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, 2018
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 two shares ofcommon 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, 2018, the following shares of capital stock were issued: 25,389,644,945 shares of common stock (including 6,487,234 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
22
22
23
50
51
51
52
103
103
106
113
117
118
120
120
120
120
121
121
121
122
122
123
123
124
124
124
125
125
125
137
137
138
144
144
144
144

Page

ITEM 11.
ITEM 12.

Quantitative and Qualitative Disclosures about Credit, Market and Other 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

145
165
165
165
165
165
166
166
166
167
167
167
168
169
169
169
171
172
172
172
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 ended, before July 1, 2013, tothe 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, 2014, 2015, 2016, 2017 and 2018 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, 2014, 2015, 2016, 2017 and 2018 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, 2016, 2017 and 2018 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,
2014
2015
2016
2017
2018
(in millions of yen, except per share data, share number information and percentages)

Statement of income data:
Interest and dividend
income . . . . . . . . . . . . . . . ¥Interest expense . . . . . . . . . .
Net interest income . . . . . . .
Provision (credit) for loan
losses . . . . . . . . . . . . . . . .
Net interest income after
provision (credit) for loan
losses . . . . . . . . . . . . . . . .
Noninterest income . . . . . . .
Noninterest expenses . . . . . .
Income before income tax
expense . . . . . . . . . . . . . .
Income tax expense . . . . . . .
Net income . . . . . . . . . . . . .
Less: Net income (loss)
attributable tononcontrollinginterests . . . . . . . . . . . . . .
Net income attributable to
MHFG shareholders . . . . ¥Net income attributable tocommon shareholders . . .
Amounts per share:
Basic earnings per commonshare—net income
attributable to commonshareholders . . . . . . . . . . .
Diluted earnings percommon share—net
income attributable tocommon shareholders . . .
Number of shares used to
calculate basic earnings
per common share (inthousands) . . . . . . . . . . . .
Number of shares used to
calculate diluted earnings
per common share (inthousands) . . . . . . . . . . . .
Cash dividends per
share (1)(2):Common stock . . . . . . .
Eleventh series class XI
preferred stock(3) . . .

1,422,799
401,565
1,021,234¥

1,457,659
411,982
1,045,677¥

1,500,171
495,407
1,004,764¥

1,509,030 ¥
601,712907,318

1,761,886
889,936
871,950(126,230)(60,223)

34,56037,668(126,362)

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

998,3121,604,663
1,763,677

726,343
226,108
500,235

1,267,653
437,420
830,233

1,196,605
346,542
850,063

480,375
91,244
389,131

839,298
237,604
601,694

1,751

27,185(429)

26,691

24,086498,484¥

803,048¥

850,492¥

362,440 ¥577,608¥

491,739¥

798,138¥

848,062¥

362,440 ¥577,608

¥

20.33

¥

32.75

¥

34.19

¥

14.33 ¥

22.77

¥

19.64

¥

31.64

¥

33.50

¥

14.28 ¥

22.76

24,189,670

24,368,116

24,806,161

25,285,899

25,366,345

25,371,252

25,381,047

25,387,033

25,380,302

25,373,931

¥
$

6.50
0.06

¥
$

7.50
0.06

¥
$

7.50
0.07

¥
$

7.50 ¥
0.07 $

7.50
0.07

¥
$

20.00
0.19

¥
$

20.00
0.17

¥
$

20.00
0.18

¥
$

— ¥
— $

—
—

7

As of and for the fiscal years ended March 31,
2014
2015
2016
2017
2018
(in millions of yen, except per share data, share number information and percentages)

Balance sheet data:
Total assets . . . . . . . . . . . . .
Loans, net of allowance . . . .
Total liabilities . . . . . . . . . .
Deposits . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . .
Common stock . . . . . . . . . . .
Total MHFG shareholders’equity . . . . . . . . . . . . . . . .
Other financial data:
Return on equity and assets:
Net income attributable tocommon shareholders as apercentage of total
average assets . . . . . . . . .
Net income attributable tocommon shareholders as apercentage of average
MHFG shareholders’equity . . . . . . . . . . . . . . . .
Dividends per commonshare as a percentage ofbasic earnings percommon share . . . . . . . . .
Average MHFG
shareholders’ equity as apercentage of total
average assets . . . . . . . . .
Net interest income as apercentage of total
average interest-earning
assets . . . . . . . . . . . . . . . .

¥175,697,452(4) ¥190,114,354(4) ¥193,810,151(4) ¥200,456,304 ¥204,255,642
72,858,777
77,528,017
77,104,122
81,804,233
83,204,742
169,076,081(4) 181,924,510(4) 185,626,960(4) 191,684,247 194,751,942
102,610,154
114,206,441
117,937,722
131,184,953 136,884,006
9,852,048(4) 14,576,861(4) 14,765,527(4) 14,529,414
12,955,230
5,489,295
5,590,396
5,703,144
5,826,149
5,826,383
6,378,470

7,930,338

8,014,551

8,261,357

8,868,421

0.27%

0.42%

0.43%

0.18%

0.28%

9.64%

13.86%

13.33%

5.25%

8.26%

31.97%

22.90%

21.94%

52.34%

32.94%

2.84%

3.04%

3.23%

3.38%

3.35%

0.64%

0.63%

0.58%

0.51%

0.47%

Notes:(1) Yen amounts are expressed in U.S. dollars at the rate of ¥102.98 = $1.00, ¥119.96 = $1.00, ¥112.42= $1.00,¥111.41= $1.00 and ¥106.20= $1.00 for the fiscal years ended March 31, 2014, 2015, 2016, 2017 and 2018,
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) 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
2014

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,
2015
2016
2017
(in millions of yen, except per share data and percentages)

2018

1,417,569 ¥
309,266

1,468,976 ¥
339,543

1,426,256 ¥
422,574

1,445,555 ¥
577,737

1,622,354
814,988

1,108,303
52,014

1,129,433
52,641

1,003,682
53,458867,818
50,627807,366
55,400560,768
187,421
126,774

593,360
262,963
209,340

607,551
310,507
246,415

603,542
325,332
245,419614,349
275,786
162,454

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

1,488,973
565,683
192,113985,366

990,632

1,008,252

784,193

799,953

137,010
77,960770,396

260,268
44,723
685,640

213,289
69,260725,702

196,535(58,800)
646,457

190,158
1,469
608,326

81,98073,70554,75942,91331,778688,415 ¥

611,935 ¥

670,943 ¥

603,544 ¥576,547

Net income per share:
Basic . . . . . . . . . . . . . . . . . . . . . ¥28.18 ¥
24.91 ¥
26.94 ¥
23.86 ¥
22.72
Diluted . . . . . . . . . . . . . . . . . . . .
27.12
24.10
26.42
23.78
22.72
Balance sheet data:
Total assets . . . . . . . . . . . . . . . . ¥175,822,885 ¥189,684,749 ¥193,458,580 ¥200,508,610 ¥205,028,300
Loans and bills discounted(3) . . .
69,301,405
73,415,170
73,708,884
78,337,793
79,421,473
Securities . . . . . . . . . . . . . . . . . .
43,997,517
43,278,733
39,505,971
32,353,158
34,183,033
Deposits(4) . . . . . . . . . . . . . . . . . 101,811,282 113,452,451 117,456,604 130,676,494 136,463,824
Net assets . . . . . . . . . . . . . . . . . .
8,304,549
9,800,538
9,353,244
9,273,361
9,821,246
Risk-adjusted capital data
(Basel III)(5):
Common Equity Tier 1
capital . . . . . . . . . . . . . . . . . . ¥ 5,304,412 ¥ 6,153,141 ¥ 6,566,488 ¥ 7,001,664 ¥ 7,437,048
Tier 1 capital . . . . . . . . . . . . . . .
6,844,746
7,500,349
7,905,093
8,211,522
9,192,244
Total capital . . . . . . . . . . . . . . . .
8,655,990
9,508,471
9,638,641
10,050,953
10,860,440
Risk-weighted assets . . . . . . . . .
60,274,087
65,191,951
62,531,174
61,717,158
59,528,983
Common Equity Tier 1 capitalratio . . . . . . . . . . . . . . . . . . . .
8.80%
9.43%
10.50%
11.34%
12.49%
Tier 1 capital ratio . . . . . . . . . . .
11.35
11.50
12.64
13.30
15.44
Total capital ratio . . . . . . . . . . .
14.36
14.58
15.41
16.28
18.24

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. We adopted the advanced internal ratingsbased approach (the “AIRB approach”) for the calculation of risk-weighted assets associated with credit risk
from the fiscal year ended March 31, 2009. We also adopted the advanced 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,

High2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 (through May 31) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Low
Average(1)(yen per dollar)

Periodend¥105.25
121.50125.58118.32114.25111.08¥ 92.96101.26111.30100.07104.83105.99¥100.46110.78120.13108.31110.70109.01¥102.98
119.96112.42111.41106.20108.73¥113.62¥111.88——¥113.18
110.40106.91109.33111.08¥108.38
106.10104.83105.99108.62

—
—
—
—
—

—
—
—
—
—

Calendar year 2017

December . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Calendar year 2018

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, 2018 was ¥108.73 = $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 Credit, Market and Other 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 banks andother financial institutions, manufacturing and real estate industries is relatively high. We manage our credit
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 also utilize 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 we periodically
re-evaluate, and economic trends based on our self-assessment standards as well as applicable charge-off andallowance standards. However, depending on trends in the domestic and global economic environment, thebusiness environment in particular industries, prices of real estate assets and other factors, the amount of ourproblem 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. The Basel Committee on Banking Supervision reviewed the risk measurement method and otherrules and published the finalized Basel III reforms in December 2017. Regulations based on the review are
expected to be phased in from 2022.
Furthermore, we have been named one of the global systemically important banks (“G-SIBs”) and havebecome 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 published the final
standard requiring G-SIBs to maintain total loss-absorbing capacity (“TLAC”) in November 2015, and G-SIBs
will be required to meet the minimum TLAC requirement from 2019.In addition, the Financial Services Agency
published a policy to develop a framework in connection with such requirements in Japan in April 2016, and arevised version of this document was published in April 2018. Based on this policy, the Financial Services
Agency intends that Mizuho Financial Group be subject to the TLAC regulations from March 31, 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.
14

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, 2018, would have been approximately ¥3.0 billion for a
one-notch downgrade and approximately ¥6.3 billion for a two-notch downgrade.
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. Also, in November 2017, withthe aim of achieving sustainable growth and maintaining and strengthening our competitive advantages over thelong term, we developed a basic principle of structural reforms.
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 due to these or otherfactors, including, but not limited to, differences in the actual economic environment compared to ourassumptions, 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 andstructural reforms.”
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.

15

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.
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 (IT) 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.
Mizuho Bank, Ltd. and Mizuho Trust & Banking Co., Ltd. are working on shifting to our next-generationaccounting system for the purpose of improving our customer service capabilities. In shifting to this new system,
we plan to progress gradually from the viewpoint of ensuring safety and a steady transition, such as multiple
temporary suspensions of our online services. However, we may not be able to prevent significant disruptions to
our information technology systems caused by, among other things, human error, accidents and development andrenewal of computer systems. In the event of any such disruption, our business, financial condition and results ofoperations could be materially and adversely affected due to information leaks, malfunctions or disruptions in ourbusiness operations, liability to customers and others, regulatory actions or harm to our reputation.
Problems relating to cyber attacks could significantly impair our ability to protect our customer’s private
information and disrupt our business operations.
Our business depends on the secure processing, storage and transmission of confidential and otherinformation within our global IT systems. There have been a number of highly publicized cases involving
financial services companies, consumer-based companies, governmental agencies and other organizations
reporting the unauthorized disclosure of client, customer or other confidential information in recent years, as wellas cyber attacks involving the dissemination, theft and destruction of corporate information or other assets, as aresult of failure by employees or contractors to follow procedures or as a result of actions by third parties,
including actions by foreign governments.
16

As we and our outside contractors continue to be the target of unauthorized access attacks, mishandling or
misuse of information, computer viruses or malware, cyber attacks designed to obtain confidential information,
destroy data, disrupt or degrade service, sabotage systems or cause other damage, denial of service attacks, data
breaches and other events, there can be no assurance that we will not suffer any losses or other consequences in
the future as a result of significant incidents due to these cyber attacks. Although our Cyber Incident Response
Team (CIRT) has led the implementation of, and continuously endeavors to upgrade, our protective measuresusing advanced technologies, our IT systems, software and computer networks may be vulnerable tounauthorized access, misuse, computer viruses or other malicious code and other events that could have asecurity impact. Due to the complexity and interconnectedness of our global IT systems, these protective
measures may be ineffective, and the process of enhancing our protective measures can itself create a risk ofsystem disruption and security issues, and there can be no assurance that our current or future countermeasures
will be sufficient to prevent or mitigate the impact of such incidents.
A cyber attack, information or security breach or a technology failure that involves us or our outsidecontractors could jeopardize our or our customers’, employees’, partners’, vendors’ or counterparties’ personal,
confidential, proprietary or other information processed and stored in, and transmitted through, our and ouroutside contractors’ IT systems. Furthermore, such events could cause interruptions or malfunctions in our, ourcustomers’, employees’, partners’, vendors’, counterparties’ or outside contractor’s operations, as well as theunauthorized release, gathering, monitoring, misuse, loss or destruction of confidential, proprietary and otherinformation of ours, our employees, our customers or of other third parties. Any of these events could result in
reputational damage with our customers and the market, customer dissatisfaction or financial losses, any ofwhich could adversely affect our financial condition and results of operations.
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, including as a result of cyber attacks.
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, including as a result of cyber attacks, could result in liabilities and regulatory actions and may also lead tosignificant harm to our reputation. In addition, recent or future regulatory changes, such as the Japan Amended
Act on the Protection of Personal Information, the EU General Data Protection Regulation and the UK
Competition and Markets Authority’s Open Banking standard, increase the risks relating to our ability to comply
with rules that impact our ability to protect information. Non-compliance with such regulations could result in
regulatory proceedings, litigation, enforcement or the imposition of fines or penalties. 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 the17

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, Syria and North Korea 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 compliancewith applicable 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,18

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 U.S. governmental policies, political concerns in Europe, the economic outlook for China
and heightening geopolitical risks. Significant changes in general economic conditions or financial markets dueto the effect of changes in these risks could materially and adversely affect our financial condition and results ofoperations.
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 or that requires us to incur additional costs related to our IT systems,
our business, financial condition and results of operations could be materially and adversely affected.
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.
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 plans
19

that 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
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
20

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.

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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.
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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, Mizuho Americas LLC, which holds our primary U.S.–based banking,securities and institutional custody services (trust banking) entities together under it, with the aim to proactively
strengthen corporate governance and expand our profit base through the consistent implementation of ourcollaborative corporate and investment banking, securities and institutional custody services strategy in the
United States in line with the global operation of our new in–house company system.
In December 2017, two subsidiaries of Mizuho Americas LLC, the former Mizuho Bank (USA) and theMizuho Trust & Banking Co. (USA), merged. The merged entity, Mizuho Bank (USA), provides both banking
services and trust services.
In October 2016, with a view to strengthening our 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 as a subsidiary of Resona
Holdings, Inc. and The Dai-ichi Life Insurance Company, Limited as a subsidiary of Dai-ichi Life Holdings, Inc.
executed a memorandum of understanding to commence detailed analysis and negotiations in preparation for the
management integration of Japan Trustee Services Bank, Ltd. (“JTSB”) and Trust & Custody Services Bank, Ltd.
(“TCSB”). In March 2018, TCSB executed a management integration agreement with JTSB to carry out the
management integration through incorporation of a holding company by joint share transfer. The purpose of theintegration is to contribute to further growth in the domestic securities settlement market and domestic
investment chain by realizing more stable and higher quality operations and strengthening its systemdevelopment capabilities by seeking the benefits of scale.
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.
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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 the
fiscal year ended March 31, 2017. This plan aims for (i) further reinforcement of the “customer-focused”
perspective that we have been promoting and (ii) the pursuit of “operational excellence,” as part of our effort topromote greater business improvement and efficiency. Through these efforts, we aim to further develop the “OneMIZUHO” 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 noninterest income 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)
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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 2018, the second year of the medium-term business plan, we adopted“accelerating the One MIZUHO strategy through commitment to customer-focused business operations andfundamental enhancement of productivity” as our operational policy and have worked together as a group in thisdirection.
First, in order to further promote the evolution of integrated, group-wide operations across banking, trustand securities functions to ensure that the business is managed on a customer-focused basis, we have enhanced
our front-line capabilities, implemented prompt decision-making processes, increased the efficiency of groupmanagement and worked to strengthen our noninterest income business on a group-wide basis by providing
solutions to issues that customers may face.
In addition, with respect to the fulfillment of fiduciary duties, in addition to our policies and action plans foreach group company regarding the asset management-related business, we set and published quantitative key
performance indicators to confirm the extent to which our fiduciary duties are being fulfilled and implemented
various kinds of customer-focused measures.
Secondly, we have promoted “operational excellence” in order to improve productivity. With the aim of“improving operational efficiency” and “enhancing service value for customers by raising the sophistication of
our operations,” we have streamlined head office operations and advanced our business process reform throughthe utilization of digital technologies such as robotic process automation (i.e., software that is capable of
inputting, processing, collecting and checking data that requires simple judgment, which can be utilized for the
automation of routine manual tasks) and employee mind-set reforms, etc.
Thirdly, we have actively worked on improving innovation. Under a new structure for promoting
innovation, which the CDIO (Chief Digital Innovation Officer) is exclusively in charge of, we have advanced our
initiatives by establishing Blue Lab Co., Ltd. for the purposes of creating next-generation business models andactual commercialization related businesses, and commenced “AI-based Score Lending,” (i.e., an individual
consumer financing service that provides reference values for lending terms, such as interest rates and borrowing
limits, based on AI-based score levels), one of the first FinTech services in Japan, provided by J.Score CO., LTD.
Fourthly, in order to contribute to the sustainable development of society and to create new corporate value,
we have pursued a CSR initiative regarding environmental, societal and governance (ESG) issues. With respect
to environment and society, we issued green bonds and developed a human rights policy in line with international
standards, among other initiatives. With respect to governance, we became the first Japanese bank holding
company for which the Chairman of the Board of Directors and the chairmen of the three legally-requiredcommittees are all outside directors, and each of Mizuho Bank, Ltd., Mizuho Trust & Banking Co., Ltd. andMizuho Securities Co., Ltd. (the “Three Core Companies”) changed its corporate governance system from the“Company with Board of Company Auditors” structure to the “Company with Audit and Supervisory
Committee” structure.
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Finally, with respect to legal compliance, we continued our various efforts, including severing transactions
with anti-social elements and our countermeasures against money laundering and terrorist financing.
The business environment surrounding financial institutions continues to be challenging, and we anticipate
it will undergo major structural changes over time. Under these circumstances, we will undertake fundamental
structural reforms in our business structure, and, based on a ten-year time horizon, we will strive to secure oursustainable growth and continued competitive advantage.
We will utilize advanced technologies in accordance with our concept of open innovation to further develop
our “One MIZUHO strategy” by, for example, (i) endeavoring to increase profit through actively pursuingcollaborative engagement with other companies, not limited to financial activities, in order to create new
business opportunities and (ii) endeavoring to strengthen cost competitiveness and enhance productivity while
striving to optimize organization and staffing, restructure branch strategies and accomplish other related tasks.
In the fiscal year ending March 31, 2019, in order to address three material issues, “launching andimplementing fundamental structural reforms,” “achieving the medium-term business plan” and “completing
implementation of our next generation IT systems,” we are focusing our attention on progressively developing
our “One MIZUHO strategy” by implementing changes to the structure and foundations of our business, further
integrating our “customer first” principle into everything we do and fundamentally increasing productivity, andwe will work to advance such strategy by placing emphasis on the points described below.
Increasing Our Earning Capacity through Fully Implementing Our Customer First Principle
Through strengthening customer contacts, ensuring awareness of customer needs and accomplishing otherrelated tasks, we will work to further develop our “One MIZUHO strategy” by which group-wide operations areintegrated and work to increase our earnings capacity on a group-wide basis by solving issues that need to beaddressed. We will also work to fulfill our fiduciary duties with respect to the asset management-related businessand incorporate customers’ voices and evaluations into the process of following our business plan in order toreflect them in our strategies and measures.
Selecting and Focusing on Certain Areas of Business
By improving the reasonable allocation of management resources in relation to the focus and streamline
areas by which targets and markets are narrowed, we will work to make efficient use of our limited management
resources and increase our earnings capacity. In the focus areas, we will work to expand the area and breadth ofrisk taking and will commence strengthening new and growing businesses.
Establishment of a Resilient Financial BaseBy capturing signs of changes in the business environment and exercising flexible and effective control over
our balance sheets, we will seek to optimize risk and return. With respect to the disposal of cross-shareholdings,
we will work to achieve targets set forth in the medium-term business plan. In addition, by thoroughly reviewing
our business processes through the pursuit of “operational excellence” and other similar efforts and by reviewing
our working style, we will reform our cost structure.
Utilization of Technology and Data
We will strengthen our ability to develop and promote group-wide digital innovation strategies and will
promote efforts towards the utilization of technology and data, and the co-creation of value through collaboration
with other companies in each area of productivity enhancement through upgraded business processes, the reformof business foundation and the creation of new businesses.
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Transforming Our Corporate Culture into One that Encourages the Active Participation of Our Workforce toSupport a Stronger Mizuho
We will seek to establish and spread the “fundamental reform of HR management” by promoting, among
other matters, HR management that respects employees’ individuality, active participation of a diverse
workforce, a work-life balance initiative to provide flexible and varied work arrangements and the “health andproductivity management” initiative. We will also proceed with initiatives toward the transformation of ourcorporate culture, such as mind-set reforms that encourage employees to take on challenges and eliminate
inward-facing energy.
Completion of Implementation of our Next Generation IT Systems
As our most important and largest systems project, we will take all possible measures to complete theimplementation of our next-generation IT systems in a safe and steady manner.
In addition to the foregoing efforts, we will also continue to endeavor to upgrade our risk appetite
framework and strengthen our attitude toward governance and compliance with laws and regulations, including
severance of business relations with anti-social elements.
As already announced, Trust & Custody Services Bank, Ltd., which is our consolidated subsidiary, has
executed a management integration agreement with Japan Trustee Services Bank, Ltd. to the effect that bothparties will carry out management integration. The integrated company will aim to be the top trust bank in Japan
specializing in asset administration services that meet a wide variety of customer needs regarding asset
administration services.
We will also continue to consider the possibility of consolidation between Mizuho Bank and Mizuho
Trust & Banking.
We will contribute to the sustainable development of society by pursuing a CSR initiative toward addressing
social challenges, such as the Sustainable Development Goals (i.e., the international goals from 2016 to 2030 thatwere set forth in the “2030 Agenda for Sustainable Development” adopted by the UN Summit held in September2015), on a group-wide basis and further promote our corporate values.
In addition, we will continue to implement measures to further improve the value of our brand throughmeans such as positive communication with various stakeholders and extending support to the Olympic andParalympic Games Tokyo 2020 (Mizuho is a Tokyo 2020 Gold Banking Partner).
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.
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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 addition to strengthening ourefforts related to NISA, a tax exemption program for small investments, and iDeCo, an individual-type defined
contribution pension plan, we will strengthen financial education through seminars.
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: 465; Mizuho Trust & Banking: 60; Mizuho Securities: 275; each as ofMarch 31, 2018) and our ATM network (approximately 7,200 locations as of March 31, 2018, including ATMs
shared with AEON Bank). We also have 166 of Mizuho Securities “Planet Booths,” which are located in the
branches and offices of Mizuho Bank, and 23 of Mizuho Trust & Banking “Trust Lounges,” which are located in
the branches and offices of Mizuho Bank, as of March 31, 2018.
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 actively offer 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.”28

