithin the range of 0% to 150% of the standard amount for each position. The basic salaries, the performance
payments and the performance-based stock compensation as well as the payment methods, etc., are in principle
as set forth below:
1)

The basic salaries shall factor in each officer’s function and responsibility in addition to the standard
amount for each position.

2)

The performance payments shall be monetary made as officers’ incentive to achieve the annual budget
and as compensation for their achievement. The payment thereof shall reflect each officer’s
performance in addition to the standard amount for each position. A system shall be adopted whichenables certain amount of deferred payments of the performance payments over three years, as well asa decrease or forfeiture of the deferred amount depending on performance, etc.

3)

The performance-based stock compensation shall be paid in the form of shares of common stock ofMizuho Financial Group acquired from the stock market through a trust with an aim to align officers’interests with those of the shareholders and increase the incentive to enhance corporate value. The
payment thereof shall reflect each officer’s performance in addition to the standard amount for eachposition. A system shall be adopted which enables the entire amount of deferred payments of theperformance-based stock compensation over three years, as well as a decrease or forfeiture of thedeferred amount depending on performance, etc.

4)

The variable compensation intended for professional personnel, etc., appointed from outside the groupshall be individually designed based on the duties and characteristics of business responsibilities andmarket values, etc., of each officer, a system which enables certain amount or a portion of deferredpayments and non-monetary payments such as stock, as well as a decrease or forfeiture (clawback) of
the deferred amount depending on the performance, etc., of the company and such personnel.

The compensation for Non-Executive Officers Responsible for Management Supervision, in principle, shallbe in the form of fixed compensation from the perspective of ensuring the effectiveness of the supervisory
function and shall consist of basic salaries and stock compensations.
1)

The basic salaries shall factor in each officer’s function and responsibilities in addition to the basic
amount for each of the full-time and part-time non-executive officers.

2)

The stock compensation shall be paid to full-time internal directors excluding outside directors inaccordance with the standard amount based on each position. However, the payment standards shall not
fluctuate depending on each officer’s level of performance. A system shall be adopted which enables
the entire amount of deferred payments of the stock compensation over three years, as well as adecrease or forfeiture of the deferred amount depending on performance, etc.

Compensation Determination Process
The Compensation Committee shall determine the determination policy of executive compensation for
Mizuho Financial Group and the Core Subsidiaries and the executive compensation system, including the system
set out in “Compensation System.” In addition, the Compensation Committee shall determine the compensationfor each individual director and executive officer as defined in the Companies Act of Mizuho Financial Groupand approve at Mizuho Financial Group the compensation of each individual director of the Core Subsidiaries.

129

The President & CEO, pursuant to this policy and regulations and detailed rules, etc., shall determine thecompensation for each executive officer as defined in our internal regulations and each specialist officer ofMizuho Financial Group and approve at Mizuho Financial Group the compensation of each individual executive
officer and specialist officer of the Core Subsidiaries, etc.
All members of the Compensation Committee shall be appointed from among outside directors (or at least
non-executive directors) and the chairman thereof shall be an outside director.
The Compensation Committee, where necessary, may have officers who are not members of the committee(including officers of the Core Subsidiaries) such as the President & CEO and external experts, etc., attend its
meetings and request their opinion.
Revision and Abolishment of the Policy
Revision and abolishment of the Policy shall be resolved by the Compensation Committee of Mizuho
Financial Group.
6.C. Board Practices
Under the Companies Act, Companies with Three Committees are required to establish a nominating
committee, a compensation committee and an audit committee and the majority of the respective committee
members must be outside directors, as defined under the Companies Act. Such companies are also required toappoint executive officers under the Companies Act.
Mizuho Financial Group transformed into a Company with Three Committees from a Company with
Audit & Supervisory Board in June 2014. The company believes that, under the current legal system, a Company
with Three Committees is the most effective as a system to realize the basic policy regarding our corporate
governance system for the following reasons:•

To allow executive officers to make swift and flexible decisions on business execution delegated by the
Board of Directors and to implement business execution, and to allow the Board of Directors to focus on
determining matters such as basic management policies and effectively supervising management.

•

To secure to the fullest extent possible a checks and balances function that fully utilizes the viewpointsof outside parties and objectively secure appropriateness and fairness in decision-making throughmembers of the Nominating Committee, the Compensation Committee and the Audit Committee, which
consist mainly of outside directors.

•

To make possible the creation of systems that are necessary to realize the fundamental perspectives
regarding our corporate governance in a form that takes into account what we aim to be and ourchallenges.

•

To be in line with governance systems that are required globally with a strong recognition that we
operate globally and are in a position in which we should play a leading role in the industry as afinancial group that is a G-SIFI to continue constructing an even stronger governance system that will
agilely respond to domestic and global structural changes and overcome a highly competitiveenvironment; and as a result, to allow us to fulfill our social role and mission, which is to realize
continuous and stable corporate growth and improved corporate value and shareholder interests andcontribute to domestic and global economic and industrial development and prosperity of society, in
response to the demands of our stakeholders.

Pursuant to its articles of incorporation, Mizuho Financial Group has established general meetings ofshareholders, individual directors, the Board of Directors, the Nominating Committee, the Compensation
Committee, the Audit Committee and an independent accounting auditor as the primary components of its
corporate governance system.
130

Board of Directors
Under the Companies Act, directors are elected by resolution of the general meetings of shareholders, andtheir term of office ends at the close of the ordinary general meeting of shareholders relating to the fiscal year
ending within a year following their appointment.
In addition, under the Companies Act, the duties of the board of directors include making decisions on
business execution and supervision of the execution of duties of directors and executive officers, and by its
resolution, it may delegate making decisions on business execution (excluding certain specified matters) to the
executive officers.
The main roles of the Board of Directors are making decisions on business execution such as basic
management policies, which are legally matters to be determined solely by the Board of Directors, andsupervising the execution of duties by directors and executive officers. The Board of Directors shall, in principle,
delegate to the President & CEO, who is also the Group CEO, decisions on business execution (excluding
matters that are legally required to be determined solely by the Board of Directors), for the purpose of realizing
swift and flexible decision-making and expeditious corporate management and strengthening the supervision of
directors and executive officers by the Board of Directors.
Pursuant to the articles of incorporation, Mizuho Financial Group has no more than 15 directors andmaintains the following structure in order to manage the Board of Directors in an effective and stable manner. In
light of the role of the Board of Directors to supervise management, (i) outside directors and internal directors
who do not concurrently serve as persons performing executive roles (“Internal Non-Executive Directors,” andtogether with outside directors, “Non-Executive Directors”) comprise a majority of the directors in the Board of
Directors and (ii) at least a third of the members of the Board of Directors are outside directors. Currently, theBoard of Directors consists of a total of 13 directors (six outside directors, two Internal Non-Executive Directors
and five directors concurrently serving as executive officers).
The Chairman of the Board of Directors shall, in principle, be an outside director (or at least a
Non-Executive Director) in light of the role of the Board of Directors to supervise management. Currently,
Ms. Hiroko Ota serves as the Chairman of the Board of Directors.
Nominating Committee
Under the Companies Act, the nominating committee is required to consist of at least three directors, andthe majority of its members is required to consist of outside directors. The duties of the nominating committee
include the determination of the contents of proposals regarding the appointment and dismissal of directors to besubmitted to the general meetings of shareholders.
The main roles of the Nominating Committee of Mizuho Financial Group are determining the contents ofproposals regarding the appointment and dismissal of directors of Mizuho Financial Group to be submitted to thegeneral meetings of shareholders, exercising the approval rights held by Mizuho Financial Group with respect tothe appointment and dismissal of directors of each of Mizuho Bank, Mizuho Trust & Banking and Mizuho
Securities (the “Core Subsidiaries”), and exercising the approval rights held by Mizuho Financial Group withrespect to the appointment and removal of representative directors and senior directors of the Core Subsidiaries.
The Chairman of the Nominating Committee shall be an outside director, and in principle its members shallbe appointed from among outside directors (or at least Non-Executive Directors) in order to ensure objectivity
and transparency in the appointment of directors. Currently, all members of the Nominating Committee,
including the Chairman, are outside directors. As of June 23, 2017, the members of the Nominating Committee
are Mr. Takashi Kawamura (Chairman), Mr. Tetsuo Seki, Mr. Tatsuo Kainaka, Ms. Hiroko Ota and Ms. Izumi
Kobayashi.
131Compensation Committee
Under the Companies Act, the compensation committee is required to consist of at least three directors, andthe majority of its members is required to consist of outside directors. The duties of the compensation committee
include the determination of the compensation for each individual director and executive officer.
The main roles of the Compensation Committee of Mizuho Financial Group are determining thecompensation for each individual director and executive officer of Mizuho Financial Group, exercising theapproval rights held by Mizuho Financial Group regarding compensation of each individual director of the Core
Subsidiaries, and determining the basic policies and compensation system for directors and executive officers ofMizuho Financial Group and the Core Subsidiaries.
The Chairman of the Compensation Committee shall be an outside director, and in principle its members
shall be appointed from among the outside directors (or at least Non-Executive Directors) in order to ensure
objectivity and transparency in the compensation of directors and executive officers. Currently, all members of
the Compensation Committee, including the Chairman, are outside directors. As of June 23, 2017, the membersof the Compensation Committee are Mr. Tatsuo Kainaka (Chairman), Mr. Tetsuo Seki, Mr. Takashi Kawamura
and Mr. Hirotake Abe.
Audit Committee
Under the Companies Act, the audit committee is required to consist of at least three Non-Executive
Directors, and the majority of its members is required to consist of outside directors. The duties of the audit
committee include the audit of the execution of duties by directors and executive officers and preparation of audit
reports.
The main roles of the Audit Committee of Mizuho Financial Group are auditing the execution of duties by
the directors and executive officers, monitoring and inspecting the establishment and management of the internal
control system of Mizuho Financial Group and its subsidiaries, monitoring and inspecting the condition of theexecution of duties with respect to corporate management of subsidiaries and others by executive officers,
preparing audit reports, and determining the contents of proposals regarding the appointment, dismissal andnon-reappointment of accounting auditors to be submitted to the general meetings of shareholders.
Given that it is necessary for the Audit Committee to gather information through internal directors who arefamiliar with the financial business and related regulations, share information among the Audit Committee and tohave sufficient coordination with internal control departments, Mizuho Financial Group shall in principle appoint
one or two Internal Non-Executive Directors as full-time members of the Audit Committee. The majority of its
members including the Chairman shall be outside directors. Currently, among the five members of the Audit
Committee, two members are appointed among Internal Non-Executive Directors as full-time members of the
Audit Committee, and three members including the Chairman are appointed among outside directors. As ofJune 23, 2017, the members of the Audit Committee are Mr. Tetsuo Seki (Chairman), Mr. Tatsuo Kainaka,
Mr. Hirotake Abe, Mr. Ryusuke Aya and Mr. Nobukatsu Funaki.
All members of the Audit Committee shall be independent under the provisions of the United States
Securities and Exchange Commission and the rules of the New York Stock Exchange. Further, at least one
member of the Audit Committee shall be a “financial expert” as defined under U.S. laws and regulations.
Mizuho Financial Group has established committees and other organizations on a voluntary basis in addition
to the above legally-required three committees as set forth below:•

Human Resources Review Meeting
Mizuho Financial Group has established the Human Resources Review Meeting that consists of the
President & CEO and outside directors who serve as members of the Nominating Committee and the132Compensation Committee as a deliberative body that mainly conducts the deliberation of proposals to
appoint executive officers as defined in the Companies Act and executive officers as defined in ourinternal regulations with title of Mizuho Financial Group and executive officers as defined in ourinternal regulations with title of Core Subsidiaries and assessment of executive officers.
•

Risk Committee
Mizuho Financial Group has established the Risk Committee that in principle fully consists of
Non-Executive Directors or external experts as an advisory body that mainly advises the Board of
Directors with respect to the determination and the supervision regarding risk governance, as well as thesupervision of the status of risk management.

•

Outside Director Session
Mizuho Financial Group has established the Outside Director Session that consists of all outside
directors and the President & CEO as a forum for free discussions with an aim to deepen outside
directors’ understanding of our group and share the top management’s awareness of issues throughcommunication among directors. At least once a year, Mizuho Financial Group holds an Outside
Director Session where only outside directors attend to discuss, among others, management issues,
operations of the Board of Directors and the current state of the governance structure. For the fiscal year
ended March 31, 2017, an Outside Director Session only for outside directors was held twice (in Julyand December) and included discussions regarding the Board of Director’s handling of authorization to
pay dividends, issues of management of the Board of Directors, evaluation of the effectiveness of theBoard of Directors (interim evaluation) and requested items for operating lines related to the formationof the business plan for the fiscal year ending March 31, 2018.

Executive Officers
Under the Companies Act, Companies with Three Committees are required to appoint at least one executive
officer by resolution of the board of directors, and its term of office ends at the close of the meeting of the boardof directors initially convened following the close of the ordinary general meeting of shareholders relating to thefiscal year ending within a year following appointment. Executive officers shall decide on the business executiondelegated by a resolution of the board of directors and implement business execution.
Executive officers of Mizuho Financial Group take charge of making decisions on business executiondelegated by a resolution of the Board of Directors and implementing business execution of Mizuho Financial
Group.
Mizuho Financial Group shall appoint as executive officers the Group CEO and, in principle, all heads of
In-house Companies, Units and Groups based on the policy that it is necessary to appoint as executive officers
people who make decisions on business execution delegated by the Board of Directors as managers of Mizuho
Financial Group and who assume a comprehensive role of business execution.
While the President & CEO is responsible for business execution at Mizuho Financial Group, after the
President & CEO makes decisions on matters delegated by the Board of Directors, determined matters shall bereported to the Board of Directors at least once every three months as part of the status of the execution of duties.
Agreements with Directors, etc.
None of the directors has service contracts with Mizuho Financial Group providing for benefits upon
termination of service.
Mizuho Financial Group’s articles of incorporation, in accordance with the Companies Act, allows thecompany to enter into an agreement with outside directors that limits their liabilities incurred in connection with
their service. The limitation of liabilities under such agreement, if the outside director performed his/her duty in133good faith without gross negligence, must be the higher of either (i) a pre-determined amount not less than
¥20 million or (ii) the amount prescribed in laws and regulations, which is currently equivalent to two times theannual compensation of such outside director. Pursuant to the provisions in its articles of incorporation, Mizuho
Financial Group has entered into such agreements with all of its outside directors that are in office.
Based on the rules of the Tokyo Stock Exchange, listed companies are required to have at least one memberof the board of directors or one member of the audit & supervisory board to be “independent.” Further, listedcompanies that do not have less than two independent outside directors must disclose the reason for it. Currently,
all of Mizuho Financial Group’s outside directors meet such independence requirements.
For additional information on directors and the board practices, see “Item 6.A. Directors and Senior
Management—Directors” and “Item 10.B. Additional Information—Memorandum and Articles of Association”
in this annual report.
The rights of holders of American Depositary Receipts, or ADRs, which evidence ADSs, including such
ADR holders’ rights relating to corporate governance practices, are governed by the deposit agreement, which isincluded as Exhibit 2.2 to this annual report.
Corporate Governance Practices
Companies listed on the New York Stock Exchange, or NYSE, must comply with certain standards regarding
corporate governance under Section 303A of the NYSE Listed Company Manual. However, NYSE-listedcompanies that are foreign private issuers meeting certain criteria, such as Mizuho Financial Group, are permitted tofollow home country practices in lieu of certain provisions of Section 303A, and the company is relying on thisexemption. See “Item 16.G. Corporate Governance” for a summary of significant ways in which corporate
governance practices of Mizuho Financial Group differ from those followed by NYSE-listed U.S. companies.
6.D. Employees
As of March 31, 2015, 2016 and 2017, we had 54,784, 56,375 and 59,179 employees, respectively, on aconsolidated basis, including overseas local staff but excluding advisers and temporary employees. We also had
an average of 20,219 temporary employees during the fiscal year ended March 31, 2017.
The following tables show our full-time employees as of March 31, 2017 and the average number of
temporary employees for the fiscal year ended March 31, 2017, each broken down based on business segment
and geographical location:
Business segment

Retail & Business Banking Company . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate & Institutional Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global Corporate Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global Markets Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset Management Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Location

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia/Oceania (excluding Japan) and others . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
134

Number offull-time employees

Average number of
temporary employees

23,813
2,116
8,680
1,738
1,722
21,11059,17912,333
350
73
128
151
7,184
20,219Percentage offull-time employees

Average percentage of
temporary employees

91.2%
2.6
1.4
4.8
100.0%

99.8%
0.0
0.1
0.1
100.0%

Most of our full-time non-management employees in Japan are members of a labor union. Outside Japan,
some of our employees are members of local unions. We consider our labor relations with employees to be good.
6.E. Share Ownership
The following tables show the number of shares of Mizuho Financial Group’s common stock owned by its
directors and executive officers as of June 30, 2017:
Directors

Number of shares owned

Yasuhiro Sato . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Takanori Nishiyama . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Koichi Iida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Makoto Umemiya . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yasuyuki Shibata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ryusuke Aya . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nobukatsu Funaki . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tetsuo Seki . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Takashi Kawamura . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tatsuo Kainaka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hirotake Abe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hiroko Ota . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Izumi Kobayashi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Executive Officers

45,180108,500
11,52018,90024,600146,380
37,00021,100130,000
16,20021,1005,000
0Number of shares owned

Yasuhiro Sato . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toshitsugu Okabe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Daisaku Abe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kosuke Nakamura . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Akira Sugano . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Junichi Kato . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Katsunobu Motohashi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Keiichiro Ogushi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tsutomu Nomura . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Takanori Nishiyama . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Koichi Iida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shuji Kojima . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shinji Taniguchi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Makoto Umemiya . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yasuyuki Shibata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

See above
625,500
277,680
611,300
370,100
579,700
227,840
324,270
283,900
See above
See above
37,50012,400See above
See above

None of the directors or executive officers is the owner of more than one percent of Mizuho Financial
Group’s common stock, and no director or executive officer has voting rights with respect to our common stockthat are different from any other holder of our common stock.
For information on our incentive stock options (stock acquisition rights) and performance-based stockcompensation for directors, see “Item 6.B Compensation.”135

We maintain an employee stock ownership plan under which participating employees of the companies
listed below is able to purchase our shares with funds deducted from such employee’s salary and bonus
payments. The plan administrator makes open-market purchases of our shares for the account of the plan on amonthly basis. The companies contribute matching funds equivalent to 5% of the amounts contributed. The
following table shows the numbers of shares that this plan held as of March 31, 2017:
As of March 31, 2017
Plan

Mizuho Employee Stock Ownership Plan . . . . . .

Employer companies

Number ofshares owned

Mizuho Financial Group
Mizuho Bank
Mizuho Trust & Banking
Mizuho Asset Management
Mizuho Research InstituteMizuho Information & Research InstituteTotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

109,395,265

136

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
7.A. Major Shareholders
Common Stock
The following table sets forth information about the ten largest holders of shares of our common stock
appearing on the register of shareholders as of March 31, 2017:
As of March 31, 2017
Number ofPercentage ofshares owned
outstanding shares

Name

Japan Trustee Services Bank, Ltd. (trustee account) . . . . . . . . . . . . . . . . . . . . .
The Master Trust Bank of Japan, Ltd. (trustee account) . . . . . . . . . . . . . . . . . .
Japan Trustee Services Bank, Ltd. (trustee account 9) . . . . . . . . . . . . . . . . . . .
Japan Trustee Services Bank, Ltd. (trustee account 5) . . . . . . . . . . . . . . . . . . .
Japan Trustee Services Bank, Ltd. (trustee account 1) . . . . . . . . . . . . . . . . . . .
Japan Trustee Services Bank, Ltd. (trustee account 2) . . . . . . . . . . . . . . . . . . .
Japan Trustee Services Bank, Ltd. (trustee account 7) . . . . . . . . . . . . . . . . . . .
State Street Bank West Client – Treaty 505234 . . . . . . . . . . . . . . . . . . . . . . . .
JP Morgan Chase Bank 385151 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan Trustee Services Bank, Ltd. (trustee account 4) . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,122,309,400
962,863,300
627,066,600
492,293,200
365,649,900
360,809,200
357,374,400
353,600,880
307,115,823
292,440,900
5,241,523,603

4.42%
3.79
2.47
1.94
1.44
1.42
1.41
1.39
1.21
1.15
20.65%

As of March 31, 2017, there were 205 record holders of our common stock with addresses in the UnitedStates, whose shareholdings represented approximately 10% of our outstanding common stock on that date.
Because some of these shares were held by brokers or other nominees, the number of record holders withaddresses in the United States might not fully reflect the number of beneficial owners in the United States.
Preferred Stock
There was no outstanding preferred stock as of March 31, 2017. We acquired 75,091,100 shares of the eleventh
series class XI preferred stock on July 1, 2016, in respect of which a request for acquisition had not been made byJune 30, 2016, and cancelled all of our treasury shares of eleventh series class XI preferred stock on July 13, 2016.
7.B. Related Party Transactions
We and our subsidiary banks had, and expect to have in the future, banking transactions and other transactionsin the ordinary course of business with our related parties. Although, for the fiscal year ended March 31, 2017, suchtransactions included, but were not limited to, call money, loans, deposits, guarantees and foreign exchangetransactions, those transactions were immaterial and were made on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable transactions with other persons and did not
involve more than the normal risk of collectability or present other unfavorable features.
During the fiscal year ended March 31, 2017, none of the directors or executive officers, and none of theclose members of their respective families, had any transactions that are material or any transactions that are
unusual in their nature or conditions, involving goods, services or tangible or intangible assets, to which we were,are or will be a party, and there were no such transactions proposed as of March 31, 2017.
During the fiscal year ended March 31, 2017, no loans were made to the directors or executive officers otherthan loans in the ordinary course of business, on substantially the same terms, including interest rates andcollateral, as those prevailing at the time for comparable transactions with other persons, and involving no morethan the normal risk of collectability or presenting other unfavorable features.
7.C. Interests of Experts and Counsel
Not applicable.
137

ITEM 8. FINANCIAL INFORMATION
8.A. Consolidated Statements and Other Financial Information
Financial Statements
Our consolidated financial statements are set forth in this annual report under “Item 18. Financial
Statements.”
Legal Proceedings
We are involved in normal collection proceedings initiated by us and other legal proceedings in the ordinary
course of our business. In addition, we are involved in the following legal proceedings.
An Indonesian subsidiary of ours acts as collateral agent for the trustee of bond issuances made bysubsidiaries of Asia Pulp & Paper Company Ltd. (“APP”). In that role, the subsidiary is involved in a dispute
between the bondholders and such APP subsidiaries in their capacities as the issuers, guarantors and/or pledgorsof security for the bonds relating to foreclosure proceedings on the collateral and has been named as a defendantin a lawsuit brought by the obligors under the bonds in Indonesia. Our consolidated financial statements do notinclude a reserve in relation to this dispute because we do not believe the resolution of this matter will have asignificant impact on our consolidated financial condition or results of operations, although there can be noassurance as to the foregoing.
Dividend Policy
We have been implementing disciplined capital management by pursuing the optimal balance between
strengthening of stable capital base and steady returns to shareholders.
Based on the above policy, annual cash dividends for the fiscal year ended March 31, 2017 were ¥7.5 pershare of common stock (interim cash dividends of ¥3.75 per share of common stock and year-end cash dividendsof ¥3.75 per share of common stock), which was the same amount as the annual cash dividend per share ofcommon stock of the fiscal year ended March 31, 2016.
We intend to distribute dividends twice per year to shareholders of record as of March 31 and September 30
in each year as year-end dividends and as interim dividends, respectively, to return profits to shareholders in atimely way.
In accordance with our articles of incorporation, we determine dividend payments of surplus not by aresolution at a general meeting of shareholders but by a resolution of our Board of Directors, unless otherwise
provided for in laws or regulations.
We continuously consider the optimal balance between strengthening of stable capital base and steadyreturns to shareholders. We will comprehensively consider the business environment such as the Mizuho group’sbusiness results, profit base, capital, and domestic and international regulation trends such as the Baselframework and determine cash dividend payments for each term.
8.B. Significant Changes
Except as disclosed in note 35 to our consolidated financial statements, no significant change in our
financial position has occurred since the date of the financial statements included in this annual report.

138

ITEM 9. THE OFFER AND LISTING
9.A. Listing Details
Market Price Information for Our American Depositary Shares
Our ADSs are listed on the New York Stock Exchange.
The following table sets forth, for the periods indicated, the high and low trading prices and average daily
trading volume on the New York Stock Exchange for our ADSs:
Price per ADS
High
Low

Fiscal years ended March 31,

2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016:
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017:First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Most recent six months:
December . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

139

Average daily
trading volume(shares)

4.68
4.55
4.17
4.51
3.87

2.80
3.62
3.22
2.72
2.69

478,892
556,105
352,911608,446
426,812

4.51
4.50
4.27
4.05

3.53
3.41
3.72
2.72

414,585
608,347
709,587
702,651

3.30
3.71
3.87
3.85

2.69
2.76
3.17
3.56

814,598
293,004
334,969
257,964

3.87
3.75
3.78
3.85
3.73
3.76

3.53
3.56
3.63
3.65
3.47
3.47

316,530
259,495
329,564
197,486
606,983
204,871Market Prices Information for Our Shares
See “Item 9.C. The Offer and Listing—Markets” for information on the stock exchanges on which ourcommon stock is listed.
The following table sets forth, for the periods indicated, the high and low trading prices and average daily
trading volume on the First Section of the Tokyo Stock Exchange for our common stock:
Price per share(1)
High
Low

Fiscal years ended March 31,

2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016:
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017:First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Most recent six months:
December . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Average daily
trading volume(shares)

221
240
226.6
280.4
225.3

110
180
178.1
149.3
142.0

142,901,584
186,546,095
132,018,080
200,523,432
162,921,802

280.4
272.8
263.2
244.4

208.6
215.7
222.6
149.3

241,085,838
218,526,590
138,586,887
203,599,279

185.7
186.4
225.3
217.3

142.6
142.0
163.5
204.0

160,817,541
160,435,263
201,903,957
128,571,211

225.3
217.3
213.9
215.0
207.3
210.7

204.1
204.4
205.4
204.0
186.7
192.2

207,247,457
139,697,321
120,643,585
126,169,232
125,785,545
97,465,930

Note:(1) Since July 22, 2014, Tokyo Stock Exchange has introduced sub-yen tick sizes for the shares of TOPIX 100
constituents, which contain decimals. Our shares are included in the TOPIX 100 constituents.
9.B. Plan of Distribution
Not applicable.
9.C. Markets
The principal trading market for our shares of common stock is the First Section of the Tokyo Stock
Exchange. Our shares have been listed on the First Section of the Tokyo Stock Exchange, under the code “8411,”
since our establishment as the holding company of the Mizuho group on March 12, 2003, as the successor to
Mizuho Holdings.
Our ADSs have been listed on the New York Stock Exchange since November 8, 2006 and are quoted under
the ticker symbol “MFG.”

140

9.D. Selling Shareholders
Not applicable.
9.E. Dilution
Not applicable.
9.F. Expenses of the Issue
Not applicable.

141

ITEM 10. ADDITIONAL INFORMATION
10.A. Share Capital
Not applicable.
10.B. Memorandum and Articles of Association
Objects and Purposes in our Articles of Incorporation
Our corporate purpose, as specified in article 2 of our articles of incorporation, which is included in thisannual report as Exhibit 1.1, is to engage in the following businesses as a bank holding company:•

operation and management of bank holding companies, banks, specialized securities companies andother companies which we may own as our subsidiaries under the Banking Act, and any other businessincidental thereto; and•any other business that a bank holding company may engage in under the Banking Act.

Our Board of Directors
Under the Companies Act (Kaisha Hou) (Act No. 86 of 2005, as amended), because we have adopted the“Company with Three Committees” system, our directors have no power to execute our business except inlimited circumstances as permitted by law. If a director also serves concurrently as an executive officer, then heor she can execute our business in the capacity of executive officer. There is no provision in our articles ofincorporation as to our directors’ power to vote on a proposal, arrangement or contract in which a director ismaterially interested. The Companies Act, however, requires such director to refrain from voting on such mattersat meetings of the board of directors.
The amount of compensation to each our director is determined by the Compensation Committee, which
consists of our directors, the majority of whom are outside directors (See “Item 6.C. Board Practices”).
The borrowing powers have been delegated to the executive officers by the Board of Directors inaccordance with the Companies Act.
Neither the Companies Act nor our articles of incorporation set a mandatory retirement age for our
directors.
There is no requirement concerning the number of shares an individual must hold to qualify as a director
under the Companies Act or our articles of incorporation.
Common Stock
GeneralSet forth below is information concerning our shares of common stock, including brief summaries of certain
provisions of our articles of incorporation, our share handling regulations and the Companies Act relating to joint
stock corporations (kabushiki kaisha) and certain related legislation, all as currently in effect.
Under our articles of incorporation, we are authorized to issue 48,000,000,000 shares of common stock.
As of March 31, 2017, 25,386,307,945 shares of common stock were issued.
Where relevant to the common stock, provisions of our preferred stock are also described below.

142

Distribution of Surplus
GeneralUnder the Companies Act, distribution of cash or other assets by a joint stock corporation to its
shareholders, including dividends, takes the form of distribution of Surplus (as defined in “—Restriction on
Distribution of Surplus”). We are permitted to make distributions of Surplus to our shareholders any number oftimes per fiscal year, subject to certain limitations described in “—Restriction on Distribution of Surplus.” Under
the Companies Act and our articles of incorporation, distributions of Surplus are in principle permitted by aresolution of the Board of Directors as long as our non-consolidated annual financial statements and certain
documents for the latest fiscal year fairly present our assets and profit and loss, as required by an ordinance of the
Ministry of Justice. Distributions of Surplus are, however, required to be authorized by a resolution of a general
meeting of shareholders if the aforementioned condition is not met.
Distributions of Surplus may be made in cash or in kind in proportion to the number of shares of common
stock held by each shareholder. A resolution of the Board of Directors or a general meeting of shareholders
authorizing a distribution of Surplus must specify the kind and aggregate book value of the assets to be
distributed, the manner of allocation of such assets to shareholders, and the effective date of the distribution. If a
distribution of Surplus is to be made in kind, we may, pursuant to a resolution of the Board of Directors or (as thecase may be) a general meeting of shareholders, grant the right to our shareholders to require us to make such
distribution in cash instead of in kind. If no such right is granted to shareholders, the relevant distribution of
Surplus must be approved by a special resolution of a general meeting of shareholders (see “—Voting Rights”
with respect to a “special resolution”).
Under our articles of incorporation, the record date for annual dividends and interim dividends is March 31
and September 30, respectively, in each year. In Japan, the “ex-dividend date” (the date from which purchasers ofshares through Japanese stock exchanges will not be entitled to the dividends to be paid to registeredshareholders as of any record date) and the record date for dividends precede the date of determination of theamount of the dividend to be paid. The ex-dividend date of the shares of common stock is generally the second
business day prior to the record date. Under our articles of incorporation, we are not obligated to pay any
distribution of Surplus to be made in cash which has not been received after the lapse of five years from thecommencement date of such distribution.
Restriction on Distribution of Surplus
Payment of annual dividends on shares of common stock is subject to the prior payment of annual preferred
dividends on the shares of any series of preferred stock. Payment of an interim dividend on shares of ourcommon stock is also subject to the prior payment of an interim preferred dividend of one-half the annual
preferred dividend amount on the shares of any series of preferred stock. In making a distribution of Surplus, wemust set aside in our additional paid-in capital and/or legal reserve an amount equal to one-tenth of the amount ofSurplus so distributed, until the sum of its additional paid-in capital and legal reserve reaches one-quarter of its
stated capital.
The amount of Surplus at any given time must be calculated in accordance with the following formula:
A + B + C + D - (E + F + G)
In the above formula:“A” = the total amount of other capital surplus and other retained earnings, each such amount being thatappearing on our non-consolidated balance sheet as of the end of the last fiscal year
“B” = (if we have disposed of our treasury stock after the end of the last fiscal year) the amount of theconsideration for such treasury stock received by us less the book value thereof143

“C” = (if we have reduced our stated capital after the end of the last fiscal year) the amount of such
reduction less the portion thereof that has been transferred to additional paid-in capital or legal reserve (ifany)“D” = (if we have reduced our additional paid-in capital or legal reserve after the end of the last fiscal year)
the amount of such reduction less the portion thereof that has been transferred to stated capital (if any)“E” = (if we have cancelled our treasury stock after the end of the last fiscal year) the book value of suchtreasury stock“F” = (if we have distributed Surplus to our shareholders after the end of the last fiscal year) the total bookvalue of the Surplus so distributed“G” = certain other amounts set forth in an ordinance of the Ministry of Justice, including:•

if we have reduced Surplus and increased our stated capital, additional paid-in capital or legal reserve
after the end of the last fiscal year, the amount of such reduction; and•if we have distributed Surplus to shareholders after the end of the last fiscal year, the amount set aside in
our additional paid-in capital or legal reserve, if any, as required by ordinances of the Ministry ofJustice.

The aggregate book value of Surplus distributed by us may not exceed a prescribed distributable amount(the “Distributable Amount”), as calculated on the effective date of such distribution. The Distributable Amountat any given time shall be the amount of Surplus less the aggregate of (a) the book value of our treasury stock,(b) the amount of consideration for any of our treasury stock disposed of by us after the end of the last fiscal year
and (c) certain other amounts set forth in an ordinance of the Ministry of Justice, including (if the sum of onehalf of our goodwill and deferred assets exceeds the total of the stated capital, additional paid-in capital and legal
reserve, each such amount being the amount in our non-consolidated balance sheet as of the end of the last fiscal
year) all or certain part of such exceeding amount as calculated in accordance with the ordinances of the Ministryof Justice.
If we have become at our option a company with respect to which its consolidated balance sheet should also
be considered in the calculation of the Distributable Amount (renketsu haito kisei tekiyo kaisha), we shall further
deduct from the amount of Surplus the excess amount, if any, of (x) the total amount of the shareholders’ equity
appearing on our non-consolidated balance sheet as of the end of the last fiscal year and certain other amounts set
forth by an ordinance of the Ministry of Justice over (y) the total amount of the shareholders’ equity and certain
other amounts set forth by an ordinance of the Ministry of Justice appearing on our consolidated balance sheet asof the end of the last fiscal year. We did not opt for becoming such a company with respect to the fiscal year
ended March 31, 2017.
If we have prepared interim financial statements as described below, and if such interim financial statements
have been approved by the Board of Directors or (if so required by the Companies Act) by a general meeting ofshareholders, then the Distributable Amount must be adjusted to take into account the amount of profit or loss,
and the amount of consideration for any of our treasury stock disposed of by us, during the period in respect ofwhich such interim financial statements have been prepared. We may prepare non-consolidated interim financial
statements consisting of a balance sheet as of any date subsequent to the end of the last fiscal year and an income
statement for the period from the first day of the current fiscal year to the date of such balance sheet. Interim
financial statements so prepared by us must be audited by our corporate auditors and/or outside accounting
auditor, as required by an ordinance of the Ministry of Justice.
Capital and Reserves
We may reduce our additional paid-in capital or legal reserve generally by resolution of a general meetingof shareholders and, if so decided by the same resolution, may account for the whole or any part of the amount ofsuch reduction as stated capital. On the other hand, we may reduce our stated capital generally by special
144

resolution of a general meeting of shareholders and, if so decided by the same resolution, may account for thewhole or any part of the amount of such reduction as additional paid-in capital or legal reserve. In addition, we
may reduce our Surplus and increase either (i) stated capital or (ii) additional paid-in capital and/or legal reserveby the same amount, in either case by resolution of a general meeting of shareholders.
Stock Splits
We may at any time split shares of common stock into a greater number of shares of common stock bydetermination by executive officers under the authority delegated by resolution of the Board of Directors. Whena stock split is to be made, so long as our only class of outstanding stock is the common stock, we may increase
the number of authorized shares in the same ratio as that of such stock split by amending our articles ofincorporation, of which amendment may be effected by resolution of the Board of Directors without approval byshareholders.
Unit Share System
We have adopted the unit share system under which shareholders will have one voting right for each unit ofshares consisting of 100 shares held by them at general meetings of shareholders or at meetings of holders of aparticular class of shares, and shares constituting less than a full unit will carry no voting rights. See “—Preferred
Stock—Voting Rights” for information on the voting rights that holders of preferred stock may have at general
meetings of shareholders. Our articles of incorporation provide that the holders of shares constituting less than afull unit will not have shareholder rights, except for those specified in an ordinance of the Ministry of Justicewhich include rights (i) to receive dividends, (ii) to receive cash or other assets in case of a consolidation or splitof shares, share exchange or share transfer, or merger or (iii) to be allotted rights to subscribe for free for new
shares and stock acquisition rights when such rights are granted to shareholders. Holders of shares constituting
less than a full unit may at any time request us to purchase such shares constituting less than a full unit (a) at thecurrent market price as determined pursuant to the Companies Act in cases of such shares having a market price(such as our common stock) or (b) at the price as determined through negotiations between the holders of sharesconstituting less than a full unit and us in cases where such shares have no market price (such as our preferredstock), which request may not be withdrawn without our consent. In addition, holders of shares constituting lessthan a full unit may require us to sell them such number of shares, which, when combined with the number ofshares already held by such holder, shall constitute a whole unit of shares; provided that we will be obliged tocomply with such request only when we own a sufficient number of shares to accommodate such request. As
prescribed in our share handling regulations, such requests shall be made through an account managing
institution at which such shareholder has its account and Japan Securities Depository Center, Inc. (“JASDEC”)
pursuant to the rules of JASDEC, without going through the notification procedure required for the exercise ofshareholders’ rights entitled regardless of record dates as described in “—Transfer of Shares.” The executive
officers under the authority delegated by the Board of Directors may reduce the number of shares constituting
one unit of shares or cease to use the unit share system by amendments to the articles of incorporation without aspecial resolution of the general meeting of shareholders which would otherwise be required.
General Meetings of Shareholders
The ordinary general meeting of shareholders shall be held no later than three months from the last day ofeach business year and is normally held in June of each year. In addition, we may hold an extraordinary general
meeting of shareholders whenever necessary. Notice of a general meeting of shareholders stating the place, thetime and the purpose thereof must be given to each shareholder having voting rights (or, in the case of a nonresident shareholder, to its standing proxy or mailing address in Japan) at least two weeks prior to the date set forthe meeting. The record date for an ordinary general meeting of shareholders is March 31 of each year.
Any shareholder holding at least 300 voting rights or 1% of the total number of voting rights for six months
or longer may propose a matter to be considered at a general meeting of shareholders by submitting a request to a145

representative director at least eight weeks prior to the date of such meeting. Any of the minimum percentages,
time periods and number of voting rights necessary for exercising the minority shareholder rights describedabove may be decreased or shortened if our articles of incorporation so provide.
Voting Rights
Our shareholders have one voting right for each unit of shares held by them (regarding the voting rights heldby holders of preferred stock, see “—Preferred Stock—Voting Rights”).
Except as otherwise provided by law or in our articles of incorporation, a resolution shall be adopted at a
general meeting of shareholders by a majority of the voting rights held by the shareholders present at themeeting. Our articles of incorporation provide that the quorum for election of directors is one-third of the total
number of voting rights. Our shareholders are not entitled to cumulative voting in the election of directors. A
shareholder may exercise its voting rights in writing or through a proxy, provided that the proxy shall also be aholder of our shares having voting rights at such meeting.
The Companies Act provides that certain important matters shall be approved by a “special resolution” of ageneral meeting of shareholders. Under our articles of incorporation, the quorum for a special resolution is onethird of the total number of voting rights, and the approval of not less than two-thirds of the voting rights held by
the shareholders present at the meeting is required for adopting a special resolution. Such important matters
include:1.

any amendment to our articles of incorporation (except for such amendments that may be authorized byexecutive officers under the authority delegated by the board of directors under the Companies Act
such as (i) an increase of the number of authorized shares in the same ratio as that of a stock split, (ii) a
reduction of the number of shares per unit of shares and (iii) abolishing the unit share system);2.

our dissolution, merger or consolidation requiring shareholders’ approval;

3.

establishment of a parent and wholly-owned subsidiary relationship by way of a share transfer(kabushiki-iten) or share exchange (kabushiki-kokan) requiring shareholders’ approval;

4.

transfer of the whole or a substantial part of our business;

5.

transfer of the whole or a part of our shares in any of our subsidiaries requiring shareholders’ approval;

6.

taking over of the whole of the business of another company requiring shareholders’ approval;

7.

our corporate split requiring shareholders’ approval;

8.

consolidation of shares of common stock;9.

acquisition of shares of common stock by us from a specific shareholder other than our subsidiary;

10. distribution of Surplus in kind (except when shareholders are granted the right to require to make such
distribution in cash instead of in kind);
11. issuance or transfer of new shares or existing shares held by us as treasury stock to persons other than
the shareholders at a “specially favorable” price; and12. issuance of stock acquisition rights (including those incorporated in bonds with stock acquisitionrights) to persons other than the shareholders at a “specially favorable” price or under “speciallyfavorable” conditions.
Liquidation Rights
In the event of our liquidation, the assets remaining after payment of all debts, liquidation expenses, taxes
and distributions of residual assets relating to the then outstanding preferred stock will be distributed among
holders of common stock in proportion to the respective numbers of shares held by them. See “—Preferred
Stock—Liquidation Rights.”146

Issue of Additional Shares and Pre-emptive Rights
Holders of the common stock have no pre-emptive rights. Authorized but unissued shares of common stock
may be issued at such times and upon such terms as executive officers under the authority delegated by the Boardof Directors determine, subject to the limitations as to the issuance of new shares of common stock at a “speciallyfavorable” price mentioned in “—Voting Rights.”
In the case of an issuance or transfer of shares or stock acquisition rights by way of an allotment to a third
party whereby the third party will hold more than 50% of the voting rights of all shareholders, we shall givenotice (including a public notice) to our shareholders in advance, and if shareholders who hold one-tenth or moreof the voting rights of all shareholders dissent from the third-party allotment, the approval by an ordinary
resolution of a general meeting of shareholders is generally required before the payment date for such issuance ortransfer pursuant to the Companies Act. In addition, pursuant to the regulations of the stock exchanges in Japan,
in the case of an issuance or transfer of shares or stock acquisition rights by way of an allotment to a third party
which would dilute the outstanding voting shares by 25% or more or change the controlling shareholder, in
addition to a determination by the executive officers, the approval of the shareholders or an affirmative opinion
from a person independent of our management is generally required.
Executive officers under the authority delegated by the Board of Directors may, however, determine thatshareholders of a particular class of stock shall be given subscription rights to new shares of the same class, inwhich case they must be given on uniform terms to all shareholders of that class as of a record date of which notless than two weeks’ prior public notice must be given. Each of the shareholders to whom such rights are given
must also be given at least two weeks’ prior notice of the date on which such rights expire (but see “—Preferred
Stock—Issue of Additional Shares and Pre-emptive Rights” regarding our preferred stock).
Stock Acquisition Rights
We may issue stock acquisition rights (shinkabu yoyakuken). Holders of stock acquisition rights are entitledto acquire shares from us, upon payment of the applicable exercise price, and subject to other terms andconditions thereof. We may also issue bonds with stock acquisition rights (shinkabu yoyakuken-tsuki shasai). The
issuance of stock acquisition rights and bonds with stock acquisition rights may be authorized by executive
officers under the authority delegated by the Board of Directors unless it is made at a “specially favorable” priceor under “specially favorable” conditions, as described in “—Voting Rights” and subject to the approval of theshareholders or an affirmative opinion from an independent person in certain cases, as described in “—Issue of
Additional Shares and Pre-emptive Rights.”
Record Date
As mentioned above, March 31 is the record date for the payment of annual dividends and the determinationof shareholders entitled to vote at the ordinary general meeting of shareholders. September 30 is the record date
for the payment of interim dividends. In addition, by a determination by executive officers under the authority
delegated by the Board of Directors and after giving at least two week’s prior public notice, we may at any time
set a record date in order to determine the shareholders who are entitled to certain rights pertaining to our stock.
JASDEC is required to give us notice of the names and addresses of our shareholders, the numbers of shares
held by them and other relevant information as of such record date promptly after we set each record date.
Acquisition by Us of Common Stock
We may acquire shares of common stock:1.

by way of purchase on any Japanese stock exchange on which the shares of our common stock arelisted or by way of tender offer (in either case pursuant to a resolution of the Board of Directors as long147

as our non-consolidated annual financial statements and certain documents for the latest fiscal year
fairly present our assets and profit and loss, as required by an ordinance of the Ministry of Justice);2.

from a specific shareholder other than any of our subsidiaries (pursuant to a special resolution of ageneral meeting of shareholders); or

3.

from any of our subsidiaries (pursuant to a determination by executive officers under the authority
delegated by the Board of Directors).

In the case of 2. above, any other shareholder may make a request to us to be included as a seller in the
proposed purchase, unless the purchase price or any other consideration to be received by the relevant specificshareholder will not exceed the last trading price of the shares on the relevant stock exchange on the day
immediately preceding the date on which the resolution mentioned in 2. above was adopted (or, if there is no
trading in the shares on the stock exchange or if the stock exchange is not open on such day, the price at which
the shares are first traded on such stock exchange thereafter).
The total amount of the purchase price of shares of common stock may not exceed the Distributable
Amount, as described in “—Distribution of Surplus—Restriction on Distribution of Surplus.”
We may hold the shares of common stock acquired, and may generally transfer or cancel such shares by adetermination by executive officers under the authority delegated by the Board of Directors.
Disposal of Shares of Common Stock Held by Shareholders whose Location is Unknown
We are not required to send notices to a shareholder if notices given by us to such shareholder fail to arrive forfive consecutive years or more at its address registered in our register of shareholders or otherwise notified to us.
In the above case, if the relevant shareholder also fails to receive dividends on the shares continuously forfive years or more at its address registered in our register of shareholders or otherwise notified to us, then we
may in general dispose of such shares at their then market price and hold or deposit the proceeds of suchdisposition on behalf of the relevant shareholder.
Reporting of Substantial Shareholders
The Financial Instruments and Exchange Act and its related regulations require any person who has become,beneficially and solely or jointly, a holder of more than 5% of the total issued shares of capital stock of acompany that is listed on any Japanese stock exchange to file a report with the Director of the relevant Local
Finance Bureau of the Ministry of Finance within five business days. With certain exceptions, a similar reportmust also be filed in respect of any subsequent change of 1% or more in the holding or of any change in material
matters set forth in any previously filed reports. For this purpose, shares issuable to such person upon conversionof convertible securities or exercise of share subscription warrants or stock acquisition rights are taken into
account in determining both the number of shares held by the holder and the company’s total issued share capital.
Any such report shall be filed with the Director of the relevant Local Finance Bureau of the Ministry of Financethrough the Electronic Disclosure for Investors’ Network (EDINET) system.
There are other reporting requirements under the Banking Act. See “Item 4.B. Information on the
Company—Business Overview—Supervision and Regulation—Japan—Examination and Reporting Applicableto Shareholders.”
Holding of Shares of Our Common Stock by Foreign Investors
There are no limitations imposed by the laws of Japan, our articles of incorporation or our other constituent
documents on the rights of non-residents or foreign shareholders to hold or exercise voting rights on our shares ofcommon stock or preferred stock.
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Transfer of Shares
At present, JASDEC is the only institution that is designated by the relevant authorities as a clearing house
which is permitted to engage in the clearing operations of listed shares under the Act on Book-Entry Transfer ofCorporate Bonds, Stocks, etc. (Act No. 75 of 2001, including regulations promulgated thereunder; the “Bookentry Act”). Under the clearing system above, in order for any person to hold, sell or otherwise dispose of listed
shares, such person must have an account at an account managing institution unless such person has an account at
JASDEC. “Account managing institutions” are financial instruments business operators (i.e., securities
companies), banks, trust companies and certain other financial institutions which meet the requirements
prescribed by the Book-entry Act, and only those financial institutions that meet further stringent requirements of
the Book-entry Act can open accounts directly at JASDEC. Under the Book-entry Act, any transfer of shares iseffected through book entry, and title to the shares passes to the transferee at the time when the transferrednumber of the shares is recorded at the transferee’s account at an account managing institution. The holder of an
account at an account managing institution is presumed to be the legal owner of the shares held in such account.
Under the Companies Act and the Book-entry Act, in order to assert shareholders’ rights to which shareholders
as of record dates are entitled (such as the rights to vote at a general meeting of shareholders or receive
dividends) against us, a shareholder must have its name and address registered in our register of shareholders.
Under the clearing system, such registration is made upon our receipt of necessary information from JASDEC.
On the other hand, in order to assert shareholders’ rights to which shareholders are entitled regardless of record
dates such as minority shareholders’ rights including the right to propose a matter to be considered at a general
meeting of shareholders, except for shareholders’ rights to request us to purchase or sell shares constituting lessthan a full unit (as described in “—Unit Share System”), upon the shareholder’s request, JASDEC shall issue a
notice of certain information, including the name and address of such shareholder, to us. Thereafter, suchshareholder is required to present us a receipt of the request of the notice in accordance with our share handlingregulations. Under the Book-entry Act, the shareholder shall exercise such shareholders’ right within four weeks
after the notice above. Non-resident shareholders are required to appoint a standing proxy in Japan or provide a
mailing address in Japan. Each such shareholder must give notice of such standing proxy or mailing address to
the relevant account managing institution. Such notice will be forwarded to us through JASDEC. Japanese
securities companies and commercial banks customarily act as standing proxies and provide related services forstandard fees. Notices from us to non-resident shareholders are delivered to such standing proxies or mailingaddresses.
Under the clearing system, shares constituting less than one unit are transferable. Under the rules of theJapanese stock exchanges, however, shares constituting less than one unit do not comprise a trading unit, except
in limited circumstances, and accordingly may not be sold on Japanese stock exchanges.
Our transfer agent is Mizuho Trust & Banking, located at 2-1, Yaesu 1-chome, Chuo-ku, Tokyo 103-8670,
Japan.
The registered holder of deposited shares underlying the ADSs is the depositary for the ADSs. Accordingly,
holders of ADSs will not be able to directly assert their shareholders’ rights against us.
Preferred Stock
The following is a summary of information concerning the shares of our preferred stock, including briefsummaries of the relevant provisions of our articles of incorporation, our share handling regulations and theCompanies Act and certain related legislation, all as currently in effect. The detailed rights of our preferred stock
are set forth in our articles of incorporation and the resolutions of our Board of Directors or a determination by
executive officer(s) under the authority delegated by the Board of Directors relating to the issuance of therelevant series of preferred stock.

149General
Under our articles of incorporation, we are authorized to issue 900,000,000 shares of each of the first to
fourth series of class XIV preferred stock (provided that the aggregate number of shares authorized to be issued
with respect to the four series of class XIV preferred stock may not exceed 900,000,000 shares), 900,000,000
shares of each of the first to fourth series of class XV preferred stock (provided that the aggregate number ofshares authorized to be issued with respect to the four series of class XV preferred stock may not exceed
900,000,000 shares), 1,500,000,000 shares of each of the first to fourth series of class XVI preferred stock(provided that the aggregate number of shares authorized to be issued with respect to the four series of class XVI
preferred stock may not exceed 1,500,000,000 shares).
As of March 31, 2017, there was no outstanding preferred stock. On July 1, 2016, 75,091,100 shares of
eleventh series class XI preferred stock, which were then all the outstanding shares of such series (excluding ourtreasury shares), were mandatorily acquired by us in consideration of 265,433,368 shares of common stock,which number of shares was calculated at ¥282.90 per share, and all of our treasury shares of eleventh seriesclass XI preferred stock were cancelled on July 13, 2016.
Preferred Dividends
Payment of annual dividends on shares of common stock is subject to the prior payment of the annual
preferred dividends on shares of preferred stock. The amount of preferred dividends for each series of thepreferred stock is as follows:•

Each of the first to fourth series of class XIV preferred stock (currently not in issue) bears an annual
non-cumulative dividend of the amount to be determined by resolution of the Board of Directors or
determination by executive officer(s) under the authority delegated by the Board of Directors at the timeof issuance, up to a maximum of ¥100 per share, and in the event we pay an interim dividend, holders
are entitled to receive one half of such amount per share in preference to common stock.

•

Each of the first to fourth series of class XV preferred stock (currently not in issue) bears an annual noncumulative dividend of the amount to be determined by resolution of the Board of Directors or
determination by executive officer(s) under the authority delegated by the Board of Directors at the timeof issuance, up to a maximum of ¥100 per share, and in the event we pay an interim dividend, holders
are entitled to receive one half of such amount per share in preference to common stock.

•

Each of the first to fourth series of class XVI preferred stock (currently not in issue) bears an annual
non-cumulative dividend of the amount to be determined by resolution of the Board of Directors or
determination by executive officer(s) under the authority delegated by the Board of Directors at the timeof issuance, up to a maximum of ¥100 per share, and in the event we pay an interim dividend, holders
are entitled to receive one half of such amount per share in preference to common stock.

The amount of any interim preferred dividend will be deducted from the annual preferred dividend payableon preferred stock in respect of the same fiscal year.
No payment of dividends on our preferred stock or any other stock may be made unless we have sufficient
Distributable Amount and a resolution to pay such dividend is obtained at the Board of Directors or at therelevant general meeting of shareholders, as the case may be.
Dividends on our preferred stock are non-cumulative. If the full amount of any dividend is not declared on
our preferred stock in respect of any fiscal year, holders of our preferred stock do not have any right to receive
dividends in respect of the deficiency in any subsequent fiscal year, and we will have no obligation to pay the
deficiency or to pay any interest regardless of whether or not dividends are paid in respect of any subsequentfiscal year. The holders of our preferred stock are not entitled to any further dividends or other participation in or
distribution of surplus.
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Liquidation Rights
In the event of our voluntary or involuntary liquidation, holders of our preferred stock will be entitled,equally in rank as among themselves and in preference over shares of common stock, to receive a distribution of¥1,000 per share out of our residual assets upon our liquidation.
Holders of our preferred stock are not entitled to any further dividends or other participation in or
distribution of our residual assets upon our liquidation.
Voting Rights
No holder of preferred stock has a right to receive notice of, or to vote at, a general meeting of shareholders,
except as otherwise specifically provided under the Companies Act or other applicable law or our articles ofincorporation. Under our articles of incorporation, holders of units of our preferred stock will be entitled toreceive notice of, and to vote at, general meetings of shareholders:•from the commencement of any ordinary general meeting of shareholders if an agenda for approval todeclare a preferred dividend is not submitted to such meeting (except in the case where a resolution of
the Board of Directors to pay the preferred dividends is made pursuant to our articles of incorporation
between the last day of the business year and the date of such meeting); or•from the close of any ordinary general meeting of shareholders if a proposed resolution to declare apreferred dividend is not approved at such meeting,until such time as a resolution of the Board of Directors to pay the preferred dividends is made pursuant to ourarticles of incorporation or a resolution of an ordinary general meeting of shareholders declaring a preferred
dividend is approved.
A separate resolution of a meeting of the holders of the preferred stock is required in order to approve thefollowing matters which would prejudice the interests of the holders of the relevant preferred stock:(i)an amendment to the articles of incorporation to add new classes of shares to be issued, alter theterms of the shares or increase the number of authorized number of shares or authorized number ofany class of shares, with certain exceptions;(ii)

consolidation or split of shares;(iii)

pro rated allocation of shares or stock acquisition rights to shareholders without any consideration;(iv)

granting pre-emptive rights for new shares or stock acquisition rights to shareholders;(v)amalgamations or mergers;(vi)

certain corporate splits;(vii)

share exchanges;(viii)

share transfers; and(ix)other matters set forth in the articles of incorporation.

Such separate resolution is not required when the articles of incorporation so provide, except in the case of(i) above.
A separate resolution of a meeting of the holders of the common stock is also required in cases where theabove matters would prejudice the interests of the holders of the common stock.
Under our articles of incorporation, in cases where a matter to be resolved at an ordinary general meeting ofshareholders is required to be approved by such separate resolution, the record date for the relevant meeting of151

the holders of the common stock or the preferred stock, as the case may be, is the same date as the record date forthe ordinary general meeting of shareholders, when is March 31 of each year.
Ranking
We will not (unless the requisite sanction has been given by holders of preferred stock) create or issue anyother shares ranking, as regards order of participation in the profits or assets of us on a liquidation or otherwise,in priority to the preferred stock in issue, but we may issue, without obtaining the consent of holders of thepreferred stock in issue, other preferred stock ranking pari passu with the preferred stock in issue as regards theorder of such participation in profits or assets of us and carrying such rights as to rates of preferred dividends orterms of conversion as the Board of Directors may determine, subject to the limitations set forth in our articles ofincorporation and the Companies Act.
Acquisition of Preferred Stock
We may, if required, subject to regulatory approval, acquire any shares of the preferred stock thenoutstanding at any time out of the Distributable Amount (as defined in “—Common Stock—Restriction on
Distribution of Surplus”). On or after the date to be determined by a resolution of the Board of Directors or adetermination by executive officer(s) under the authority delegated by the Board of Directors relating to theissuance of the relevant preferred stock, we may also acquire all or a portion of each series of the first to fourth
series of class XV (currently not in issue) or the first to fourth series of class XVI preferred stock (currently notin issue) at the acquisition price to be determined by a resolution of the Board of Directors or a determination by
executive officer(s) under the authority delegated by the Board of Directors relating to the issuance of therelevant preferred stock on the date separately determined by a resolution of the Board of Directors or adetermination by executive officer(s) under the authority delegated by the Board of Directors, without consent of
the holders of such preferred stock. When a portion of a certain class of preferred stock is acquired, suchacquisition shall be made from each holder thereof in number of shares determined by way of a lot or pro rata
allocation.
Stock Splits
Our articles of incorporation provide that no stock split, stock consolidation or free distribution of stock
shall be made in respect of the preferred stock unless otherwise provided for in any law or regulation.
Issue of Additional Shares and Pre-emptive Rights
Our articles of incorporation provide that no holder of our preferred stock has any pre-emptive right tosubscribe for or purchase shares, stock acquisition rights or bonds with stock acquisition rights in the event of anissuance of additional shares or bonds and that no free distribution of stock acquisition rights may be made to theholders of our preferred stock.
Conversion
Our articles of incorporation provide that holders of the first to fourth series of class XIV (currently not in
issue) or the first to fourth series of class XV (currently not in issue) preferred stock may, at their option, convert
their shares to common stock by requesting us to acquire such shares and issue or transfer common stock tothem. Other classes of our preferred stock are non-convertible.
Our articles of incorporation also provide that the first to fourth series of class XIV (currently not in issue)or the first to fourth series of class XV (currently not in issue) preferred stock outstanding on the last day of theacquisition period will be mandatorily acquired by us on the immediately following day (the “mandatory
conversion date”) in consideration of shares of common stock of which number shall be calculated at the thencurrent market price per share of our common stock (the “mandatory conversion price”).
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On July 1, 2016, which was the mandatory conversion date, 75,091,100 shares of eleventh series class XI
preferred stock, which were then all the outstanding shares of such series (excluding our treasury shares), weremandatorily acquired by us in consideration of 265,433,368 shares of common stock. Such number of shares wascalculated at ¥282.90 per share as the mandatory conversion price which was the average price of daily closing
prices of our common stock on the Tokyo Stock Exchange for the 30 consecutive trading days commencing on
the 45th trading day prior to the mandatory conversion date.
Acquisition of Preferred Stock without Consideration or in Exchange for Common Stock
In order to enable the relevant preferred stock to meet the criteria for inclusion in Additional Tier 1 capital
under the capital adequacy guidelines of the Financial Services Agency under the Basel III rules, the first to
fourth series of class XIV (currently not in issue), the first to fourth series of class XV (currently not in issue) andthe first to fourth series of class XVI (currently not in issue) preferred stock have the following feature.
In respect of the first and second series of class XIV (currently not in issue), the first and second series ofclass XV (currently not in issue) and the first and second series of class XVI (currently not in issue) preferredstock, upon the occurrence of an event determined by a resolution of the Board of Directors or a determination by
executive officer(s) under the authority delegated by the Board of Directors relating to the issuance of therelevant preferred stock as an event where a write-off of the relevant preferred stock or a conversion of therelevant preferred stock into common stock, or financial support or other similar measures taken by a public
sector, without which we would become non-viable, is determined to be necessary, we shall mandatorily acquire
the relevant preferred stock, in whole, free of consideration, on a date which falls after the occurrence of such
event as determined by the resolution of the Board of Directors or a determination by executive officer(s) under
the authority delegated by the Board of Directors relating to the issuance of the relevant preferred stock andwhich date shall be separately determined by a resolution of the Board of Directors or a determination by
executive officer(s) under the authority delegated by the Board of Directors after the issuance of the relevant
preferred stock, or a date which falls after the occurrence of the relevant certain event and which date shall be
determined by the resolution of the Board of Directors or a determination by executive officer(s) under theauthority delegated by the Board of Directors relating to the issuance of the relevant preferred stock, giving due
consideration to the capital adequacy requirements applicable to us and other factors.
In respect of the third and fourth series of class XIV (currently not in issue), the third and fourth series ofclass XV (currently not in issue) and the third and fourth series of class XVI (currently not in issue) preferred stock,
upon the occurrence of an event determined by a resolution of the Board of Directors or a determination by
executive officer(s) under the authority delegated by the Board of Directors relating to the issuance of the relevant
preferred stock as an event where a write-off of the relevant preferred stock or a conversion of the relevant preferredstock into common stock, or financial support or other similar measures taken by a public sector, without which wewould become non-viable, is determined to be necessary, we shall mandatorily acquire the relevant preferred stock,in whole, on a date which falls after the occurrence of such event as determined by the resolution of the Board of
Directors or a determination by executive officer(s) under the authority delegated by the Board of Directors relating
to the issuance of the relevant preferred stock and which date shall be separately determined by a resolution of theBoard of Directors or a determination by executive officer(s) under the authority delegated by the Board of
Directors after the issuance of the relevant preferred stock, or a date which falls after the occurrence of the relevant
certain event and which date shall be determined by the resolution of the Board of Directors or a determination by
executive officer(s) under the authority delegated by the Board of Directors relating to the issuance of the relevant
preferred stock, giving due consideration to the capital adequacy requirements applicable to us and other factors,
and instead, we shall deliver our own common stock to holders of the relevant preferred stock. In this case, theterms of acquisition, including the number of shares of the common stock to be delivered in exchange for theacquisition of one (1) share of the relevant preferred stock, shall be determined by the resolution of the relevant
Board of Directors or the determination by relevant executive officer(s) under the authority delegated by the Boardof Directors relating to the issuance of the relevant preferred stock, giving due consideration to the market price ofcommon stock, the subscription price of the relevant preferred stock and other factors.
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10.C. Material Contracts
There were no material contracts entered into by us for the two years preceding the filing of this annual
report that were not entered into in the ordinary course of business.
10.D. Exchange Controls
Foreign Exchange and Foreign Trade Act
The Foreign Exchange and Foreign Trade Act of Japan and the cabinet orders and ministerial ordinances
incidental thereto, collectively the Foreign Exchange Act, set forth, among other matters, the regulations relating
to the receipt by non-residents of Japan of payment with respect to shares to be issued by us and the acquisitionand holding of shares by non-residents of Japan and foreign investors, both as defined below. It also applies insome cases to the acquisition and holding of ADSs representing such shares acquired and held by non-residents
of Japan and by foreign investors. Generally, the Foreign Exchange Act currently in effect does not affect theright of a non-resident of Japan to purchase or sell ADSs outside Japan for non-Japanese currency.
“Non-residents of Japan” are defined as individuals who are not resident in Japan and corporations whose
principal offices are located outside Japan. Generally, the branches and offices of non-resident corporations thatare located in Japan are regarded as residents of Japan while the branches and offices of Japanese corporations
located outside Japan are regarded as non-residents of Japan.
“Foreign investors” are defined as:•

individuals not resident in Japan;•

judicial persons or other organizations that are organized under the laws of foreign countries or whose
principal offices are located outside Japan;•

corporations of which 50% or more of the shares are held by individuals not resident in Japan and/or
judicial persons or other organizations that are organized under the laws of foreign countries or whose
principal offices are located outside Japan; and•judicial persons or other organizations, a majority of officers (or a majority of officers having the powerof representation) of which are not resident in Japan.