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.
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 syndicated 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 serves non-Japanese companies and Japanese companies operating outside
Japan.
For our Japanese corporate customers, we provide integrated 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 Asia, we support Japanese corporate customers developing newmarkets by offering advisory and other services.
We are also expanding business with non-Japanese corporate customers. We use our global network to
support U.S. and European global companies developing business in Asia as well as Asian multinational
enterprises expanding within Asia. For our non-Japanese corporate customers, we are pursuing the Global 300
29Strategy, which involves focusing on a group of approximately 300 blue-chip companies around the world.
Taking the characteristics of each industry sector into consideration, we take a focused approach based on our
know-how and insight on the business and financial aspects. Through a close relationship with top management,
we aim to develop long-term relationships with our customers. Our market presence within the United States
continues to grow, including in the area of investment-grade corporate debt underwriting, based on the enhanced
sophistication in the collaboration between our banking and securities functions.
Meanwhile, we are enhancing our support to clients by expanding our global office network andstrengthening the framework to support our customers’ business outside Japan. We have recently opened theMizuho Bank Phnom Penh Branch (under the Bangkok Branch), Washington, D.C. Representative Office, andDallas Representative Office (under the New York Branch) as well as the Mizuho Bank Mexico, S.A., Leon
Office, the Mizuho Securities Asia Limited, Seoul Branch and the Mizuho International plc, Dubai Branch.
We are forming business alliances with government-affiliated institutions and financial institutions toprovide up-to-date local information to our customers. We are also enhancing our service framework to address
the diverse business needs of customers, including 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
The Global Markets Company operates sales and trading business to meet the risk hedging and investment
needs of a wide range of customers, from individuals to institutional investors, by offering a comprehensive
range of market-related products. We also operate asset liability management and investment business withrespect to bonds and equities.
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.
With respect to our asset liability management, we contribute to the stabilization of foreign currency
liquidity management. Also, as for the investment business, we earn stable revenue by constructing welldiversified portfolio and changing allocation appropriately with using our early warning control to reflect thechanges of market environment flexibly.
In addition, we are also actively working on the advancement of our market business through the use ofadvanced technology such as AI.
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 to meet the needs of a wide range of customers, from individuals to institutional investors, byproviding products and services while fulfilling its fiduciary duties.
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For individual customers, we offer investment products that contribute to their medium- to long-term asset
formation.
For institutional investors such as pension funds, we offer consulting services to meet their diversified andsophisticated asset management needs.
We offer our customers investment products that are best 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 Matthews
Asia, an independent, privately owned firm and the largest dedicated Asia investment specialist in the U.S.
In addition, in various product fields, we are focusing on developing and offering products throughcollaboration with BlackRock, Inc. and 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 in response to our customers’ needs, mainly in the areas of cross-border mergers andacquisitions, business succession and management buyouts.
In the real estate business, by taking full advantage of our extensive knowledge and skills developed throughthe collaboration of our group companies, we offer various real estate-backed financing methods and real estaterelated investment strategy support.
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 internationally, including
long-term loan facilities for large-scale mining and public infrastructure development, and domestically,
including loans for renewable energy-related projects and arrangement of PFI/PPP deals. 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 and debt 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 in the transaction business, we offer various financial services and products
such as online banking, cash management solutions, Renminbi-denominated services and trade finance on a
global basis.
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For financial institutions and institutional investors, we promote custody, global custody and yen
correspondence settlement, asset management and stock transfer agent services.
In addition, we are further expanding our range of services in collaboration with our group companies andleveraging the 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, the fifth pillar for becoming a “Financial Services Consulting Group,”
offers both in-house and customer research and consulting functions through “One Think Tank,” in collaboration
with each of the in-house companies.
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 well
as social issues within the public sector, including the environment, energy, infrastructure and health care.
With increased global economic and social uncertainties, as well as the diversification of management
issues for our customers and social challenges, our customers’ expectations of the unit’s research and consulting
functions are rising. To better meet such a business environment, we will focus on the following two areas:•

Creating new value through sharpening our expertise in the research and consulting fields andcombining it with digital technology.

•

Helping boost the Mizuho group’s underlying profitability by disseminating the Research & Consulting
Unit’s knowledge, skills and value-added to the entire group through strengthened collaboration with
the in-house companies.

Through such efforts, our “One Think Tank” teams of experts are tackling a variety of new areas and further
strengthening intra-group collaboration in order to contribute to the further development of our customers andsociety as the “source of value creation.”
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.

•

Government financial institutions: These include Japan Finance Corporation, Japan Post Bank,
Development Bank of Japan and Japan Bank for International Cooperation.
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•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 28, 2018): (i) ordinarybanks, of which there were 122, not including foreign commercial banks with banking operations in Japan; and(ii) trust banks, of which there were 15, 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 [May 8], 2018, there were
56 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.
In April 2012, Japan Bank for International Cooperation, which provides policy-based finance with a
mission to contribute to the sound development of Japan and the international economy and society, was spun off
from Japan Finance Corporation and was established as a joint stock company wholly owned by the Japanese
government.
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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. “In September 2017, the government further solddown approximately 22% of Japan Post Holdings shares.” Japan Post Holdings plans to initially dispose of its
two subsidiaries shares gradually down to approximately 50% ownership.
In recent years, as a result of technological advances in the digital field called ”FinTech,” entry fromdifferent industries into areas considered to be the inherent business of financial institutions such as settlement
services has been increasing.
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.
34

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.
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. On
December 15, 2017, the Financial Services Agency announced a plan to repeal the Financial Inspection Manual
after April 1, 2019 and establish its new supervisory approaches. In addition to individual 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 andoperational 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. Under35

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.
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 2018, 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 0.034%.
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,36

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.
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.
37

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 orcertain 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 2017, the Financial Stability Board published the latest list of G-SIBs. The list is annually
updated by the Financial Stability Board in each November, and the list as of November 2017 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 publicmoney 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 thesoundness of such financial institutions but also the extension of loans or other forms of credit to small andmedium-sized enterprises in order to 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
38exceptions for disaster-affected financial 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 suchspecial 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.
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 a delivery of explanatory documents to such customers prior to and upon the conclusion oftransactional 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.
39

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.
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) (ActNo. 132 of 1998, as amended). Financial institutions are required to analyze their assets, giving due considerationto accounting principles and other applicable rules and to classify their assets into four categories according toasset 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 accountthe likelihood 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.
40

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.
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 regulatory41

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 were increased by 20% increments per year, and became fully effective in March 2018.
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 bankholding 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 risk, market risk andoperational risk.
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.
In December 2017, the Basel Committee on Banking Supervision (“BCBS”) published the finalized BaselIII reforms endorsed by the Group of Central Bank Governors and Heads of Supervision. The finalized reforms
complement the initial phase of Basel III reforms set forth above, seek to restore credibility in the calculation ofrisk-weighted assets and improve the comparability of banks’ capital ratios. Such reforms include the following
elements:•

a revised standardized approach for credit risk, which is designed to improve the robustness and risk
sensitivity of the existing approach;•revisions to the internal ratings-based approach for credit risk, where the use of the most advanced
internally modelled approaches for low-default portfolios will be limited;42•revisions to the credit valuation adjustment (CVA) framework, including the removal of the internallymodelled approach and the introduction of a revised standardized approach;•a revised standardized approach for operational risk, which will replace the existing standardized
approaches and the advanced measurement approaches;•

revisions to the capital floor, under which banks’ risk-weighted assets generated by internal models
must be no lower than 72.5% of the total risk-weighted assets as calculated using only the standardized
approaches under the revised Basel III framework; and•requirements to disclose their risk-weighted assets based on the standardized approaches.

In addition, under the finalized Basel III reforms, G-SIBs are required to meet a leverage ratio buffer, which
will take the form of a Tier 1 capital buffer set at 50% of the applicable G-SIB’s risk-weighted capital buffer, andvarious refinements are made to the definition of the leverage ratio exposure measure based on the text of theleverage ratio framework issued by the BCBS in January 2014.
The revised framework will mainly take effect from January 1, 2022, and the revisions to the capital floor
will be phased in from January 1, 2022, with the initial capital floor of 50%, and will be fully implemented at
72.5% from January 1, 2027.
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. This
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.
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 defined as Tier 1 capital, and the minimum leverage ratio isdefined as 3%.
The leverage ratio requirements under the finalized definition of the leverage ratio exposure measure andthe leverage ratio buffer requirement for G-SIBs, will take effect from January 1, 2022.
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 such
43

guidelines. 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 90% during the period from January 1 to December 31, 2018. 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 theresolution 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, and a revised version of this document was published in April 2018. According to the
Financial Services Agency’s approach, which is subject to change based on future international discussions, thepreferred resolution strategy for G-SIBs in Japan as well as a domestic systematically important bank in Japan
which is deemed of particular need for a cross-border resolution arrangement and of particular systemic
significance to Japanese financial system if it fails (together with G-SIBs in Japan, the “Covered SIBs”) is Single
Point of Entry (“SPE”) resolution, in which resolution tools are applied to the ultimate holding company of agroup by a single national resolution authority, although the actual measures to be taken will be determined on acase-by-case basis considering the actual condition of the relevant Covered SIB in crisis. To implement this SPE
resolution strategy effectively, the Financial Services Agency plans to require the resolution entities in Japan of
the Covered SIBs, which will be typically the ultimate holding company of the group, to (i) meet the minimum
external TLAC requirements provided under the FSB’s TLAC standard, and (ii) cause their material subsidiaries
or material sub-groups that are designated as systemically important by the Financial Services Agency or that are
subject to TLAC requirements or similar requirements by the relevant foreign authority to maintain a certain
level of capital and debt recognized as having loss-absorbing and recapitalization capacity, or Internal TLAC. In
addition, under the approach, the Financial Services Agency plans to apply the TLAC requirement for Japanese
G-SIBs from March 31, 2019, and 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.
44

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.
In February 2018, the Financial Services Agency issued “Guidelines for Anti-Money Laundering andCombating the Financing of Terrorism” to clarify the basic stance on risk management practices against money
laundering and terrorists financing in order to encourage financial institutions to improve their regimes toeffectively prevent money laundering and terrorists financing.
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.
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, Dallas, San Francisco andWashington, D.C. representative offices. We also own one bank in the United States, Mizuho Bank (USA),
which is engaged primarily in the banking services, trust services and custody business, and Mizuho Securities
USA LLC, a U.S. broker dealer engaged in the securities business.
The Bank Secrecy Act, as amended by 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. The Bank Secrecy Act, as amended, imposes anti-money laundering complianceobligations on U.S. financial institutions, including the U.S. offices of foreign banks. In recent years, federal andstate regulatory and law enforcement authorities have closely scrutinized the compliance by financial institutions
with the Bank Secrecy Act and anti-money laundering rules.
45

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. As a matter of law, these three companies are
required to act as a source of financial strength to Mizuho Bank (USA). The BHCA generally prohibits us fromacquiring, directly or indirectly, the ownership or control 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 orincidental 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 ourmerchant banking authority. In addition, U.S. regulatory approval is generally required for us to acquire morethan 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. As FHCs, we, Mizuho Bank, and Mizuho
Americas and the companies under their control are permitted to engage in a broader range of activities in the
U.S. and abroad than permitted for bank holding companies and their subsidiaries. For example, FHC statusunder the BHCA permits banking groups in the United States to engage in comprehensive investment banking
businesses, such as the underwriting of and dealing in corporate bonds, equities and other types of securities, andtherefore enables our group to promote our investment banking business on a broader basis in the United States.
As an FHC, we are also subject to additional regulatory requirements. For example, we and each of our U.S.
insured depository institution subsidiaries with operations in the United States must be “well capitalized,”meaning maintenance of a Tier 1 risk-based capital ratio of at least 6%, a total risk-based capital ratio of at least
10% and a leverage ratio of at least 5%. We and each of our U.S. insured depository institution subsidiaries mustalso be “well managed,” including that we and 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 an FHC during any period of noncompliance without theprior 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 failing to correct suchconditions 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 statelicensed. Under U.S. federal banking laws, state-licensed branches and agencies of foreign banks, as a generalmatter, may engage only in activities that would be permissible for their federally-licensed counterparts, unlessthe Federal Reserve Board determines that the additional activity is consistent with sound practices. U.S. federalbanking laws also subject state-licensed branches and agencies to the same single-borrower lending limits that
apply to federal branches and agencies, which are substantially similar to the lending limits applicable to nationalbanks, 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 (“NYDFS”) as well as by the Federal Reserve. Except for aprohibition on such branch accepting retail deposits, a state-licensed branch generally has the same powers as astate-chartered bank in such state. New York State has an asset pledge requirement for branches equal to thegreater 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 acap of $100 million. The NYDFS may require higher amounts for supervisory reasons. Each other U.S. branch46

and representative office of Mizuho Bank is also subject to regulation and examination by the state banking
authority of the state in which such branch or representative office is located. The deposits of Mizuho Bank’s
U.S. branches are not insured by the Federal Deposit Insurance Corporation (“FDIC”)
Mizuho Bank (USA) is a New York state-chartered bank that is a member of the Federal Reserve System
whose deposits are insured by the FDIC. As such, Mizuho Bank (USA) is subject to regulation, supervision andexamination by the Federal Reserve and the NYDFS, as well as to relevant FDIC regulation.
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 of 2010 (the “Dodd-Frank Act”), provides a broad framework forsignificant regulatory changes across most areas of U.S. financial regulation. Among other things, the DoddFrank Act addresses systemic risk oversight, minimum leverage and risk-based capital requirements for insured
depository institutions and depository institution holding companies, and the resolution of failing systemicallysignificant financial institutions.
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 banking organization is subject to comparable home country standards. In February
2014, the Federal Reserve Board finalized rules (the “FBO Rules”) under Regulation YY that impose enhanced
prudential standards on certain large foreign banking organizations having a U.S. presence, such as Mizuho
Bank. Under the FBO Rules, 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, under the FBO Rules,
foreign banking organizations with consolidated U.S. assets of $50 billion or more (excluding the assets of U.S.
branches and agencies) are, as of July 1, 2016, required to establish or designate a separately capitalized top-tier
U.S. intermediate holding company (“IHC”) that would 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 ofcertain enhanced prudential requirements under the FBO Rules, we established a new U.S. bank holding
company, Mizuho Americas, a wholly owned direct subsidiary of Mizuho Bank as of July 1, 2016. Mizuho
Americas is currently the holding company for our U.S. bank subsidiary, Mizuho Bank (USA), our U.S.
securities broker dealer, Mizuho Securities USA LLC, and certain other our U.S. subsidiaries. The establishmentof Mizuho Americas was part of a larger internal corporate reorganization, which was taken with the aim of,among other things, strengthening corporate governance practices and operations.
Under Section 619 of the Dodd-Frank Act, also known as the “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. In December 2013, U.S. financial regulators approved final rules
implementing Section 619 of the Dodd-Frank Act, and established a deadline of July 21, 2015 for banking
entities to conform their activities and investments to the requirements of the final rules. In December 2014, the47Federal Reserve Board extended the conformance period to July 21, 2017 for investments in and relationships
with certain funds that were in place prior to December 31, 2013. In addition, prior to the expiration of thegeneral conformance period, banking entities with investments in or relationships with certain “illiquid” funds”
were permitted to seek an additional one-time extension by the Federal Reserve Board of up to five years. All
investments in and relationships with funds covered by the Volcker Rule made after December 31, 2013 musthave 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. For example, on May 24, 2018, theU.S. Economic Growth, Regulatory Relief and Consumer Protection Act (the “Reform Act”) was signed intolaw. Among other regulatory changes, the Reform Act amends various sections of the Dodd-Frank Act, including
by modifying the Volcker Rule. The ultimate consequences of the Reform Act on us and our U.S. operations
remain uncertain. The scope any additional future legislation is not possible to determine at this time, and wecannot predict what impact, if any, such future legislative developments will have on us if and when such
legislation is enacted.
Cybersecurity and privacy developments in Europe and the U.S.
The European Union General Data Protection Regulation (“GDPR”) will replace the existing E.U. Data
Protection Directive and, as a regulation, will have direct effect in all EU member states from May 25, 2018.
Although a number of the existing principles for the protection of personal data will remain, the GDPR is
designed to harmonize data privacy laws across Europe and reshape the way organizations approach data
privacy. The GDPR introduces new obligations and expands its territorial reach. It will apply to all organizations
processing or holding personal data of EU ‘data subjects’ (regardless of the organization’s location) as well as toorganizations outside the EU that offer goods or services in the EU, or that monitor the behavior of EU data
subjects. Personal data is information that can be used to identify a natural person, including a name, a photo, anemail address, or a computer IP address. Compliance with the GDPR will require companies to analyze andevaluate how they handle data in the ordinary course of their business, from processes to technology. It imposes aprescriptive approach to compliance requiring organizations to demonstrate and record compliance and toprovide much more detailed information to data subjects regarding processing. EU data subjects will need to begiven full disclosure about how their personal data will be used and stored. In that connection, consent must be
explicit and companies must be in a position to delete information from their global systems permanently if
consent were withdrawn. Financial regulators and data protection authorities throughout the EU will havesignificantly increased audit and investigatory powers under GDPR to probe how personal data is being used andprocessed. Penalties for non-compliance are material. Serious breaches of GDPR include antitrust-like fines oncompanies of up to the greater of €20 million or 4% of global group turnover in the preceding year, regulatory
action and reputational risk.
In the United States, federal and state regulators, including the Financial Industry Regulatory Authority(“FINRA”) and the NYDFS, have increasingly focused on cybersecurity risks and responses for regulated
entities. For example, on March 1, 2017, the revised NYDFS cybersecurity regulation became effective. The
regulation applies to any person licensed or chartered by the NYDFS, including New York state-chartered banks
and NYDFS-licensed branches of non-U.S. banks such as Mizuho Bank (USA) and the New York branch ofMizuho Bank, and requires each company to assess its specific risk profile periodically and design a program that
addresses its risks “in a robust fashion”, including addressing risks posed by third-party service providers,training and retention of specialized staff to address cybersecurity risks, maintaining systems designed toreconstruct material financial transactions and complying with security requirements for non-public information.
Each covered entity must monitor its systems and networks and notify the superintendent of the NYDFS within
72 hours after it is determined that a material cybersecurity event has occurred. Senior management of thecovered entity is required to file an annual certification confirming compliance with the NYDFS regulations
beginning February 15, 2018. Similarly, FINRA has identified cybersecurity as a significant risk and will assess
firms’ programs to mitigate those risks.
48

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 was a party to a legacy counter guarantee thatwas opened in connection with activity of its customer for the benefit of an Iranian bank. When the guarantee
was entered into, the bank in question, which is related to the Government of Iran, had not been designated under
U.S. Executive Orders (“E.O.”) 13224 or 13382, although it was subsequently so designated. Mizuho Bank
maintained this guarantee post-designation only after confirming that such a transaction did not involve
prohibited or sanctionable activity under U.S. or other economic sanctions. As contractual obligations, thisguarantee cannot be exited by Mizuho Bank unilaterally. In the fiscal year ended March 31, 2018, Mizuho Bank
received fees of less than ¥1 million attributable to this guarantee and earned 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, 2018, Mizuho Bank conducted a limited number of fund transfers throughaccounts it maintains for or at a limited number of Iranian banks related to the Government of Iran and a bankdesignated under E.O. 13224, or through other correspondent banking accounts on behalf of such Iranian banks. Thesetransfers were mainly associated with requests by our customers after the relaxation of applicable sanctions pursuant to
the Joint Comprehensive Plan of Action. Mizuho Bank has policies and procedures to process transfers through theseaccounts only after confirming that such transactions do not involve prohibited or sanctionable activity under U.S. orother economic sanctions and obtaining licenses issued by Japan’s Ministry of Finance where necessary. Estimatedgross revenue to Mizuho Bank in the fiscal year ended March 31, 2018 attributable to fees for these activities was lessthan ¥50 million, with a net profit of less than that amount. Mizuho Bank intends to continue engaging in these
activities but will process transfers through these accounts only under the limited circumstances where Mizuho Bank
believes the transfer would conform to its compliance policies 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.

49

4.C. Organizational Structure
The following diagram shows our basic corporate structure as of March 31, 2018:
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

The following table sets forth information with respect to our principal consolidated subsidiaries as ofMarch 31, 2018:
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%

Mizuho-DL Financial Technology Co.,
Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Japan

60.0%

60.0%

UC Card Co., Ltd. . . . . . . . . . . . . . . . . . . .
J.Score CO., LTD . . . . . . . . . . . . . . . . . . . .

Japan
Japan

Application andSophistication of
Financial Technology
Credit cardLending

51.0%
50.0%

51.0%
50.0%

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 . . . . . . . . . . . . . .
Mizuho Realty One Co., Ltd. . . . . . . . . . . .
Defined Contribution Plan Services Co.,
Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

50

Name

Country oforganization

Mizuho Trust Systems Company,
Limited . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Japan

Main businessSubcontracted
calculation services,
softwaredevelopment
Venture capital

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
Mizuho Securities USA LLC . . . . . . . . . . .
U.S.A.
Securities
Mizuho Bank Europe N.V. . . . . . . . . . . . . . Netherlands Banking and securities
Banco Mizuho do Brasil S.A. . . . . . . . . . .
BrazilBankingMizuho Trust & Banking (Luxembourg)
S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Luxembourg Trust and banking
Mizuho Bank (USA) . . . . . . . . . . . . . . . . .
U.S.A.
Banking and trust
Mizuho Bank (Switzerland) Ltd . . . . . . . . . Switzerland Banking and trust
Mizuho Capital Markets LLC . . . . . . . . . .
U.S.A.
Derivatives
PT. Bank Mizuho Indonesia . . . . . . . . . . . . Indonesia Banking

Proportion of Proportion ofownershipvotinginterest
interest
(%)
(%)

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%
99.0%

100.0%
100.0%
100.0%
100.0%
99.0%

4.D. Property, Plant and Equipment
The following table shows the breakdown of our premises and equipment at cost as of March 31, 2017 and 2018:
As of March 31,
2017
2018
(in millions of yen)

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 575,054 ¥ 566,040
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
807,312
811,911Equipment and furniture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
485,407484,102
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
93,967
97,066
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23,09325,849Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,308,292
1,463,786
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Accumulated depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . .

3,293,125
1,251,852

3,448,754
1,332,570

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

¥2,041,273¥2,116,184

Our head office is located at 1-5-5 Otemachi, Chiyoda-ku, Tokyo, Japan. The headquarter building is leased
from a third party.
The total area of land related to our material office and other properties at March 31, 2018 wasapproximately 661,000 square meters for owned land and approximately 13,000 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.
51

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52
59
63
73
77
80
91
92
97
98
98
99

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, small and medium-sized enterprises (“SME”s), large
corporations, financial institutions, public sector entities and foreign corporations, including foreignsubsidiaries 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.
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;52•

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;•fee and commission from asset management business, including investment trust management fees andinvestment advisory fees;•

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.
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 currency53

denominated 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 backed
by such factors as the pickup in the Chinese economy, the improvement related to the IT cycle and improvements
in business confidence particularly in major industrialized countries.
In the United States, the economy continued to recover due to such factors as strong consumer spending
resulting from improvements in employment and income conditions and the wealth effect due to increases instock prices and capital investment resulting from expectation regarding the tax reduction measures by theUnited States administration. Under such circumstances, the Federal Reserve Board (“FRB”) pursued an exit
strategy from monetary easing whereby, among other measures, the FRB raised interest rates in June 2017,
September 2017, March 2018 and June 2018 and began implementing a policy of shrinking its balance sheet in
October 2017.
In Europe, despite the downward pressure from the further appreciation of the euro, the economy continued
to recover, backed by the continued expansion of consumer spending due to an increase in employment, in
addition to the actualization of demand for capital investment that had been put off due to political uncertainty
surrounding the presidential election in France. Given these conditions, the European Central Bank (“ECB”)
determined to decrease monthly asset purchases by half and steered itself in the direction of pursuing an exit
strategy from monetary easing, while leaving key interest rates unchanged.
In Asia, the Chinese economy remained strong, despite continued sluggishness in capital investment due totighter financial regulations and policies to control real estate speculation, supported by such factors as strong54

consumer spending and expansion of exports, which were backed by income growth and governmental policies
to support the economy adopted in preparation for the National Congress of the Communist Party of China in
Fall 2017. The economies in emerging countries continued to recover due to such factors as China’s enduring
economy and expansion of exports.
In Japan, the economy continued to recover due to such factors as overseas economic expansion and strong
domestic demand. Regarding domestic demand, the improvement of the inventory cycle, the rise of capital
investment related to the 2020 Tokyo Olympic Games and productivity improvements, as well as theimplementation of public investment in connection with Japan’s economic stimulus measures, served to bolster
growth. Consumer spending continued to pick up due to the replacement of durable goods and the effect of wage
increases especially in SMEs. Under such circumstances, stock prices trended upward and the exchange ratecontinued to trend sideways; however, since February 2018, stock prices have entered a correction phase with astronger yen due to the rise in long-term interest rates in the United States and concerns regarding theprotectionist policies of the United States administration. On the other hand, long-term interest rates in Japan
continued to remain low at around zero percent under the Bank of Japan’s “quantitative and qualitative monetaryeasing with yield curve control.”As for the future outlook of the global economy, the recovery is expected to continue particularly in the
United States, but it remains necessary to further monitor downturn risks such as the United States’ policy
direction under its presidency, the political concerns in Europe, the economic outlook for China and heightening
geopolitical risks. As for the future outlook of the Japanese economy, it is expected to continue on its gradual
recovery path, supported by the effects of government economic measures and growth in consumer spending andcapital investment. However, the potential impact of increasing uncertainty in overseas economies on Japanrequires 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 2015 through the firstquarter of 2018:55

Japan’s real gross domestic product on a year-on-year basis increased by 1.4%, 1.2% and 1.6% in thefiscal years ended March 31, 2016, 2017 and 2018, respectively. Japan’s real gross domestic product ona quarterly basis, compared to the corresponding period of the previous year, increased consecutively
from the first quarter of calendar year 2015 through the first quarter of calendar year 2018. Japan’s core
nationwide consumer price index was unchanged in the fiscal year ended March 31, 2016, decreased by
0.2% in the fiscal year ended March 31, 2017 and increased by 0.7% in the fiscal year ended March 31,
2018.
•

In September 2016, the Bank of Japan decided to introduce “quantitative and qualitative monetaryeasing with yield curve control” by strengthening its two previous policy frameworks, namely“quantitative and qualitative 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 Bankof Japan will control short-term and long-term interest rates; and (2) an “inflation-overshooting
commitment” in which the Bank of Japan commits itself to expand the monetary base until the
year-on-year rate of increase in the observed consumer price index exceeds the price stability target of
2% and stays above the target in a stable manner. Under the new policy framework, the Bank of Japandecided to set the guideline for market operations under which, regarding short-term interest rates, theBank of Japan will apply a negative interest rate of minus 0.1% to certain excess balances in current
accounts held by financial institutions at the Bank of Japan, while for long-term interest rates, it wouldpurchase Japanese government bonds to control long-term interest rates so that the yield of 10-year
Japanese government bonds will remain at around 0%. 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 (thereby extending the longest
maturity of the operation of one year).
The following chart shows movements in long-term interest rates from January 2015 to May 2018,
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 8,408 corporatebankruptcies in the fiscal year ended March 31, 2016, involving approximately ¥1.9 trillion in total
liabilities, 8,153 corporate bankruptcies in the fiscal year ended March 31, 2017, involving
approximately ¥1.9 trillion in total liabilities, and 8,285 corporate bankruptcies in the fiscal year ended56

March 31, 2018, involving approximately ¥1.7 trillion in total liabilities. The number of corporatebankruptcies showed annual decreases for eight consecutive years until the most recent fiscal year
which showed an increase from the previous year, while the amount of total liabilities decreased byapproximately ¥0.3 trillion from the previous fiscal year.
•

The following chart shows the daily closing price of the Nikkei Stock Average from January 2015 to
May 2018:

The Nikkei Stock Average, which is an average of the price of 225 stocks listed on the Tokyo Stock
Exchange, decreased by 12.7% to ¥16,758.67 during the fiscal year ended March 31, 2016, followed by
a 12.8% increase to ¥18,909.26 during the fiscal year ended March 31, 2017 and a 13.5% increase to¥21,454.30 during the fiscal year ended March 31, 2018. Thereafter, the Nikkei Stock Averageincreased to ¥22,201.82 as of May 31, 2018.
•

The following chart shows the yen/dollar spot rate of 5 p.m. Tokyo time published by the Bank of Japan
from January 2015 to May 2018:

The yen to U.S. dollar spot exchange rate, according to the Bank of Japan, was ¥112.43 to $1.00 as ofMarch 31, 2016, ¥111.80 to $1.00 as of March 31, 2017, and ¥106.19 to $1.00 as of March 30, 2018.
Thereafter, the yen weakened to ¥108.77 to $1.00 as of May 31, 2018.
•

According to the Ministry of Land, Infrastructure, Transport and Tourism of Japan, housing starts inJapan increased by 4.6% and 5.8% in the fiscal years ended March 31, 2016 and 2017, respectively anddecreased by 2.8% in the fiscal year ended March 31, 2018.
57•

According to the Ministry of Land, Infrastructure, Transport and Tourism of Japan, the average
published housing land prices in Japan decreased by 0.2% in calendar year 2015, was unchanged incalendar year 2016 and increased by 0.3% in calendar year 2017.

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, 2018, we strengthened our capital base mainly as a result of earning¥576.5 billion of profit attributable to owners of parent (under Japanese GAAP).
With respect to redemptions of previously issued securities, since April 2017, we have redeemed various
securities that are eligible regulatory 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 2018, we redeemed ¥274.5 billion of non-dilutive Tier 1 preferred securities issued by our overseas
special purpose company in January 2008. With respect to Tier 2 capital, in April 2017, January 2018 and March
2018, we redeemed ¥50.0 billion, ¥70.0 billion and ¥50.0 billion of dated subordinated bonds issued by our
subsidiary bank in April 2007, January 2008 and March 2008, respectively.
With respect to Additional Tier 1 capital new issuances, in July 2017, we issued ¥460.0 billion of perpetual
subordinated bonds with optional-redemption clause and write-down clause that are Basel III-eligible Additional
Tier 1 capital instruments through public offerings to wholesale investors in Japan. With respect to Tier 2 capital
new issuances, in June 2017, we issued ¥114.0 billion of dated subordinated bonds with a write-down feature thatare Basel III-eligible Tier 2 capital instruments through public offerings to retail investors in Japan. In June 2018,
we issued ¥40.0 billion and ¥70.0 billion of dated subordinated bonds with a write-down feature that are Basel
III-eligible Tier 2 capital instruments through public offerings to wholesale and retail investors, respectively, inJapan.
Our Common Equity Tier 1 capital ratio under Basel III was 11.34% and 12.49% as of March 31, 2017 and2018, respectively.
Steady Returns to Shareholders
Annual cash dividends for the fiscal year ended March 31, 2018 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 for 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.
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.”58

Others
Creation of New Business based on Digital Innovation
In July 2017, Mizuho Bank and WiL, LLC established a joint venture named Blue Lab, Co., Ltd. to drive
business generation through innovative technological advances. Blue Lab is focused on the creation andcommercialization of next-generation business models through open innovation. In September 2017, J. Score
CO., Ltd, which was established as a 50/50 joint company of Mizuho Bank and Softbank Corp. and is a
subsidiary of Mizuho Bank, began operations as Japan’s first score-based lending business based on big data andartificial intelligence technologies.
Merger of Mizuho Bank (USA) and Mizuho Trust & Banking Co. (USA)In December 2017, two subsidiaries of Mizuho Americas LLC, namely the former Mizuho Bank (USA) andthe Mizuho Trust & Banking Co. (USA), merged. The merged entity, Mizuho Bank (USA), provides bothbanking services and trust services. This merger streamlines Mizuho’s corporate operations in the United States,
reinforcing its governance structure, while providing enhanced support to clients investing and expanding
businesses in the United States.
Execution of Agreement Concerning the Integration of Trust Banks Specializing in Asset Administration Services(Joint Share Transfer)
In March 2018, Trust & Custody Services Bank, Ltd., a subsidiary of ours, executed a management
integration agreement with Japan Trustee Services Bank, Ltd. to carry out the management integration throughincorporation of a holding company by joint share transfer. The purpose of the integration is to contribute tofurther growth in the domestic securities settlement market and domestic investment chain by realizing morestable and higher quality operations and strengthening its system development capabilities by seeking thebenefits of scale.
Fundamental Structural Reforms
The business environment surrounding financial institutions continues to be difficult, and we anticipate it
will undergo major structural changes over time. Under these circumstances, we will undertake fundamental
structural reforms in our business structure, and, based on a ten-year time horizon, we will strive to secure oursustainable growth and continued competitive advantage. We will utilize advanced technologies in accordancewith our concept of open innovation to further develop our “One MIZUHO strategy” by, for example,(i) endeavoring to increase profit through actively pursuing collaborative engagement with other companies, notlimited to financial activities, in order to create new business opportunities and (ii) endeavoring to strengthen
cost competitiveness and enhance productivity while striving to optimize organization and staffing, restructure
branch strategies and accomplish other related tasks.
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. Under Japanese GAAP
on an acquisition cost basis, our total Japanese stock portfolio (included within other securities which havereadily determinable fair value) as of March 31, 2015 was ¥1,962.9 billion, and we have reduced such amount by¥398.0 billion as of March 31, 2018.
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
59

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 observable
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. In obtaining the collateral, 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, in the case ofreal estate, valuation is generally performed by an appraising subsidiary that is independent from ourloan 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 oflarge real estate collateral, we generally engage third-party appraisers to perform the valuation.
Management identifies impaired loans through the credit quality review process, in which the ability ofborrowers to service their debt is assessed. The difference between our evaluation of the value of theimpaired loan and its principal amount is the amount of the impairment which is recorded in theallowance for loan losses. Estimation of future cash flows is based on a comprehensive analysis of theborrower’s ability to service the debt, any progress made on the borrower’s rehabilitation program andthe 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 groups of loans that are collectively
evaluated for impairment. The determination of expected losses is based on a statistical analysis of ourhistorical default and loan loss data, as well as data from third-party sources. The estimation of theformula allowance is back-tested on a periodic basis by comparing 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.
60

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.
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, including the impact of a valuation allowance, are calculated separately foreach member of our consolidated group.
61

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 decrease in net unrealized
gains on available-for-sale securities that are available to be utilized in the future. If we are not able to realize allor part of our net deferred tax assets in the future, an adjustment to our valuation allowance would be charged toincome tax expense in the period when such determination is made, and this could materially and adversely
affect our financial condition and results of operations.
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.

62

Operating Results
The following table shows certain information as to our income, expenses and net income for the fiscal
years ended March 31, 2016, 2017 and 2018:
Fiscal years ended March 31,
2016
2017
2018
(in billions of yen)Interest and dividend income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,500 ¥1,509 ¥1,762
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
495
602
890
Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision (credit) for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,005
35

907
38

872
(126)

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

970
1,884
1,657

869
1,368
1,757

998
1,605
1,764

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

1,197
347

480
91

839
237

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

850
—

389
27

602
24

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

¥ 850

¥ 362

¥ 578

63

The following is a discussion of major components of our net income attributable to MHFG shareholders forthe fiscal years ended March 31, 2016, 2017 and 2018.
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,
2016, 2017 and 2018:
Fiscal years ended March 31,
2016
2017
2018
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 . . . . . . . . . . . . . . . . . . . . . . . . ¥ 29,485 ¥ 30
Call loans and funds sold, andreceivables under resale agreements
and securities borrowing
transactions . . . . . . . . . . . . . . . . . . .
4,309
10
Trading account assets . . . . . . . . . . . . .
5,262
16
Investments . . . . . . . . . . . . . . . . . . . . .
25,62588
Loans . . . . . . . . . . . . . . . . . . . . . . . . . .
52,866565

0.10% ¥ 37,389 ¥27

0.07% ¥ 39,812 ¥

27

0.07%

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

5,283
4,654
21,26758,049

23
50
97
511

0.43
1.07
0.46
0.88

Total interest-earning assets . . . . . .

117,547709

0.60

121,163660

0.54

129,065708

0.55

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

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

90,07813,6781,454
13,032

60
43
27
197

0.07
0.31
1.87
1.51

Total interest-bearing liabilities . . . .

112,557271

0.24

113,690270

0.24

118,242327

0.28

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

4,990

438

0.36

7,473

390

0.30

10,823381

0.27

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

6,639

38

0.57

7,671

48

0.63

8,363

94

1.13

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

9,251
10,821
3,544
24,822

132
152
77
599

1.43
1.41
2.18
2.41

Total interest-earning assets . . . . . .

56,043791

1.41

56,546849

1.50

56,801

1,054

1.86

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

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

24,567
16,385
1,235
732

323
222
14
4

1.32
1.35
1.16
0.49

Total interest-bearing liabilities . . . .

42,576224

0.53

41,989332

0.79

42,919563

1.31

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

13,467567

0.88

14,557517

0.71

13,882491

0.55

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

173,590
155,133

1,500
495

0.86
0.32

177,709
155,679

1,509
602

0.85
0.39

185,866
161,161

1,762
890

0.95
0.55

Net . . . . . . . . . . . . . . . . . . . . . . ¥ 18,457 ¥1,005

0.54¥ 22,030 ¥ 907

0.46¥ 24,705 ¥ 872

0.40

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.

64

Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017
Interest and dividend income increased by ¥253 billion, or 16.8%, from the previous fiscal year to¥1,762 billion in the fiscal year ended March 31, 2018. Domestic interest and dividend income accounted for¥708 billion of the total amount, an increase of ¥48 billion from the previous fiscal year, and foreign interest anddividend income accounted for ¥1,054 billion, an increase of ¥205 billion from the previous fiscal year.
Long-term interest rates continued to be in the vicinity of 0% under the Bank of Japan’s “Quantitative andQualitative Monetary Easing with Yield Curve Control.” Short-term interest rates also continued to be in thevicinity of 0%. Under such circumstances, the average yield on domestic loans decreased by 0.07 percentage
points from the previous fiscal year to 0.88% in the fiscal year ended March 31, 2018, and the average rate on
domestic deposits remained at a low level and slightly increased by 0.01 percentage points from the previous
fiscal year to 0.07% in the fiscal year ended March 31, 2018. The average yield on foreign loans increased by
0.45 percentage points from the previous fiscal year to 2.41% in the fiscal year ended March 31, 2018, and theaverage rate on foreign deposits increased by 0.40 percentage points from the previous fiscal year to 1.32% in thefiscal year ended March 31, 2018.
The increase in domestic interest and dividend income was due mainly to an increase in the average balance.
Changes in the average yields on domestic interest-earning assets contributed to an overall increase in interestand dividend income of ¥4 billion, and changes in the average balances of domestic interest-earning assets
contributed to an overall increase in interest and dividend income of ¥44 billion, resulting in the ¥48 billion
increase 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 and theincrease in interest income from foreign call loans and funds sold, and receivable under resale agreements andsecurities borrowing transactions were due mainly to an increase in the average yield. Changes in the average
yield on foreign interest-earning assets contributed to an increase in interest and dividend income of ¥213 billion,
and changes in the average balance of foreign interest-earning assets contributed to a decrease of ¥8 billion,
resulting in the ¥205 overall billion increase in foreign interest and dividend income.
Interest expense increased by ¥288 billion, or 47.8%, from the previous fiscal year to ¥890 billion in thefiscal year ended March 31, 2018. Domestic interest expense accounted for ¥327 billion of the total amount, an
increase of ¥57 billion from the previous fiscal year, and foreign interest expense accounted for ¥563 billion of
the total amount, an increase of ¥231 billion from the previous fiscal year.
The changes in the average interest rates on domestic interest-bearing liabilities contributed to an increase ininterest expense of ¥74 billion, and the changes in the average balance of domestic interest-bearing liabilities
contributed to a decrease in interest expense of ¥17 billion, resulting in the ¥57 billion overall increase indomestic interest expense.
The increase in foreign interest expense was due mainly to an increases in the average rates on foreigndeposits and short-term borrowings. The changes in the average interest rates on foreign interest-bearing
liabilities contributed to an increase in interest expense of ¥221 billion, and the changes in the average balance of
foreign interest-bearing liabilities contributed to an increase in interest expense of ¥10 billion, resulting in the¥231 billion overall increase in foreign interest expense.
As a result of the foregoing, net interest income decreased by ¥35 billion, or 3.9%, from the previous fiscal
year to ¥872 billion. The average interest rate spread declined by 0.06 percentage points from the previous fiscal
year to 0.40% in the fiscal year ended March 31, 2018. 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.
65

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
66

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.
Provision (Credit) for Loan Losses
Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017
We recorded a credit for loan losses of ¥126 billion in the fiscal year ended March 31, 2018 compared to a
provision for loan losses of ¥38 billion in the fiscal year ended March 31, 2017. The change was due mainly to
improvements in the credit condition of some borrowers in the domestic manufacturing industry as well as thegradual recovery in the economic environment.
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.
Noninterest Income
The following table shows a breakdown of noninterest income for the fiscal years ended March 31, 2016,2017 and 2018:
Fiscal years ended March 31,
2016
2017
2018
(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 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fee and commission from asset management 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 805
176
144
110
62
50
263
114
559
264
66
192
6
29
10
103
¥1,884¥ 826 ¥ 866
166
180
165
156
108
110
79
101
47
52
261
267
69
92
(42)
237
333
297
61
7
272
283
—
7
27
24
6
8
149
81
¥1,368 ¥1,605

Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017
Noninterest income increased by ¥237 billion, or 17.3%, from the previous fiscal year to ¥1,605 billion in
the fiscal year ended March 31, 2018. The increase was due mainly to trading account gains—net of ¥237 billion
67compared to trading account losses—net of ¥42 billion in the previous fiscal year, offset in part by a decrease inother noninterest income of ¥68 billion and a decrease in investment gains—net of ¥36 billion.
Fee and commission
Fee and commission increased by ¥40 billion, or 4.8%, from the previous fiscal year to ¥866 billion in thefiscal year ended March 31, 2018. The increase was due mainly to an increase in fee and commission from asset
management business of ¥22 billion, or 27.8%, and fee and commission from securities-related business of¥14 billion, or 8.4%. The increase in fee and commission from asset management business was due mainly to anincrease in fees related to investment trust management and investment advisory management businesses. The
increase in fee and commission from securities-related business was due mainly to the relative strength in market
conditions in the fiscal year ended March 31, 2018 compared to the previous fiscal year.
Foreign exchange gains (losses)—net
Foreign exchange gains—net increased by ¥23 billion, or 33.3%, from the previous fiscal year to ¥92 billion
in the fiscal year ended March 31, 2018. The change was due mainly to fluctuations in foreign exchange rates in
the fiscal year ended March 31, 2018.
Trading account gains (losses)—net
Trading account gains (losses)—net was a gain of ¥237 billion in the fiscal year ended March 31, 2018
compared to a loss of ¥42 billion in the previous fiscal year. The increase in trading account gains (losses)—net
was due mainly to an increase in gains related to changes in the fair value of foreign currency-denominatedsecurities for which the fair value option was elected. Long-term interest rates rose and unrealized losses of fairvalue increased during the previous fiscal year. The fluctuation range of long-term interest rates narrowed,
unrealized losses decreased, and unrealized profit increased.
For further information on the fair value option, see note 28 to our consolidated financial statements
included elsewhere in this annual report.
Investment gains (losses)—net
Investment gains—net decreased by ¥36 billion, or 10.8 %, from the previous fiscal year to ¥297 billion in
the fiscal year ended March 31, 2018. The decrease was due mainly to a decrease in investment gains related tobonds of ¥54 billion, or 88.5%, from the fiscal year to ¥7 billion in the fiscal year ended March 31, 2018. The
decrease in investment gains related to bonds was due mainly to a decrease in gains on sales of investment
account bonds and an increase in losses on sales of investment account bonds in the fiscal year ended March 31,
2018.
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 ¥21 billion, or 2.6%, from the previous fiscal year to ¥826 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.
68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.
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.
Noninterest Expenses
The following table shows a breakdown of noninterest expenses for the fiscal years ended March 31, 2016,2017 and 2018:
Fiscal years ended March 31,
2016
2017
2018
(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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 634 ¥
548
6
196
164
(16)
125
¥1,657

663
571
—
195
177
19
132

¥ 688
586
—
192
189
(30)
139

¥1,757¥1,764

Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017
Noninterest expenses increased by ¥7 billion, or 0.4%, from the previous fiscal year to ¥1,764 billion in thefiscal year ended March 31, 2018. The increase was due mainly to an increase in salaries and employee benefitsof ¥25 billion, or 3.8%, and general and administrative expenses of ¥15 billion, or 2.6%, offset in part by credit
for losses on off-balance-sheet instruments of ¥30 billion compared to provision for losses on off-balance-sheet
instruments of ¥19 billion in the previous fiscal year.
69

We will continue to aim to achieve sustainable growth of the group looking ahead ten years and to secure
future competitive superiority. These efforts include organization and personnel optimization, system structuralreform, channel reconstruction and strengthening of earnings.