Dividends and Proceeds of Sales
Under the Foreign Exchange Act, dividends paid on, and the proceeds of sales in Japan of, shares held by
non-residents of Japan may in general be converted into any foreign currency and repatriated abroad. The
acquisition of our shares by non-residents of Japan by way of a stock split is not subject to any notification orreporting requirements.
Acquisition of Shares
In general, a non-resident of Japan who acquires shares from a resident of Japan is not subject to any priorfiling requirement, although the Foreign Exchange Act empowers the Minister of Finance of Japan to requireprior approval for any such acquisition in certain limited circumstances. While such prior approval is not
required in general, in the case where a resident of Japan transfers shares of a Japanese company forconsideration exceeding \100 million to a non-resident of Japan, the resident of Japan that transfers the shares isrequired to report the transfer to the Minister of Finance of Japan within 20 days from the date of the transfer orthe date of the payment for such transfer, whichever is later, unless the transfer is made through a bank or
financial instruments business operator licensed or registered under Japanese law.

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If a foreign investor acquires our shares and, together with parties who have a special relationship with that
foreign investor, holds 10% or more of our issued shares as a result of such acquisition, the foreign investor mustfile a report of such acquisition with the Minister of Finance and any other competent Minister on or before the15th day of the month following the month in which the acquisition was made, in principle. In certain limited
circumstances, however, a prior notification of such acquisition must be filed with the Minister of Finance andany other competent Minister, who may modify or prohibit the proposed acquisition.
Deposit and Withdrawal under American Depositary Facility
The deposit of shares with Mizuho Bank, in its capacity as custodian and agent for the depositary, in Tokyo,
the issuance of ADSs by the depositary to a non-resident of Japan in respect of the deposit and the withdrawal of
the underlying shares upon the surrender of the ADR are not subject to any of the formalities or restrictions
referred to above. However, where as a result of a deposit or withdrawal the aggregate number of shares held by
the depositary, including shares deposited with Mizuho Bank as custodian for the depositary, or the holder
surrendering the ADR, as the case may be, would be 10% or more of the total outstanding shares, a report will be
required, and in specified circumstances, a prior notification may be required, as noted above.

10.E. Taxation
Japanese Taxation
The following is a general summary of major Japanese tax consequences (limited to national tax) to holdersof shares of our common stock or ADSs representing shares of our common stock who are non-residents of Japanor non-Japanese corporations without a permanent establishment in Japan, which we refer to as “non-resident
holders” in this section. The statements regarding Japanese tax laws set forth below are based on the laws andtreaties in force and as interpreted by the Japanese tax authorities as at the date of this Annual Report and are
subject to changes in the applicable Japanese laws or tax treaties, conventions or agreements, or interpretations
thereof, occurring after that date. This summary is not exhaustive of all possible tax considerations that may
apply to a particular investor, and potential investors are advised to satisfy themselves as to the overall tax
consequences of the acquisition, ownership and disposition of shares of our common stock or ADSs, including
specifically the tax consequences under Japanese law, the laws of the jurisdiction of which they are resident, andany tax treaty, convention or agreement between Japan and their country of residence, by consulting their own
tax advisers.
For the purpose of Japanese tax law and the tax treaty between the United States and Japan, a U.S. holder of
ADSs will generally be treated as the owner of the shares underlying the ADSs evidenced by the ADRs.
Generally, a non-resident holder of shares of our common stock or ADSs is subject to Japanese income tax
collected by way of withholding on dividends paid by us, and such tax will be withheld prior to payment ofdividends. Stock splits are, in general, not a taxable event.
In the absence of any applicable tax treaty, convention or agreement reducing the maximum rate of Japanese
withholding tax or allowing exemption from Japanese withholding tax, the rate of Japanese withholding tax
applicable to dividends paid by Japanese corporations on their shares of stock to non-resident holders is generally
20.42% under Japanese tax law. However, with respect to dividends paid on listed shares issued by a Japanese
corporation (such as shares of our common stock or ADSs) to non-resident holders, other than any individual
shareholder who holds 3% or more of the total number of shares issued by the relevant Japanese corporation, theaforementioned 20.42% withholding tax rate is reduced to 15.315% for dividends due and payable on or before
December 31, 2037. Due to the imposition of a special additional withholding tax (2.1% of the original
withholding tax amount) to secure funds for reconstruction from the Great East Japan Earthquake, the original
withholding tax rate of 15% and 20%, as applicable, has been effectively increased, respectively, to 15.315% and20.42%, during the period beginning on January 1, 2013 and ending on December 31, 2037.
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Under the income tax treaty between the United States and Japan, the maximum rate of Japanese
withholding tax which may be imposed on dividends paid to a qualified United States resident eligible to enjoy
treaty benefits that is either a corporation owning, directly or indirectly, less than 10% of the voting stock of aJapanese corporation or an individual is generally reduced to 10% of the gross amount actually distributed,
except where such United States resident conducts business in Japan through a permanent establishment situatedtherein and the holding in respect of which the dividends are paid is effectively connected with such permanentestablishment. Dividends paid to pension funds which are qualified United States residents eligible to enjoy
treaty benefits are exempt from Japanese income taxation by way of withholding or otherwise unless such
dividends are derived from the carrying on of a business, directly or indirectly, by such pension funds. Under
Japanese tax law, any reduced maximum rate applicable under a tax treaty shall be available when suchmaximum rate is below the rate otherwise applicable under the Japanese tax law referred to in the preceding
paragraph with respect to the dividends to be paid by us on shares of our common stock or ADSs. A non-resident
holder of shares of our common stock who is entitled, under any applicable tax treaty, to a reduced rate ofJapanese withholding tax, or exemption therefrom, as the case may be, is required to submit an Application Formfor Income Tax Convention Regarding Relief from Japanese Income Tax and Special Income Tax for
Reconstruction on Dividends (together with any other required forms and documents) in advance, through thewithholding agent, to the relevant tax authority before payment of dividends. A standing proxy for a non-resident
holder may provide such application service. In addition, a certain simplified special filing procedure is available
for non-resident holders to claim treaty benefits of exemption from or reduction of Japanese withholding tax, by
submitting a Special Application Form for Income Tax Convention Regarding Relief from Japanese Income Taxand Special Income Tax for Reconstruction on Dividends of Listed Stocks (together with any other required
forms and documents). With respect to ADSs, this reduced rate or exemption will be applicable to non-resident
holders of ADSs if the depositary or its Agent submits two Application Forms (one before payment of dividends
and the other within eight months after the record date concerning such payment of dividends, together withcertain other documents. To claim this reduced rate or exemption, non-resident holders of ADSs will be required
to file a proof of taxpayer status, residence and beneficial ownership, as applicable, and to provide otherinformation or documents as may be required by the depositary. Non-resident holders who are entitled, under any
applicable tax treaty, to a reduced rate of Japanese withholding tax below the rate otherwise applicable underJapanese tax law, or exemption therefrom, as the case may be, but fail to submit the required application inadvance may nevertheless be entitled to claim a refund from the relevant Japanese tax authority of withholding
taxes withheld in excess of the rate under an applicable tax treaty (if such non-resident holders are entitled to a
reduced treaty rate under the applicable tax treaty) or the full amount of tax withheld (if such non-resident
holders are entitled to an exemption under the applicable tax treaty), as the case may be, by complying with acertain subsequent filing procedure.
We do not assume any responsibility to ensure withholding at the reduced rate, or exemption therefrom, for
non-resident holders who would be so eligible under an applicable tax treaty but where the required proceduresas stated above are not followed.
Gains derived from the sale or other disposition of shares of our common stock or ADSs outside Japan by anon-resident holder, who is a portfolio investor, are not, in general, subject to Japanese income tax or corporationtax.
Any deposits or withdrawals of shares of our common stock by a non-resident holder in exchange for ADSs
are, in general, not subject to Japanese income or corporation tax.
Japanese inheritance and gift taxes, at progressive rates, may be payable by an individual who has acquired
our shares of our common stock or ADSs from an individual, as a legatee, heir or donee, even if none of theacquiring individual, the decedent or the donor is a Japanese resident.

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U.S. Taxation
The following sets forth the material United States federal income tax consequences of the ownership ofshares and ADSs as of the date hereof. The discussion set forth below is applicable to U.S. holders (as defined
below) (i) who are residents of the United States for purposes of the current income tax treaty between Japan andthe United States (the “Treaty”), (ii) whose shares or ADSs are, for purposes of the Treaty, neither effectively
connected with nor attributable to a permanent establishment in Japan and (iii) who otherwise qualify for the full
benefits of the Treaty.
The following summary is not a complete analysis or description of all potential U.S. federal income tax
consequences to a particular U.S. holder. It does not address all U.S. federal income tax considerations that may
be relevant to all categories of potential purchasers, certain of which (such as banks or other financial
institutions, insurance companies, dealers in securities or currencies, tax-exempt entities, non-U.S. persons,
persons holding a share or an ADS as part of a “straddle,” “hedge,” conversion or integrated transaction,
partnerships or other pass-through entities for U.S. federal income tax purposes, traders in securities who haveelected the mark-to-market method of accounting for their securities, regulated investment companies, real estate
investment trusts, holders whose “functional currency” is not the U.S. dollar, holders liable for alternative
minimum tax and holders of 10% or more of our voting shares) are subject to special tax treatment. Thissummary does not address any foreign, state, local or other tax consequences of investments in our shares or
ADSs.
This summary addresses only shares or ADSs held as capital assets.
As used herein, a “U.S. holder” is a beneficial owner of shares or ADSs, as the case may be, that is, for
U.S. federal income tax purposes:•

an individual citizen or resident of the United States;•

a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created ororganized in or under the laws of the United States or any political subdivision thereof;•an estate, the income of which is subject to U.S. federal income tax regardless of its source; or•a trust if it (1) is subject to the primary supervision of a court within the United States and the control of
one or more U.S. persons as described in Section 7701(a)(30) of the Code or (2) has a valid election in
effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

If a partnership holds shares or ADSs, the tax treatment of a partner will generally depend on the status of
the partner and the activities of the partnership. If you are a partner of a partnership holding shares or ADSs, you
should consult your tax advisor.
The discussion below is based upon the provisions of the Internal Revenue Code of 1986, as amended (the“Code”), and regulations, rulings and judicial decisions thereunder as of the date hereof, and such authorities
may be replaced, revoked or modified so as to result in U.S. federal income tax consequences different fromthose discussed below. In addition, this summary is based, in part, upon representations made by the depositary
to us and assumes that the deposit agreement, and all other related agreements, will be performed in accordancewith their terms.
We urge U.S. holders to consult their own tax advisors concerning the U.S. federal, state and local and othertax consequences to them of the purchase, ownership and disposition of shares or ADSs.
ADSs
If a U.S. holder holds ADSs, for U.S. federal income tax purposes, such holder will generally be treated as
the owner of the underlying shares that are represented by such ADSs. Accordingly, deposits or withdrawals ofshares in exchange for ADSs are not subject to U.S. federal income tax.
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Taxation of Dividends
Subject to the discussion under “—U.S. Taxation—Passive Foreign Investment Company Rules” below, thegross amount of any distribution received with respect to our shares or ADSs (including amounts withheld toreflect Japanese withholding taxes), will be taxable as dividends, to the extent paid out of the current oraccumulated earnings and profits (as determined for U.S. federal income tax purposes). The amount of
distribution of property other than cash will be the fair market value of such property on the date of the
distribution. Such cash or non-cash income, including withheld taxes, will be includable in a U.S. holder’s grossincome as ordinary income on the day actually or constructively received by such U.S. holder in the case ofshares, or by the depositary, in the case of ADSs. Such dividends received by a U.S. holder will not be eligible
for the “dividends-received deduction” allowed to U.S. corporations in respect of dividends received from other
U.S. corporations. To the extent that an amount received by a U.S. holder exceeds such holder’s allocable shareof our current and accumulated earnings and profits, such excess will be applied first to reduce such holder’s tax
basis in its shares or ADSs, thereby increasing the amount of gain or decreasing the amount of loss recognized ona subsequent disposition of the shares or ADSs. Then, to the extent such distribution exceeds such U.S. holder’stax basis, such excess will be treated as capital gain. However, we do not expect to keep earnings and profits inaccordance with U.S. federal income tax principles. Therefore, U.S. holders should expect that a distribution will
generally be treated as a dividend.
The amount of the dividend paid in yen will be the U.S. dollar value of the yen payments received. Thisvalue will be determined at the spot yen/U.S. dollar rate on the date the dividend is received by the depositary inthe case of U.S. holders of ADSs, or by the shareholder in the case of U.S. holders of shares, regardless ofwhether the dividend payment is in fact converted into U.S. dollars at that time. If the yen received as a dividend
are not converted into U.S. dollars on the date of receipt, a U.S. holder will have basis in such yen equal to theirdollar value on the date of receipt, and any foreign currency gains or losses resulting from the conversion of theyen will generally be treated as U.S. source ordinary income or loss.
The maximum rate of withholding tax on dividends paid to you pursuant to the Treaty is 10%. As discussed
under “ —Japanese Taxation” above, if the Japanese statutory rate applicable to you is higher than the maximum
Treaty rate, you will be required to properly demonstrate to the Japanese tax authorities your entitlement to the
reduced withholding rate under the Treaty. Subject to certain limitations, the Japanese tax withheld may becreditable against the U.S. holder’s U.S. federal income tax liability or may be claimed as a deduction from the
U.S. holder’s federal adjusted gross income provided that the U.S. holder elects to deduct all foreign taxes paid in
the same taxable year. For foreign tax credit limitation purposes, the dividend will be income from sources
outside the United States. The limitation on foreign taxes eligible for credit is calculated separately with respect
to specific classes of income. For this purpose, dividends we pay will generally constitute “passive category
income.” Further, in certain circumstances, if a U.S. holder:•

has held shares or ADSs for less than a specified minimum period during which such U.S. holder is notprotected from the risk of loss; or•is obligated to make payments related to the dividends,

such U.S. holder will not be allowed a foreign tax credit for foreign taxes imposed on dividends paid on shares or
ADSs. The rules governing U.S. foreign tax credits are very complex and U.S. holders should consult their tax
advisors regarding the availability of foreign tax credits under their particular circumstances.
With respect to non-corporate U.S. investors, certain dividends received from a qualified foreign
corporation may be subject to reduced rates of taxation. A qualified foreign corporation includes a corporationthat is eligible for the benefits of a comprehensive income tax treaty with the United States which the U.S.
Treasury Department determines to be satisfactory for these purposes and which includes an exchange of
information provision. The U.S. Treasury Department has determined that the Treaty meets these requirements.
In addition, it is expected that we will be eligible for the benefits of the Treaty. A foreign corporation is also158

treated as a qualified foreign corporation with respect to dividends paid by that corporation on shares (or ADSs
backed by such shares) that are readily tradable on an established securities market in the United States. UnitedStates Treasury Department guidance indicates that our ADSs (which are listed on the New York Stock
Exchange), but not the shares, are readily tradable on an established securities market in the United States. Therecan be no assurance that our ADSs will be considered readily tradable on an established securities market in later
years. Non-corporate holders who do not meet a minimum holding period requirement during which they are notprotected from a risk of loss or that elect to treat the dividend income as “investment income” pursuant to
Section 163(d)(4) of the Code will not be eligible for the reduced rates of taxation. In addition, the rate reduction
will not apply to dividends if the recipient of a dividend is obligated to make related payments with respect topositions in substantially similar or related property. This disallowance applies even if the minimum holding
period has been met. U.S. holders should consult their own tax advisors regarding the application of theforegoing rules to their particular circumstances.
Taxation of Capital Gains
Upon a sale or other disposition of shares or ADSs, a U.S. holder will recognize gain or loss in an amountequal to the difference between the U.S. dollar value of the amount realized and the U.S. holder’s tax basis,
determined in U.S. dollars, in such shares or ADSs. Subject to the discussion under “—U.S. Taxation—Passive
Foreign Investment Company Rules” below, such gain or loss will be capital gain or loss and will be long-term
capital gain or loss if the U.S. holder’s holding period for such shares or ADSs exceeds one year. A U.S. holder’stax basis in its shares or ADSs will generally be the cost to the holder of such shares or ADSs. Any such gain orloss realized by a U.S. holder upon disposal of the shares or ADSs will generally be income or loss from sources
within the United States for foreign tax credit limitation purposes. The deductibility of capital losses is subject tolimitations.
Passive Foreign Investment Company Rules
Based on our past and projected composition of income and valuation of assets, including goodwill, we donot believe that we were a passive foreign investment company (“PFIC”) for our most recent taxable year and do
not expect to become one in the current taxable year or the foreseeable future, although there can be no assurance
in this regard. However, PFIC status is a factual determination that is made annually. Accordingly, it is possiblethat we may become a PFIC in the current or any future taxable year due to changes in valuation or compositionof our income or assets. In addition, this determination is based in part upon certain proposed U.S. Treasury
regulations that are not yet in effect (the “Proposed Regulations”) and are subject to change in the future. The
Proposed Regulations and other administrative pronouncements from the Internal Revenue Service (the “IRS”)
provide special rules for determining the character of income and assets derived in the banking business forpurposes of the PFIC rules. Although we believe we have adopted a reasonable interpretation of the Proposed
Regulations and administrative pronouncements, there can be no assurance that the IRS will follow the sameinterpretation.
In general, a foreign corporation is considered a PFIC for any taxable year if either:•at least 75% of its gross income is passive income; or•at least 50% of the value of its assets is attributable to assets that produce or are held for the productionof passive income.

The 50% of value test is based on the average of the value of our assets for each quarter during the taxable
year. If we own at least 25% by value of another company’s stock, we will be treated, for purposes of the PFIC
rules, as owning the proportionate share of the assets and receiving our proportionate share of the income of thatcompany.

159

If we are a PFIC for any taxable year during which a U.S. holder holds shares or ADSs, the U.S. holder will
be subject to special tax rules with respect to any “excess distribution” that the U.S. holder receives and any gain
the U.S. holder realizes from the sale or other disposition (including a pledge) of shares or ADSs. Additionally,
non-corporate U.S. holders will not be eligible for reduced rates of taxation on any dividends received from us if
we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.
These special tax rules generally will apply even if we cease to be a PFIC in future years. Distributions U.S.
holders receive in a taxable year that are greater than 125% of the average annual distributions they received
during the shorter of the three preceding taxable years or their holding period for shares or ADSs will be treatedas excess distributions. Under these special tax rules:•

the excess distribution or gain will be allocated ratably over the U.S. holder’s holding period for sharesor ADSs;•

the amount allocated to the current taxable year, and any taxable year prior to the first taxable year inwhich we were a PFIC, will be treated as ordinary income; and•the amount allocated to each other year will be subject to tax at the highest tax rate in effect for thatyear, and the interest charge generally applicable to underpayments of tax will be imposed on the
resulting tax attributable to each such year.

Alternatively, a U.S. holder could make a mark-to-market election provided that shares or ADSs are
regularly traded on a qualified exchange. Under current law, the mark-to-market election may be available to
U.S. holders of ADSs because the ADSs are listed on the New York Stock Exchange which constitutes aqualified exchange, although there can be no assurance that the ADSs will be “regularly traded” for purposes ofthe mark-to-market election. Under current law, the mark-to-market election may be available to U.S. holders ofshares because the shares are listed on the Tokyo Stock Exchange, which constitutes a qualified exchange,
although there can be no assurance that the shares will be “regularly traded” for purposes of the mark-to-market
election. U.S. holders should consult their own tax advisors regarding the potential availability and consequencesof a mark-to-market election. In addition, a U.S. holder of shares or ADSs in a PFIC can sometimes avoid therules described above by electing to treat the company as a “qualified electing fund” under Section 1295 of theCode. This option is not available to U.S. holders of shares or ADSs because we do not intend to comply with therequirements necessary to permit U.S. holders to make this election.
If a U.S. holder holds shares or ADSs in any year in which we are classified as a PFIC, such holder may berequired to file IRS Form 8621.
U.S. holders should consult their own tax advisors concerning the determination of our PFIC status and the
U.S. federal income tax consequences of holding shares or ADSs if we are considered a PFIC in any taxable
year.
Information Reporting and Backup Withholding
In general, information reporting requirements will apply to dividends in respect of the shares or ADSs or
the proceeds from the sale, exchange or redemption of the shares or ADSs paid within the United States, and, insome cases, outside of the United States, to you, unless you are an exempt recipient. In addition, backup
withholding tax may apply to those amounts if you fail to provide an accurate taxpayer identification number or
fail either to report interest and dividends required to be shown on your U.S. federal income tax returns or makecertain certifications. The amount of any backup withholding from a payment to you will be allowed as a refundor credit against your U.S. federal income tax liability, provided you furnish the required information to the IRS.
Certain U.S. holders are required to report information with respect to their investment in shares or ADSs
not held in an account maintained by certain financial institutions to the IRS. Investors who fail to report required160

information by attaching a complete IRS Form 8938, Statement of Specified Foreign Financial Assets, on theirtax return for each year in which they hold shares or ADSs could become subject to substantial penalties.
Potential investors are urged to consult with their own tax advisors regarding the possible implications of theserules on their investment in shares or ADSs.
10.F. Dividends and Paying Agents
Not applicable.
10.G. Statement by Experts
Not applicable.
10.H. Documents on Display
We file annual reports on Form 20-F with, and furnish periodic reports on Form 6-K to, the U.S. Securities
and Exchange Commission. These reports, including this annual report on Form 20-F and the exhibits thereto,and other information can be inspected without charge at the Commission’s Public Reference Room at
100 F Street, N.E., Washington, D.C. 20549. You can also obtain copies of such materials by mail, at prescribed
fees, from the Commission’s Public Reference Room or from commercial document retrieval services. You may
obtain information on the operation of the Commission’s Public Reference Room by calling the Securities andExchange Commission in the United States at 1-800-SEC-0330. You can also access to the documents filed via
the Electronic Data Gathering, Analysis, and Retrieval system on the Commission’s website(http://www.sec.gov).
10.I. Subsidiary Information
Not applicable.

161

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Amid the growing diversity and complexity of banking operations, financial institutions are exposed tovarious risks, including credit, market, operations, information technology, legal, settlement and other risks. We
recognize the conducting of operations tailored to the risks and managing such risks as a key issue relating tooverall management. In order to implement our business strategy while maintaining our financial stability, we
maintain comprehensive risk management and control measures. We maintain basic policies for risk management
established by our Board of Directors that are applicable to the entire Mizuho group. These policies clearly
define the kinds of risks to be managed, set forth the organizational structure and provide for the humanresources training necessary for appropriate levels of risk management. The policies also provide for audits tomeasure the effectiveness and suitability of the risk management structure. In line with these basic policies, we
maintain various measures to strengthen and enhance the sophistication of our risk management system. All yen
figures and percentages in this item are truncated. Accordingly, the total of each column of figures may not be
equal to the total of the individual items.
Approach to the Basel Regulatory Framework
Basel III Framework, the regulations for international standards of the health of banks, is being phased infrom 2013, which consists of minimum capital requirements, a leverage ratio and a global liquidity standard.
Basel III is based on the Basel II framework which requires the observance of “three pillars.” “Pillar 1” isminimum requirements relating to risk which should be maintained by banks. “Pillar 2” is the self-disciplined
risk management by financial institutions with a supervisory review process. “Pillar 3” is market discipline
allowing for assessment by the market through appropriate disclosure.
We have been calculating our capital adequacy ratios by applying the advanced internal rating based
approach (the “AIRB”) for the calculation of credit risk from March 31, 2009 and the advanced measurement
approach (the “AMA”) for the calculation of operational risk from September 30, 2009. In Japan, from March 31,
2013, the minimum capital requirements based on Basel III began to be phased in, and we have been calculating
capital adequacy ratios based on the revisions to capital adequacy guidelines published by the Financial Services
Agency. The Basel Committee continues to review the treatments related to capital requirements. We willcomply with new requirements appropriately. We have been identified as a G-SIB by the Financial Stability
Board since November 2015, and the stricter capital requirements began to be phased in from March 31, 2016.
A leverage ratio also has been implemented under “Pillar 3” from March 31, 2015, and we began disclosing
it accordingly. Also a global liquidity standard has been implemented under “Pillar 1” from March 31, 2015 in
Japan, and we have been calculating and disclosing our liquidity coverage ratio pursuant to such standard.
Overview of Risk Management
Risk Management Structure
Each of our subsidiaries adopts appropriate risk management measures for its business based on the size andnature of its risk exposures, while Mizuho Financial Group controls risk management for the Mizuho group as awhole. At Mizuho Financial Group, the Risk Management Committee chaired by the Group Chief Risk Officer
provides integrated monitoring and management of the overall risk for the Mizuho group. The Group Chief Risk
Officer reports the risk management situation to the Board of Directors, the Risk Committee, the Executive
Management Committee and the President & Group CEO, on a regular basis and as needed. Mizuho Financial
Group regularly receives reports and applications concerning the risk management situation from our principal
banking subsidiaries and other core group companies and gives them appropriate instructions concerning risk
management. Our principal banking subsidiaries and other core group companies each maintains its own system
for managing various types of risk, regularly receiving reports on the status of risk at their respective
subsidiaries, and gives them appropriate instructions concerning risk management.
162

Basic Approach
We classify our risk exposures according to the various kinds of risk, including credit risk, market risk,
liquidity risk and operational risk, and manage each type of risk according to its characteristics. In addition to
managing each type of risk individually, we have established a risk management structure to identify andevaluate overall risk and, where necessary, to devise appropriate responses to keep risk within limits that aremanagerially acceptable in both qualitative and quantitative terms. In line with the basic policies relating tooverall risk management laid down by Mizuho Financial Group, companies within the Mizuho group identify
risk broadly and take a proactive and sophisticated approach to risk management, including methodologies for
operations that involve exposures to multiple categories of risk such as settlement and trust businesses.
Risk Capital Allocation
We endeavor to obtain a clear grasp of the group’s overall risk exposure and have implemented measures tokeep such risks within the group’s financial base in accordance with the risk capital allocation framework. Morespecifically, we allocate risk capital to our principal banking subsidiaries, including their respective subsidiaries,
and other core group companies to control risk within the limits set for each company. We also control risk
within managerially acceptable limits by working to ensure that the overall risk we hold on a consolidated basis
does not exceed shareholders’ equity and other measures of financial strength. To ensure the ongoing financial
soundness of Mizuho Financial Group, our principal banking subsidiaries and other core group companies, weregularly monitor the manner in which risk capital is being used in order to obtain a proper grasp of the risk
profile within this framework. Reports are also submitted to the Board of Directors and other committees of eachcompany. Risk capital is allocated to Mizuho Bank, Mizuho Trust & Banking, Mizuho Securities and Mizuho
Americas by risk category, and is further allocated within their respective business units based on establishedframeworks.
As part of our risk capital allocation management, we create multiple risk scenarios common to the group,
based on which we and our principal banking subsidiaries calculate potential losses and risk amount arising fromassumed stress events across all risk types. The calculated losses and risk amount are used for assessing internal
capital adequacy and verifying whether they balance with the group’s capital.
The risk scenarios for stress testing are formulated by taking into account the current economic conditions
and the economic outlook and by assuming historical stress events, etc. from a risk management perspective tomeasure the impacts of stress events by scenario.
(Assessment of Balance between Risk under Stressed Condition and Capital)

1. Development ofStress Scenarios

Current economic conditions, economic outlook, etc.
Occurrence of historical stress events, etc.

Create multiple risk scenarios common to the group

2. Measurement of
Impacts of Stress
Events

3. Analysis and Utilizationof Stress Test Results

Measure the impacts of stress events on the group based on the stressscenarios created
Key items to be calculatedLosses, VAR, etc.

Utilize stress test results for internal capital adequacy assessments,
etc.

163

Credit Risk Management
We define credit risk as the Mizuho group’s exposure to the risk of losses that may be incurred due to a
decline in, or total loss of, the value of assets (including off-balance-sheet instruments), as a result of
deterioration in obligors’ financial position. We have established the methods and structures necessary forgrasping and managing credit risk. Mizuho Financial Group manages credit risk for the Mizuho group as awhole. More specifically, we have adopted two different but mutually complementary approaches in credit risk
management. The first approach is “credit management,” in which we manage the process for each individualtransaction and individual obligor from execution until collection, based on our assessment of the credit qualityof the customer. Through this process, we curb losses in the case of a credit event. The second is “credit portfolio
management,” in which we utilize statistical methods to assess the potential for losses related to credit risk.
Through this process, we identify credit risks and respond appropriately.
Credit Risk Management Structure
Credit Risk Management of the Mizuho Group
Our Board of Directors determines the Mizuho group’s basic matters pertaining to credit risk management.
In addition, the Risk Management Committee of Mizuho Financial Group broadly discusses and coordinates
matters relating to basic policies and operations in connection with credit risk management and matters relatingto credit risk monitoring for the Mizuho group. Under the control of the Group Chief Risk Officer of Mizuho
Financial Group, the Credit Risk Management Department and the Risk Management Department jointly
monitor, analyze and submit suggestions concerning credit risk and formulate and execute plans in connection
with basic matters pertaining to credit risk management.
Credit Risk Management at Our Principal Banking Subsidiaries and Other Core Group Companies
Our principal banking subsidiaries and other core group companies manage their credit risk according to thescale and nature of their exposures in line with basic policies set forth by Mizuho Financial Group. The Board of
Directors of each company determines key matters pertaining to credit risk management.
The business policy committees established respectively by our principal banking subsidiaries are
responsible for discussing and coordinating overall management of their individual credit portfolios andtransaction policies towards obligors. The respective Chief Risk Officers of our principal banking subsidiaries
are responsible for matters relating to planning and implementing credit risk management. The credit risk
management departments of our principal banking subsidiaries are in charge of planning and administering credit
risk management and conducting credit risk measuring and monitoring. The departments regularly present
reports regarding their risk management situation to Mizuho Financial Group. The credit departments of ourprincipal banking subsidiaries determine policies and approve/disapprove individual transactions in terms ofcredit review, credit management and collection from customers in accordance with the lines of authority set
forth respectively by our principal banking subsidiaries. In addition, our principal banking subsidiaries haveestablished internal audit groups that are independent of the business departments in order to ensure appropriate
credit risk management.
Individual Credit Management
Credit Codes
The basic code of conduct for all of our officers and employees engaged in the credit business is set forth inour credit code. Seeking to fulfill the bank’s public and social role, our basic policy for credit business isdetermined in light of fundamental principles focusing on public welfare, safety, growth and profitability.

164Internal Rating System
One of the most important elements of the risk management infrastructure of our principal banking
subsidiaries is the use of an internal rating system that consists of credit ratings and pool allocations. Credit
ratings consist of obligor ratings which represent the level of credit risk of the obligor, and transaction ratings
which represent the possibility of ultimately incurring losses related to each individual claim by taking into
consideration the nature of any collateral or guarantee and the seniority of the claim. In principle, obligor ratings
apply to all obligors and are subject to regular reviews at least once a year to reflect promptly the fiscal period
end financial results of the obligors, as well as special reviews as required whenever a obligor’s credit standing
changes. This enables our principal banking subsidiaries to monitor both individual obligors and the status of theoverall portfolio in a timely fashion. Because we consider obligor ratings to be an initial phase of the selfassessment process regarding the quality of our loans and off-balance-sheet instruments, such obligor ratings areclosely linked to the obligor classifications and are an integral part of the process for determining the provision
for loan losses and charge-offs in our self-assessment of loans and off-balance-sheet instruments.
Pool allocations are applied to small claims that are less than a specified amount by pooling customers andclaims with similar risk characteristics and assessing and managing the risk for each such pool. We efficiently
manage credit risk and credit screening by dispersing a sufficient number of small claims within each pool. We
generally review the appropriateness and effectiveness of our approach to obligor ratings and pool allocations
once a year in accordance with predetermined procedures.
Self-assessment, Provision for Loan Losses and Off-Balance-Sheet Instruments and Charge-Offs
We conduct self-assessment of assets to ascertain the status of assets both as an integral part of credit risk
management and in preparation for appropriate accounting treatment, including provision for loan losses andoff-balance-sheet instruments and charge-offs. During the process of self-assessment, obligors are categorized
into certain groups taking into consideration their financial condition and their ability to make payments, andcredit ratings are assigned to all obligors, in principle, to reflect the extent of their credit risks. The related assets
are then categorized into certain classes based on the risk of impairment. This process allows us to identify andcontrol the actual quality of assets and determine the appropriate accounting treatment, including provision forloan losses and off-balance-sheet instruments and charge-offs. Specifically, the credit risk management
department of each of our principal subsidiaries is responsible for the overall control of the self-assessment ofassets of the respective banking subsidiaries, cooperating with the administrative departments specified for eachtype of asset, including loan portfolios and securities, in executing and managing self-assessments.
Credit Review
Prevention of new impaired loans through routine credit management is important in maintaining the qualityof our overall loan assets. Credit review involves analysis and screening of each potential transaction within therelevant business department. In case the screening exceeds the authority of the department, the credit group at
headquarters carries out the review. The credit group has specialist departments for different industries, businesssizes and regions, carries out timely and specialized examinations based on the characteristics of the customer
and its market, and provides appropriate advice to the business department. In addition, in the case of obligors
with low credit ratings and high downside risks, the business department and credit department jointly clarify
their credit policy and in appropriate cases assist obligors at an early stage in working towards credit soundness.
Portfolio Management
Risk Measurement
We use statistical methods to manage the possibility of losses by measuring the expected average loss for a
one-year risk horizon (“Expected Loss”) and the maximum loss within a certain confidence interval (“credit
VaR”). The difference between expected loss and credit VaR is measured as the credit risk amount (“Unexpected
Loss”).
165

In establishing transaction spread guidelines for credit transactions, we aim to ensure an appropriate returnfrom the transaction in light of the level of risk by utilizing credit cost data as a reference. Also, we monitor ourcredit portfolio from various perspectives and set guidelines noted below so that losses incurred through ahypothetical realization of the full credit VaR would be within the amount of risk capital and loan loss reserves.
Risk Control Methods
We recognize two types of risk arising from allowing unexpected loss to become too large. One type is“credit concentration risk,” which stems from granting excessive credit to certain individual counterparties or
corporate groups. The other type is “chain-reaction default risk,” which arises from granting excessive credit tocertain, areas, industrial sectors and other groupings. We make appropriate management to control these risks inline with our specific guidelines for each. The individual risk management departments of our principal banking
subsidiaries are responsible for monitoring adherence to these guidelines and reporting to their respective
business policy committees.
Market and Liquidity Risk Management
We define market risk as the risk of losses incurred by the group due to fluctuations in interest rates, stock
prices and foreign exchange rates. Our definition includes the risk of losses incurred when it becomes impossible
to execute transactions in the market because of market confusion or losses arising from transactions at pricesthat are significantly less favorable than usual. We define liquidity risk as the risk of losses arising from funding
difficulties due to a deterioration in our financial position that makes it difficult for us to raise necessary funds orthat forces us to raise funds at significantly higher interest rates than usual. Mizuho Financial Group manages
market and liquidity risk for the Mizuho group as a whole.

166

The following diagram shows our risk management structure:

Mizuho Financial Group
Supervision, Audit

Board of Directors

Risk Committee

Management
Executive Management
Committee

President & Group CEO(Group CEO)Risk Management
Committee

Group Chief Risk Officer(Group CRO)

Risk Management Department

Set risk management policies
Approve limits
Give instructions concerning
risk management

Report the risk management
situation
Apply for limits

Core group companies
MizuhoBank

MizuhoTrust&Banking

MizuhoSecurities

MizuhoAmericasOthercore groupcompanies

Supervision, Audit

Audit & Supervisory
Committee

Board of Directors

Management
Executive Management
Committee

CEO

Balance Sheet & Risk
Management Committee

CRO

Offices

Middle offices

Risk Management Department

Front offices167Market Risk Management StructureMarket Risk Management of the Mizuho Group
Our Board of Directors determines basic matters pertaining to market risk management policies. The Risk
Management Committee of Mizuho Financial Group broadly discusses and coordinates matters relating to basic
policies in connection with market risk management, market risk operations and market risk monitoring. The
Group Chief Risk Officer of Mizuho Financial Group is responsible for matters relating to market risk
management planning and operations.
The Risk Management Department of Mizuho Financial Group is responsible for monitoring market risk,
reports and analyses, proposals, setting limits and guidelines, and formulating and implementing plans relating tomarket risk management. The Risk Management Department assesses and manages the overall market risk of theMizuho group. It also receives reports from our principal banking subsidiaries and other core group companies
on their market risk management that enable it to obtain a solid grasp of the risk situation, submitting reports to
the President & Group CEO on a daily basis and to our Board of Directors and the Executive Management
Committee of Mizuho Financial Group on a regular basis.
To manage market risk, we set limits that correspond to risk capital allocations according to the risk profilesof our principal banking subsidiaries and other core group companies and thereby prevent market risk fromexceeding our ability to withstand losses based on our financial strength represented by capital, etc. The amountof risk capital allocated to market risk corresponds to VaR and additional costs that may arise in order to close
relevant positions. For trading and banking activities, we set limits for VaR and for losses. For banking activities,
we set position limits based on interest rate sensitivity as needed.
These limits are discussed and coordinated by the Risk Management Committee, discussed further by the
Executive Management Committee, then determined by the President & Group CEO. Various factors are taken
into account including business strategies, historical limit usage ratios, risk-bearing capacity (profits, total capitaland risk management systems), profit targets and the market liquidity of the products involved.
Market Risk Management at Our Principal Banking Subsidiaries and Other Core Group Companies
Our principal banking subsidiaries and other core group companies, which account for most of the Mizuho
group’s exposure to market risk, have formulated their basic policies in line with the basic policies determined by
Mizuho Financial Group. Their Boards of Directors determine important matters relating to market risk
management while their Chief Executive Officers are responsible for controlling market risk. Their respective
business policy committees, including their Balance Sheet & Risk Management Committees, are responsible foroverall discussion and coordination of market risk management. Specifically, these committees discuss andcoordinate matters relating to basic asset and liability management policies, risk planning and market risk
management. The Chief Risk Officer of each subsidiary is responsible for matters pertaining to planning andimplementing market risk management. Based on a common Mizuho group risk capital allocation framework, theabove-mentioned companies manage market risk by setting limits according to the risk capital allocated tomarket risk by Mizuho Financial Group.
These companies have established specialized company-wide market risk management departments toprovide integrated monitoring of market risk, submit reports, analyses and proposals, set limits and formulate andimplement plans relating to market risk management. The risk management departments of each company submit
reports on the status of market risk management to their respective Chief Executive Officers and top management
on a daily basis, and to their Board of Directors and Executive Management Committee on a regular basis. They
also provide regular reports to Mizuho Financial Group. To provide a system of mutual checks and balances inmarket operations, they have established middle offices specializing in risk management that are independent of
their front offices, which engage in market transactions, and their back offices, which are responsible for bookentries and settlements. When VaR is not adequate to control risk, the middle offices manage risk using168

additional risk indices, carry out stress tests and set stop loss limits as needed. They monitor their market
liquidity risk for individual financial products in the market while taking turnover and other factors into
consideration.
Value-at-Risk
We use the value-at-risk (the “VaR”) method, supplemented with stress testing, as our principal tool tomeasure market risk. The VaR method measures the maximum possible loss that could be incurred due to market
movements within a certain time period (or holding period) and degree of probability (or confidence interval).
Trading Activities
VaR related to our trading activities is based on the following:•

historical simulation method;•

confidence interval: one-tailed 99.0%;•

holding period of one day; and•historical observation period of three years.

The following tables show the VaR related to our trading activities by risk category for the fiscal years
ended March 31, 2015, 2016 and 2017 and as of March 31, 2015, 2016 and 2017:
Fiscal year ended March 31, 2015
Daily average Maximum Minimum(in billions of yen)

Risk category

As ofMarch 31, 2015

Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1.8
3.0
0.5
0.0

¥2.6
5.8
1.3
0.0

¥1.4
1.6
0.2
0.0

¥1.5
5.6
0.3
0.0

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥4.4

¥7.1

¥3.1

¥6.5

Fiscal year ended March 31, 2016
Daily average Maximum Minimum(in billions of yen)

Risk category

As ofMarch 31, 2016

Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1.8
0.9
0.6
0.0

¥3.7
2.3
2.5
0.0

¥0.6
0.2
0.1
0.0

¥1.1
0.3
0.3
0.0

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2.9

¥4.5

¥1.8

¥2.0

Fiscal year ended March 31, 2017
Daily average Maximum Minimum(in billions of yen)

Risk category

As ofMarch 31, 2017

Interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2.0
0.5
0.4
0.0

¥3.6
1.6
3.2
0.0

¥1.0
0.1
0.1
0.0

¥1.0
0.1
0.9
0.0

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥3.3

¥5.8

¥2.3

¥2.6

169

The following graph shows VaR figures of our trading activities for the fiscal year ended March 31, 2017:(VaR: billions of yen)

7
6
5
4
3
2
1

03/31/2017

03/17/2017

03/03/2017

02/17/2017

02/03/2017

01/20/2017

01/06/2017

12/23/2016

12/09/2016

11/25/2016

11/11/2016

10/28/2016

10/14/2016

09/30/2016

09/16/2016

09/02/2016

08/19/2016

08/05/2016

07/22/2016

07/08/2016

06/24/2016

06/10/2016

05/27/2016

05/13/2016

04/29/2016

04/15/2016

04/01/2016

0

The following table shows VaR figures of our trading activities for the fiscal years indicated:
Fiscal years ended March 31,
2015 2016 2017 Change(in billions of yen)

As of fiscal year end . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maximum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minimum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥6.5
7.1
3.1
4.4

¥2.0
4.5
1.8
2.9

¥2.6
5.8
2.3
3.3

¥0.5
1.3
0.5
0.4

Non-trading Activities
The VaR related to our banking activities is based on the same conditions as those of trading activities, but
the holding period is one month.

170

The following graph shows the VaR related to our banking activities excluding our cross-shareholdings
portfolio for the year ended March 31, 2017:(VaR:billions of yen)

(%)

450

0.5

400

0.4

350

0.3
0.2

300

0.1
250
0.0
200
-0.1
150

-0.2

100

-0.3

50

VaR

-0.4

Interest rate on five-year government bonds

03/31/2017

03/17/2017

03/03/2017

02/17/2017

02/03/2017

01/20/2017

01/06/2017

12/23/2016

12/09/2016

11/25/2016

11/11/2016

10/28/2016

10/14/2016

09/30/2016

09/16/2016

09/02/2016

08/19/2016

08/05/2016

07/22/2016

07/08/2016

06/24/2016

06/10/2016

05/27/2016

05/13/2016

04/29/2016

04/15/2016-0.5
04/01/2016

0

The following table shows the VaR figures relating to our banking activities for the fiscal years indicated:
Fiscal years ended March 31,
2015
2016
2017
Change(in billions of yen)

As of fiscal year end . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥325.6
Maximum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349.0
Minimum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
265.0
Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
307.9¥321.5
360.6
190.0
284.9

¥292.7
397.5
247.4
331.0

¥(28.7)
36.9
57.4
46.1

VaR is a commonly used market risk management technique. However, VaR models have the following
shortcomings:•

By its nature as a statistical approach, VaR estimates possible losses over a certain period at a particularconfidence level using past market movement data. Past market movement, however, is not necessarily
a good indicator of future events, particularly potential future events that are extreme in nature.

•

VaR may underestimate the probability of extreme market movements.

•

The use of a 99.0% confidence level does not take account of, nor makes any statement about, any
losses that might occur beyond this confidence level.

•

VaR does not capture all complex effects of various risk factors on the value of positions and portfolios
and could underestimate potential losses.

We also conduct interest sensitivity analyses of interest risk, our main source of market risk. The following
table shows sensitivity to yen interest risk in our banking activities as of the dates indicated. Interest ratesensitivity (10 BPV) shows how much net present value varies when interest rates rise by 10 basis points (0.1%),
and it explains the impact of interest rate movements on net present value when short- and long-term interest
rates behave differently.

171

2015

As of March 31,
2016
2017
(in billions of yen)

ChangeUp to one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
From one to five years . . . . . . . . . . . . . . . . . . . . . . . . .
Over five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (1)
(35)
(14)

¥ (2)
(21)
(25)

¥ (4)
(8)
(27)

¥ (1)
12
(1)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(51)

¥(50)

¥(40)

¥ 9

Cross-shareholdings Portfolio Management Activities
We take the market risk management approach with use of VaR and risk indices for cross-shareholdings
portfolio management activities as well as for trading activities and non-trading activities. The risk index forcross-shareholdings portfolio management for the fiscal year ended March 31, 2017, consisting of the sensitivityof the cross-shareholdings portfolio to a 1% change in the equity index of TOPIX, was ¥31.7 billion.
Back Testing and Stress Testing
In order to evaluate the effectiveness of market risk measurements calculated using the VaR method, we
carry out regular back tests to compare VaR with assumptive profits and losses. Assumptive profits and losses
accounts for general market risk. The graph below shows daily VaR of trading activities for the fiscal year ended
March 31, 2017 and the corresponding paired distribution of profits and losses. We had zero case where losses
exceeded VaR during the period. In addition, we conduct evaluations of the assumptions related to the VaRmodels. Based on the number of times losses exceeded VaR through back testing and the results of the evaluationof the model assumptions, we will make adjustments to the models as appropriate. We changed our VaR models
from the variance co-variance model to the Historical Simulation method, which has been used since thebeginning of the fiscal year ended March 31,2017. Changes to fundamental portions of the VaR models are
subject to the approval of our Group Chief Risk Officer.

Back Testing for the fiscal year ended March 31, 2017(assumptive profit or loss
:billions of yen)
6
5
4
3
2
1
0
1
2
3
4
5
6
0

1

2

3

4

5

6
(VaR : billions of yen)172

Note:

We conduct our back testing and assess the number of cases where losses exceed VaR based on a
250 business day year. The expected average number of instances where one-day trading losses
exceeded VaR at the 99% confidence level is 2.5.

Because the VaR method is based on statistical assumptions, we conduct stress testing to simulate the levelsof losses that could be incurred in cases where the market moves suddenly to levels that exceed theseassumptions. The stress testing methods we use include the calculation of losses on the basis of the largest
fluctuations occurring over a period of more than five years and the calculation of losses based on market
fluctuations occurring during historical market events. The following table shows the assumed maximum loss
results of stress testing in trading activities using the methods described above:
Assumed maximum loss results

As of March 31, 2017
(in billions of yen)

Assumed maximum loss result calculated by stress testing (holding period: one month) . . . .

¥25.2

Outlier Criteria
As part of the capital adequacy requirements under the Basel Regulatory Framework, the losses arising froma banking book in hypothetical interest rate shock scenarios under certain stress conditions are calculated andcompared with broadly-defined capital. If the interest rate risk of the banking book leads to an economic value
decline of more than 20% of broadly-defined capital, we will be deemed an “outlier” and may be required toreduce the banking book risk or adopt other responses. We measure losses arising from our banking book eachmonth as a part of our stress tests.
The table below shows the results of calculations of losses in the banking book in cases where interest rate
fluctuations occur under stress conditions. The results of calculations of losses in the banking book show thatthey are 3.5% of broadly-defined capital. Because the amount of risk on the banking book is therefore well underthe 20% threshold and within controllable limits, we do not fall under the “outlier” category.
Results of calculations under the outlier framework

Amount of Broadly-defined Loss ratio tolosscapitalcapital(in billions of yen, except percentages)

As of March 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
As of March 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
As of March 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of yen interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of dollar interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of euro interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥529.2
516.6
361.2
60.4
245.1
17.3

¥ 9,508.4
9,638.6
10,050.9

5.5%
5.3
3.5

Notes:(1) In the above results of calculations of losses, a part of demand deposits without fixed intervals for amending
applicable interest rates is deemed core deposits and is treated accordingly in the calculation.
(2) For the interest rate shock scenario used in connection with the above figures, we generate annual rate
fluctuation data for five years derived from daily raw historical interest rate data of the past six years andthen apply the actual fluctuation data, which show a rise in interest rates, at a 99.0% confidence level to theshock scenario.
Market Risk Equivalent
In order to calculate the amount of capital necessary to meet the capital requirements relating to market risk(the “market risk equivalent”), we apply internal models to calculate general market risk (risks related to factorsthat apply generally to the market, e.g., interest rates, foreign exchange rates) and the standardized measurement
173

method to calculate specific risks (risks other than general market risk, e.g., credit quality and market liquidity of
an individual security or instrument). In addition, our internal models are applied to trading transactions withmarket liquidity based on the relevant holding period.
Under the internal models, the market risk equivalent is expressed as the sum of:•

The higher of (i) VaR on the calculation date and (ii) the average of VaR for the preceding 60 businessdays (including the calculation date) multiplied by a multiplication factor ranging from 3.00 to 4.00 thatis determined based on the number of times VaR is exceeded upon back testing; and•The higher of (i) stressed VaR on the calculation date and (ii) the average of stressed VaR for thepreceding 60 business days (including the calculation date) multiplied by the same multiplication factor
as used in the bullet point above.

The following table shows total market risk equivalent as of the dates indicated calculated using thestandardized measurement method and internal models:
As of March 31,
2016
2017
(in billions of yen)

ChangeCalculated using standardized measurement method . . . . . . . . . . .
Calculated using internal models . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 70.665.0¥103.6
78.9

¥32.9
13.9

Total market risk equivalent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥135.6¥182.6

¥46.9

Note:
VaR and stressed VaR used to calculate market risk equivalent is based on the following:
VaR•

historical simulation method;•

confidence interval: one-tailed 99.0%;•

holding period of 10 days; and•historical observation period of three years.

Stressed VaR•

historical simulation method;•

confidence interval: one-tailed 99.0%;•

holding period of 10 days; and•historical observation period of one year.

174Liquidity Risk Management Structure
Liquidity Risk Management of the Mizuho Group
Our Board of Directors determines basic matters pertaining to liquidity risk management policies. The Risk
Management Committee of Mizuho Financial Group broadly discusses and coordinates matters relating to basic
policies in connection with liquidity risk management, operations, monitoring and proposes responses toemergencies such as sudden market changes.
The Group Chief Risk Officer of Mizuho Financial Group is responsible for matters relating to liquidity risk
management planning and operations. The Risk Management Department of Mizuho Financial Group is
responsible for monitoring liquidity risk, reports and analyses, proposals, and formulating and implementing
plans relating to liquidity risk management.
In addition, the Group Chief Financial Officer of Mizuho Financial Group is additionally responsible formatters relating to planning and running cash flow management operations, and the Financial Planning
Department is responsible for monitoring and adjusting the cash flow management situation and for planning andimplementing cash flow management to maintain appropriate funding liquidity. Reports on the liquidity risk
management are submitted to the Risk Management Committee, the Balance Sheet Management Committee, theExecutive Management Committee and the President & Group CEO on a regular basis.
To manage liquidity risk, we use indices pertaining to cash flow, such as limits on funds raised in the market
that are set based on a number of time horizons. Limits on liquidity risk set for yen and foreign currencies taking
into account characteristics and strategies of each principal banking subsidiary, are discussed and coordinated by
the Risk Management Committee, discussed further by the Executive Management Committee and determinedby the President & Group CEO. In addition, our principal banking subsidiaries set limits on liquidity risk forseveral currencies. Moreover, they are working on measures to reduce their liquidity risk such as enhancing
management related to local currencies.
We have established a group-wide framework of liquidity risk stage such as “Normal,” “Anxious” and“Crisis,” which reflects funding conditions. In addition, we set Early Warning Indicators (“EWIs”) and monitor
on a daily basis to manage liquidity conditions. As EWIs, we select stock prices, credit ratings, amount ofliquidity reserve assets such as Japanese government bonds, our funding situations and so on.
We have established a liquidity contingency funding plan for emergency situations which are deemed to fall
into the “Anxious” or “Crisis.” In emergency situations, we will consider measures such as a reduction in theamount of investments made, an expansion of funding from financial markets and deposits, the sale ofinvestment securities and borrowings from the central bank.
In order to evaluate the sufficiency of liquidity reserve assets and the effectiveness of liquidity contingency
funding plan, we conduct stress testing under market-wide, idiosyncratic and combined scenario. Furthermore,
we utilize stress testing for evaluating appropriateness of our annual funding plan.
Liquidity Risk Management at Our Principal Banking Subsidiaries and Other Core Group Companies
Our principal banking subsidiaries and other core group companies have formulated their basic policies inline with the basic policies determined by Mizuho Financial Group. Their Boards of Directors determine
important matters relating to liquidity risk management while their Chief Executive Officers are responsible forcontrolling liquidity risk. Their respective business policy committees, including their Balance Sheet & Risk
Management Committees, are responsible for overall discussion and coordination of liquidity risk management.
Specifically, these committees discuss and coordinate matters relating to risk planning, cash flow management
planning and propose responses to emergencies such as sudden market changes. The Chief Risk Officer is
responsible for matters relating to liquidity risk management planning and operations and the senior executivesof the asset and liability management and trading units are responsible for matters pertaining to planning andconducting cash flow management.
175

The methodologies used for ensuring precise control of liquidity risk include the formulation ofmanagement indices pertaining to cash flow, such as limits on funds raised in the market that are set based on anumber of time horizons. As with Mizuho Financial Group, the above-mentioned companies have establishedliquidity risk stage, such as “Normal,” “Anxious” and “Crisis,” which reflects funding conditions and haveestablished liquidity contingency funding plan for emergency situations which are deemed to fall into the“Anxious” or “Crisis” categories.
Each subsidiary has adopted stringent controls that call for the submission of reports on liquidity risk
management and cash flow management to their respective business policy committees, including their Balance
Sheet & Risk Management Committees, the Executive Management Committee and the Chief Executive Officerof each subsidiary.

176

Operational Risk Management
We define operational risk as the risk of loss that we may incur resulting from inadequate or failed internal
processes, people and systems or from external events. We recognize that operational risk includes information
technology risk, operations risk, legal risk, human resources risk, tangible asset risk, regulatory change risk andreputational risk. We have determined risk management policies for each kind of risk. Mizuho Bank, Mizuho
Trust & Banking, Mizuho Securities, Trust & Custody Services Bank, Mizuho Americas, etc., respectively
manage operational risk in an appropriate manner pursuant to risk management policies determined by Mizuho
Financial Group.
Mizuho Financial Group, Mizuho Bank, Mizuho Trust & Banking, Mizuho Securities, Trust & Custody
Services Bank, etc., share common rules for data gathering, and we measure operational risk on a regular basis,taking into account possible future loss events and the changes in the business environment and internalmanagement.
We have established and are strengthening management methods and systems to appropriately identify,
assess, measure, monitor and control the operational risks which arise from the growing sophistication anddiversification of financial operations and developments relating to information technology by utilizing control
self-assessments and improving measurement methods.
Definition of Risks and Risk Management Methods
As shown in the table below, we have defined each component of operational risk, and we apply appropriate
risk management methods in accordance with the scale and nature of each risk.
Definition

Information
Technology Risk

Principal Risk Management Methods

Information technology risk (“IT risk”) shallrefer to the risk that problems (e.g.
malfunctions, disruptions, etc.) with thecomputer systems or improper use of thecomputers in these systems, which cause
disruptions of the services provided tocustomers, or have significant impact onsettlement systems, etc., will result in losses
for customers, and the incurrence of losses(tangible or intangible) by our groupcompanies.

•

•

•
•
•

Operations Risk

Risk that customers may suffer service
disruptions, as well as the risk that customers
or the group may incur losses because senior
executives or employees fail to fulfill theirtasks properly, cause accidents or otherwise
act improperly.

•
•
•
•

•

177

Identify and evaluate the risk by setting
specific standards that need to becomplied with and implementing
measures tailored based on evaluation
results to reduce the risk.
Ensure ongoing project management insystems development and quality
control.
Strengthen security to prevent
information leaks.
Strengthen capabilities for rapidly andeffectively dealing with cyberattacks.
Improve effectiveness of emergency
responses by improving backup systems
and holding drills.
Establish clearly defined procedures forhandling operations.
Periodically check the status ofoperational processes.
Conduct training and development
programs by headquarters.
Introduce information technology, officeautomation and centralization for
operations.
Improve the effectiveness of emergency
responses by holding drills.

Definition

Legal Risk

Principal Risk Management Methods

Risk that the group may incur losses due toviolation of laws and regulations, breach ofcontract, entering into improper contracts orother legal factors.

•

•
•
Human
Resources Risk

Tangible Asset
Risk

Regulatory
Change Risk

Risk that the group may incur losses due todrain or loss of personnel, deterioration of
morale, inadequate development of humanresources, inappropriate working schedule,
inappropriate working and safety
environment, inequality or inequity in humanresource management or discriminatory
conduct.

•••

Risk that the group may incur losses fromdamage to tangible assets or a decline in thequality of working environment as a result of
disasters, criminal actions or defects in asset
maintenance.

•

Risk that the group may incur losses due tochanges in various regulations or systems,
such as those related to law, taxation andaccounting.

•

•
•

•

•

•

Reputational
Risk

Risk that the group may incur losses due todamage to our credibility or the value of the“Mizuho” brand when market participants orothers learn about, or the media reports on,
various adverse events, including actual
materialization of risks or false rumors.

••

Review and confirm legal issues,
including the legality of material
decisions, agreements and external
documents, etc.
Collect and distribute legal informationand conduct internal training programs.
Analyze and manage issues related tolawsuits.
Conduct employee satisfaction surveys.
Understand the status of working hours.
Understand the status of vacation days
taken by personnel.
Understand the status of voluntary
resignations.
Understand the status of the stress checksystem.
Manage the planning andimplementation of construction projects
related to the repair and replacement offacilities.
Identify and evaluate the status ofdamage to tangible assets caused bynatural disasters, etc., and respond
appropriately to such damage.
Understand important changes inregulations or systems that havesignificant influence on our business
operations or financial condition in atimely and accurate manner.
Analyze degree of influence ofregulatory changes and establish
countermeasures.
Continuously monitor our regulatorychange risk management mentioned
above.
Establish framework to identify andmanage, on an integrated basis,
information that may have a serious
impact on group management andrespond to such risk in a manner
appropriate to its scale and nature.
Swiftly identify rumors and devise
appropriate responses depending on theurgency and possible impact of thesituation to minimize possible losses.

We also recognize and manage “Information Security Risk” and “Compliance Risk,” which constitute a
combination of more than one of the above components of operational risk, as operational risk.

178

Measurement of operational risk equivalent
Implementation of the AMA
We have adopted the AMA from September 30, 2009, for the calculation of operational risk equivalent inassociation with capital adequacy ratios based on Basel II. However, we use the Basic Indicator Approach forentities that are deemed to be less important in the measurement of operational risk equivalent and for entities
that are preparing to implement the AMA. The measurement results under the AMA are used not only as theoperational risk equivalent in the calculation of capital adequacy ratios but also as Operational VAR for internalrisk management purposes for implementing action plans to reduce operational risk, etc.
Outline of the AMA•

Outline of measurement system
We have established the model by taking account of four elements: internal loss data; external loss data;
scenario analysis and business environment; and internal control factors (BEICFs). We calculate theoperational risk equivalent amount by estimating the maximum loss using a 99.9th percentile one-tailed
confidence interval and a one-year holding period etc., employing both internal loss data (i.e., actuallyexperienced operational loss events) and scenario data to reflect unexperienced potential future loss
events in the measurement.
In the measurement of operational risk equivalent as of March 31, 2017, we did not exclude expected
losses and also did not recognize the risk mitigating impact of insurance. In addition, we did not take
into account the events related to credit risk in measuring operational risk equivalent.

•

Outline of measurement model
Operational risk equivalent is calculated as a simple sum of those related to the seven loss event types
defined by Basel II, large-scale natural disasters and litigation. In the measurement of operational risk
equivalent as of March 31, 2017, we did not reflect the correlation effects among operational risk related
to each of the seven loss event types.

•

Operational risk by the loss event type
Loss Distribution (Compound Poisson Distribution) Approach (LDA) is adopted for the calculation ofoperational risk. LDA is based on the assumption that Poisson Distribution applies to the occurrence
frequency of operational risk events, and loss severity is expressed through a separate distribution.
Operational risk is calculated for each of the seven loss event types employing both internal loss data,
based on our actual experience as operational loss events and scenario data. Scenario data, expressed as
numerical values of occurrence frequency and loss severity, reflects external loss data and BEICFs, inorder to estimate unexperienced potential future loss events (of low frequency and high severity).
“Frequency Distribution” and “Severity Distribution” are estimated employing the above mentioned
internal loss data and scenario data, and Monte-Carlo simulations are then applied to these distributions
to measure operational risk. The detailed steps of creation of scenario data are explained later in“Scenario Analysis.”•

Estimation of “Frequency Distribution” and “Loss Severity Distribution”“Frequency Distribution” is estimated by applying information on occurrence frequency of both internal
loss data and scenario data to Poisson Distribution. “Loss Severity Distribution” is generated as theresult of combining, through a statistical approach (Extreme Value Theory), of the actual distribution forthe low severity distribution portion created by internal loss data and another loss distribution(Log-normal Distribution or Generalized Pareto Distribution) for the high severity distribution portion
created by scenario data.

179

•

Operational risk of large-scale natural disasters
Monte-Carlo simulation is applied to the datasets expressed as a combination of the probability ofoccurrence of large-scale natural disasters and the probable loss amount in case of such occurrence, as
opposed to estimating “Frequency Distribution” and “Loss Severity Distribution.”•

Operational risk of litigation
Each litigation is converted into data according to the profile of the individual litigation to which
Monte-Carlo simulation is applied, as opposed to estimating “Frequency Distribution” and “LossSeverity Distribution.” In the measurement process, we assume that final decisions will be made on all
litigation within one year.

•

Verification
We confirm the appropriateness of the measurement model by verifying it, in principle, semi-annually.

Scenario Analysis•

Outline of scenario analysis
In the process of scenario analysis, scenario data is created as numerical values of occurrence frequency
and loss severity reflecting external loss data and BEICFs, in order to estimate unexperienced potential
future operational risk events (of low frequency and high severity).
As for external loss data, we refer to data publicly reported by domestic and overseas media, and suchdata are reflected in the estimation of occurrence frequency and loss severity distribution in the processof scenario analysis. In addition, BEICFs are utilized as indices to adjust occurrence frequency and loss
severity distribution in the process of scenario analysis.
We categorize scenario analysis into four approaches in accordance with the characteristics of each loss
event type and risk management structures.
Approach

Loss event type(s) to be applied

A

Internal fraud / External fraud / Clients, products and business practices /Execution, delivery and process management
Employment practices and workplace safety
Damage to physical assets
Business disruption and system failure

BCD

At Mizuho Financial Group, loss event types to which Approach A is applied account for a considerable
amount of operational risk. The detailed process of Approach A is explained below as a typical exampleof scenario analysis.
•

Setting units for scenario analysis
In order to ensure completeness and sufficiency, we set units that are commonly applied across group
entities that adopt AMA (the “Group Entities”) by referencing and categorizing risk scenarios
recognized through control self-assessment, internal loss data of the Group Entities and external loss
data, etc. Then each of the Group Entities selects the unit on which scenario analysis is conducted fromthe units established on a groupwide basis in accordance with its business activities and operational risk
profile.

•Estimation of occurrence frequency
Basic occurrence frequency (once a year) is calculated for each scenario analysis unit. If a certain
scenario analysis unit has relevant internal loss data of a pre-determined threshold amount or above, its
basic occurrence frequency is calculated based on such data, and if not, the basic occurrence frequency
180

(the occurrence frequency per year of losses at or above a pre-determined threshold) is calculated withreference to the situation of occurrence of internal loss data of less than the threshold amount and/or
external loss data. The basic occurrence frequency is then adjusted within a pre-determined range for the
purpose of reflecting the most recent BEICFs to determine the final occurrence frequency.
•

Estimation of loss severity distribution
In order to estimate loss severity distribution, we use a pre-determined series of severity ranges. Basicloss severity distribution is calculated for each scenario analysis unit as an occurrence ratio (inpercentile figures) of loss at each severity range when losses at or above a pre-determined thresholdoccurred, with reference to transaction amount data, external loss data, etc. Then the basic severity
distribution is adjusted, if necessary, from the viewpoint of statistical data processing to determine thefinal loss severity distribution.