Salaries and employee benefits
Salaries and employee benefits increased by ¥25 billion, or 3.8%, from the previous fiscal year to¥688 billion in the fiscal year ended March 31, 2018 due mainly to an increase in personnel expenses reflecting
an increase in domestic personnel and an increase in bonuses at overseas branches. Additional information
regarding pension and other employee benefit plans is included in note 21 to our consolidated financial
statements included elsewhere in this annual report.

Provision (credit) for losses on off-balance-sheet instruments
Provision (credit) for losses on off-balance-sheet instruments was a credit of ¥30 billion in the fiscal year
ended March 31, 2018 compared to a provision of ¥19 billion in the previous fiscal year. The change was due
mainly to an increase in reversal of allowance for losses on guarantees.

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.

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.
70

Income Tax Expense
The following table shows the components of income tax expense (benefit) for the fiscal years ended
March 31, 2016, 2017 and 2018:
Fiscal years ended March 31,
2016
2017
2018
(in billions of yen)

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

¥163
61

¥ 130
68

¥130
47

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

224

198

177

127
(4)

(100)
(7)

58
2

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

123

(107)

60

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

¥347

¥ 91

¥237

Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017
Income tax expense increased by ¥146 billion, or 160.4%, from the previous fiscal year to ¥237 billion in
the fiscal year ended March 31, 2018 due to a decrease in current tax expense of ¥21 billion and an increase indeferred tax expense of ¥167 billion related to a deferred tax expense of ¥60 billion in the current fiscal year ascompared to a deferred tax benefit of ¥107 billion in the previous fiscal year. The decrease in current tax expense
was due mainly to a decrease in the taxable income of principal banking subsidiaries. The change in deferred tax
expense (benefit) was due mainly to decreases in deferred tax assets in 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
unchanged at approximately one-third of overall deferred tax assets during the fiscal year ended March 31, 2018.

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.
71

The following table shows components of deferred tax assets (liabilities) as of March 31, 2016, 2017 and2018:
As of March 31,
2016
2017
2018
(in billions of yen)

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

¥ 522
179
—
—
—
342
170

¥ 498
184
14
4
31
452
190

¥ 454
127
53
5
2
178
204

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

1,213

1,373

1,023

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

(340)

(438)

(163)

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

873

935

860

711
175
12
57
23
1
39

724
195
17
—
—
—
75

764
255
15
—
—
—
75

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

1,018

1,011

1,109

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

¥ (145) ¥ (76) ¥ (249)

Net Income (Loss) Attributable to Noncontrolling Interests
Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017
Net income (loss) attributable to noncontrolling interests decreased by ¥3 billion from the previous fiscal
year to ¥24 billion in the fiscal year ended March 31, 2018.
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.
Net Income Attributable to MHFG Shareholders
Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017
As a result of the foregoing, net income attributable to MHFG shareholders increased by ¥216 billion, or
59.7%, from the previous fiscal year to ¥578 billion in the fiscal year ended March 31, 2018.
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.
72

Business Segments Analysis
We introduced an in-house company system based on our diverse customer segments in April 2016. The
aim of this system is to leverage our strengths and competitive advantage, which is the seamless integration of
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, we changed the reportable segments 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, 2018 were ¥1,915.4 billion, a decrease of¥177.3 billion compared to the fiscal year ended March 31, 2017. Consolidated general and administrative
expenses for the fiscal year ended March 31, 2018 were ¥1,458.1 billion, an increase of ¥37.6 billion comparedto the fiscal year ended March 31, 2017. Consolidated net business profits for the fiscal year ended March 31,2018 were ¥457.8 billion, a decrease of ¥205.6 billion compared to the fiscal year ended March 31, 2017.

Fiscal year ended March 31, 2016(3):Mizuho Financial Group (Consolidated)
Retail &Business Corporate &GlobalGlobalAsset
Banking Institutional Corporate Markets Management
Company
Company
Company Company
Company
Others(2)(4)(in billions of yen)

Total

Gross profits . . . . . . . . . . . . . . . . . . . . . .
General and administrative expenses . . .
Equity in earnings (losses) of equity
method investees—net . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥754.8702.4¥425.0187.0¥400.6236.2¥577.7
170.4

¥51.0
28.1

¥ 12.520.9¥2,221.6
1,345.0

20.9
—

1.2
—

0.2
—

—
—

1.1
—

0.8
(48.0)

24.2(48.0)Net business profits (losses)(1) . . . . . . . .

¥ 73.3¥239.2¥164.6¥407.3¥24.0¥(55.6)¥ 852.8

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(2)(4)(in billions of yen)

Total

Gross profits . . . . . . . . . . . . . . . . . . . . . .
General and administrative expenses . . .
Equity in earnings (losses) of equity
method investees—net . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥717.2719.7¥434.1194.0¥358.3244.3¥539.9
193.8

¥48.9
29.3

¥ (5.7)39.4¥2,092.7
1,420.5

14.9
—

1.0
—

1.0
—

—
—

0.4
—

1.6
(27.7)

18.9(27.7)Net business profits (losses)(1) . . . . . . . .

¥ 12.4¥241.1¥115.0¥346.1¥20.0¥(71.2)¥ 663.4

73

Fiscal year ended March 31, 2018:

Mizuho Financial Group (Consolidated)
Retail &Business Corporate &GlobalGlobalAsset
Banking Institutional Corporate Markets Management
Company
Company
Company Company
Company
Others(2)(in billions of yen)

Gross profits . . . . . . . . . . . . . . . . . . . . . . .
General and administrative expenses . . . .
Equity in earnings (losses) of equity
method investees—net . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥726.2723.3¥433.0197.7¥352.6254.8¥381.7
200.9

¥50.2
27.6

12.7
—

1.0
—

2.4
—

—
—

3.1
—

Net business profits (losses)(1) . . . . . . . . . .

¥ 15.6¥236.3¥100.2¥180.8

¥25.7

Total

¥ (28.3) ¥1,915.4
53.8 1,458.1
2.3(21.0)

21.5(21.0)¥(100.8) ¥ 457.8

Notes:(1) 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 plus equity in earnings (losses) of equity method
investees—net and others. Measurement of net business profits is required for regulatory reporting to the Financial
Services Agency.
(2) “Others” includes items which should be eliminated as internal transactions between each segment on a consolidated
basis.
(3) 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.
(4) Beginning on April 1, 2017, new allocation methods for transactions between each segment and “Others” have been
applied. Figures for the fiscal years ended March 31, 2016 and 2017 have been restated for the new allocation methods
and “Equity in earnings (losses) of equity method investees—net” has been presented as a new item in connection withthe use of the new allocation methods.

Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017
Retail & Business Banking Company
Gross profits for the fiscal year ended March 31, 2018 were ¥726.2 billion, an increase of ¥9.0 billion, or
1.3%, compared to the fiscal year ended March 31, 2017. The increase was attributable mainly to an increase of
non-interest income such as solution-related revenue and asset management-related revenue which more thanoffset a decrease of interest income.
General and administrative expenses for the fiscal year ended March 31, 2018 increased by ¥3.6 billion, or
0.5%, compared to the fiscal year ended March 31, 2017 to ¥723.3 billion.
As a result, net business profits for the fiscal year ended March 31, 2018 increased by ¥3.2 billion, or
25.8%, compared to the fiscal year ended March 31, 2017 to ¥15.6 billion.
Corporate & Institutional Company
Gross profits for the fiscal year ended March 31, 2018 were ¥433.0 billion, a decrease of ¥1.1 billion, or
0.3%, compared to the fiscal year ended March 31, 2017. The decrease was attributable mainly to a decrease in
M&A and equity capital markets-related revenue.
General and administrative expenses for the fiscal year ended March 31, 2018 increased by ¥3.7 billion, or
1.9%, compared to the fiscal year ended March 31, 2017 to ¥197.7 billion.
As a result, net business profits for the fiscal year ended March 31, 2018 decreased by ¥4.8 billion, or 2.0%,
compared to the fiscal year ended March 31, 2017 to ¥236.3 billion.
74

Global Corporate Company
Gross profits for the fiscal year ended March 31, 2018 were ¥352.6 billion, a decrease of ¥5.7 billion, or
1.6%, compared to the fiscal year ended March 31, 2017. The decrease was attributable mainly to the stagnationof our solution related-business such as M&A in the Americas.
General and administrative expenses for the fiscal year ended March 31, 2018 increased by ¥10.5 billion, or4.3%, compared to the fiscal year ended March 31, 2017 to ¥254.8 billion.
As a result, net business profits for the fiscal year ended March 31, 2018 decreased by ¥14.8 billion, or
12.9%, compared to the fiscal year ended March 31, 2017 to ¥100.2 billion.
Global Markets Company
Gross profits for the fiscal year ended March 31, 2018 were ¥381.7 billion, a decrease of ¥158.2 billion, or
29.3%, compared to the fiscal year ended March 31, 2017. The decrease was attributable mainly to the decreaseof bond-related revenue under adverse market conditions.
General and administrative expenses for the fiscal year ended March 31, 2018 increased by ¥7.1 billion, or
3.7%, compared to the fiscal year ended March 31, 2017 to ¥200.9 billion.
As a result, net business profits for the fiscal year ended March 31, 2018 decreased by ¥165.3 billion, or
47.8%, compared to the fiscal year ended March 31, 2017 to ¥180.8 billion.
Asset Management Company
Gross profits for the fiscal year ended March 31, 2018 were ¥50.2 billion, an increase of ¥1.3 billion, or
2.7%, compared to the fiscal year ended March 31, 2017. The increase was attributable mainly to the increase in
the balance of asset formation products.
General and administrative expenses for the fiscal year ended March 31, 2018 decreased by ¥1.7 billion, or
5.8%, compared to the fiscal year ended March 31, 2017 to ¥27.6 billion.
As a result, net business profits for the fiscal year ended March 31, 2018 increased by ¥5.7 billion, or
28.5%, compared to the fiscal year ended March 31, 2017 to ¥25.7 billion.
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 ¥717.2 billion, a decrease of ¥37.6 billion, or
5.0%, 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 ¥17.3 billion, or
2.5%, compared to the fiscal year ended March 31, 2016 to ¥719.7 billion. The increase was attributable mainly
to an increase in personnel expenses, including employee retirement benefit expenses.
As a result, net business profits for the fiscal year ended March 31, 2017 decreased by ¥60.9 billion, or
83.1%, compared to the fiscal year ended March 31, 2016 to ¥12.4 billion.
75

Corporate & Institutional Company
Gross profits for the fiscal year ended March 31, 2017 were ¥434.1 billion, an increase of ¥9.1 billion, or
2.1%, 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 ¥7.0 billion, or
3.7%, compared to the fiscal year ended March 31, 2016 to ¥194.0 billion.
As a result, net business profits for the fiscal year ended March 31, 2017 increased by ¥1.9 billion, or 0.8%,
compared to the fiscal year ended March 31, 2016 to ¥241.1 billion.
Global Corporate Company
Gross profits for the fiscal year ended March 31, 2017 were ¥358.3 billion, a decrease of ¥42.3 billion, or
10.6%, 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 ¥8.1 billion, or
3.4%, compared to the fiscal year ended March 31, 2016 to ¥244.3 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 ¥49.6 billion, or
30.1%, compared to the fiscal year ended March 31, 2016 to ¥115.0 billion.
Global Markets Company
Gross profits for the fiscal year ended March 31, 2017 were ¥539.9 billion, a decrease of ¥37.8 billion, or
6.5%, 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 ¥23.4 billion, or
13.7%, compared to the fiscal year ended March 31, 2016 to ¥193.8 billion.
As a result, net business profits for the fiscal year ended March 31, 2017 decreased by ¥61.2 billion, or
15.0%, compared to the fiscal year ended March 31, 2016 to ¥346.1 billion.
Asset Management Company
Gross profits for the fiscal year ended March 31, 2017 were ¥48.9 billion, a decrease of ¥2.1 billion, or4.1%, 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 increased by ¥1.2 billion, or4.3%, 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 ¥4.0 billion, or
16.7%, compared to the fiscal year ended March 31, 2016 to ¥20.0 billion.

76

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, 2016:
Total revenue(1) . . . . . . . . . . . . . . ¥Total expenses(2) . . . . . . . . . . . . .

2,288
1,534

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

754

Net income . . . . . . . . . . . . . ¥465

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

434
282

6

¥

137

Total assets at end of fiscal
year . . . . . . . . . . . . . . . . . . . . . ¥142,588

46
29

¥

17
¥

15

188
126

¥

62
¥

51

428
216

Total

¥

212
¥

182

3,384
2,187
1,197

¥

850

¥28,985¥4,228¥11,617¥15,824¥193,810

¥

¥

¥

¥

¥

500
303
197

¥

168

70
29
41

¥

39

191
136
55

¥

39

368
216
152

¥

137

2,877
2,396
481

¥

389

¥30,262¥4,203¥10,629¥16,530¥200,456

¥

¥

¥

¥

¥

655
479

420
231

¥

152

36

Total assets at end of fiscal
year . . . . . . . . . . . . . . . . . . . . . ¥138,832
Fiscal year ended March 31, 2018:
Total revenue(1) . . . . . . . . . . . . . . ¥ 2,003
Total expenses(2) . . . . . . . . . . . . .
1,583
Income before income tax
expense . . . . . . . . . . . . . . . . . .

¥OthersEurope(in billions of yen)

Asia/Oceania
excludingJapan,and others

176
¥

153

¥28,136

64
38
26

¥

24

¥4,380

197
173
24

¥

21

¥11,678

448
255
193

¥

173

¥17,474

3,367
2,528
839

¥

602

¥204,256

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, 2018 Compared to Fiscal Year Ended March 31, 2017
In the fiscal year ended March 31, 2018, 38.5% of our net income was derived from Japan, 25.4% from theUnited States, 3.9% from the Americas excluding the United States, 3.5% from Europe and 28.7% from Asia/
Oceania excluding Japan, and others. At March 31, 2018, 69.8% of total assets were allocated to Japan, 13.8% to
the United States, 2.1% to the Americas excluding the United States, 5.7% to Europe and 8.6% to Asia/Oceania
excluding Japan, and others.
In Japan, total revenue increased by ¥255 billion from the previous fiscal year due primarily to an increasein trading account gains—net. The increase in trading account gains—net was due mainly to an increase in gains
77related to changes in the fair value of foreign currency-denominated securities for which the fair value option
was elected. Total expenses decreased by ¥129 billion from the previous fiscal year due mainly to a change fromprovision to credit for loan losses. In addition, income tax expense increased by ¥159 billion from the previous
fiscal year to ¥189 billion in the fiscal year ended March 31, 2018. As a result, net income in Japan increased by¥225 billion. Total assets in Japan increased by ¥3,756 billion due primarily to an increase in investment
securities.
In the United States, total revenue increased by ¥155 billion due primarily to increases in interest income
from resale agreements and securities lending transactions, interest-bearing deposits and loans. The increase ininterest income from resale agreements and securities lending transactions, interest-bearing deposits and loans
was due mainly to an increase in market interest rates. Total expenses increased by ¥176 billion due mainly toincreases in expenses on payables under resale agreements and securities lending transactions and deposits. As aresult, net income in the United States decreased by ¥15 billion. Total assets in the United States decreased by¥2,126 billion due primarily to a decrease in trading account assets, offset in part by an increase in interestbearing deposits.
In the Americas excluding the United States, total revenue decreased by ¥6 billion due primarily to adecrease in other noninterest income, including foreign exchange gains (losses)—net, offset in part by anincrease in trading account gains—net. Total expenses increased by ¥9 billion due mainly to an increase in
expenses on deposits. As a result, net income in the Americas excluding the United States decreased by¥15 billion. Total assets in the Americas excluding the United States increased by ¥177 billion due primarily to
an increase in trading account assets, offset in part by a decrease in loans.
In Europe, total revenue increased by ¥6 billion due primarily to an increase in interest from loans, offset inpart by a decrease in interest from trading account assets. Total expenses increased by ¥37 billion due mainly toincreases in expenses on deposits and provision for loan losses. As a result, net income in Europe decreased by¥18 billion. Total assets in Europe increased by ¥1,049 billion due primarily to increases in trading accountassets and loans.
In Asia/Oceania excluding Japan, and others, total revenue increased by ¥80 billion due primarily to anincrease in interest income from loans. Total expenses increased by ¥39 billion due mainly to an increase in
expenses on deposits. As a result, net income in Asia/Oceania excluding Japan, and others increased by¥36 billion. Total assets in Asia/Oceania excluding Japan, and others increased by ¥944 billion due primarily to
an increase in loans.
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
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.
78

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 interestbearing deposits in other banks.

79

Financial Condition
AssetsOur assets as of March 31, 2017 and 2018 were as follows:
As of March 31,
Increase20172018(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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,592 ¥ 1,686
45,99546,485
1,038
720
8,968
8,081
3,350
4,409
24,99824,30324,96926,77082,284
83,515
(480)
(310)

¥

94
490
(318)
(887)
1,059
(695)
1,801
1,231
170

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

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

83,205
2,116
213
301
95
84
57
5,731

1,401
75
29
30
—
(10)
(7)
738

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

¥200,456¥204,256¥3,800Total assets increased by ¥3,800 billion from March 31, 2017 to ¥204,256 billion as of March 31, 2018.
This increase was due mainly to an increase of ¥1,801 billion in investments and an increase of ¥1,401 billion inloans, net of allowance.

80LoansLoans outstanding
The following table shows our loans outstanding as of March 31, 2017 and 2018 based on classifications bydomicile and industry segment:
As of March 31,
Increase20172018(decrease)(in billions of yen, except percentages)

Domestic(1):Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 8,740
Construction and real estate . . . . . . . . . . . . . . . . . . . . .
7,772
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,749
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,140Transportation and communications . . . . . . . . . . . . . .
3,491
Banks and other financial institutions . . . . . . . . . . . . .
4,006
Government and public institutions . . . . . . . . . . . . . . .
8,532
4,427
Other industries(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,800Mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,960
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
840

10.6% ¥ 8,156
9.4
8,102
5.8
5,024
6.2
5,113
4.2
3,565
4.9
4,471
10.3
8,882
5.4
5,018
13.1
10,329
12.1
9,445
1.0
884

9.7% ¥ (584) (0.9)%
9.7
330 0.3
6.0
275 0.2
6.1(27) (0.1)
4.3
74 0.1
5.3
465 0.4
10.6
350 0.3
6.0
591 0.6
12.4(471) (0.7)11.3(515) (0.8)
1.1
44 0.1

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

57,657

69.9

58,660

70.1

1,003

0.2

16,872
6,760
960
191

20.5
8.2
1.2
0.2

17,095
6,740
1,128
38

20.4
8.1
1.3
0.1

223 (0.1)(20) (0.1)
168 0.1(153) (0.1)

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

24,78330.1

25,001

29.9

218

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

82,440100.0% 83,661

100.0% 1,221

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

(156)

(146)

10

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

¥82,284¥83,515¥1,231(0.2)—

Notes:(1) Certain loans were reclassified primarily from Other of Individuals to Construction and real estate to alignwith current period presentation.
(2) Other industries of Domestic includes trade receivables and lease receivables of consolidated variableinterest entities.
Total loans before allowance for loan losses increased by ¥1,231 billion from March 31, 2017 to¥83,515 billion as of March 31, 2018. Loans to domestic borrowers increased by ¥1,003 billion to¥58,660 billion due mainly to increases in loans to other industries, bank and other financial institutions andgovernment and public institutions, offset in part by decreases in manufacturing and mortgage loans ofindividuals.
Loans to foreign borrowers increased by ¥218 billion from March 31, 2017 to ¥25,001 billion as ofMarch 31, 2018. The increase in loans to foreign borrowers was due mainly to increases in loans to commercial
and industrial and government and public institutions, offset in part by a decrease in other industries.
Within our loan portfolio, the proportion of loans to domestic borrowers against gross total loans increased
from 69.9% to 70.1% while that of loans to foreign borrowers against gross total loans decreased from 30.1% to29.9%, and loans to foreign borrowers were regionally diversified.
81

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(1)(2)

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

E1
E2

Intensive control

F

Substantiallybankrupt

G

Bankrupt

H

Notes:(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.
(2) We classify loans to special attention, intensive control, substantially bankrupt and bankrupt obligors as
impaired loans.
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
82

terms for the periods presented other than those already designated as impaired loans. See “Item 11. Quantitativeand Qualitative Disclosures about Credit, Market and Other Risk—Credit Risk Management” for descriptions of
our self-assessment procedures and our internal credit rating system.
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, 2018, the balance ofrestructurings that are troubled debt restructurings was ¥316 billion, and the balance of restructurings that are nottroubled debt restructurings was ¥32 billion. Also, no charge-offs were recorded as a result of troubled debt
restructurings that were made during the fiscal year ended March 31, 2018.
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.
83Balance of impaired loans
The following table shows our impaired loans as of March 31, 2017 and 2018 based on classifications bydomicile and industry segment:
As of March 31,
2017
2018
Increase (decrease)
Ratio to grossRatio to grossRatio to gross
Impaired total loans by Impaired total loans by Impaired total loans byloans
industry(1)loansindustryloans
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 . . . . . . . . . . . . . . . . . .

¥379
57
66
147

4.3%
0.7
1.4
2.9

¥142
41
58
131

1.7%
0.5
1.2
2.6

¥(237)
(16)
(8)
(16)

(2.6)%
(0.2)
(0.2)
(0.3)

23

0.6

28

0.8

5

0.2

6
7
105

0.2
0.1
1.0

12
4
90

0.3
0.0
0.9

6
(3)
(15)

0.1
(0.1)
(0.1)

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

790
191

1.4
0.8

506
109

0.9
0.4

(284)
(82)

(0.5)
(0.4)

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

¥981

1.2

¥615

0.7

¥(366)

(0.5)

Note:
(1) Certain ratio to gross total loans by industry information as of March 31, 2017 was changed due toreclassification of loans to align with current presentation.
Impaired loans decreased by ¥366 billion from March 31, 2017 to ¥615 billion as of March 31, 2018.
Impaired loans to domestic borrowers decreased by ¥284 billion due mainly to improvements in the credit
condition of some borrowers in the manufacturing industry as well as the gradual recovery in the economic
environment. Impaired loans to foreign borrowers decreased by ¥82 billion, and the relative impact of foreign
currency fluctuations on the decrease was immaterial.
Reflecting the aforementioned change, the percentage of impaired loans within gross total loans decreased
from 1.2% as of March 31, 2017 to 0.7% as of March 31, 2018 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 0.61% as of March 31, 2017 to 0.37% as of March 31, 2018 due to a decrease in impaired loans
net of allowance for loan losses, whereas gross total loans net of 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 applicable84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).
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, 2017 and 2018:
As of March 31,
Increase20172018(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) . . . . . . . . . . . . . . . . . . .

¥

303
177

¥

153
157

¥ (150)(20)

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

¥

480

¥

310

¥ (170)

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

¥

851
130
81,459¥478
137
83,046¥ (373)7
1,587

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

¥82,440¥83,661¥1,221

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

85

35.55%

31.87%(3.68)%

0.22

0.19

(0.03)

0.58

0.37(0.21)

Notes:(1) The allowance for loan losses on impaired loans includes the allowance for groups of loans totaling¥302 billion and ¥246 billion as of March 31, 2017 and 2018 which were collectively 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.
Allowance for loan losses decreased by ¥170 billion from March 31, 2017 to ¥310 billion as of March 31,2018 due mainly to a decrease in allowance for loan losses on impaired loans. The percentage of allowance forloan losses on impaired loans against the balance of impaired loans requiring an allowance decreased by 3.68
percentage points to 31.87%.
In the fiscal year ended March 31, 2018, impaired loans decreased by 37.3% due mainly to a decrease indomestic impaired loans. Allowance for loan losses on impaired loans decreased by 49.6%.
The coverage ratio for impaired loans increased by 1.5% as of March 31, 2018 compared to the previous
fiscal year. The increase was due to a larger percentage decrease in impaired loans than the percentage decrease
in allowance for loan losses.

86

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, 2017 and 2018:
Fiscal years ended March 31, Increase
2017
2018
(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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥451
38

¥ 480
(126)

¥ 29
(164)

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

(9)
—
(5)
(13)
(1)
(5)

(7)
1
(2)
(7)
—
2

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

(20)
(11)

(33)
(23)

(13)
(12)

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

(31)

(56)

(25)

Recoveries:
Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction and real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transportation and communications . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . .
Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1
2
1
5
4

1
1
2
1

3

1
2

—
(1)
1
(4)
(4)
1
(1)

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

16
10

8
7

(8)
(3)

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

26

15

(11)

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

(5)
(4)

(41)
(3)

(36)
1

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

¥480

¥ 310

¥(170)——

Note:(1) “Others” includes primarily foreign exchange translation.
We recorded a credit for loan losses of ¥126 billion in the fiscal year ended March 31, 2018 compared to a
provision for loan losses of ¥38 billion in the fiscal year ended March 31, 2017. The change was due mainly to
improvements in the credit condition of some borrowers in the domestic manufacturing industry as well as thegradual recovery in the economic environment.
Charge-offs increased by ¥25 billion from the previous fiscal year to ¥56 billion for the fiscal year ended
March 31, 2018. The increase was due to similar amounts of increases in charge-offs of both domestic loans andforeign loans.

87Investments
The majority of our investments are available-for-sale and held-to-maturity securities, which at March 31,2017 and 2018 were as follows:
As of March 31,
2017

2018
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) . . . . .

¥16,684
10,257¥16,756
10,263

6,427
1,530

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

¥

72
6

¥19,587
13,334¥19,633
13,332

6,493
3,801

66
2,271

6,253
1,595

¥18,214¥20,557¥2,343

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

¥ 3,060¥ 3,097

¥

37

757

750

(7)

558

538

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

¥ 3,817¥ 3,847¥30¥ 2,518¥ 2,522¥46(2)¥ 2,903
3,077¥ 2,877
3,069¥ (26)
(8)

6,301
4,033

48
2,438

(174)
65

(192)
232

(18)
167

¥21,182¥23,666¥2,484¥ 2,968¥ 3,109¥141¥ 1,960¥ 1,984¥¥(1,100) ¥(1,113)¥ (13)

24
(20)

¥

4

(212)

(13)

¥(1,299) ¥(1,325)(199)¥ (26)

Available-for-sale securities measured at fair value increased by ¥3,109 billion from March 31, 2017 to¥23,666 billion at March 31, 2018. This increase was due primarily to an increase in Japanese government bonds.
Held-to-maturity securities measured at amortized cost decreased by ¥1,299 billion from March 31, 2017 to¥2,518 billion at March 31, 2018. This decrease was due primarily to a decrease in Japanese government bonds
due to their maturity. See note 4 to our consolidated financial statements included elsewhere in this annual reportfor 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, amajority of which consists of Japanese government bonds. As of March 31, 2018, we had a total of¥19,633 billion of available-for-sale debt securities within our investments, of which ¥13,332 billion was
Japanese government bonds. We had ¥16,756 billion and ¥19,633 billion of available-for-sale debt securities
measured at fair value as of March 31, 2017 and 2018, respectively, and net unrealized gains of ¥72 billion and¥46 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, 2018 was approximately 2.5 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.
88Liabilities
The following table shows our liabilities as of March 31, 2017 and 2018:
As of March 31,
Increase20172018(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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥131,185
4,123
1,255
17,9701,919
1,477
13,592
184
74
140
209
14,5295,027¥136,884
3,993
2,105
16,657
1,833
1,688
13,115
213
65
306
233
12,955
4,705¥ 5,699(130)
850(1,313)
(86)
211
(477)
29
(9)
166
24
(1,574)(322)

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥191,684¥194,752¥ 3,068

Total liabilities increased by ¥3,068 billion from March 31, 2017 to ¥194,752 billion at March 31, 2018.
This increase was due primarily to an increase of ¥5,699 billion in deposits, offset in part by a decrease of¥1,574 billion in long-term debt, a decrease of ¥477 billion in trading account liabilities and a decrease of¥468 billion in short-term borrowings. We analyze short-term borrowings, consisting of due to trust accounts,
call money and funds purchased, payables under repurchase agreements, payables under securities lendingtransactions and other short-term borrowings, on a combined basis.
Deposits
The following table shows a breakdown of our deposits as of March 31, 2017 and 2018:
As of March 31,
Increase20172018(decrease)(in billions of yen)Domestic:
Noninterest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 19,064
87,359¥ 21,069
91,207¥2,005
3,848

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

106,423

112,276

5,853

Foreign:
Noninterest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,996
22,766

2,257
22,351

261(415)

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

24,762

24,608(154)

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

¥131,185¥136,884¥5,699Deposits increased by ¥5,699 billion from March 31, 2017 to ¥136,884 billion at March 31, 2018. Domestic
deposits increased by ¥5,853 billion from March 31, 2017 to ¥112,276 billion at March 31, 2018. Domestic
interest-bearing deposits increased by ¥3,848 billion from March 31, 2017 to ¥91,207 billion at March 31, 2018
due mainly to an increase in ordinary deposits, offset in part by a decrease in time deposits, and domestic
noninterest-bearing deposits increased by ¥2,005 billion to ¥21,069 billion at March 31, 2018 due mainly to89increases in current accounts. Foreign deposits decreased by ¥154 billion from March 31, 2017 to ¥24,608 billion
at March 31, 2018 due mainly to a decrease in time deposits, offset in part by an increase in certificates ofdeposit.
Short-term Borrowings
The following table shows a breakdown of our short-term borrowings as of March 31, 2017 and 2018:
As of March 31,
2017
Domestic Foreign
Due to trust accounts . . . . . . . . . . . . . . . . . . . . . . . . ¥ 4,123
Call money and funds purchased, and payables
under repurchase agreements and securities
lending transactions . . . . . . . . . . . . . . . . . . . . . . .
5,727
Other short-term borrowings . . . . . . . . . . . . . . . . . .
587
Total short-term borrowings . . . . . . . . . . . . . . ¥10,437¥—
15,417890

2018
Increase (decrease)
Domestic Foreign Total Domestic Foreign Total(in billions of yen)
¥ 4,123 ¥ 3,993 ¥ — ¥ 3,993 ¥ (130) ¥ — ¥(130)
Total

21,144
1,477

6,724
827

¥16,307 ¥26,744 ¥11,544

13,871861

20,595
1,688

997
240

(1,546) (549)(29) 211¥14,732 ¥26,276¥1,107¥(1,575) ¥(468)Short-term borrowings decreased by ¥468 billion from March 31, 2017 to ¥26,276 billion at March 31,
2018. Domestic short-term borrowings increased by ¥1,107 billion due mainly to increases in call money andfunds purchased, and payables under repurchase agreements. Foreign short-term borrowings decreased by¥1,575 billion due mainly to a decrease in payables under repurchase agreements.
EquityThe following table shows a breakdown of equity as of March 31, 2017 and 2018:
As of March 31,
Increase20172018(decrease)(in billions of yen)

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

¥5,826 ¥5,826
919
1,306
1,521
1,742
(5)
(6)
8,261
8,868
511
636
¥8,772 ¥9,504

¥—
387
221
(1)
607
125
¥732

Total equity increased by ¥732 billion from March 31, 2017 to ¥9,504 billion due mainly to increases inretained earnings and accumulated other comprehensive income, net of tax.
Retained earnings increased by ¥387 billion from March 31, 2017 to ¥1,306 billion at March 31, 2018. This
increase was due to net income attributable to MHFG shareholders for the fiscal year ended March 31, 2018 of¥578 billion offset in part by dividend payments of ¥190 billion.
Accumulated other comprehensive income, net of tax increased by ¥221 billion from March 31, 2017 to¥1,742 billion at March 31, 2018 due to an increase in pension liability adjustments of ¥155 billion, an increasein net unrealized gains on available-for-sale securities of ¥95 billion and a decrease in foreign currencytranslation adjustments of ¥30 billion.
90

Noncontrolling interests increased by ¥125 billion from March 31, 2017 to ¥636 billion at March 31, 2018.
The increase was due mainly to a new consolidation of an investment fund and an increase in the share ofnoncontrolling shareholders of some investment funds.
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 Credit, Market and Other Risk—Liquidity Risk Management.”
Deposits, based on our broad customer base and brand recognition in Japan, have been our primary sourceof liquidity. Our total deposits increased by ¥5,699 billion, or 4.3%, from the end of the previous fiscal year to¥136,884 billion as of March 31, 2018. Our average balance of deposits for the fiscal year ended March 31, 2018of ¥136,532 billion exceeded our average balance of loans for the same period by ¥53,661 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, 2018:
As of May 31, 2018
S&P

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

Moody’s

Long-term

Short-termStand-alone
credit profile

AA
A

—
A-1
A-1

—
aa-

Long-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.
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 appropriate91

actions based on such conditions. As of March 31, 2018, the balance of Japanese government bonds included
within our investments was ¥13.3 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.
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 90% applicable for the period between January 1 and December 31, 2018. The LCR disclosure
guidelines of the Financial Service Agency require banks and bank holding companies with international
operations to disclose the three-month averages of daily LCR. 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 dataof our principal banking subsidiaries, for the fourth quarter of the fiscal year ended March 31, 2018. All yen
figures in this table are truncated.
Fourth Quarter of Fiscal Year
Ended March 31, 2018
(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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥60,159
50,079120.1%¥53,720
38,199140.7%¥53,116
37,555141.5%¥ 2,5381,601
160.3%¥ 2,509
1,576
161.1%For more information on LCR, see “Item 4. Information on the Company—Supervision and Regulation—
Liquidity.”
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
92

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, October 2014and December 2017), which presents the details of global regulatory standards on bank capital adequacy andliquidity agreed by the Governors and Heads of Supervision, which is the oversight body of BCBS, and endorsedby the G20 Leaders at the Seoul summit in November 2010. The rules text sets out higher and better-quality
capital, better risk coverage, the introduction of a leverage ratio as a backstop to the risk-based requirement, andthe introduction 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
the following 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 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 31,2018 being ¥577.5 billion) and existing subordinated debt issued before March 2013 (the amounts thereof
included within Tier 2 capital as of March 31, 2018 being ¥674.8 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
93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 2017 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 G-SIB and a 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 phasedin 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 defined as Tier 1 capital, and the minimum leverage ratio isdefined as 3%.
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 deductions,and became fully effective in March 2018.

94

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
2017
2018

Minimum Common Equity Tier 1 capital . . . . . . . . . . . . . . . . . . .
Minimum Tier 1 capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minimum total capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Phase-in of deductions from capital . . . . . . . . . . . . . . . . . . . . . . .
Phase out of recognition of capital instruments that no longer
qualify as capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital conservation buffer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Countercyclical capital buffer(1) . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional loss absorbency requirements for G-SIBs and
D-SIBs(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

March
2019

March
2020

March
2021

March
2022

4.5% 4.5% 4.5% 4.5% 4.5% 4.5%
6.0% 6.0% 6.0% 6.0% 6.0% 6.0%
8.0% 8.0% 8.0% 8.0% 8.0% 8.0%
80.0% 100.0% 100.0% 100.0% 100.0% 100.0%
50.0% 40.0% 30.0% 20.0% 10.0% 0.0%
1.25% 1.875% 2.5% 2.5% 2.5% 2.5%
0.00% 0.01% 0.01% 0.01% 0.01% 0.01%
0.50% 0.75%

1.0%

1.0%

1.0%

1.0%

Notes:(1) Figures assume that the countercyclical capital buffer will continue to be 0.01% after March 2018.
(2) 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 and Leverage Ratios
Our capital adequacy ratios and leverage ratios as of March 31, 2017 and 2018, calculated in accordancewith Japanese GAAP and the guidelines established by the Financial Services Agency, were as set forth in thefollowing table:
As of March 31,
Increase20172018(decrease)(in billions of yen, except percentages)

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

¥ 7,001.6
1,209.8¥ 7,437.0
1,755.1

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

8,211.5
1,839.4

9,192.2
1,668.1

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

¥10,050.9¥10,860.4

¥

435.3
545.3
980.7
(171.2)¥

809.4

Risk-weighted assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥61,717.1 ¥59,528.9 ¥(2,188.1)
Common Equity Tier 1 capital ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.34%
12.49%
1.15%
Required Common Equity Tier 1 capital ratio(1) . . . . . . . . . . . . . . . . . . . . . . .
6.25
7.135
0.885
Tier 1 capital ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13.30
15.44
2.14
Required Tier 1 capital ratio(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.75
8.635
0.885
Total capital ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.28
18.24
1.96
Required total capital ratio(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.75
10.6350.885
CET1 available after meeting the bank’s minimum capital requirements . . .
6.84
7.99
1.15
Leverage ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.95
4.28
0.33
95

Note:(1) The required ratios disclosed above, at March 31, 2017 and 2018, include the transitional capitalconservation buffer of 1.25% and 1.875%, respectively, the countercyclical capital buffer of 0% and 0.01%,
respectively, and the transitional additional loss absorbency requirements for G-SIBs and D-SIBs of 0.5%
and 0.75%, respectively, which are all in addition to the regulatory minima. The respective required
amounts are determined by applying the ratios to the sum of the risk weighted assets and certain other risk
amounts. These buffers and additional loss absorbency requirements are applied to us but not to our banking
subsidiaries.
Our total capital ratio as of March 31, 2018 was 18.24%, an increase of 1.96 percentage points compared toMarch 31, 2017. Our Tier 1 capital ratio as of March 31, 2018 was 15.44%, an increase of 2.14 percentage points
compared to March 31, 2017. Our Common Equity Tier 1 capital ratio as of March 31, 2018 was 12.49%, anincrease of 1.15 percentage points compared to March 31, 2017. The increases in each ratio were due mainly to adecrease in risk-weighted assets and to an increase in Common Equity Tier 1 capital and Additional Tier 1
capital. Our Common Equity Tier 1 capital increased due mainly to an increase in retained earnings, and ourAdditional Tier 1 capital increased due mainly to an increase in directly-issued qualifying Additional Tier 1
instruments. Our risk-weighted assets decreased due mainly to a decrease in credit risk assets. We believe that wewere in compliance with all capital adequacy requirements to which we were subject as of March 31, 2018.
Principal Banking Subsidiaries
Capital adequacy ratios and leverage ratios of our principal banking subsidiaries, on a consolidated basis, asof March 31, 2017 and 2018, 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,
2017
2018

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)

11.16%
13.34
16.20
4.16

12.34%
15.61
18.52
4.53

1.18%
2.27
2.32
0.37

18.73
18.73
19.47
6.74

19.99
20.05
20.28
7.03

1.26
1.32
0.81
0.29

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, 2018.
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,
2018, that our securities subsidiaries in Japan were in compliance with all capital adequacy requirements towhich they were subject.
96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, 2017 and 2018:
As of March 31,
Increase20172018(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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,243
278
175
1,823
730
15,177
14,415¥ 2,165
241
164
2,210
709
13,861
11,654

¥

(78)
(37)
(11)
387
(21)
(1,316)(2,761)

As of March 31,
Increase20172018(decrease)(in billions of yen)

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

¥76,678522¥78,448690¥ 1,770
168

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

¥77,200¥79,138¥ 1,938

See 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.

97

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, 2018:
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 . . . . . . . . .

¥35,724
11,0212,492
12
52¥1,689
297
1,607
10
44

¥1,285
61
1,314
7
38

¥ 329
4
1,205
4
32

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

¥49,289¥3,637¥2,698¥1,570Due after
five years

Total

¥ 362
—
1,068
2
23

¥ 137
—
5,269
1
57

¥39,526
11,383
12,95536
246¥1,453¥5,463¥64,110Notes:(1) A contribution paid to our pension plans, which is not included in the above table, is expected to beapproximately ¥52 billion in the fiscal year ending March 31, 2019, 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 ¥2.3 billion, of
which ¥0.9 billion was interest and penalties, at March 31, 2018. 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.

98

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. For reporting based on Japanese banking
regulations, we prepare our annual financial results using financial statements in accordance with Japanese
GAAP. In addition, pursuant to the Japanese securities law and 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 haveprovided below, with respect to our most recent fiscal year, a reconciliation of consolidated net income andshareholders’ equity under U.S. GAAP with those amounts under Japanese GAAP.
As of and for the fiscal
year ended March 31, 2018
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥8,868.4¥ 577.6

64.0(97.7)
158.2
79.6(119.6)178.4(86.9)
117.1
54.9(160.3)
—
10.9

107.8
(101.7)2.4(6.8)(35.4)(2.9)(15.4)
4.4
13.2
47.2
(10.8)(3.1)

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

¥9,067.0(1)¥ 576.5

Note:(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.
99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 initial100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.
101

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.
During the fiscal year ended March 31, 2018, a subsidiary of MHFG partially withdrew assets from
employee retirement benefit trusts, which were established for the payment of employees’ severance pay andretirement pensions. Under U.S. GAAP, no gains or losses have been recognized as a consequence of thistransaction.
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.

102

ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

6.A. Directors and Senior Management
Directors
Shown below are information regarding the directors of Mizuho Financial Group as of June 30, 2018:

Name

Tatsufumi Sakai . . . . . . . .
Takanori Nishiyama . . . . .
Makoto Umemiya . . . . . . .
Yasuyuki Shibata . . . . . . .
Hisashi Kikuchi . . . . . . . .
Yasuhiro Sato . . . . . . . . . .
Ryusuke Aya . . . . . . . . . .
Nobukatsu Funaki . . . . . .
Tetsuo Seki . . . . . . . . . . . .
Takashi Kawamura . . . . . .
Tatsuo Kainaka . . . . . . . . .
Hirotake Abe . . . . . . . . . .
Hiroko Ota . . . . . . . . . . . .
Izumi Kobayashi . . . . . . .

Age

58
56
53
55
52
66
58
59
79
78
78
73
64
59

Director Type

Executive(1)Executive(1)Executive(1)Executive(1)Executive(1)Non-executive(2)Non-executive(2)Non-executive(2)Independent(3)Independent(3)Independent(3)Independent(3)Independent(3)Independent(3)Chair /
Deputy Chairof the Board

Committee Membership
Nominating Compensation
Audit

—
—
—
—
—
—
Deputy Chair
—
—
—
—
—
Chair
—

—
—
—
—
—
—
—
—
MemberChairMember—MemberMember

—
—
—
—
—
—
—
—
MemberMemberChairMember
—
—

—
—
—
—
—
—
MemberMemberChair—MemberMember——Risk(4)

—
—
—
—
—
—
Chair
—
—
—
—
—
—
MemberNotes:(1) Directors concurrently serving as executive officers.
(2) Directors not concurrently serving as executive officers, specialist officers, employees or executive directorsof Mizuho Financial Group or its subsidiaries.
(3) Directors satisfying the requirements for outside directors, as defined in the Companies Act of Japan, andthose for independent directors, as defined both by the Tokyo Stock Exchange and by Mizuho Financial
Group.
(4) Risk Committee consists of the two directors and an outside expert, who is not a director.
The directors’ current positions, key business experiences in the past and major concurrent offices (if any)
are as follows:
Mr. Tatsufumi Sakai has been Member of the Board of Directors and the President & Group CEO(Representative Executive Officer) since June 2018. Previously, he had been President & CEO of Mizuho
Securities from April 2016 to April 2018; Head of International Banking Unit from April 2014 to April 2016;
and Head of Investment Banking Unit from April 2013 to April 2014. He concurrently serves as Member of theBoard of Directors at each of Mizuho Bank, Mizuho Trust & Banking, and Mizuho Securities.
Mr. Takanori Nishiyama has been Member of the Board of Directors and Managing Executive Officer /Head of Compliance Group (Group CCO) since June 2017. Previously, he had been in charge of businesspromotion from April 2015 to April 2017; and General Manager of Omiya Branch from April 2014 to April
2015. He concurrently serves as Executive Managing Director of Mizuho Bank.
Mr. Makoto Umemiya has been Member of the Board of Directors and Managing Executive Officer / Headof Financial Control & Accounting Group (Group CFO) since June 2017. Previously, he had been General
Manager of Financial Planning Department from April 2014 to April 2017; and General Manager of Osaka
Branch from April 2012 to April 2014. He concurrently serves as Executive Managing Director of Mizuho Bank.
103