•

Creation of scenario data
For each scenario analysis unit, scenario data is generated as a series of combinations of occurrence
frequency per year at each severity range, based on the final occurrence frequency and the final loss
severity distribution.

181

Compliance
As the leading Japanese financial services group with a global presence and a broad customer base, we
remain conscious of the importance of our social responsibilities and public mission at all times. We definecompliance as “the strict observance of all laws and regulations and the pursuit of fair and honest corporate
activities that conform to the norms accepted by society” and view ongoing compliance as one of the basic
principles of sound business management. Each of our group companies maintains its own compliance structure
in line with the basic policies established by Mizuho Financial Group.
Compliance Structure
The chief executive officer of Mizuho Financial Group, Mizuho Bank, Mizuho Trust & Banking and
Mizuho Securities each generally oversees compliance matters of their respective companies, and the chief
executive officer, etc., also head their respective compliance committees at which important matters concerningcompliance are discussed. The four companies also have individual compliance divisions under the chiefcompliance officer. These divisions are responsible for compliance planning and implementation and control
overall compliance management at the respective companies. At the level of each organizational unit (such as
branches and divisions) at the four companies, the head of the unit is responsible for guidance andimplementation related to compliance matters within such unit, and the compliance officer or the complianceadministrator at each unit reviews the status of compliance.
Other core group companies have also established compliance structures adapted to the characteristics oftheir respective businesses.
Mizuho Financial Group monitors the status of compliance of the Mizuho group through reports submitted
by our principal banking subsidiaries and other core group companies and adopts appropriate responses whennecessary.
Compliance at subsidiaries of our principal banking subsidiaries and other core group companies ismonitored and managed by their respective parents.
Compliance Activities
We have established the “Mizuho Code of Conduct,” which sets forth clear and concrete standards of ethicalbehavior, and distributed it to all directors, senior management and employees of the Mizuho group so that they
are well aware of its content and act accordingly.
Each of our group companies has also prepared a compliance manual, which serves as a practical guidebook
for rigorous compliance enforcement and clarifies the laws and regulations that the group companies mustobserve in pursuing their business activities and the compliance activities they are required to follow.
We conduct compliance training for directors, senior management and employees so that they are fullyacquainted with the contents of the manual.
We monitor the status of compliance levels through self assessments conducted by individual organizational
units and monitoring conducted by the compliance division of each company.
Every fiscal year, each of our group companies establishes a compliance program, which contains concretemeasures for compliance enforcement such as measures related to the management of the complianceframework, training and assessments. Progress regarding the implementation of the compliance program ismonitored every six months.

182

Internal Audit
Internal audits are designed as an integrated process, independent from other business operations, forevaluating the extent to which internal control achieves its objectives in key areas, including appropriate risk
management, efficient and effective business operations, reliable financial reporting and compliance with laws,
regulations and internal rules. We conduct internal audits from an objective and comprehensive standpoint,
independent of operational reporting lines, and offer advice and remedial recommendations in connection withany problems that may be identified. Through this process, internal audits assist the boards of directors of each of
our group companies to fulfill their managerial duties efficiently and effectively.
In line with the Basic Policy for Internal Audit established by Mizuho Financial Group, our principal
banking subsidiaries and other core group companies conduct internal audits, which include the internal auditingof their respective subsidiaries. In addition, with respect to the management of risks applicable across the Mizuho
group, we coordinate internal audits throughout the group to assess the risk management status of the group as awhole.
Internal Audit Management Structure
Mizuho Financial Group
Our internal audit committee determines all important matters concerning internal audits. The committee ischaired by our President & Group CEO and is independent of our other business operations.
Our internal audit committee monitors and manages internal audits at our principal banking subsidiaries andother core group companies through internal audit reports submitted by such subsidiaries. Our internal audit
committee discusses and makes decisions regarding internal audits at our principal banking subsidiaries and othercore group companies and submits the results, together with the results of their examination of the internal audit
reports, to the Audit Committee and our Board of Directors.
Mizuho Bank and Mizuho Trust & Banking
Mizuho Bank and Mizuho Trust & Banking have also established internal audit committees that are
independent of their other business operations.
Both banks have established internal audit departments and credit review departments (Credit Assessment
and Auditing Office at Mizuho Trust & Banking) to conduct internal audits at their respective domestic andoverseas business offices, head office departments and group companies. Specifically, the internal audit
departments assess the suitability and effectiveness of business activities associated with compliance and risk
management. The credit review departments (Credit Assessment and Auditing Office at Mizuho Trust &Banking) audit credit ratings and the status of credit management in addition to auditing the self-assessment ofassets to verify the accuracy and suitability of matters deemed necessary to assure the soundness of assets.
Other Core Group Companies
Other core group companies have also established effective and efficient internal audit structures adapted tothe characteristics of their respective businesses.

183

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
12.A. Debt Securities
Not applicable.
12.B. Warrants and Rights
Not applicable.
12.C. Other Securities
Not applicable.
12.D. American Depositary Shares
The depositary collects its fees for delivery and surrender of ADSs directly from investors depositing sharesor surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The table below setsout such fees payable to the depositary:
Persons depositing or withdrawing shares must pay:For:

$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)– Execution and delivery of ADRs and the surrenderof ADRs$.02 (or less) per ADS– Any cash distribution to ADS registered holders

A fee equivalent to the fee that would be payable if
securities distributed to you had been shares and theshares had been deposited for issuance of ADSs

– Distribution of securities distributed to holders ofdeposited securities that are distributed by thedepositary to ADS registered holders

Registration or transfer fees

– Transfer and registration of shares on our shareregister to or from the name of the depositary or its
agent when you deposit or withdraw shares

Expenses of the depositary– Cable, telex and facsimile transmissions expenses(as are expressly provided in the deposit agreement)– Converting foreign currency to U.S. dollars

Taxes and other governmental charges– As necessary

Any other charge incurred by the depositary or its agentsin connection with the servicing of the deposited
securities– As necessary

The Bank of New York Mellon (“BNYM”), as depositary, has agreed to reimburse us annually for expenses
related to the administration and maintenance of the depositary receipt facility including, but not limited to,investor relations expenses, legal fees, New York Stock Exchange continue listing fees or any other direct or
non-direct depositary receipt program related expenses. There are limits on the amount of expenses for which thedepositary will reimburse us, and the terms and conditions of the annual reimbursement are subject to bereviewed by us and BNYM on an annual basis. In the fiscal year ended March 31, 2017, the depositary
reimbursed us $75,000 for such expenses.

184

PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIESNone.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE
OF PROCEEDS
None.
ITEM 15. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We carried out an evaluation under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of ourdisclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) asof March 31, 2017. There are inherent limitations to the effectiveness of any system of disclosure controls andprocedures, including the possibility of human error and the circumvention or overriding of the controls andprocedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable, notabsolute, assurance of achieving their control objectives. Also, projections of any evaluation of effectiveness tofuture periods are subject to the risk that controls may become inadequate because of changes in conditions, orthat the degree of compliance with the policies or procedures may deteriorate. Based upon the evaluation referred
to above, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of ourdisclosure controls and procedures as of March 31, 2017 were effective to provide reasonable assurance that
information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. Our internal control overfinancial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting andthe preparation of financial statements for external purposes in accordance with applicable generally accepted
accounting principles. Our internal control over financial reporting includes those policies and procedures that:(i)pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransactions and dispositions of our assets;(ii)

provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles, and that ourreceipts and expenditures are being made only in accordance with authorizations of management anddirectors; and(iii)

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.
Our management evaluated the effectiveness of our internal control over financial reporting as of March 31,2017 based on the criteria established in “Internal Control—Integrated Framework” issued by the Committee of185

Sponsoring Organizations of the Treadway Commission (2013 framework) (COSO). Based on the evaluation,
management has concluded that we maintained effective internal control over financial reporting as of March 31,
2017.
Our independent registered public accounting firm, Ernst & Young ShinNihon LLC has issued an attestation
report on our internal control over financial reporting as of March 31, 2017, which appears on page F-3.
Attestation Report of the Registered Public Accounting Firm
See the attestation report of our independent registered public accounting firm, Ernst & Young ShinNihon
LLC, which appears on page F-3.
Changes in Internal Control over Financial Reporting
During the period covered by this annual report, there were no changes in our internal control over financial
reporting that have materially affected, or are reasonably likely to materially affect, our internal control overfinancial reporting.
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERTOur board of directors has determined that Messrs. Tetsuo Seki, Hirotake Abe, and Nobukatsu Funaki eachqualifies as an “audit committee financial expert” as defined in Item 16A of Form 20-F under the Securities
Exchange Act of 1934, as amended. In addition, all three are determined to be independent as defined under the
New York Stock Exchange (“NYSE”) Corporate Governance Standards.
ITEM 16B. CODE OF ETHICS
Mizuho Financial Group has adopted a code of ethics, which is applicable to all directors and executive
officers, as well as all managers and other employees of the company who engage in financial reporting,accounting or disclosure. The code of ethics is included in this annual report as Exhibit 11.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Fees for Services Provided by Ernst & Young ShinNihon LLC
The aggregate fees billed by Ernst & Young ShinNihon LLC, our independent registered public accounting
firm, and its affiliates, for the fiscal years ended March 31, 2016 and 2017 are presented in the following table:
Fiscal years ended March 31,
2016
2017
(in millions of yen)

Audit fees(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit-related fees(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax fees(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other fees(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥4,608485
131
1¥4,800406
117
42

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥5,225¥5,365

Notes:(1) Audit fees include fees related to the audit of U.S. GAAP financial statements as well as Japanese GAAP
financial statements used for home-country reporting purposes.
(2) Audit-related fees include fees for services relating to agreed-upon procedures on internal controls, due
diligence services related to our securitization business and services related to the implementation ofSection 404 of the Sarbanes-Oxley Act.
186

(3) Tax fees include fees for services relating to the preparation of tax returns and tax advice.
(4) All other fees include fees for services relating to education to improve the financial business knowledge of
our employees.
Pre-Approval Policies and Procedures
We established the pre-approval policies and procedures required by the Sarbanes-Oxley Act on April 1,
2006. Under the procedures, Mizuho Financial Group and its subsidiaries must apply to our audit committee
members for pre-approval before entering into an agreement regarding audit and permitted non-audit services
with Ernst & Young ShinNihon LLC.
We follow two types of pre-approval policies and procedures:
General pre-approval . . . . . . . . . . . .

General pre-approval is required for services which are expected to be
performed during a given fiscal year. Our audit committee reviews the
specific maximum fee amount for new services and the maximum
amount of increase/decrease from previous fee amounts for the same typeof services as those performed in the past and authorizes pre-approval at
the beginning of each fiscal year.

Specific pre-approval . . . . . . . . . . . .

For those services which have not been approved pursuant to the generalpre-approval procedure, specific pre-approval by our audit committee
members is required prior to each engagement. With respect to suchservices, two full-time audit committee members must provide
pre-approval and report such pre-approval at the monthly meeting of theaudit committee.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable187

ITEM 16E. PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS
The following table sets forth purchases of our common stock by us and our affiliated purchasers during the
fiscal year ended March 31, 2017:
Maximum
number of sharesthat may yet bepurchased under
the plansor programs

Total number ofshares purchased

Average pricepaid per share

Total number ofshares purchased
as part of publicly
announced plansor programs

April 1 to April 30, 2016 . . . . . . . . . . . . . . . .
May 1 to May 31, 2016 . . . . . . . . . . . . . . . . .
June 1 to June 30, 2016 . . . . . . . . . . . . . . . . .
July 1 to July 31, 2016 . . . . . . . . . . . . . . . . . .
August 1 to August 31, 2016 . . . . . . . . . . . . .
September 1 to September 30, 2016 . . . . . . . .
October 1 to October 31, 2016 . . . . . . . . . . . .
November 1 to November 30, 2016 . . . . . . . .
December 1 to December 31, 2016 . . . . . . . .
January 1 to January 31, 2017 . . . . . . . . . . . .
February 1 to February 28, 2017 . . . . . . . . . .
March 1 to March 31, 2017 . . . . . . . . . . . . . .

1,422
1,033
3,045
3,304
2,131
1,358
1,518
3,125
7,648
3,516
3,306
3,412

¥161.1
169.0
162.4
155.6
165.3
176.8
169.7
181.2
218.2
212.7
211.0
211.4

—
—
—
—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—
—
—
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .

34,818¥191.4——Note:(1) A total of 34,818 shares were purchased other than through a publicly announced plan or program during
the fiscal year ended March 31, 2017, due to our purchase of shares constituting less than one (1) unit fromregistered holders of shares constituting less than one (1) unit at the current market price of those shares.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
None.
ITEM 16G. CORPORATE GOVERNANCE
Mizuho Financial Group’s corporate governance practices are governed by applicable Japanese laws,
specifically the Companies Act and Financial Instruments and Exchange Act of Japan, and its articles ofincorporation and corporate governance guidelines. The company transformed itself from a Company with
Audit & Supervisory Board to a Company with Three Committees as of June 24, 2014.
Because Mizuho Financial Group’s shares are registered with the U.S. Securities and Exchange Commission
and are listed on the New York Stock Exchange (“NYSE”), the company is also subject to corporate governancerequirements applicable to NYSE-listed foreign private issuers. NYSE-listed companies that are foreign private
issuers meeting certain criteria are permitted to follow home country practices in lieu of certain provisions ofSection 303A, and Mizuho Financial Group is relying on this exemption.
A NYSE-listed foreign private issuer is required to provide to its U.S. investors a brief, general summary of
the significant differences of corporate governance practices that differ from those followed by NYSE-listed U.S.
companies. The following is a summary of the significant ways in which Mizuho Financial Group’s corporate
governance practices differ from NYSE listing standards followed by U.S. companies:•

A NYSE-listed U.S. company is required to have a majority of directors that meet the independence
requirements under Section 303A of the NYSE’s Listed Company Manual. The Companies Act does not188require Mizuho Financial Group to have a majority of “independent” directors on the board; rather, it
requires the company to have a majority of “outside” directors on each of the Nominating Committee,
the Compensation Committee and the Audit Committee, each established as a committee, pursuant to
the requirements that apply to a Company with Three Committees. An outside director is defined under
the Companies Act as a director who meets all of the following requirements: (a) a person who is not
currently, and has not been in the ten years prior to his or her assumption of office as outside director, an
executive director, an executive officer, a manager, or any other type of employee (“Executive Director,
etc.”) of the company or its subsidiaries; (b) if a person has been a non-executive director, an audit &supervisory board member, or an accounting adviser of the company or its subsidiaries within the ten
years prior to his or her assumption of office as outside director, a person who was not an Executive
Director, etc., of the company or its subsidiaries in the ten years prior to his or her assumption of officeas such; (c) a person who is not (i) a person who controls the company (including the company’s parent
company) (“Parent Company, etc.”) and who is a natural person or (ii) a director, an executive officer, amanager or any other type of employee of a Parent Company, etc.; (d) a person who is not an Executive
Director, etc., of another subsidiary of a Parent Company, etc.; and (e) a person who is not a spouse or afamily member within the second degree of kinship of (i) a director, an executive officer, a manager, or
any other type of important employee of the company or (ii) a Parent Company, etc., who is a natural
person. In addition to the requirements under the Companies Act, Mizuho Financial Group’s
independence standards for outside directors set forth additional independence requirements on a
voluntary basis. Such additional requirements include, but are not limited to, restrictions against persons
that are related to a principal business counterparty of Mizuho Financial Group and its Core
Subsidiaries, entities to which Mizuho Financial Group and its Core Subsidiaries are a principal
business counterparty, entities that receive more than a specified amount of donations from Mizuho
Financial Group or its Core Subsidiaries, entities to which directors have been transferred from us, our
accounting auditor, law firms and consulting firms that receive more than a specified amount of feesfrom Mizuho Financial Group or its Core Subsidiaries, as well as persons who otherwise are likely togive rise to consistent substantive conflicts of interest in relation to general shareholders. Mizuho
Financial Group may, however, appoint a person as an outside director who does not satisfy theadditional independence requirements but who it believes to be suitable for the position with sufficient
independence in consideration of such person’s character and insight, provided that it externallyprovides an explanation as to the reason it believes such person qualifies as an outside director with
sufficient independence.
Currently, Mizuho Financial Group has six outside directors among the thirteen directors.
•

A NYSE-listed U.S. company is required to have an audit committee composed entirely of independent
directors. Currently, among the five members of the Audit Committee, three members including the
Chairman are outside directors and two members are internal non-executive directors in compliancewith the requirements under the Companies Act, and all such committee members are independent
under Rule 10A-3 under the U.S. Securities Exchange Act of 1934 with three members qualified asaudit committee financial experts.

•

A NYSE-listed U.S. company is required to have a nominating/corporate governance committee and acompensation committee, both of which must be composed entirely of independent directors. Currently,
the Nominating Committee and the Compensation Committee consist solely of outside directors incompliance with the requirements under the Companies Act.

•A NYSE-listed U.S. company must hold regularly scheduled executive sessions where participants arelimited to non-executive directors. Under the Companies Act, Japanese corporations are not obligated tohold executive sessions where participants are limited to non-executive directors. Mizuho Financial
Group has established the Outside Director Session that consists of all outside directors and thePresident & CEO as a forum for free discussions with an aim to deepen outside directors’ understandingof our group and share the top management’s awareness of issues through communication among189

directors. Among the Outside Director Session meetings, at least one meeting is held where only outside
directors attend to discuss, among others, management issues, operations of the Board of Directors andthe current state of the governance structure.
•

A NYSE-listed U.S. company must adopt corporate governance guidelines and a code of businessconduct and ethics and must post those on its website. While Mizuho Financial Group is not required toadopt such guidelines and code under applicable Japanese laws or the rules of the stock exchange inJapan on which it is listed, the company established in June 2014 and has been updating its corporate
governance guidelines that sets forth the basic policy, framework and governing policies regarding thecorporate governance system in Mizuho Financial Group and also maintains the “Mizuho Code of
Conduct” as its standard for corporate conduct to be observed by the directors, officers and employees.

ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.

190

PART IIIITEM 17. FINANCIAL STATEMENTS
We have elected to provide the financial statements and related information specified in Item 18.
ITEM 18. FINANCIAL STATEMENTS
The information required by this item is set forth in our consolidated financial statements starting on
page F-1 of this annual report.
ITEM 19. EXHIBITS
Exhibit
NumberDescription of Exhibits

1.1

Articles of Incorporation of Mizuho Financial Group, Inc., dated June 23, 2017 (English
Translation)

1.2

Regulations of the Board of Directors of Mizuho Financial Group, Inc., as amended on April 1,2017 (English Translation)

1.3

Share Handling Regulations of Mizuho Financial Group, Inc., dated June 23, 2017 (English
Translation)

2.1

Form of American Depositary Receipt*

2.2

Form of Deposit Agreement among the registrant, The Bank of New York Mellon (formerly The
Bank of New York) as Depositary and all owners and holders from time to time of American
Depositary Receipts issued thereunder*

8

List of significant subsidiaries of Mizuho Financial Group, Inc.—see “Item 4.C. Information on
the Company—Organizational Structure.”

11

Code of Ethics of Mizuho Financial Group, Inc. (English Translation)**

12.1

CEO Certification required by Rule 13a-14(a) (17 CFR 240.13a-14(a)).

12.2

CFO Certification required by Rule 13a-14(a) (17 CFR 240.13a-14(a)).

13.1

Certification required by Rule 13a-14(b) (17 CFR 240.13a-14(b)) and Section 1350 of Chapter 63
of Title 18 of the United States Code (18 U.S.C. 1350).

15Consent of Independent Registered Public Accounting Firm

101.INSXBRL Instance Document

101.SCHXBRL Taxonomy Extension Schema

101.CALXBRL Taxonomy Extension Calculation Linkbase

101.DEFXBRL Taxonomy Extension Definition Linkbase

101.LABXBRL Taxonomy Extension Label Linkbase

101.PREXBRL Taxonomy Extension Presentation Linkbase***

Incorporated by reference to our annual report on Form 20-F (No. 001-33098) filed on July 23, 2015.
Incorporated by reference to our annual report on Form 20-F (No. 001-33098) filed on July 21, 2016.

191

SELECTED STATISTICAL DATA
In preparing the selected statistical data set forth below, foreign activities are defined as business transactions
that involve customers residing outside of Japan. However, as the operations of Mizuho Financial Group, Inc.
and its subsidiaries (“the MHFG Group” or “the Group”) are highly and globally integrated, the MHFG Grouphas made certain estimates and assumptions in allocating assets, liabilities, income and expense between
domestic and foreign operations. The Group considers domestic and foreign activities determined by suchmethods to be representative of the Group’s operations.

A-1

I. Distribution of assets, liabilities and equity; interest rates and interest differential
Average balances of balance sheet items, interest and dividend income, interest expense and average yields andrates
The following tables show the MHFG Group’s average balances of balance sheet items, Interest and dividend
income, Interest expense, average yields on interest-earning assets, and average rates on interest-bearing
liabilities for the fiscal years ended March 31, 2015, 2016 and 2017. Average balances are generally based on adaily average. Month-end or quarter-end averages are used for certain average balances where it is notpracticable to obtain applicable daily averages. The average balances determined by such methods are considered
to be representative of the MHFG Group’s operations.
2015
2016
2017
Interest andInterest andInterest andAverage dividend Average Average dividend Average Average dividend Averagebalance
incomeyield balance
incomeyield balance
incomeyield(in billions of yen, except percentages)
Assets:Interest-earning assets:
Interest-bearing deposits in otherbanks:
Domestic . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . .

15,900
5,689

20
29

0.12%
0.51%

29,485
6,639

30
38

0.10%
0.57%

37,389
7,671

27
48

0.07%
0.63%

Total . . . . . . . . . . . . . . . . . . . . . . .

21,58949

0.23%

36,12468

0.19%

45,06075

0.17%Call loans and funds sold, andreceivables under resale agreements
and securities borrowing
transactions:
Domestic . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . .

4,771
10,862

8
33

0.17%
0.30%

4,309
10,465

10
50

0.22%
0.48%

5,079
9,213

18
79

0.35%
0.85%

Total . . . . . . . . . . . . . . . . . . . . . . .

15,63341

0.26%

14,77460

0.41%

14,29297

0.68%

Trading account assets:
Domestic . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . .

6,755
11,950

32
142

0.47%
1.19%

5,262
11,602

16
135

0.31%
1.16%

4,408
10,335

27
136

0.62%
1.31%

Total . . . . . . . . . . . . . . . . . . . . . . .

18,705174

0.93%

16,864151

0.90%

14,743163

1.11%

Investments:
Domestic . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . .

31,690
2,850

127
79

0.40%
2.77%

25,625
3,058

88
102

0.34%
3.34%

20,357
3,915

78
87

0.38%
2.24%

Total . . . . . . . . . . . . . . . . . . . . . . .

34,540206

0.59%

28,683190

0.66%

24,272165

0.68%

Loans (1):Domestic . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . .

54,207
21,634

593
395

1.09%
1.83%

52,86624,279

565
466

1.07%
1.92%

53,93025,412

510
499

0.95%
1.96%

Total . . . . . . . . . . . . . . . . . . . . . . .

1.34%

79,342

1,009

1.27%

75,841988

1.30%

77,145

1,031

Total interest-earning assets:
Domestic . . . . . . . . . . . . . . . . . . . 113,323
Foreign . . . . . . . . . . . . . . . . . . . . . 52,985

780
678

0.69% 117,547
1.28% 56,043

709
791

0.60% 121,163
1.41% 56,546

660
849

0.54%
1.50%

Total . . . . . . . . . . . . . . . . . . . . . . . 166,308

1,458

0.88% 173,590

1,500

0.86% 177,709

1,509

0.85%

Noninterest-earning assets:
Cash and due from banks . . . . . . . . . . .
Other noninterest-earning assets (2) . . .
Allowance for loan losses . . . . . . . . . .

4,012
19,853(558)

Total noninterest-earning
assets . . . . . . . . . . . . . . . . . . . .

23,307

23,25026,176

Total average assets . . . . . . . . . . . . . . . . . 189,615

196,840

203,885

2,285
21,443(478)

3,312
23,320(456)

Notes:(1) Average balances of loans include all nonaccrual loans. The amortized portion of net loan origination fees (costs) is included in interest
income on loans.
(2) The fair value carrying amounts of derivative contracts are reported in Other noninterest-earning assets.

A-2

Within total average assets, the percentage attributable to foreign activities was 33.0%, 33.2% and 32.7%,
respectively, for the fiscal years ended March 31, 2015, 2016 and 2017.
Averagebalance

2015
Interest
expense2016
Average Average Interest Average Averageratebalance expense
ratebalance(in billions of yen, except percentages)

2017Interest
expenseAveragerate

Liabilities and equity:
Interest-bearing liabilities:
Deposits:
Domestic . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . .

77,12619,801

50
100

0.06%
0.51%

81,09020,958

60
154

0.07%
0.73%

83,29323,173

51
214

0.06%
0.92%

Total . . . . . . . . . . . . . . . . . . . . . .

96,927150

0.15%

102,048

214

0.21%

106,466

265

0.25%

Domestic . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . .

17,342
20,326

24
28

0.14%
0.14%

15,13918,982

22
58

0.15%
0.31%

14,177
17,112

27
109

0.19%
0.63%

Total . . . . . . . . . . . . . . . . . . . . . .

37,66852

0.14%

34,12180

0.24%

31,289136

0.43%

Trading account liabilities:
Domestic . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . .

2,629
1,692

14
17

0.52%
1.05%

2,092
1,195

13
8

0.61%
0.69%

1,697
1,049

14
7

0.82%
0.71%

Total . . . . . . . . . . . . . . . . . . . . . .

4,321

31

0.73%

3,287

21

0.64%

2,746

21

0.78%

Long-term debt:
Domestic . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . .

11,727
268

175
4

1.49%
1.66%

14,236
1,441

176
4

1.23%
0.26%

14,523
655

178
2

1.22%
0.32%

Total . . . . . . . . . . . . . . . . . . . . . .

11,995179

1.49%

15,677180

1.15%

15,178180

1.18%

Total interest-bearing liabilities:
Domestic . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . .

108,824
42,087

263
149

0.24%
0.36%

112,557
42,576

271
224

0.24%
0.53%

113,690
41,989

270
332

0.24%
0.79%

Total . . . . . . . . . . . . . . . . . . . . . .

150,911

412

0.27%

155,133

495

0.32%

155,679

602

0.39%

907

0.46%

Short-term borrowings (1):Noninterest-bearing liabilities (2)....

32,73635,17640,992Equity . . . . . . . . . . . . . . . . . . . . . . . . .

5,968

6,531

7,214

Total average liabilities and equity . . .

189,615

196,840

203,885

Net interest income and averageinterest rate spread . . . . . . . . . . . . .
Net interest income as a percentage of
average total interest-earning
assets . . . . . . . . . . . . . . . . . . . . . . . .

1,046

0.61%

0.63%

1,005

0.54%

0.58%

0.51%

Notes:(1) Short-term borrowings consist of Due to trust accounts, Call money and funds purchased, Payables under repurchase agreements andsecurities lending transactions, and Other short-term borrowings.
(2) The fair value carrying amounts of derivative contracts are reported in Noninterest-bearing liabilities.

Within total average liabilities, which is the total of interest-bearing liabilities and noninterest-bearing liabilities
shown in the above table, the percentage attributable to foreign activities was 28.5%, 28.2% and 28.4%,
respectively, for the fiscal years ended March 31, 2015, 2016 and 2017.

A-3

Analysis of net interest income
The following tables show changes in the MHFG Group’s Interest and dividend income, Interest expense, andNet interest income based on changes in volume and changes in rate for the fiscal year ended March 31, 2016
compared to the fiscal year ended March 31, 2015 and the fiscal year ended March 31, 2017 compared to thefiscal year ended March 31, 2016. Changes attributable to the combined impact of changes in rate and volume
have been allocated proportionately to the changes due to volume changes and changes due to rate changes.
Fiscal year ended March 31, 2016
Fiscal year ended March 31, 2017versusversusfiscal year ended March 31, 2015
fiscal year ended March 31, 2016
Increase (decrease)
Increase (decrease)
due to changes indue to changes in
Net
Net
VolumeYieldchangeVolumeYieldchange(in billions of yen)Interest and dividend income:Interest-bearing deposits in other banks:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

13
5

(3)
4

10
9

6
6

(9)
4

(3)
10

Total . . . . . . . . . . . . . . . . . . . . . . . .

18

1

19

12

(5)

7

Call loans and funds sold, andreceivables under resale agreements
and securities borrowing transactions:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

(1)
(1)

3
18

2
17

2
(6)

6
35

8
29

Total . . . . . . . . . . . . . . . . . . . . . . . .

(2)

21

19

(4)

41

37

Trading account assets:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

(6)
(4)

(10)
(3)

(16)
(7)

(3)
(14)

14
15

11
1

Total . . . . . . . . . . . . . . . . . . . . . . . .

(10)

(13)

(23)

(17)

29

12

Investments:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

(22)
6

(17)
17

(39)
23

(18)
19

8
(34)

(10)
(15)

Total . . . . . . . . . . . . . . . . . . . . . . . .

(16)

—

(16)

1

(26)

(25)

Loans:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

(15)
51

(13)
20

(28)
71

10
22

(65)
11

(55)
33

Total . . . . . . . . . . . . . . . . . . . . . . . .

36

7

43

32

(54)

(22)

Total interest and dividend income:Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

(31)
57

(40)
56

(71)
113

(3)
27

(46)
31

(49)
58

Total . . . . . . . . . . . . . . . . . . . . . . . .

26

16

42

24

(15)

9

A-4

Fiscal year ended March 31, 2016
Fiscal year ended March 31, 2017versusversusfiscal year ended March 31, 2015
fiscal year ended March 31, 2016
Increase (decrease)
Increase (decrease)
due to changes indue to changes in
Net
Net
VolumeRatechangeVolumeRatechange(in billions of yen)Interest expense:
Deposits:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

3
6

7
48

10
54

1
18

(10)
42

(9)
60

Total . . . . . . . . . . . . . . . . . . . . . . . .

9

55

64

19

32

51

Short-term borrowings:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

(3)
(2)

1
32

(2)
30

(1)
(6)

6
57

5
51

Total . . . . . . . . . . . . . . . . . . . . . . . .

(5)

33

28

(7)

63

56

Trading account liabilities:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

(3)
(4)

2
(5)

(1)
(9)

(2)
(1)

3
—

1
(1)

Total . . . . . . . . . . . . . . . . . . . . . . . .

(7)

(3)

(10)

(3)

3

Long-term debt:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

31
3

(30)
(3)

1
—

4
(2)

(2)
—

2
(2)

Total . . . . . . . . . . . . . . . . . . . . . . . .

34

(33)

1

2

(2)

—

Total interest expense:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

28
3

(20)
72

8
75

2
9

(3)
99

(1)
108

Total . . . . . . . . . . . . . . . . . . . . . . . .

31

52

83

11

96

107

Net interest income:Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

(59)
54

(20)
(16)

(79)
38

(5)
18

(43)
(68)

(48)
(50)

Total . . . . . . . . . . . . . . . . . . . . . . . .

(5)

(36)

(41)

13

(111)

(98)

A-5

—

II. Investment portfolio
The following table shows the amortized cost, fair value and net unrealized gains (losses) of available-for-saleand held-to-maturity securities at March 31, 2015, 2016 and 2017:
2015

2016
2017
Net
Net
Net
unrealized
unrealized
unrealized
Amortized Fairgains Amortized Fairgains Amortized Fair
gains
cost
value (losses)
costvalue (losses)
costvalue (losses)(in billions of yen)
Available-for-sale securities:
Domestic:
Japanese government bonds . . . . . . . . . . . .
Agency mortgage-backed securities (1) . . . .
Corporate bonds and other debt
securities . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities (marketable) . . . . . . . . . .

17,391717

17,414734

23
17

15,672751

15,763780

91
29

10,257694

10,263
709

6
15

2,578
1,697

2,597
4,396

19
2,699

2,696
1,610

2,721
3,726

25
2,116

2,597
1,452

2,654
3,722

57
2,270

22,38325,141

2,758

20,72922,9902,261

15,00017,348

2,348

116
962
90

117
966
88

1
4
(2)

436
940
169

438
942
169

2
2
—

1,148
934
139

1,144
935
134

(4)
1
(5)

747
1

758
1

11
—

852
54

859
55

7
1

915
78

917
79

2
1

Total foreign . . . . . . . . . . . . . . . . . . . . . . . .

1,916

1,930

14

2,451

2,463

12

3,214

3,209

(5)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,29927,071

2,772

23,18025,453

2,273

18,214

20,5572,343

Held-to-maturity securities:
Domestic:
Japanese government bonds . . . . . . . . . . . .

4,360

4,389

29

3,760

3,817

57

3,060

3,097

37

Total domestic . . . . . . . . . . . . . . . . . . . . . .

4,360

4,389

29

3,760

3,817

57

3,060

3,097

37

Foreign:
Agency mortgage-backed securities (3) . . . .

1,287

1,289

2

1,059

1,056

(3)

757

750

(7)

Total foreign . . . . . . . . . . . . . . . . . . . . . . . .

1,287

1,289

2

1,059

1,056

(3)

757

750

(7)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,647

5,678

31

4,819

4,873

54

3,817

3,847

30

Total domestic . . . . . . . . . . . . . . . . . . . . . .
Foreign:
U.S. Treasury bonds and federal agency
securities . . . . . . . . . . . . . . . . . . . . . . . . .
Other foreign government bonds . . . . . . . .
Agency mortgage-backed securities (2) . . . .
Corporate bonds and other debt
securities . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities (marketable) . . . . . . . . . .

Notes:(1) All domestic agency mortgage-backed securities are mortgage-backed securities issued by Japan Housing Finance Agency, a Japanese
government-sponsored enterprise.
(2) Foreign agency mortgage-backed securities primarily consist of Government National Mortgage Association (“Ginnie Mae”) securities,
which are guaranteed by the United States government.
(3) All foreign agency mortgage-backed securities presented in the above table are Ginnie Mae securities.

A-6

The following table shows the book values, contractual maturities and weighted average yields ofavailable-for-sale and held-to-maturity debt securities at March 31, 2017. Fair value and amortized cost are thebasis of the book value for available-for-sale and held-to-maturity debt securities, respectively. Weighted average
yields are calculated based on amortized cost for all debt securities.
Maturity
After one year After five years
throughthrough
One year or lessfive years
ten years
After ten years
Total
Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield(in billions of yen, except percentages)
Available-for-sale securities:
Domestic:
Japanese government bonds . . . . . . . . . . .
Agency mortgage-backed securities . . . . .
Corporate bonds and other debt
securities . . . . . . . . . . . . . . . . . . . . . . . .

3,152
—

(0.13)% 5,549——(0.12)% 1,562——(0.02)%——
709—
10,2631.04%
709(0.11)%
1.04%

520

0.24% 1,088

0.34%

0.39%

372

0.83%

2,654

0.39%

674

Total domestic . . . . . . . . . . . . . . . . . . . . . .

3,672(0.07)% 6,637(0.04)% 2,236

0.10% 1,081

0.97% 13,626

0.05%

Foreign:
U.S. Treasury bonds and federal agency
securities . . . . . . . . . . . . . . . . . . . . . . . .
Other foreign government bonds . . . . . . .
Agency mortgage-backed securities . . . . .
Corporate bonds and other debt
securities . . . . . . . . . . . . . . . . . . . . . . . .

1,066
757
—

0.45%
1.62%
—

—
172
—

—
5.73%
—

78
6
—

1.26%
0.43%
—

—
—
134

—
—
2.74%

1,144
935
134

0.50%
2.36%
2.74%

451

1.76%

401

1.17%

56

1.34%

9

0.36%

917

1.46%

573

2.53%

140

1.25%

143

2.58%

Total foreign . . . . . . . . . . . . . . . . . . . . . . .

2,274

1.10%

3,130

1.44%

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,946

0.37% 7,210

0.16% 2,376

0.17% 1,224

1.17% 16,756

0.31%

Held-to-maturity securities:
Domestic:
Japanese government bonds . . . . . . . . . . .

1,100

0.19% 1,480

0.19%

480

0.67%

—

—

3,060

0.27%

0.19% 1,480

0.19%

480

0.67%

—

—

3,060

0.27%

Total domestic . . . . . . . . . . . . . . . . . . . . . .

1,100Foreign:
Agency mortgage-backed securities . . . . .

—

—

—

—

—

—

757

3.73%

757

3.73%

Total foreign . . . . . . . . . . . . . . . . . . . . . . .

—

—

—

—

—

—

757

3.73%

757

3.73%

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,100

0.19%

480

0.67%

757

3.73%

3,817

0.95%

0.19% 1,480

Other than Japanese government bonds, the MHFG Group did not have any securities of individual issuers withrespect to which their aggregate book value exceeded 10% of the Group’s shareholders’ equity at March 31,
2017.
In addition to Available-for-sale securities and Held-to-maturity securities, the MHFG Group’s Investments also
include Other investments. See Note 4 “Investments” to the consolidated financial statements included elsewherein this annual report for information regarding Other investments.

A-7

III. Loan portfolio
Types of loans
The following table shows loans outstanding by domicile and industry of borrower at March 31, 2013, 2014,2015, 2016 and 2017:
2013

2014
2015
2016
(in billions of yen)

2017

Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction and real estate . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transportation and communications . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . . . . . . . . .
Government and public institutions . . . . . . . . . . . . . . . . . . . . .
Other industries (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Individuals:
Mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,079
7,478
3,972
5,356
3,147
3,143
6,907
4,522

8,026
7,205
3,957
5,351
3,247
3,460
6,734
4,983

8,224
7,354
4,273
5,587
3,157
3,853
4,612
5,080

8,345
7,734
4,656
5,409
3,268
3,632
3,395
4,619

8,741
7,654
4,759
5,142
3,491
4,006
8,532
4,427

11,234742

11,187788

11,022848

10,590
924

9,965
940

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

54,58054,93854,01052,57257,657

Foreign:
Commercial and industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . . . . . . . . .
Government and public institutions . . . . . . . . . . . . . . . . . . . . .
Other (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,481
4,089
596
199

12,938
4,610
883
255

16,688
6,077
1,011
426

17,320
6,382
1,175
274

16,872
6,760
960
191

Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,365

18,68624,20225,151

24,783

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Unearned income and deferred loan fees—net . . . . . . . . . . . .

69,945
112

73,624
139

78,212
164

77,723
168

82,440156

Total loans before allowance for loan losses . . . . . . . . . . . . . . . . . .

69,83373,48578,04877,55582,284

Note: Other industries of Domestic and Other of Foreign include trade receivables and lease receivables of
consolidated variable interest entities.
There were no concentrations of loans exceeding 10% of total loans which are not disclosed as a category ofloans in the table above.

A-8

Maturities and sensitivities of loans to changes in interest rates
The following table shows the maturities of loan portfolio by domicile and industry of borrower at March 31,
2017:

One yearor less

Maturity
After one year
throughAfterfive years
five years(in billions of yen)

Total

Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction and real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transportation and communications . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . . . . . . . . . . .
Government and public institutions . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,151
1,581
1,963
2,952
848
1,793
7,738
2,408
1,394

3,370
3,111
2,106
1,628
2,007
1,617
462
1,359
2,325

1,220
2,962
690
562
636
596
332
660
7,186

8,741
7,654
4,759
5,142
3,491
4,006
8,532
4,427
10,905

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,82817,985

14,84457,657

Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11,744

10,6452,394

24,783

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36,572

28,63017,23882,440Foreign:

Of the above loans due after one year, loans which had floating rates and fixed rates at March 31, 2017 were as
follows:(in billions of yen)

Floating rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35,043
10,825

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

45,868A-9

Impaired loans
The MHFG Group considers loans to be impaired when it is probable that the Group will be unable to collect all
the scheduled payments of principal and interest when due according to the contractual terms of the loans. The
Group classifies loans to special attention, intensive control, substantially bankrupt and bankrupt obligors as
impaired loans. Impaired loans include loans past due for 90 days or more and restructured loans that meet thedefinition of troubled debt restructuring in accordance with ASC 310, “Receivables” (“ASC 310”). All of theGroup’s impaired loans are designated as nonaccrual loans. The Group does not have any loans to borrowers thatcause management to have serious doubts as to the ability of such borrowers to comply with the present loan
repayment terms for the periods presented other than those already designated as impaired loans. The following
table shows the distribution of impaired loans at March 31, 2013, 2014, 2015, 2016 and 2017 by domicile andindustry of borrower:
2013

2014
2015
2016
(in billions of yen)

2017

Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction and real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transportation and communications . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

336
249
90
173
59
14
5
235

229
138
79
156
48
11
1
195

480
101
71
150
36
5
1
143

374
77
66
147
29
3
4
123

379
57
66
147
23
6
7
105

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,161

857

987

823

790

Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

303

288

188

167

191

Total impaired loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,464

1,145

1,175

990

981

Foreign:

Had interest on nonaccrual loans been accrued at the original contractual terms, gross interest income on
domestic and foreign nonaccrual loans outstanding during the fiscal year ended March 31, 2017 would have been
¥11 billion and ¥3 billion, respectively. The MHFG group recognized interest income on these domestic andforeign loans of ¥9 billion and ¥2 billion, respectively, in the consolidated statements of income for the fiscal
year ended March 31, 2017.

A-10

Cross-border outstandings
Cross-border outstandings are defined as loans (including accrued interest), acceptances, interest-bearing
deposits with other banks, other interest-bearing investments and any other monetary assets denominated inJapanese yen or other non-local currencies. This cross-border disclosure is based on the reports to the Bank ofJapan required under Japanese foreign exchange-related law. Local currency outstandings are netted out fromcross-border outstandings.
The following table sets forth the cross-border outstandings to borrowers in countries with respect to which thetotal of such outstandings exceeded 0.75% of consolidated total assets at March 31, 2015, 2016 and 2017:
Publicinstitutions% of total
Banks Others
Total
assets(in billions of yen, except percentages)

Undrawn
commitments

2015
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,666
1,206
1,183
108

341
192
294
639

5,338
279
197
767

10,345
1,677
1,674
1,514

5.44%
0.88%
0.88%
0.80%

8,357
316
543
82

2016
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . .
Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,928
1,392
1,276
15
212

261
224
304
264
340

4,352
266
214
1,258
932

8,541
1,882
1,794
1,537
1,484

4.41%
0.97%
0.93%
0.79%
0.77%

8,531
338
540
954
92

2017
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,827
1,243
82

254
190
309

4,950
305
1,332

8,031
1,738
1,723

4.01%
0.87%
0.86%

8,279
833
1,223

A-11

IV. Summary of loan loss experience
The following table shows an analysis of loan loss experience by domicile and industry of borrower for the fiscal
years ended March 31, 2013, 2014, 2015, 2016 and 2017:
2013

2014
2015
2016
(in billions of yen, except percentages)

2017

Allowance for loan losses at beginning of fiscal year . . . . . . .
Provision (credit) for loan losses . . . . . . . . . . . . . . . . . . . . . . .

683
140

773
(126)

626
(60)

520
35

451
38

Charge-offs:
Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction and real estate . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . .
Transportation and communications . . . . . . . . . . . .
Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25
5
10
11
2
17

20
1
3
13
7
13

8
3
2
15
1
10

37
2
4
14
5
8

2
1
3
6
1
7

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

70
25

57
8

39
40

70
42

20
11

Total charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

95

65

79

112

31

Recoveries:
Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction and real estate . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . .
Transportation and communications . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4
8
3
3
1
1

6
5
3
3
3

2
4
2
3
1

2
1
2
8
1

1
2
1
5
4

—

—
1
3

—
—

—
—

4

1
3

2

3

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24
8

24
2

16
7

16
5

16
10

Total recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

32

26

23

21

26

Net charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

63

39

56

91

5

Others (Note).......................................
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . .

13
773

18
626

10
520

(13)
451

(4)
480

Ratio of net charge-offs to average loans outstanding . . . . . .

0.09%

0.05%

0.07%

0.12%

0.01%

Note: Others includes primarily foreign exchange translation.

A-12

—

The following table shows an allocation of the MHFG Group’s allowance for loan losses by domicile andindustry of borrower at March 31, 2013, 2014, 2015, 2016 and 2017:
2013
2014
2015
2016
2017
% of
% of
% of
% of
% of
loans inloans inloans inloans inloans in
each
each
each
each
each
category
category
category
category
category
to total
to total
to total
to total
to total
Amount loans Amount loans Amount loans Amount loans Amount loans(in billions of yen, except percentages)

Domestic:
Manufacturing . . . . . . . . . . . . . .
Construction and real estate . . .
Services . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . .
Transportation andcommunications . . . . . . . . . .
Banks and other financial
institutions . . . . . . . . . . . . . . .
Other industries (Note) . . . . . . . . .
Individuals . . . . . . . . . . . . . . . .
Mortgage loans . . . . . . . . .
Other . . . . . . . . . . . . . . . . .

210
79
35
84

11.55% 177
10.69% 51
5.68% 30
7.66% 65

10.90% 187
9.79% 33
5.37% 26
7.27% 66

10.52% 154
9.40% 25
5.46% 26
7.14% 58

10.74% 201
9.95% 20
5.99% 28
6.96% 63

10.60%
9.28%
5.77%
6.24%

26

4.50% 22

4.41%

14

4.04%

9

4.20%

10

4.23%

28
12
109
86
23

4.49%
16.34%
17.12%
16.06%
1.06%

4.70%
15.92%
16.26%
15.19%
1.07%

18
5
59
51
8

4.93%
12.39%
15.18%
14.09%
1.09%

14
5
42
35
7

4.67%
10.31%
14.82%
13.63%
1.19%

13
6
34
27
7

4.86%
15.72%
13.24%
12.10%
1.14%

Total domestic . . . . . . . . . . . . . . . . .
Total foreign . . . . . . . . . . . . . . . . . . .

583
190

78.03% 466
21.97% 160

74.62% 408
25.38% 112

69.06% 333
30.94% 118

67.64% 375
32.36% 105

69.94%
30.06%

Total allowance for loan losses . . . . .

773

100.00% 626

100.00% 520

100.00% 451

100.00% 480

100.00%

21
5
95
74
21

Note: Other industries includes government and public institutions.

A-13

V. Deposits
The following table shows the average amount of, and the average rate on, the following deposit categories forthe fiscal years ended March 31, 2015, 2016 and 2017:
2015
2016
2017
Average
Average
Average
Average
Average
Averageamountrate
amountrate
amountrate(in billions of yen, except percentages)

Domestic offices:
Noninterest-bearing demand deposits . . . . . . . .
Interest-bearing demand deposits . . . . . . . . . . . .
Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certificates of deposit . . . . . . . . . . . . . . . . . . . .

12,37836,26728,984
11,875

— %
0.02%
0.11%
0.09%

13,26838,92830,658
11,504

— %
0.02%
0.14%
0.08%

17,31048,98627,929
6,378

— %
0.01%
0.16%
0.01%

Foreign offices:
Noninterest-bearing demand deposits . . . . . . . .
Interest-bearing deposits, principally time
deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certificates of deposit . . . . . . . . . . . . . . . . . . . .

1,179

— %

1,429

— %

2,321

— %

13,647
6,154

0.59%
0.31%

16,276
4,682

0.77%
0.60%

18,313
4,860

0.93%
0.91%

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

110,484

0.14% 116,745

0.18% 126,097

0.21%

The total amounts of deposits by foreign depositors in domestic offices at March 31, 2015, 2016 and 2017 were¥871 billion, ¥719 billion and ¥645 billion, respectively.
At March 31, 2017, the balance and remaining maturities of time deposits and certificates of deposit issued bydomestic offices in amounts of ¥10 million (approximately US$90 thousand at the Federal Reserve Bank of New
York’s noon buying rate on March 31, 2017) or more and the balances of these deposits issued by foreign offices
in amounts of US$100,000 or more are shown in the following table:Timedeposits

Domestic offices:
Due in three months or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after three months through six months . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after six months through twelve months . . . . . . . . . . . . . . . . . . . . . . . .
Due after twelve months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Certificates ofdepositTotal(in billions of yen)

9,238
3,525
3,620
1,380

5,337
240
245
55

14,575
3,765
3,865
1,435

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,763
Foreign offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,863

5,877
4,754

23,64019,617

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,631

43,257

A-14

32,626

VI. Short-term borrowings
The following table shows certain additional information with respect to the MHFG Group’s short-termborrowings for the fiscal years ended March 31, 2015, 2016 and 2017:
2015
2016
2017
(in billions of yen, except percentages)

Due to trust accounts:
Average balance outstanding during the fiscal year . . . . . . . . . . . . . . .
Maximum balance outstanding at any month-end during the fiscal
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average interest rate during the fiscal year . . . . . . . . . . . . . .
Weighted average interest rate on balance at end of fiscal year . . . . . .
Call money and funds purchased, and payables under repurchaseagreements and securities lending transactions:Average balance outstanding during the fiscal year . . . . . . . . . . . . . . .
Maximum balance outstanding at any month-end during the fiscal
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average interest rate during the fiscal year . . . . . . . . . . . . . .
Weighted average interest rate on balance at end of fiscal year . . . . . .
Other short-term borrowings:
Average balance outstanding during the fiscal year . . . . . . . . . . . . . . .
Maximum balance outstanding at any month-end during the fiscal
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average interest rate during the fiscal year . . . . . . . . . . . . . .
Weighted average interest rate on balance at end of fiscal year . . . . . .

A-15

726

1,239

3,941

1,257
1,241
0.17%
0.12%

4,467
4,467
0.09%
0.02%

4,123
4,123
0.02%
0.02%

33,93831,00925,62936,53027,1650.13%
0.18%

35,541
22,1990.24%
0.35%

25,96821,144
0.48%
0.58%

3,004

1,873

1,719

6,007
1,583
0.21%
0.25%

2,391
2,080
0.31%
0.43%

2,135
1,477
0.66%
0.91%

MIZUHO FINANCIAL GROUP, INC.
Index to Consolidated Financial Statements
Page

Consolidated Financial Statements of Mizuho Financial Group, Inc. and Subsidiaries
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2
Consolidated Balance Sheets as of March 31, 2016 and 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4
Consolidated Statements of Income for the fiscal years ended March 31, 2015, 2016 and 2017 . . . . . .
F-6
Consolidated Statements of Comprehensive Income for the fiscal years ended March 31, 2015, 2016
and 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-7
Consolidated Statements of Equity for the fiscal years ended March 31, 2015, 2016 and 2017 . . . . . .
F-8
Consolidated Statements of Cash Flows for the fiscal years ended March 31, 2015, 2016 and 2017 . . F-10
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-12

F-1

Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders
of Mizuho Financial Group, Inc.
We have audited the accompanying consolidated balance sheets of Mizuho Financial Group, Inc. and subsidiaries(the “Company”) as of March 31, 2017 and 2016, and the related consolidated statements of income,comprehensive income, equity and cash flows for each of the three years in the period ended March 31, 2017.
These financial statements are the responsibility of the Company’s management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated
financial position of Mizuho Financial Group, Inc. and subsidiaries at March 31, 2017 and 2016, and theconsolidated results of their operations and their cash flows for each of the three years in the period ended
March 31, 2017, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board(United States), Mizuho Financial Group, Inc. and subsidiaries’ internal control over financial reporting as ofMarch 31, 2017, based on criteria established in Internal Control-Integrated Framework issued by the Committeeof Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated July 7, 2017expressed an unqualified opinion thereon.
/s/ Ernst & Young ShinNihon LLC
Tokyo, Japan
July 7, 2017

F-2

Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders
of Mizuho Financial Group, Inc.
We have audited Mizuho Financial Group, Inc. and subsidiaries’ (the “Company”) internal control over financial
reporting as of March 31, 2017, based on criteria established in Internal Control—Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the “COSO
criteria”). The Mizuho Financial Group, Inc. and subsidiaries’ management is responsible for maintaining
effective internal control over financial reporting, and for its assessment of the effectiveness of internal control
over financial reporting included in the accompanying Management’s Annual Report on Internal Control overFinancial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial
reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in all material respects. Our audit
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on theassessed risk, and performing such other procedures as we considered necessary in the circumstances. We believethat our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financial statements in accordancewith generally accepted accounting principles, and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of thecompany’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.
In our opinion, Mizuho Financial Group, Inc. and subsidiaries maintained, in all material respects, effective
internal control over financial reporting as of March 31, 2017, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board(United States), the consolidated balance sheets of Mizuho Financial Group, Inc. and subsidiaries as of March 31,2017 and 2016, and the related consolidated statements of income, comprehensive income, equity and cash flows
for each of the three years in the period ended March 31, 2017 and our report dated July 7, 2017 expressed an
unqualified opinion thereon.
/s/ Ernst & Young ShinNihon LLC
Tokyo, Japan
July 7, 2017

F-3

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSMARCH 31, 2016 AND 2017
2016
2017
(in millions of yen)
Assets:Cash and due from banks (Note 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing deposits in other banks (Note 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call loans and funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables under resale agreements (Note 29) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables under securities borrowing transactions (Note 29) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account assets (including assets pledged that secured parties are permitted to sell or repledge of¥7,020,645 million in 2016 and ¥5,861,942 million in 2017) (Notes 9, 28 and 29) . . . . . . . . . . . . . . . . .
Investments (Notes 4, 9 and 28):
Available-for-sale securities (including assets pledged that secured parties are permitted to sell or
repledge of ¥513,054 million in 2016 and ¥442,775 million in 2017) . . . . . . . . . . . . . . . . . . . . . . . .
Held-to-maturity securities (including assets pledged that secured parties are permitted to sell or
repledge of ¥1,238,965 million in 2016 and ¥1,050,714 million in 2017) . . . . . . . . . . . . . . . . . . . . .
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans (Notes 5, 6, 9 and 28) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,322,597
35,327,408
893,545
7,805,643
3,407,391

1,592,191
45,994,780
1,037,986
8,967,712
3,350,052

30,020,743

24,998,493

25,452,525

20,557,118

4,818,961
613,446
77,555,369(451,247)

3,817,360
595,069
82,283,906(479,673)

Loans, net of allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premises and equipment—net (Note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due from customers on acceptances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill (Note 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets (Note 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets (Note 20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets (Notes 5, 9, 13, 21, 23 and 28) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

77,104,122
1,837,990
109,567
274,226
19,09748,651
57,3494,696,890

81,804,233
2,041,273
184,171
270,694
95,176
94,14763,5204,992,329

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

193,810,151

200,456,304

The following table presents the assets of consolidated variable interest entities (“VIE”s), which are included in
the consolidated balance sheets above. The assets in the table below can be used only to settle obligations ofconsolidated VIEs.
2016
2017
(in millions of yen)
Assets of consolidated VIEs:
Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing deposits in other banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans, net of allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

51,30485,976
1,639,050
40,7322,255,409
620,008

96,07781,8072,099,890
46,1802,149,321
772,290

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,692,479

5,245,565

See the accompanying Notes to the Consolidated Financial Statements.
F-4

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS—(Continued)
MARCH 31, 2016 AND 2017
2016
2017
(in millions of yen)
Liabilities and equity:
Deposits (Notes 9 and 10):
Domestic:
Noninterest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign:
Noninterest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due to trust accounts (Note 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call money and funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under repurchase agreements (Notes 29 and 30) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under securities lending transactions (Notes 29 and 30) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings (Note 12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account liabilities (Notes 28 and 29) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bank acceptances outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities (Note 20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt (including liabilities accounted for at fair value of ¥1,055,626 million in 2016, and¥1,496,488 million in 2017) (Notes 12 and 28) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities (Notes 13, 21, 23, 24 and 28) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,108,032
79,596,483

19,063,774
87,358,504

1,601,417
20,631,790
4,467,305
2,521,009
16,833,263
2,844,653
2,080,039
17,111,142
109,567
96,710201,859
181,441

1,996,450
22,766,225
4,123,088
1,255,172
17,969,941
1,919,249
1,476,612
13,591,740
184,171
73,598140,475
209,309

14,765,527
6,476,723

14,529,414
5,026,525

185,626,960

191,684,247

98,924—

5,703,144
746,785
1,469,308

5,826,149
918,894
1,521,163

Commitments and contingencies (Note 24)
Equity:MHFG shareholders’ equity:
Preferred stock (Note 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock (Note 15)—no par value, authorized 48,000,000,000 shares in 2016 and 2017,and issued 25,030,525,657 shares in 2016, and 25,386,307,945 shares in 2017 . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income, net of tax (Note 17) . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Treasury stock, at cost—Common stock 10,929,211 shares in 2016, and 19,992,754
shares in 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total MHFG shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3,610)(4,849)8,014,551
168,640

8,261,357
510,700

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,183,191

8,772,057

Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

193,810,151

200,456,304

The following table presents the liabilities of consolidated VIEs, which are included in the consolidated balance
sheets above. The creditors or investors of the consolidated VIEs have no recourse to the MHFG Group, except
where the Group provides credit enhancement through guarantees or other means.
2016
2017
(in millions of yen)
Liabilities of consolidated VIEs:
Other short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

292,614—411,679
967,141

60,575
7,723
431,190
1,147,895

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,671,434

1,647,383

See the accompanying Notes to the Consolidated Financial Statements.
F-5

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME
FOR THE FISCAL YEARS ENDED MARCH 31, 2015, 2016 AND 2017
2015
Interest and dividend income:Loans, including fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call loans and funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables under resale agreements and securities borrowing transactions . . . . . . . . . . . . . .
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2016
2017
(in millions of yen)

988,236

1,030,802

1,009,094

130,626
74,673
174,458
7,555
33,37948,732

110,41179,600151,278
6,983
53,007
68,09088,311
77,343
163,114
5,068
91,45374,647

Total interest and dividend income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,457,659

1,500,171

1,509,030

Interest expense:
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call money and funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under repurchase agreements and securities lending transactions . . . . . . . . . . . . . . .
Other short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

149,776
31,402
7,545
36,641
7,490
179,128

213,601
21,031
7,830
66,5796,791
179,575

264,748
21,3993,173
120,578
12,175
179,639

Total interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

411,982

495,407

601,712Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision (credit) for loan losses (Notes 5 and 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,045,677 1,004,764(60,223)
34,560907,318
37,668Net interest income after provision (credit) for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,105,900

970,204

869,650

Noninterest income:Fee and commission income (Note 26) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange gains (losses)—net (Note 27) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account gains (losses)—net (Note 27) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment gains (losses)—net (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings (losses) of equity method investees—net . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on disposal of premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other noninterest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

715,657(34,520)689,959
271,174
17,502
2,754
138,689

742,953
113,553
559,139
263,793
28,96910,223
165,264

746,537
69,453(42,481)333,270
26,785
5,638
228,830

Total noninterest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,801,215

1,883,894

1,368,032

Noninterest expenses:
Salaries and employee benefits (Note 21) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of goodwill (Note 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Occupancy expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fee and commission expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision (credit) for losses on off-balance-sheet instruments (Note 24) . . . . . . . . . . . . . . . . .
Other noninterest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

605,454530,365—
189,004
134,395(2,827)183,071

633,557
548,027
6,222
195,898
146,107(16,447)
144,129

663,166
570,897—
194,955
148,483
19,464160,342

Total noninterest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,639,462

1,657,493

1,757,307

Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense (Note 20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,267,653
437,420

1,196,605
346,542

480,375
91,244

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Net income (loss) attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . .

830,233
27,185850,063(429)

389,131
26,691

Net income attributable to MHFG shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

803,048

850,492

362,440

Earnings per common share (Note 19):
Basic net income per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

32.75(in yen)
34.19

14.33

Diluted net income per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31.64

33.50

14.28

See the accompanying Notes to the Consolidated Financial Statements.
F-6

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE FISCAL YEARS ENDED MARCH 31, 2015, 2016 AND 2017
2015

2016
(in millions of yen)

2017

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

830,233

850,063

Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on available-for-sale securities, net of tax(Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments, net of tax . . . . . . . . . . . . . . . . . .
Pension liability adjustments, net of tax (Note 21) . . . . . . . . . . . . . . . . . . .

622,975
136,299
163,338(338,822) 51,957(123,221) (12,322)(111,599) 11,922

Total other comprehensive income (loss), net of tax . . . . . . . . . . . . . . . . . .

922,612(573,642)

51,557

Total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,752,845
Less: Total comprehensive income (loss) attributable to noncontrollinginterests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26,669276,421440,688(2,373)

26,724

Total comprehensive income attributable to MHFG shareholders . . . . . . . . . . .

278,794

413,964

1,726,176

389,131

Note: The amounts that have been reclassified out of Accumulated other comprehensive income, net of tax into
net income are presented in Note 17 “Accumulated other comprehensive income”.

See the accompanying Notes to the Consolidated Financial Statements.
F-7

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF EQUITY
FOR THE FISCAL YEARS ENDED MARCH 31, 2015, 2016 AND 2017
2015

2016
(in millions of yen)

2017

Preferred stock (Note 14):
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Conversion to common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

312,651(99,530)

213,121(114,197)

98,924(98,924)

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

213,12198,924—

5,489,295

5,590,396

5,703,144

99,530114,197

98,924

864
67
640
—
—
—

772
82
(1,058)—(1,245)—969(56)(1,009)354
23,824(1)

5,590,396

5,703,144

5,826,149

Common stock (Note 15):
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of new shares of common stock due to conversion ofpreferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of new shares of common stock due to exercise of stockacquisition rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains (losses) on disposal of treasury stock . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation related to stock options (Note 22) . . . . . . . .
Performance-based stock compensation program . . . . . . . . . . . . . . . . . .
Change in ownership interests in consolidated subsidiaries . . . . . . . . . .
Cancellation of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings (Accumulated deficit):
Balance at beginning of fiscal year, previously reported . . . . . . . . . . . .
Cumulative effect of change in accounting principles, net of tax(Notes 2 and 25) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of fiscal year, adjusted . . . . . . . . . . . . . . . . . . . . .
Net income attributable to MHFG shareholders . . . . . . . . . . . . . . . . . . .
Dividends declared . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(537,479)

89,432746,785—(537,479)
803,048(176,137)——
89,432
850,492(195,265)
2,126

(329)
746,456
362,440(190,002)—

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

89,432746,785

918,894

1,117,877

2,041,005

1,469,308—
1,117,877
923,128—330
2,041,005 1,469,638(571,697)
51,525

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,041,005

1,469,308

1,521,163

Treasury stock, at cost:
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Disposal of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cancellation of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3,874)
(274)
532
—

(3,616)
(653)
659
—

(3,610)(1,903)663
1

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3,616)(3,610)(4,849)Total MHFG shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,930,338

8,014,551

8,261,357

Accumulated other comprehensive income, net of tax (Note 17):
Balance at beginning of fiscal year, previously reported . . . . . . . . . . . .
Cumulative effect of change in accounting principles(Notes 2 and 25) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of fiscal year, adjusted . . . . . . . . . . . . . . . . . . . . .
Change during year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

See the accompanying Notes to the Consolidated Financial Statements.
F-8

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF EQUITY—(Continued)
FOR THE FISCAL YEARS ENDED MARCH 31, 2015, 2016 AND 20172015

Noncontrolling interests:
Balance at beginning of fiscal year, previously reported . . . . . . . . . . . .
Cumulative effect of change in accounting principles(Notes 2 and 25) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of fiscal year, adjusted . . . . . . . . . . . . . . . . . . . . .
Effect of other increase (decrease) in consolidated subsidiaries . . . . . . .
Dividends paid to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to noncontrolling interests . . . . . . . . . . .
Net unrealized gains (losses) on available-for-sale securities
attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments attributable to noncontrollinginterests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension liability adjustments attributable to noncontrolling interests . .

2016(in millions of yen)2017

242,901

259,506

168,640—
242,901(6,128)(3,936)27,185—259,506(85,809)(2,683)(429)(10,441)
158,199
328,692(2,914)
26,691(1,360)

(674)

29

686
158

(352)
(919)

(62)
65

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

259,506

168,640

510,700

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,189,844

8,183,191

8,772,057

Note: The amounts that have been reclassified out of Accumulated other comprehensive income, net of tax into
net income are presented in Note 17 “Accumulated other comprehensive income”.

See the accompanying Notes to the Consolidated Financial Statements.
F-9

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE FISCAL YEARS ENDED MARCH 31, 2015, 2016 AND 20172015

Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Net income (loss) attributable to noncontrolling interests . . . . . . . . . . . . . .

2016(in millions of yen)

2017

830,233
27,185850,063(429)

389,131
26,691

Net income attributable to MHFG shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash provided by (used in) operating
activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision (credit) for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment losses (gains)—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in losses (earnings) of equity method investees—net . . . . . . . . . . . . . . . . . . . .
Foreign exchange losses (gains)—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in trading account liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in loans held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in accrued income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

803,048

850,492

362,440

166,528(60,223)(271,174)(17,502)357,103
181,990(2,121,400)
1,333,577
56,549(7,531)
87,157
697,804

167,930
34,560(263,793)(28,969)(225,130)
123,125(778,204)
916,958(27,347)(2,441)(26,425)(499,046)

171,20237,668(333,270)(26,785)
22,812(107,432)
4,867,508(3,267,060)(5,574)
7,087
4,485(519,773)

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,205,926

241,710

1,213,308

Cash flows from investing activities:
Proceeds from sales of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from maturities of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in interest-bearing deposits in other banks . . . . . . . . . . . . . . . . . . . . . . . .
Net change in call loans and funds sold, and receivables under resale agreements andsecurities borrowing transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and due from banks acquired in business combination . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flows from financing activities:
Net change in deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in call money and funds purchased, and payables under repurchaseagreements and securities lending transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in due to trust accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in other short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayment of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of treasury stock of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

58,629,117 19,830,288 31,139,716
6,107,552
8,669,730
8,099,488(61,507,248) (25,046,188) (34,137,270)
651,339
197,898
291,782(2,800,196) (1,923,627) (5,606,627)(8,189,150) (7,750,251) (10,688,447)
1,813,089
41,521(419,912)—

385,134
47,506(388,565)—(1,481,661)
12,059(430,913)
301(5,673,888)(5,978,075) (12,801,572)

9,460,669

5,441,731

14,005,565(5,376,701)
499,065(4,480,378)
6,537,703(2,196,492)
891
(1)
6
3
(12)
—
(176,186)(3,936)(3,900,502)
3,226,204
571,901
2,723,168(2,307,082)
1,354
(86)
5
3
(13)
—
(195,283)(2,683)(771,368)(344,217)(589,512)
4,496,041(4,734,010)
3,323
—
6
1
(1,435)(1,696)(190,031)(2,914)4,264,631

5,558,717

11,869,753

Effect of exchange rate changes on cash and due from banks . . . . . . . . . . . . . . . . . . . . . . .

34,758(28,061)(11,895)

Net increase (decrease) in cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and due from banks at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(168,573)
1,696,879(205,709)
1,528,306

269,594
1,322,597

Cash and due from banks at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,528,306

1,322,597

1,592,191

See the accompanying Notes to the Consolidated Financial Statements.
F-10

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS—(Continued)
FOR THE FISCAL YEARS ENDED MARCH 31, 2015, 2016 AND 2017
2015
2016
2017
(in millions of yen)Supplemental disclosure of cash flow information:
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncash investing activities:
Transfer of loans into other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment in capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncash assets acquired and liabilities assumed at fair value in business combination (Note 3):
Noncash assets acquired at fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncash Liabilities assumed at fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

419,070
172,022435,584
269,364

582,947
246,802

2,414
8,184

63,42016,123—
12,467————93,04925,893

See the accompanying Notes to the Consolidated Financial Statements.
F-11

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of presentation and summary of significant accounting policies
Basis of presentation
Mizuho Financial Group, Inc. (“MHFG”) is a joint stock corporation with limited liability under the laws ofJapan. MHFG is a holding company for Mizuho Bank, Ltd. (“MHBK”), Mizuho Trust & Banking Co., Ltd.
(“MHTB”), Mizuho Securities Co., Ltd. (“MHSC”), Trust & Custody Services Bank, Ltd. (“TCSB”), AssetManagement One Co., Ltd. (“Asset Management One”), and other subsidiaries. MHFG, through its subsidiaries(“the MHFG Group”, or “the Group”), provides domestic and international financial services in Japan and othercountries. The MHFG Group has introduced an in-house company system based on its diverse customer
segments as of April 2016. See Note 32 “Business segment information” for further discussion of the Group’s
segment information.
The accompanying consolidated financial statements have been prepared in accordance with the accounting
principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial
statements are stated in Japanese yen, the currency of the country in which MHFG is incorporated and principally
operates.
The accompanying consolidated financial statements include the accounts of MHFG and its subsidiaries.
MHFG’s fiscal year ends on March 31 and the fiscal year of certain subsidiaries ends on December 31. The
necessary adjustments have been made to the consolidated financial statements if significant transactions took
place during the three-month period. When determining whether to consolidate investee entities, the MHFG
Group performed a careful analysis of the facts and circumstances of the particular relationships between the
MHFG Group and the investee entities as well as the ownership of voting shares. The consolidated financial
statements also include the accounts of the VIEs for which MHFG or its subsidiaries have been determined to be
the primary beneficiary in accordance with the Financial Accounting Standards Board (“FASB”) AccountingStandards Codification (“ASC”) 810, “Consolidation” (“ASC 810”). All significant intercompany transactions
and balances have been eliminated upon consolidation. The MHFG Group accounts for investments in entities
over which it has significant influence by using the equity method of accounting. These investments are includedin Other investments and the Group’s proportionate share of income or loss is included in Equity in earnings(losses) of equity method investees—net.
Use of estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management tomake estimates and assumptions that affect reported amounts and related disclosures. Specific areas, among
others, requiring the application of management’s estimates and judgment include assumptions pertaining to theallowance for loan losses, allowance for losses on off-balance-sheet instruments, deferred tax assets, derivative
financial instruments, investments and pension and other employee benefits. Actual results could differ fromestimates and assumptions made.
Definition of cash and due from banks
For purposes of the consolidated statements of cash flows, Cash and due from banks includes cash on hand, cash
items in the process of collection and noninterest-bearing deposits with banks.

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Translation of foreign currency financial statements and foreign currency transactions
Financial statements of overseas entities are prepared using the functional currency of each entity and translated
into Japanese yen for consolidation purposes. Assets and liabilities are translated using the fiscal-year-end
exchange rate of each functional currency, and income and expenses are translated using the average rate of eachfunctional currency for the period.
Foreign currency translation gains and losses related to the financial statements of overseas entities of the MHFG
Group, net of related income tax effects, are credited or charged directly to Foreign currency translation
adjustments, a component of Accumulated other comprehensive income, net of tax (“AOCI”). The tax effects ofgains and losses related to the foreign currency translation of financial statements of overseas entities are notrecognized unless it is apparent that the temporary differences will reverse in the foreseeable future.
Assets and liabilities denominated in foreign currencies are translated into Japanese yen at the fiscal-year-end
foreign exchange rates, and gains and losses resulting from such translation are included in Foreign exchange
gains (losses)—net. Foreign currency denominated income and expenses are translated using the averageexchange rates for the period.
Call loans and call money
Call loans and call money represent lending/borrowing, primarily through the Japanese short-term money
market, to/from other financial institutions such as banks, insurance companies, and securities brokerage houses.
Repurchase and resale agreements, securities lending and borrowing and other secured financing transactions
Securities sold under agreements to repurchase (“repurchase agreements”), securities purchased underagreements to resell (“resale agreements”) and securities lending and borrowing transactions are accounted for as
secured financing or lending transactions when control over the underlying securities is not deemed to be
surrendered by the transferor. Otherwise, they are recorded as sales of securities with related forward repurchasecommitments or purchases of securities with related forward resale commitments in accordance with ASC 860,
“Transfers and Servicing” (“ASC 860”).
Under resale agreements, securities borrowing and certain derivatives transactions, the MHFG Group receives
collateral in the form of securities. In many cases, the MHFG Group is permitted to sell or repledge the securities
obtained as collateral. Disclosures in respect of such collateral are presented in Note 9 “Pledged assets andcollateral”. With respect to repurchase agreements, securities lending, and certain derivative transactions,counterparties may have the right to sell or repledge securities that the MHFG Group has pledged as collateral.
The MHFG Group separately discloses these pledged securities in the consolidated balance sheets.
The MHFG Group monitors credit exposure arising from resale agreements, repurchase agreements, securities
borrowing and securities lending transactions on a daily basis, and additional collateral is obtained from orreturned to counterparties, as appropriate.
Trading securities and trading securities sold, not yet purchased
Trading securities consist of securities and money market instruments that are bought and held principally for the
purpose of reselling in the near term with the objective of generating profits on short-term fluctuations in price.
Trading securities sold, not yet purchased, are securities and money market instruments sold to third parties that
the MHFG Group does not own and is obligated to purchase at a later date to cover the short position. Trading
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
securities and trading securities sold, not yet purchased, are recorded on the trade date. Trading securities andtrading securities sold, not yet purchased, are recorded at fair value in the consolidated balance sheets in Trading
account assets and Trading account liabilities with realized and unrealized gains and losses recorded on a tradedate basis in Trading account gains (losses)—net in the consolidated statements of income. Interest and dividends
on trading securities, including securities sold, not yet purchased, are recorded in Interest and dividend income orInterest expense on an accrual basis.
Investments
Debt securities that the MHFG Group has both the positive intent and ability to hold to maturity are classified as
Held-to-maturity securities and carried at amortized cost. Debt securities that the MHFG Group may not hold tomaturity and any marketable equity securities, other than those classified as trading securities, are classified as
Available-for-sale securities, and are carried at fair value, with unrealized gains and losses reported in AOCI.
The credit component of an other-than-temporary impairment of a debt security is reported in Investment gains(losses)—net, and the noncredit component is reported in Other comprehensive income (loss). See Note 4“Investments” for further discussion of impairment. Interest and dividends, as well as amortization of premiums
and accretion of discounts, are reported in Interest and dividend income. Amortization of premiums and accretionof discounts on debt securities are recognized over their remaining maturities under the interest method. Gains
and losses on disposition of investments are computed using the first-in first-out method for debt securities andthe average method for equity securities, and are recorded on the trade date.
Other investments include marketable and non-marketable equity securities accounted for using the equity
method, marketable and non-marketable investments held by consolidated investment companies carried at fairvalue under specialized industry accounting principles for investment companies, and other non-marketable
equity securities carried at cost, less other-than-temporary impairment, if any.
Derivative financial instruments
Derivative financial instruments are bought and held principally for the purpose of market making for customers,
proprietary trading in order to generate trading revenues and fee income, and also to manage the MHFG Group’s
exposure to interest rate, credit and market risks related to asset and liability management. Such derivative
financial instruments include interest rate, foreign currency, equity, commodity and credit default swap
agreements, options, caps and floors, and financial futures and forward contracts.
Derivatives bought and held for trading purposes are recorded in the consolidated balance sheets at fair value inTrading account assets and Trading account liabilities. The fair values of derivatives in a gain position and a loss
position are reported as Trading account assets and Trading account liabilities, respectively.
Derivatives used for asset and liability management include contracts that qualify for hedge accounting under
ASC 815, “Derivatives and Hedging” (“ASC 815”). To be eligible for hedge accounting, derivative instruments
must be highly effective in achieving offsetting changes in fair values or variable cash flows of the hedged items
attributable to the particular risk being hedged. All qualifying hedging derivatives are valued at fair value andincluded in Trading account assets or Trading account liabilities. Derivatives that do not qualify for hedge
accounting under ASC 815 are treated as trading positions and are accounted for as such. The fair value amounts
recognized for all derivatives are presented on a gross basis and not offset against the amounts recognized for theright to reclaim cash collateral or the obligation to return cash collateral under the master netting agreement withthe same counterparty.
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The fair values of derivative financial instruments are determined based on quoted market prices or broker-dealer
quotes, if available. If not available, the fair values are estimated using quoted market prices for similar
instruments, option or binomial pricing models or a present value cash flow analysis, utilizing current observable
market information, where available. In determining the fair values, the Group considers various factors such as
exchange or over-the-counter market quotes, time value of money and volatility factors for options and warrants,
observed prices for similar or synthetic instruments, and counterparty credit quality including potential exposure.
Changes in the fair values of all derivatives are recorded in earnings, except for derivatives qualifying as net
investment hedges under ASC 815 which are recorded in AOCI. The changes in the fair values of all derivatives
relating to foreign currency exchange rates are included in Foreign exchange gains (losses)—net and Trading
account gains (losses)—net. Other elements of the changes in the fair values, including interest rate, equity andcredit related components, except these of certain credit derivatives hedging the credit risk in the corporate loan
portfolio, are recognized in Trading account gains (losses)—net. The net gain (loss) resulting from changes in thefair values of certain credit derivatives where the Group purchases protection to mitigate its credit risk exposure
related to its corporate loan portfolio is recorded in Other noninterest income (expenses).
Certain financial and hybrid instruments often contain embedded derivative instruments that possess implicit or
explicit contract terms similar to those of a derivative instrument. Such derivative instruments are required to befair-valued separately from the host contracts if they meet the bifurcation criteria of an embedded derivative.
Such criteria include that the entire instrument is not marked to market through earnings, the economic
characteristics and risks of the embedded contract terms are not clearly and closely related to those of the hostcontract and the embedded contract terms would meet the definition of a derivative on a stand-alone basis.
Loans
Loans are generally carried at the principal amount adjusted for unearned income and deferred net nonrefundable
loan fees and costs. Loan origination fees, net of certain direct origination costs are deferred and recognized overthe contractual life of the loan as an adjustment of yield using a method that approximates the interest method.
Interest income on performing loans is accrued and credited to income as it is earned. Unearned income anddiscounts or premiums on purchased loans are deferred and recognized over the life of the loan using a methodthat approximates the interest method.
Loans are considered impaired when, based on current information and events, it is probable that the MHFG
Group will be unable to collect all the scheduled payments of principal and interest when due according to thecontractual terms of the loans. Factors considered by management in determining if a loan is impaired include
delinquency status and the ability of the debtor to make payments of the principal and interest when due.
Impaired loans include loans past due for 90 days or more and restructured loans that meet the definition of atroubled debt restructuring (“TDR”) in accordance with ASC 310, “Receivables” (“ASC 310”).
All of the MHFG Group’s impaired loans are designated as nonaccrual loans and thus interest accruals and theamortization of net origination fees are suspended and capitalized interest is written off. Cash received on
nonaccrual loans is accounted for as a reduction of the loan principal if the ultimate collectibility of the principal
amount is uncertain, otherwise, as interest income. Loans are not restored to accrual status until interest andprincipal payments are current and future payments are reasonably assured. Impaired loans are restored to
non-impaired loans and accrual status, when the MHFG Group determines that the borrower poses no concerns
regarding current certainty of debt fulfillment. In general, such determination is made if the borrower qualifies
for an obligor rating of E2 or above and is not classified as a special attention obligor. With respect to loans
restructured in a TDR, in general, such loans are restored to non-impaired loans, and accrual status, when the
borrower qualifies for an obligor rating of D or above. See Note 5 “Loans” for the definitions of obligor ratings.
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Loans that have been identified for sale are classified as loans held for sale within Other assets and are accounted
for at the lower of cost or fair value on an individual loan basis. If management decides to retain certain loans
held for sale for the foreseeable future or until maturity or payoff, such items are transferred to Loans at thelower of cost or fair value.
Allowance and provision (credit) for loan losses
The MHFG Group maintains an appropriate allowance for loan losses to absorb probable losses inherent in theloan portfolio and makes adjustments to such allowance through Provision (credit) for loan losses in the
consolidated statements of income. Loan principal that management judges to be uncollectible, based on detailed
loan reviews and a credit quality assessment, is charged off against the allowance for loan losses. In general, theMHFG Group charges off loans when the Group determines that the obligor should be classified as substantiallybankrupt or bankrupt. See Note 5 “Loans” for the definitions of obligor categories. Obligors in the retail portfolio
segment are generally determined to be substantially bankrupt when they are past due for more than six months,
and as for other obligors, the Group separately monitors the credit quality of each obligor without using timebased triggers. Subsequent recoveries of previously charged-off loan balances are recorded as an increase to theallowance for loan losses as the recoveries are received.
The credit quality review process and the credit rating process serve as the basis for determining the allowance
for loan losses. Through such processes loans are categorized into groups to reflect the probability of default,
whereby the MHFG Group’s management assesses the ability of borrowers to service their debt, taking into
consideration current financial information, ability to generate cash, historical payment experience, analysis of
relevant industry segments and current trends. In determining the appropriate level of the allowance, the MHFG
Group evaluates the probable loss by category of loan based on its risk type and characteristics.
The allowance for loan losses is determined in accordance with ASC 310 and ASC 450, “Contingencies”(“ASC 450”). The MHFG Group measures the impairment of a loan when it is probable that the Group will be
unable to collect all amounts due according to the contractual terms of the loan agreement, based on (1) the
present value of expected future cash flows, after considering the restructuring effect and subsequent payment
default with respect to TDRs, discounted at the loan’s initial effective interest rate, or (2) the loan’s observable
market price, or (3) the fair value of the collateral if the loan is collateral dependent. The collateral that the Groupobtains for loans consists primarily of real estate or listed securities. In obtaining the collateral, the Groupevaluates the fair value of the collateral and its legal enforceability. The Group also performs subsequent
re-evaluations at least once a year. As it pertains to real estate collateral, valuation is generally performed by anappraising subsidiary which is independent from the Group’s loan origination departments by using generally
accepted valuation techniques such as (1) the replacement cost approach, or (2) the sales comparison approach or(3) the income approach. In the case of large real estate collateral, the Group generally engages third-party
appraisers to perform the valuation. As it pertains to listed securities collateral, observable market prices are usedfor valuation.
The formula allowance is applied to groups of small balance, homogeneous loans that are collectively evaluatedfor impairment and to non-homogeneous loans that have not been identified as impaired. The evaluation of theinherent loss in respect of these loans involves a high degree of uncertainty, subjectivity and judgment because
probable loan losses are not easily identifiable or measurable. In determining the formula allowance, the MHFG
Group therefore relies on a statistical analysis that incorporates loss rates based on its own historical loss
experience and third-party data such as the number of corporate default cases which is updated once a year. In
determining the allowance amount, the Group analyzes (1) the probability of default: (a) by using the mostrecently available data since April 2008 for the fiscal years ended March 31, 2015, 2016 and 2017 for the
F-16

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
corporate portfolio segment, which resulted in using the data for the past seven, eight and nine years,
respectively, and the most recently available data for the past six years for the retail portfolio segment,
respectively, in the case of normal obligors; and (b) by using the most recently available data since April 2002, inthe case of watch obligors; and (2) the loss given default by using the most recently available data for the past six
years. As it pertains to TDR loans in the retail portfolio segment, which are subject to collective evaluation for
impairment, the restructuring itself, as well as subsequent payment defaults, if any, are considered in determining
obligor ratings.
The historical loss rate is adjusted, where appropriate, to reflect current factors, such as general economic andbusiness conditions affecting the key lending areas of the MHFG Group, credit quality trends, specific industry
conditions within portfolio segments, and recent loss experience in particular segments of the portfolio. When
determining the length of the period to calculate the probability of default, the Group considers the uncertainty inthe economic and business conditions. The estimation of the formula allowance is back-tested on a periodic basis
by comparing the allowance with the actual results subsequent to the balance sheet date.
Allowance and provision (credit) for losses on off-balance-sheet instruments
The MHFG Group maintains an allowance for losses on off-balance-sheet credit instruments, such as guarantees,
standby letters of credit, commitments to invest in securities and commitments to extend credit, in the samemanner as the allowance for loan losses. The allowance is recorded in Other liabilities. Net changes in theallowance for losses on off-balance-sheet instruments are accounted for in Provision (credit) for losses on
off-balance-sheet instruments in the consolidated statements of income.
Premises and equipment
Premises and equipment are stated at historical cost, and depreciation and amortization are recorded over theestimated useful lives of the assets, except for leasehold improvements, which are amortized over the shorter ofthe estimated useful lives of the assets or the lease term. Depreciation and amortization are principally computedin accordance with the straight-line method with respect to buildings and leasehold improvements and inaccordance with the declining-balance method with respect to other premises and equipment.
The useful lives of premises and equipment are as follows:
Years

Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment and furniture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3 to 50
2 to 20
3 to 50

Regular repairs and maintenance costs that do not extend the estimated useful life of an asset are charged to
expense as incurred. Upon sale or disposition of premises and equipment, the cost and related accumulated
depreciation or amortization are removed from the accounts, and any gains or losses on disposal are included in
Gains on disposal of premises and equipment or Occupancy expenses.
Impairment of long-lived assets
The MHFG Group’s long-lived assets that are held for use are reviewed periodically for events or changes incircumstances that indicate possible impairment. The Group’s impairment review is based on an undiscounted
cash flow analysis of a group of assets, combined with associated liabilities, at the lowest level for which
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
identifiable cash flows exist. Impairment occurs when the carrying value of the asset group exceeds the future
undiscounted cash flows that the asset group is expected to generate. When impairment is identified, the future
cash flows are then discounted to determine the estimated fair value of the asset group and an impairment charge
is recorded for the difference between the carrying value and the estimated fair value of the asset group. The
long-lived assets to be disposed of by sale are carried at the lower of the carrying amount or fair value, lessestimated cost to sell.
Software
Internal and external costs incurred in connection with developing and obtaining software for internal use during
the application development stage are capitalized. Such costs include salaries and benefits for employees directly
involved with and who devote time to the project, to the extent such time is incurred directly on the internal use
software project. The capitalization of software ceases when the software project has been substantiallycompleted. The capitalized software is amortized on a straight-line basis over the estimated useful life, generally
5 to 10 years. Internal use software is reviewed for impairment when triggering events occur.
Goodwill
Goodwill represents the excess of the total fair value of the acquired company, which consists of theconsideration transferred, the fair value of any interest in the acquiree already held by the acquirer and the fairvalue of any noncontrolling interest in the acquiree over the fair value of net identifiable assets acquired at thedate of acquisition in a business combination. The MHFG Group accounts for goodwill in accordance withASC 350, “Intangibles—Goodwill and Other” (“ASC 350”). Goodwill is recorded at a designated reporting unit
level for the purpose of assessing impairment. An impairment loss is recorded to the extent the carrying amountof goodwill exceeds its estimated fair value.
Intangible assets
Intangible assets having definite useful lives are amortized over their estimated useful lives on either a straightline basis or the method that reflects the pattern in which the economic benefits of the intangible assets are
consumed. Intangible assets acquired in connection with the merger of MHSC and Shinko Securities Co., Ltd.
(“Shinko”) and the integration among asset management companies consist primarily of customer relationshipintangibles, and are amortized over weighted-average amortization periods of 16 years and 16.9 years,
respectively. See Note 3 “Business Combination” for further details of the integration among asset managementcompanies. Intangible assets having indefinite useful lives are not amortized and are subject to impairment tests.
An impairment loss is recorded to the extent that the carrying amount of the indefinite-lived intangible asset
exceeds its estimated fair value. For intangible assets subject to amortization, an impairment loss is recorded if
the carrying amount is not recoverable and exceeds its estimated fair value.
Pension and other employee benefits
MHFG and certain subsidiaries sponsor severance indemnities and pension plans, which provide defined benefits
to retired employees. Periodic expense and accrued liabilities are computed based on the actuarial present valueof benefits, net of investment returns expected from plan assets and their fair values at the balance sheet date. Net
periodic expense is charged to Salaries and employee benefits. Net actuarial gains and losses that arise fromdifferences between actual experience and assumptions are generally amortized over the average remaining
service period of participating employees if they exceed the corridor, which is defined as the greater of 10% ofplan assets or the projected benefit obligation.
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Stock-based compensation
The compensation cost with regard to stock options is measured at fair value using the Black-Scholes option
pricing model.
The compensation cost with regard to the performance-based stock compensation is determined based upon thefair value of the shares of MHFG common stock as of the grant date and is recognized over the three year
deferral period on a straight-line basis.
See Note 22 “Stock-based compensation” for further details of the stock options and the performance-based stockcompensation.
Long-term debt
Premiums, discounts and issuance costs of long-term debt are amortized based on a method that approximates theinterest method over the respective terms of the long-term debt.
Obligations under guarantees
The MHFG Group provides customers with a variety of guarantees and similar arrangements, including standby
letters of credit, financial and performance guarantees, credit protection, and liquidity facilities. The MHFG
Group recognizes guarantee fee income over the guarantee period. The MHFG Group receives such a guarantee
fee at the inception of the guarantee or in installments and, in either case, the present value of the total fees
approximates the fair value of the guarantee.
Fair Value Measurements
The MHFG Group carries certain of its financial assets and liabilities at fair value on a recurring basis. These
financial assets and liabilities are primarily composed of trading account assets, trading account liabilities andavailable-for-sale securities. In addition, the Group measures certain financial assets and liabilities, at fair value
on a non-recurring basis. Those assets and liabilities primarily include items that are measured at the lower ofcost or fair value such as loans held for sale, and items that were initially measured at cost and have been written
down to fair value due to impairments, such as loans and other investments.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date. In accordance with ASC 820, “Fair Value
Measurement” (“ASC 820”), the Group classifies its financial assets and liabilities into the fair value hierarchy(Level 1, 2, and 3). See Note 28 “Fair value” for the detailed definition of each level.
When determining fair value, the MHFG Group considers the principal or most advantageous market in which
the Group would transact and considers assumptions that market participants would use when pricing the asset or
liability. The Group maximizes the use of observable inputs and minimizes the use of unobservable inputs whenmeasuring fair value. See Note 28 “Fair value” for descriptions of valuation methodologies used for its assets andliabilities by product.
Fee and commission income
Fee revenue is recognized when all of the following criteria have been met: persuasive evidence of an agreement
exists, services have been rendered, the price is fixed or determinable, and collectibility is reasonably assured.
Fees in respect of securities-related business and fees on funds transfer and collection services are generally
recognized as revenue when the related services are performed. Fees on credit-related business, excluding loan
origination fees which are deferred and recognized over the loan period as a yield adjustment, are generally
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
recognized either at one time when the service is rendered or over the related transaction period. Fee andcommission income is presented on a gross basis and exclusive of consumption taxes.
Income taxes
Income taxes are accounted for in accordance with ASC 740, “Income Taxes” (“ASC 740”). Deferred income
taxes reflect the net tax effects of (1) temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the corresponding amounts used for income tax purposes, and (2) operating
loss and tax credit carryforwards. A valuation allowance is recorded for any portion of the deferred tax assets
unless it is more likely than not that the deferred tax assets will be realized. Deferred income tax benefit or
expense is recognized for the changes in the net deferred tax asset or liability between periods.
Earnings per common share
Basic earnings per common share are computed by dividing net income attributable to MHFG commonshareholders by the weighted average number of common shares outstanding during the fiscal year. Diluted
earnings per common share reflect the possible exercise of all convertible securities, such as convertible
preferred stock to the extent they are not anti-dilutive. See Note 19 “Earnings per common share” for thecomputation of basic and diluted earnings per common share.
2. Recently issued accounting pronouncements
Recently adopted accounting pronouncements
In June 2013, the FASB issued Accounting Standards Update (“ASU”) No.2013-08, “Financial Services—
Investment Companies (Topic 946)—Amendments to the Scope, Measurement, and Disclosure Requirements”(“ASU No.2013-08”). The ASU changes the approach to the investment company assessment and requires aninvestment company to measure noncontrolling ownership interests in other investment companies at fair value.
The ASU also requires additional disclosures of (a) the fact that the entity is an investment company and isapplying the guidance in ASC 946, “Financial Services—Investment Companies” (“ASC 946”), (b) information
about changes, if any, in an entity’s status as an investment company, and (c) information about financial support
provided or contractually required to be provided by an investment company to any of its investees. The ASU is
effective for an entity’s interim and annual reporting periods in fiscal years that begin after December 15, 2013.
The adoption of ASU No.2013-08 did not have a material impact on the MHFG Group’s consolidated results ofoperations or financial condition.
In June 2014, the FASB issued ASU No.2014-11, “Transfers and Servicing (Topic 860)—Repurchase-to-Maturity
Transactions, Repurchase Financings, and Disclosures” (“ASU No.2014-11”). The ASU changes the accounting for
repurchase-to-maturity transactions to secured borrowing accounting. For repurchase financing arrangements, theASU requires separate accounting for a transfer of a financial asset executed contemporaneously with a repurchaseagreement with the same counterparty, which will result in secured borrowing accounting for the repurchaseagreement. The ASU requires disclosures for certain transactions comprising (1) a transfer of a financial asset
accounted for as a sale and (2) an agreement with the same transferee entered into in contemplation of the initialtransfer that results in the transferor retaining substantially all of the exposure to the economic return on thetransferred financial asset throughout the term of the transaction. The ASU also requires an entity to disclose certain
information, including risks related to collateral pledged, for repurchase agreements, securities lending transactions,and repurchase-to-maturity transactions that are accounted for as secured borrowings. The ASU is effective for the
first interim or annual period beginning after December 15, 2014, except for interim disclosure requirements related

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
to secured borrowings, which are effective for interim periods beginning after March 15, 2015. The adoption of
ASU No.2014-11 did not have a material impact on the MHFG Group’s consolidated results of operations or
financial condition.
In November 2014, the FASB issued ASU No.2014-16, “Derivatives and Hedging (Topic 815)—Determining
Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt
or to Equity” (“ASU No.2014-16”). The ASU clarifies that an entity that issues or invests in a hybrid financial
instrument should determine the nature of the host contract by considering the economic characteristics and risksof the entire hybrid financial instrument, including the embedded derivative feature that is being evaluated forbifurcation. The ASU also clarifies that an entity should assess the substance of the relevant terms and features in
evaluating the nature of a host contract when considering how to weight those terms and features. Specifically,
the assessment of the substance of the relevant terms and features should incorporate a consideration of (1) the
characteristics of the terms and features themselves, (2) the circumstances under which the hybrid financial
instrument was issued or acquired, and (3) the potential outcomes of the hybrid financial instrument, as well as
the likelihood of those potential outcomes. The ASU is effective for fiscal years and interim periods within thosefiscal years, beginning after December 15, 2015. The adoption of ASU No.2014-16 did not have a material
impact on the MHFG Group’s consolidated results of operations or financial condition.
In February 2015, the FASB issued ASU No.2015-02, “Consolidation (Topic 810)—Amendments to theConsolidation Analysis” (“ASU No.2015-02”). The ASU amends the current accounting for consolidation ofcertain legal entities. Specifically the amendments: (1) modify the evaluation of whether limited partnerships andsimilar legal entities are VIEs or voting interest entities, (2) eliminate the presumption that a general partner
should consolidate a limited partnership, (3) affect the consolidation analysis of reporting entities that are
involved with VIEs, particularly those that have fee arrangements and related party relationships, and (4) provide
a scope exception from consolidation guidance for reporting entities with interests in legal entities that are
required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of theInvestment Company Act of 1940 for registered money market funds. On April 1, 2016, the MHFG Group
adopted ASU No.2015-02 using a modified retrospective approach. The adoption of the ASU resulted in adecrease to the beginning balance of Retained earnings of ¥329 million and an increase to the beginning balanceof Accumulated other comprehensive income of ¥330 million, respectively. See Note 25 “Variable interest
entities and securitizations” for further information.
In April 2015, the FASB issued ASU No.2015-03, “Interest—Imputation of Interest (Subtopic 835-30)—
Simplifying the Presentation of Debt Issuance Costs” (“ASU No.2015-03”). The ASU requires that debt issuancecosts related to a recognized debt liability be presented in the balance sheet as a direct deduction from thecarrying amount of that debt liability, consistent with debt discounts. The ASU is effective for financial
statements issued for fiscal years beginning after December 15, 2015 and interim periods within those fiscal
years, and should be applied retrospectively. The adoption of ASU No.2015-03 did not have a material impact on
the MHFG Group’s consolidated results of operations or financial condition. The retrospective adoption of
ASU No.2015-03 resulted in the reduction of Other assets and Long-term debt in the comparative consolidatedbalance sheet.
In May 2015, the FASB issued ASU No.2015-07, “Fair Value Measurement (Topic 820)—Disclosures for
Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)” (“ASU No.2015-07”).
The ASU removes the requirement to categorize within the fair value hierarchy all investments for which fair value
is measured using the net asset value per share practical expedient. The ASU also removes the requirement to makecertain disclosures for all investments that are eligible to be measured at fair value using the net asset value pershare practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to
F-21

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
measure the fair value using that practical expedient. The ASU is effective for fiscal years beginning after
December 15, 2015, and interim periods within those fiscal years, and should be applied retrospectively to all
periods presented. The adoption of ASU No.2015-07 did not have a material impact on the MHFG Group’s
consolidated results of operations or financial condition.
Accounting pronouncements issued but not yet effective
In May 2014, the FASB issued ASU No.2014-09, “Revenue from Contracts with Customers (Topic 606)”(“ASU No.2014-09”). The ASU provides comprehensive guidance in respect of revenue recognition, inconvergence with International Financial Reporting Standards (“IFRS”), to improve financial reporting in U.S.
GAAP by replacing the current complex guidance for recognizing revenue. The core principle of this ASU is thatan entity should recognize revenue to depict the transfer of promised goods or services to customers in an amountthat reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
The ASU was effective for fiscal years and interim periods within those fiscal years, beginning after
December 15, 2016. In August 2015, the FASB issued ASU No.2015-14, “Revenue from Contracts with
Customers (Topic 606)—Deferral of the Effective Date” (“ASU No.2015-14”) to defer the effective date of
ASU No.2014-09 by one year. Therefore, ASU No.2014-09 is effective for annual periods and interim reporting
periods within those annual periods, beginning after December 15, 2017 under a modified retrospective approachor retrospectively to all periods presented. Early application is permitted only as of annual reporting periods
beginning after December 15, 2016, including interim reporting periods within that reporting period. The MHFG
Group expects to adopt ASU No.2014-09 on April 1, 2018 and is currently evaluating the potential impact thatthe adoption of ASU No.2014-09 and any subsequent amendments will have on its consolidated results ofoperations and financial condition, as well as on its disclosures. The Group is also currently evaluating themethod of adoption. While the guidance is not applicable to revenue associated with financial instruments suchas loans, investment securities and derivatives, the Group currently expects that the new guidance may primarily
affect Fee and commission income, including brokerage fees, underwriting fees and asset management fees, andOther noninterest income. In preparation for the adoption of the new guidance, the Group has been working toperform an initial scoping analysis of the Group’s revenue contracts and is in the process of identifying revenue
contracts to be reviewed in further detail.
In January 2016, the FASB issued ASU No.2016-01, “Financial Instruments—Overall (Subtopic 825-10)—
Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU No.2016-01”). The ASU
requires equity investments (except those accounted for under the equity method of accounting or those that
result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net
income. The ASU also requires an entity to present separately in other comprehensive income the portion of thetotal change in the fair value of a liability resulting from a change in the instrument-specific credit risk when theentity has elected to measure the liability at fair value in accordance with the fair value option for financial
instruments. The ASU is effective for fiscal years beginning after December 15, 2017, and interim periods withinthose fiscal years, and should be applied using a cumulative-effect adjustment to the balance sheet as of the
beginning of the fiscal year of adoption. Early application by public business entities is permitted for financial
statements of fiscal years or interim periods that have not yet been issued. The MHFG Group is currently
evaluating the potential impact that the adoption of ASU No.2016-01 will have on its consolidated results ofoperations and financial condition.
In February 2016, the FASB issued ASU No.2016-02, “Leases (Topic 842)” (“ASU No.2016-02”). The ASU
requires lessees to recognize the assets and liabilities arising from leases on the balance sheet. Lessees should
recognize liabilities to make lease payments and right-of-use assets representing its right to use the underlying
assets for the lease term. This recognition applies to leases classified as operating leases and finance leases, and
F-22

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
the update retains a distinction between finance leases and operating leases. However, the ASU has not changed
the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee
significantly. The ASU also requires qualitative disclosures along with specific quantitative disclosures including
the amount, timing, and uncertainty of cash flows arising from leases. In transition, an entity is required torecognize and measure leases at the beginning of the earliest period presented using a modified retrospective
approach. The ASU is effective for fiscal years beginning after December 15, 2018, including interim periods
within those fiscal years. Early application is permitted. The MHFG Group is currently evaluating the potential
impact that the adoption of ASU No.2016-02 will have on its consolidated results of operations and financial
condition.
In June 2016, the FASB issued ASU No.2016-13, “Financial Instruments—Credit Losses (Topic 326)—
Measurement of Credit Losses on Financial Instruments” (“ASU No.2016-13”). The ASU replaces the incurred
loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses andrequires consideration of a broader range of information such as relevant information about past events including
historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of
the reported amount, for the purpose of informing credit loss estimates. The ASU requires a financial asset (or agroup of financial assets) measured at amortized cost basis to be presented at the net amount expected to becollected. The income statement reflects the measurement of credit losses for newly recognized financial assets,
as well as the expected increases or decreases of expected credit losses that have taken place during the period.
The ASU also requires that credit losses on available-for-sale debt securities be presented as an allowance for
credit losses rather than as a write-down, and limits the amount of the allowance for credit losses to the amountby which fair value is below amortized cost. The ASU is effective for fiscal years beginning after December 15,
2019, including interim periods within those fiscal years, and will be applied using a cumulative-effectadjustment to retained earnings as of the beginning of the first reporting period in which the guidance iseffective. Early application is permitted as of the fiscal years beginning after December 15, 2018, includinginterim periods within those fiscal years. The MHFG Group is currently evaluating the potential impact that the
adoption of ASU No.2016-13 will have on its consolidated results of operations and financial condition.
In October 2016, the FASB issued ASU No.2016-16, “Income Taxes (Topic 740)—Intra-Entity Transfers ofAssets Other Than Inventory” (“ASU No.2016-16”). The ASU requires recognition of current and deferredincome taxes in an intra-entity transfer of an asset other than inventory when the transfer occurs although current
U.S. GAAP has prohibited the recognition of income tax consequences of the transfer until the asset has beensold to an outside party. The ASU does not include new disclosure requirements; however, existing disclosure
requirements might be applicable when accounting for the current and deferred income taxes for an intra-entity
transfer of an asset other than inventory. The ASU is effective for fiscal years beginning after December 15,
2017, and interim periods within those fiscal years, and should be applied using a cumulative-effect adjustment
to retained earnings as of the beginning of the fiscal year of adoption. Early application is permitted for all
entities as of the beginning of a fiscal year for which financial statements (interim or annual) have not been
issued or made available for issuance. The MHFG Group is currently evaluating the potential impact that the
adoption of ASU No.2016-16 will have on its consolidated results of operations and financial condition.
In January 2017, the FASB issued ASU No.2017-04, “Intangibles—Goodwill and Other (Topic 350)—
Simplifying the Test for Goodwill Impairment” (“ASU No.2017-04”). The ASU eliminates Step 2, under which
an entity had to perform procedures to determine the fair value at the impairment testing date of its assets andliabilities, from the goodwill impairment test. Instead, under the ASU, an entity should perform its annual, orinterim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The
ASU is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15,
2019. Early application is permitted for interim or annual goodwill impairment tests performed on testing dates
F-23

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
after January 1, 2017. The MHFG Group is currently evaluating the potential impact that the adoption of
ASU No. 2017-04 will have on its consolidated results of operations and financial condition.
In May 2017, the FASB issued ASU No.2017-09, “Compensation—Stock Compensation (Topic 718)—Scope ofModification Accounting” (“ASU No.2017-09”). The ASU provides clarity and reduces both (1) diversity inpractice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock
Compensation, to a change to the terms or conditions of a share-based payment award. The ASU provides
guidance about which changes to the terms or conditions of a share-based payment award require an entity toapply modification accounting in Topic 718. An entity should account for the effects of a modification unless all
the following factors of the award are the same before and after the modification: (1) the fair value, (2) thevesting conditions and (3) the classification as an equity or a liability instrument. The current disclosure
requirements in Topic 718 apply regardless of whether an entity is required to apply modification accounting
under the ASU. The ASU is effective for all entities for annual periods, and interim periods within those annual
periods, beginning after December 15, 2017, and should be applied prospectively to an award modified on orafter the adoption date. Early application is permitted, including adoption in any interim period, for publicbusiness entities for reporting periods for which financial statements have not yet been issued. The MHFG Group
does not expect that the adoption of ASU No. 2017-09 will have a material impact on its consolidated results ofoperations or financial condition.
3. Business combination
Integration among asset management companies
On October 1, 2016, DIAM Co., Ltd. (“DIAM”), MHTB, Mizuho Asset Management Co., Ltd. (“MHAM”) and
Shinko Asset Management Co., Ltd. (“Shinko Asset Management”) (collectively, the “Integrating Companies”)
integrated their asset management functions pursuant to an integration agreement signed on July 13, 2016. The
integration was implemented through the following steps: (i) a merger between MHAM as surviving company
and Shinko Asset Management as absorbed company; (ii) a company split between MHTB and MHAM (after themerger in (i) above) as successor company whereby rights and obligations attributed to Asset Management
Division of MHTB were transferred to MHAM; and (iii) a merger between DIAM as surviving company and
MHAM as absorbed company. After the integration, DIAM was renamed Asset Management One.
As of September 30, 2016, MHAM was a wholly-owned subsidiary of MHFG and DIAM was an equity method
affiliate of the MHFG Group which owned 50.0% of the voting equity interests. On October 1, 2016, MHFG
exchanged 30.0% of the voting equity interests in MHAM (after the split in (ii) above) for voting equity interests
and non-voting equity interests in DIAM. As a result of the exchange, MHFG acquired 51.0% of the voting rights
and 70.0% of the economic interests in Asset Management One, which became a consolidated subsidiary of theGroup.
Based on the strong commitment of MHFG and Dai-ichi Life Holdings, Inc. (“Dai-ichi Life”) to strengthen anddevelop their respective asset management businesses, Asset Management One aims to achieve significant
development as a global asset management company, providing its customers with high-quality solutions by
combining the asset management-related knowledge and experience accumulated and developed by each of theIntegrating Companies over many years, and by taking full advantage of collaboration with both the MHFG
Group and the Dai-ichi Life group. The MHFG Group recognized goodwill at the acquisition date. The goodwill
was not allocated to the reportable segments in Note 32 “Business segment information”. The MHFG Group
allocated the entire amount of the goodwill to the Asset Management One reporting unit for the purpose of
assessing impairment. None of the goodwill recognized is deductible for tax purposes.

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes the consideration paid for DIAM and the amounts of the acquired assets andassumed liabilities recognized at the acquisition date, as well as the fair value at the acquisition date of thenoncontrolling interest in DIAM. There were no material acquisition-related costs that were recognizedseparately from the acquisition of the assets and the assumption of the liabilities.
At October 1,
2016(in millions of yen)

Consideration:
Equity instruments (1,038,408 common shares of MHAM) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28,842

Fair value of total consideration transferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of equity interests in DIAM held by MHFG before the business combination . . . . . .

28,842
72,106
100,948

Recognized amounts of identifiable assets acquired:
Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing deposits in other banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premises and equipment-net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

831
12,873266
12,234
3,546
7,882
53,0371,003
2,208

Recognized amounts of identifiable liabilities assumed:
Trading account liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred taxes liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

304
918
16,2385,392
3,041

Total identifiable net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

67,98776,225

Noncontrolling interest in DIAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

43,264
100,948

Note: Amount represents customer relationships subject to amortization, of which the weighted-averageamortization period is 16.9 years.
The fair value of the equity interests in DIAM held by MHFG before the business combination (¥72,106 million),
the fair value of the 1,038,408 common shares of MHAM as the consideration paid for DIAM (¥28,842 million)
and the fair value of the noncontrolling interest in DIAM (¥43,264 million) were determined with reference to anindependent third-party appraisal by applying the income approach and the market approach. The income
approach was based on the discounted future cash flows of DIAM and MHAM and the market approach was
based on market values, earnings and revenues of public companies comparable to DIAM and MHAM. A
discount for lack of control was not considered in determining the fair value of the noncontrolling interest, which

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
is entirely held by Dai-Ichi Life, as the economic benefits of DIAM are expected to be divided proportionately
between MHFG and Dai-Ichi Life based on their respective economic interests.
On October 1, 2016, the MHFG Group recognized a gain of ¥56,226 million as a result of remeasuring to fairvalue its 50.0% of the voting equity interests in DIAM held before the business combination. The gain is
included in Other noninterest income in the Group’s consolidated statement of income for the fiscal year ended
March 31, 2017. In addition, the MHFG Group recognized an increase in Common stock of ¥23,829 million as aresult of remeasuring to fair value its 30.0% of the voting equity interests in MHAM held before the businesscombination due to the change in the voting equity interests in MHAM.
The revenue and earnings of Asset Management One since the acquisition date included in the Group’s
consolidated statement of income for the fiscal year ended March 31, 2017 are not material. Other than the gainof ¥56,226 million described above, the revenue and earnings of the MHFG Group would not have differedsignificantly from those reported in the consolidated statements of income for the fiscal years ended March 31,
2016 and 2017 if the business combination had occurred as of the beginning of the fiscal year ended March 31,
2016.
4. Investments
Available-for-sale and held-to-maturity securities
The amortized cost, gross unrealized gains and losses, and fair value of available-for-sale and held-to-maturity
securities at March 31, 2016 and 2017 are as follows:
Amortized cost

Gross unrealized Gross unrealized
gains
losses(in millions of yen)

Fair value

2016
Available-for-sale securities:
Debt securities:
Japanese government bonds . . . . . . . . . . . . . . . . . . . . . .
Japanese local government bonds . . . . . . . . . . . . . . . . . .
U.S. Treasury bonds and federal agency securities . . . . .
Other foreign government bonds . . . . . . . . . . . . . . . . . . .
Agency mortgage-backed securities (1) . . . . . . . . . . . . . .
Residential mortgage-backed securities . . . . . . . . . . . . .
Commercial mortgage-backed securities . . . . . . . . . . . .
Japanese corporate bonds and other debt securities (2) . .
Foreign corporate bonds and other debt securities (3) . . .
Equity securities (marketable) . . . . . . . . . . . . . . . . . . . . . . . . .

15,672,171
234,587436,792
939,808
920,375
206,882
186,525
2,079,599
839,981
1,663,486

91,420
6,097
1,720
2,740
29,804
4,254
788
15,6888,744
2,121,379

1,015
3
32
153
1,293
878
523
420
1,421
4,577

15,762,576
240,681438,480
942,395
948,886
210,258
186,7902,094,867
847,304
3,780,288

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23,180,206

2,282,634

10,31525,452,525

Held-to-maturity securities:
Debt securities:
Japanese government bonds . . . . . . . . . . . . . . . . . . . . . .
Agency mortgage-backed securities (4) . . . . . . . . . . . . . .

3,760,032
1,058,929

56,620
3,894

—
6,266

3,816,652
1,056,557

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,818,961

60,514

6,266

4,873,209

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Amortized cost

Gross unrealized Gross unrealized
gains
losses(in millions of yen)

Fair value

2017
Available-for-sale securities:
Debt securities:
Japanese government bonds . . . . . . . . . . . . . . . . . . . . . .
Japanese local government bonds . . . . . . . . . . . . . . . . . .
U.S. Treasury bonds and federal agency securities . . . . .
Other foreign government bonds . . . . . . . . . . . . . . . . . . .
Agency mortgage-backed securities (1) . . . . . . . . . . . . . .
Residential mortgage-backed securities . . . . . . . . . . . . .
Commercial mortgage-backed securities . . . . . . . . . . . .
Japanese corporate bonds and other debt securities (2) . .
Foreign corporate bonds and other debt securities (3) . . .
Equity securities (marketable) . . . . . . . . . . . . . . . . . . . . . . . . .

10,256,512
279,864
1,148,389
933,942
832,738
142,879
223,105
1,958,472
909,0521,528,808

22,782
4,841
10
1,246
15,5001,838
1,092
52,046
3,377
2,273,883

16,408
233
4,578
236
5,441
558
282
2,286
1,643
1,593

10,262,886
284,472
1,143,821
934,952
842,797
144,159
223,915
2,008,232
910,786
3,801,098

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18,213,761

2,376,615

33,25820,557,118

Held-to-maturity securities:
Debt securities:
Japanese government bonds . . . . . . . . . . . . . . . . . . . . . .
Agency mortgage-backed securities (4) . . . . . . . . . . . . . .

3,059,976
757,384

37,168
121

—
7,931

3,097,144
749,574

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,817,360

37,2897,931

3,846,718

Notes :
(1) Agency mortgage-backed securities presented in the above table consist of U.S. agency securities and Japanese agency securities, ofwhich the fair values were ¥168,604 million and ¥780,282 million, respectively, at March 31, 2016, and ¥134,240 million and¥708,557 million, respectively, at March 31, 2017. U.S. agency securities primarily consist of Government National Mortgage
Association (“Ginnie Mae”) securities, which are guaranteed by the United States government. All Japanese agency securities aremortgage-backed securities issued by Japan Housing Finance Agency, a Japanese government-sponsored enterprise.
(2) Other debt securities presented in the above table primarily consist of certificates of deposit (“CDs”) and asset-backed securities(“ABS”), of which the total fair values were ¥158,446 million at March 31, 2016, and ¥155,138 million at March 31, 2017.
(3) Other debt securities presented in the above table primarily consist of CDs, ABS, and collateralized loan obligations (“CLO”), of which
the total fair values were ¥201,952 million at March 31, 2016, and ¥258,059 million at March 31, 2017.
(4) All Agency mortgage-backed securities presented in the above table are Ginnie Mae securities.

Contractual maturities
The amortized cost and fair value of available-for-sale and held-to-maturity debt securities at March 31, 2017 bycontractual maturity are shown in the table below. Expected maturities may differ from contractual maturities
because borrowers may have the right to call or prepay obligations with or without penalties. Securities not due
at a single maturity date and securities embedded with call or prepayment options, such as mortgage-backed
securities, are included in the table below based on their contractual maturities.

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Amortized cost

Due after one Due after fiveDue in one year through years through Due after
year or less five years
ten yearsten years(in millions of yen)

Total

Available-for-sale securities:
Debt securities:
Japanese government bonds . . . . . . . . . . . . . . . . . . . . 3,147,992
Japanese local government bonds . . . . . . . . . . . . . . . .
41,307
U.S. Treasury bonds and federal agency securities . . . 1,065,881
Other foreign government bonds . . . . . . . . . . . . . . . . . 757,093
Agency mortgage-backed securities . . . . . . . . . . . . . .
—Residential mortgage-backed securities . . . . . . . . . . .
—Commercial mortgage-backed securities . . . . . . . . . .
7,000Japanese corporate bonds and other debt securities . . 471,592
Foreign corporate bonds and other debt securities . . . 450,865

5,538,724
101,307—
170,836——
116,633
866,455
399,330

1,569,796
136,70182,508
6,013——
99,472431,097
55,808— 10,256,512
549
279,864— 1,148,389—
933,942
832,738
832,738
142,879
142,879—
223,105
189,328 1,958,472
3,049
909,052

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,941,730

7,193,285

2,381,395

1,168,543 16,684,953

Held-to-maturity securities:
Debt securities:
Japanese government bonds . . . . . . . . . . . . . . . . . . . . 1,100,032
Agency mortgage-backed securities . . . . . . . . . . . . . .
—1,480,073—

479,871—— 3,059,976
757,384
757,384

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,100,032

1,480,073

479,871757,384 3,817,360

Fair value

Due after one Due after fiveDue in one year through years through Due after
year or less five years
ten yearsten years(in millions of yen)

Total

Available-for-sale securities:
Debt securities:
Japanese government bonds . . . . . . . . . . . . . . . . . . . . 3,151,367
Japanese local government bonds . . . . . . . . . . . . . . . .
41,366
U.S. Treasury bonds and federal agency securities . . . 1,065,415
Other foreign government bonds . . . . . . . . . . . . . . . . . 757,094
Agency mortgage-backed securities . . . . . . . . . . . . . .
—Residential mortgage-backed securities . . . . . . . . . . .
—Commercial mortgage-backed securities . . . . . . . . . .
7,008
Japanese corporate bonds and other debt securities . . 472,047
Foreign corporate bonds and other debt securities . . . 451,370

5,549,293
102,326—
171,662——
116,641869,226
400,669

1,562,226
140,138
78,406
6,196——
100,266
433,132
55,728— 10,262,886
642
284,472— 1,143,821—
934,952
842,797
842,797
144,159
144,159—
223,915
233,827 2,008,232
3,019
910,786

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,945,667

7,209,817

2,376,092

1,224,444 16,756,020

Held-to-maturity securities:
Debt securities:
Japanese government bonds . . . . . . . . . . . . . . . . . . . . 1,102,730
Agency mortgage-backed securities . . . . . . . . . . . . . .
—1,491,570—

502,844—— 3,097,144
749,574
749,574

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,102,730

1,491,570

502,844749,574 3,846,718

Other-than-temporary impairment
The MHFG Group performs periodic reviews to identify impaired securities in accordance with ASC 320,
“Investments—Debt and Equity Securities” (“ASC 320”). For debt securities, in the cases where the MHFG
Group has the intent to sell a debt security or more likely than not will be required to sell a debt security before
the recovery of its amortized cost basis, the full amount of an other-than-temporary impairment loss is
F-28

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
recognized immediately through earnings. In other cases, the MHFG Group evaluates expected cash flows to bereceived and determines if a credit loss exists, and if so, the amount of an other-than-temporary impairment
related to the credit loss is recognized in earnings, while the remaining decline in fair value is recognized in othercomprehensive income, net of applicable taxes. For equity securities, impairment is evaluated considering thelength of time and extent to which the fair value has been below cost, the financial condition and near-term
prospects of the issuers, as well as the MHFG Group’s ability and intent to hold these investments for areasonable period of time sufficient for a forecasted recovery of fair value. If an equity security is deemed otherthan-temporarily impaired, it shall be written down to fair value, with the full decline recognized in earnings.
The following table shows the other-than-temporary impairment losses on available-for-sale securities for the
fiscal years ended March 31, 2015, 2016 and 2017. No impairment losses were recognized on held-to-maturity
securities for the periods.
2015
2016
2017
(in millions of yen)

Available-for-sale securities:
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

450
618

4,020
34,041138
12,029Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,068

38,061

12,167For the fiscal year ended March 31, 2017, the other-than-temporary impairment losses on debt securities were
attributable to the decline in the fair value of certain Japanese corporate bonds in respect of which the MHFG
Group determined credit losses existed. In accordance with ASC 320-10-35-33A and ASC 320-10-35-34B, theother-than-temporary impairment on these securities was recognized in earnings. There has never been any
instance related to credit losses on debt securities recognized in earnings where a portion of an other-thantemporary impairment was recognized in other comprehensive income.
The other-than-temporary impairment losses on equity securities were mainly attributable to the decline in thefair value of certain Japanese equity securities.

F-29

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Continuous unrealized loss position
The following table shows the gross unrealized losses and fair value of available-for-sale and held-to-maturity
securities, aggregated by the length of time that individual securities have been in a continuous unrealized loss
position, at March 31, 2016 and 2017:
Less than 12 months 12 months or more
Gross
Gross
Fair
unrealized Fair unrealized
value
lossesvalue
losses(in millions of yen)

Total
Gross
Fair
unrealized
value
losses2016
Available-for-sale securities:
Debt securities:
Japanese government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,531,400
Japanese local government bonds . . . . . . . . . . . . . . . . . . . . . . .
3,434
U.S. Treasury bonds and federal agency securities . . . . . . . . . . 315,425
Other foreign government bonds . . . . . . . . . . . . . . . . . . . . . . . . 225,493
Agency mortgage-backed securities (1) . . . . . . . . . . . . . . . . . . .
15,965Residential mortgage-backed securities . . . . . . . . . . . . . . . . . . .
2,417
Commercial mortgage-backed securities . . . . . . . . . . . . . . . . . .
40,471
Japanese corporate bonds and other debt securities . . . . . . . . . . 360,782
Foreign corporate bonds and other debt securities . . . . . . . . . . . 186,478
Equity securities (marketable) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
71,262

692
3
32
139
86
3
300
348
972
4,515

74,427——
225
58,14739,984
22,465
20,10922,090
180

323
—
—
14
1,207
875
223
72
449
62

1,605,827
3,434
315,425
225,718
74,112
42,40162,936
380,891
208,568
71,442

1,015
3
32
153
1,293
878
523
420
1,421
4,577

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,753,127

7,090

237,6273,225

2,990,754

10,315

Held-to-maturity securities:
Debt securities:
Agency mortgage-backed securities (2) . . . . . . . . . . . . . . . . . . .

394,673

5,384

101,892882

496,565

6,266

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

394,673

5,384

101,892882

496,565

6,266

2017
Available-for-sale securities:
Debt securities:
Japanese government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,574,649
Japanese local government bonds . . . . . . . . . . . . . . . . . . . . . . .
58,700U.S. Treasury bonds and federal agency securities . . . . . . . . . . 1,013,962
Other foreign government bonds . . . . . . . . . . . . . . . . . . . . . . . . 334,300
Agency mortgage-backed securities (1) . . . . . . . . . . . . . . . . . . . 195,887
Residential mortgage-backed securities . . . . . . . . . . . . . . . . . . .
5,873
Commercial mortgage-backed securities . . . . . . . . . . . . . . . . . .
8,314
Japanese corporate bonds and other debt securities . . . . . . . . . . 470,602
Foreign corporate bonds and other debt securities . . . . . . . . . . . 202,347
Equity securities (marketable) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30,68815,796
233
4,578
230
3,705
3
218
2,062
1,353
383

95,612——
8,327
42,501
28,994
17,634
158,71377,699
4,117

612
—
—
6
1,736
555
64
224
290
1,210

5,670,261
58,7001,013,962
342,627
238,388
34,86725,948629,315
280,046
34,805

16,408
233
4,578
236
5,441
558
282
2,286
1,643
1,593

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,895,322

28,561

433,597

4,697

8,328,919

33,258

Held-to-maturity securities:
Debt securities:
Agency mortgage-backed securities (2) . . . . . . . . . . . . . . . . . . .

460,882

3,518

259,466

4,413

720,348

7,931

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

460,882

3,518

259,466

4,413

720,348

7,931

Notes :
(1) Agency mortgage-backed securities presented in the above table consist of U.S. agency securities and Japanese agency securities, ofwhich the fair values were ¥69,805 million and ¥4,307 million, respectively, at March 31, 2016, and ¥134,118 million and¥104,270 million, respectively, at March 31, 2017. U.S. agency securities primarily consist of Ginnie Mae securities, which are
guaranteed by the United States government. All Japanese agency securities are mortgage-backed securities issued by Japan Housing
Finance Agency, a Japanese government-sponsored enterprise.
(2) All Agency mortgage-backed securities presented in the above table are Ginnie Mae securities.

F-30

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
At March 31, 2017, the MHFG Group did not intend to sell the debt securities in an unrealized loss position andit was not more likely than not that the MHFG Group would be required to sell them before the recovery of theiramortized cost bases. For Japanese government bonds, U.S. Treasury bonds and federal agency securities andAgency mortgage-backed securities, their entire amortized cost bases were expected to be recovered since theunrealized losses had not resulted from credit deterioration, but primarily from changes in interest rates. For the
debt securities other than those described above, including Japanese corporate bonds with similar credit risks as
the other-than-temporarily impaired securities, the MHFG Group determined that their entire amortized costbases were expected to be recovered, after considering various factors such as the extent to which their fairvalues were below their amortized cost bases, the external and/or internal ratings and the present values of cash
flows expected to be collected. Based on the aforementioned evaluation, the MHFG Group determined that the
debt securities in an unrealized loss position were not considered other-than-temporarily impaired.
The equity securities in an unrealized loss position were determined not to be other-than-temporarily impaired
based on the evaluation of the following factors: (1) the severity and duration of the impairments, (2) the
financial condition and near-term prospects of the issuers, and (3) the MHFG Group’s ability and intent to holdthese investments for a reasonable period of time sufficient for a forecasted recovery of fair value.
Realized gains and losses
The following table shows the realized gains and losses on sales of available-for-sale securities for the fiscal
years ended March 31, 2015, 2016 and 2017. See “Consolidated Statements of Cash Flows for the fiscal years
ended March 31, 2015, 2016 and 2017” for the proceeds from sales of investments, the vast majority of which
consists of the proceeds from sales of available-for-sale securities.
2015

2016
2017
(in millions of yen)

Gross realized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220,250 297,344 353,036
Gross realized losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,670) (45,376) (21,163)
Net realized gains (losses) on sales of available-for-sale securities . . . . . . . . . . . .

205,580

251,968

331,873

Other investments
The following table summarizes the composition of Other investments at March 31, 2016 and 2017:
2016
2017
(in millions of yen)

Equity method investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments held by consolidated investment companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other equity interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

258,180
42,045313,221249,679
37,462
307,928

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

613,446

595,069

Equity method investments
Investments in investees over which the MHFG Group has the ability to exert significant influence are accounted
for using the equity method of accounting. Such investments included marketable equity securities with carrying
values of ¥124,830 million and ¥132,817 million, at March 31, 2016 and 2017, respectively. The aggregate
market values of these marketable equity securities were ¥277,508 million and ¥273,249 million, respectively.
F-31

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The majority of the aggregate market values of these marketable equity securities are related to Orient
Corporation, of which the MHFG Group’s proportionate share of the total outstanding common stock was 49.0%
as of March 31, 2017.
Investments held by consolidated investment companies
The MHFG Group consolidates certain investment companies over which it has control through either ownershipor other means. Investment companies are subject to specialized industry accounting which requires investments
to be carried at fair value, with changes in fair value recorded in earnings. The MHFG Group maintains thisspecialized industry accounting for investments held by consolidated investment companies, which consist of
marketable and non-marketable investments.
Other equity interests
Other equity interests primarily consist of non-marketable equity securities outside the scope of ASC 320, of
which the fair values are not readily determinable, nor practicable to estimate. The MHFG Group has neither
significant influence nor control over the investees. Each of these securities is stated at acquisition cost, with another-than-temporary impairment, if any, included in earnings. The MHFG Group monitors the status of each
investee, including its credit rating, to determine whether impairment losses should be recognized.
5. Loans
The table below presents loans outstanding by domicile and industry of borrower at March 31, 2016 and 2017:
2016
2017
(in millions of yen)Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction and real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transportation and communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Government and public institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other industries (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Individuals:
Mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,344,808
7,733,513
4,655,704
5,408,850
3,267,902
3,632,481
3,395,784
4,619,336

8,740,281
7,654,016
4,759,225
5,142,003
3,490,415
4,006,401
8,532,246
4,427,349

10,589,646
924,408

9,964,633
939,971

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52,572,432

57,656,540

Foreign:
Commercial and industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Government and public institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,319,284
6,382,449
1,174,665
273,695

16,872,448
6,759,921
959,948
190,724

Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25,150,093

24,783,041

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Unearned income and deferred loan fees—net . . . . . . . . . . . . . . . . . . . . . . . . . . .

77,722,525
167,156

82,439,581
155,675

Total loans before allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

77,555,369

82,283,906

F-32

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note: Other industries of Domestic and Other of Foreign include trade receivables and lease receivables of
consolidated VIEs.
Net losses on sales of loans were ¥33,291 million, ¥1,752 million and ¥919 million, including unrealized losses
related to recording loans held for sale at the lower of cost or fair value of ¥34,262 million, ¥810 million, and¥310 million for the fiscal years ended March 31, 2015, 2016 and 2017, respectively.
Credit quality information
In accordance with the MHFG Group’s credit risk management policies, the Group uses an internal rating systemthat consists of credit ratings and pool allocations as the basis of its risk management infrastructure. Credit
ratings consist of obligor ratings which represent the level of credit risk of the obligor, and transaction ratings
which represent the ultimate possibility of incurring losses on individual loans by taking into consideration
various factors such as collateral or guarantees involved. In principle, obligor ratings are applied to all obligors
except those to which pool allocations are applied, and are subject to regular review at least once a year as well
as special review which is required whenever the obligor’s credit standing changes. Pool allocations are applied
to groups of small balance, homogeneous loans. The Group pools loans with similar risk characteristics, and therisk is assessed and managed according to such pools. The Group generally reviews the appropriateness andeffectiveness of the approach to obligor ratings and pool allocations once a year in accordance withpredetermined policies and procedures.