Mr. Yasuyuki Shibata has been Member of the Board of Directors and Managing Executive Officer / Headof Risk Management Group (Group CRO) since June 2017. Previously, he had been General Manager of Risk
Management Department from July 2016 to June 2017; and General Manager of Americas Treasury Divisionfrom April 2014 to July 2016. He concurrently serves as Executive Managing Director of Mizuho Bank.
Mr. Hisashi Kikuchi has been Member of the Board of Directors and Managing Executive Officer / Headof Strategic Planning Group (Group CSO) since June 2018. Previously, he had been General Manager ofCorporate Secretariat from April 2015 to June 2018; and General Manager of Tokyo Corporate Banking Divisionfrom July 2013 to April 2015. He concurrently serves as Executive Managing Director of Mizuho Bank.
Mr. Yasuhiro Sato has been Member of the Board of Directors and Chairman (Kaicho) since June 2018.
Previously, he had been President & Group CEO from June 2011 to April 2018; and President & CEO of Mizuho
Bank / the former Mizuho Corporate Bank from April 2009 to April 2014.
Note: Chairman (Kaicho) Sato engages in the company’s external activities, but does not chair the Board
meetings. The Board meetings are chaired by the independent director chair Ota.
Mr. Ryusuke Aya has been a non-executive Member of the Board of Directors since June 2017. Previously,
he had been a non-executive Member of the Board of Directors (Audit & Supervisory Committee Member) of
Mizuho Bank from June 2017 to April 2018; and Head of Risk Management Group (Group CRO) from
November 2013 to June 2017.
Mr. Nobukatsu Funaki has been Member of the Board of Directors since June 2014. Previously, he had
been Audit & Supervisory Board Member at each of Mizuho Financial Group (from June 2013 to June 2014),
Mizuho Securities (April 2013 to June 2014) and the former Mizuho Corporate Bank (from March 2010 to June
2013)
Mr. Tetsuo Seki has been Member of the Board of Directors since June 2015. Previously, he had been
Representative Director and Executive Vice President of Nippon Steel Corporation; and President(Representative Director) of the Shoko Chukin Bank, Ltd. He concurrently serves as Audit & Supervisory Board
Member of Sapporo Holdings Limited.
Mr. Takashi Kawamura has been Member of the Board of Directors since June 2014. Previously, he had
been Representative Executive Officer, Chairman, President and Chief Executive Officer and Director of Hitachi,Ltd. He concurrently serves as Outside Audit & Supervisory Board Member of Nikkei Inc.; and Chairman of theBoard of Directors (Outside Director) of Tokyo Electric Power Company Holdings, Inc.
Mr. Tatsuo Kainaka has been Member of the Board of Directors since June 2014. Previously, he had been
Superintending Prosecutor of the Tokyo High Public Prosecutors Office and Justice of the Supreme Court. He
concurrently serves as Attorney-at-law at Takusyou Sogo Law Office; President of the Life Insurance
Policyholders Protection Corporation of Japan; and Corporate Auditor (External) of Oriental Land Co., Ltd.
Mr. Hirotake Abe has been Member of the Board of Directors since June 2015. Previously, he had been
CEO of Tohmatsu & Co. He concurrently serves as Certified Public Accountant at Certified Public Accountant
Hirotake Abe Office.
Ms. Hiroko Ota has been Member of the Board of Directors since June 2014. Previously, she had been
Minister of State for Economic and Fiscal Policy of the Cabinet Office. She concurrently serves as Professor of
National Graduate Institute for Policy Studies; Outside Director of JXTG Holdings, Inc.; and Outside Director ofPanasonic Corporation.
Ms. Izumi Kobayashi has been Member of the Board of Directors since June 2017. Previously, she had
been President and Representative Director of Merrill Lynch Japan Securities Co., Ltd.; and Executive Vice
104

President of the Multilateral Investment Guarantee Agency of the World Bank Group. She concurrently serves as
Outside Director of ANA HOLDINGS INC.; Outside Director of Mitsui & Co., Ltd.; and Member of the Boardof Governors of Japan Broadcasting Corporation.
Executive Officers
Shown below are information regarding the executive officers of Mizuho Financial Group as of June 30,
2018:
Name

Age

Title

Area of Oversight

Tatsufumi Sakai(1) . . . . . . . 58 President & Group CEO(2)Toshitsugu Okabe . . . . . . . 62 Deputy President &Head of Retail & Business Banking Company
Executive Officer(2)Daisaku Abe . . . . . . . . . . . 61 Deputy President &Head of IT & Systems Group (Group CIO) and
Executive Officer
Head of Operations Group (Group COO)
Junichi Kato . . . . . . . . . . . 60 Senior Managing Executive Head of Global Markets Company
Officer
Katsunobu Motohashi . . . . 60 Senior Managing Executive Head of Asset Management Company
Officer
Akira Nakamura . . . . . . . . 57 Senior Managing Executive Head of Corporate & Institutional Company
Officer
Seiji Imai . . . . . . . . . . . . . . 56 Senior Managing Executive Head of Global Corporate Company
Officer
Tsutomu Nomura . . . . . . . 59 Managing Executive Officer Head of Internal Audit Group (Group CA)
Takanori Nishiyama(1) . . . . 56 Managing Executive Officer Head of Compliance Group (Group CCO)
Motonori Wakabayashi . . . 53 Managing Executive Officer Head of Research & Consulting Unit
Goji Fujishiro . . . . . . . . . . 53 Managing Executive Officer Head of Global Products Unit
Shuji Kojima . . . . . . . . . . . 53 Managing Executive Officer Head of Human Resources Group (Group CHRO)
Makoto Umemiya(1) . . . . . 53 Managing Executive Officer Head of Financial Control & Accounting Group(Group CFO)
Yasuyuki Shibata(1) . . . . . . 55 Managing Executive Officer Head of Risk Management Group (Group CRO)
Hisashi Kikuchi(1) . . . . . . . 52 Managing Executive Officer Head of Strategic Planning Group (Group CSO)
Notes:(1) Executive officers concurrently serving as directors.
(2) Representative Executive Officer.
The executive officers’ current positions, key business experiences in the past and major concurrent offices(if any) are as follows:
For information on Messrs. Tatsufumi Sakai, Takanori Nishiyama, Makoto Umemiya, Yasuyuki
Shibata and Hisashi Kikuchi, see “—Directors.”
Mr. Toshitsugu Okabe has been Deputy President & Executive Officer / Head of Retail & BusinessBanking Company since April 2016. Previously, he had been Head of Retail Banking Unit or in charge of similar
responsibilities from April 2009 to April 2016.
Mr. Daisaku Abe has been Deputy President & Executive Officer / Head of IT & Systems Group (GroupCIO) and Head of Operations Group (Group COO) since April 2013. Previously, he had been in charge of similar
responsibilities from April 2009 to April 2013; and Head of Strategic Planning Group from April 2009 to April
2012. He concurrently serves as Deputy President & Executive Officer of Mizuho Bank.
105

Mr. Junichi Kato has been Senior Managing Executive Officer / Head of Global Markets Company sinceApril 2016. Previously, he had been in charge of similar responsibilities from April 2009 to April 2016; andPresident & CEO of Mizuho Bank (Switzerland), Ltd.
Mr. Katsunobu Motohashi has been Senior Managing Executive Officer / Head of Asset Management
Company since April 2016. Previously, he had been in charge of similar responsibilities from April 2010 to April
2016; and General Manager of Treasury Department of Mizuho Trust & Banking from April 2007 to April 2010.
He concurrently serves as Senior Managing Executive Officer of Mizuho Bank.
Mr. Akira Nakamura has been Senior Managing Executive Officer / Head of Corporate & Institutional
Company since April 2018. Previously, he had been in charge of similar responsibilities from April 2016 to April
2018; and Head of Telecom Media Technology Group and in charge of Investment Banking Business of Mizuho
Securities from April 2015 to April 2016. He concurrently serves as Senior Managing Executive Officer ofMizuho Bank.
Mr. Seiji Imai has been Senior Managing Executive Officer / Head of Global Corporate Company sinceApril 2018. Previously, he had been Head of Asia & Oceania from April 2016 to April 2018; and General
Manager of Seoul Branch from April 2014 to April 2016. He concurrently serves as Senior Managing Executive
Officer of Mizuho Bank.
Mr. Tsutomu Nomura has been Managing Executive Officer / Head of Internal Audit Group (Group CA)
since April 2017. Previously, he had been Co-head of Credit Group or in charge of similar responsibilities from
April 2014 to April 2017.
Mr. Motonori Wakabayashi has been Managing Executive Officer / Head of Research & Consulting Unit
since April 2018. Previously, he had been in charge of similar responsibilities and business promotion from April
2016 to April 2018; and General Manager of Industry Research Division from April 2013 to April 2016. He
concurrently serves as Managing Executive Officer of Mizuho Bank.
Mr. Goji Fujishiro has been Managing Executive Officer / Head of Global Products Unit since April 2018.
Previously, he had been in charge of business promotion from April 2016 to April 2018; and General Manager of
Executive Secretariat from April 2014 to April 2016. He concurrently serves as Managing Executive Officer ofMizuho Bank.
Mr. Shuji Kojima has been Managing Executive Officer / Head of Human Resources Group (Group
CHRO) since April 2017. Previously, he had been Deputy Head of Internal Audit Group or in charge of similar
responsibilities from April 2016 to April 2017; and General Manager of Compliance Division from November
2013 to April 2016. He concurrently serves as Managing Executive Officer of Mizuho Bank.
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.
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
106

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, 2018 (basic salaries and others) and March 31, 2017 (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, 2018
March 31, 2017
Aggregate
Performance
Stock
Amount of
Basic Salaries
Other
Payments
Compensation
Compensation
Number of (in millions of Number
NumberNumberNumber
Persons
yen)
of
of
of
of
(Note 2)
(Note 3)
Persons Amount Persons Amount Persons Amount Persons Amount

10

289

10

270

8

0

1

9

1

9

19

1,299

19

827

19

1

19

236

19

234

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, 2017 and 2018 arestated.
(3) With respect to the amounts, the aggregate amounts for the fiscal years ended March 31, 2017 and 2018 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) Five executive officers who resigned as of April 1, 2017, two directors who retired as of June 23, 2017 andone executive officer who resigned as of June 23, 2017 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 2017 as the performance payments for the
fiscal year ended March 31, 2017 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, 2019.
(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 2017 as the stock ownership points granted for the fiscal year
ended March 31, 2017 (one (1) point translates into one (1) share of common stock of Mizuho Financial
107

Group) by the book value of Mizuho Financial Group stock (196.9447 per share) are stated. The stockcompensation for the fiscal year ended March 31, 2017 is expected to be paid as deferred payments overthree years from the fiscal year ending March 31, 2019.
(8) Because the amount of the performance payments and stock compensation to be paid with respect to thefiscal year ended March 31, 2018 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, 2018 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
Amount of
Name
Compensation(Classification) (in millions of yen)

Yasuhiro Sato
(Executive
officer as
defined intheCompanies
Act)

126

Company

MizuhoFinancial Group
Mizuho Bank
Mizuho Trust &BankingMizuho Securities

Aggregate Amounts of Compensation by Type (in millions of yen)
For the fiscal year ended
For the fiscal year ended
March 31, 2018
March 31, 2017
Basic
Performance
Stock
Salary
Other
Payments
Compensation

69
3

0
—

22
1

22
1

1
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, 2018.

108

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, 2018.
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, 2018.
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, 2018.
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, 2018.
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, 2018.
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, 2018.
109

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 and stockcompensation for directors and officers. In addition, the Compensation Committee resolved, at the meeting heldon June 14, 2018, to amend the compensation system in order to further clarify the linkage between businessperformance and compensation. For further information on the current compensation system, including
performance payments and 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 (“Officers,etc.”) of Mizuho Financial Group as well as Mizuho Bank, Mizuho Trust & Banking and Mizuho Securities(“Three Core Companies”).
Philosophy and Objectives
Executive compensation for Mizuho Financial Group and the Three Core Companies pursuant to suchpolicy is determined based on appropriate governance and control, and aims to function as incentive andcompensation for each Officer, etc., to exercise their designated function to the fullest in our efforts to realize
management that contributes to value creation for various stakeholders and improve corporate value throughcontinuous 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 Officers, etc.,of Mizuho Financial Group and the Three Core Companies is set forth below:
1)

The executive compensation shall be determined based on appropriate governance and control, andfunction as an appropriate incentive in order to realize management that contributes to value creationfor various stakeholders and improve corporate value through continuous and stable corporate growth
based on our basic management policies under our Corporate Philosophy.

2)

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

3)

The executive compensation shall contribute to suppressing excessive risk-taking, improving corporate
value and creating value for various stakeholders not only in the short-term, but also over the mediumto long-term.

4)

The executive compensation shall reflect the management environment and business performance ofour group.

5)

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

6)

The compensation system and standards shall be timely and appropriately reevaluated and set at acompetitive and appropriate standard based on such factors as the economic and social conditions andsurvey data with respect to management compensation provided by external specialized organizations.

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

110Compensation System
Compensation for Officers, etc., shall, in principle, consist of a “Basic Salary,” “Performance Payment” and“Stock Compensation.”
1)“Basic Salaries” shall factor in the function and responsibility of each Officer, etc., in addition to thestandard amount for each position and payment will be made monthly in cash.

2)“Performance Payments” shall be made as a monetary incentive for Officers, etc., to achieve the annual
budget and as compensation for their achievement. The payment thereof shall reflect our group-wide
results of operations, the results of organizations (our in-house companies and units, etc.) that each
Officer, etc., is in charge of and the performance or each Officer, etc., in addition to the standard
amount for each position. A system shall be adopted which, based on resolution by the Compensation
Committee, etc., enables certain amount of deferred payments of the performance payments over three
years, as well as a decrease or forfeiture of the deferred amount depending on performance, etc., of thecompany or the individual.

3)“Stock Compensation” shall be paid in the form of shares of common stock of Mizuho Financial Groupconsisting of “Stock Compensation I” and “Stock Compensation II,” (together “Stock Compensation I
and II”) acquired from the stock market through a trust with an aim to align the interests of Officers,etc., with those of the shareholders and increase the incentive to enhance corporate value.
(a) “Stock Compensation I” shall be paid at the time of retirement of each Officer, etc., in the form ofshares of common stock of Mizuho Financial Group calculated based on each position. A systemshall be adopted which enables a decrease or forfeiture of the amount by resolution of theCompensation Committee, etc., depending on performance of the company or the individual.
(b) “Stock Compensation II” shall be paid in accordance with our group-wide results of operations,the results of organizations (our in-house companies and units, etc.) that each Officer, etc., is incharge of and the performance of each Officer, etc., in addition to the standard amount for eachposition. A system shall be adopted which enables the entire amount of deferred payments overthree years, as well as a decrease or forfeiture of the deferred amount by resolution of theCompensation Committee, etc., depending on performance of the company or the individual.

Among the Officers, etc., the compensation system for the directors, the executive officers as defined in the
Companies Act, the executive officers as defined in our internal regulations and the specialist officers responsible
for business execution (the “Officers Responsible for Business Execution”) shall be separate from thecompensation system for the directors responsible for management supervision (“Non-Executive Officers
Responsible for Management Supervision”).
1)

The basic compensation system for Officers Responsible for Business Execution shall be a “Basic
Salary,” “Performance Payment” and “Stock Compensation I and II.”(a) The composition of the compensation shall, in principle, be 50%, 17.5% and 32.5% for “Basic
Salary,” “Performance Payment” and “Stock Compensation I and II” respectively.
(b) The upper limit of “Performance Payment” and “Stock Compensation II” shall be decided* inaccordance with our annual group-wide results of our operations taking into account the traits ofour business activities as a Financial Services Group. The payment to each officer shall reflect theperformance of each officer and the results of organizations (our in-house companies and units,etc.) that each Officer, etc., is in charge of, and be, in principle, within the range of 0% to 150% of
the standard amount for each position.
*The amount of funds for “Performance Payment” and “Stock Compensation II” is decided foreach fiscal year by multiplying the standard amount for each position in a respective year with thetotal number of officers in that year and a coefficient based on the result from the fiscal year’s
111results of operations. The evaluation metric for this coefficient is decided by setting metrics basedon our Consolidated Net Business Profits, and using such evaluation metrics for the reference year
and the current fiscal year (provided that, for Mizuho Securities Co., Ltd., the system is linked toOrdinary Income, which is a metric that is equivalent to Consolidated Net Business Profits basedon the traits of business activities and financial structure of securities companies).
2)

The compensation for Non-Executive Officers Responsible for Management Supervision, in principle,
shall be in the form of fixed compensation from the perspective of ensuring the effectiveness of thesupervisory function. The compensation system shall consist of “Basic Salaries” and “Stock
Compensation” and the composition shall, in principle, be 85% and 15% for “Basic Salaries” and“Stock Compensation,” respectively.

There are cases where compensation for some personnel, including those officers recruited locally incountries other than Japan, may be designed individually in compliance with local compensation regulations
while taking into consideration local compensation practices and the responsibilities, business characteristics andmarket value, etc., of each respective officer. For cases where compensation is designed individually, payment ofcompensation is also made in accordance with the performance of the company or the individual. Payment ofcompensation is designed to avoid excessive risk-taking through a system which enables certain amount or a
portion of deferred payments and non-monetary payments such as stock, as well as a decrease or forfeiture of thedeferred amount depending on the performance, etc., of the company or the individual.
Compensation Determination Process
The Compensation Committee shall determine the determination policy of executive compensation for
Mizuho Financial Group and the Three Core Companies and the executive compensation system including thecompensation system set out in “Compensation System” in order to effectively secure the transparency andobjectivity of compensation, etc., for individual Officers, etc. In addition, the Compensation Committee shalldetermine the compensation for each individual director and executive officer as defined in the Companies Act ofMizuho Financial Group; and approve at Mizuho Financial Group the compensation of each individual directorof the Three Core Companies.
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 specialist officer of Mizuho
Financial Group; and approve at Mizuho Financial Group the compensation of each individual executive officer
and specialist officer of the Three Core Companies.
The Compensation Committee shall verify the validity of the compensation system and standards based on
economic and social conditions and survey data with respect to management compensation provided by external
specialized organizations.
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 may have officers who are not members of the committee (including officersof the Three Core Companies) such as the President & CEO and external experts, etc., attend its meetings andprovide their opinion in order to facilitate adequate and appropriate discussions and determinations.
Revision and Abolishment of the Policy
Revision and abolishment of the Policy shall be resolved by the Compensation Committee of Mizuho
Financial Group.
112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.
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. In order to fulfill the roles mentioned
above, the Board of Directors shall appropriately establish and supervise the operation of the internal control
113systems (regarding matters such as risk management, compliance and internal auditing) and risk governancesystems of our group. The Board of Directors shall, in principle, delegate to the President & CEO, who is also theGroup 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 14 directors (six outside directors, three 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 “Three Core Companies”), and exercising the approval rights held by Mizuho Financial Group
with respect to the appointment and removal of representative directors and senior directors of the Three Core
Companies. For your reference, succession planning is also deliberated by the Nominating Committee.
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 22, 2018, the members of the Nominating Committee
are Mr. Takashi Kawamura (Chairman), Mr. Tetsuo Seki, Mr. Tatsuo Kainaka, Ms. Hiroko Ota and Ms. Izumi
Kobayashi.
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 Three
Core Companies, and determining the basic policies and compensation system for directors and executive
officers of Mizuho Financial Group and the Three Core Companies.
114

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 22, 2018, 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,
determining the contents of proposals regarding the appointment, dismissal and non-reappointment of accounting
auditors to be submitted to the general meetings of shareholders, and adopting resolutions regarding the approvalof basic internal audit plans and the commission of the Group Chief Auditor.
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 22, 2018, 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:•

Risk Committee
The Risk Committee shall advise the Board of Directors regarding decision-making and supervision
relating to risk governance and supervision of matters such as the status of risk management.
The Risk Committee shall, in principle, comprise no less than three members who shall be
Non-Executive Directors or outside experts and evaluate the consistency among our basic policy
concerning management, basic policy concerning risk strategy and the execution of that strategy, andthe adequacy of our risk profile and other status of risk management, and the Risk Committee shallreport to the Board of Directors thereon.

•

Human Resources Review Meeting
The Human Resources Review Meeting shall deliberate over plans for the appointment and dismissal ofMizuho Financial Group’s executive officers as defined in the Companies Act and plans for the115

appointment and removal of or commission to Mizuho Financial Group’s executive officers (as definedin the Companies Act or our internal regulations) with special titles, such plans to be decided upon by
the Board of Directors. Additionally, the Human Resources Review Meeting shall deliberate over plans
for the appointment and removal of or commission to the Three Core Companies’ executive officers as
defined in our internal regulations with special titles, such plans to be approved by the Board of
Directors.
The Human Resources Review Meeting shall comprise the members of the Nominating Committee, themembers of the Compensation Committee, and the Group CEO from the perspective of ensuringtransparency and fairness in the appointment of executive officers.
•

Outside Director Session
The Outside Director Session shall comprise only outside directors and exchange information and share
understanding with each other and provide objective and candid opinions to management based on theoutside directors’ perspectives as outsiders.
The Outside Director Session shall meet at least twice each year, shall discuss matters such as issues
facing management, the operation of the Board of Directors and the governance systems, and shallprovide opinions as appropriate to the Group CEO.

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 ingood 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.
116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 have less than two independent outside directors must disclose the reason for it. Currently, all ofMizuho 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, NYSElisted companies that are foreign private issuers meeting certain criteria, such as Mizuho Financial Group, arepermitted to follow home country practices in lieu of certain provisions of Section 303A, and the company isrelying on this exemption. 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, 2016, 2017 and 2018, we had 56,375, 59,179 and 60,051 employees, respectively, on aconsolidated basis, including overseas local staff but excluding advisers and temporary employees. We also had
an average of approximately 20,076 temporary employees during the fiscal year ended March 31, 2018.
The following tables show our full-time employees as of March 31, 2018 and the average number of
temporary employees for the fiscal year ended March 31, 2018, each broken down based on business segment
and geographical location:
Number offull-time employees

Average number of
temporary employees

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

24,526
2,145
8,645
1,591
1,669
21,475

12,417
354
67
115
147
6,976

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

60,051

20,076Percentage offull-time employees

Average percentage of
temporary employees

Business segment

Location

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

91.5%
2.3
1.4
4.8

99.8%
0.0
0.1
0.1

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

100.0%

100.0%

117

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 OwnershipShown below are two types of numbers of shares of Mizuho Financial Group’s common stock held by its
directors and executive officers as of June 30, 2018: One column shows the actual number of shares held; The
other shows the potential number of additional shares to be held (i.e., the number of shares that is scheduled to bedelivered equivalent to the stock ownership points granted by the current stock compensation system and thestock acquisition rights granted by the former stock option system).
Directors

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

Tatsufumi Sakai . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Toshitsugu Okabe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Daisaku Abe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Junichi Kato . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Katsunobu Motohashi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Akira Nakamura . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Seiji Imai . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tsutomu Nomura . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Takanori Nishiyama . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Motonori Wakabayashi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goji Fujishiro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shuji Kojima . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Makoto Umemiya . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yasuyuki Shibata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hisashi Kikuchi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Actual number ofshares held

Potential number of
additional shares to be held

308,538
130,925
34,75549,50048,200890,412218,192
77,11533,400130,000
22,40033,4005,000
4,500

120,388
73,857
74,124
69,07037,868
677,640
123,454
198,422
—
—
—
—
—
—

Actual number ofshares held

Potential number of
additional shares to be held

See above
688,495
308,457
611,011249,365
191,062
52,600305,794
See above
14,04031,69265,796
See above
See above
See above

See above
262,923
458,450
127,745
199,015
99,651
134,497
91,940See above
81,38179,87981,544
See above
See 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.”118

We maintain an employee stock ownership plan under which participating employees of the companies
listed below are able to purchase our shares with funds deducted from their salary and bonus payments. The plan
administrator makes open-market purchases of our shares for the account of the plan on a monthly 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, 2018:
As of March 31, 2018
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

111,318,229

119

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
7.A. Major Shareholders
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, 2018:
As of March 31, 2018
Number ofPercentage ofshares owned
outstanding shares

Name

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

1,070,043,700
1,054,777,400
512,108,700
479,711,500
453,273,840
381,129,200
374,905,000
341,932,527
325,656,600
308,675,100

4.22%
4.16
2.02
1.89
1.79
1.50
1.48
1.35
1.28
1.22

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,302,213,567

20.89%

As of March 31, 2018, there were 220 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.
7.B. Related Party Transactions
We and our subsidiary banks had, and expect to have in the future, banking transactions and othertransactions in the ordinary course of business with our related parties. Although, for the fiscal year ended
March 31, 2018, such transactions included, but were not limited to, call money, loans, deposits, guarantees andforeign exchange transactions, those transactions were immaterial and were made on substantially the sameterms, including interest rates and collateral, as those prevailing at the time for comparable transactions withother persons and did not involve more than the normal risk of collectability or present other unfavorable
features.
During the fiscal year ended March 31, 2018, 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, 2018.
During the fiscal year ended March 31, 2018, 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.