F-33

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The table below presents the MHFG Group’s definition of obligor ratings used by MHBK and MHTB:
Obligor category

Obligor rating

NormalA

Obligors whose certainty of debt fulfillment is very high, hence theirlevel of credit risk is very low.

B

Obligors whose certainty of debt fulfillment poses no problems for theforeseeable future, and their level of credit risk is low.

C

Obligors whose certainty of debt fulfillment and their level of credit riskpose no problems for the foreseeable future.

D

Obligors whose current certainty of debt fulfillment poses no problems,
however, their resistance to future economic environmental changes is
low.

E1

Obligors that require observation going forward because of either minor
concerns regarding their financial position, or their somewhat weak or
unstable business conditions.

E2

Obligors that require special observation going forward because ofproblems with their borrowings such as reduced or suspended interest
payments, problems with debt fulfillment such as failure to makeprincipal or interest payments, or problems with their financial position
as a result of their weak or unstable business conditions.
Obligors that are not yet bankrupt but are in financial difficulties and are
deemed likely to become bankrupt in the future because of insufficient
progress in implementing their management improvement plans or othermeasures (including obligors that are receiving ongoing support fromfinancial institutions).

Watch (Note)

Definition

Intensive control

F

Substantially bankrupt

G

Obligors that have not yet become legally or formally bankrupt but aresubstantially insolvent because they are in serious financial difficulties
and are deemed to be incapable of being restructured.

Bankrupt

H

Obligors that have become legally or formally bankrupt.

Note: Special attention obligors are watch obligors with debt in troubled debt restructuring (“TDR”) or 90 daysor more delinquent debt. Loans to such obligors are considered impaired.

F-34

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The table below presents credit quality information of loans based on the MHFG Group’s internal rating system
at March 31, 2016 and 2017:
Normal obligors
C-D
Retail (2)Watch obligors excluding
special attention obligors (1) Impaired
Other (3) E1-E2 Retail (2) Other (3) loans(in millions of yen)Total

4,859,256
3,956,798
2,611,296
2,240,228

2,681,958
2,709,617
1,674,328
2,552,552

103,343
601,251
195,140
223,677

148,102
157,057
2,380
57,865

163,213215,244
81,704147,404

12,473
16,40824,84639,486

8,344,808
7,733,513
4,655,704
5,408,850

2,410,967

695,697

86,094380

35,09010,518—29,156

3,267,902

2,719,047

881,405

2,234

3,788

22,303

264

—

3,440

3,632,481

3,181,241
1,954,222
—

4,047
—
210,496685,258
3,501 1,929,712
259,646 10,891,538 107,131—
7,053
34,744—329
96,729——3,395,784
35,315
3,946 4,619,336
1,659 122,607 11,514,054

706,755 201,053

40,733 822,639 52,572,432

46 2,214,584

422,567—

80,339 166,742 17,319,284

550,380—

656,969

45,196———

6,382,449

224,514
6,308

—
8,336

2,940
258,363

4,801
132

—
10

—
268

44
278

1,174,665
273,695

8,382 3,132,856

472,696

10

A-B
2016
Domestic:
Manufacturing . . . . . . . . . . . . . . .
Construction and real estate . . . .
Services . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . .
Transportation andcommunications . . . . . . . . . . .
Banks and other financial
institutions . . . . . . . . . . . . . . . .
Government and public
institutions . . . . . . . . . . . . . . . .
Other industries (4) . . . . . . . . . . . .
Individuals . . . . . . . . . . . . . . . . . .

Total domestic . . . . . . . . . . . 23,933,055 12,144,508 12,106,778 2,616,911
Foreign:
Commercial and industrial . . . . . 9,468,077
Banks and other financial
institutions . . . . . . . . . . . . . . . . 5,129,904
Government and public
institutions . . . . . . . . . . . . . . . .
942,366
Other (4) . . . . . . . . . . . . . . . . . . . .
—Total foreign . . . . . . . . . . . . 15,540,347

4,966,929

5,748,131

2,958 373,505
255 76,883—
66,010546 147,092

80,607 167,064 25,150,093

Total . . . . . . . . . . . . . . . . . . . . . . . . . . 39,473,402 17,892,639 12,115,160 5,749,767 1,179,451 201,063 121,340 989,703 77,722,525
2017
Domestic:
Manufacturing . . . . . . . . . . . . . . .
Construction and real estate . . . .
Services . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . .
Transportation andcommunications . . . . . . . . . . .
Banks and other financial
institutions . . . . . . . . . . . . . . . .
Government and public
institutions . . . . . . . . . . . . . . . .
Other industries (4) . . . . . . . . . . . .
Individuals . . . . . . . . . . . . . . . . . .

5,313,232
4,199,022
2,699,487
2,244,214

2,599,760
2,641,436
1,687,515
2,369,842

90,825558,321
185,577
200,00367,734
15,585910
22,785

276,771
165,836
95,973
124,846

11,58916,02323,18932,9112,584,367

739,781

82,543

1,092

50,3199,698—

22,6153,490,415

3,050,605

887,527

1,894

37,907

21,574

353

—

6,541

4,006,401

4,059,349
1,873,137—

1,600— 4,471,297
591,1093,535 1,906,756
289,809 10,312,739
80,566—
4,613
26,288—410
89,066——
8,532,246
41,1796,610 4,427,349
1,434 104,702 10,904,604

766,220 183,239

44,949 790,271 57,656,540

173 2,153,757

312,275—

90,722 190,183 16,872,448

592,380—

480,806

58,348———6,759,921

214,558
6,535

—
9,439

1,082
173,464

2,801
124

—

—
753

29
401

959,948
190,724

9,612 2,809,109

373,548

Total domestic . . . . . . . . . . . 26,023,413 11,808,379 11,435,437 6,604,632
Foreign:
Commercial and industrial . . . . . 9,310,432
Banks and other financial
institutions . . . . . . . . . . . . . . . . 5,628,387
Government and public
institutions . . . . . . . . . . . . . . . .
741,478
Other (4) . . . . . . . . . . . . . . . . . . . .
—Total foreign . . . . . . . . . . . . 15,680,297

4,814,906

5,628,379

8
8

1,314 379,056
317 57,476
204 66,370
501 146,901

8,740,281
7,654,016
4,759,225
5,142,003

91,475 190,613 24,783,041

Total . . . . . . . . . . . . . . . . . . . . . . . . . . 41,703,710 17,436,758 11,445,049 9,413,741 1,139,768 183,247 136,424 980,884 82,439,581
Notes:(1) Special attention obligors are watch obligors with debt in TDR or 90 days or more delinquent debt. Loans to such obligors are considered
impaired.
(2) Amounts represent small balance, homogeneous loans which are subject to pool allocations.

F-35

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(3) Non-impaired loans held by subsidiaries other than MHBK and MHTB constitute Other, since their portfolio segments are not identicalto those of MHBK and MHTB.
(4) Other industries of Domestic and Other of Foreign include trade receivables and lease receivables of consolidated VIEs.

Impaired loans
The MHFG Group considers loans to be impaired when it is probable that the Group will be unable to collect all
the scheduled payments of principal and interest when due according to the contractual terms of the loans. The
Group classifies loans to special attention, intensive control, substantially bankrupt and bankrupt obligors as
impaired loans, and all of the Group’s impaired loans are designated as nonaccrual loans. The Group does nothave any loans to borrowers that cause management to have serious doubts as to the ability of such borrowers tocomply with the present loan repayment terms for the periods presented other than those already designated as
impaired loans. The table below presents impaired loans information at March 31, 2016 and 2017:
Recorded investment (1)Notrequiring an
Requiring an allowance
UnpaidAverage
Interest
allowance for for loan
principal Related
recordedincomeloan losses
losses (2)Total balance allowance (3) investment recognized (4)(in millions of yen)
2016
Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . .
Construction and real estate . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . .
Transportation and communications . . . . . . .
Banks and other financial institutions . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . .
Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . .

365,361
59,88356,695
134,425
25,6653,390
3,591
63,367

8,144
17,0009,315
12,6673,491
50355
59,240373,505
76,88366,010147,092
29,156
3,440
3,946
122,607379,642
87,516
72,603
157,215
30,4973,440
4,132
135,325

138,676
10,13019,09546,304
5,694
1,095
799
6,085

410,491
89,07569,525
149,324
33,1195,188
2,665
133,015

7,930
1,246
1,292
2,376
630
42
64
2,058

Total domestic . . . . . . . . . . . . . . . . . . . .

712,377

110,262822,639

870,370

227,878

892,402

15,638Foreign:
Total foreign . . . . . . . . . . . . . . . . . . . . . .

148,471

18,593167,064

180,870

61,308

186,440

2,629

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

860,848

128,855

989,703 1,051,240

289,186

1,078,842

18,267

Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . .
Construction and real estate . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . .
Transportation and communications . . . . . . .
Banks and other financial institutions . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . .
Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . .

372,241
46,13058,366
133,466
19,3862,601
6,484
51,893

6,815
11,346
8,004
13,435
3,229
3,940
126
52,809379,056
57,476
66,370146,901
22,6156,541
6,610
104,702383,81266,006
72,261
155,023
23,5686,873
6,740
114,880

148,777
6,367
20,122
52,341
5,968
962
1,999
4,935

375,895
66,796
66,050148,865
24,035
5,305
6,053
114,104

2,859
877
1,173
2,261
371
50
91
1,696

Total domestic . . . . . . . . . . . . . . . . . . . .

690,567

99,704790,271829,163

241,471807,103

9,378

2017

Foreign:
Total foreign . . . . . . . . . . . . . . . . . . . . . .

160,563

30,050190,613

209,129

61,102

169,192

2,040

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

851,130

129,754

980,884 1,038,292

302,573

976,295

11,418Notes:(1) Amounts represent the outstanding balances of nonaccrual loans. The MHFG Group’s policy for placing loans in nonaccrual status
corresponds to the Group’s definition of impaired loans.
(2) These impaired loans do not require an allowance for loan losses because the MHFG Group has sufficient collateral to cover probableloan losses.

F-36

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(3) The allowance for loan losses on impaired loans includes the allowance for groups of small balance, homogeneous loans which werecollectively evaluated for impairment, in addition to the allowance for those loans that were individually evaluated for impairment. The
total carrying amount of the groups of small balance, homogeneous loans at March 31, 2016 and 2017 was ¥347,839 million and¥302,251 million, respectively.
(4) Amounts represent gross interest income on impaired loans which were included in Interest income on loans in the consolidated
statements of income.

The remaining balance of impaired loans which had been partially charged off was ¥31,933 million and¥26,513 million as of March 31, 2016 and 2017, respectively.
Troubled debt restructurings
The MHFG Group considers a TDR to be a restructuring in which it, for economic or legal reasons related to the
obligor’s financial difficulties, grants a concession to the obligor that it would not otherwise consider. The Groupconsiders the relevant obligor to be in financial difficulty when its obligor rating is E2 or below. The following
table presents TDRs that were entered into during the fiscal years ended March 31, 2016 and 2017:
Loan forgiveness or debt toequity swaps
Recorded
investment (Note)
Charge-offs(in millions of yen)Interest rate
reduction and/or
postponement ofprincipal and/orinterest

2016

Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction and real estate . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transportation and communications . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign:
Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

67,058
—
—
—
49
—
—
—
67,10734,081
—
—
—
279
—
—
—
34,360108,395
27,07843,919157,651
28,244
6,342
7,120
28,163406,912—
67,107—34,36044,748451,660

—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—

106,697
18,81845,287
159,649
17,417
7,933
2,518
17,067375,386————

35,685411,0712017

Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction and real estate . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transportation and communications . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign:
Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Note: Amounts represent the book values of loans immediately after the restructurings.
F-37

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Payment default is deemed to occur when the loan becomes three months past due or the obligor is downgradedto the category of substantially bankrupt or bankrupt. The following table presents payment defaults which
occurred during the fiscal years ended March 31, 2016 and 2017 with respect to the loans modified as TDRs
within the previous twelve months:
Recorded investment
2016
2017
(in millions of yen)Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction and real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transportation and communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign:
Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-38

10,6692,195
4,824
20,522
2,361
—
3,864
44,435

5,164
2,887
4,471
10,116795
14
2,288
25,735

10,84655,281

3,213
28,948MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Age analysis of past due loans
The table below presents an analysis of the age of the recorded investment in loans that are past due at March 31,
2016 and 2017:30-59 days
past due60-89 days
past due

90 days or
Total past
more past duedue(in millions of yen)Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . .
Construction and real estate . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . .
Transportation and communications . . . . . . . .
Banks and other financial institutions . . . . . . .
Government and public institutions . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . .
Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,555
2,713
2,479
3,193
594
—
—
—
38,682

163
1,024
223
886
81
—
—
—
13,5709,454
35,691
7,016
8,861
2,033
—
—
29
38,413

Total domestic . . . . . . . . . . . . . . . . . . . . .

49,216

15,947

Total foreign . . . . . . . . . . . . . . . . . . . . . . .

859

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Current

Total

11,172
39,428
9,718
12,9402,708——
2990,6658,333,636
7,694,085
4,645,986
5,395,910
3,265,194
3,632,481
3,395,784
4,619,307
11,423,389

8,344,808
7,733,513
4,655,704
5,408,850
3,267,902
3,632,481
3,395,784
4,619,336
11,514,054

101,497

166,660

52,405,772

52,572,432

2,598

30,00033,457

25,116,636

25,150,093

50,075

18,545

131,497

200,117

77,522,408

77,722,525

Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . .
Construction and real estate . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . .
Transportation and communications . . . . . . . .
Banks and other financial institutions . . . . . . .
Government and public institutions . . . . . . . . .
Other industries . . . . . . . . . . . . . . . . . . . . . . . .
Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,938
2,818
917
1,330
384
—
—
—
32,995

360
947
217
2,834
322
—
—
—
12,291

7,767
32,523
5,914
5,585
1,859
—
—
69
34,846

10,06536,288
7,048
9,749
2,565
—
—
69
80,1328,730,216
7,617,728
4,752,177
5,132,254
3,487,850
4,006,401
8,532,246
4,427,280
10,824,472

8,740,281
7,654,016
4,759,225
5,142,003
3,490,415
4,006,401
8,532,246
4,427,349
10,904,604

Total domestic . . . . . . . . . . . . . . . . . . . . .

40,382

16,971

88,563145,916

57,510,624

57,656,540

2016

Foreign:2017

Foreign:
Total foreign . . . . . . . . . . . . . . . . . . . . . . .

546

216

95,71996,481

24,686,560

24,783,041

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40,92817,187

184,282

242,397

82,197,184

82,439,581

6. Allowance for loan losses
In accordance with ASC 450, a formula-based allowance utilizing historical loss factors, after adjusting forexisting economic conditions where appropriate, is applied to groups of non-homogeneous loans and smallbalance, homogeneous loans which have not been identified as impaired. At MHBK and MHTB, whenmanagement estimates probable credit losses to determine the allowance for loan losses, small balance,
homogeneous loans are classified in the retail portfolio segment to which pool allocations apply, and loans otherthan these classified in the retail portfolio segment are classified in the corporate portfolio segment. The
corporate portfolio segment consists of loans originated by MHBK and MHTB, and includes mainly businessloans such as those used for working capital and capital expenditure, as well as loans for which the primarysource of repayment of the obligation is income generated by the relevant assets such as project finance, asset
F-39

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
finance and real estate finance. The retail portfolio segment consists mainly of residential mortgage loans,originated by MHBK. The other portfolio segment consists of loans of subsidiaries other than MHBK and
MHTB, such as consolidated VIEs and overseas subsidiaries. See Note 1 “Basis of presentation and summary ofsignificant accounting policies” for further details of the methodology used to determine the allowance for loan
losses and Note 5 “Loans” for further details of obligor ratings and pool allocations.
Changes in Allowance for loan losses by portfolio segment for the fiscal years ended March 31, 2015, 2016 and2017 are shown below:
Corporate

RetailOther(in millions of yen)

Total

2015
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . .

501,349

95,542

29,286626,177

Provision (credit) for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(40,167) (33,261)

13,205(60,223)

Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(64,634)
19,086(3,266) (11,322)
1,454
2,743

(79,222)
23,283

Net charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(45,548)(1,812)(8,579)(55,939)

Others (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,543

—

2,701

10,244

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

423,177

60,46936,613

520,2592016
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . .

423,177

60,46936,613

520,259

Provision (credit) for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33,532(15,474)

16,502

34,560Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(97,536)
17,232(2,173) (12,610) (112,319)
1,399
2,034
20,665

Net charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(80,304)(774) (10,576)(91,654)

Others (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8,666)—(3,252)(11,918)

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

367,739

44,221

39,287451,2472017
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . .

367,739

44,221

39,287451,247

Provision (credit) for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

45,059(10,666)

3,275

37,668Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(22,901)
18,320(1,754)
5,122(6,597)2,158(31,252)
25,600Net charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4,581)

3,368(4,439)(5,652)Others (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(890)

—

(2,700)(3,590)

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

407,327

36,92335,423479,673

Note: Others includes primarily foreign exchange translation.

F-40

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The table below presents Allowance for loan losses and loans outstanding by portfolio segment disaggregated on
the basis of impairment method at March 31, 2016 and 2017:
Corporate

RetailOther(in millions of yen)

Total

2016
Allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . .

367,739

44,221

39,287451,247of which individually evaluated for impairment . . . . . .
of which collectively evaluated for impairment . . . . . .

222,591
145,148

3,829
40,392

12,521
26,766238,941
212,306

Loans (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

59,385,962

12,414,453

5,922,110

77,722,525

of which individually evaluated for impairment . . . . . .
of which collectively evaluated for impairment . . . . . .

634,049
58,751,913

24,76812,389,685

63,2805,858,830

722,097
77,000,428

2017
Allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . .

407,327

36,92335,423479,673of which individually evaluated for impairment . . . . . .
of which collectively evaluated for impairment . . . . . .

272,714
134,613

2,922
34,001

13,306
22,117

288,942
190,731

Loans (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

61,120,654

11,722,726

9,596,201

82,439,581

of which individually evaluated for impairment . . . . . .
of which collectively evaluated for impairment . . . . . .

772,647
60,348,007

23,422
11,699,304

65,0759,531,126

861,144
81,578,437

Note: Amounts represent loan balances before deducting unearned income and deferred loan fees.
In the fiscal year ended March 31, 2015, Credit for loan losses decreased by ¥66,007 million from the previous
fiscal year. The decrease was due primarily to an increase in allowance for loan losses on impaired loans related
to certain domestic borrowers, although the MHFG Group continued to record a credit for loan losses andrecorded a decrease in allowance for loan losses on non-impaired loans as a result of upgrades in the obligor
categories of a broad range of borrowers, reflecting the continuing gradual recovery of the Japanese economy.
In the fiscal year ended March 31, 2016, Provision for loan losses increased by ¥94,783 million from theprevious fiscal year. The MHFG Group recorded a modest level of Provision for loan losses, reflecting how theJapanese economy was in a “leveling off” phase.
In the fiscal year ended March 31, 2017, Provision for loan losses increased by ¥3,108 million from the previous
fiscal year. Although obligor categories improved as a whole, reflecting the gradual recovery in the economic
environment, Provision for loan losses increased due mainly to the deterioration of credit status of certain
borrowers.

F-41

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
7. Premises and equipment
Premises and equipment at March 31, 2016 and 2017 consist of the following:
2016
2017
(in millions of yen)

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
552,205
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
827,458
Equipment and furniture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
463,205
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
88,195Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,656
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,086,124
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,037,843
Less: Accumulated depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,199,853
Premises and equipment—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,837,990

575,054807,312
485,407
93,96723,093
1,308,292
3,293,125
1,251,852
2,041,273

Depreciation and amortization expense for premises and equipment for the fiscal years ended March 31, 2015,2016 and 2017 was ¥161,152 million, ¥162,676 million and ¥163,769 million, respectively.
Premises and equipment under capital leases, which is primarily comprised of data processing equipment,
amounted to ¥69,077 million and ¥80,430 million at March 31, 2016 and 2017, respectively. Accumulated
depreciation and amortization on such premises and equipment at March 31, 2016 and 2017 amounted to¥34,733 million and ¥40,155 million, respectively.
8. Goodwill and intangible assets
Goodwill
The changes in Goodwill during the fiscal years ended March 31, 2015, 2016 and 2017 are as follows:
2015

Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment losses recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross amount of goodwill (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated impairment losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2016
2017
(in millions of yen)

11,549——154
11,703
81,25469,551

11,70319,097
16,470 (1) 76,225 (2)(6,222)—(2,854)(146)
19,097
95,176
94,473 171,432
75,37676,256

Notes:(1) Goodwill acquired is entirely related to the acquisition of Simplex Real Estate Management Inc. andSimplex REIT Partners Inc.
(2) Goodwill acquired is entirely related to the acquisition of Asset Management One (see Note 3 “Businesscombination”).
(3) Goodwill is recorded at a designated reporting unit level for the purpose of assessing impairment. Goodwill
is not allocated to the reportable segments in Note 32 “Business segment information”.
Due to the prolonged severe business environment for Banco Mizuho do Brasil S.A., it was determined that thecarrying amount of the Banco Mizuho do Brasil S.A. reporting unit exceeded its fair value, which is based on themarket approach. Therefore, a goodwill impairment loss of ¥6,222 million was recognized during the fiscal year
ended March 31, 2016.
F-42

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Intangible assets
The table below presents the gross carrying amount, accumulated amortization and net carrying amount ofintangible assets, at March 31, 2016 and 2017:
2016
Gross
Net
Gross
carrying Accumulated carrying carrying
amount amortization amountamount(in millions of yen)

2017
Net
Accumulated carrying
amortization amount

Intangible assets subject to amortization:
Customer relationships (Note) . . . . . . . . . . . . 73,949
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,864

35,1782,208

38,771 126,979
656
2,814

42,5172,190

84,462624

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,813

37,38639,427 129,793

44,70785,086

9,061

—

9,061

48,651 138,854

44,707

94,147

Intangible assets not subject to amortization:
Total . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,224

—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86,037

37,386

9,224

Note: Customer relationships were acquired in connection with the merger of MHSC and Shinko on May 7, 2009
and the integration among asset management companies on October 1, 2016, see Note 3 “Businesscombination” for further details of the integration among asset management companies. See Note 1 “Basisof presentation and summary of significant accounting policies” for further information.
For the fiscal years ended March 31, 2015, 2016, and 2017, the MHFG Group recognized ¥5,376 million,¥5,254 million, and ¥7,433 million, respectively, of amortization expense in respect of intangible assets.
The table below presents the estimated aggregate amortization expense in respect of intangible assets for the next
five years:(in millions of yen)

Fiscal year ending March 31:2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,465
9,243
8,940
8,232
7,699

9. Pledged assets and collateral
The following amounts, by balance sheet classification, have been pledged as collateral for borrowings and forother purposes at March 31, 2016 and 2017:
2016
2017
(in billions of yen)Interest-bearing deposits in other banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

69
7,939
10,254
5,871
1,322

51
6,577
8,213
7,468
1,588

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25,45523,897

F-43

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The associated liabilities collateralized by the above assets at March 31, 2016 and 2017 are summarized below:
2016
2017
(in billions of yen)

Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under repurchase agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under securities lending transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

813
6,182
2,790
657
5,545

919
6,109
1,460
686
4,220

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,987

13,394The Bank of Japan (“the BOJ”) requires private depository institutions to maintain a certain amount of funds as
reserves in current accounts with the BOJ, based on average deposit balances and certain other factors. There aresimilar reserve deposit requirements for foreign branches and subsidiaries engaged in banking businesses inforeign countries. At March 31, 2016 and 2017, the deposit amounts maintained with the BOJ and foreign central
banks, which were included in Cash and due from banks and Interest-bearing deposits in other banks, were¥34,377 billion and ¥44,741 billion, respectively. These balances included the reserve funds required to be
maintained by the MHFG Group, which amounted to ¥1,322 billion and ¥1,462 billion at March 31, 2016 and2017, respectively.
At March 31, 2016 and 2017, the MHFG Group had received collateral that can be sold or repledged, with a fairvalue of ¥12,116 billion and ¥13,395 billion, respectively, of which ¥11,616 billion and ¥12,988 billion,
respectively, was sold and repledged. Such collateral was primarily obtained in connection with resale orsecurities borrowing agreements, and was generally used as collateral for repurchase or securities lending
agreements, or to cover short sales.
10. Deposits
The balances of time deposits and certificates of deposit issued by domestic offices in amounts of ¥10 million(approximately US$90 thousand at the Federal Reserve Bank of New York’s noon buying rate on March 31,2017) or more and the balances of these deposits issued by foreign offices in amounts of US$100,000 or more atMarch 31, 2016 and 2017 are as follows:
2016
2017
(in millions of yen)Domestic offices:Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certificates of deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19,209,570
6,432,810

17,763,052
5,877,100

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25,642,380

23,640,152

Foreign offices:Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certificates of deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,708,142
5,394,695

14,862,230
4,754,170

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18,102,837

19,616,400

The aggregate amount of demand deposits in overdraft status that have been reclassified as loan balances at
March 31, 2016 and 2017 was ¥890 billion and ¥718 billion, respectively.
F-44

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The balance and remaining maturities of time deposits and certificates of deposit issued by domestic and foreign
offices at March 31, 2017 are shown in the following table:Timedeposits

Certificates ofdeposit(in millions of yen)

Total

Domestic offices:
Due in one year or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after one year through two years . . . . . . . . . . . . . . . . . . . . . . .
Due after two years through three years . . . . . . . . . . . . . . . . . . . . .
Due after three years through four years . . . . . . . . . . . . . . . . . . . . .
Due after four years through five years . . . . . . . . . . . . . . . . . . . . . .
Due after five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,800,247
2,024,310
1,206,888
349,896346,569
133,581

5,821,000
56,100————28,621,247
2,080,410
1,206,888
349,896346,569
133,581

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26,861,491

5,877,100

32,738,591

Foreign offices:
Due in one year or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due after one year through two years . . . . . . . . . . . . . . . . . . . . . . .
Due after two years through three years . . . . . . . . . . . . . . . . . . . . .
Due after three years through four years . . . . . . . . . . . . . . . . . . . . .
Due after four years through five years . . . . . . . . . . . . . . . . . . . . . .
Due after five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,765,251
88,304
5,740
—
198
8,956

4,599,583
38,70955,81860,067——

19,364,834
127,01361,55860,067198
8,956

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,868,449

4,754,177

19,622,626

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

41,729,940

10,631,277

52,361,217

11. Due to trust accounts
MHTB and TCSB, which are MHFG’s trust bank subsidiaries, hold assets on behalf of their customers in an
agent, fiduciary or trust capacity. Such trust account assets are not the MHFG Group’s proprietary assets and aremanaged and accounted for separately. However, the cash in individual trust accounts is often placed withMHTB and TCSB for the customers’ short-term investment needs. These amounts which MHTB and TCSB owe
to the trust accounts are recorded as Due to trust accounts.
The MHFG Group consolidates certain guaranteed principal money trusts. See Note 25 “Variable interest entities
and securitizations” for further discussion of the guaranteed principal money trusts.
12. Short-term borrowings and long-term debt
Short-term borrowings
Short-term borrowings consist of Due to trust accounts, Call money and funds purchased, Payables under
repurchase agreements and securities lending transactions, and Other short-term borrowings.
Details of Other short-term borrowings at March 31, 2016 and 2017 are as follows:
2016
2017
(in millions of yen)

Commercial paper and short-term notes issued by consolidated VIEs of asset-backed
commercial paper programs (1) (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
289,219
Commercial paper and short-term notes issued by MHFG and its subsidiaries (1) (3) . . . . . 1,369,302
Borrowings from the Bank of Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
324,146
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
97,372
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,080,039
F-45

59,607
956,447355,255
105,3031,476,612

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Notes:(1) Short-term notes are issued under the laws of Japan in the form of dematerialized commercial paper, whosecharacteristics are economically the same as commercial paper.
(2) Commercial paper and short-term notes issued by consolidated VIEs of asset-backed commercial paper
programs in the above table consist of commercial paper and short-term notes, of which the amounts were¥232,538 million and ¥56,681 million, respectively, at March 31, 2016, and ¥24,559 million and¥35,048 million, respectively, at March 31, 2017.
(3) Commercial paper and short-term notes issued by MHFG and its subsidiaries in the above table consist ofcommercial paper and short-term notes, of which the amounts were ¥777,602 million and ¥591,700 million,
respectively, at March 31, 2016, and ¥765,147 million and ¥191,300 million, respectively, at March 31, 2017.
Long-term debt
Long-term debt with original maturities of more than one year at March 31, 2016 and 2017 is comprised of thefollowing:
2016
2017
(in millions of yen)

Obligations under capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loan participation borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Senior borrowings and bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subordinated borrowings and bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37,81164,524
11,576,384
3,086,808

40,947
90,63911,119,136
3,278,692

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,765,527

14,529,414

The following table presents the interest rates and maturities of senior borrowings and bonds, and subordinatedborrowings and bonds:
Interest rates (1)(%)

Senior borrowings and bonds:
fixed rate denominated in Japanese yen . . . . . . .
fixed rate denominated in U.S. dollars . . . . . . . .
fixed rate denominated in other currencies . . . .
floating rate denominated in Japanese yen . . . . .
floating rate denominated in U.S. dollars . . . . . .
floating rate denominated in other currencies . .

0.00-10.00
0.00-7.49
0.01-10.00
0.00-23.80
0.00-10.00
0.00-9.40

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subordinated borrowings and bonds:
fixed rate denominated in Japanese yen . . . . . . .
fixed rate denominated in U.S. dollars . . . . . . . .

Maturities (2)

2016
2017
(in millions of yen)

Apr. 2017-Dec. 2046 7,863,984 6,011,939
Apr. 2017-Aug. 2046 1,778,892 2,533,715
Apr. 2017-May. 2037
135,515
172,370
Apr. 2017-Mar. 2047
852,425
717,056
Apr. 2017-Jul. 2033
898,840 1,557,288
Aug. 2017-Sep. 2035
46,728
126,768
11,576,384 11,119,136

0.50-4.26
4.30-4.70

Apr. 2017-Perpetual 2,596,460 2,858,445
Jul. 2022-Oct. 2025
490,348420,247

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,086,808 3,278,692

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,663,192 14,397,828

Notes:(1) The interest rates disclosed reflect the range of contractual rates in effect at March 31, 2017.
(2) Maturity information disclosed is the range of maturities at March 31, 2017.
F-46

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(3) None of the long-term debt issuances above are convertible to common stock.
(4) Certain debt agreements permit the MHFG Group to redeem the related debt, in whole or in part, prior tomaturity at the MHFG Group’s option on terms specified in the respective agreements.
The following is a summary of the contractual maturities of long-term debt subsequent to March 31, 2017:(in millions of yen)

Fiscal year ending March 31:2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,614,386
3,127,227
1,733,501
1,841,416
1,194,536
5,018,348

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,529,414

13. Other assets and liabilities
The following table sets forth the details of other assets and liabilities at March 31, 2016 and 2017:
2016
2017
(in millions of yen)

Other assets:
Accounts receivable from brokers, dealers and customers for securities
transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,718,769
Collateral provided for derivative transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
884,651
Prepaid pension cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
612,102
Miscellaneous receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
286,896
Margins provided for futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
225,240
Security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
113,066
Loans held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33,133
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
823,033

1,564,295
973,404
682,592
324,135
276,398
122,858
26,689
1,021,958

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,696,890

4,992,329

Other liabilities:
Accounts payable to brokers, dealers and customers for securities transactions . . . . 2,882,824
Guaranteed trust principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
623,904
Collateral accepted for derivative transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
715,894
Miscellaneous payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
442,352
Margins accepted for futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
334,925
Unearned income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
144,903
Factoring amounts owed to customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
242,392
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,089,529

1,400,141
683,324
671,691
481,809
307,066
134,666
53,4881,294,340

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,026,525

F-47

6,476,723

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Guaranteed trust principal
Guaranteed trust principal is the liability of certain consolidated trust arrangements, in respect of which the
MHFG Group provides guarantees for the repayment of principal. See Note 25 “Variable interest entities andsecuritizations” for further discussion of the guaranteed principal money trusts.
Unearned income
Unearned income is primarily comprised of refundable fees received from consumer loan customers at the time
the loans were made, which is being deferred and recognized in earnings as earned.
14. Preferred stock
The composition of preferred stock at March 31, 2015, 2016 and 2017 is as follows:
2015
Class of stock

Eleventh series class XI
preferred stock (1) . . . . . .
First series class XIV
preferred stock (2) . . . . . .
Second series class XIV
preferred stock (2) . . . . . .
Third series class XIV
preferred stock (2) . . . . . .
Fourth series class XIV
preferred stock (2) . . . . . .
First series class XV
preferred stock (3) . . . . . .
Second series class XV
preferred stock (3) . . . . . .
Third series class XV
preferred stock (3) . . . . . .
Fourth series class XV
preferred stock (3) . . . . . .
First series class XVI
preferred stock (4) . . . . . .
Second series class XVI
preferred stock (4) . . . . . .
Third series class XVI
preferred stock (4) . . . . . .
Fourth series class XVI
preferred stock (4) . . . . . .
Total . . . . . . . . . . . . . . . . .

Aggregate amount(in millions of yen)

914,752

Authorized

Number of shares
IssuedIn treasury

914,752,000 914,752,000 701,631,100

Liquidation Convertible
value per shareor not(in yen)

1,000

Yes

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

1,500,000,000

—

—

—

—

—

1,500,000,000

—

—

—

—

—

1,500,000,000

—

—

—

—

—

1,500,000,000

—

—

—

—

914,752

4,214,752,000 914,752,000 701,631,100

F-48

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2016
Class of stock

Eleventh series class XI
preferred stock (1) . . . .
First series class XIV
preferred stock (2) . . . .
Second series class XIV
preferred stock (2) . . . .
Third series class XIV
preferred stock (2) . . . .
Fourth series class XIV
preferred stock (2) . . . .
First series class XV
preferred stock (3) . . . .
Second series class XV
preferred stock (3) . . . .
Third series class XV
preferred stock (3) . . . .
Fourth series class XV
preferred stock (3) . . . .
First series class XVI
preferred stock (4) . . . .
Second series class XVI
preferred stock (4) . . . .
Third series class XVI
preferred stock (4) . . . .
Fourth series class XVI
preferred stock (4) . . . .
Total . . . . . . . . . . . . . . . .

Aggregate amount(in millions of yen)

914,752

Authorized

Number of shares
IssuedIn treasury

914,752,000 914,752,000 815,828,400

Liquidation
Convertible
value per shareor not(in yen)

1,000

Yes

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

1,500,000,000

—

—

—

—

—

1,500,000,000

—

—

—

—

—

1,500,000,000

—

—

—

—

—

1,500,000,000

—

—

—

—

914,752

4,214,752,000 914,752,000 815,828,400

F-49

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2017
Class of stock

Class XI preferredstock . . . . . . . . . . . . . .
First series class XIV
preferred stock (2) . . . .
Second series class XIV
preferred stock (2) . . . .
Third series class XIV
preferred stock (2) . . . .
Fourth series class XIV
preferred stock (2) . . . .
First series class XV
preferred stock (3) . . . .
Second series class XV
preferred stock (3) . . . .
Third series class XV
preferred stock (3) . . . .
Fourth series class XV
preferred stock (3) . . . .
First series class XVI
preferred stock (4) . . . .
Second series class XVI
preferred stock (4) . . . .
Third series class XVI
preferred stock (4) . . . .
Fourth series class XVI
preferred stock (4) . . . .
Total . . . . . . . . . . . . . . . .

Aggregate amount(in millions of yen)

Authorized

Number of shares
IssuedIn treasury

Liquidation
Convertible
value per shareor not(in yen)—914,752,000

—

—

—

—

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

900,000,000

—

—

—

—

—

1,500,000,000

—

—

—

—

—

1,500,000,000

—

—

—

—

—

1,500,000,000

—

—

—

—

—

1,500,000,000

—

—

—

—

—

4,214,752,000——

Notes:(1) The aggregate amount and number of issued shares include the preferred stock in treasury which has been
converted into common stock but not yet cancelled.
(2) The total number of authorized shares from first to fourth series class XIV preferred stock shall not exceed
900,000,000.
(3) The total number of authorized shares from first to fourth series class XV preferred stock shall not exceed
900,000,000.
(4) The total number of authorized shares from first to fourth series class XVI preferred stock shall not exceed
1,500,000,000.
Holders or registered pledgees of preferred stock are entitled to receive annual dividends, and distribution ofresidual assets of MHFG as set out above at the liquidation value per share, prior to holders of common stock but
pari passu among themselves. MHFG may pay up to one-half of the annual dividend payable on each class ofpreferred stock as an interim dividend. Dividends on preferred stock are not cumulative. Holders of preferredstock are not entitled to vote at a general meeting of shareholders except where the articles of incorporation
entitle holders of preferred stock to vote.

F-50

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In June 2013, MHFG newly authorized class XIV preferred stock, class XV preferred stock and class XVI
preferred stock to meet the requirements of Basel III. Under Basel III, in order for preferred stock issued by abank holding company to be included as its regulatory capital under the capital adequacy requirements, the terms
and conditions of the preferred stock are required to include a provision that in the event the bank holding
company is considered to be non-viable, (1) a write-off of the relevant preferred stock or (2) a conversion of therelevant preferred stock into common stock shall be effected (loss-absorption clause). In respect of class XI
preferred stock, which was authorized before the implementation of Basel III in the articles of incorporation of
MHFG, it is not possible to include the foregoing loss-absorption clause in the terms and conditions of that
preferred stock under the current provisions of the articles of incorporation. Therefore, class XIV preferred stock,class XV preferred stock and class XVI preferred stock were newly authorized so that the foregoing lossabsorption clause can be included in the terms and conditions of class XIV preferred stock, class XV preferredstock and class XVI preferred stock by a resolution of the board of directors relating to the issuance of therelevant preferred stock. Besides the foregoing loss-absorption clause, provisions regarding the preferred stock
dividends, distribution of residual assets, acquisition clause and rights to request acquisition in respect of class
XIV preferred stock, class XV preferred stock and class XVI preferred stock were newly established. In addition,
each of class XIV preferred stock, class XV preferred stock and class XVI preferred stock was established in
multiple series as a separate class of shares in order to enable MHFG to issue that preferred stock in multiple
series.
The following table shows the changes in the number of shares and the aggregate amount of preferred stockduring the fiscal years ended March 31, 2015, 2016 and 2017:

Eleventh series class XI preferred stock (Note) . . . 914,752,000—

Issued at
Issued at
Issued atMarch 31,
Net
March 31,
Net
March 31,2015change2016change2017(number of shares)
914,752,000—
914,752,000 (914,752,000)—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 914,752,000—

914,752,000Class of stock

Class of stock

Issued atMarch 31,2014

Aggregate
amount at
March 31,2014

NetchangeNetchangeEleventh series class XI preferred stock (Note) . . .

914,752—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

914,752——

914,752,000 (914,752,000)

Aggregate
Aggregate
amount at
amount at
March 31,
Net
March 31,2015change2016(in millions of yen)
914,752—
914,752
914,752—

914,752

Netchange—Aggregate
amount at
March 31,2017

(914,752)—(914,752)—

Note: In July 2016, all shares of the eleventh series class XI preferred stock were converted into common stockand cancelled.

F-51

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
15. Common stock
The following table shows the changes in the number of issued shares of common stock during the fiscal years
ended March 31, 2015, 2016 and 2017:
2015

2016
(shares)

2017

Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . .
Issuance of new shares of common stock due to conversion
of Eleventh series class XI preferred stock . . . . . . . . . . .
Issuance of new shares of common stock due to exercise ofstock acquisition rights . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,263,885,187

24,621,897,967

25,030,525,657

351,822,780

403,667,690

349,677,288

6,190,000

4,960,000

6,105,000

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . .

24,621,897,967

25,030,525,657

25,386,307,945

16. Dividends
The amount available for dividends under the Companies Act is based on the amount recorded in MHFG’s
non-consolidated general books of account, maintained in accordance with accounting principles generally
accepted in Japan (“Japanese GAAP”) and adjusted by post period-end changes. Therefore, the consolidated
shareholders’ equity under U.S. GAAP has no effect on the determination of the amount available for dividends.
On March 31, 2017, MHFG’s capital stock, capital surplus and retained earnings were ¥2,256,275 million,¥1,196,259 million and ¥1,839,725 million, respectively, under Japanese GAAP.
In making a distribution of retained earnings, an entity must set aside in its legal reserve an amount equal to
one-tenth of the amount of retained earnings so distributed, until its legal reserve reaches one-quarter of its
capital stock. MHFG’s legal reserve at March 31, 2017 was ¥1,200,517 million, of which ¥1,196,167 million was
included in capital surplus and ¥4,350 million in retained earnings.
In addition to the provision that requires an appropriation for the legal reserve, the Companies Act and the
Banking Act impose certain limitations on the amount available for dividends. Under the Companies Act,
MHFG’s maximum amount available for dividends, at March 31, 2017, was ¥1,831,321 million, based on theamount recorded in MHFG’s general books of account under Japanese GAAP. Under the Banking Act andrelated regulations, MHFG has to meet the minimum capital adequacy requirements. Distributions of retained
earnings, which are otherwise distributable to shareholders, are restricted in order to maintain the minimum
Common Equity Tier 1 capital ratio of 4.5% for capital adequacy purposes under the rules in Basel III. See
Note 18 “Regulatory matters” for further discussion of regulatory capital requirements.
Payment of dividends on shares of common stock is also subject to the prior payment of dividends on shares ofpreferred stock.
The following table shows dividends on preferred stock and common stock during the fiscal years ended
March 31, 2015, 2016 and 2017:2015
Class of stock

Cash dividends
Per share
In aggregate(in yen)(in millions of yen)

Eleventh series class XI preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-52

20
7

5,906
170,231
176,137MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2016
Class of stock

Cash dividends
Per share
In aggregate(in yen)(in millions of yen)

Eleventh series class XI preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20
7.75

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017Class of stock

3,572
191,693
195,265

Cash dividends
Per share
In aggregate(in yen)(in millions of yen)

Eleventh series class XI preferred stock (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10
7.50

989
189,013
190,002

Note: In July 2016, all shares of the eleventh series class XI preferred stock were converted into common stockand cancelled. Consequently, the amount for the fiscal year does not include interim dividends.

F-53

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
17. Accumulated other comprehensive income
Changes in each component of AOCI for the fiscal years ended March 31, 2015, 2016 and 2017 are as follows:
2015

2016
(in millions of yen)

2017

AOCI, balance at beginning of fiscal year, previously reported . . . . . . . . . . . 1,117,877 2,041,005 1,469,308
Cumulative effect of change in accounting principles (Notes 2 and 25) . . . .
——330
AOCI, balance at beginning of fiscal year, adjusted . . . . . . . . . . . . . . . . . . . . 1,117,877 2,041,005 1,469,638
Net unrealized gains (losses) on available-for-sale securities:
Balance at beginning of fiscal year, previously reported . . . . . . . . 1,123,272 1,747,607 1,409,459
Cumulative effect of change in accounting principles(Notes 2 and 25) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
——(85)
Balance at beginning of fiscal year, adjusted . . . . . . . . . . . . . . . . . 1,123,272 1,747,607 1,409,374
Unrealized holding gains (losses) during year . . . . . . . . . . . .
763,115 (189,479) 273,844
Less: reclassification adjustments for losses (gains) included
in net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (138,780) (148,669) (221,916)
Change during year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

624,335(338,148)

51,928

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments:
Balance at beginning of fiscal year, previously reported . . . . . . . .
Cumulative effect of change in accounting principles(Notes 2 and 25) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at beginning of fiscal year, adjusted . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments during year . . . . . .
Less: reclassification adjustments for losses (gains) included
in net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,747,607

1,409,459

1,461,302(6,434)

129,179

6,310—(6,434)
134,104—
129,179(122,081)

415
6,725
(11,920)

1,509

(788)

(340)

Change during year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

135,613(122,869)(12,260)

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension liability adjustments:
Balance at beginning of fiscal year, previously reported . . . . . . . .
Unrealized gains (losses) during year . . . . . . . . . . . . . . . . . . .
Less: reclassification adjustments for losses (gains) included
in net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

129,179

6,310(5,535)

1,039
163,191

164,219(107,497)

53,53911,561(11)(3,183)296

Change during year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

163,180(110,680)

11,857

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other comprehensive income (loss), net of tax attributable to
MHFG shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

164,21953,53965,396923,128(571,697)

51,525

AOCI, balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,041,005

1,469,308

1,521,163

F-54

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table shows the amounts reclassified out of AOCI into net income during the fiscal year ended
March 31, 2017:

Beforetax (1)Taxeffect (2)Net of tax
beforeNet of tax
Net of tax
allocation to attributable to attributablenoncontrolling noncontrolling to MHFG
interests
interests (2)shareholders(in millions of yen)Amounts reclassified out of
AOCI into net income:Net unrealized gains(losses) on
available-for-salesecurities . . . . . . . . . . 319,707 (97,729)
Foreign currencytranslation
adjustments . . . . . . . .
340—
Pension liability
adjustments . . . . . . . .
(476)
178
Total . . . . . . . . . . . . . . . . . . . 319,571 (97,551)

Affected line items in
the consolidated
statements ofincome:221,978(62)

221,916

340

—

340

(298)

2

(296)

222,020(60)

221,960

Investment gains(losses)—net
Foreign exchange
gains (losses)-net
Salaries andemployee benefits

Notes:(1) The amounts in the Before tax column are recorded in each account presented under the heading “Affectedline items in the consolidated statements of income”.
(2) The amounts in the Tax effect column and Net of tax attributable to noncontrolling interests column arerecorded in Income tax expense and Net income (loss) attributable to noncontrolling interests in the
consolidated statements of income, respectively.
18. Regulatory matters
Regulatory capital requirements
MHFG, MHBK, and MHTB are subject to regulatory capital requirements administered by the Financial
Services Agency in accordance with the provisions of the Banking Act and related regulations. Failure to meet
minimum capital requirements may initiate certain mandatory actions by regulators that, if undertaken, could
have a direct material effect on the MHFG Group’s consolidated financial condition and results of operations.
The capital adequacy guidelines applicable to Japanese banks and bank holding companies with international
operations supervised by the Financial Services Agency closely follow the risk-adjusted approach proposed by
the Basel Committee on Banking Supervision (“BCBS”) and are intended to further strengthen the soundness andstability of Japanese banks. In December 2010, BCBS issued the Basel III rules text (later revised in June 2011,
January 2013 and October 2014), which presents the details of global regulatory standards on bank capital
adequacy and liquidity agreed by the Governors and Heads of Supervision, which is the oversight body of BCBS,
and endorsed by the G20 Leaders at the Seoul summit in November 2010. The rules text sets out higher andbetter-quality capital, better risk coverage, the introduction of a leverage ratio as a backstop to the risk-based
requirement, and the introduction of the capital conservation buffer and countercyclical capital buffer asmeasures to promote the build-up of capital that can be drawn down in periods of stress, and the introduction of
F-55

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
two global liquidity standards. The Financial Services Agency’s revisions to its capital adequacy guidelines
became effective from March 31, 2013, which generally reflect the rules in the Basel III rules text that have been
applied from January 1, 2013. The framework of Basel III is based on the following three pillars: minimum
capital requirements; supervisory review; and market discipline. Under the first pillar, the capital ratio is
calculated by dividing regulatory capital, or risk-based capital, by risk-weighted assets. Under the second pillar,banks are required to maintain adequate capital to support all of the major risks in their business and areencouraged to develop and use better risk management techniques in monitoring and managing such risks. Under
the third pillar, banks are required to enhance disclosure, including disclosure of details of the capital adequacy
ratio, the amount of each type of risk and the method of calculation used so that the market may make more
effective evaluations.
With regard to risk-based capital, the guidelines based on Basel III set out higher and better-quality capital
standards compared to those under Basel II, which had been effective until Basel III was applied. The guidelines
based on Basel III require a target minimum standard capital adequacy ratio of 8%, Tier 1 capital ratio of 6% andCommon Equity Tier 1 capital ratio of 4.5%, on both a consolidated and non-consolidated basis for banks withinternational operations, such as MHBK and MHTB, or on a consolidated basis for bank holding companies withinternational operations, such as MHFG.
Risk-based capital, calculated from financial statements prepared under Japanese GAAP, is classified into thefollowing two tiers: Tier 1 capital; and Tier 2 capital. Tier 1 capital consists of Common Equity Tier 1 capitaland Additional Tier 1 capital. Common Equity Tier 1 capital generally consists of common stock, capital surplus,
retained earnings, accumulated other comprehensive income and other disclosed reserves and others less any
regulatory adjustments. Additional Tier 1 capital generally consists of instruments issued by a bank or its holding
company that meet the criteria for inclusion in Additional Tier 1 capital and others less any regulatory
adjustments. Tier 2 capital generally consists of instruments issued by a bank or its holding company such as
subordinated debt that meet the criteria for inclusion in Tier 2 capital, general reserve for possible losses on loans(equaling the sum of (i) the excess of the amount of qualified reserves over the amount of expected losses and(ii) the amount of general reserves calculated based on the standardized approach) and others less any regulatory
adjustments.
Under Basel III, capital instruments that no longer qualify as Additional Tier 1 capital or Tier 2 capital are being
phased out beginning March 2013 by increments of 10% until becoming fully effective in March 2022. The
MHFG Group’s existing preferred securities (the amounts thereof included within Additional Tier 1 capital as ofMarch 31, 2017 being ¥577.5 billion) and existing subordinated debt issued before March 2013 (the amounts
thereof included within Tier 2 capital as of March 31, 2017 being ¥842.1 billion) are subject to the phase-out
arrangements.
In November 2011, the Financial Stability Board (“FSB”) published policy measures to address the systemic andmoral hazard risks associated with systemically important financial institutions. The policy measures include
requirements for global systemically important banks (“G-SIBs”) to have additional loss absorption capacity
tailored to the impact of their default, ranging from 1% to 2.5% of risk-weighted assets, to be met with Common
Equity Tier 1 capital, which would be in addition to the 7.0% Common Equity Tier 1 capital requirement(including capital conservation buffer). The requirements began phasing in from January 2016 and will be fully
implemented by January 2019. The Group was included in the list of G-SIBs updated in November 2016 and wasallocated to the category that would require 1.0% of additional loss absorbency.
In November 2015, the Financial Service Agency published the revised capital adequacy guidelines to introduce
the Basel III rules text regarding the capital conservation buffer, the countercyclical capital buffer and the
F-56

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
additional loss absorption capacity requirement for G-SIBs and domestic systemically important banks(“D-SIBs”). These guidelines became effective on March 31, 2016. The capital conservation buffer, thecountercyclical capital buffer and the additional loss absorption capacity requirement for G-SIBs and D-SIBs
must be met with Common Equity Tier l capital under the revised guidelines, and if such buffer and requirement
are not satisfied, a capital distribution constraints plan is required to be submitted to the Financial Service
Agency and carried out. The capital conservation buffer is being phased in starting in March 2016 at 0.625%
until becoming fully effective in March 2019 at 2.5%. In addition, subject to national discretion by the respective
regulatory authorities, if the relevant national authority judges a period of excess credit growth to be leading to
the build-up of system-wide risk, a countercyclical capital buffer ranging from 0% to 2.5% would also be
imposed on banking organizations. The countercyclical capital buffer is a weighted average of the buffers
deployed across all the jurisdictions to which the banking organization has credit exposures.
In December 2015, the Financial Service Agency published a capital adequacy guideline regarding thedesignation of G-SIBs and D-SIBs in Japan. The Group was designated as both a global systemically importantbank (“G-SIB”) and domestic systemically important bank (“D-SIB”), and the additional loss absorption capacity
requirement applicable to the Group was 1.0% on a fully effective basis. The additional loss absorption capacity
requirement was the same as that imposed by the FSB, which is being phased in starting in March 2016 at 0.25%
until becoming fully effective in March 2019 at 1.0%.
Regulatory adjustments such as goodwill and other intangibles, and defined benefit pension fund assets andliabilities, are to be applied mainly to the calculation of Common Equity Tier 1 capital in the form of thedeductions. The regulatory adjustments began at 20% of the required deductions in the calculation of Common
Equity Tier 1 capital in March 2014 and will be increased by 20% increments per year through March 2018 when
the regulatory adjustments reach 100%. During this transition period, the remainder not deducted from capitalwill continue to be subject to existing national treatments.
The capital requirements and regulatory adjustments are being phased in over a transitional period as follows(italicized percentages indicate those still in transition periods):
March
2016

Minimum Common Equity Tier 1 capital . . . . . . . . . . .
Minimum Tier 1 capital . . . . . . . . . . . . . . . . . . . . . . . . .
Minimum total capital . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital conservation buffer . . . . . . . . . . . . . . . . . . . . . .
Phase out of recognition of capital instruments that nolonger qualify as capital . . . . . . . . . . . . . . . . . . . . . . .
Phase-in of deductions from capital . . . . . . . . . . . . . . . .
Additional loss absorbency requirements for G-SIBs
and D-SIBs (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

March
2017

March
2018

4.5% 4.5% 4.5%
6.0% 6.0% 6.0%
8.0% 8.0% 8.0%
0.625% 1.25% 1.875%

March
2019

4.5%
6.0%
8.0%
2.5%

March
2020

4.5%
6.0%
8.0%
2.5%

March
2021

4.5%
6.0%
8.0%
2.5%

March
2022

4.5%
6.0%
8.0%
2.5%

60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0%
60.0% 80.0% 100.0% 100.0% 100.0% 100.0% 100.0%
0.25% 0.50% 0.75%

1.0%

1.0%

1.0%

1.0%

Note: Figures assume that the additional loss absorbency requirements applied to the Group as a G-SIB and
D-SIB continue to be 1.0% on a fully effective basis.
If the capital adequacy ratio of a financial institution falls below the required level, the Financial Services
Agency may, depending upon the extent of capital deterioration, take certain corrective action, including
requiring the financial institution to submit an improvement plan to strengthen its capital base, reduce its total
assets, restrict its business operations or other actions that could have a material effect on its financial condition
and results of operations.
F-57

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Capital adequacy ratios of MHFG, MHBK, and MHTB as of March 31, 2016 and 2017 calculated in accordancewith Japanese GAAP and the guidelines established by the Financial Services Agency are set forth in thefollowing table:
2016
2017
AmountRatio Amount Ratio(in billions of yen, except percentages)
Consolidated:
MHFG:
Common Equity Tier 1 capital:
Required (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier 1 capital:
Required (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total risk-based capital:
Required (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MHBK:Common Equity Tier 1 capital:
Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier 1 capital:
Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total risk-based capital:
Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MHTB:Common Equity Tier 1 capital:
Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier 1 capital:
Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total risk-based capital:
Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-consolidated:
MHBK:
Common Equity Tier 1 capital:
Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier 1 capital:
Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total risk-based capital:
Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MHTB:Common Equity Tier 1 capital:
Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier 1 capital:
Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total risk-based capital:
Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,361
6,566

5.375
10.50

3,857
7,002

6.25
11.34

4,299
7,905

6.875
12.64

4,783
8,212

7.75
13.30

5,550
9,639

8.875
15.41

6,017
10,051

9.75
16.28

2,555
6,142

4.50
10.81

2,541
6,304

4.50
11.16

3,406
7,244

6.00
12.75

3,388
7,536

6.00
13.34

4,542
8,780

8.00
15.46

4,517
9,149

8.00
16.20

109
440

4.50
18.21

112
466

4.50
18.73

145
440

6.00
18.21

149
466

6.00
18.73

193
472

8.00
19.52

199
485

8.00
19.47

2,489
5,892

4.50
10.65

2,432
6,057

4.50
11.20

3,318
7,004

6.00
12.66

3,243
7,316

6.00
13.53

4,424
8,576

8.00
15.50

4,324
8,938

8.00
16.53

109
448

4.50
18.52

113
475

4.50
18.98

145
448

6.00
18.52

150
475

6.00
18.98

194
480

8.00
19.80

200
493

8.00
19.70

Note: The required ratios disclosed above, at March 31, 2016 and 2017, include the transitional capitalconservation buffer of 0.625% and 1.25%, respectively, and the transitional additional loss absorbency
F-58

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
requirements for G-SIBs and D-SIBs of 0.25% and 0.5%, respectively, which are both in addition to theregulatory minima. The respective required amounts are determined by applying the ratios to the sum of
the risk weighted assets and certain other risk amounts.
MHFG’s securities subsidiaries in Japan are also subject to the capital adequacy requirement under the Financial
Instruments and Exchange Act. Under this requirement, securities firms must maintain a minimum capital
adequacy ratio of 120% calculated as a percentage of capital accounts less certain assets, as determined inaccordance with Japanese GAAP, against amounts equivalent to market, counterparty, and basic risks. Specificguidelines are issued as a ministerial ordinance that details the definition of essential components of the capitalratios, including capital, disallowed assets and risks, and related measures. Failure to maintain a minimum capitalratio will trigger mandatory regulatory actions. A capital ratio of less than 140% will call for regulatory reporting
and a capital ratio of less than 100% may lead to a temporary suspension of all or part of the business operations
and further, to the cancellation of the license to act as a securities broker and dealer.
Management believes, as of March 31, 2017, that MHFG, MHBK, MHTB, and their securities subsidiaries inJapan were in compliance with all capital adequacy requirements to which they were subject.
19. Earnings per common share
Basic earnings per common share are computed by dividing net income attributable to MHFG commonshareholders by the weighted average number of common shares outstanding during the fiscal year. Diluted
earnings per common share reflect the assumed conversion to common shares of all convertible securities such as
convertible preferred stock.
The following table sets forth the computation of basic and diluted earnings per common share for the fiscal
years ended March 31, 2015, 2016 and 2017:
2015

2016
(in millions of yen)

2017

Net income:Net income attributable to MHFG shareholders . . . . . . . . . . . . . . . .
Less: Net income attributable to preferred shareholders . . . . . . . . . .

803,048
4,910

850,492
2,430

362,440—

Net income attributable to common shareholders . . . . . . . . . . . . . . .

798,138

848,062

362,440

Effect of dilutive securities:
Convertible preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,910

2,430

—

Net income attributable to common shareholders after
assumed conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

803,048

850,492

362,440

2015

2016(thousands of shares)

2017

Shares:
Weighted average common shares outstanding . . . . . . . . . . . . . . . .

24,368,116

24,806,161

25,285,899

Effect of dilutive securities:
Convertible preferred stock (Note) . . . . . . . . . . . . . . . . . . . . . . . .
Stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

994,745
18,186563,044
17,82882,993
11,410Weighted average common shares after assumed
conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25,381,047

25,387,033

25,380,302

F-59

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2015

2016
(in yen)2017

Amounts per common share:
Basic net income per common share . . . . . . . . . . . . . . . . . . . . . . . . .

32.75

34.19

14.33

Diluted net income per common share . . . . . . . . . . . . . . . . . . . . . . .

31.64

33.50

14.28

Note: The number of common shares after assumed conversion of the convertible preferred stock is based on theapplicable conversion prices.
20. Income taxes
Income tax expense
The following table presents the components of Income tax expense for the fiscal years ended March 31, 2015,2016 and 2017:
2015

2016
(in millions of yen)

2017

Current:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

184,180
71,250

162,408
61,009130,164
68,512

Total current tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

255,430

223,417

198,676

Deferred:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

187,134(5,144)

127,185(4,060)(99,831)(7,601)

Total deferred tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . .

181,990

123,125(107,432)

Total income tax expense . . . . . . . . . . . . . . . . . . . . . . . . .

437,420

346,542

91,244The preceding table does not reflect the tax effects of items recorded directly in Equity for the fiscal years ended
March 31, 2015, 2016 and 2017. The detailed amounts recorded directly in Equity are as follows:
2015

2016
(in millions of yen)

2017

Net unrealized gains (losses) on available-for-sale securities:
Unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: reclassification adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .

403,690(65,699)(97,339)(65,207)

112,467(97,729)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

337,991(162,546)

14,738Foreign currency translation adjustments:
Unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: reclassification adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
—

126
—

—
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

126

—

Pension liability adjustments:
Unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: reclassification adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .

87,654(16)(51,661)(1,317)

4,785
178

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

87,638(52,978)

4,963

Total tax effect before allocation to noncontrolling interests . . . . . . . . . .

425,629(215,398)

19,701F-60

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Reconciliation of Income tax expense
The following table shows a reconciliation of Income tax expense at the effective statutory tax rate to the actual
income tax expense for the fiscal years ended March 31, 2015, 2016 and 2017:
2015
2016
2017
(in millions of yen, except tax rates)

Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,267,653
35.64%

1,196,605
33.06%

480,375
30.86%

Income tax calculated at the statutory tax rate . . . . . . . . . . . . . . . . . . .
Income not subject to tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses not deductible for tax purposes . . . . . . . . . . . . . . . . . . . . . . .
Tax rate differentials of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in undistributed earnings of subsidiaries . . . . . . . . . . . . . . . . .
Change in net operating loss carryforwards resulting fromintercompany capital transactions . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of enacted change in tax rates . . . . . . . . . . . . . . . . . . . . . . . . . .
Reversal of outside basis differences . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

451,792(20,911)
1,532(3,517)(4,444)16,084

395,598(12,888)
1,521(2,208)(1,897)(16,112)148,244(7,521)
1,483(2,165)
112,781 (3)5,217(1,290)(21,714) (1)—19,888(1,446)(7,976) (2)—(8,050)647—(159,119) (3)(8,323)

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

437,420

346,542

91,244

Notes:(1) On March 31, 2015, the National Diet of Japan approved a bill affecting the statutory tax rates of MHFG
and its domestic subsidiaries. As a result, the statutory tax rate in respect of MHFG’s tax returns for the
fiscal year ended March 31, 2016 was reduced to 33.06% from the previous rate of 35.64%. In addition,
the tax rate for the fiscal years ended March 31, 2017 and thereafter was reduced to 32.26%. The decreasein the MHFG Group’s balance of net deferred tax liabilities, reflecting such tax rate reductions, wasrecognized as a reduction to Income tax expense in the fiscal year ended March 31, 2015.
(2) On March 29, 2016, the National Diet of Japan approved a bill affecting the statutory tax rates of MHFG
and its domestic subsidiaries. As a result, the statutory tax rate in respect of MHFG’s tax returns for the
fiscal year ended March 31, 2017 was reduced to 30.86% from the previous rate of 32.26%, and thestatutory tax rate for the fiscal year ending March 31, 2018 will be the same rate. In addition, the tax rate
for the fiscal years ending March 31, 2019 and thereafter will be 30.62%. The decrease in the Group’sbalance of net deferred tax liabilities, reflecting such tax rate reductions, was recognized as a reduction to
Income tax expense in the fiscal year ended March 31, 2016.
(3) These amounts for the fiscal year ended March 31, 2017 represent mainly the reversal of an outside basis
difference related to certain foreign subsidiaries due to their organizational restructuring and the related
increase in the valuation allowance.

F-61

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Deferred tax assets and liabilities
The components of net deferred tax assets (liabilities) at March 31, 2016 and 2017 are as follows:
2016
2017
(in millions of yen)

Deferred tax assets:
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net operating loss carryforwards (1)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

522,197
178,683———
341,572
170,414497,629
184,366
30,841
14,5373,594
452,166
190,083

1,212,866 1,373,216(339,922) (438,344)

Deferred tax assets, net of valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

872,944934,872

Deferred tax liabilities:
Available-for-sale securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid pension cost and accrued pension liabilities . . . . . . . . . . . . . . . . . . . . . . . . .
Undistributed earnings of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

710,497
174,959
11,94456,87723,154
1,033
38,990724,160
195,620
17,161———
74,886

Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,017,454

1,011,827

Net deferred tax assets (liabilities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(144,510)(76,955)

Notes:(1) The amount includes ¥268,544 million and ¥271,266 million related to MHFG’s net operating loss
carryforwards resulting mainly from intercompany capital transactions as of March 31, 2016 and 2017,
respectively. The tax effect of the net operating loss carryforwards is offset by a full valuation allowancebecause MHFG experienced a significant expiration of net operating loss carryforwards of ¥1,262 billion in
March 2013, which is negative evidence outweighing any positive evidence. Furthermore, MHFG is aholding company whose primary sources of future taxable income are management fees from subsidiaries
that are not sufficient to realize deferred tax assets related to the net operating loss carryforwards.
(2) The amount includes ¥115,698 million related to MHSC’s net operating loss carryforwards resulting mainly
from the organizational restructuring of certain foreign subsidiaries as of March 31, 2017. The tax effect of
the net operating loss carryforwards is substantially offset by ¥90,204 million of valuation allowance as aresult of considering all available evidence regarding sources of future taxable income including historical
trends in taxable income in the preceding periods and forecasted taxable income.
Deferred tax assets and deferred tax liabilities within the same tax jurisdiction have been netted for presentation
purposes in the consolidated balance sheets.

F-62

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table and accompanying footnotes provide a breakdown of deferred tax assets and the valuation
allowance recognized in respect of net operating loss carryforwards by tax jurisdiction and by year of expiration
as of March 31, 2016 and 2017:
Deferred tax assets

Deferred tax assets,
Valuation allowance net of valuation allowance(in billions of yen)

2016
Japan (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The United States . . . . . . . . . . . . . . . . . . . . . . . . . .
The United Kingdom (2) . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

270
16
53
3

(270)
(8)
(53)
(3)

—
8
—
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

342

(334)

8

2017
Japan (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The United States . . . . . . . . . . . . . . . . . . . . . . . . . .
The United Kingdom (2) . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

388
15
46
3

(362)
(3)
(46)
(3)

26
12
—
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

452

(414)

38

Notes:(1) ¥265 billion of the Japan deferred tax assets of ¥270 billion is related to MHFG, which is offset by a fullvaluation allowance, and will expire during the fiscal year ending March 31, 2018.
(2) The United Kingdom net operating loss carryforwards may be carried forward indefinitely for the tax
purposes.
(3) ¥265 billion of the Japan deferred tax assets of ¥388 billion is related to MHFG, which is offset by a fullvaluation allowance, and will expire during the fiscal year ending March 31, 2018. In addition, ¥116 billionof the Japan deferred tax assets is related to MHSC, which is substantially offset by a valuation allowance,
and will expire during the fiscal year ending March 31, 2026.
Determination of valuation allowance
In accordance with ASC 740, when the MHFG Group determines whether and to what extent a valuation
allowance is needed, the Group considers all available evidence, both positive and negative, to estimate futuretaxable income. In this regard, the Group considers reversals of existing taxable temporary differences, projected
future taxable income (exclusive of reversals of existing temporary differences) and qualifying tax-planning
strategies to be possible sources of future taxable income. The Group considers the specific pattern and timing of
future reversals of existing taxable and deductible temporary differences on available-for-sale securities toconstitute a prudent and feasible tax-planning strategy and strong positive evidence. The Group has the ability tocontrol when its available-for-sale securities with unrealized gains and losses are sold in order to accelerate ordecelerate taxable or deductible amounts. The Group also has a long history of effecting such sales as necessary
in order to utilize net operating loss carryforwards or otherwise realize deferred tax assets.
Positive evidence includes the Group’s results of operations for the current and preceding years on an overall
consolidated basis and for most of the principal subsidiaries. In particular, the strong results of operations inrecent years of MHFG’s principal banking subsidiaries in Japan represent positive evidence that can beobjectively verified.
F-63

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Negative evidence includes the existence of significant amounts of net operating loss carryforwards orcumulative losses recorded at certain entities, and the expiration of unused net operating loss carryforwards inrecent years.
A valuation allowance is recorded against deferred tax assets as of the balance sheet date to the extent the Groupestimates it is more likely than not that sufficient future taxable income is not available to realize such deferred
tax assets. As the Group does not apply a consolidated taxation system, with a few exceptions of non-principal
subsidiaries outside Japan, deferred tax assets and liabilities are calculated separately for each legal entity.
Therefore, changes in the valuation allowance are primarily due to changes in deductible temporary differences,
net operating loss carryforwards and the estimated availability of future taxable income sources of each entity.
In general, a valuation allowance is recognized against deferred tax assets related to entities that haveaccumulated significant net operating loss carryforwards. As of March 31, 2017, the Group’s valuation allowance
was primarily related to entities in Japan, the United States and the United Kingdom. The valuation allowance
was partially recognized in Japan and in the United States, while the valuation allowance was fully recognized in
the United Kingdom.
The Group determined whether cumulative losses were recognized by aggregating pretax results for the recent
three years as part of the analysis of potential indicators of negative evidence. In each tax jurisdiction, certain
entities recognized a cumulative loss on the basis of the most recent three years’ pretax results as of March 31,
2017. As it pertains to each entity with a cumulative loss, a valuation allowance was fully recognized against thedeferred tax assets if the Group determined there was no positive evidence that overcame the negative evidence.
As of March 31, 2017, MHFG’s securities subsidiary in the United Kingdom recorded cumulative losses on thebasis of the recent three years’ pretax results and recognized a full valuation allowance, as there was no positive
evidence to overcome the negative evidence. MHFG and its principal banking subsidiaries in Japan did notrecord cumulative losses in the periods presented.
Change in valuation allowance
The following table presents a roll-forward of the valuation allowance for the fiscal years ended March 31, 2015,2016 and 2017:
2015

2016
2017
(in millions of yen)

Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes that directly affected Income tax expense . . . . . . . . . . . . . . . . . . . . .
Changes that did not affect Income tax expense:
Expiration of net operating loss carryforwards . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

443,847 388,551 339,922(4,444) (1,897) 112,781

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(50,852) (46,732) (14,359)

Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

———(50,852) (46,732) (14,359)
388,551

339,922438,344

The decrease in the fiscal year ended March 31, 2015 of ¥4,444 million in the valuation allowance that directly
affected Income tax expense was a result of an assessment of the realizability of deferred tax assets that mainlyreflected decreases in deductible temporary differences. The decrease in the fiscal year ended March 31, 2015 of¥50,852 million in others was primarily related to a decrease in the valuation allowance that is fully recognizedagainst MHFG’s net operating loss carryforwards due to tax rate reductions.
F-64

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The decrease in the fiscal year ended March 31, 2016 of ¥1,897 million in the valuation allowance that directly
affected Income tax expense was primarily related to an increase of the realizability of deferred tax assets of
MHFG’s subsidiaries. The decrease in the fiscal year ended March 31, 2016 of ¥46,732 million in others wasprimarily related to a decrease in the valuation allowance that is fully recognized against the MHFG Group’s net
operating loss carryforwards due to tax rate reductions and the anticipated liquidation of one of MHFG’s
subsidiaries.
The increase in the fiscal year ended March 31, 2017 of ¥112,781 million in the valuation allowance that directly
affected Income tax expense was a result of an assessment of realizability of deferred tax assets related to the net
operating loss carryforwards, primarily related to the reversal of an outside basis difference related to certain
foreign subsidiaries due to their organizational restructuring. The decrease in the fiscal year ended March 31,2017 of ¥14,359 million in others was primarily related to a decrease in the valuation allowance that is fullyrecognized against the MHFG Group’s net operating loss carryforwards due to tax rate reductions and foreign
currency rate reductions of MHFG’s foreign subsidiaries.

Net operating loss carryforwards
At March 31, 2017, the MHFG Group had net operating loss carryforwards totaling ¥1,590 billion. These
carryforwards are scheduled to expire as follows:
Net operating loss
carryforwards(in billions of yen)

Fiscal year ending March 31:2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 and thereafter(Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

865
4
—
—
1
720

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,590

Note: Including the net operating loss carryforwards which may be carried forward indefinitely in the United
Kingdom.
Included in net operating loss carryforwards in the above table are MHFG’s net operating loss carryforwards of¥879 billion resulting mainly from intercompany capital transactions, ¥865 billion of which are net operating loss
carryforwards generated in relation to a previous intragroup reorganization. The tax loss was recorded at MHFG
in accordance with Japanese tax law. The net operating loss carryforwards due to this transaction are to expire in
March 31, 2018.
In addition, included in the net operating loss carryforwards in the above table are MHSC’s net operating loss
carryforwards of ¥378 billion resulting mainly from the reversal of an outside basis difference related to certain
foreign subsidiaries due to their organizational restructuring. The tax loss was recorded at MHSC in accordancewith Japanese tax law. The net operating loss carryforwards due to this restructuring are to expire in March 31,
2026.
F-65

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Uncertainty in income tax
The following table is a roll-forward of unrecognized tax benefits for the fiscal years ended March 31, 2015,2016 and 2017:2015

Total unrecognized tax benefits at beginning of fiscal year . . . . . . . . . . . . . . . . .

2016
2017
(in millions of yen)

1,691

1,632

1,300

Gross amount of increases (decreases) related to positions taken during
prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross amount of increases related to positions taken during the current
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amount of decreases related to settlements . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(37)

(415)

167

346
(652)
284

181
—
(98)

409
—
(9)

Total unrecognized tax benefits at end of fiscal year . . . . . . . . . . . . . . . . . . . . . .

1,632

1,300

1,867

The total amount of unrecognized tax benefits including ¥517 million, ¥506 million and ¥675 million of interest
and penalties was ¥1,632 million, ¥1,300 million and ¥1,867 million at March 31, 2015, 2016 and 2017,
respectively, which would, if recognized, affect the Group’s effective tax rate. The Group classifies interest andpenalties accrued relating to unrecognized tax benefits as Income tax expense.
The MHFG Group is currently subject to ongoing tax audits in some jurisdictions. The oldest years open to tax
audits in Japan, the United States and the United Kingdom are 2008, 2002 and 2015, respectively. The Group
does not anticipate that increases or decreases of unrecognized tax benefits within the next twelve months would
have a material effect on its consolidated results of operations or financial condition.
21. Pension and other employee benefit plans
Severance indemnities and pension plans
MHFG and certain subsidiaries sponsor and offer their employees, other than directors and corporate auditors,
contributory and non-contributory defined benefit plans. Under these plans, employees are provided withlump-sum cash payments upon leaving the company. The amount of benefits under each plan is principally
determined based on the position, the length of service and the reason for retirement. When employees meetcertain conditions including the length of service, they may opt to receive annuity payments instead of lump-sum
payments at retirement. MHFG and certain subsidiaries also offer special termination benefits to former
employees whose contributions during their careers were deemed meritorious and to those with particular
circumstances.
Certain foreign offices and subsidiaries have defined contribution plans and/or defined benefit plans, of which
disclosures are combined with those for domestic benefit plans, as they are not significant.
MHFG and certain subsidiaries have several defined contribution plans. The costs recognized in respect ofcontributions to the plans for the fiscal years ended March 31, 2015, 2016 and 2017 were ¥2,444 million,¥2,820 million and ¥3,141 million, respectively.
Pension plans are not fully integrated among subsidiaries of MHFG and plan assets are managed separately byeach plan.
F-66

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Net periodic benefit cost and funded status
The following table presents the components of net periodic cost of the severance indemnities and pension plans
for the fiscal years ended March 31, 2015, 2016 and 2017:
2015

2016
2017
(in millions of yen)

Service cost-benefits earned during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . 33,578 38,032 44,367
Interest costs on projected benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,060 10,479
5,724
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (38,087) (40,603) (35,969)
Amortization of prior service benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(195)
(195)
(195)
Amortization of net actuarial loss (gain) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
150(4,108)780
Special termination benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,504
4,456
3,857
Net periodic benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,0108,061

18,564

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) before-tax
for the fiscal years ended March 31, 2016 and 2017 are summarized as follows:
2016
2017
(in millions of yen)

Net actuarial gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of net actuarial loss (gain) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(160,132) 15,645(4,108)
780
(195)
(195)

Total recognized in other comprehensive income (loss) before-tax . . . . . . . . . . . . . . . . . . . . .

(164,435) 16,230

As of March 31, 2017, the amounts in Accumulated other comprehensive income (loss), which will be amortizedas prior service costs and actuarial loss over the next fiscal year, are estimated to be ¥180 million and¥417 million, respectively.
Weighted-average assumptions used to determine benefit obligations and net periodic benefit cost are as follows:
2015

2016

2017

Weighted-average assumptions used to determine benefit obligations at
fiscal year end:
Discount rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.76%
0.37%
0.47%
Rates of increase in future compensation levels . . . . . . . . . . . . . . . . . . 2.00-4.80% 1.80-4.80% 1.80-4.80%
Weighted-average assumptions used to determine net periodic benefit cost
during the year:
Discount rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.96%
0.76%
0.37%
Rates of increase in future compensation levels . . . . . . . . . . . . . . . . . . 2.00-4.80% 2.00-4.80% 1.80-4.80%
Expected rates of return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . .
2.17%
1.95%
1.73%
In estimating the discount rates, the MHFG Group uses interest rates on high-quality fixed-income governmentand corporate bonds. The durations of such bonds closely match those of the benefit obligations. Assumed
discount rates are reevaluated at each measurement date. The expected rate of return for each asset category isbased primarily on various aspects of the long-term prospects for the economy that include historicalperformance and the market environment.
F-67

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table sets forth the combined funded status and amounts recognized in the accompanying
consolidated balance sheets at March 31, 2016 and 2017 for the plans of MHFG and its subsidiaries:
2016
2017
(in millions of yen)

Change in benefit obligations:Benefit obligations at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,392,459 1,495,208
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38,03244,367
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,4795,724
Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,192
1,215
Actuarial loss (gain) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
125,122
67,335
Foreign exchange translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4,054)(2,159)Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(51,392)(51,899)
Lump-sum payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(16,630)(13,898)
Benefit obligations at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,495,208

1,545,893

Change in plan assets:
Fair value of plan assets at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . 2,081,600 2,082,996
Actual return (negative return) on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,058
118,714
Foreign exchange translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3,312)(3,273)
Employer contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49,85053,059Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,192
1,215
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(51,392)(51,899)
Fair value of plan assets at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,082,996

2,200,812

Funded status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

587,788654,919

Amounts recognized in the consolidated balance sheets consist of:Prepaid pension cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued pension liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

612,102(24,314)682,592(27,673)

Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

587,788654,919

Amounts recognized in Accumulated other comprehensive income (loss) before-tax
consist of:Prior service benefits (cost) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net actuarial gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,025)57,619(1,220)74,044

Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

56,594

72,824

Note: The aggregated accumulated benefit obligations of these plans were ¥1,493,393 million and¥1,544,039 million, as of March 31, 2016 and 2017, respectively. The defined benefit plans generally
employ a multi-variable and non-linear formula based upon rank and years of service. Employees withservice in excess of one year are qualified to receive lump-sum severance indemnities.
In the fiscal year ended March 31, 2017, the Group incorporated employee-level anticipated future mortality
improvement actuarial indicators in its pension benefit calculation, which resulted in an increase of the benefit
obligations of ¥79,861 million.

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table shows the projected benefit obligations and the fair value of plan assets for the plans of
MHFG and its subsidiaries with projected benefit obligations in excess of plan assets, and the accumulated
benefit obligations and the fair value of plan assets for the plans with accumulated benefit obligations in excess
of plan assets at March 31, 2016 and 2017:
2016
2017
(in millions of yen)Plans with projected benefit obligations in excess of plan assets:
Projected benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plans with accumulated benefit obligations in excess of plan assets:
Accumulated benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

50,554
26,24057,98030,306

48,73826,24056,12530,306

Note: The plans with projected benefit obligations in excess of plan assets include those with accumulated
benefit obligations in excess of plan assets.
Investment policies and asset allocation
In managing plan assets, the MHFG Group determines the appropriate levels of risk that the Group can assume
under the given circumstances to maximize the investment returns from a long-term perspective while ensuringthat the sufficient funds will be available to plan participants and beneficiaries. Generally, the investment returns
are relative to the risks involved. In considering the maximum levels of risk that the MHFG Group can assume, it
primarily considers the following factors; the employers’ burden of maintaining the benefit plans based on thedesign of the plans and future plan contributions, the age distribution of the plan participants and beneficiaries,
the financial conditions of the employers, and the employers’ ability to absorb future variability in plan
premiums. The long-term asset allocation to each asset category such as Japanese equity securities, Japanese debt
securities, foreign equity securities and foreign debt securities is determined based upon the optimal portfolio,
which is estimated to yield the maximum return within the range of an acceptable level of risk. Additionally, theasset allocation is reviewed whenever there are large fluctuations in pension plan liabilities caused bymodifications of pension plans, or there are changes in the market environment. When selecting an investment ineach asset category, the MHFG Group takes into consideration credit standing of an investee, concentration of
credit risk to a certain investee, liquidity of a financial instrument, etc. The investments in each asset category arefurther diversified across funds, strategies, sectors, etc. There is no significant investment in a single investee
except Japanese government bonds.
Certain subsidiaries of MHFG established employee retirement benefit trusts and transferred their assets to thetrusts as plan assets. These assets are separated from the employer’s proprietary assets for the payment to theplan beneficiaries. The assets held in these trusts are primarily Japanese equity securities and have been entrusted
directly to qualified trustees including trust banks.

F-69

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
MHFG and certain subsidiaries’ target allocation for the plan assets, excluding those of the employee retirement
benefit trusts, at March 31, 2017 is as follows:
Asset category

Asset ratio

Japanese equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General account of life insurance companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.00%
44.00%
25.00%
10.00%
14.00%
2.00%

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100.00%Note: General account of life insurance companies is a contract with life insurance companies which guarantees
payments of principal and predetermined interest rates.
Fair value of plan assets
The following table presents the fair value of plan assets of MHFG and its subsidiaries at March 31, 2016 and2017, by asset class. For the detailed information on fair value measurements, including descriptions of Level 1,
2 and 3 of the fair value hierarchy and the valuation methodologies, see Note 28 “Fair value”.
Level 1

Japanese equity securities:
Common stocks (1) . . . . . . . . . . . . . . . .
Pooled funds (2) . . . . . . . . . . . . . . . . . .
Japanese debt securities:
Government bonds . . . . . . . . . . . . . . .
Pooled funds (2) . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign equity securities:
Common stocks . . . . . . . . . . . . . . . . . .
Pooled funds (2) . . . . . . . . . . . . . . . . . .
Foreign debt securities:
Government bonds . . . . . . . . . . . . . . .
Pooled funds (2) . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . .
General account of life insurancecompanies (3) . . . . . . . . . . . . . . . . . . . . . .
Hedge funds . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan assets measured at net asset
value (6) . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets at fair value . . . . . . . . . . . . . . .

2016
Level 2 Level 3

Total
Level 1(in billions of yen)

2017
Level 2 Level 3

Total

1,114
10

1
1

—
—

1,115
11

1,162
10

—
—

—
—

1,162
10

262
—
—

—

—
—
—

262
1
32

254
—
—

—

—
—
—

254
2
25

98
—

—

—
—

98
2

111
—

—

2

2

—
—

111
2

72
—
—

2
8
16

—
—
—

74
8
16

68
—
—

3
7
16

—
—
—

71
7
16

—
121
—
—
—
—
44 (4)(4) (5) —

121
—
40

—
—
78

124
—
1

—
—
—

124
—
79

1
32

2
25

303
1,600

180

—

2,083

338
1,683

180

—

2,201

Notes:(1) This class represents equity securities held in the employee retirement benefit trusts of ¥1,115 billion and¥1,162 billion at March 31, 2016 and 2017, respectively, which are well-diversified across industries.
F-70

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(2) These classes primarily include pension investment fund trusts. Investments in these classes are generally
measured at fair value and can be redeemed within a short-term period upon request.
(3) Investments in this class are measured at conversion value.
(4) Amounts primarily include cash and short-term assets carried at fair value.
(5) Amounts primarily include foreign exchange contracts carried at fair value.
(6) In accordance with ASC 820, certain plan assets that are measured at fair value using the net asset value pershare (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
Amounts of actual returns on and purchases and sales of Level 3 assets during the fiscal years ended March 31,
2016 and 2017 were not significant.
Contributions
The total contribution of approximately ¥51 billion is expected to be paid to the pension plans during the fiscal
year ending March 31, 2018, based on the current funded status and expected asset return assumptions.
Estimated future benefit payments
The following table presents forecasted benefit payments including the effect of expected future service for the
fiscal years indicated:(in millions of yen)

Fiscal year ending March 31:2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023-2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

66,14067,75869,57870,80871,549354,180

22. Stock-based compensation
Stock options
MHFG, MHBK, MHTB and MHSC have stock options, in the form of stock acquisition rights, for directors(excluding the outside directors) and executive officers of the respective companies (hereinafter referred tocollectively as the “Directors”).
In this plan (“MHFG Stock Plan”), 1,000 shares of MHFG common stock shall be issued or transferred upon
exercise of each of the stock acquisition rights. The amount to be paid upon exercise shall be 1 yen per share. The
contractual term of the stock acquisition rights is 20 years. A holder may exercise the stock acquisition rights
only after the date on which such holder loses the status as a Director of MHFG, MHBK, MHTB or MHSC.

F-71

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following is a roll-forward of MHFG Stock Plan for the fiscal year ended March 31, 2017:
Number ofshares

Weighted-average
exercise price(in yen)

Outstanding at beginning of fiscal year . . . . .
Exercised during fiscal year . . . . . . . . . . . . . .

17,190,000
6,371,000

1
1

Outstanding at end of fiscal year . . . . . . . . . .

10,819,000

1Exercisable at end of fiscal year . . . . . . . . . .

——Weighted-averageremaining
contractual term(in years)

Aggregate
intrinsic value(in millions of yen)

16.49

2,196

—

—

There were no non-vested stock options remaining as of March 31, 2017.
The following table presents the assumptions used in the Black-Scholes option pricing model to estimate the fairvalue of the stock acquisition rights granted during the fiscal year ended March 31, 2015. The risk-free interest
rate is based on the Japanese government bonds yield curve for the expected remaining term in effect at the dateof grant. The expected volatility is based on the historical trading data of MHFG common stock. The expected
remaining term is based on the average service period of Directors of MHFG, MHBK, MHTB and MHSC, which
represents the period of time that stock acquisition rights granted are expected to be outstanding. The expected
dividend yield is based on the dividend rate of MHFG common stock at the date of grant.
2015

Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.01%
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25.91%
Expected remaining term (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.46
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.42%
The weighted-average grant-date fair value of stock acquisition rights granted during the fiscal year ended
March 31, 2015 was ¥186,990.
The compensation cost related to this plan recognized in income was ¥1,795 million during the fiscal year ended
March 31, 2015.
In May, 2015, MHFG announced discontinuance of the current stock option program along with the introductionof performance payments and performance-based stock compensation for Directors. Thereafter, MHFG has notissued and will not issue any new stock options.
Performance-based stock compensation
MHFG, MHBK, MHTB and MHSC introduced a new performance-based stock compensation program for
Directors on May, 2015 using a trust. The program utilizes the Board Benefit Trust framework. The
performance-based stock compensation is paid in the form of shares of common stock of MHFG acquired fromthe stock market through a trust with the aim of aligning the officers’ interests with those of the shareholders andincreasing the incentive to enhance corporate value. The payment thereof is a reflection of each officer’s
performance. The entire amount of the payment in respect of the performance-based stock compensation isdeferred over three years and the deferred portion is subject to reduction or forfeiture depending on certain
factors, including the performance of the MHFG group or the relevant Directors.
F-72

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents activities related to the performance-based stock compensation for the fiscal year
ended March 31, 2017:

Outstanding as of March 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted during fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested during fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited during fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding as of March 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of shares

Weighted-average
grant-date fair value(per share in yen)—
9,000,000——
9,000,000—
158.68——158.68The shares of MHFG common stock were acquired from the stock market by the trustee by using the money
entrusted to the Compensation Committee. The total amount of the common stock was ¥1,428 million.
The compensation cost with regard to the performance-based stock compensation is determined based upon thefair value of shares of MHFG common stock as of grant date and is recognized over three year deferral period ona straight-line basis. The compensation cost recognized in this performance-based stock compensation program
for the fiscal year ended March 31, 2017 was ¥354 million.
As of the fiscal year ended March 31, 2017, the total compensation cost related to non-vested awards not yet
recognized is ¥1,074 million, and this cost will be recognized over 2.3 years.
23. Derivative financial instruments
The MHFG Group enters into derivative financial instruments in response to the diverse needs of customers, tocontrol the risk related to the assets and liabilities of the MHFG Group, as part of its asset and liability
management, and for proprietary trading purposes. The MHFG Group is exposed primarily to market risk
associated with interest rate, commodity, foreign currency, and equity products. Market risk arises from changes
in market prices or indices, interest rates and foreign exchange rates that may result in an adverse change in themarket value of the financial instrument or an increase in its funding costs. Exposure to market risk is managed
by imposing position limits and monitoring procedures and by initiating hedging transactions. In addition tomarket risk, the MHFG Group is exposed to credit risk associated with counterparty default or nonperformancein respect of transactions. Credit risk arises when a counterparty fails to perform according to the terms andconditions of the contract and the value of the underlying collateral held, if applicable, is not sufficient to recover
resulting losses. The exposure to credit risk is measured by the fair value of all derivatives in a gain position andits potential increase at the balance sheet dates. The exposure to credit risk is managed by entering into legally
enforceable master netting agreements to mitigate the overall counterparty credit risk, requiring underlying
collateral and guarantees based on an individual credit analysis of each obligor and evaluating the credit featuresof each instrument. In addition, credit approvals, limits and monitoring procedures are also imposed.

F-73

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Notional and fair value amounts of derivative instruments
The following table summarizes the notional and fair value amounts of derivative instruments outstanding as ofMarch 31, 2016 and 2017. The fair values of derivatives are presented on a gross basis and not offset against theamounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral under masternetting agreements in the consolidated balance sheets, or the table below.

2016

Notional amount (1)Fair value
Derivative receivables (2)Derivative payables (2)Designated Not designated Designated Not designatedas hedges
as hedges
as hedges
as hedges(in billions of yen)Interest rate contracts . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . .
Equity-related contracts . . . . . . . . . . . . .
Credit-related contracts . . . . . . . . . . . . .
Other contracts . . . . . . . . . . . . . . . . . . . .

1,066,252
141,517
3,115
4,826
327

—
4
18
—
—

11,522
3,126
152
43
59

—
1
—
—
—

11,269
2,979
140
37
55

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,216,037

22

14,902

1

14,4802017

Notional amount (1)Fair value
Derivative receivables (2)Derivative payables (2)Designated Not designated Designated Not designatedas hedges
as hedges
as hedges
as hedges(in billions of yen)Interest rate contracts . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . .
Equity-related contracts . . . . . . . . . . . . .
Credit-related contracts . . . . . . . . . . . . .
Other contracts . . . . . . . . . . . . . . . . . . . .

961,518
167,698
4,177
3,696
360

—
2
—
—
—

8,506
2,743
134
35
23

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,137,449

2

11,441

—
—
5
—
—
5

8,473
2,611
224
36
22
11,366

Notes:(1) Notional amount includes the sum of gross long and gross short third-party contracts.
(2) Derivative receivables and payables are recorded in Trading account assets and Trading account liabilities,
respectively.
The MHFG Group provided and/or accepted cash collateral for derivative transactions under master netting
agreements. The cash collateral, not offset against derivative positions, was included in Other assets and Otherliabilities, respectively, of which the amounts were ¥885 billion and ¥716 billion at March 31, 2016, and¥973 billion and ¥672 billion at March 31, 2017, respectively.
Hedging activities
In order to qualify for hedge accounting, a derivative must be considered highly effective at reducing the risk
associated with the exposure being hedged. Each derivative must be designated as a hedge, with documentationof the risk management objective and strategy, including identification of the hedging instrument, the hedged
item and the risk exposure, and how effectiveness is to be assessed prospectively and retrospectively. The extent
to which a hedging instrument is effective at achieving offsetting changes in fair value or cash flows must be
assessed at least quarterly. Any ineffectiveness must be reported immediately in earnings. The MHFG Group’s
hedging activities include fair value and net investment hedges.
F-74

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Fair value hedges
The MHFG Group primarily uses forward contracts to modify exposure to changes in the fair value ofavailable-for-sale securities. For qualifying fair value hedges, all changes in the fair value of the derivative andthe corresponding hedged item relating to the risk being hedged are recognized in earnings in Investment gains(losses)—net. The change in fair value of the portion of the hedging instruments excluded from the assessment ofhedge effectiveness is recorded in Trading account gains (losses)—net. No ineffectiveness exists because the
MHFG Group chooses to exclude changes in the differences between the spot and the forward prices from theeffectiveness test. If the hedge relationship is terminated, the fair value adjustment to the hedged item continues
to be reported as part of the basis of the item. The fair value adjustment is recognized in earnings upon the sale ofthe hedged item.
The following table summarizes gains and losses information related to fair value hedges for the fiscal years
ended March 31, 2015, 2016 and 2017:
Gains (losses) recorded in income
Net gain (loss) excluded
HedgedHedge
from assessment of
items
ineffectivenesseffectiveness(in millions of yen)

2015

Derivatives

Equity-related contracts . . . . . . . . . . . . . . . . . . . . . . .

(29,666)

28,005—(1,661)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(29,666)

28,005—(1,661)2016

Derivatives

Gains (losses) recorded in income
Net gain (loss) excluded
HedgedHedge
from assessment of
items
ineffectivenesseffectiveness(in millions of yen)

Equity-related contracts . . . . . . . . . . . . . . . . . . . . . . .

14,623(18,224)—(3,601)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,623(18,224)—(3,601)

Gains (losses) recorded in income
Net gain (loss) excluded
HedgedHedge
from assessment of
items
ineffectivenesseffectiveness(in millions of yen)

2017

Derivatives

Equity-related contracts . . . . . . . . . . . . . . . . . . . . . . .

(14,747)

11,393—(3,354)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(14,747)

11,393—(3,354)

Net investment hedges
The MHFG Group uses forward foreign exchange contracts and foreign currency-denominated debt instruments
to protect the value of net investments in non-Japanese subsidiaries from foreign currency exposure. Under net
investment hedges, both derivatives and nonderivative financial instruments qualify as hedging instruments. The
foreign currency-denominated debt instruments qualifying as hedging instruments include deposits and long-term
debt, of which the carrying amounts of the portion designated as net investment hedges are included within therespective items in the consolidated balance sheets as well as relevant accompanying notes. For net investment
hedges, the change in the fair value of a hedging derivative instrument or nonderivative hedging financial
instrument is recorded in Foreign currency translation adjustments within Accumulated other comprehensive
F-75

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
income, provided that the hedging instrument is designated and is effective as a hedge of the net investment. Thechange in fair value of the ineffective portion is recorded in Foreign exchange gains (losses)—net in earnings. No
amount is excluded from the assessment of hedge effectiveness of net investment hedges.
The following table summarizes gains and losses information related to net investment hedges for the fiscal years
ended March 31, 2015, 2016 and 2017:
Gains (losses) recorded in income and other comprehensive income (“OCI”)
2015
2016
2017
Ineffective portion
Ineffective portion
Ineffective portion
Effective portion
recorded in
Effective portion
recorded in
Effective portion
recorded inrecorded in OCI
incomerecorded in OCI
incomerecorded in OCI
income(in millions of yen)

Financial instruments
hedging foreignexchange risk . . . .

(53,252)(2,678)46,697696

16,76747

Total . . . . . . . . . . . . .

(53,252)(2,678)46,697696

16,76747

Note: No amount related to the effective portion of net investment hedges was reclassified from Accumulated
other comprehensive income to earnings for the fiscal year ended March 31, 2015. Related to the effective
portion of net investment hedges, gains of ¥345 million and ¥41 million were reclassified from
Accumulated other comprehensive income to earnings for the fiscal years ended March 31, 2016 and 2017,
respectively.
Derivative instruments not designated or qualifying as hedges
The MHFG Group enters into the following derivative transactions that do not qualify for hedge accounting witha view to implementing risk management hedging strategies: (1) interest-rate swap transactions for the purposeof hedging the interest-rate risks in deposits, loans etc., (2) currency swap transactions for the purpose of hedging
the foreign exchange risk of these assets, and (3) credit derivatives for the purpose of hedging the credit risk inloans, residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”),
CLO and other similar assets. Such derivatives are accounted for as trading positions. The changes in fair valueof these instruments are primarily recorded in Trading account gains (losses)—net, even though they are used tomitigate or transform the risk of exposures arising from banking activities. The net gain (loss) resulting fromchanges in the fair value of certain credit derivatives where the Group purchases protection to mitigate its credit
risk exposure, related to its corporate loan portfolio, is recorded in Other noninterest income (expenses).

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes gains and losses on derivatives not designated or qualifying as hedges during the
fiscal years ended March 31, 2015, 2016 and 2017:
Gains (losses) recorded in income
2015
2016
2017
(in millions of yen)Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity-related contracts (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit-related contracts (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

265,324 319,225 (209,361)(93,601) 65,101
37,129(100,326) 21,571
5,131(18,007) (6,960)(6,694)
368
2,015
742

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

53,758400,952(173,053)

Notes:(1) The net gain (loss) excluded from the assessment of the effectiveness of fair value hedges is not included in
the above table.
(2) Amounts include the net loss of ¥2,836 million, ¥5,230 million and ¥7,594 million on the credit derivatives
hedging the credit risk of loans during the fiscal years ended March 31, 2015, 2016 and 2017, respectively.
Credit derivatives
A credit derivative is a bilateral contract between a seller and a buyer of protection against the credit risk of aparticular entity. Credit derivatives generally require that the seller of credit protection make payments to thebuyer upon the occurrence of predefined credit events, which include bankruptcy, dissolution or insolvency of
the referenced entity. The MHFG Group either purchases or writes protection on either a single name or aportfolio of reference credits. The Group enters into credit derivatives to help mitigate credit risk in its corporateloan portfolio and other cash positions, to take proprietary trading positions, and to facilitate client transactions.
The notional amount of credit derivatives represents the maximum potential amount of future payments the seller
could be required to make. If the predefined credit event occurs, the seller will generally have a right to collect on
the underlying reference credit and the related cash flows, while being liable for the full notional amount ofcredit protection to the buyer. The Group manages credit risk associated with written protection by purchasingprotection with identical or similar underlying reference credits, which substantially offsets its exposure. Thus,
the notional amount is not necessarily a reliable indicator of the Group’s actual loss exposure.
The following table summarizes the notional and fair value amounts of credit derivatives at March 31, 2016 and
2017:
2016
Notional amount2017
Fair value Notional amount(in billions of yen)

Fair value

Credit protection written:
Investment grade . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-investment grade . . . . . . . . . . . . . . . . . . . . . . . .

1,603
763

14
1

1,546
298

21
1

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,366

15

1,844

22

Credit protection purchased . . . . . . . . . . . . . . . . . . . . . . . .

2,592

(9)

1,994

(23)

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note: The rating scale is based upon either the external ratings or the internal ratings of the underlying reference
credit. The lowest investment grade rating is considered to be BBB-, while anything below or unrated isconsidered to be non-investment grade. Non-investment grade credit derivatives primarily consist ofunrated credit default swap indices such as CDX and iTraxx.
The following table shows the maximum potential amount of future payments for credit protection written by
expiration period at March 31, 2016 and 2017:
Maximum payout/Notional amount
2016
2017
(in billions of yen)

One year or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
After one year through five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
After five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

538
1,729
99

507
1,020
317

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,366

1,844

Note: The maximum potential amount of future payments is the aggregate notional amount of the credit
derivatives where the Group wrote the credit protection, and it has not been reduced by the effect of any
amounts that the Group may possibly collect on the underlying assets and the related cash flows, nor netted
against that of credit protection purchased.
Credit-related contingent features
Certain of the MHFG Group’s derivative instruments contain provisions that require the Group’s debt tomaintain an investment grade credit rating from the major credit rating agencies. If the Group’s debt credit ratingwere to fall below investment grade, the counterparties to the derivative instruments could request immediatepayment or demand immediate and ongoing full overnight collateralization on derivative instruments which are
in net liability positions for the Group.
The following table shows the quantitative information about derivative instruments with credit-risk-related
contingent features at March 31, 2016 and 2017:
2016
2017
(in billions of yen)

Aggregate fair value of derivative instruments with credit-risk-related
contingent features in net liability positions . . . . . . . . . . . . . . . . . . . . . . . . . .
Collateral provided to counterparties in the normal course of business . . . . . . .
Amount required to be posted as collateral or settled immediately if creditrisk-related contingent features were triggered . . . . . . . . . . . . . . . . . . . . . . . .

790
746

698
658

44

40

24. Commitments and contingencies
Obligations under guarantees
The MHFG Group provides guarantees or indemnifications to counterparties to enhance their credit standing andenable them to complete a variety of business transactions. A guarantee represents an obligation to makepayments to third parties if the counterparty fails to fulfill its obligation under a borrowing arrangement or othercontractual obligation.
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The types of guarantees under ASC 460, “Guarantees” (“ASC 460”) provided by the MHFG Group are described
below.
Performance guarantees
Performance guarantees are issued to guarantee customers’ performance under contractual arrangements such asa tender bid on a construction project or the completion of a construction project.
Guarantees on loans
Guarantees on loans include obligations to guarantee the customers’ borrowing contracts. The MHFG Group isrequired to make payments to the guaranteed parties in the event that customers fail to fulfill obligations under
the contracts.
Guarantees on securities
Guarantees on securities include obligations to guarantee securities, such as bonds issued by customers.
Other guarantees
Other guarantees include obligations to guarantee customers’ payments, such as tax payments.
Guarantees for the repayment of trust principal
The MHFG Group provides certain trust products with guarantees for the repayment of trust principal, e.g., loan
trusts and certain jointly operated designated money trusts. Pursuant to Japanese trust-related laws, trustees areprohibited from compensating beneficiaries for any loss in the beneficial interests in each trust. However, under aspecial condition of the Japanese trust-related laws, trust banks as trustees are allowed to enter into an agreement
to provide compensation for any loss in the principal of the trust. The MHFG Group manages and administers thetrust assets to minimize exposures against losses from the guarantees for the repayment of trust principal,
including writing-off impaired loans and charging it to the trust account profits. In performing its fiduciary
duties, the MHFG Group also manages the trust assets separately from its own proprietary assets on behalf ofcustomers and keeps separate records for the trust activities. The MHFG Group consolidates certain guaranteed
principal money trusts. See Note 25 “Variable interest entities and securitizations” for further discussion of theguaranteed principal money trusts. The contract amounts of guarantees for repayment of unconsolidated trust
principal are presented in the tables below.
Part of the trust account profits is set aside as a reserve in trust accounts to absorb losses in the trust asset
portfolios in accordance with relevant Japanese laws concerning the trust business and/or trust agreements.
Statutory reserves for loan trusts and reserves for jointly operated designated money trusts are calculated basedon the trust principal or the balance of loans and other assets in the trust accounts. Since the probability ofprincipal indemnification is considered to be remote, the MHFG Group had no related reserve for credit losses
recorded in its consolidated financial statements.
Liabilities of trust accounts
The MHFG Group, as trustee, may enter into an agreement with a third party who is not the party to the relevant
trust agreement to the extent necessary to handle the trust affairs for the purpose of fulfilling the objectives of thetrust and, as such, the trustee shall be allowed to assume certain liabilities. Pursuant to Japanese trust-related
F-79

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
laws, the trustee is ultimately liable to pay those liabilities out of its proprietary assets in the event that the trust
assets are insufficient to cover those liabilities. The amount of trust liabilities rarely exceeds the amount of trust
assets and, therefore, those liabilities are generally covered by the corresponding trust assets. To avoid thedemand for payment out of the proprietary assets, the trustee can enter into a special covenant of limited liability
under which the trust creditors agree to limit the trustee’s liability to the value of the trust assets and to waive theright for compulsory execution against the trustee’s proprietary assets. The MHFG Group regularly monitors thecondition of trust accounts to minimize exposures against making payment.
The amounts of such liabilities in the trust accounts, excluding those with the special covenant of limited
liability, are presented in the tables below. Liabilities of trust accounts principally include obligations to returncollateral under security lending transactions and other transactions.
Derivative financial instruments
Certain written options and credit default swaps are deemed guarantees pursuant to the definition of guarantees in
ASC 460 if these contracts require the MHFG Group to make payments to counterparties based on changes in anunderlying instrument or index that is related to an asset, a liability, or an equity security of the counterparties.
The MHFG Group’s payments could involve a gross settlement or a net settlement. Because it is difficult inpractice to determine whether the counterparty has the asset, the liability or the equity security relating to theunderlying, the MHFG Group has decided to include all credit default swaps and written options, excluding
written options outside the scope of ASC 460, in the guarantee disclosures.
Carrying amountThe MHFG Group records all guarantees and similar obligations subject to ASC 460 at fair value in the
consolidated balance sheets at the inception of the guarantee. The total carrying amount of guarantees and similar
obligations at March 31, 2016 and 2017 was ¥357 billion and ¥249 billion, respectively, and was included in
Other liabilities and Trading account liabilities. The total includes the carrying amounts of derivatives that are
deemed to be guarantees, which amounted to ¥336 billion and ¥228 billion at March 31, 2016 and 2017,
respectively.
Maximum exposure under guarantee contracts
The table below summarizes the remaining term and maximum potential amount of future payments by type ofguarantee at March 31, 2016 and 2017. The maximum potential amount of future payments disclosed below
represents the contractual amounts that could be required to be repaid in the event of the guarantees being
executed, without consideration of possible recoveries under recourse provisions or from collateral held. With
respect to written options included in derivative financial instruments in the table below, in theory, the MHFG
Group is exposed to unlimited losses; therefore, the table shows the notional amounts of the contracts as a
substitute for the maximum exposure.

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The MHFG Group, when necessary, requires collateral such as cash, investment securities and real estate or
third-party guarantees depending on the amount of credit risk involved, and employs means such as
sub-participation to reduce the credit risk associated with guarantees. The maximum exposure or notional amount
below does not represent the expected losses from the execution of the guarantees.
Maximum
potential/Contractualor Notional amount2016

Performance guarantees . . . . . . . . . . . . . . . . .
Guarantees on loans . . . . . . . . . . . . . . . . . . . .
Guarantees on securities . . . . . . . . . . . . . . . . .
Other guarantees . . . . . . . . . . . . . . . . . . . . . . .
Guarantees for the repayment of trust
principal . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities of trust accounts . . . . . . . . . . . . . . .
Derivative financial instruments . . . . . . . . . . .

2,110
297
203
1,571

1,049
117
67
1,206

909
20
136
325

152
160
—
40

1,141
12,747
15,792

1,051
12,537
6,505

63
79
8,032

27
131
1,255

Maximum
potential/Contractualor Notional amount2017

Performance guarantees . . . . . . . . . . . . . . . . .
Guarantees on loans . . . . . . . . . . . . . . . . . . . .
Guarantees on securities . . . . . . . . . . . . . . . . .
Other guarantees . . . . . . . . . . . . . . . . . . . . . . .
Guarantees for the repayment of trust
principal . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities of trust accounts . . . . . . . . . . . . . . .
Derivative financial instruments . . . . . . . . . . .

Amount by expiration period
After one year
through
One year or lessfive years
After five years(in billions of yen)Amount by expiration period
After one year
through
One year or lessfive years
After five years(in billions of yen)

2,243
278
175
1,823

1,246
147
37
1,246

828
20
138
513

169
111
—
64

730
15,177
14,415654
14,927
6,066

52
82
6,603

24
168
1,746

The table below presents the maximum potential amount of future payments of performance guarantees,
guarantees on loans, guarantees on securities and other guarantees classified based on internal ratings at
March 31, 2016 and 2017:
2016
2017
(in billions of yen)

Investment grade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-investment grade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,160
1,022

3,477
1,042

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,182

4,519

Note: Investment grade in the internal rating scale generally corresponds to BBB- or above in the external rating
scale.
Other off-balance-sheet instruments
In addition to guarantees, the MHFG Group issues other off-balance-sheet instruments to its customers, such as
lending-related commitments and commercial letters of credit. Under the terms of these arrangements, theMHFG Group is required to extend credit or make certain payments upon the customers’ requests.
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Commitments to extend credit
Commitments to extend credit are legally binding agreements to lend to customers on demand. They usually
have set maturity dates. These agreements differ from guarantees in that they are generally revocable or containprovisions that enable the MHFG Group to avoid payment or reduce the amount of credit extended under certain
conditions, such as the deterioration of the borrower’s financial condition or other reasonable conditions. The
MHFG Group monitors the financial condition of the potential borrowers throughout the commitment period todetermine whether additional collateral or changes in the terms of the commitment are necessary. Since many ofthese commitments to extend credit expire without being drawn upon, the total commitment amounts do notnecessarily represent future cash requirements.
Commitments to invest in securities
Commitments to invest in securities include legally binding contracts to make additional contributions toinvestment funds, such as private equity funds in accordance with the terms of investment agreements.
Commercial letters of credit
Commercial letters of credit are issued in connection with customers’ trade transactions. Normally, the customers
cannot receive the goods until they make payment to a bank, and therefore these commercial letters of credit arecollateralized by the underlying goods. Upon issuance of commercial letters of credit, the MHFG Group monitors
the credit risk associated with these transactions to determine if additional collateral is required.
The table below summarizes the contractual amounts with regard to these undrawn commitments at March 31,
2016 and 2017:
2016
2017
(in billions of yen)

Commitments to extend credit (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial letters of credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

75,742
448

76,678522

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

76,19077,200Note: Commitments to extend credit include commitments to invest in securities.
Allowance for losses on off-balance-sheet instruments
The amounts of allowance for losses on off-balance-sheet instruments at March 31, 2016 and 2017 were¥100 billion and ¥120 billion, respectively.

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
LeasesThe MHFG Group leases certain office space and equipment under noncancelable agreements. The lease periods
for these leases range from less than 1 year to around 30 years. These leases include cancellation clauses withpenalties of a maximum of approximately 5 years-worth of rentals and/or periodic adjustment clauses of rentals.
The table below shows future minimum lease payments for capitalized leases and future minimum rental
payments for operating leases at March 31, 2017:
Capitalized leases Operating leases(in millions of yen)

Fiscal year ending March 31:2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11,51910,721
8,697
6,118
3,188
1,846

52,28046,33041,15735,291
30,562
57,787

Total minimum lease/rental payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42,089263,407

Amount representing interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,142

Present value of minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . .

40,947

Total rental expense for the fiscal years ended March 31, 2015, 2016 and 2017 was ¥109,390 million,¥118,400 million and ¥113,991 million, respectively.
During prior years, the MHFG Group’s major banking subsidiaries sold their head offices (including land,buildings, facilities and equipment) to third parties. Concurrent with the sales, these subsidiaries leased theproperties back for periods of 5 and 10 years for total rental payments for these periods of ¥214,690 million. The
terms of certain lease agreements were changed during the fiscal years ended March 31, 2009, 2011, 2012 and2014, and the total rental payments for these periods increased to ¥282,832 million, as a consequence. The
MHFG Group accounted for the transactions as operating leases. The future minimum rental payments under theterms of the related lease agreements were ¥58,336 million, ¥49,883 million and ¥41,430 million at March 31,
2015, 2016 and 2017, respectively.
During the fiscal year ended March 31, 2014, MHFG began to lease its head office from a third party andaccounted for the lease arrangement as operating lease.
Legal proceedings
The MHFG Group is involved in normal collection proceedings initiated by the Group and other legal
proceedings in the ordinary course of business.
The Group’s Indonesian subsidiary acts as the collateral agent for the trustee of bond issuances made bysubsidiaries of Asia Pulp & Paper Company Ltd. (“APP”). In that role, the subsidiary is involved in a dispute
between the bondholders and such APP subsidiaries in their capacities as the issuers, guarantors and/or pledgorsof security for the bonds relating to foreclosure proceedings in respect of the collateral and the subsidiary has
been named as a defendant in a lawsuit brought by the obligors under the bonds in Indonesia. The Group’s
consolidated financial statements do not include a reserve in relation to this dispute and the Group does notbelieve that the resolution of this matter will have a significant impact on the consolidated financial condition or
results of operations of the Group, although there can be no assurance as to the foregoing.
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
25. Variable interest entities and securitizations
Variable interest entities
In the normal course of business, the MHFG Group is involved with VIEs primarily through the following typesof transactions: asset-backed commercial paper/loan programs, asset-backed securitizations, investments insecuritization products, investment funds, trust arrangements, and structured finance. The Group consolidates
certain of these VIEs, where the Group is deemed to be the primary beneficiary because it has both (1) the power
to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the
obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. The
MHFG Group reassesses whether it is the primary beneficiary on an ongoing basis as long as the Group has any
continuing involvement with the VIE. There are also other VIEs, where the Group has determined that it is not
the primary beneficiary but has significant variable interests. In evaluating the significance of the variableinterests, the Group comprehensively takes into consideration the extent of its involvement with each VIE, suchas the seniority of its investments, the share of its holding in each tranche and the variability it expects to absorb,
as well as other relevant facts and circumstances. The likelihood of loss is not necessarily relevant to thedetermination of significance, and therefore, “significant” does not imply that there is high likelihood of loss.
The maximum exposure to loss that is discussed in this section refers to the maximum loss that the Group could
possibly be required to record in its consolidated statements of income as a result of its involvement with the
VIEs. This represents exposures associated with both on-balance-sheet assets and off-balance-sheet liabilities
related to the VIEs. Further, this maximum potential loss is disclosed regardless of the probability of such losses
and, therefore, it is not indicative of the ongoing exposure which is managed within the Group’s risk
management framework.
The table below shows the consolidated assets of the Group’s consolidated VIEs as well as total assets andmaximum exposure to loss for its significant unconsolidated VIEs, as of March 31, 2016 and 2017:
Significant
unconsolidated VIEs
Maximum
Consolidated assets Total assets exposure to loss
(in billions of yen)
Consolidated VIEs

2016

Asset-backed commercial paper/loan programs . . . . . . . . . . . . . . .
Asset-backed securitizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in securitization products . . . . . . . . . . . . . . . . . . . . . .
Investment funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trust arrangements and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,092
579
337
1,660
24

—
205
445
2,422
—

—
13
154
367
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,692

3,072

534

Significant
unconsolidated VIEs
Maximum
Consolidated assets Total assets exposure to loss
(in billions of yen)
Consolidated VIEs

2017

Asset-backed commercial paper/loan programs . . . . . . . . . . . . . . .
Asset-backed securitizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in securitization products . . . . . . . . . . . . . . . . . . . . . .
Investment funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trust arrangements and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,031
629
375
2,188
23

—
108
445
3,895
—

—
11
154
463
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,246

4,448

628

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The Group has not provided financial or other support to consolidated or unconsolidated VIEs that the Group was
not previously contractually required to provide.
The tables below present the carrying amounts and classification of assets and liabilities on the MHFG Group’sbalance sheets that relate to its variable interests in significant unconsolidated VIEs, as of March 31, 2016 and2017:
Assets on balance sheets related to unconsolidated VIEs:

2016
2017
(in billions of yen)

Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55
254
205

85
254
237

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

514

576

Liabilities on balance sheets and maximum exposure to loss related to unconsolidated VIEs:

2016
2017
(in billions of yen)

Payables under securities lending transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27
1

31
1

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28

32

Maximum exposure to loss (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

534

628

Note: This represents the maximum amount the Group could possibly be required to record in its consolidated
statements of income associated with on-balance-sheet exposures and off-balance-sheet liabilities such as
undrawn commitments.
Asset-backed commercial paper/loan programs
The MHFG Group manages several asset-backed commercial paper/loan programs that provide its clients with
off-balance-sheet and/or cost-effective financing. The VIEs used in the programs purchase financial assets,
primarily receivables, from clients participating in the programs and provide liquidity through the issuance ofcommercial paper or borrowings from the MHFG Group backed by the financial assets. While customers
normally continue to service the transferred receivables, the MHFG Group underwrites, distributes, and makes amarket in commercial paper issued by the conduits. The MHFG Group typically provides program-wide liquidity
and credit support facilities and, in some instances, financing to the VIEs. The MHFG Group has the power todetermine which assets will be held by the VIEs and has an obligation to monitor these assets. The Group is also
responsible for liability management. In addition, through the liquidity and credit support facilities provided to
the VIEs, the Group has the obligation to absorb losses that could potentially be significant to the VIEs.
Therefore, the Group consolidates such VIEs.
Asset-backed securitizations
The MHFG Group acts as an arranger of various types of structured finance to meet its clients’ needs foroff-balance-sheet financing. In substantially all of these structured financing transactions, the transfer of thefinancial asset by the client is structured to be bankruptcy remote by use of a bankruptcy remote entity, which isdeemed to be a VIE because its equity holder does not have decision making rights. The MHFG Group receives
fees for structuring and/or distributing the securities sold to investors. In some cases, the MHFG Group itself
purchases the securities issued by the entities and/or provides loans to the VIEs.
F-85

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In addition, the MHFG Group establishes several single-issue and multi-issue special purpose entities that issue
collateralized debt obligations (“CDO”) or CLO, synthetic CDO/CLO or other repackaged instruments to meetclients’ and investors’ financial needs. The MHFG Group also arranges securitization transactions including
CMBS, RMBS and others. In these transactions, the MHFG Group acts as an underwriter, placement agent, asset
manager, derivatives counterparty, and/or investor in debt and equity instruments.
In certain VIEs, where the MHFG Group provides liquidity and credit support facilities, writes credit protection
or invests in debt or equity instruments in its role as an arranger, servicer, administrator or asset manager, etc.,
the Group has the power to determine which assets will be held by the VIEs or to manage and monitor theseassets. In addition, through the variable interests above, the Group has the obligation to absorb losses and theright to receive benefits that could potentially be significant to the VIEs. Therefore, the Group consolidates such
VIEs.
The MHFG Group established certain VIEs to securitize its own mortgage loans. The Group provides servicing
for and holds retained subordinated beneficial interests in the securitized mortgage loans. In addition, the Groupretains credit exposure in the form of guarantees on these loans. In its role as a servicer, the Group has the power
to direct the entity’s activities that most significantly impact the entity’s economic performance by managing
defaulted mortgage loans. In addition, through its retained interests and its aforementioned involvement as aguarantor, the Group has the obligation to absorb losses and the right to receive benefits that could potentially besignificant to the entity. Therefore, the Group consolidates such VIEs.
Investments in securitization products
The MHFG Group invests in, among other things, various types of CDO/CLO, synthetic CDO/CLO andrepackaged instruments, CMBS and RMBS arranged by third parties for the purpose of generating current
income or capital appreciation, which all utilize entities that are deemed to be VIEs. By design, such investments
were investment grade at issuance and held by a diverse group of investors. The potential loss amounts of the
securities and the loans are generally limited to the amounts invested because the Group has no contractual
involvement in such VIEs beyond its investments. Since the Group is involved in these VIEs only as an investor,
the Group does not ordinarily have the power to direct the VIEs’ activities that most significantly impact the
VIEs’ economic performance. However, the Group consolidates VIEs, where the transactions are tailored by thethird party arrangers to meet the Group’s needs as a main investor, who is ultimately deemed to have the power
to determine which assets are to be held by the VIEs. The Group also invests in certain beneficial interests issued
by VIEs which hold real estate that the Group utilizes. In addition to these variable interests, when the Group has
the power including the sole unilateral ability to liquidate the VIEs, the Group consolidates such VIEs.
Investment funds
The MHFG Group invests in various investment funds, including securities investment trusts, which collectively
invest in equity and debt securities that include listed Japanese securities and investment grade bonds. Investment
advisory companies or fund management companies, including the Group’s subsidiaries and affiliates, administerand make investment decisions about such investment funds. The Group consolidates certain investment funds
where it is deemed to be the primary beneficiary.
Prior to April 1, 2016, the Group determined that certain investment funds managed by the Group that had
attributes of an investment company (or similar entity) qualified for the deferral from certain requirements of
ASC 810 that originated from Statement of Financial Accounting Standards (“SFAS”) No.167 “Amendments to
FASB Interpretation No.46(R)” (“SFAS No.167”). For these funds, the Group determined whether it was theprimary beneficiary by evaluating whether it absorbed the majority of expected losses, received the majority of
expected residual returns, or both.
F-86

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
On April 1, 2016, the Group adopted ASU No.2015-02 which eliminated the deferral. The Group determines
whether it is the primary beneficiary by evaluating whether it has both (1) the power to make investment
decisions about the investment funds and (2) the obligation to absorb losses or the right to receive benefits that
could potentially be significant to the investment funds.
Upon the adoption of ASU No.2015-02, the Group newly consolidated certain investment funds that had not been
consolidated prior to April 1, 2016, which had the impact of increasing total assets primarily consisting ofTrading account assets by ¥16 billion, and noncontrolling interests by ¥16 billion, respectively. On the other
hand, the Group deconsolidated certain investment funds that had been consolidated prior to April 1, 2016, which
had the impact of decreasing total assets by ¥54 billion, total liabilities by ¥27 billion, and noncontrollinginterests by ¥27 billion, respectively. In addition, the Group determined that certain limited partnerships andsimilar entities that had been voting interest entities prior to April 1, 2016 are significant unconsolidated VIEs.
The amounts relating to significant unconsolidated VIEs as of March 31, 2017 in the tables above include theamounts of these limited partnerships and similar entities.
Trust arrangements
The MHFG Group offers a variety of asset management and administration services under trust arrangements
including security investment trusts, pension trusts and trusts used in the securitization of assets originated byand transferred to third parties. The Group receives trust fees for providing services as an agent or fiduciary on
behalf of beneficiaries.
With respect to guaranteed principal money trust products, the MHFG Group assumes certain risks by providing
guarantees for the repayment of principal as required by the trust agreements or relevant Japanese legislation.
The MHFG Group manages entrusted funds primarily through the origination of high quality loans and othercredit-related products, investing in investment grade marketable securities such as Japanese government bonds
and placing cash with the MHFG Group’s subsidiary trust banks. The Group has the power to determine whichassets will be held by the VIEs or to manage these assets. In addition, through the principal guarantee
agreements, the Group has the obligation to absorb losses that could potentially be significant to the VIEs.
Therefore, the Group consolidates such VIEs. However, the MHFG Group does not consolidate certain
guaranteed principal money trusts, which invest all the entrusted funds in the MHFG Group itself, as the Grouphas determined that it has no variable interests (Refer to Note 11 “Due to trust accounts”). See Note 24“Commitments and contingencies” for the balances of guaranteed trust principal that are not consolidated at
March 31, 2016 and 2017.
With respect to non-guaranteed trust arrangements, the MHFG Group manages and administers assets on behalfof its customers (trust beneficiaries) in the capacity of a trustee and fiduciary. For substantially all
non-guaranteed trust arrangements, the Group generally does not have the power to direct the activities of the
VIEs that most significantly impact the VIEs’ economic performance or has neither the obligation to absorb
losses nor the right to receive benefits that could potentially be significant to the VIEs. Therefore, such trust
accounts are not included in the consolidated financial statements of the MHFG Group.
Special purpose entities created for structured finance
The MHFG Group is involved in real estate, commercial aircraft and other vessel and machinery and equipment
financing to VIEs. As the Group typically only provides senior financing with credit enhanced by subordinatedinterests and may sometimes act as an interest rate swap counterparty, the Group has determined that it does nothave the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic
performance, or it does not have significant variable interests.
F-87

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Securitization
The MHFG Group engages in securitization activities and securitizes mortgage loans, other loans, governmentand corporate securities and other types of financial assets in the normal course of business. In thesesecuritization transactions, the Group records the transfer of a financial asset as a sale when all the accounting
criteria for a sale under ASC 860 are met. These criteria are (1) the transferred financial assets are legally isolated
from the Group’s creditors, (2) the transferee or beneficial interest holder has the right to pledge or exchange thetransferred financial assets, and (3) the Group does not maintain effective control over the transferred financial
assets. If all the criteria are not met, the transfer is accounted for as a secured borrowing.
For the fiscal years ended March 31, 2015, 2016 and 2017, the MHFG Group neither made significant transfersof financial assets nor recognized significant gains or losses in securitization transactions accounted for as sales.
The Group did not retain significant interests in securitization transactions accounted for as sales as of March 31,
2016 and 2017.
There are certain transactions where transfers of financial assets do not qualify for the aforementioned sales
criteria and are accounted for as secured borrowings. These transferred assets continue to be carried on the
consolidated balance sheets of the MHFG Group. Such assets are associated with securitization transactions andloan participation transactions, which amounted to ¥243 billion and ¥64 billion as of March 31, 2016, and¥244 billion and ¥91 billion as of March 31, 2017, respectively. Liabilities associated with securitization andloan participation transactions are presented as Payables under securities lending transactions and Other shortterm borrowings or Long-term debt, respectively, on the consolidated balance sheets.
26. Fee and commission income
Details of Fee and commission income for the fiscal years ended March 31, 2015, 2016 and 2017 are as follows:
2015

2016
2017
(in millions of yen)

Securities-related business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172,234 175,723 165,857
Deposits and lending business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131,491 143,763 164,573
Remittance business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110,181 109,859 108,368
Trust fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49,82750,49647,379Fees for other customer services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251,924 263,112 260,360
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

715,657

742,953

746,537

Securities-related business fees consist of broker’s fees and markups on securities underwriting and othersecurities related activities. Remittance business fees consist of service charges for funds transfer and collections.
Trust fees are earned primarily by fiduciary asset management and administration services for corporate pension
plans, investment funds, and other. Fees for other customer services include fees related to the MHFG Group’s
agency business, guarantee related business, and other.
Fee and commission related to assets management business, which are included in Other noninterest income in
the Group’s consolidated statement of income, for the fiscal years ended March 31, 2015, 2016 and 2017 were¥57,998 million, ¥61,803 million and ¥79,426 million, respectively.
27. Trading account gains and losses
The MHFG Group performs trading activities through market making, sales, and arbitrage. Accordingly, Trading
account gains (losses)—net include gains and losses from transactions undertaken for trading purposes, including
both market making for customers and proprietary trading, or transactions through which the Group seeks tocapture gains arising from short-term changes in market value. Trading account gains (losses)—net also include
F-88

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
gains and losses related to changes in the fair value of derivatives and other financial instruments not eligible forhedge accounting under U.S. GAAP that are utilized to offset mainly interest rate risk related to the Group’s
various assets and liabilities, as well as gains and losses related to changes in the fair value of foreign currencydenominated available-for-sale securities for which the fair value option has been elected in accordance with
ASC 825, “Financial Instruments” (“ASC 825”). Net trading gains (losses) for the fiscal years ended March 31,
2015, 2016 and 2017 are comprised of the following:
2015

2016
2017
(in millions of yen)

Trading account gains (losses)—net:
Trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 635,027 156,559 126,332
Derivative contracts:
Interest rate contracts (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265,324 319,225 (209,361)
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(93,601) 65,101
37,129Equity-related contracts (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (101,988) 17,970
1,777
Credit-related contracts (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(15,171) (1,731)
900
Other contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
368
2,015
742
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange gains (losses)—net (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

689,959 559,139(34,520) 113,553(42,481)
69,453

Net trading gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

655,439

26,972

672,692

Notes:(1) The net gain (loss) excluded from the assessment of the effectiveness of fair value hedges is included in theabove table.
(2) Amounts do not include the net loss of ¥2,836 million, ¥5,230 million and ¥7,594 million on the credit
derivatives hedging the credit risk of loans during the fiscal years ended March 31, 2015, 2016 and 2017,
respectively. The net loss is recorded in Other noninterest expenses.
(3) Amounts include realized and unrealized gains and losses on both derivative instruments and nonderivative
instruments, such as translation gains and losses related to foreign currency-denominated available-for-salesecurities for which the fair value option has been elected in accordance with ASC 825.
28. Fair value
Fair value measurements
ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability(an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction
between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which
requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs whenmeasuring fair value. In addition, ASC 820 precludes (1) the deferral of gains and losses at inception of certain
derivative contracts whose fair value was not evidenced by market-observable data, and (2) the use of block
discounts when measuring the fair value of instruments traded in an active market, which were previously
applied to large holdings of publicly traded financial instruments.