120

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 proceeding.
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, 2018 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 dividends per share ofcommon stock of the fiscal year ended March 31, 2017.
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 described in this annual report, no significant change in our financial position has occurred since
the date of the financial statements included in this annual report.

121

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,

2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017:First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018:First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Most recent six months:
December . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

122

Average daily
trading volume(shares)

4.55
4.17
4.51
3.87
4.00

3.62
3.22
2.72
2.69
3.37

556,105
352,911608,446
426,812285,536

3.30
3.71
3.87
3.85

2.69
2.76
3.17
3.56

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

3.76
3.72
3.76
4.00

3.47
3.37
3.46
3.54

349,014251,729
181,256
362,590

3.76
4.00
3.87
3.77
3.69
3.70

3.57
3.62
3.54
3.59
3.53
3.46

200,194
433,467
383,575
272,728333,099
253,515

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,

2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017:First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018:First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Most recent six months:
December . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Average daily
trading volume(shares)

240
226.6
280.4
225.3
220.7

180
178.1
149.3
142.0
185.4

186,546,095
132,018,080
200,523,432
162,921,802
127,920,473

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

210.7
208.9
210.0
220.7

186.7
185.4
194.7
189.1

115,420,966
108,518,360
141,275,285
147,410,341

208.6
220.7
211.5
198.3
200.6
203.3

199.8
205.2
193.8
189.1
188.0
189.1

129,917,095
147,543,079
157,500,153
138,161,367
102,114,325
97,854,567

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.”

123

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

124

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, 2018, 25,389,644,945 shares of common stock were issued.
Where relevant to the common stock, provisions of our preferred stock are also described below.

125

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 thereof126

“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
one-half of our goodwill and deferred assets exceeds the total of the stated capital, additional paid-in capital andlegal 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
Ministry of 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, 2018.
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
127

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
non-resident shareholder, to its standing proxy or mailing address in Japan) at least two weeks prior to the dateset for the 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 a128

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
one-third 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 importantmatters 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.”129

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 long130

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
for five consecutive years or more at its address registered in our register of shareholders or otherwise notified tous.
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.
131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.

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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, 2018, there was no outstanding preferred stock.
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
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 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 of134

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”).
135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) 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, 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 delegatedby the Board of Directors relating to the issuance of the relevant preferred stock and which date shall beseparately 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 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, giving due consideration to the capital adequacy
requirements applicable to us and other factors, and instead, we shall deliver our own common stock to holdersof the relevant preferred stock. In this case, the terms of acquisition, including the number of shares of thecommon stock to be delivered in exchange for the acquisition 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 Board of Directors relating to the issuance of therelevant preferred stock, giving due consideration to the market price of common stock, the subscription price ofthe 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 the following persons who make certain prescribed investments:•

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.
137

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. If a foreign investor
required to file such prior notification acquires our shares without compliance with such notification
requirements or the order of modification of or prohibition on the proposed acquisition, the Minister of Financeand any other competent minister may order the foreign investor to dispose of all or part of the shares or takeother necessary measures.
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 original138

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.
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, persons required to accelerate the recognition of any item of gross income with respect to shares or
ADSs as a result of such income being recognized on an applicable financial statement and holders of 10% ormore of our shares by vote or value) are subject to special tax treatment. This summary does not address the
Medicare tax on net investment income or any foreign, state, local or other tax consequences of investments inour 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 our 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 forthe “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 share of ourcurrent 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 on asubsequent 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 paidor accrued in the same taxable year. For foreign tax credit limitation purposes, the dividend will be income fromsources outside the United States. The limitation on foreign taxes eligible for credit is calculated separately withrespect 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 also141

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 assets and the valuation of our assets, including
goodwill, we do not 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 possible that we may become a PFIC in the current or any future taxable year due to changes in
the composition of our income or assets or the valuation of our assets. In addition, this determination is based inpart upon certain proposed U.S. Treasury regulations that are not yet in effect (the “Proposed Regulations”) andare subject to change in the future. The Proposed Regulations and other administrative pronouncements from theInternal Revenue Service (the “IRS”) provide special rules for determining the character of income and assets
derived in the banking business for purposes of the PFIC rules. Although we believe we have adopted areasonable interpretation of the Proposed Regulations and administrative pronouncements, there can be noassurance that the IRS will follow the same interpretation.
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.

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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 required143

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 U.S. Securities
and Exchange Commission 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.

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ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT CREDIT, MARKET AND
OTHER 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. Mizuho Financial Group maintains 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 andprovide for the human resources training necessary for appropriate levels of risk management. The policies also
provide for audits to measure the effectiveness and suitability of the risk management structure. In line with thesebasic 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.
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, which is one of the Business Policy
Committees of Mizuho Financial Group, 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 therisk management situation to the Board of Directors, the Risk Committee and the Executive Management
Committee, etc., on a regular basis and as needed. Mizuho Financial Group regularly receives reports andapplications concerning the risk management situation from our principal banking subsidiaries and other coregroup companies and gives them appropriate instructions concerning risk management. Our principal banking
subsidiaries and other core group companies each maintain their own systems for managing various types of risk,
receiving reports on the status of risk at their respective subsidiaries, and gives them appropriate instructions
concerning risk management as necessary.
Basic Approach
We classify the risks arising from the group’s businesses into different types of risk such as credit risk,
market risk, liquidity risk and operational risk according to their risk factors, and manage each type of risk
depending on its characteristics. Furthermore, each group entity manages such risks according to thecharacteristics of its business operations (i.e., management of risks associated with settlement and trust
businesses, etc.). In addition to managing each type of risk individually, we have established a comprehensive
risk management structure to identify and evaluate overall risk and to keep risk within limits that aremanagerially acceptable. In line with the basic policies relating to overall risk management laid down by Mizuho
Financial Group, companies within the Mizuho group identify risk broadly and take a proactive and sophisticatedapproach to risk management.
Risk Capital Allocation
We endeavor to obtain a clear grasp of the group’s risk exposure and have implemented measures to control
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 risk145within managerially acceptable limits by working to ensure that the overall risk we hold on a consolidated basis
does not exceed our financial strength. To ensure the ongoing financial soundness of Mizuho Financial Group,
our principal banking subsidiaries and other core group companies, we regularly monitor the manner in whichrisk capital is being used in order to obtain a proper grasp of the risk profile within this framework. Reports arealso submitted to the Board of Directors and other committees of each company. Risk capital is allocated toMizuho Bank, Mizuho Trust & Banking, Mizuho Securities and Mizuho Americas by risk category, and isfurther allocated within their respective business units based on established frameworks.
Stress Testing
For the purpose of verifying the appropriateness of the Mizuho group’s risk appetite and the adequacy of its
business plans, we carry out stress testing on our entire portfolio by measuring and assessing the impacts on ourcapital ratio and financial performance of the stress events assumed in the main and risk scenarios set by thegroup. Stress testing is carried out to confirm that the required capital ratio and financial performance can be
secured on the occurrence of any of the assumed stress events. When our capital ratio or financial performancefalls below the required level, we will consider and carry out a revision of our risk appetite and business plans.
We also calculate the impacts of assumed stress events on risk volumes, including interest rate risk related to ourbanking book that is not covered by regulatory capital, to confirm whether the risk volumes balance with thegroup’s capital when a risk event occurs. The calculated risk volumes are used for assessing the group’s internal
capital adequacy. Risk scenarios are set considering the current and projected economic conditions, as well as
vulnerabilities in the group’s business and financial structure. Moreover, we have established a robust risk
management framework under which stress testing is respectively carried out for each risk category, including
market risk. Through such stress testing, we deepen our understanding of the distinctive features of ourbusinesses and portfolios, and proactively determine action to be taken if a stress event happens. In this way, weare committed to enhancing our risk management capabilities on a continued basis.
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. Mizuho Financial Group has established the methods and structures
necessary for grasping and managing credit risk. Mizuho Financial Group manages credit risk for the Mizuho
group as a whole. Specifically, Mizuho Financial Group establishes the group’s fundamental credit risk policy tomanage major group companies, and monitors and manages the credit risks of the group as a whole.
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 broadly discusses and coordinates matters relating to basic policies
and operations in connection with credit risk management and matters relating to credit risk monitoring for theMizuho 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.
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The Balance Sheet & Risk Management Committee and the Credit Committee, each of which is a Business
Policy Committee of our principal banking subsidiaries, are responsible for discussing and coordinating overallmanagement of their individual credit portfolios and transaction policies towards obligors. The respective Chief
Risk Officers of our principal banking subsidiaries are responsible for matters relating to planning andimplementing 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 our principal banking subsidiaries determine policies andapprove/disapprove individual transactions in terms of credit 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 have established internal audit groups that are independent of thebusiness departments in order to ensure appropriate credit risk management.
Method of Credit Risk Management
We have adopted two different but mutually complementary approaches to credit risk management. The
first approach is “individual credit management,” in which we manage the process for each individual transaction
and individual obligor from execution until collection, based on our assessment of the credit quality of thecustomer. 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.
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 mission and social responsibilities, our basic policy for credit
business is determined in light of fundamental principles focusing on public welfare, safety, growth andprofitability.
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.
To assign obligor ratings, we have a quantitative evaluation system (rating model) in place to enable proper
assessment of an obligor’s credit standing. The system gives a quantitative rating to an obligor based on obligorspecific characteristics such as type of business (corporation or individual) and geography (in Japan or outside
Japan). We categorize our rating models for companies in Japan into those for large companies and those forsmall and medium-sized companies. The former consist of 13 models according to industry-specific factors,
while the latter consist of three models. For companies outside Japan, we utilize nine models.
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These were developed by the Credit Risk Management Department based on a statistical methodology andapproved by the Chief Risk Officer.
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. Our principal
banking subsidiaries efficiently manage credit risk and credit screening by dispersing a sufficient number ofsmall claims within each pool. Our principal banking subsidiaries generally review the appropriateness andeffectiveness of our approach to obligor ratings and pool allocations once a year in accordance withpredetermined procedures, which is audited by the Internal Audit Group.
Mizuho Financial Group defines a Restructured Loan as a loan extended to a Customer with Special
Attention when the following conditions are met: we are aiming for business reconstruction or financial support;
and lending conditions were amended favorably to the customer such as allowing interest rate reduction,
postponement of principal repayment/interest payment, debt forgiveness, etc.
An overdue loan is defined as a loan for a Customer with Special Attention of which the loan principal orinterest is overdue for three months or more following the contractual payment date.
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. In ourassessment of the probability of obligor bankruptcy, we deem an obligor that is rated as being insolvent or lower
as being bankrupt.
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
department in charge at headquarters carries out the review. The credit group has specialist departments fordifferent industries, business sizes and regions, carries out timely and specialized examinations based on thecharacteristics 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 andcredit department jointly clarify their credit policy and in appropriate cases assist the obligors at an early stage inworking towards credit soundness.
Credit Portfolio Management
Risk Measurement
We use statistical methodologies that involve a risk measurement system (enterprise value corporate
valuation model, holding period of one year) to manage the possibility of losses by measuring the expected148

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”). The risk measurement system covers the following account items reported by eachMizuho Financial Group company: credit transactions including loans and discounts; securities; customer’s
liabilities for acceptances and guarantees; deposits and foreign exchange; derivatives including swaps andoptions; off-balance sheet items including commitments; and other assets involving credit risk.
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
Our principal banking subsidiaries 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 to certain areas, industrial sectors and other groupings. Our principal banking
subsidiaries manage these risks in line with our specific guidelines for each. Our principal banking subsidiaries
also set the credit limit based on verification of status of capital adequacy. In cases where the limit is exceeded,
our principal banking subsidiaries will formulate a handling policy and/or action plan. In addition to the above,
our principal banking subsidiaries monitor total credit exposure, credit exposure per rating, credit concentration
per individual company, corporate group, geography, country and business sector to make a periodical report to
the Balance Sheet & Risk Management Committee and the Credit Committee.

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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 offices

150Market 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. Market risk includes market liquidity risk; i.e., the risk that we will suffer aloss due to market disruptions or other disorders that prevent us from conducting transactions in the market or
require us to pay significantly higher prices than normal to conduct transactions. Mizuho Financial Groupmanages market risk for the Mizuho group as a whole. Specifically, Mizuho Financial Group establishes thefundamental risk management policy for the entire group, manages the market risk of our principal banking
subsidiaries and other core group companies and monitors how the group’s market risk is being managed as awhole.
Market Risk Management Structure
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
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,
reporting and analysing, making proposals, setting limits and guidelines, and formulating and implementing
plans relating to market risk management.
As for the situation of market risk, the Risk Management Department submits reports to the President andGroup CEO on a daily basis and to the Board of Directors on a regular basis. For the purpose of managing themarket risk of our principal banking subsidiaries and other core group companies, the Department regularly
receives reports from each of them to properly identify and manage their market risk. These subsidiaries and coregroup companies, which account for most of the Mizuho group’s exposure to market risk, establish their basic
policies based on ours, and their Boards of Directors determine important matters relating to market risk
management.
Market Risk Management Method
To manage market risk, we set limits that correspond to risk capital allocations according to the risk profile
of each of our principal banking subsidiaries and other core group companies and thereby prevent the overallmarket risk we hold from exceeding our financial strength represented by capital, etc. The amount of risk capital
allocated to market risk corresponds to value-at-risk (the “VAR”) and additional costs that may arise in order toclose relevant positions.
Setting Limits
When the said limits are set, various factors are taken into account, including business strategies, historicallimit usage ratios, risk-bearing capacity (profits, equity capital and risk management framework), profit targets
and the market liquidity of the products involved. The limits are discussed and coordinated by the Risk
Management Committee, discussed further by the Executive Management Committee and then determined by the
President & Group CEO. 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 (10 BPV) as needed. An excess over any ofthese limits is immediately reported and addressed according to a pre-determined procedure.
Monitoring
To provide a system of mutual checks and balances in market operations, we have established middle
offices specializing in risk management that are independent of front offices which engage in market transactions
and of back offices which are responsible for book entries and settlements. When VAR is not adequate to control151

risk, the middle offices manage risk using additional risk indices, carry out stress testing and set stop loss limits
as needed. We monitor market liquidity risk for individual financial products in the market while taking turnoverand other factors into consideration.
Value-at-Risk
We use the VAR method, supplemented with stress testing, as our principal tool to measure market risk. The
VAR method measures the maximum possible loss that could be incurred due to market movements within acertain 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, 2016, 2017 and 2018 and as of March 31, 2016, 2017 and 2018:
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

Fiscal year ended March 31, 2018
Daily average Maximum Minimum(in billions of yen)

Risk category

As ofMarch 31, 2018

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

¥1.7
0.4
0.6
0.0

¥2.5
1.2
2.4
0.0

¥1.0
0.1
0.3
0.0

¥2.2
0.1
0.5
0.0

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

¥3.0

¥6.2

¥2.2

¥3.0

152

The following graph shows VAR figures of our trading activities for the fiscal year ended March 31, 2018:(VAR : billions of yen)

The following table shows VAR figures of our trading activities for the fiscal years indicated:
Fiscal years ended March 31,
2016 2017 2018 Change(in billions of yen)

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

¥2.0
4.5
1.8
2.9

¥2.6
5.8
2.3
3.3

¥3.0
6.2
2.2
3.0

¥ 0.4
0.3
(0.1)
(0.3)

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. In addition, as for risk management of banking activities, it is important toproperly measure interest rate risk so that we calculate interest risk using appropriate methods such asrecognizing demand deposits as “core deposits.”

153

The following graph shows the VAR related to our banking activities excluding our cross-shareholdings
portfolio for the year ended March 31, 2018:(VAR : billions of yen)

VAR

(%)

Interest rate on five-year government bonds

The following table shows the VAR figures relating to our banking activities for the fiscal years indicated:
Fiscal years ended March 31,
2016
2017
2018
Change(in billions of yen)

As of fiscal year end . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥321.5
Maximum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360.6
Minimum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
190.0
Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
284.9¥292.7
397.5
247.4
331.0

¥268.4
307.2
210.8
267.8

¥(24.3)(90.2)(36.6)(63.2)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.

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 to properly manage stock price risk. Specifically, we monitor VAR
measurements and the state of risk capital on a daily basis. Moreover, in order to control stock price risk, we areworking on the reduction in cross-shareholdings through careful negotiations with counterparties.
154Back 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, 2018 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 VAR
models. Based on the number of times losses exceeded VAR through back testing and the results of theevaluation of the model assumptions, we will make adjustments to the models as appropriate. Changes tofundamental portions of the VAR models are subject to the approval of our Group Chief Risk Officer.

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.

Stress Testing
Because the VAR method is based on statistical assumptions, we conduct stress testing to simulate thelevels of 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 under scenarios in whichstresses are applied to interest rate risk and stock price risk based on current and projected economic conditions,
historical market events, etc.
Liquidity Risk Management
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 or that forces us to raise funds atsignificantly higher interest rates than usual. Mizuho Financial Group manages liquidity risk for the Mizuho
group as a whole. Specifically, Mizuho Financial Group establishes the fundamental liquidity risk management
policy for the entire group, manages the liquidity risk of our principal banking subsidiaries and other core groupcompanies and monitors how the group’s liquidity risk is being managed as a whole.

155

Liquidity Risk Management Structure
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, reporting and analysing,making 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 for matters relating toplanning and running cash flow management operations, and the Financial Planning Department is responsible
for monitoring and adjusting cash flow management situation and for planning and implementing cash flow
management to maintain appropriate funding liquidity. Reports on the liquidity risk management are submitted to
the Risk Management Committee and the Balance Sheet Management Committee (each of which is a Business
Policy Committee), the Executive Management Committee and the President & Group CEO on a regular basis.
Our principal banking subsidiaries and other core group companies also establish their basic policies on
liquidity risk management to properly identify and manage liquidity risk.
Liquidity Risk Management Method
We manage liquidity risk with the use of “Liquidity Risk Management Indicators” and “Liquidity
Categorization.” The former is determined for the purpose of managing limits on funds raised in the market
considering our fund raising capabilities, and the latter is determined based on our funding conditions. We also
carry out liquidity stress testing to verify the sufficiency of liquidity reserve assets and the effectiveness ofcountermeasures against a possible outflow of funds during a stress event. The results of stress testing are used
for cash flow management operations.
Liquidity Risk Management Indicators
Limits on funds raised in the market are set based on a number of time horizons taking into accountcharacteristics and strategies of each of our principal banking subsidiaries and other core group companies. Suchlimits are discussed and coordinated by the Risk Management Committee, discussed further by the Executive
Management Committee and determined by the President & Group CEO. An excess over any of these limits isimmediately reported and addressed according to a pre-determined procedure.
Liquidity Categorization
We have established a group-wide framework of liquidity risk stages 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 funding conditions. As EWIs, we select stock prices, credit ratings, amount ofliquidity reserve assets such as Japanese government bonds, our funding situations and others.
Liquidity Stress Testing
We carry out stress testing regularly based on market-wide factors, idiosyncratic factors of the group and a
combination of both types of factors to verify the sufficiency of liquidity reserve assets and the effectiveness of
our liquidity contingency funding plans. Furthermore, we utilize stress testing for evaluating the appropriatenessof our annual funding plan.

156

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 control operational risk management for the Mizuho
group as a whole. Considering that operational risk includes information technology risk, operations risk, legalrisk, human resources risk, tangible asset risk, regulatory change risk and reputational risk, we have separately
determined the fundamental risk management policies for these different types of risk. We manage theoperational risk associated with our principal banking subsidiaries and other core group companies while
monitoring the state of group-wide operational risk.
Operational Risk Management Structure
Our Board of Directors determines basic matters pertaining to operational risk management policies. The
Risk Management Committee of Mizuho Financial Group broadly discusses and coordinates matters relating tobasic policies in connection with operational risk management, operational risk operations and operational risk
monitoring. The Group Chief Risk Officer of Mizuho Financial Group is responsible for matters relating tooperational risk management planning and operations. The Risk Management Department of Mizuho Financial
Group is responsible for monitoring market risk, reporting and analysing, making proposals, setting limits andguidelines, and formulating and implementing plans relating to operational risk management.
Our principal banking subsidiaries and core group companies establish their basic policies on operationalrisk management, and their Boards of Directors determine important matters relating to operational risk
management.
Operational Risk Management Method
To manage operational risk, we set common rules for data gathering to develop various databases shared by
the group and measure operational risk as operational VAR on a regular basis, taking into account possible future
loss events and changes in the business environment and internal management.
We have established and are strengthening management methods and systems to appropriately identify,
assess, measure, monitor and control the operational risks that 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.

•

•

•
•
•

157

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.

Definition

Operations Risk

Principal Risk Management Methods

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.

•
•
•
•

•
Legal Risk

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.

•

•
•

•

•

•

158

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.
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.

Definition

Reputational
Risk

Principal Risk Management Methods

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.

••

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.

159

Measurement of operational risk equivalent
Implementation of the AMA/Advanced Measurement Approach (“AMA”)
We have adopted the AMA for the calculation of operational risk equivalent in association with capital
adequacy ratios based on Basel Regulation. However, we use the Basic Indicator Approach for entities that are
deemed to be less important in the measurement of operational risk equivalent. Entities within our group that use
the AMA include the following: Mizuho Financial Group; Mizuho Bank., Ltd., Mizuho Trust & Banking Co.,
Ltd.; Mizuho Securities; Mizuho Information & Research Institute Corporation Inc.; Trust & Custody Services
Bank Ltd.; Mizuho Operation Service, Ltd.; Mizuho Credit Guarantee Co., Ltd.; Mizuho Business Service Co.,
Ltd.; Mizuho Trust Operations Co., Ltd.; Mizuho Trust Systems Co., Ltd.; Mizuho Trust Business Operations
Co., Ltd.; Mizuho Trust Retail Support Co., Ltd.; Mizuho Bank Europe N.V.; and Mizuho International plc.
The measurement results under the AMA are used not only as the operational risk equivalent in thecalculation of capital adequacy ratios based on Basel Regulation, but also as operational VAR for internal risk
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 amount by estimating the maximum loss, using a 99.9th percentile one-tailed
confidence interval and a one-year holding period, etc., as operational risk equivalent, employing bothinternal loss data (i.e., actually experienced 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, 2018, 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 risk amounts related to the seven loss
event types defined in the FSA’s Capital Adequacy Notice, large-scale natural disasters and litigation. In
the measurement of operational risk equivalent as of March 31, 2018, we did not reflect the correlation
effects among operational risk related to each of the seven loss event types.