F-89

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Fair value hierarchy
ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques
are observable or unobservable. The standard describes three levels of inputs that may be used to measure fairvalue:
Level 1

Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities include
debt and equity securities and derivative contracts that are traded in an active exchange market.

Level 2

Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities;
quoted prices in markets that are not active; or other inputs that are observable or can be corroborated
by observable market data for substantially the full term of the assets or liabilities. Level 2 assets andliabilities include debt securities with quoted prices that are traded less frequently than exchange-traded
instruments. If no quoted market prices are available, the fair values of debt securities andover-the-counter derivative contracts in this category are determined using pricing models with inputs
that are observable in the market or can be derived principally from or corroborated by observable
market data.

Level 3

Unobservable inputs that are supported by little or no market activity and that are significant to the fairvalue of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose
values are determined using pricing models, discounted cash flow methodologies, or similar
techniques, as well as instruments for which the determination of fair value requires significant
management judgment or estimation.

Valuation process
The MHFG Group has established valuation policies which govern the principles of fair value measurements andthe authority and duty of each department. The Group has also established well-documented procedure manuals
which describe valuation techniques and related inputs for determining the fair values of various financial
instruments. The policies require that the measurement of fair values be carried out in accordance with theprocedures performed by the risk management departments or the back offices which are independent from thefront offices. The policies also require the risk management departments to check and verify whether thevaluation methodologies defined in the procedure manuals are fair and proper and the internal audit departments
to periodically review the compliance with the procedures throughout the Group. Although the valuation
methodologies and related inputs are consistently used from period to period, a change in the market
environment sometimes leads to a change in the valuation methodologies and the inputs. For instance, a change
in market liquidity due to a delisting or a new listing is one of the key drivers of revisions to the valuation
methodologies and the inputs. The key drivers also include the availability or the lack of market observable
inputs and the development of new valuation methodologies. Price verification performed through the Group’s
internal valuation process has an important role in identifying whether the valuation methodologies and the
inputs need to be changed. The internal valuation process over the prices broker-dealers provide, primarily forJapanese securitization products, is described in more detail below in “Investments”. A change in the valuation
methodologies and/or the inputs requires the revision of the valuation policies and procedure manuals, which is
required to be approved by the appropriate authority, either the CEO, the head of risk management, and/or thehead of accounting, depending on the nature and characteristics of the change.
The following is a description of valuation methodologies and inputs used for assets and liabilities measured atfair value on a recurring basis, including the general classification of such instruments pursuant to the fair value
hierarchy and the MHFG Group’s valuation techniques used to measure fair values. During the fiscal year ended
March 31, 2017, there were no significant changes made to the Group’s valuation techniques and related inputs.
F-90

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Trading securities and trading securities sold, not yet purchased
When quoted prices for identical securities are available in an active market, the Group uses the quoted prices tomeasure the fair values of securities and such securities are classified in Level 1 of the fair value hierarchy.
Level 1 securities include highly liquid government bonds and Ginnie Mae securities. When quoted prices for
identical securities are available, but not actively traded, such securities are classified in Level 2 of the fair value
hierarchy. When no quoted market prices are available, the Group estimates fair values by using pricing models
with inputs that are observable in the market and such securities are classified in Level 2 of the fair value
hierarchy. Level 2 securities include Japanese local government bonds, corporate bonds, and commercial paper.
When less liquid market conditions exist for securities, the quoted prices are stale or the prices from independentsources vary significantly, such securities are generally classified in Level 3 of the fair value hierarchy. The fairvalues of foreign currency denominated securitization products such as RMBS, CMBS, and ABS are determinedprimarily by using a discounted cash flow model. The key inputs used for the model include default rates,
recovery rates, prepayment rates, and discount rates. In the event that certain key inputs are unobservable orcannot be corroborated by observable market data, these financial instruments are classified in Level 3.
As it pertains to investment funds, exchange-traded funds (“ETF”) are generally classified in Level 1. Hedge
funds the Group invests in are primarily multi strategy funds that employ a fundamental bottom-up investment
approach across various asset classes globally. Hedge funds are measured at the net asset value (“NAV”) per
share and the Group has the ability to redeem its investment with the investees at the NAV per share at themeasurement date or within the near term. Private equity funds have specific investment objectives in connection
with their acquisition of equity interests in new and emerging firms in need of capital. Employing venture capital
strategies, they provide financing and other support to start-up businesses, medium and small entities inparticular geographical areas, and to companies with certain technologies or companies in high-growthindustries. Real estate funds invest globally and primarily in real estate companies, debt recapitalizations anddirect property. Private equity funds and real estate funds are measured at the NAV per share and the Group does
not have the ability to redeem its investment in the investees at the NAV per share at the measurement date orwithin the near term. It is estimated that the underlying assets of the funds would be liquidated within a ten-year
period.
Derivative financial instruments
Exchange-traded derivatives are valued using quoted market prices and consequently are classified in Level 1 of
the fair value hierarchy. However, the majority of derivatives entered into by the Group are executed
over-the-counter and are valued using internal valuation techniques as no quoted market prices are available forsuch instruments. The valuation techniques depend on the type of derivatives. The principal techniques used tovalue these instruments are discounted cash flow models and the Black-Scholes option pricing model, which arewidely accepted in the financial services industry. The key inputs vary by the type of derivatives and the natureof the underlying instruments and include interest rate yield curves, foreign exchange rates, the spot price of theunderlying, volatility and correlation. Each item is classified in either Level 2 or Level 3 depending on theobservability of the significant inputs to the model. Level 2 derivatives include plain vanilla interest rate andcurrency swaps and option contracts. Derivative contracts valued using significant unobservable correlation orvolatility are classified in Level 3 of the fair value hierarchy.
Investments
The fair values of available-for-sale securities are determined primarily using the same procedures described for
trading securities above. Since private placement bonds have no quoted market prices, the fair values of suchbonds are estimated based on a discounted cash flow model using interest rates approximating the current rates
F-91

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
for instruments with similar maturities and credit risk. Private placement bonds are classified in either Level 2 orLevel 3 depending on the observability of the significant inputs to the model, such as credit risk. The fair valuesof Japanese securitization products such as RMBS, CMBS, CDO, ABS, and CLO are generally based upon single
non-binding quoted prices from broker-dealers. Such quotes are validated through the Group’s internal processes
and controls. In rare instances where the Group finds the quoted prices to be invalid through its internal valuation
process, it adjusts those prices or alternatively estimates their fair values by using a discounted cash flow model
to incorporate the Group’s estimates of key inputs such as the most recent value of each underlying asset, cash
flows of the underlying assets, and discount margin. The validation of such prices varies depending on the natureand type of the products. For the majority of RMBS, CDO, ABS and CLO, broker quotes are validated byinvestigating significant unusual monthly valuation fluctuations and comparing to prices internally computed
through discounted cash flow models using assumptions and parameters provided by brokers such as the cash
flows of underlying assets, yield curve, prepayment speed and credit spread. For the majority of CMBS, theGroup validates broker quotes through a review process that includes the investigation of significant unusual
monthly valuation fluctuations and/or a review of underlying assets with significant differences between thevaluations of the Group and the broker-dealers being identified. Though most Japanese securitization products
are classified in Level 3, certain securitization products such as Japanese RMBS are classified in Level 2, if thequoted prices are verified through either recent market transactions or a pricing model that can be corroborated
by observable market data.
Other investments, except for investments held by consolidated investment companies, have not been measured
at fair value on a recurring basis. Investments held by consolidated investment companies mainly consist of
marketable and non-marketable equity securities and debt securities. The fair value of the marketable equity
securities is based upon quoted market prices. The fair value of the non-marketable equity securities is based
upon significant management judgment, as very limited quoted prices exist. When evaluating such securities, theGroup firstly considers recent market transactions of identical securities, if applicable. Thereafter, the Group uses
commonly accepted valuation techniques such as earnings multiples based on comparable public securities.
Non-marketable equity securities are generally classified in Level 3 of the fair value hierarchy. The fair value ofthe debt securities is estimated using a discounted cash flow model, since they have no quoted market prices.
Those debt securities are classified in Level 3, because the credit risk is unobservable.
Long-term debt
Where fair value accounting has been elected for structured notes, the fair values are determined by incorporating
the fair values of embedded derivatives that are primarily derived by using the same procedures described forderivative financial instruments above. Such instruments are classified in Level 2 or Level 3 depending on theobservability of significant inputs to the model used in determining the fair value of the embedded derivatives.

F-92

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Items measured at fair value on a recurring basis
Assets and liabilities measured at fair value on a recurring basis at March 31, 2016 and 2017, including those forwhich the MHFG Group has elected the fair value option, are summarized below:

2016

Assets/Liabilities
measured
at fair value

Level 1

Level 2 Level 3(in billions of yen)

2,272
—
3,729
2,192
995
—
—
—
9
758

31
79
77
373
563
—
2
881
1,693
62

—
—
—
—
—
21
2
—
720
21

2,303
79
3,806
2,565
1,558
21
4
881
2,422
841
617

Assets:Trading securities (1):Japanese government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese local government bonds . . . . . . . . . . . . . . . . . . . . . . . .
U.S. Treasury bonds and federal agency securities . . . . . . . . . .
Other foreign government bonds . . . . . . . . . . . . . . . . . . . . . . . .
Agency mortgage-backed securities . . . . . . . . . . . . . . . . . . . . . .
Residential mortgage-backed securities . . . . . . . . . . . . . . . . . . .
Commercial mortgage-backed securities . . . . . . . . . . . . . . . . . .
Certificates of deposit and commercial paper . . . . . . . . . . . . . . .
Corporate bonds and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading securities measured at net asset value (2) . . . . . . . . . . . .
Derivatives:
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity-related contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit-related contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Available-for-sale securities:
Japanese government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese local government bonds . . . . . . . . . . . . . . . . . . . . . . . .
U.S. Treasury bonds and federal agency securities . . . . . . . . . .
Other foreign government bonds . . . . . . . . . . . . . . . . . . . . . . . .
Agency mortgage-backed securities . . . . . . . . . . . . . . . . . . . . . .
Residential mortgage-backed securities . . . . . . . . . . . . . . . . . . .
Commercial mortgage-backed securities . . . . . . . . . . . . . . . . . .
Japanese corporate bonds and other debt securities . . . . . . . . . .
Foreign corporate bonds and other debt securities . . . . . . . . . . .
Equity securities (marketable) . . . . . . . . . . . . . . . . . . . . . . . . . .
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

97
23
46
—
—

11,396
3,099
95
40
21

29
8
29
3
38

11,522
3,130
170
43
59

15,037
—
438
352
169
—
—
—
—
3,716
—

726
241
—
590
780
87
—
1,921
739
65
—

—
—
—
—
—
123
187
174
108
—
42

15,763
241
438
942
949
210
187
2,095
847
3,781
42

Total assets measured at fair value on a recurring basis . . . . . . . . . . . . . . .

29,83323,561

1,505

55,516

2,482

148

—

2,630

98 11,168
26 2,953
60
56
—
33
—
18
—
433

3
1
24
4
37
623

11,269
2,980
140
37
55
1,056

692

18,167

Liabilities:
Trading securities sold, not yet purchased . . . . . . . . . . . . . . . . . . . . .
Derivatives:
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity-related contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit-related contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities measured at fair value on a recurring basis . . . . . . . . . . . .
F-93

2,666

14,809MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

2017

Assets:Trading securities (1):Japanese government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese local government bonds . . . . . . . . . . . . . . . . . . . . . . . .
U.S. Treasury bonds and federal agency securities . . . . . . . . . .
Other foreign government bonds . . . . . . . . . . . . . . . . . . . . . . . .
Agency mortgage-backed securities . . . . . . . . . . . . . . . . . . . . . .
Residential mortgage-backed securities . . . . . . . . . . . . . . . . . . .
Commercial mortgage-backed securities . . . . . . . . . . . . . . . . . .
Certificates of deposit and commercial paper . . . . . . . . . . . . . . .
Corporate bonds and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading securities measured at net asset value (2) . . . . . . . . . . . .
Derivatives:
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity-related contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit-related contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Available-for-sale securities:
Japanese government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese local government bonds . . . . . . . . . . . . . . . . . . . . . . . .
U.S. Treasury bonds and federal agency securities . . . . . . . . . .
Other foreign government bonds . . . . . . . . . . . . . . . . . . . . . . . .
Agency mortgage-backed securities . . . . . . . . . . . . . . . . . . . . . .
Residential mortgage-backed securities . . . . . . . . . . . . . . . . . . .
Commercial mortgage-backed securities . . . . . . . . . . . . . . . . . .
Japanese corporate bonds and other debt securities . . . . . . . . . .
Foreign corporate bonds and other debt securities . . . . . . . . . . .
Equity securities (marketable) . . . . . . . . . . . . . . . . . . . . . . . . . .
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets measured at fair value on a recurring basis . . . . . . . . . . . . . . .
Liabilities:
Trading securities sold, not yet purchased . . . . . . . . . . . . . . . . . . . . .
Derivatives:
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity-related contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit-related contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities measured at fair value on a recurring basis . . . . . . . . . . . .

Assets/Liabilities
measured
at fair value

Level 1

Level 2 Level 3(in billions of yen)

1,485
—
2,883
1,127
1,335
—
—
—
3
1,661

23
69
80
457
638
—
3
554
1,449
20

—
—
—
—
—
15
—
—
1,052
23

1,508
69
2,963
1,584
1,973
15
3
554
2,504
1,704
678

37
28
31
—
1

8,442
2,709
89
33
11

27
8
14
2
11

8,506
2,745
134
35
23

9,543
—
1,144
346
134
—
—
—
—
3,717
—

720
284
—
589
709
67
—
1,834
801
84
—

—
—
—
—
—
77
224
174
110
—
37

10,263
284
1,144
935
843
144
224
2,008
911
3,801
37

23,475

19,665

1,774

45,592

1,993

228

—

2,221

46
20
129
—
1
—

8,426
2,591
61
34
10
903

1
—
39
2
11
593

8,473
2,611
229
36
22
1,496

2,189

12,253646

15,088Notes:(1) Trading securities include foreign currency denominated securities for which the MHFG Group elected thefair value option.
F-94

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(2) In accordance with ASC 820, certain investments that are measured at fair value using the net asset value
per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fairvalue amounts presented for these classes of assets are intended to permit the reconciliation of the fair value
hierarchy to the amounts presented in the statements of financial position. The amounts of unfunded
commitments related to these investments at March 31, 2016 and 2017 were ¥30 billion and ¥33 billion,
respectively.
(3) Amounts represent items for which the Group elected the fair value option.
Items measured at fair value on a recurring basis using significant unobservable inputs (Level 3)
The following table presents a reconciliation for all assets and liabilities measured at fair value on a recurring
basis using significant unobservable inputs (Level 3) for the fiscal years ended March 31, 2016 and 2017:

2016

Change inunrealized
Gains
Gains Transfers Transfers
gains
April 1, (losses) in (losses) in
into
out ofMarch 31, (losses)
2015 Earnings
OCI
Level 3
Level 3 Purchases Sales Issuances Settlements
2016
still held (6)(in billions of yen)

Assets:Trading securities:
Other foreign
government
bonds . . . . . . . . . . .
Residential mortgagebacked securities . .
Commercial
mortgage-backed
securities . . . . . . . .
Corporate bonds andother . . . . . . . . . . . .
Equity securities . . . . .
Derivatives, net (1):Interest rate
contracts . . . . . . . . .
Foreign exchange
contracts . . . . . . . . .
Equity-related
contracts . . . . . . . . .
Credit-related
contracts . . . . . . . . .
Other contracts . . . . . .
Available-for-salesecurities:
Residential mortgagebacked securities . .
Commercial
mortgage-backed
securities . . . . . . . .
Japanese corporate
bonds and otherdebt securities . . . . .
Foreign corporate
bonds and otherdebt securities . . . . .
Other investments . . . . . . .
Liabilities:
Trading securities sold, notyet purchased . . . . . . . . .
Long-term debt . . . . . . . . . .

—

— (2)

—

—

—

1

29

— (2)

—

—

—

4

— (2)

—

—

639
23

(43)(2)(3)(2)——

18(1)(2)

8

(1)

—

—

—

—

—

—

—

(8)

21

—

—

—

—

—

(2)

2

—

25
—

(34)
—

452
1

(192)
—

—
—

(127)
—

720
21

(38)
(1)

—

—

—

—

—

—

9

26

11

(1)(2)

—

—

—

—

—

—

—

7

(2)

(14)

22(2)

—

—

—

—

—

—

(3)

5

14

(1)
—

— (2)
1(2)

—
—

—
—

—
—

—
—

—
—

—
—

—
—

(1)
1

—
1

166

— (3)

— (4)

—

—

—

(4)

—

(39)

123

—

169

— (3)

— (4)

—

—

102

(62)

—

(22)

187

—

155

(2)(3)

— (4)

—

—

67

(3)

—

(43)

174

(4)

85
53

2(3)
7(3)

(5)(4)
—

23
—

—
—

41
5

—
(20)

—
—

(38)
(3)

108
42

—
(7)

—
587

—(2)
18(5)

—
—

—

—
—

(5)
(1)

5
—

—
305

—
(258)

—
623

—
19

8

F-95

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

2017

Change inunrealized
Gains
Gains Transfers Transfers
gains
April 1, (losses) in (losses) in
into
out ofMarch 31, (losses)
2016 Earnings
OCI
Level 3
Level 3 Purchases Sales Issuances Settlements
2017
still held (6)(in billions of yen)

Assets:Trading securities:
Residential mortgagebacked securities . .
Commercial
mortgage-backed
securities . . . . . . . .
Corporate bonds andother . . . . . . . . . . . .
Equity securities . . . . .
Derivatives, net (1):Interest rate
contracts . . . . . . . . .
Foreign exchange
contracts . . . . . . . . .
Equity-related
contracts . . . . . . . . .
Credit-related
contracts . . . . . . . . .
Other contracts . . . . . .
Available-for-salesecurities:
Residential mortgagebacked securities . .
Commercial
mortgage-backed
securities . . . . . . . .
Japanese corporate
bonds and otherdebt securities . . . . .
Foreign corporate
bonds and otherdebt securities . . . . .
Other investments . . . . . . .
Liabilities:
Trading securities sold, notyet purchased . . . . . . . . .
Long-term debt . . . . . . . . . .

21(1)(2)

—

—

—

—

—

—

(5)

15

(1)

2

— (2)

—

—

—

—

—

—

(2)

—

—

720
21

12(2)
1(2)

—
—

296
—

(39)
—

875
3

(555)
(2)

—
—

(257)
—

1,052
23

19
—

26

(2)(2)

—

—

—

—

—

—

2

26

2

7

7(2)

—

—

—

—

—

—

(6)

8

1

5

(31)(2)

—

—

—

—

—

—

1

(25)

(35)

(1)
1

1(2)
— (2)

—
—

—
—

—
—

—
—

—
—

—
—

—
(1)

—
—

—
—

123

— (3)

(1)(4)

—

—

—

(7)

—

(38)

77

—

187

— (3)

1(4)

—

—

63

(12)

—

(15)

224

—

174

(1)(3)

43(4)

—

—

10

(19)

—

(33)

174

—

108
42

1(3)
— (3)

(1)(4)
—

—
—

(2)
—

10
12

—
(3)

—
—

(6)
(14)

110
37

—
—

—
623

— (2)
20(5)

—
—

1
21

—
(12)

(54)
(2)

53
1

—
278

—
(296)

—
593

—
18

Notes:(1) Total Level 3 derivative exposures have been netted on the table for presentation purposes only.
(2) Gains (losses) in Earnings are reported in Trading account gains (losses)—net, Foreign exchange gains (losses)—net or Other noninterest
income (expenses).
(3) Gains (losses) in Earnings are reported in Investment gains (losses)—net.
(4) Gains (losses) in OCI are reported in Other comprehensive income (loss).
(5) Gains (losses) in Earnings are reported in Other noninterest income (expenses).
(6) Amounts represent total gains or losses recognized in earnings during the period. These gains or losses were attributable to the change infair value relating to assets and liabilities classified as Level 3 that were still held at March 31, 2016 and 2017.

Transfers between levels
Transfers of assets or liabilities between levels of the fair value hierarchy are assumed to occur at the beginningof the period.
During the fiscal year ended March 31, 2016, the transfers into Level 3 included ¥25 billion of Trading securities,¥23 billion of Available-for-sale securities and ¥8 billion of Long-term debt. Transfers into Level 3 for Trading
F-96

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
securities and Available-for-sale securities were primarily due to decreased liquidity for certain Japanese andforeign corporate bonds. Transfers into Level 3 for Long-term debt were primarily due to changes in the impactof unobservable inputs on the value of certain structured notes. During the fiscal year ended March 31, 2016, thetransfers out of Level 3 included ¥34 billion of Trading securities. Transfers out of Level 3 for Trading securities
were primarily due to increased price transparency for certain Japanese and foreign corporate bonds.
During the fiscal year ended March 31, 2017, the transfers into Level 3 included ¥296 billion of Trading
securities, ¥1 billion of Trading securities sold, not yet purchased and ¥21 billion of Long-term debt. Transfers
into Level 3 for Trading securities and Trading securities sold, not yet purchased were primarily due to decreased
liquidity for certain Japanese and foreign corporate bonds. Transfers into Level 3 for Long-term debt wereprimarily due to changes in the impact of unobservable inputs on the value of certain structured notes. During the
fiscal year ended March 31, 2017, the transfers out of Level 3 included ¥39 billion of Trading securities,¥2 billion of Available-for-sale securities and ¥12 billion of Long-term debt. Transfers out of Level 3 for Trading
securities were primarily due to increased price transparency for certain Japanese and foreign corporate bonds.
Transfers out of Level 3 for Available-for-sale securities were primarily due to increased liquidity for certain
Foreign corporate bonds and other debt securities. Transfers out of Level 3 for Long-term debt were primarily
due to changes in the impact of unobservable inputs on the value of certain structured notes.

F-97

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Quantitative information about Level 3 fair value measurements
The following table presents information about significant unobservable inputs related to the MHFG Group’smaterial classes of Level 3 assets and liabilities at March 31, 2016 and 2017:2016
Products/Instruments Fair value Principal valuation technique Unobservable inputs Range of input values Weighted average (5)(in billions of yen, except for percentages and basis points)
Trading securities andAvailable-for-salesecurities:
Residential
144
Discounted cash flow
Prepayment rate
3%–19%
7%
mortgage-backed
Price-based
Default rate
0%–2%0%securities
Recovery rate
100%–100%100%
Discount margin
13bps–180bps
60bps
Commercial
mortgage-backed
securities

189

Discounted cash flow
Price-based

Discount margin6bps–580bps

37bps

Corporate bonds andother debt
securities

1,002

Discounted cash flow
Price-based

Prepayment rate (1)Default rate (1)Recovery rate (1)Discount margin (1)Discount margin (2)0%–21%
0%–2%
60%–69%11bps–1,115bps
10bps–3,850bps

19%
2%
68%
151bps454bps26

Internal valuation model (3)IR – IR correlation
Default rate (4)32%–100%
0%–63%

Foreign exchange
contracts

7Internal valuation model (3)FX – IR correlation
FX – FX correlation
Default rate (4)5%–50%
54%–54%0%–63%

Equity-related
contracts

5Internal valuation model (3)Equity – IR correlation
Equity – FX correlation
Equity volatility

30%–30%55%–55%
10%–40%Credit-related
contracts(1)

Internal valuation model (3)Default rate
Credit correlation

0%–42%
29%–100%

623

Internal valuation model (3)IR – IR correlation
FX – IR correlation
FX – FX correlation
Equity – IR correlation
Equity – FX correlation
Equity correlation
Equity volatility
Default rate
Credit correlation

32%–100%
5%–50%
54%–54%30%–30%55%–55%18%–100%
14%–39%0%–5%28%–100%

Derivatives, net:
Interest rate
contracts

Long-term debt

F-98

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2017
Products/Instruments
Trading securities andAvailable-for-salesecurities:
Residential
mortgage-backed
securities

Fair value Principal valuation technique Unobservable inputs Range of input values Weighted average (5)(in billions of yen, except for percentages and basis points)

92

Discounted cash flow
Price-based

Prepayment rate
Default rate
Recovery rate
Discount margin

0%–18%
0%–1%
100%–100%15bps–170bps

7%
0%
100%
55bps

Commercial
mortgage-backed
securities

224

Discounted cash flow
Price-based

Discount margin4bps–205bps

28bps

Corporate bonds andother debt
securities

1,336

Discounted cash flow
Price-based

Prepayment rate (1)Default rate (1)Recovery rate (1)Discount margin (1)Discount margin (2)

16%–30%1%–2%
60%–68%
8bps–1,181bps
10bps–939bps

29%
2%
68%
131bps359bps26

Internal valuation model (3)IR – IR correlation
Default rate (4)23%–100%
0%–63%

Foreign exchange
contracts

8Internal valuation model (3)FX – IR correlation
FX – FX correlation
Default rate (4)5%–52%
55%–55%0%–63%

Equity-related
contracts(25)Internal valuation model (3)Equity – IR correlation
Equity – FX correlation
Equity volatility

25%–25%55%–55%6%–59%

Credit-related
contracts—

Internal valuation model (3)Default rate
Credit correlation

0%–5%
30%–100%

593

Internal valuation model (3)IR – IR correlation
FX – IR correlation
FX – FX correlation
Equity – IR correlation
Equity – FX correlation
Equity correlation
Equity volatility
Default rate
Credit correlation

23%–100%
5%–52%
55%–55%25%–25%55%–55%20%–100%
5%–40%
0%–3%
33%–100%

Derivatives, net:
Interest rate
contracts

Long-term debt

Notes:(1) These inputs are mainly used for determining the fair values of securitization products such as CDO, CLO and ABS, other than RMBS
and CMBS.
(2) This input is mainly used for determining the fair values of Japanese corporate bonds and foreign corporate bonds.
(3) Internal valuation model includes discounted cash flow models and the Black-Scholes option pricing model.
(4) This input represents the counterparty default rate derived from the MHFG Group’s own internal credit analyses.
(5) Weighted averages are calculated by weighting each input by the relative fair value of the respective financial instruments.
IR = Interest rate
FX = Foreign exchange

F-99

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Sensitivities to unobservable inputs and interrelationships between unobservable inputs
The following is a description of the sensitivities and interrelationships of the significant unobservable inputs
used to measure the fair values of Level 3 assets and liabilities.
(1) Prepayment rate
The prepayment rate is the estimated rate at which voluntary unscheduled repayments of the principal of theunderlying assets are expected to occur. The movement of the prepayment rate is generally negatively correlatedwith borrower delinquency. A change in prepayment rate would impact the valuation of the fair values offinancial instruments either positively or negatively, depending on the structure of financial instruments.
(2) Default rate
The default rate is an estimate of the likelihood of not collecting contractual payments. An increase in the default
rate would generally be accompanied by a decrease in the recovery rate and an increase in the discount margin. It
would also generally impact the valuation of the fair values of financial instruments negatively.
(3) Recovery rate
The recovery rate is an estimate of the percentage of contractual payments that would be collected in the event ofa default. An increase in recovery rate would generally be accompanied by a decrease in the default rate. It would
also generally impact the valuation of the fair values of financial instruments positively.
(4) Discount margin
The discount margin is the portion of the interest rate over a benchmark market interest rate such as LIBOR or
swap rates. It primarily consists of a risk premium component which is the amount of compensation that market
participants require due to the uncertainty inherent in the financial instruments’ cash flows resulting from credit
risk. An increase in discount margin would generally impact the valuation of the fair values of financial
instruments negatively.
(5) Correlation
Correlation is the likelihood of the movement of one input relative to another based on an establishedrelationship. The change in correlation would impact the valuation of derivatives either positively or negatively,
depending on the nature of the underlying assets.
(6) Volatility
Volatility is a measure of the expected change in variables over a fixed period of time. Some financial
instruments benefit from an increase in volatility and others benefit from a decrease in volatility. Generally, for along position in an option, an increase in volatility would result in an increase in the fair values of financial
instruments.

F-100

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Items measured at fair value on a nonrecurring basis
Certain assets and liabilities are measured at fair value on a nonrecurring basis. These assets and liabilities
primarily include items that are measured at the lower of cost or fair value, and items that were initially measured
at cost and have been written down to fair value as a result of impairment. The following table shows the fairvalue hierarchy for these items as of March 31, 2016 and 2017:
2016

Total

Level 1

Level 2 Level 3(in billions of yen)

Assets:Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans held-for-sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premises and equipment—net . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

124
13
1
—
—

—
—
—
—
—

—

Total assets measured at fair value on a nonrecurring basis . . . . .

138

—

2017

Total

Level 1

Assets:Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans held-for-sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premises and equipment—net . . . . . . . . . . . . . . . . . . . . . . . . . . . .

124
7
7
7

—
—

—
6

—

—

Total assets measured at fair value on a nonrecurring basis . . . . .

145

6Aggregate cost

—
—
—

124
6
1
—
—

197
14
2
1
6

7

131

220

7

Level 2 Level 3(in billions of yen)

Aggregate cost

6

124
—
1
1

194
8
11
11

13

126

224

7

Loans in the table above have been impaired and measured based upon the fair value of the underlying collateral.
Loans held-for-sale in the table above are accounted for at the lower of cost or fair value at the end of the period.
The items for which fair values are determined by using actual or contractually determined selling price data areclassified as Level 2. Due to the lack of current observable market information, the determination of the fairvalues for items other than the aforementioned requires significant adjustment based upon management judgment
and estimation, which results in such items being classified in Level 3 of the hierarchy.
Other investments in the table above, which consist of certain equity method investments and non-marketable
equity securities, have been impaired and written down to fair value. The fair values of the impaired marketable
equity method investments are determined by their quoted market prices. As the securities are traded on an active
exchange market, they are classified as Level 1. The fair values of the impaired non-marketable equity securities,
which include non-marketable equity method investments, are determined primarily by using a liquidation value
technique. As significant management judgment or estimation is required in the determination of the fair valuesof non-marketable equity securities, they are classified as Level 3.
Premises and equipment—net in the table above have been impaired and written down to fair value.
Goodwill in the table above is entirely related to Banco Mizuho do Brasil S.A. reporting unit. Due to the decline
in the fair value of the reporting unit, the carrying amount of the goodwill was reduced to its fair value which isbased on the market approach and an impairment loss was recognized. As the determination of the fair value ofthe goodwill required significant management judgment and estimation, it is classified as Level 3.
F-101

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Fair value option
The MHFG Group elected the fair value option for certain eligible financial instruments described below.
Foreign currency denominated available-for-sale securities
Prior to the adoption of the fair value option in accordance with ASC 825, the changes in fair value of foreign
currency denominated available-for-sale securities had been accounted for in AOCI, while the changes in fairvalue caused by foreign exchange fluctuations of foreign currency denominated financial liabilities had beenaccounted for in earnings. The MHFG Group elected the fair value option for these securities to mitigate thevolatility in earnings due to the difference in the recognition of foreign exchange risk between available-for-salesecurities and financial liabilities. Following the election of the fair value option, these securities have beenreported as trading securities in Trading account assets.
Certain hybrid financial instruments
The MHFG Group issues structured notes as part of its client-driven activities. Structured notes are debt
instruments that contain embedded derivatives. The Group elected the fair value option for certain structured
notes to mitigate accounting mismatches and to achieve operational simplifications. In addition, the Groupmeasures certain notes that contain embedded derivatives at fair value under the practicability exception. These
notes continue to be reported in Long-term debt and interest on these notes continues to be reported in Interest
expense on long-term debt based on the contractual rates. The differences between the aggregate fair value ofthese notes and the aggregate unpaid principal balance of such instruments were ¥20 billion and ¥36 billion atMarch 31, 2016 and 2017, respectively. The net unrealized gains (losses) resulting from changes in fair values ofthese notes of ¥14 billion and ¥16 billion, which included the fair value changes attributable to changes in theGroup’s own credit risk, were recorded in Other noninterest income (expenses) for the fiscal years ended March
31, 2016 and 2017, respectively.
Fair value of financial instruments
ASC 825 requires the disclosure of the estimated fair value of financial instruments. The fair value of financial
instruments is the amount that would be exchanged between willing parties, other than in a forced sale or
liquidation. Quoted market prices, if available, are best utilized as estimates of the fair values of financial
instruments. However, since no quoted market prices are available for certain financial instruments, fair values
for such financial instruments have been estimated based on management’s assumptions, discounted cash flow
models or other valuation techniques. Such estimation methods are described in more detail below. Theseestimates could be significantly affected by different sets of assumptions. There are certain limitations tomanagement’s best judgment in estimating fair values of financial instruments and inherent subjectivity involvedin estimation methodologies and assumptions used to estimate fair value. Accordingly, the net realizable or
liquidation values could be materially different from the estimates presented below.
ASC 825 does not require the disclosure of the fair value of nonfinancial instruments.

F-102

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following is a description of the valuation methodologies used for estimating the fair value of financial
assets and liabilities not carried at fair value on the MHFG Group’s consolidated balance sheets.
Cash and due from banks, call loans and funds sold, and receivables under resale agreements and securities
borrowing transactions
The carrying value of short-term financial assets, such as cash and due from banks, interest-bearing deposits inother banks, call loans and funds sold, and receivables under resale agreements and securities borrowing
transactions approximates the fair value of these assets since they generally involve limited losses from credit
risk or have short-term maturities with interest rates that approximate market rates.
Investments
The fair value of held-to-maturity securities is determined primarily by using the same procedures and techniques
described for trading securities and available-for-sale securities aforementioned in this Note. The fair value ofother equity interests, which primarily comprises non-marketable equity securities, is not readily determinable,
nor practicable to estimate, due to the lack of available information. Their carrying amounts of ¥313 billion and¥308 billion at March 31, 2016 and 2017, respectively, were not included in the disclosure.
Loans
Performing loans have been fair valued as groups of similar loans based on the type of loan, credit quality,
prepayment assumptions and remaining maturity. The fair value of performing loans is determined based on
discounted cash flows using interest rates approximating the MHFG Group’s current rates for similar loans. The
fair value of impaired loans is determined based on either discounted cash flows incorporating the Group’s best
estimate of the expected future cash flows or the fair value of the underlying collateral, if impaired loans arecollateral dependent.
Other financial assets
The carrying value of other financial assets, which primarily consist of accounts receivable from brokers, dealers,and customers for securities transactions, accrued income and collateral provided for derivative transactions,approximates the fair value of these assets since they generally involve limited losses from credit risk or haveshort-term maturities with interest rates that approximate market rates. The majority of other financial assets isclassified as Level 2, and included in the table in Note 13 “Other assets and liabilities”.
Noninterest-bearing deposits, call money and funds purchased, and payables under repurchase agreements andsecurities lending transactions
The carrying value of short-term financial liabilities, such as noninterest-bearing deposits, call money and funds
purchased, and payables under repurchase agreements and securities lending transactions approximates the fairvalue of these liabilities since they generally have short-term maturities with interest rates that approximate
market rates.
Interest-bearing deposits
The carrying value of demand deposits approximates the fair value since it represents the amount payable on
demand at the balance sheet date. The fair value of time deposits and certificates of deposit is primarily estimatedbased on discounted cash flow analysis using current interest rates for instruments with similar maturities. The
carrying value of short-term certificates of deposit approximates the fair value.
F-103

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Due to trust accounts
The carrying value of due to trust accounts approximates the fair value since they generally have short-term
maturities with interest rates that approximate market rates.
Other short-term borrowings
The carrying value of the majority of other short-term borrowings approximates the fair value since theygenerally have short-term maturities with interest rates that approximate market rates. The fair value of certain
borrowings is estimated based on discounted cash flow analysis using interest rates approximating the MHFG
Group’s incremental borrowing rates for instruments with similar maturities.
Long-term debt
Long-term debt is fair valued using quoted market prices, if available. Otherwise, the fair value of long-term debt
is estimated based on discounted cash flow analysis using interest rates approximating the MHFG Group’s
incremental borrowing rates for instruments with similar maturities.
Other financial liabilities
The carrying value of other financial liabilities, which primarily consist of accounts payable to brokers, dealers,and customers for securities transactions, accrued expenses and collateral accepted for derivative transactions,approximates the fair value since they generally have short-term maturities with interest rates that approximate
market rates. The majority of other financial liabilities is classified as Level 2, and included in the table in Note
13 “Other assets and liabilities”.
The fair value of certain off-balance-sheet financial instruments, such as commitments to extend credit andcommercial letters of credit, was not considered material to the consolidated balance sheets at March 31, 2016
and 2017.

F-104

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table shows the carrying amounts and fair values at March 31, 2016 and 2017, of certain financial
instruments, excluding financial instruments which are carried at fair value on a recurring basis and those outside
the scope of ASC 825 such as equity method investments as defined in ASC 323, “Investments—Equity Method
and Joint Ventures” (“ASC 323”) and lease contracts as defined in ASC 840, “Leases” (“ASC 840”) :Carrying
amount2016
Estimated fair value
Total
Level 1
Level 2(in billions of yen)

Financial assets:
Cash and due from banks, call loans and funds sold, andreceivables under resale agreements and securities
borrowing transactions . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans, net of allowance for loan losses (Note) . . . . . . . . . . . .

48,757
4,819
77,04048,757
4,873
78,241

923
4,873
—

47,834————78,241

Financial liabilities:
Noninterest-bearing deposits, call money and funds
purchased, and payables under repurchase agreements
and securities lending transactions . . . . . . . . . . . . . . . . . .
Interest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due to trust accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

39,908100,228
4,467
2,080
13,691

39,908100,234
4,467
2,080
13,863

17,223
46,207———

22,68554,027
4,467
2,080
12,969

—
—
—
—
894

Level 3Carrying
amount2017
Estimated fair value
Total
Level 1
Level 2(in billions of yen)

Financial assets:
Cash and due from banks, call loans and funds sold, andreceivables under resale agreements and securities
borrowing transactions . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans, net of allowance for loan losses (Note) . . . . . . . . . . . .

60,943
3,817
81,66260,943
3,846
82,696

1,063
3,846
—

59,880————82,696

Financial liabilities:
Noninterest-bearing deposits, call money and funds
purchased, and payables under repurchase agreements
and securities lending transactions . . . . . . . . . . . . . . . . . .
Interest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due to trust accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42,205
110,125
4,123
1,477
13,00942,205
110,124
4,123
1,477
13,07820,54456,738———21,661
53,386
4,123
1,477
12,120

—
—
—
—
958

Note: Loans, net of allowance for loan losses include items measured at fair value on a nonrecurring basis.

F-105

Level 3

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
29. Offsetting of financial assets and financial liabilities
Derivatives
The MHFG Group enters into master netting arrangements such as International Swaps and Derivatives
Association, Inc. (“ISDA”) or similar agreements with counterparties to manage mainly credit risks associatedwith counterparty default. If the predetermined events including counterparty default occur, these enforceable
master netting arrangements or similar agreements give the Group the right to offset derivative receivables andderivative payables and related financial collateral such as cash and securities with the same counterparty.
Repurchase and resale agreements and securities lending and borrowing transactions
Repurchase and resale agreements and securities lending and borrowing transactions are generally covered byindustry standard master repurchase agreements and industry standard master securities lending agreements withnetting terms to manage mainly credit risks associated with counterparty default. In the event of default by thecounterparty, these agreements with netting terms provide the Group with the right to offset receivables andpayables related to such transactions with the same counterparty, and to liquidate the collateral held.
The following table provides information about the offsetting of financial assets and financial liabilities at
March 31, 2016 and 2017. The table includes derivatives, repurchase and resale agreements, and securities
lending and borrowing transactions that are subject to enforceable master netting arrangements or similar
agreements irrespective of whether or not they are offset on the Group’s consolidated balance sheets.
Amounts not offset on
the balance sheet (3)Gross amounts Net amounts
Gross amounts offset on the presented on the
Financial
CashNet
recognizedbalance sheet balance sheet (2) instruments (4) collateral amounts(in billions of yen)
2016
Assets (1):
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables under resale agreements . . . . .
Receivables under securities borrowing
transactions . . . . . . . . . . . . . . . . . . . . . . .

14,1307,490——

14,130
7,490(12,167)(7,461)

(599)
—

3,327

—

3,327

(3,318)—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,947—

24,947(22,946)

(599)

1,402

Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under repurchase agreements . . . .
Payables under securities lendingtransactions . . . . . . . . . . . . . . . . . . . . . . .

13,652
16,507——

13,652
16,507(12,043)(16,464)

(748)
—

861
43

2,538

—

2,538

(2,531)—

7

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

32,697—32,697(31,038)

(748)

911

2017
Assets (1):
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables under resale agreements . . . . .
Receivables under securities borrowing
transactions . . . . . . . . . . . . . . . . . . . . . . .

10,608
8,698——

10,608
8,698(8,966)(8,662)

(620)
—

1,022
36

3,127

—

3,127

(3,116)—

11

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,433—22,433(20,744)

(620)

1,069

10,405
17,446——

10,405
17,446(8,866)(17,391)

(901)
—

638
55

1,364
29
9

Liabilities (1):Liabilities (1):
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under repurchase agreements . . . .
Payables under securities lendingtransactions . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,458

—

1,458

(1,455)—

3

29,309—29,309(27,712)

(901)

696

F-106

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Notes:(1) Amounts relating to master netting arrangements or similar agreements where the MHFG Group does not have the legal right of set-off
or where uncertainty exists as to the enforceability of these agreements are excluded. For derivatives, the table includes amounts relating
to over-the-counter (“OTC”) and OTC-cleared derivatives that are subject to enforceable master netting arrangements or similar
agreements.
(2) Derivative assets and liabilities are recorded in Trading account assets and Trading account liabilities, respectively.
(3) Amounts do not exceed the net amounts presented on the balance sheet and do not include the effect of overcollateralization, where it
exists.
(4) For derivatives, amounts include derivative assets or liabilities and securities collateral that are eligible for offsetting under enforceable
master netting arrangements or similar agreements.

30. Repurchase agreements and securities lending transactions accounted for as secured borrowings
The following table shows the gross amounts of liabilities associated with repurchase agreements and securities
lending transactions, by remaining contractual maturity at March 31, 2016 and 2017:
Overnight andcontinuous

Up to 30 days 31-90 days(in billions of yen)Greater than
90 days

Total

2016
Repurchase agreements . . . . . . . . . . . . . . . . .
Securities lending transactions . . . . . . . . . . .

6,289
1,909

6,125
700

3,582
—

837
236

16,833
2,845

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,198

6,825

3,582

1,073

19,678

Repurchase agreements . . . . . . . . . . . . . . . . .
Securities lending transactions . . . . . . . . . . .

249
320

12,700
1,359

3,897
—

1,124
240

17,9701,919

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

569

14,059

3,897

1,364

19,8892017

The following table shows the gross amounts of liabilities associated with repurchase agreements and securities
lending transactions, by class of underlying collateral at March 31, 2016 and 2017:
Repurchase Securities lending
agreements
transactions(in billions of yen)

2016
Japanese government bonds and Japanese local government bonds . . . . . . . . .
Foreign government bonds and foreign agency mortgage-backed securities . . .
Commercial paper and corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

532
15,781
221
141
158

1,891
700
27
185
42

Total (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,833

2,845

Japanese government bonds and Japanese local government bonds . . . . . . . . .
Foreign government bonds and foreign agency mortgage-backed securities . . .
Commercial paper and corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,127
15,782
294
578
189

1,152
375
47
320
25

Total (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,970

1,919

2017

F-107

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note: Amounts exceeded the gross amounts recognized in Note 29 “Offsetting of financial assets and financial
liabilities” by ¥633 billion and ¥985 billion, at March 31, 2016 and 2017, respectively, which excluded theamounts relating to master netting agreements or similar agreements where the MHFG Group did not havethe legal right of set-off or where uncertainty exists as to the enforceability.
The MHFG Group is required to post securities as collateral with a fair value equal to or in excess of theprincipal amount of the cash borrowed under repurchase agreements. For securities lending transactions, theGroup receives collateral in the form of cash. These contracts involve risks, including (1) the counterparty may
fail to return the securities at maturity and (2) the fair value of the securities posted may decline below theamount of the Group’s obligation and therefore the counterparty may require additional amounts. The Group
attempts to mitigate these risks by entering into transactions mainly with central counterparty clearing houses
which revalue assets and perform margin maintenance activities on a daily basis, diversifying the maturities andcounterparties, and using mainly highly liquid securities.
31. Related party transactions
Transactions with directors, executive officers, and their associates
The banking subsidiaries of MHFG make loans to the MHFG Group’s directors, executive officers, and theirassociates in their ordinary course of business. At March 31, 2016 and 2017, outstanding loans to such relatedparties were not considered significant. These related party loans were made on substantially the same terms,
including interest rate and collateral, as those prevailing at the same time for comparable transactions withunrelated parties. At March 31, 2016 and 2017, there were no loans to these related parties that were considered
impaired.
Other transactions, such as deposits, were entered into between MHFG’s subsidiaries and the MHFG Group’s
directors, executive officers, and their associates during the fiscal years ended March 31, 2015, 2016 and 2017.
The outstanding amounts of these transactions, which were made in the ordinary course of business with
substantially the same terms as those for comparable transactions with unrelated parties, were not consideredsignificant.
Transactions with other related parties
A number of transactions were entered into with other related parties, such as MHFG’s employees and affiliates
accounted for under the equity method. These transactions included loans, deposits, and other banking services.
They were not significant in amount and were conducted with substantially the same terms as those forcomparable transactions with unrelated parties.
32. Business segment information
The MHFG Group has introduced an in-house company system based on its diverse customer segments as ofApril 2016. The aim of this system is to leverage the Group’s strengths and competitive advantage, which is theseamless integration of the Group’s banking, trust and securities functions under a holding company structure, tospeedily provide high-quality financial services that closely match customer needs.
Specifically, the company system is classified into the following five in-house companies, each based on acustomer segment: the Retail & Business Banking Company, the Corporate & Institutional Company, the Global
Corporate Company, the Global Markets Company, and the Asset Management Company. These customer
segments are regarded as operating segments.
F-108

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In line with the aforementioned system, the reportable segments have been changed from those based on therelevant principal consolidated subsidiaries to the five in-house companies. The services that each in-housecompany is in charge of are as follows.
Retail & Business Banking Company
This company provides financial services for individual customers, small and medium-sized enterprises andmiddle market firms in Japan.
Corporate & Institutional Company
This company provides financial services for large corporations, financial institutions and public corporations inJapan.
Global Corporate Company
This company provides financial services for Japanese overseas affiliated corporate customers and non-Japanese
corporate customers, etc.
Global Markets Company
This company invests in financial products with market risk, such as interest rate risk, equity risk, and credit risk.
Asset Management Company
This company develops financial products and provides financial services that match the asset management
needs of its wide range of customers from individuals to institutional investors.
The reportable segment information, set forth below, is derived from the internal management reporting systems
used by management to measure the performance of the Group’s operating segments. Management measures theperformance of each of the operating segments in accordance with internal managerial accounting rules andpractices. In addition, the format and information are presented primarily on the basis of Japanese GAAP.
Therefore, they are not consistent with the consolidated financial statements prepared in accordance with U.S.
GAAP. A reconciliation is provided for the total amount of each business segment’s net business profits withincome before income tax expense under U.S. GAAP.

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Management does not use information on business segment’s assets to allocate resources and assess performanceand has not prepared information on the segment’s assets. Accordingly, information on the segment’s assets is
not available.
MHFG (Consolidated)
Retail &Business
BankingCompany

Corporate &Institutional
Company

Gross profits . . . . . . . . . . . . . . . .
General and administrative
expenses . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . .

676.4

434.9

403.8

577.7

661.2
—

183.2
—

232.7
—

Net business profits (losses) (2) . .

15.2

251.7

171.1

2016 (1)GlobalGlobalAsset
Corporate
Markets
Management
Company Company
Company(in billions of yen)

Others (3)

Total

52.1

76.7

2,221.6

178.9
—

30.1
—

58.9
(23.7)

1,345.0(23.7)

398.8

22.0

(5.9)

852.9

Others (3)Total

MHFG (Consolidated)
Retail &Business
BankingCompany

Corporate &Institutional
Company

Gross profits . . . . . . . . . . . . . . .
General and administrative
expenses . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . .

646.1

445.1

386.5

539.4

49.6

26.0

2,092.7

678.3
—

186.7
—

237.8
—

200.9
—

29.3
—

87.5
(8.8)

1,420.5(8.8)

Net business profits (losses) (2) . .

(32.2)

258.4

148.7

338.5

20.3

(70.3)

663.4

2017

GlobalGlobalAsset
Corporate
Markets
Management
Company Company
Company(in billions of yen)

Notes:(1) Following the introduction of an in-house company system based on customer segments in April 2016,segment information for the fiscal year ended March 31, 2016 was restated to reflect the relevant changes astransaction data on a customer segment basis had been maintained. Due to such data not being available, it
is impracticable to restate segment information for the fiscal year ended March 31, 2015.
(2) Net business profits is used in Japan as a measure of the profitability of core banking operations, and isdefined as gross profits (or the sum of net interest income, fiduciary income, net fee and commission
income, net trading income and net other operating income) less general and administrative expenses.
Measurement of net business profits is required for regulatory reporting to the Financial Services Agency.
(3) “Others” includes items which should be eliminated as internal transactions between each segment on aconsolidated basis.

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Before the introduction of the in-house company system, business segment information was disclosed based on
the relevant principal consolidated subsidiaries such as MHBK, MHTB, and MHSC. Segment information basedon the relevant principal consolidated subsidiaries for the fiscal years ended March 31, 2015, 2016 and 2017 is asfollows:
MHTB
MHSC
MHFG
(Consolidated) (Consolidated) Others (Consolidated)

MHBK (Consolidated)2015 (1)(2)

Total

MHBK (Non-consolidated)

OthersCorporate
Financial
Banking
Institutions & InterPersonal Retail(LargeCorporate Public Sector national Trading
Banking Banking Corporations) Banking
Business Banking and others
Total
(a)
(b)
(c)
(d)
(e)
(f)
(g)

(h)

(i)

(j)

(k)

Total

(in billions of yen)
Gross profits:
Net interest
income . . . . . 1,087.3
Net noninterest
income . . . . . 598.4

934.9

213.4

77.6

179.5

99.6

33.3

147.1

184.4

152.4

39.4

1.8

0.9

1,129.4

560.6

48.7

53.7

128.0

79.8

27.4

164.9

58.1

37.8

122.6

335.8

61.5

1,118.3

Total . . . . . 1,685.7 1,495.5
General andadministrative
expenses . . . . . . . . . . 904.7 833.7
Others . . . . . . . . . . . (43.2)
—

262.1

131.3

307.5

179.4

60.7

312.0

242.5

190.2

162.0

337.6

62.4

2,247.7

233.5
—

118.4
—

94.4
—

76.5
—

30.3
—

92.6
—

188.0
—

71.0
(43.2)

94.5
(3.7)

268.0
—

54.0
(2.7)

1,321.2(49.6)

28.6

12.9

213.1

102.9

30.4

219.4

54.5

76.0

63.8

69.6

5.7

876.9

Net businessprofits (3) . . . .

737.8

661.8

MHTB
MHSC
MHFG
(Consolidated) (Consolidated) Others (Consolidated)

MHBK (Consolidated)2016 (2)Total

MHBK (Non-consolidated)

OthersCorporate
Financial
Banking
Institutions & InterPersonal Retail(LargeCorporate Public Sector national Trading
Banking Banking Corporations) Banking
Business Banking and others
Total
(a)
(b)
(c)
(d)
(e)
(f)
(g)

(h)

(i)

(j)

(k)

Total

(in billions of yen)
Gross profits:
Net interest
income . . . . .
Net noninterest
income . . . . .

959.4

830.1

214.8

75.7

173.0

97.5

32.5

175.5

61.1

129.3

36.1

5.4

2.8

1,003.7

675.3

633.7

45.0

53.1

143.7

77.5

31.8

185.1

97.5

41.6

130.7

343.8

68.1

1,217.9

Total . . . . . 1,634.7 1,463.8
General andadministrative
expenses . . . . . . . . . . 903.3 833.3
Others . . . . . . . . . . . (22.1)
—

259.8

128.8

316.7

175.0

64.3

360.6

158.6

170.9

166.8

349.2

70.9

2,221.6

234.4
—

118.6
—

91.9
—

75.2
—

29.8
—

122.1
—

161.3
—

70.0
(22.1)

99.1
(4.2)

279.3
—

63.3
2.5

1,345.0(23.8)

25.4

10.2

224.8

99.8

34.5

238.5

(2.7)

78.8

63.5

69.9

10.1

852.8

Net businessprofits(losses) (3) . . .

709.3

630.5

F-111

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

2017 (2)(4)

Total

MHBK
(Consolidated)
MHBK(Non-consolidated)(a)-(g)Total

MHTB(Consolidated)

MHSC(Consolidated)

Others

MHFG(Consolidated)

(i)

(j)

(k)

Total

Others(h)(in billions of yen)

Gross profits:
Net interest
income(expense) . . . .
Net noninterest
income . . . . . .
Total . . . . . .
General andadministrative
expenses . . . . . . . . . . .
Others . . . . . . . . . . . . .
Net businessprofits (3) . . . . .

836.5

719.8

116.7

30.2

(1.5)

2.6

867.8

686.7

600.6

86.1

121.8

333.1

83.3

1,224.9

1,523.2

1,320.4

202.8

152.0

331.6

85.9

2,092.7

982.7
(8.7)

866.6
—

116.1
(8.7)

101.6
(5.2)

257.5
0.1

78.7
5.0

1,420.5
(8.8)

531.8

453.8

78.0

45.2

74.2

12.2

663.4

Notes:(1) Beginning on April 1, 2015, new allocation methods have been applied to the calculation of “Gross profits”
and “General and administrative expenses” for reportable segments of MHBK. Figures for the fiscal year
ended March 31, 2015 have been restated for the new allocation methods.
(2) “Others (h)” and “Others (k)” include the elimination of transactions between consolidated subsidiaries.
(3) Net business profits is used in Japan as a measure of the profitability of core banking operations, and isdefined as gross profits (or the sum of net interest income, fiduciary income, net fee and commission
income, net trading income and net other operating income) less general and administrative expenses.
Measurement of net business profits is required for regulatory reporting to the Financial Services Agency.
(4) Segment information based on the relevant principal consolidated subsidiaries for the fiscal year ended
March 31, 2017 is presented for comparability purposes. Due to system limitations, it is impracticable topresent the details of MHBK (Non-consolidated).

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Reconciliation
As explained above, the measurement bases of the internal management reporting systems and the income andexpenses items included are different from the accompanying consolidated statements of income. Therefore, it isimpracticable to present reconciliations of all the business segment’s information, other than net business profits,
to the corresponding items in the accompanying consolidated statements of income. A reconciliation of total net
business profits under the internal management reporting systems for the fiscal years ended March 31, 2015,2016 and 2017 presented above to income before income tax expense shown on the consolidated statements ofincome is as follows:
2015
2016
2017
(in billions of yen)

Net business profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

876.9

852.8

U.S. GAAP adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Provision) credit for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net gains (losses) related to equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-recurring personnel expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on disposal of premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Provision) credit for losses on off-balance-sheet instruments . . . . . . . . . . . . . . . . . . .
Others—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

230.8
60.2
160.1
(8.0)
2.8
2.8
(57.9)

201.3 (387.8)(34.6) (37.7)
188.4 259.6
(3.9)
(8.8)
10.2
5.6
16.4
(19.5)(34.0)
5.6

Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,267.7

F-113

1,196.6

663.4

480.4

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
33. Foreign activities
The following table presents consolidated income statement and total assets information by major geographic
area. Foreign activities are defined as business transactions that involve customers residing outside of Japan.
However, as the MHFG Group’s operations are highly integrated globally, estimates and assumptions have been
made for an allocation among the geographic areas.
Americas
UnitedStates ofAmericaJapan

OthersEurope(in billions of yen)

Asia/Oceania
excludingJapan,and others

Total

Fiscal year ended March 31, 2015:
Total revenue (1) . . . . . . . . . . . . . . . . .
Total expenses (2) . . . . . . . . . . . . . . . .

2,396.9
1,459.9

324.1
210.8

102.4
24.3

211.8
133.8

223.7
162.4

3,258.9
1,991.2

Income before income tax
expense . . . . . . . . . . . . . . . . . . . . .

937.0

113.3

78.1

78.0

61.3

1,267.7

Net income . . . . . . . . . . . . . . . . . . . .

565.6

79.7

76.2

74.3

34.4

830.2

Total assets at end of fiscal year . . . .

127,468.2

31,074.9

4,871.0

10,880.6

15,819.7

190,114.4

Fiscal year ended March 31, 2016:
Total revenue (1) . . . . . . . . . . . . . . . . .
Total expenses (2) . . . . . . . . . . . . . . . .

2,288.5
1,534.2

434.4
282.6

45.7
28.7

187.5
126.2

428.0
215.8

3,384.1
2,187.5

Income before income tax
expense . . . . . . . . . . . . . . . . . . . . .

754.3

151.8

17.0

61.3

212.2

1,196.6

Net income . . . . . . . . . . . . . . . . . . . .

464.7

136.9

15.4

51.1

182.0

850.1

Total assets at end of fiscal year . . . .

133,157.1

28,985.3

4,227.5

11,616.9

15,823.4

193,810.2

Fiscal year ended March 31, 2017:
Total revenue (1) . . . . . . . . . . . . . . . . .
Total expenses (2) . . . . . . . . . . . . . . . .

1,748.3
1,712.3

500.3
303.2

70.3
29.1

190.7
136.2

367.5
215.9

2,877.1
2,396.7

Income before income tax
expense . . . . . . . . . . . . . . . . . . . . .

36.0

197.1

41.2

54.5

151.6

480.4

Net income . . . . . . . . . . . . . . . . . . . .

5.7

167.6

38.8

39.5

137.5

389.1

Total assets at end of fiscal year . . . .

138,832.3

30,262.0

4,203.3

10,629.1

16,529.6

200,456.3

Notes:(1) Total revenue is comprised of Interest and dividend income and Noninterest income.
(2) Total expenses are comprised of Interest expense, Provision (credit) for loan losses and Noninterest
expenses.

F-114

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
34. Mizuho Financial Group, Inc., parent company
The following tables present the parent company only financial information of MHFG:
Condensed balance sheets
2016
2017
(in millions of yen)

Assets:Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing deposits in other banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in subsidiaries and affiliated companies . . . . . . . . . . . . . . . . . . . . . . .
Long-term loans receivable from subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

137
16,3058,840,003
624,518
400,590

15,912
4,278
8,993,388
2,697,250
477,375

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,881,553

12,188,203

Liabilities and shareholders’ equity:
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,186,345
584,518
96,1398,014,551

1,156,100
2,632,250
138,496
8,261,357

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9,881,553

12,188,203

2015

2016
(in millions of yen)

2017

Income:Dividends from subsidiaries and affiliated companies:
Banking subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-banking subsidiaries and affiliated companies . . . . . . . . .
Management fees from subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . .
Interest Income on Loans and Discounts . . . . . . . . . . . . . . . . . . . . .
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

316,035
28,63332,163799
37,308272,070
20,81439,2679,630
1,855

300,530
27,61848,59439,35921,054

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

414,938

343,636

437,155

Expenses:
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bond issuance cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26,855
8,937
865
1,828

31,063
11,914
3,230
5,973

38,92738,7599,835
7,708

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

38,48552,18095,229Equity in undistributed net income of subsidiaries . . . . . . . . . . . . . . . . . .

427,037

559,553

21,251

Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

803,490442

851,009517

363,177
737

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

803,048

850,492

362,440

Condensed statements of income

F-115

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Condensed statements of cash flows
2015

2016
(in millions of yen)

Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

803,048(460,230)

850,492(546,946)

362,440(40,595)

Net cash provided by operating activities . . . . . . . . . . . . . . . . .

342,818

303,546

321,845

Cash flows from investing activities:
Net change in loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of premises and equipment . . . . . . . . . . . . . . . . . . . . . . . .
Payments for purchases of securities of subsidiaries . . . . . . . . . . . .
Proceeds from withdrawal of securities of subsidiaries . . . . . . . . . .
Net change in other investing activities . . . . . . . . . . . . . . . . . . . . . .

(150,000)(159,670)
—
—
3,294

(479,948)(165)(2,249)—1,872(2,022,860)(40,362)(65,269)
13,3596,691

Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . .

(306,376)(480,490)(2,108,441)

Cash flows from financing activities:
Net change in short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of long-term debt . . . . . . . . . . . . . . . . . . . .
Repayment of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of common stock . . . . . . . . . . . . . . . . . . . .
Purchases of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in other financing activities . . . . . . . . . . . . . . . . . . . . . .

130,000
150,000(141,200)6(12)(176,186)
1,006(10,000)
479,948(98,800)
5(13)(195,283)
1,001(30,000)
2,022,860—
6(1,435)(190,031)
971

Net cash provided by (used in) financing activities . . . . . . . . .

(36,386)

176,858

1,802,371

Net increase (decrease) in cash and due from banks . . . . . . . . . . . . . . . . .
Cash and due from banks at beginning of fiscal year . . . . . . . . . . . . . . . .

56
167

(86)
223

15,775137

Cash and due from banks at end of fiscal year . . . . . . . . . . . . . . . . . . . . .

223

137

15,912

F-116

2017

Signature
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has
duly caused and authorized the undersigned to sign this annual report on its behalf.
MIZUHO FINANCIAL GROUP, INC.
By: /s/ Yasuhiro Sato
Name: Yasuhiro Sato
Title: President & CEO
July 7, 2017

EXHIBIT INDEXExhibit
NumberDescription of Exhibits

1.1

Articles of Incorporation of Mizuho Financial Group, Inc., dated June 23, 2017 (English
Translation)

1.2

Regulations of the Board of Directors of Mizuho Financial Group, Inc., as amended on April 1,2017 (English Translation)

1.3

Share Handling Regulations of Mizuho Financial Group, Inc., dated June 23, 2017 (English
Translation)

2.1

Form of American Depositary Receipt*

2.2

Form of Deposit Agreement among the registrant, The Bank of New York Mellon (formerly The
Bank of New York) as Depositary and all owners and holders from time to time of American
Depositary Receipts issued thereunder*

8

List of significant subsidiaries of Mizuho Financial Group, Inc.—see “Item 4.C. Information on
the Company—Organizational Structure.”

11

Code of Ethics of Mizuho Financial Group, Inc. (English Translation)**

12.1

CEO Certification required by Rule 13a-14(a) (17 CFR 240.13a-14(a)).

12.2

CFO Certification required by Rule 13a-14(a) (17 CFR 240.13a-14(a)).

13.1

Certification required by Rule 13a-14(b) (17 CFR 240.13a-14(b)) and Section 1350 of Chapter 63
of Title 18 of the United States Code (18 U.S.C. 1350).

15Consent of Independent Registered Public Accounting Firm

101.INSXBRL Instance Document

101.SCHXBRL Taxonomy Extension Schema

101.CALXBRL Taxonomy Extension Calculation Linkbase

101.DEFXBRL Taxonomy Extension Definition Linkbase

101.LABXBRL Taxonomy Extension Label Linkbase

101.PREXBRL Taxonomy Extension Presentation Linkbase***

Incorporated by reference to our annual report on Form 20-F (No. 001-33098) filed on July 23, 2015.
Incorporated by reference to our annual report on Form 20-F (No. 001-33098) filed on July 21, 2016.

Exhibit 1.1

ARTICLES OF INCORPORATIONOFMIZUHO FINANCIAL GROUP, INC.
June 23, 2017

[ Translation ]ARTICLES OF INCORPORATIONOFMIZUHO FINANCIAL GROUP, INC.
CHAPTER I
GENERAL PROVISIONS
Article 1.

(Trade Name)

The company shall be called “Kabushiki Kaisha Mizuho Financial Group” and in English, “Mizuho
Financial Group, Inc.”(hereinafter referred to as the “Company”).
Article 2.

(Purpose)

The purpose of the Company shall be to engage in the following businesses as a bank holding company:(1) Operation and management of bank holding companies, banks, specialized securities companies andother companies which may be owned by the Company as its subsidiaries under the Banking Act, andany other business incidental thereto; and(2) Any other business that a bank holding company may engage in under the Banking Act.
Article 3.

(Head Office)

The Company shall have its head office in Chiyoda-ku, Tokyo.
Article 4.

(Organizations)

The Company shall establish the following organizations, in addition to the general meeting of shareholders
and Directors.
(1) Board of Directors;(2) Nominating Committee, Audit Committee, and Compensation Committee; and(3) Accounting Auditors.
Article 5.

(Method of Public Notices)

Public notices by the Company shall be given by electronic public notices; provided, however, that in thecase where an electronic public notice is impracticable due to an accident or any other unavoidable reason, thesame public notice of the Company may be given in the Nikkei.

1

CHAPTER IISHARES
Article 6.

(Total Number of Authorized Shares)

The total number of shares which the Company is authorized to issue shall be 51,300,000,000 shares, andeach total number of the classes of shares which the Company is authorized to issue shall be as set forth below;
provided, however, that the total number of the classes of shares which the Company is authorized to issue inrespect of the First to Fourth Series of Class XIV preferred stock shall not exceed nine hundred million(900,000,000) in total, the total number of the classes of shares which the Company is authorized to issue inrespect of the First to Fourth Series of Class XV preferred stock shall not exceed nine hundred million(900,000,000) in total, and the total number of the classes of shares which the Company is authorized to issue inrespect of the First to Fourth Series of Class XVI preferred stock shall not exceed fifteen hundred million(1,500,000,000) in total:
Common stock: . . . . . . . . . . . . . . . . . . . . . . . . . . . .48,000,000,000 sharesFirst Series of Class XIV preferred stock: . . . . . . .

900,000,000 shares

Second Series of Class XIV preferred stock: . . . . .

900,000,000 shares

Third Series of Class XIV preferred stock: . . . . . . .

900,000,000 shares

Fourth Series of Class XIV preferred stock: . . . . . .

900,000,000 sharesFirst Series of Class XV preferred stock: . . . . . . . .

900,000,000 shares

Second Series of Class XV preferred stock: . . . . . .

900,000,000 shares

Third Series of Class XV preferred stock: . . . . . . .

900,000,000 shares

Fourth Series of Class XV preferred stock: . . . . . .

900,000,000 sharesFirst Series of Class XVI preferred stock: . . . . . . . 1,500,000,000 shares
Second Series of Class XVI preferred stock: . . . . . 1,500,000,000 shares
Third Series of Class XVI preferred stock: . . . . . . . 1,500,000,000 shares
Fourth Series of Class XVI preferred stock: . . . . . . 1,500,000,000 shares
Article 7.

(Number of Shares Constituting One (1) Unit of Shares)

The number of shares constituting one (1) unit of shares of the Company shall be one hundred (100) withrespect to the common stock and each class of preferred stock, respectively.
Article 8.

(Rights Pertaining to Shares Constituting Less Than One (1) Unit)

A shareholder of the Company may not exercise any rights, except for the rights set forth below (excluding
the rights which may not be exercised as the rights pertaining to shares constituting one (1) unit of shares), withrespect to shares constituting less than one (1) unit held by such shareholder:1.

The rights provided for in each item of Article 189, Paragraph 2 of the Companies Act of Japan (the“Act”);

2.

The right to make a request pursuant to Article 166, Paragraph 1 of the Act;3.

The right to receive an allotment of offered shares and offered stock acquisition rights in proportion to
the number of shares held by such shareholder; and4.

The right to make a request provided for in the following Article.
2Article 9.

(Additional Purchase of Shares Constituting Less Than One (1) Unit)

A shareholder of the Company may request the Company to sell to such shareholder a number of shares
which will, when combined with the shares constituting less than one (1) unit already held by such shareholder,
constitute one (1) unit of shares pursuant to the Share Handling Regulations.
Article 10.

(Record Date)

1.

The Company shall deem shareholders having voting rights appearing in writing or electronically in theregister of shareholders as of the end of March 31 of each year as the shareholders who are entitled toexercise their rights at the ordinary general meeting of shareholders for the relevant business year.

2.

The provisions of the preceding paragraph shall apply mutatis mutandis to the record date for voting rights
at the general meetings of holders of classes of stock, where there is a matter to be resolved at an ordinary
general meeting of shareholders that requires, in addition to such resolution, a resolution by the relevant
general meeting of holders of class of stock.

3.

In addition to the preceding two paragraphs, the Company may set an extraordinary record date, whennecessary, by a determination by Executive Officer(s) under the authority delegated by the Board of
Directors and upon giving a prior public notice thereof.

Article 11.

(Shareholder Register Manager, Etc.)

1.

The Company shall appoint a shareholder register manager.

2.

The shareholder register manager and its handling office shall be determined by a determination by
Executive Officer(s) under the authority delegated by the Board of Directors, and a public notice shall begiven with respect thereto.

3.

The preparation and keeping of, and other operations relating to, the register of shareholders and the registerof stock acquisition rights of the Company shall be entrusted to the shareholder register manager and shallnot be handled by the Company.

Article 12.

(Share Handling Regulations)

An entry, whether written or electronic, in the register of shareholders, a repurchase by the Company and an
additional purchase by a shareholder of shares constituting less than one (1) unit, and other operations relating toshares and handling fees therefor and the method of request or notice by shareholders with respect to general
meetings of shareholders shall be governed by the Share Handling Regulations prescribed by Executive
Officer(s) under the authority delegated by the Board of Directors, in addition to laws and regulations and these
Articles of Incorporation.

3

CHAPTER III
PREFERRED STOCK
Article 13.
1.

(Preferred Stock Dividends)

In respect of dividends from its surplus provided for in Article 48 (except for interim dividends provided forin the same Article), the Company shall distribute dividends from its surplus by cash on preferred stock(hereinafter referred to as the “Preferred Stock Dividends”) in such amount as provided for below toshareholders of preferred stock (hereinafter referred to as the “Shareholders of Preferred Stock”) or
registered stock pledgees in respect of preferred stock (hereinafter referred to as the “Registered Preferred
Stock Pledgees”) in priority to holders of common stock (hereinafter referred to as the “Shareholders ofCommon Stock”), registered stock pledgees in respect of common stock (hereinafter referred to as the“Registered Common Stock Pledgees”); provided, however, that in the case where all or a part of thePreferred Stock Interim Dividends provided for in Article 14 have been paid in the relevant business year,
the amount so paid shall be reduced accordingly:
First to Fourth Series of Class XIV preferred stock:

First to Fourth Series of Class XV preferred stock:

First to Fourth Series of Class XVI preferred stock:

Amount decided by the resolution of theBoard of Directors or the determination by
Executive Officer(s) under the authority
delegated by the Board of Directors on theissuance of such stock, which amount shallnot exceed 100 yen per share per year
Amount decided by the resolution of theBoard of Directors or the determination by
Executive Officer(s) under the authority
delegated by the Board of Directors on theissuance of such stock, which amount shallnot exceed 100 yen per share per year
Amount decided by the resolution of theBoard of Directors or the determination by
Executive Officer(s) under the authority
delegated by the Board of Directors on theissuance of such stock, which amount shallnot exceed 100 yen per share per year2.

In a given business year, if all or a part of the Preferred Stock Dividends have not been paid to the
Shareholders of Preferred Stock or Registered Preferred Stock Pledgees, the unpaid amount shall not be
accumulated for the subsequent business years.

3.

The Company shall not distribute dividends from its surplus to any Shareholder of Preferred Stock orRegistered Preferred Stock Pledgee, any amount in excess of the amount of the relevant Preferred Stock
Dividends.

Article 14.

(Preferred Stock Interim Dividends)

In respect of interim dividends provided for in Article 48, the Company shall distribute dividends from its
surplus by cash in one half (1/2) of the amount of the Preferred Stock Dividends provided for in the main clauseof Paragraph 1 of the preceding Article (referred to as the “Preferred Stock Interim Dividends” in these Articles
of Incorporation) to the Shareholders of Preferred Stock or Registered Preferred Stock Pledgees in priority to the
Shareholders of Common Stock or Registered Common Stock Pledgees.
4Article 15.
1.

(Distribution of Residual Assets)

In respect of distribution of residual assets, the Company shall pay to the Shareholders of Preferred Stock orRegistered Preferred Stock Pledgees in priority to the Shareholders of Common Stock or Registered
Common Stock Pledgees in such amount as provided for below:
First Series of Class XIV through the Fourth Series of Class XVI preferred stock: 1,000 yen per share2.

No distribution of residual assets other than those provided for in the preceding paragraph shall be made to
any Shareholder of Preferred Stock or Registered Preferred Stock Pledgee.

Article 16.

(Voting Rights)

The Shareholders of Preferred Stock shall not have voting rights at a general meeting of shareholders;provided, however, that the Shareholders of Preferred Stock may have voting rights from the date of an ordinary
general meeting of shareholders, in the case where a proposal on the Preferred Stock Dividends is not submitted
to such ordinary general meeting of shareholders (except in the case where a resolution of the Board of Directors
to pay the Preferred Stock Dividends is made pursuant to the provisions of Article 47 between the last day of thebusiness year and the date of such ordinary general meeting of shareholders), or immediately after the closing ofan ordinary general meeting of shareholders, in the case where a proposal on the Preferred Stock Dividends isrejected at such ordinary general meeting of shareholders, until such time as a resolution of the Board of
Directors to pay the Preferred Stock Dividends is made pursuant to the provisions of Article 47 or a resolution ofan ordinary general meeting of shareholders is passed to grant the Preferred Stock Dividends.
Article 17. (Consolidation or Split of Preferred Stock, Free Allotment of Stock and Rights to Receive Allotmentof Offered Stock, Etc.)
1.

The Company shall not consolidate or split any preferred stock, and shall not make any free allotment of any
stock for the Shareholders of Preferred Stock.

2.

The Company shall not grant the Shareholders of Preferred Stock any rights to receive allotment of offeredstock, offered stock acquisition rights, bonds with stock acquisition rights, or offered stock acquisition rights
and bonds, either of which are capable of being transferred separately from the others and shall not makeany free allotment of any stock acquisition rights for the Shareholder of Preferred Stock.

Article 18.

(Acquisition of Preferred Stock)1.

In respect of the First Series of Class XV through the Fourth Series of Class XVI preferred stock, theCompany may acquire each such class of preferred stock, in whole or in part, on the date separately
determined by a resolution of the Board of Directors or a determination by Executive Officer(s) under theauthority delegated by the Board of Directors, after such time and at such acquisition price as respectively
determined by a resolution of the Board of Directors or a determination by Executive Officer(s) under theauthority delegated by the Board of Directors relating to the issuance of the relevant preferred stock.

2.

In the case of a partial acquisition pursuant to the preceding paragraph, such redemption shall be made by
way of lot or pro rata allocation.

Article 19.

(Request for Acquisition of Preferred Stock)

Any holder of the First to Fourth Series of Class XIV and the First to Fourth Series of Class XV preferredstock may request to the Company to acquire the relevant preferred stock held by such Shareholder of Preferred
Stock during the period in which such Shareholder of Preferred Stock is entitled to request such acquisition as
determined by a resolution of the Board of Directors or a determination by Executive Officer(s) under theauthority delegated by the Board of Directors relating to the issuance of the relevant preferred stock (hereinafter,
together with the period provided for in the preceding paragraph, referred to as the “Period for Acquisition
5

Request”). The Company shall deliver its own common stock to such Shareholder of Preferred Stock, in
exchange for the Company’s acquisition of the relevant preferred stock. The terms of acquisition, including thenumber of the common stock to be delivered per one (1) share of the relevant preferred stock upon such request
for acquisition, shall be determined by the relevant resolution of the Board of Directors or the relevant
determination by Executive Officer(s) under the authority delegated by the Board of Directors.
Article 20.

(Mandatory Acquisition of Preferred Stock)

1.

The Company may acquire any of the First to Fourth Series of Class XIV and the First to Fourth Series ofClass XV preferred stock, in respect of which a request for acquisition has not been made during the Period
for Acquisition Request, on the day immediately following the last day of such period (hereinafter referred
to as the “Mandatory Acquisition Date”) and instead, the Company shall deliver its own common stock toholders of the relevant preferred stock. In this case, the number of shares of the common stock to bedelivered in exchange for the acquisition of one (1) share of the relevant preferred stock shall be obtained by
dividing the amount equivalent to the subscription money per one (1) share of the relevant preferred stockby the current market price of a share of the common stock of the Company ; provided, however, that suchcurrent market price of a share of the common stock shall be the daily average price of closing prices(including the closing bid or offered price) of the common stock of the Company (in regular trading) as
reported by the Tokyo Stock Exchange for the 30 consecutive trading days (excluding any trading day ordays on which no closing prices or closing bids or offered prices are reported) commencing on the
45th trading day prior to the Mandatory Acquisition Date, and such calculation shall be made to units of
0.01 yen, and by rounding up to the nearest 0.1 yen when equal to or more than 0.05 yen and disregarding
amounts less than 0.05 yen.

2.

In respect of the First to Fourth Series of Class XIV and the First to Fourth Series of Class XV preferredstock, the number of common stock referred to in the preceding paragraph shall not exceed the number ofshares obtained by dividing the amount equivalent to the subscription money per one (1) share of each suchclass of preferred stock by the minimum acquisition price determined by a resolution of the Board of
Directors or a determination by Executive Officer(s) under the authority delegated by the Board of Directors
relating to the issuance of the relevant preferred stock.

3.

In respect of the First and Second Series of Class XIV, the First and Second Series of Class XV and the Firstand Second Series of Class XVI preferred stock, upon the occurrence of an event determined by a resolutionof the Board of Directors or a determination by Executive Officer(s) under the authority delegated by the
Board of Directors relating to the issuance of the relevant preferred stock as an event where a write-off ofthe relevant preferred stock or a conversion of the relevant preferred stock into common stock, or financial
support or other similar measures taken by a public sector, without which the Company would become
non-viable, is determined to be necessary, the Company shall mandatorily acquire the relevant preferredstock, in whole, free of consideration, on a date which falls after the occurrence of such event as determinedby the resolution of the Board of Directors or the determination by Executive Officer(s) under the authority
delegated by the Board of Directors relating to the issuance of the relevant preferred stock and which dateshall be separately determined by a resolution of the Board of Directors or a determination by Executive
Officer(s) under the authority delegated by the Board of Directors after the issuance of the relevant preferredstock, or a date which falls after the occurrence of the relevant certain event and which date shall be
determined by the resolution of the Board of Directors or the determination by Executive Officer(s) under
the authority delegated by the Board of Directors relating to the issuance of the relevant preferred stock,giving due consideration to the capital adequacy requirements applicable to the Company and other factors.

4.

In respect of the Third and Fourth Series of Class XIV, the Third and Fourth Series of Class XV and theThird and Fourth Series of Class XVI preferred stock, upon the occurrence of an event determined by aresolution of the Board of Directors or a determination by Executive Officer(s) under the authority
delegated by the Board of Directors relating to the issuance of the relevant preferred stock as an event wherea write-off of the relevant preferred stock or a conversion of the relevant preferred stock into common stock,6

or financial support or other similar measures taken by a public sector, without which the Company would
become non-viable, is determined to be necessary, the Company shall mandatorily acquire the relevant
preferred stock, in whole, on a date which falls after the occurrence of such event as determined by the
resolution of the Board of Directors or the determination by Executive Officer(s) under the authority
delegated by the Board of Directors relating to the issuance of the relevant preferred stock and which dateshall be separately determined by a resolution of the Board of Directors or a determination by Executive
Officer(s) under the authority delegated by the Board of Directors after the issuance of the relevant preferredstock, or a date which falls after the occurrence of the relevant certain event and which date shall be
determined by the resolution of the Board of Directors or the determination by Executive Officer(s) under
the authority delegated by the Board of Directors relating to the issuance of the relevant preferred stock,giving due consideration to the capital adequacy requirements applicable to the Company and other factors,
and instead, the Company shall deliver its own common stock to holders of the relevant preferred stock. In
this case, the terms of acquisition, including the number of shares of the common stock to be delivered in
exchange for the acquisition of one (1) share of the relevant preferred stock, shall be determined by therelevant resolution of the Board of Directors or the relevant determination by Executive Officer(s) under theauthority delegated by the Board of Directors relating to the issuance of the relevant preferred stock, giving
due consideration to the market price of common stock, the subscription price of the relevant preferred stockand other factors.
5.

In the calculation of the number of common stock provided for in Paragraphs 1, 2 and 4, any number lessthan one (1) share shall be treated pursuant to the provisions provided for in Article 234 of the Act.

Article 21.

(Order of Priority)

All classes of preferred stock authorized to be issued by the Company shall rank pari passu with each otherin respect of the payment of the Preferred Stock Dividends and the Preferred Stock Interim Dividends, and the
distribution of residual assets.
CHAPTER IV
GENERAL MEETINGS OF SHAREHOLDERS
Article 22.

(Convocation of General Meetings of Shareholders)

An ordinary general meeting of shareholders of the Company shall be convened no later than 3 months fromthe last day of each business year and an extraordinary general meeting of shareholders shall be convened
whenever necessary.
Article 23.
Meeting)(Person Authorized to Convene General Meetings of Shareholders and the Chairman of the1.

The Director concurrently serving as President & CEO shall convene and chair the general meeting ofshareholders.

2.

In the case where the Director concurrently serving as President & CEO is unable to so act, one of the other
Director(s) in the order previously determined by the Board of Directors shall take such person’s place.

Article 24.

(Disclosure of Reference Materials, Etc. for General Meetings of Shareholders via Internet)

The Company may, at the time of convocation of a general meeting of shareholders, deem to have provided
shareholders with information with respect to matters which shall be stated or indicated in the reference materials
for a general meeting of shareholders, business reports, non-consolidated financial documents and consolidated
financial documents by disclosing those by way of using the Internet as provided for in the ordinances of the
Ministry of Justice.
7

Article 25.

(Method of Adopting Resolutions)

1.

Unless otherwise provided for by laws or regulations or these Articles of Incorporation, resolutions of ageneral meeting of shareholders shall be adopted by an affirmative vote of a majority of the voting rights
held by the shareholders present at the meeting who are entitled to exercise their voting rights.

2.

Resolutions of a meeting of shareholders governed by Article 309, Paragraph 2 of the Act shall be adopted
by an affirmative vote of not less than two-thirds (2/3) of the voting rights held by the shareholders present
at the relevant meeting who shall hold in aggregate not less than one-third (1/3) of the voting rights of theshareholders entitled to exercise their voting rights.

Article 26.

(Voting by Proxy)1.

Shareholders may exercise their voting rights at the relevant general meeting of shareholders by a proxy
who shall also be a shareholder of the Company holding voting rights at such meeting.

2.

The shareholder or his/her proxy shall submit to the Company a document evidencing the authority of suchproxy to act as such at each general meeting of shareholders.

Article 27.

(Minutes of General Meetings)

The minutes of general meetings of shareholders shall be prepared in writing or by electromagnetic file asprovided for in laws and regulations.
Article 28.

(General Meetings of Holders of Classes of Stock)

1.

Unless otherwise provided for by laws or regulations or these Articles of Incorporation, resolutions of ageneral meeting of holders of classes of stock shall be adopted by an affirmative vote of a majority of thevoting rights held by the holders present at the meeting who are entitled to exercise their voting rights.

2.

Resolutions provided for in Article 324, Paragraph 2 of the Act shall be adopted by an affirmative vote of
not less than two-thirds (2/3) of the voting rights held by the holders present at the relevant meeting who
shall hold in aggregate not less than one-third (1/3) of the voting rights of the holders entitled to exercise
their voting rights.

3.

The provisions of Articles 23, 24 and 26 and the preceding Article shall apply mutatis mutandis to thegeneral meetings of holders of classes of stock.
CHAPTER V
DIRECTORS AND BOARD OF DIRECTORS

Article 29.

(Number)

The Company shall have not more than fifteen (15) Directors.
Article 30.

(Method of Appointment)

1.

The Director(s) shall be appointed at a general meeting of shareholders.

2.

A resolution for the appointment of Director(s) shall be adopted by an affirmative vote of a majority of thevoting rights held by the shareholders present at the relevant meeting who shall hold in aggregate not lessthan one-third (1/3) of the voting rights of the shareholders entitled to exercise their voting rights.

3.

Cumulative voting shall not be used for the appointment of Director(s).
8Article 31.

(Method of Dismissal)

A resolution for the dismissal of Director(s) shall be adopted by an affirmative vote of a majority of thevoting rights held by the shareholders present at the relevant general meeting of shareholders who shall hold in
aggregate not less than one-third (1/3) of the voting rights of the shareholders entitled to exercise their voting
rights.
Article 32.

(Term of Office)The term of office of Director(s) shall expire at the closing of the ordinary general meeting of shareholders
concerning the last business year ending within one (1) year after their appointment.
Article 33.

(Chairman and Deputy Chairman)

The Board of Directors may, by its resolutions, appoint Chairman and Deputy Chairman.
Article 34.

(Person Authorized to Convene Meetings of the Board of Directors and Chairman of the Meeting)1.

Unless otherwise provided for by laws or regulations, a Director previously appointed by the Board of
Directors shall convene and chair the meeting of the Board of Directors.

2.

In the case where the Director appointed pursuant to the preceding paragraph is unable to so act, one of theother Director(s) in the order previously determined by the Board of Directors shall take such person’splace.

Article 35.

(Notice to Convene Meetings of the Board of Directors)

1.

Notice to convene a meeting of the Board of Directors shall be given to each Director not less than three(3) days prior to the date set for such meeting; provided, however, that in case of emergency, such period
may be shortened.

2.

A meeting of the Board of Directors may be held without taking the procedures of convocation with theconsent of all the Directors.

Article 36.

(Method of Adopting Resolutions of the Board of Directors)

1.

Resolutions of a meeting of the Board of Directors shall be adopted by an affirmative vote of a majority of
the Directors present at the relevant meeting who shall constitute a majority in number of all the Directors
entitled to take part in the vote.

2.

Notwithstanding the provisions of the preceding paragraph, in cases where Director(s) submit a proposal
with respect to a matter which is the purpose of the resolution of the Board of Directors, if all Directors whoare entitled to vote agree in writing or by means of electromagnetic file to such proposal, it shall be deemedthat the resolution to approve such proposal at a meeting of the Board of Directors has been made.

Article 37.

(Minutes of Meetings of the Board of Directors)

The minutes of the meetings of the Board of Directors shall be prepared in writing or by electromagnetic file
as provided for in laws and regulations, and the Director(s) present thereat shall affix their names and seals
thereon, or electronic signatures thereto.
Article 38.

(Regulations of the Board of Directors)

Matters concerning the Board of Directors shall be governed by the Regulations of the Board of Directors
prescribed by the Board of Directors, in addition to laws and regulations and these Articles of Incorporation.
9Article 39.

(Liability Limitation Agreements with Outside Director(s))

Pursuant to the provisions provided for in Article 427, Paragraph 1 of the Act, the Company may enter into
liability limitation agreements with any Outside Director which limit the liability provided for in Article 423,
Paragraph 1 of the Act to the higher of either (i) the pre-determined amount not less than twenty million(20,000,000) yen or (ii) the amount prescribed in laws and regulations, provided that such Outside Director isbona fide and without gross negligence in performing his/her duty.
CHAPTER VINOMINATING COMMITTEE, AUDIT COMMITTEE, AND COMPENSATION COMMITTEE
Article 40.

(Method of Designation)

1.

Committee members who shall constitute the Nominating Committee, the Audit Committee, and theCompensation Committee shall be designated by the Board of Directors.

2.

The chairman of each committee shall be designated by the Board of Directors.

Article 41.

(Regulations of Each Committee)

Matters concerning each committee shall be governed by the Regulations of each committee prescribed by
the Board of Directors, in addition to laws and regulations and these Articles of Incorporation.
CHAPTER VII
EXECUTIVE OFFICERS
Article 42.

(Number)

The Company shall have no less than one (1) Executive Officer.
Article 43.

(Method of Appointment)

Executive Officers shall be appointed by the Board of Directors.
Article 44.

(Term of Office)The term of office of Executive Officers shall expire at the closing of the first meeting of the Board of
Directors convened after the closing of the ordinary general meeting of shareholders concerning the last businessyear ending within one (1) year after their appointment.
Article 45.

(Representative Executive Officer(s) and Executive Officer(s) with Tittles)

1.

The Representative Executive Officer(s) shall be designated by the Board of Directors.

2.

The Board of Directors shall, by its resolutions, appoint the President & CEO.

3.

The Board of Directors may, by its resolutions, appoint Deputy President & CEO(s), Senior Managing
Executive Officer(s), and Managing Executive Officer(s).
CHAPTER VIIIACCOUNTING

Article 46.

(Business Year)The business year of the Company shall be the one-year period from April 1 of each year through March 31of the following year.
10Article 47.

(Organizations that Decide Dividends from Surplus, Etc.)

The Company shall decide distribution of dividends from surplus and other matters provided for in each
item of Article 459, Paragraph 1 of the Act, not by a resolution of a general meeting of shareholders, but by aresolution of the Board of Directors, unless otherwise provided for in laws or regulations.
Article 48.

(Record Date for Distribution of Dividends from Surplus)

The record dates for distribution of dividends from surplus of the Company shall be March 31 and
September 30 of each year (in these Articles of Incorporation, distribution of dividends from surplus made withthe record date of September 30 of each year shall be referred to as “interim dividends”).
Article 49.

(Prescription for Payment of Dividends)

In the case where the dividends from its surplus are distributed by cash, the Company shall be released fromthe obligation to pay such dividends from the surplus which have not been received after the lapse of
five (5) years from the date of commencement of payment thereof.

11

Exhibit 1.2[ Translation ]Effective from January 8, 2003
As amended on April 1, 2017
REGULATIONS OF THE BOARD OF DIRECTORSCHAPTER IPURPOSE
Article 1.

(Purpose)

These Regulations provide for matters concerning the Board of Directors pursuant to laws and regulations,
the Articles of Incorporation, and the Corporate Governance Guidelines.
CHAPTER IIORGANIZATION
Article 2.

(Function)

The Board of Directors shall conduct the following matters.
(1) Determine the matters provided for in Article 10 of these Regulations(2) Supervise the execution of duties by directors, executive officers as defined in the Companies Act,and executive officers as defined in our internal regulations, and specialist officers
Article 3.

(Constitution)

The Board of Directors shall consist of all the directors.
CHAPTER III
HOLDING, CONVOCATION AND CHAIRMAN OF MEETINGS
Article 4.

(Holding of Meetings)

1.

Meetings of the Board of Directors shall be held ordinarily and extraordinarily.

2.

Ordinary meetings of the Board of Directors shall be held at least once every three (3) months.

3.

Extraordinary meetings of the Board of Directors shall be held whenever necessary.

4.

Meetings of the Board of Directors shall be held at the head office of the Company; provided, however,that when necessary, a meeting of the Board of Directors may be held at another location or at multiple
locations by a method such as teleconference.

Article 5.
1.

(Person Authorized to Convene Meetings and Chairman of Meetings)
Unless otherwise provided for in laws and regulations, each meeting of the Board of Directors will be
convened and chaired by a director who does not concurrently serve as an executive officer as definedin the Companies Act, executive director, executive officer as defined in our internal regulations,specialist officer, or employee of the Company or a subsidiary of the Company (“Non-Executive
Director”) as previously appointed by the Board of Directors.
1

2.

In the case where the director appointed pursuant to the preceding paragraph is unable to so act, one ofthe other Non-Executive Director(s) in the order previously determined by the Board of Directors shalltake such person’s place.

3.

The Board of Directors may, by its resolution, appoint a Non-Executive Director as a Deputy Chairman
to assist the Chairman.

4.

Any Director who is not a director provided for under the provisions of paragraph 1 or paragraph 2 orany executive officer as defined in the Companies Act may demand the convocation of a meeting of theBoard of Directors in accordance with the provisions of laws and regulations.

5.

Any person appointed by the Nominating Committee, the Compensation Committee, or the Audit
Committee from among their members may convene a meeting of the Board of Directors in accordancewith the provisions of laws and regulations.

Article 6.

(Convocation and Reduction of Convocation Period)

Notices to convene a meeting of the Board of Directors shall be issued to each director not less than three(3) days prior to the date of that meeting; provided, however, that in case of emergency, such period may be
shortened.
Article 7.

(Omission of Convocation Notice)

A meeting of the Board of Directors may be held without taking the procedures for convocation provided
for in the preceding Article with the consent of all of the directors.
CHAPTER IVQUORUM AND METHOD OF ADOPTING RESOLUTIONSArticle 8.

(Quorum and Method of Adopting Resolutions)

1.

Resolutions of meetings of the Board of Directors shall be adopted by an affirmative vote of a majorityof the directors present at the relevant meeting who shall constitute a majority in number of all the
directors entitled to take part in the vote.

2.

Notwithstanding the provisions of the preceding paragraph, in the case where director(s) submit a
proposal with respect to a matter which is the purpose of the resolution of the Board of Directors, if all
directors who are entitled to vote agree in writing or by means of electromagnetic file to such proposal,
it shall be deemed that the resolution to approve such proposal at a meeting of the Board of Directors
has been made.

Article 9.

(Person Who Has Special Interests)

Any person who has special interests with respect to a matter to be resolved at a meeting of the Board of
Directors may not participate in voting for resolution thereof.

2

CHAPTER V
MATTERS TO BE RESOLVED
Article 10.
1.

(Matters to be Resolved)

The following matters shall be resolved at a meeting of the Board of Directors.
(1) Important matters concerning the management policy of the Company and its subsidiaries andother entities administered by the Company (collectively, the “Mizuho Group”)(i)Basic matters concerning the management of the Mizuho Group(ii)

Basic matters concerning annual business plans and mid- and long-term business plans of
the Mizuho Group;(iii)

Basic matters concerning the capital policy of the Mizuho Group (together with thepreceding two items, these form the “basic management policy” under Article 416,
Paragraph 1, Item 1 (a) of the Companies Act);(iv)“System to ensure the properness of operations” of the Mizuho Group (the “Internal Control
System”);(v)

Matters concerning changes of particularly important companies of the Mizuho Group; and(vi)

Basic matters concerning risk governance, risk management, compliance, and internal
auditing of the Mizuho Group.

(2) Important matters concerning the Company(i)

Determination of convocation of general meetings of shareholders and agenda thereof;(ii)

Determination of person authorized to convene general meetings of shareholders and thechairman thereof (including the order in which substitutes are to be determined);(iii)

Appointment and removal of directors with special titles;(iv)

Appointment and dismissal of executive officers as defined in the Companies Act;(v)

Appointment and removal of representative executive officers as defined in the Companies
Act, and executive officers as defined in the Companies Act with special titles;(vi)

Matters concerning the interrelationship between executive officers as defined in the
Companies Act, including the commission to executive officers as defined in the Companies
Act, and hierarchy of commands of executive officers as defined in the Companies Act;(vii) Appointment of, removal of, and commission to executive officers as defined in our internal
regulations with special titles;(viii) Approval of competitive transactions and conflicting interest transactions by directors andexecutive officers as defined in the Companies Act;
(ix)

Determination of person authorized to convene meetings of the Board of Directors and the
Chairman thereof (including the order in which substitutes are to be determined);(x)

Determination of director to receive demands for convocation of meetings of the Board of
Directors from executive officers as defined in the Companies Act;(xi)

Appointment and removal of members who constitute the Nominating Committee, theCompensation Committee, and the Audit Committee;(xii) Appointment and removal of the Chairman of each of the Nominating Committee, theCompensation Committee, and the Audit Committee;
3

(xiii) Determination of a person to represent the Company in any action between the Company
and a member of the Audit Committee;(xiv) Matters concerning business transfers, etc. (including transfers of shares or equity ofsubsidiaries), mergers, absorption-type company splits, incorporation-type company splits,
share exchanges, and share transfers of the Company which require the approval of ageneral meeting of shareholders;(xv) Approval of financial statements, business reports and supplementary schedules, temporary
financial statements, and consolidated financial statements;(xvi) Distribution of surplus and other matters the Board of Directors is authorized to determine
pursuant to the provisions of the Articles of Incorporation;(xvii) Determination of approval of transfers of stock acquisition rights with restriction ontransfers; and(xviii) Establishment of, revisions to, and abolition of particularly important internal regulations.
(3) Important matters concerning the management of subsidiaries, etc.
(i)

Matters concerning transfer of particularly important subsidiaries and other entities
administered by the Company(ii)

Basic matters concerning risk governance, risk management, compliance, and internal
auditing of the core group companies (meaning the “core group companies” as provided in
the Group Management Administration Regulations)(iii)

Appointment of, removal of, and commission to executive officers as defined in our internal
regulations with special titles of management category A1 companies (companies
categorized into “management category A1” under the Group Management Administration
Regulations)(4) Other matters provided for in laws and regulations or the Articles of Incorporation, or resolved at
a General Meeting of Shareholders(5) Any other matter that a Director believes should be proposed at a meeting of the Board of
Directors
2.

The Supplementary Provisions of the Regulations of the Board of Directors shall apply as the operating
standards with respect to the matters to be resolved in the preceding paragraph.
CHAPTER VIREPORTS, ETC. TO THE BOARD OF DIRECTORS

Article 11.

(Business Execution Reports)

1.

Executive officer(s) as defined in the Companies Act shall report to the Board of Directors at least once
every three (3) months on the status of the execution of his or her duties.

2.

Each person appointed by the Nominating Committee, the Compensation Committee, or the Audit
Committee from among their members shall report without delay to the Board of Directors on thestatus of the execution of the duties of that committee.

3.

The Supplementary Provisions of the Regulations of the Board of Directors shall apply as the operating
standards with respect to the matters to be reported to the Board of Directors.
4

Article 12.

(Other Reports, etc.)

1.

The Board of Directors may, when necessary, have executive officers as defined in the Companies Act,
executive officers as defined in our internal regulations, specialist officers, and employees of theCompany, and directors, executive officers as defined in our internal regulations, specialist officers,
and employees of subsidiaries, etc., of the Company, and outside experts, etc., attend meetings of theBoard of Directors and seek their reports and opinions.

2.

If an executive officer as defined in the Companies Act, executive officer as defined in our internal
regulations, specialist officer or employee of the Company, or a director, executive officer as defined in
our internal regulations, specialist officer or employee of subsidiaries, etc. of the Company receives arequest from the Board of Directors, that person shall attend a meeting of the Board of Directors andexplain matters requested by the Board of Directors.
CHAPTER VII

EXECUTIVE OFFICERS AS DEFINED IN THE COMPANIES ACT WITH SPECIAL TITLES ANDEXECUTIVE OFFICERS AS DEFINED IN OUR INTERNAL REGULATIONS WITH SPECIAL
TITLES
Article 13.

(Executive Officers as Defined in the Companies Act with Special Titles)

1.

The Board of Directors shall, by its resolution, appoint a President & CEO from among the executive
officers as defined in the Companies Act.

2.

The Board of Directors may, by its resolution, appoint one or more Deputy President & Executive
Officer, Senior Managing Executive Officer, and Managing Executive Officer from among theexecutive officers as defined in the Companies Act.

Article 14.

(Executive Officers as Defined in our Internal Regulations with Special Titles)

The Board of Directors may, by its resolution, appoint one or more Deputy President & Executive Officer,
Senior Managing Executive Officer, and Managing Executive Officer from among the executive officers as
defined in our internal regulations.
CHAPTER VIIIPRESIDENT & CEO
Article 15.

(Duties of the President & CEO)The President & CEO shall oversee the business of the Company as the chief executive officer of theMizuho Group (Group CEO).
Article 16.

(Delegation to the President & CEO)The determination of businesses other than the matters provided for in Article 10 of these Regulations shallbe delegated to the President & CEO.
CHAPTER IXDIRECTORS WITH SPECIAL TITLES
Article 17.

(Directors with Special Titles)

The Board of Directors may, by its resolution, appoint a Chairman, Deputy Chairman, and other directors
with special titles from among the Non-Executive Directors.
5

CHAPTER XMINUTES
Article 18.

(Minutes)

The minutes of meetings of the Board of Directors shall be prepared in writing or by electromagnetic file asprovided for in laws and regulations, and the Directors present thereat shall affix their names and seals
thereon or electronic signatures thereto.
CHAPTER XIOTHER MATTERS
Article 19.

(Amendment and Abolition)

These Regulations and the Supplementary Provisions of the Regulations of the Board of Directors may beamended or abolished by a resolution of the Board of Directors.
Article 20.

(Division in Charge)

The division in charge for administering these Regulations is the Corporate Secretariat.

6

Exhibit 1.3[Translation]
This is a translation of a document written in Japanese,and has been prepared for reference purpose only.

Share Handling Regulations(as of June 23, 2017)

Mizuho Financial Group, Inc.

SHARE HANDLING REGULATIONSOFMIZUHO FINANCIAL GROUP, INC.
SECTION 1
GENERAL PROVISIONS
Article 1.

(Purposes)

Operations relating to shares of the Company and handling fees therefor shall be governed by theseRegulations pursuant to the provisions of the Articles of Incorporation, as well as the rules of Japan Securities
Depository Center, Incorporated (hereinafter referred to as “JASDEC”) and the account management agencies,
such as the securities companies, etc. (hereinafter referred to as the “Securities Companies, Etc.”), with which ashareholder has opened a transfer account.
Article 2.

(Shareholder Register Manager)

The shareholder register manager of the Company and its handling office shall be as follows:
Shareholder Register Manager:
Mizuho Trust & Banking Co., Ltd.
2-1, Yaesu 1-chome, Chuo-ku, Tokyo
Handling Office:Stock Transfer Agency Department of the Head Office of Mizuho Trust &Banking Co., Ltd.
2-1, Yaesu 1-chome, Chuo-ku, Tokyo
SECTION 2
COMMON STOCKCHAPTER I
GENERAL PROVISIONS
Article 3.

(Applicability of this SECTION)

The provisions of SECTION 1, this SECTION and SECTION 4 shall apply to common stock of theCompany listed on a stock exchange.
CHAPTER IIRECORDS IN THE REGISTER OF SHAREHOLDERS, ETC.
Article 4.
1.

(Records in the Register of Shareholders)
The matters described in the register of shareholders shall be changed upon the provision of a noticefrom JASDEC, such as a notice to all shareholders (excluding the notice (hereinafter referred to as the“Individual Shareholder Notice”) provided for in Article 154, Paragraph 3 of the Law Concerning
Book-entry Transfer of Corporate Bonds and Shares, Etc. (hereinafter referred to as the “Transfer
Law”)).
-1-

2.

In addition to the provisions of the preceding paragraph, in the case of the issuance of new shares or in
any other case provided for in the laws and regulations, the matters described in the register ofshareholders shall be changed without notice from JASDEC.

3.

Records in the register of shareholders shall be made using the characters/symbols designated by
JASDEC.

Article 5.

(Reports Concerning Matters Described in the Register of Shareholders)1.

Shareholders shall report their names, or trade names, and addresses to the Company through the
Securities Companies, Etc. and JASDEC pursuant to the rules of JASDEC. The same procedures shallbe taken in the case of any change in the shareholders’ names, or trade names, and addresses.

2.

Notwithstanding the provisions in the preceding paragraph, the matters that are not subject to thereporting obligation to the Company through the Securities Companies, Etc. and JASDEC shall bereported to the shareholder register manager in the designated form.

Article 6.

(Representative of a Corporate Shareholder)

A shareholder that is a corporation shall report one (1) of the representatives to the Company through the
Securities Companies, Etc. and JASDEC pursuant to the rules of JASDEC. The same procedures shall be taken in
the case of any change in such representative.
Article 7.

(Representative of Shareholders Who Jointly Own Shares)

Shareholders who jointly own shares shall appoint one (1) representative and report his/her name, or tradename, and address to the Company through the Securities Companies, Etc. and JASDEC pursuant to the rules of
JASDEC. The same procedures shall be taken in the case of any change in such representative.
Article 8.

(Legal Representative)

A legal representative of a shareholder, such as an agent of a person having parental authority or guardian,
shall report his/her name, or trade name, and address to the Company through the Securities Companies, Etc. and
JASDEC pursuant to the rules of JASDEC. The same procedures shall be taken in the case of any change or
removal of such legal representative.
Article 9.

(Reports of an Address to Which Notices Shall Be Sent to Shareholders, etc., Residing Overseas)

Shareholders and registered stock pledgees or their legal representatives who reside outside Japan shall,either appoint a standing proxy in Japan or designate an address in Japan to which notices shall be sent, andreport to the Company, through the Securities Companies, Etc. and JASDEC, pursuant to the rules of JASDEC,
the name, or trade name, and address of such standing proxy or an address to which notices shall be sent. The
same procedures shall be taken in the case of any change or removal of such standing proxy.
Article 10.

(Method of Identification through JASDEC)

Reports that are submitted to the Company from a shareholder through the Securities Companies, Etc. and
JASDEC shall be deemed to have been submitted by such shareholder himself/herself.

-2-

CHAPTER III
Identification of Shareholder
Article 11.

(Identification of Shareholder)1.

In case a shareholder (including a shareholder who provided the Individual Shareholder Notice) makes
requests or exercises any other shareholder rights (hereinafter referred to as the “Requests, Etc.”), suchshareholder shall attach to the Requests, Etc., or provide a document certifying that such Requests, Etc.
were made by such shareholder himself/herself (hereinafter referred to as the “Evidence”), except
where the Company is able to confirm that such Requests, Etc. were made by such shareholder himself/
herself.

2.

In case the Requests, Etc. are submitted to the Company by a shareholder through the Securities
Companies, Etc. or JASDEC, such Requests, Etc. shall be deemed to have been made by suchshareholder himself/herself, and no Evidence is required.

3.

In case the Requests, Etc. are made by a proxy, a power of attorney, on which a shareholder signed oraffixed his/her name and seal, shall be attached to the Requests, Etc., in addition to the procedures
provided for in preceding two paragraphs. The names, or trade names and addresses of the proxy shallbe stated in the power of attorney.

4.

The provisions of the first paragraph and the second paragraph shall apply mutatis mutandis to theproxy.
CHAPTER IV
PROCEDURES FOR EXERCISE OF SHAREHOLDER RIGHTS

Article 12.

(Minority Shareholder Rights)

In case a shareholder directly exercises against the Company the minority shareholder rights, etc., provided
for in Article 147, Paragraph 4 of the Transfer Law, the shareholder shall exercise such rights upon providing a
document affixed with his/her signature, or name and seal thereon, together with the receipt of the Individual
Shareholder Notice.
Article 13. (Description of Matters that are Proposed by Shareholders in Reference Materials for General
Meeting of Shareholders)
If a shareholder proposes matters to be discussed at a general meeting of shareholders and if the Company
sets forth a description with regard to reasons for the proposal or matters concerning the appointment of
Director(s) or Corporate Auditor(s), etc., in the reference materials for a general meeting of shareholders, andsuch description exceeds 400 characters, such description may be set forth in the form of an outline pursuant to
Article 93, Paragraph 1 of the Enforcement Regulations of the Company Law.
Article 14.

(Method of Request for Purchase of Shares Constituting Less Than One (1) Unit)

In the case of a request to purchase shares constituting less than one (1) unit, such request shall be madethrough the Securities Companies, Etc. and JASDEC pursuant to the rules of JASDEC.
Article 15.
1.

(Method of Determination of Purchase Price)

The purchase price per share of shares constituting less than one (1) unit requested for purchasepursuant to the preceding Article shall be the last reported price on the market established by the Tokyo-3-

Stock Exchange on the day on which the request for purchase provided for in the preceding Article isreceived at the handling office of the shareholder register manager; provided, however, that if theshares are not traded on the market established by the Tokyo Stock Exchange on such day, or if suchday falls on a holiday of the said Stock Exchange, the purchase price per share of shares constituting
less than one (1) unit shall be the price at which the shares were first sold on the market established by
the Tokyo Stock Exchange thereafter.
2.

The purchase price of shares constituting less than one (1) unit shall be the amount obtained bymultiplying the purchase price per share of shares constituting less than one (1) unit provided for in thepreceding paragraph by the number of such shares constituting less than one (1) unit requested forpurchase.

Article 16.

(Payment of Purchase Price)

1.

Unless otherwise provided by the Company, the Company shall pay to the person who has requested
for purchase the purchase price determined pursuant to the preceding Article after deducting therefrom
the handling fees provided for in Article 52, on the fourth (4th) business day commencing on the day
following the day on which the purchase price per share of shares constituting less than one (1) unit isdetermined, pursuant to the rules of JASDEC; provided, however, that if the purchase price reflects therights to receive dividends from surplus (including interim dividends, the same shall apply hereinafter)or stock split, etc., such payment shall be made not later than the relevant record date.

2.

The person who has requested for purchase may request that the payment be made by way of transfer
to a bank account designated by him/her or by cash payment at Japan Post Bank (Yucho Ginko
Genkinbarai).

Article 17.

(Transfer of Purchased Shares)

The shares constituting less than one (1) unit requested for purchase shall be transferred to the transfer
account of the Company on the day on which the payment or the payment procedures provided for in thepreceding Article have been completed.
Article 18.

(Method of Request for Additional Purchase of Shares Constituting Less Than One (1) Unit)

In case a holder of the shares constituting less than one (1) unit requests the Company to sell to the holder ofthe shares constituting less than one (1) unit such a number of shares that would, together with the number ofshares constituting less than one (1) unit owned by such holder, constitute one (1) unit of shares (hereinafterreferred to as the “Request for Additional Purchase”), such request shall be made through the Securities
Companies, Etc. and JASDEC pursuant to the rules of JASDEC.
Article 19. (Request for Additional Purchase of Number of Shares Exceeding the Remaining Number of Sharesof Treasury Stock, etc.)
If an aggregate number of shares for which the Requests for Additional Purchase were made on the same
day exceeds the number of shares reserved by the Company as treasury stock for sale and the order in which such
Requests for Additional Purchase were received is unknown, none of such Requests for Additional Purchasemade on such day shall become effective.
Article 20.

(Effective Date of Request for Additional Purchase)

The Request for Additional Purchase shall become effective as of the date on which the written Request for
Additional Purchase is received at the handling office of the shareholder register manager.
-4-Article 21.

(Determination of Additional Purchase Price)1.

The additional purchase price per share of shares constituting less than one (1) unit, for which theRequest for Additional Purchase has been made, shall be the last reported price on the market
established by the Tokyo Stock Exchange as of the effective date of the Request for Additional
Purchase; provided, however, that if the shares are not traded on the market established by the Tokyo
Stock Exchange on such day, or if such day falls on a holiday of the said Stock Exchange, theadditional purchase price per share of shares constituting less than one (1) unit shall be the price atwhich the shares were first sold on the market established by the Tokyo Stock Exchange thereafter.

2.

The additional purchase price of shares constituting less than one (1) unit shall be the amount obtainedby multiplying the additional purchase price per share of shares constituting less than one (1) unit
provided for in the preceding paragraph by the number of such shares constituting less than one(1) unit, for which the Request for Additional Purchase has been made.

Article 22.

(Transfer of Additionally Purchased Shares)

With respect to the shares of treasury stock in the number equivalent to the number of shares for which theRequest for Additional Purchase has been made, pursuant to the rules of JASDEC, the shareholder who made a
Request for Additional Purchase shall apply for a transfer of such shares of treasury stock to the transfer accountof the shareholder who made the Request for Additional Purchase on the day on which it is confirmed that theaggregate amount of the additional purchase price and the handling fees provided for in Article 52, asconsideration for additional purchases, have been remitted to the bank account designated by the Company.
Article 23.
1.

(Suspension Period of Request for Additional Purchase)In each year the Company shall suspend acceptance of the Request for Additional Purchase during theperiod of ten (10) business days before all of the following dates:(1) March 31;(2) September 30; and(3) Any other date determined by JASDEC, such as the determination date of shareholders.

2.

Notwithstanding the preceding paragraph, the Company may, whenever it deems necessary, establish
any other period during which the Company shall suspend acceptance of the Request for Additional
Purchase.
CHAPTER V
EXCEPTIONS FOR SPECIAL ACCOUNTS

Article 24.

(Exceptions for Special Accounts)

Identification of the shareholder for whom a special account is opened and any other handling mattersconcerning such special account shall be governed by the rules of the account management agencies for suchspecial account as well as the rules of JASDEC.

-5-SECTION 3
PREFERRED STOCKCHAPTER I
GENERAL PROVISIONS
Article 25.

(Applicability of this SECTION)

The provisions of SECTION 1, this SECTION and SECTION 4 shall apply to preferred stock of theCompany that is not listed on a stock exchange.
Article 26.

(Liaison Offices of Shareholder Register Manager)

The liaison offices of the shareholder register manager for preferred stock shall be as follows:
Liaison Offices:
All branches in Japan of Mizuho Trust & Banking Co., Ltd.
Head office and all branches and agencies in Japan of Mizuho Securities Co., Ltd.
Article 27.

(Method of Requests and Reports, etc., for Preferred Stock)1.

All procedures for requests and reports with respect to the business delegated to the shareholder
register manager by the Company shall be made to the shareholder register manager.

2.

All procedures for requests and reports provided for in this Article shall be made in the form prescribedby the Company with the seal impression affixed which has been reported in accordance with theprovisions of Article 33.

3.

If any requests and reports provided for in the preceding paragraph shall be made by a proxy, adocument certifying the authorization of such proxy shall be submitted.

4.

If any requests and reports provided for in the second paragraph shall be required to be made with theconsent of a curator (hosanin) or an assistant (hojonin), a document certifying such consent shall be
submitted.

Article 28.

(Mutatis Mutandis Application of Procedures for Exercise of Shareholder Rights)

The provisions of Article 12 (excluding “together with the receipt of the Individual Shareholder Notice”)
and Article 13 shall apply mutatis mutandis to preferred stock.
CHAPTER IIRECORDS IN THE REGISTER OF SHAREHOLDERS, ETC.
Article 29.
1.

(Registration of Transfer of Preferred Stock)

In the case of a request for the written or electronic records on the register of shareholders (hereinafterreferred to as the “Registration of Transfer of Preferred Stock”), a designated written request thereforbearing the signatures of both the current shareholder of preferred stock and the acquirer of shares ofthe preferred stock shall be submitted.
-6-

2.

In the case of a request for the Registration of Transfer of Preferred Stock acquired as the result of
inheritance, testament or merger of companies, etc. other than assignment, a document certifying suchacquisition shall be submitted, in addition to the procedures provided for in the preceding paragraph.

Article 30. (Registration of Transfer of Preferred Stock Where Special Procedure is Required by Laws orRegulations)
In case where the special procedure is required by laws or regulations for the Registration of Transfer ofPreferred Stock, a designated written request therefor shall be submitted, together with a document certifying thecompletion of such procedures.
CHAPTER III
REGISTRATION OF PLEDGES AND INDICATION OF TRUST ASSETS
Article 31.

(Registration of Pledges and Cancellation Thereof)

In case registration of a pledge or change or cancellation thereof is requested in respect of preferred stock, adesignated written request therefor bearing signatures of both the pledgor and the pledgee in respect of preferredstock shall be submitted.
Article 32.

(Indication of Trust Assets and Cancellation Thereof)

In case indication of trust assets or cancellation thereof is requested in respect of preferred stock, adesignated written request therefor shall be submitted either by the trustor or the trustee.
CHAPTER IVNOTIFICATIONSArticle 33.

(Reports of Addresses, Names, and Seal Impressions of Shareholders, etc.)

1.

The shareholders of preferred stock and the registered preferred stock pledgees or their legal
representatives shall report their addresses, names and seal impressions by submitting shareholders’cards, etc.; provided, however, that a foreigner who has the custom of affixing his/her signature may
substitute his/her specimen signature for such seal impression.

2.

The same procedures shall be taken in the case of any change in the matters referred to in the preceding
paragraph.

Article 34.

(Reports of an Address to Which Notices Shall Be Sent to Shareholders, etc. Residing Overseas)

1.

The shareholders of preferred stock and the registered preferred stock pledgees or their legal
representatives who reside outside Japan shall, either appoint a standing proxy in Japan or designate anaddress to which notices shall be sent, and report thereof, in addition to the procedures provided for in
the preceding Article.

2.

The provisions of the preceding Article shall apply mutatis mutandis to the standing proxy.

Article 35.

(Representative of a Corporation)

1.

In case where a shareholder of preferred stock or a registered preferred stock pledgee is a corporation,
the name of one (1) of the representatives of such corporation shall be notified.

2.

In the case of any change in the representative provided for in the preceding paragraph, a designatedwritten report therefor shall be submitted, together with such certificate of matters to be registered, etc.
-7-Article 36.

(Representative of Shareholders Who Jointly Own Shares)

1.

The shareholders of preferred stock who jointly own preferred stock shall appoint one(1) representative and report thereof.

2.

The same procedures shall be taken in the case of any change in the representative provided for in thepreceding paragraph.

Article 37.

(Representative of Unincorporated Organization)

1.

In case where a shareholder of preferred stock or a registered preferred stock pledgee is anunincorporated organization, the name of one (1) of the representatives of such organization shall be
notified.

2.

The same procedures shall be taken in the case of any change in the representative provided for in thepreceding paragraph.

Article 38.

(Change in the Register of Shareholders)

In case where a shareholder of preferred stock makes any changes in entry in the register of shareholders forany of the following reasons, a designated report therefor shall be submitted, together with a certified copy ofextract of the family register or a certificate of matters to be registered, etc. as the case may be.
(1) Change of family name or given name;(2) Appointment, change or removal of a legal representative such as an agent of a person having parental
authority, guardian, etc.;(3) Change of trade name or name of a juridical person; or(4) Change of corporate organization.
Article 39.

(Mutatis Mutandis Application)

The provisions in this Chapter shall apply mutatis mutandis to the trustor and the trustee of trust assets.
CHAPTER V
PURCHASE OF SHARES OF PREFERRED STOCK CONSTITUTING LESS THAN ONE (1) UNIT
Article 40.

(Method of Request for Purchase of Shares of Preferred Stock Constituting Less Than One (1) Unit)

In the case of a request to purchase shares of preferred stock constituting less than one (1) unit, a designatedwritten request (hereinafter referred to as the “Written Request for Purchase”) therefor shall be submitted at thehandling office of the shareholder register manager provided for in Article 2 or any of the liaison offices of theshareholder register manager provided for in Article 26.
Article 41.

(Method of Determination of Purchase Price)

The purchase price of preferred stock constituting less than one (1) unit requested for purchase shall be
determined in accordance with the method provided for in the laws and regulations.
Article 42.
1.

(Payment of Purchase Price)

Unless otherwise provided by the Company, the Company shall pay to the person who has requested
for purchase, the purchase price determined pursuant to the preceding Article after deducting therefrom
the handling fees provided for in Article 52, on the fourth (4th) business day commencing on the day
following the day (in case where the purchase price pursuant to the preceding Article has not yet been-8-

decided up to such day, the day shall be the decision date of the purchase price pursuant to the same
Article) on which the Written Request for Purchase provided for in Article 40 is received at thehandling office of the shareholder register manager; provided, however, that if the purchase pricereflects the rights to receive dividends from surplus or stock split, etc., such payment shall be made notlater than the relevant record date.
2.

The person who has requested for purchase may request that the payment be made by way of transfer
to a bank account designated by him/her or by cash payment by Japan Post Bank (Yucho Ginko
Genkinbarai) to the address of such person. If this is the case, the payment of the purchase price shallbe deemed to be completed, concurrently with arrangement for payment by transfer or by voucher for
disbursement through Japan Post Bank (Hurikaeharaidashi-shousho).

Article 43.

(Transfer of Title to Purchased Shares of Preferred Stock Constituting Less Than One (1) Unit)

The title to the shares of preferred stock constituting less than one (1) unit, for which a Request for Purchasehas been made, shall be transferred to the Company on the day on which the payment procedures provided for in
the preceding Article have been completed.
CHAPTER VI
ADDITIONAL PURCHASE OF SHARES OF PREFERRED STOCK CONSTITUTINGLESS THAN ONE (1) UNIT
Article 44. (Method of Request for Additional Purchase of Shares of Preferred Stock Constituting Less Than
One (1) Unit)
In case where a holder of shares of preferred stock constituting less than one (1) unit requests that theCompany sell to the holder of the shares of preferred stock constituting less than one (1) unit such number ofshares of preferred stock that would, together with the number of shares of preferred stock constituting less thanone (1) unit owned by such holder, constitute one (1) share of preferred stock (hereinafter referred to as the“Request for Additional Purchase”), a designated written request (hereinafter referred to as the “Written Request
for Additional Purchase”) therefor shall be submitted at the handling office of the shareholder register manager
provided for in Article 2 or any of the liaison offices of the shareholder register manager provided for in Article
26.
Article 45. (Request for Additional Purchase of Number of Shares of Preferred Stock Constituting Less Than
One (1) Unit Exceeding the Remaining Number of Shares of Preferred Stock Reserved as Treasury Preferred
Stock, etc.)
If an aggregate number of shares of preferred stock constituting less than one (1) unit for which theRequests for Additional Purchase were made on the same day exceeds the number of shares of preferred stock
reserved by the Company as treasury stock for sale, none of such Requests for Additional Purchase made on suchday shall become effective.
Article 46.

(Effective Date of Request for Additional Purchase)

The Request for Additional Purchase shall become effective as of the date on which the Written Request for
Additional Purchase provided for in Article 44 is received at the handling office of the shareholder registermanager.
Article 47.
1.

(Suspension Period of Request for Additional Purchase)In each year the Company shall suspend acceptance of the Requests for Additional Purchase during theperiod of ten (10) business days before all of the following dates:(1) March 31;-9-(2) September 30; and(3) Any other date determined by JASDEC, such as the determination date of shareholders.
2.

Notwithstanding the preceding paragraph, the Company may, whenever it deems necessary, establish
any other periods during which the Company shall suspend acceptance of the Requests for Additional
Purchase.

Article 48.

(Method of Determination of Additional Purchase Price)

The additional purchase price of preferred stock constituting less than one (1) unit, for which a Request for
Additional Purchase has been made, shall be determined in accordance with the method provided for in the laws
and regulations.
Article 49. (Transfer of Title to Shares of Preferred Stock Constituting Less Than One (1) Unit Purchased
Additionally)
The title to the shares of preferred stock constituting less than one (1) unit, for which a Request for
Additional Purchase has been made, shall be transferred to the holder of shares of preferred stock constituting
less than one (1) unit who made such Request for Additional Purchase on the day on which the Company duly
receives the aggregate amount of the additional purchase price provided for in the preceding Article and thehandling fees provided for in Article 52, as consideration for the additional purchase.
CHAPTER VII
REQUEST FOR ACQUISITION OF PREFERRED STOCK
Article 50.

(Method of Request for Acquisition)

1.

In case an acquisition of preferred stock is requested, a designated written request therefor shall be
submitted at the handling office of the shareholder register manager provided for in Article 2 or any ofthe liaison offices of the shareholder register manager provided for in Article 26.

2.

The request for acquisition may not be withdrawn after submission of such request.

Article 51.

(Effectiveness of Acquisition)

The acquisition shall be effective concurrently with arrival of the request provided for in the preceding
Article at the handling office of the shareholder register manager.
SECTION 4
HANDLING FEES
Article 52.

(Handling Fees)

Handling fees in connection with shares of the Company shall be as follows (not including consumption
tax):
1.

In the case of purchase of shares constituting less than one (1) unit pursuant to Article 14 (Method ofRequest for Purchase of Shares Constituting Less Than One (1) Unit) and Article 40 (Method ofRequest for Purchase of Shares of Preferred Stock Constituting Less Than One (1) Unit) and in thecase of the sale of shares constituting less than one (1) unit pursuant to Article 18 (Method of Request
for Additional Purchase of Shares Constituting Less Than One (1) Unit) and Article 44 (Method ofRequest for Additional Purchase of Preferred Stock Constituting Less Than One (1) Unit):- 10 -

The fees shall be calculated by dividing proportionally the amount of handling fees per unit calculated by
the following formula (In the case of any amount less than one (1) yen, such amount shall be disregarded) by therelevant number of shares constituting less than one (1) unit so purchased or sold (In the case of any amount lessthan one yen, such amount shall be disregarded);(1) In case the purchase price or additional purchase price per unit shall be: Not more than one
hundred thousand yen (¥100,000):
1.15% of the amount involved (If the amount per unit obtained by the above formula is less than
two hundred fifty yen (¥250), the fees shall be two hundred fifty yen (¥250).)(2) In case the purchase price or additional purchase price per unit shall be: More than one hundred
thousand yen (¥100,000):
0.9% of the amount involved + ¥250

- 11 -

Exhibit 12.1
CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Yasuhiro Sato, certify that:1.

I have reviewed this annual report on Form 20-F of Mizuho Financial Group, Inc. (the “company”);

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to statea material fact necessary to make the statements made, in light of the circumstances under which suchstatements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of thecompany as of, and for, the periods presented in this report;

4.

The company’s other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company andhave:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures tobe designed under our supervision, to ensure that material information relating to the company,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in thisreport our conclusions about the effectiveness of the disclosure controls and procedures, as of the endof the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the company’s internal control over financial reporting that
occurred during the period covered by the annual report that has materially affected, or is reasonably
likely to materially affect, the company’s internal control over financial reporting; and5.

The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the company’s auditors and the audit committee of the company’s boardof directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the company’s ability to record,
process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have asignificant role in the company’s internal control over financial reporting.

Date: July 7, 2017
By: /s/ Yasuhiro Sato
Name: Yasuhiro Sato
Title: Chief Executive Officer

Exhibit 12.2
CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Makoto Umemiya, certify that:1.

I have reviewed this annual report on Form 20-F of Mizuho Financial Group, Inc. (the “company”);

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to statea material fact necessary to make the statements made, in light of the circumstances under which suchstatements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of thecompany as of, and for, the periods presented in this report;

4.

The company’s other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company andhave:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures tobe designed under our supervision, to ensure that material information relating to the company,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in thisreport our conclusions about the effectiveness of the disclosure controls and procedures, as of the endof the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the company’s internal control over financial reporting that
occurred during the period covered by the annual report that has materially affected, or is reasonably
likely to materially affect, the company’s internal control over financial reporting; and5.

The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the company’s auditors and the audit committee of the company’s boardof directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the company’s ability to record,
process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have asignificant role in the company’s internal control over financial reporting.

Date: July 7, 2017
By: /s/ Makoto Umemiya
Name: Makoto Umemiya
Title: Chief Financial Officer

Exhibit 13.1
CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The certification set forth below is being submitted in connection with the annual report of Mizuho
Financial Group, Inc. on Form 20-F for the year ended March 31, 2017 as filed with the U.S. Securities andExchange Commission on the date hereof (the “Report”) for the purpose of complying with Rule 13a-14(b) or
Rule 15d-14(b) of the United States Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 ofChapter 63 of Title 18 of the United States Code.
Yasuhiro Sato, Chief Executive Officer, and Makoto Umemiya, Chief Financial Officer of Mizuho
Financial Group, Inc., each certifies that, to the best of his knowledge:
1.

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and2.

The information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of Mizuho Financial Group, Inc.

Date: July 7, 2017
By: /s/ Yasuhiro Sato
Name: Yasuhiro Sato
Title: Chief Executive Officer
By: /s/ Makoto Umemiya
Name: Makoto Umemiya
Title: Chief Financial Officer

Exhibit 15
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statement (Form F-3 No. 333-213187) of
Mizuho Financial Group, Inc. and in the related Prospectus of our reports dated July 7, 2017, with respect to theconsolidated financial statements of Mizuho Financial Group, Inc., and the effectiveness of internal control overfinancial reporting of Mizuho Financial Group, Inc., included in this Annual Report (Form 20-F) for the year
ended March 31, 2017.
/s/ Ernst & Young ShinNihon LLC
Tokyo, Japan
July 7, 2017