•

Operational risk by 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 the160result 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.
•

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 group-wide basis in accordance with its business activities and operational risk
profile.
161

•

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(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.

162

Compliance
As a 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 define complianceas “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 soundbusiness management. Each of our group companies maintains its own compliance structure in line with thebasic 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 their respective
chief compliance officers. These divisions are responsible for compliance planning and implementation andcontrol overall compliance management at their 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.
163

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 to conduct internal audits at their respective
domestic and overseas business offices, head office departments and group companies. Specifically, the internal
audit departments assess the suitability and effectiveness of business activities associated with compliance andrisk management.
Other Core Group Companies
Other core group companies have also established effective and efficient internal audit structures adapted tothe characteristics of their respective businesses.

164

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:

$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)– Delivery of ADRs and the surrender of ADRs$.05 (or less) per ADS(1)– 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$.05 (or less) per ADS(2)– General depositary services

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

Notes:(1) Based on the amendments to the Deposit Agreement that became effective April 2, 2018, fees for cash
distribution to ADS registered holders were changed from $.02 (or less) per ADS to $.05 (or less) per ADS.
(2) Based on the amendments to the Deposit Agreement that became effective April 2, 2018, fees for generaldepositary services were newly added.
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. In the fiscal year ended March 31, 2018, the depositary reimbursed us $75,000 forsuch expenses.
165

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, 2018. 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, 2018 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 our receipts
and expenditures are being made only in accordance with authorizations of management and directors;
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 31,2018 based on the criteria established in “Internal Control—Integrated Framework” issued by the Committee of166

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,
2018.
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, 2018, 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.
Since June 11, 2018, Mizuho Bank and Mizuho Trust & Banking have been engaging in the multi-stage
process of migration to and the implementation of our next-generation IT systems, including accounting system.
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 Mizuho Financial Group 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, 2017 and 2018 are presented in the following table:
Fiscal years ended March 31,
2017
2018
(in millions of yen)

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

¥4,800406
117
42¥4,951306
213
13

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

¥5,365¥5,483

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.
167

(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 preapproval and report such pre-approval at the monthly meeting of theaudit committee.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable168

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, 2018:
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, 2017 . . . . . . . . . . . . . . .
May 1 to May 31, 2017 . . . . . . . . . . . . . . . .
June 1 to June 30, 2017 . . . . . . . . . . . . . . . .
July 1 to July 31, 2017 . . . . . . . . . . . . . . . . .
August 1 to August 31, 2017 . . . . . . . . . . . .
September 1 to September 30, 2017 . . . . . .
October 1 to October 31, 2017 . . . . . . . . . . .
November 1 to November 30, 2017 . . . . . . .
December 1 to December 31, 2017 . . . . . . .
January 1 to January 31, 2018 . . . . . . . . . . .
February 1 to February 28, 2018 . . . . . . . . .
March 1 to March 31, 2018 . . . . . . . . . . . . .

2,478
3,681
3,265
4,639
2,468
2,122
2,573
3,189
10,012
7,645
4,207
2,783

¥195.5
204.8
198.3
202.4
192.0
189.8
198.8
203.0
204.7
212.6
203.9
196.0

—
—
—
—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—
—
—
—

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

49,062¥202.5——Note:(1) A total of 49,062 shares were purchased other than through publicly announced plans or programs during
the fiscal year ended March 31, 2018, due to our purchase of shares constituting less than one (1) unit fromholders 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.

169

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 not
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 Three Core
Companies, entities to which Mizuho Financial Group and its Three Core Companies are a principal
business counterparty, entities that receive more than a specified amount of donations from Mizuho
Financial Group or its Three Core Companies, 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 Three Core Companies, as well as persons who otherwise are likely
to give 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 fourteen 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.
170

•

A NYSE-listed U.S. company must hold regularly scheduled executive sessions where participants arelimited to non-executive directors. Currently, the Outside Director Session consists solely of outside
directors and is held at least twice a year, where the outside directors discuss matters such as issues
facing management, the operation of the Board of Directors and the governance systems, and provide
opinions as appropriate to the Group CEO.

•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.

171

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 1,2018 (English Translation)

1.3

Share Handling Regulations of Mizuho Financial Group, Inc., dated April 1, 2018 (English
Translation)

2.1

Form of American Depositary Receipt

2.2

Form of Deposit Agreement, amended and restated as of April 2, 2018, among the registrant, The
Bank of New York Mellon as Depositary and all owners and holders from time to time ofAmerican Depositary Receipts issued thereunder8

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 7, 2017.
Incorporated by reference to our annual report on Form 20-F (No. 001-33098) filed on July 21, 2016.

172

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, 2016, 2017 and 2018. 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.
2016
2017
2018
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 . . . . . . . . . . . . . . . . . . . . .

29,485
6,639

30
38

0.10%
0.57%

37,389
7,671

27
48

0.07%
0.63%

39,812
8,363

27
94

0.07%
1.13%

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

36,12468

0.19%

45,06075

0.17%

48,175121

0.25%

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

4,309
10,465

10
50

0.22%
0.48%

5,079
9,213

18
79

0.35%
0.85%

5,283
9,251

23
132

0.43%
1.43%

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

14,77460

0.41%

14,29297

0.68%

14,534155

1.07%

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

5,262
11,602

16
135

0.31%
1.16%

4,408
10,335

27
136

0.62%
1.31%

4,654
10,821

50
152

1.07%
1.41%

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

16,864151

0.90%

14,743163

1.11%

15,475202

1.31%

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

25,625
3,058

88
102

0.34%
3.34%

20,357
3,915

78
87

0.38%
2.24%

21,267
3,544

97
77

0.46%
2.18%

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

28,683190

0.66%

24,272165

0.68%

24,811174

0.70%

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

52,86624,279

565
466

1.07%
1.92%

53,93025,412

510
499

0.95%
1.96%

58,04924,822

511
599

0.88%
2.41%

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

1.34%

79,342

1,009

1.27%

82,871

1,110

1.34%

77,145

1,031

Total interest-earning assets:
Domestic . . . . . . . . . . . . . . . . . . . 117,547
Foreign . . . . . . . . . . . . . . . . . . . . . 56,043

709
791

0.60% 121,163
1.41% 56,546

660
849

0.54% 129,065
1.50% 56,801

708
1,054

0.55%
1.86%

Total . . . . . . . . . . . . . . . . . . . . . . . 173,590

1,500

0.86% 177,709

1,509

0.85% 185,866

1,762

0.95%

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

2,285
21,443(478)

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

23,25026,176

22,592

Total average assets . . . . . . . . . . . . . . . . . 196,840

203,885

208,458

3,312
23,320(456)

3,076
19,896(380)

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 33.2%, 32.7% and 31.2%,
respectively, for the fiscal years ended March 31, 2016, 2017 and 2018.
Averagebalance

2016
Interest
expense2017
Average Average Interest Average Averageratebalance expense
ratebalance(in billions of yen, except percentages)

2018Interest
expenseAveragerate

Liabilities and equity:
Interest-bearing liabilities:
Deposits:
Domestic . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . .

81,09020,958

60
154

0.07%
0.73%

83,29323,173

51
214

0.06%
0.92%

90,07824,567

60
323

0.07%
1.32%

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

102,048

214

0.21%

106,466

265

0.25%

114,645

383

0.33%

Domestic . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . .

15,13918,982

22
58

0.15%
0.31%

14,177
17,112

27
109

0.19%
0.63%

13,67816,385

43
222

0.31%
1.35%

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

34,12180

0.24%

31,289136

0.43%

30,063265

0.88%

Trading account liabilities:
Domestic . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . .

2,092
1,195

13
8

0.61%
0.69%

1,697
1,049

14
7

0.82%
0.71%

1,454
1,235

27
14

1.87%
1.16%

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

3,287

21

0.64%

2,746

21

0.78%

2,689

41

1.54%

Long-term debt:
Domestic . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . .

14,236
1,441

176
4

1.23%
0.26%

14,523
655

178
2

1.22%
0.32%

13,032
732

197
4

1.51%
0.49%

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

15,677180

1.15%

15,178180

1.18%

13,764201

1.46%

Total interest-bearing
liabilities:
Domestic . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . .

112,557
42,576

271
224

0.24%
0.53%

113,690
41,989

270
332

0.24%
0.79%

118,242
42,919

327
563

0.28%
1.31%

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

155,133

495

0.32%

155,679

602

0.39%

161,161

890

0.55%

Noninterest-bearing liabilities (2) . . . .

35,176872

0.40%

Short-term borrowings (1):40,99239,758Equity . . . . . . . . . . . . . . . . . . . . . . . . .

6,531

7,214

7,539

Total average liabilities and equity . .

196,840

203,885

208,458

Net interest income and averageinterest rate spread . . . . . . . . . . . . .
Net interest income as a percentageof average total interest-earning
assets . . . . . . . . . . . . . . . . . . . . . . .

1,005

0.54%

0.58%

907

0.46%

0.51%

0.47%

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 28.2%, 28.4% and 26.9%,
respectively, for the fiscal years ended March 31, 2016, 2017 and 2018.

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, 2017
compared to the fiscal year ended March 31, 2016 and the fiscal year ended March 31, 2018 compared to thefiscal year ended March 31, 2017. 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, 2017
Fiscal year ended March 31, 2018
versusversusfiscal year ended March 31, 2016
fiscal year ended March 31, 2017
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 . . . . . . . . . . . . . . . . . . . . . . .

6
6

(9)
4

(3)
10

1
5

(1)
41

—
46

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

12

(5)

7

6

40

46

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

2
(6)

6
35

8
29

1
—

4
53

5
53

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

(4)

41

37

1

57

58

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

(3)
(14)

14
15

11
1

2
6

21
10

23
16

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

(17)

29

12

8

31

39

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

(18)
19

8
(34)

(10)
(15)

4
(8)

15
(2)

19
(10)

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

1

(26)

(25)

(4)

13

9

Loans:
Domestic . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . .

10
22

(65)
11

(55)
33

36
(11)

(35)
111

1
100

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

32

(54)

(22)

25

76

101

Total interest and dividend income:Domestic . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . .

(3)
27

(46)
31

(49)
58

44
(8)

4
213

48
205

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

24

(15)

9

36

217

253

A-4

Fiscal year ended March 31, 2017
Fiscal year ended March 31, 2018
versusversusfiscal year ended March 31, 2016
fiscal year ended March 31, 2017
Increase (decrease)
Increase (decrease)
due to changes indue to changes in
Net
Net
VolumeRatechangeVolumeRatechange(in billions of yen)Interest expense:
Deposits:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

1
18

(10)
42

(9)
60

4
14

5
95

9
109

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

19

32

51

18

100

118

Short-term borrowings:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

(1)
(6)

6
57

5
51

(1)
(5)

17
118

16
113

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

(7)

63

56

(6)

135

129

Trading account liabilities:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

(2)
(1)

3
—

1
(1)

(2)
1

15
6

13
7

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

(3)

3

—

(1)

21

20

Long-term debt:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

4
(2)

(2)
—

2
(2)

(18)
—

37
2

19
2

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

2

(2)

—

(18)

39

21

Total interest expense:
Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

2
9

(3)
99

(1)
108

(17)
10

74
221

57
231

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

11

96

107

(7)

295

288

Net interest income:Domestic . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . .

(5)
18

(43)
(68)

(48)
(50)

61
(18)

(70)
(8)

(9)
(26)

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

13

(111)

(98)

43

(78)

(35)

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, 2016, 2017 and 2018:
2016

2017
2018
Net
Net
Net
unrealized
unrealized
unrealized
Amortized Fair
gains
Amortized Fair
gains
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) . . . . . . . . .

15,672751

15,763780

91
29

10,257694

10,263709

6
15

13,334730

13,332
743

(2)
13

2,696
1,610

2,721
3,726

25
2,116

2,597
1,452

2,654
3,722

57
2,270

2,743
1,478

2,789
3,915

46
2,437

20,72922,9902,261

15,00017,3482,348

18,285

20,779

2,494

436
940
169

438
942
169

2
2
—

1,148
934
139

1,144
935
134

(4)
1
(5)

689
1,058
153

686
1,058
146

(3)
—
(7)

852
54

859
55

7
1

915
78

917
79

2
1

880
117

879
118

(1)
1

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

2,451

2,463

12

3,214

3,209

(5)

2,897

2,887

(10)

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

23,18025,453

2,273

18,214

20,557

2,343

21,182

23,6662,484

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) . . . . . . . . .

Held-to-maturity securities:
Domestic:
Japanese government bonds . . . . . . . . . .

3,760

3,817

57

3,060

3,097

37

1,960

1,984

24

Total domestic . . . . . . . . . . . . . . . . . . . . .

3,760

3,817

57

3,060

3,097

37

1,960

1,984

24

Foreign:
Agency mortgage-backed securities (3) . .

1,059

1,056

(3)

757

750

(7)

558

538

(20)

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

1,059

1,056

(3)

757

750

(7)

558

538

(20)

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

4,819

4,873

54

3,817

3,847

30

2,518

2,522

4

Notes:(1) All domestic agency mortgage-backed securities are issued by Japan Housing Finance Agency, a Japanese government-sponsoredenterprise.
(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 this line 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, 2018. 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 . . . . . . . . . . . . . . . . . . . . . . . .

6,286
—

(0.22)% 5,026——(0.11)% 1,921——(0.02)%—

99743

0.52% 13,332
0.93%
743

(0.15)%
0.93%345

0.21% 1,359

2.82%

0.39%

363

0.52%

2,789

1.56%

(0.20)% 6,385

0.50% 2,643

0.10% 1,205

0.77% 16,864

0.18%

722

Total domestic . . . . . . . . . . . . . . . . . . . . . .

6,631

Foreign:
U.S. Treasury bonds and federal agency
securities . . . . . . . . . . . . . . . . . . . . . . . .
Other foreign government bonds . . . . . . .
Agency mortgage-backed securities . . . . .
Corporate bonds and other debt
securities . . . . . . . . . . . . . . . . . . . . . . . .

611
842
—

1.61%
1.83%
—

—
208
—

—
2.14%
—

75
8
—

2.16%
0.35%
—

—
—
146

—
—
2.89%

686
1,058
146

1.67%
1.88%
2.89%

503

1.29%

312

1.33%

61

1.22%

3

0.15%

879

1.29%

520

1.66%

144

1.67%

149

2.84%

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

1,956

1.62%

2,769

1.70%

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

8,587

0.21% 6,905

0.59% 2,787

0.18% 1,354

1.01% 19,633

0.39%

Held-to-maturity securities:
Domestic:
Japanese government bonds . . . . . . . . . . .

840

0.22%

740

0.21%

380

0.69%

—

—

1,960

0.31%

Total domestic . . . . . . . . . . . . . . . . . . . . . .

840

0.22%

740

0.21%

380

0.69%

—

—

1,960

0.31%

Foreign:
Agency mortgage-backed securities . . . . .

—

—

—

—

—

—

558

3.72%

558

3.72%

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

—

—

—

—

—

—

558

3.72%

558

3.72%

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

840

0.22%

740

0.21%

380

0.69%

558

3.72%

2,518

1.06%

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,
2018.
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, 2014, 2015,2016, 2017 and 2018:
2014

2015
2016
2017
(in billions of yen)

2018

Domestic (2):Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction and real estate . . . . . . . . . . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transportation and communications . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . . . . . . . . .
Government and public institutions . . . . . . . . . . . . . . . . . . . . .
Other industries (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Individuals:
Mortgage loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,026
7,238
3,953
5,350
3,247
3,460
6,734
4,983

8,224
7,416
4,267
5,586
3,157
3,853
4,612
5,079

8,345
7,822
4,648
5,407
3,268
3,632
3,395
4,618

8,740
7,772
4,749
5,140
3,491
4,006
8,532
4,427

8,156
8,102
5,024
5,113
3,565
4,471
8,882
5,018

11,184763

11,018798

10,585
852

9,960
840

9,445
884

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

54,93854,01052,57257,65758,660Foreign:
Commercial and industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banks and other financial institutions . . . . . . . . . . . . . . . . . . .
Government and public institutions . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

17,095
6,740
1,128
38

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

18,68624,20225,151

24,78325,001

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

73,624
139

78,212
164

77,723
168

82,440156

83,661
146

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

73,48578,04877,55582,284

83,515

Notes:(1) Other industries of Domestic includes trade receivables and lease receivables of consolidated variable interest entities.
(2) Certain loans were reclassified primarily from Other of Individuals to Construction and real estate to align with current period
presentation.

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,
2018:

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,837
1,604
2,116
2,964
1,018
1,844
8,155
3,143
1,328

3,177
3,239
2,173
1,664
1,623
1,884
422
1,159
2,134

1,142
3,259
735
485
924
743
305
716
6,867

8,156
8,102
5,024
5,113
3,565
4,471
8,882
5,018
10,329Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26,00917,475

15,176

58,660Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,460

10,3152,226

25,001

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

38,46927,79017,402

83,661

Foreign:

Of the above loans due after one year, loans which had floating rates and fixed rates at March 31, 2018 were as
follows:(in billions of yen)

Floating rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

34,29910,893

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

45,192A-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. There are no loans that are ninety days past due andstill accruing. The Group does 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 otherthan those already designated as impaired loans. The following table shows the distribution of impaired loans at
March 31, 2014, 2015, 2016, 2017 and 2018 by domicile and industry of borrower:
2014

2015
2016 2017(in billions of yen)

2018

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

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

142
41
58
131
28
12
4
90

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

857

987

823

790

506

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

288

188

167

191

109

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

1,145

1,175

990

981

615

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, 2018 would have been
¥8 billion and ¥2 billion, respectively. The MHFG group recognized interest income on these domestic andforeign loans of ¥7 billion and ¥1 billion, respectively, in the consolidated statements of income for the fiscal
year ended March 31, 2018.

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, 2016, 2017 and 2018:
Publicinstitutions% of total
Undrawn
Banks Others
Total
assetscommitments(in billions of yen, except percentages)

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

2018
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,090
9
1,518

340
374
275

4,231
1,821
355

7,661
2,204
2,148

3.75%
1.08%
1.05%

7,137
1,006
728

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, 2014, 2015, 2016, 2017 and 2018:
2014

2015
2016
2017
(in billions of yen, except percentages)

2018

Allowance for loan losses at beginning of fiscal year . . . . . . .
Provision (credit) for loan losses . . . . . . . . . . . . . . . . . . . . . . .

773
(126)

626
(60)

520
35

451
38

Charge-offs:
Domestic:
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction and real estate . . . . . . . . . . . . . . . . . .
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Wholesale and retail . . . . . . . . . . . . . . . . . . . . . . . .
Transportation and communications . . . . . . . . . . . .
Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57
8

39
40

70
42

20
11

29
27

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

65

79

112

31

56

6
5
3
3
3

2
4
2
3
1

2
1
2
8
1

1
2
1
5
4

1
1
2
1
—

—

—
1
3

1
3

—
—

—
—

—

2

3

2

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24
2

16
7

16
5

16
10

8
7

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

26

23

21

26

15

Net charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

39

56

91

5

41

Others (Note).......................................
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . .

18
626

10
520

(13)
451

(4)
480

(3)
310

Ratio of net charge-offs to average loans outstanding . . . . . .

0.05%

0.07%

0.12%

0.01%

0.05%

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

Note: Others includes primarily foreign exchange translation.

A-12

480
(126)

6
—
5
12
1
5

1

The following table shows an allocation of the MHFG Group’s allowance for loan losses by domicile andindustry of borrower at March 31, 2014, 2015, 2016, 2017 and 2018:
2014
2015
2016
2017
2018
% 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 . . . . . . . . . . . . . . . . .

177
51
30
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%

85
17
20
52

9.75%
9.68%
6.01%
6.11%

22

4.41% 14

4.04%

9

4.20%

10

4.23%

10

4.26%

21
5
95
74
21

4.70% 18
15.92% 5
16.26% 59
15.19% 51
1.07% 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%

20
7
25
19
6

5.34%
16.62%
12.35%
11.29%
1.06%

Total domestic . . . . . . . . . . . . . . . . .
Total foreign . . . . . . . . . . . . . . . . . . .

466
160

74.62% 408
25.38% 112

69.06% 333
30.94% 118

67.64% 375
32.36% 105

69.94% 236
30.06% 74

70.12%
29.88%

Total allowance for loan losses . . . . .

626

100.00% 520

100.00% 451

100.00% 480

100.00% 310

100.00%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, 2016, 2017 and 2018:
2016
2017
2018
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 . . . . . . . . . . . . . . . . . . . .

13,26838,92830,658
11,504

— %
0.02%
0.14%
0.08%

17,31048,98627,929
6,378

— %
0.01%
0.16%
0.01%

19,64356,47827,035
6,565

— %
0.01%
0.19%
0.01%

Foreign offices:
Noninterest-bearing demand deposits . . . . . . . .
Interest-bearing deposits, principally time
deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certificates of deposit . . . . . . . . . . . . . . . . . . . .

1,429

— %

2,321

— %

2,244

— %

16,276
4,682

0.77%
0.60%

18,313
4,860

0.93%
0.91%

19,161
5,406

1.33%
1.25%

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

116,745

0.18% 126,097

0.21% 136,532

0.28%

The total amounts of deposits by foreign depositors in domestic offices at March 31, 2016, 2017 and 2018 were¥719 billion, ¥645 billion and ¥779 billion, respectively.
At March 31, 2018, the balance and remaining maturities of time deposits and certificates of deposit issued bydomestic offices in amounts of ¥10 million (approximately US$94 thousand at the Federal Reserve Bank of
New York’s noon buying rate on March 31, 2018) 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)

9,046
3,576
3,412
1,161

5,025
238
395
120

14,071
3,814
3,807
1,281

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,195
Foreign offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,427

5,778
5,604

22,973
19,031

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

11,38242,004A-14

30,622

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, 2016, 2017 and 2018:
2016
2017
2018
(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

1,239

3,941

4,016

4,467
4,467
0.09%
0.02%

4,123
4,123
0.02%
0.02%

4,094
3,993
0.02%
0.02%

31,00925,62924,69235,541
22,1990.24%
0.35%

25,96821,1440.48%
0.58%

25,47020,595
1.01%
1.07%

1,873

1,719

1,355

2,391
2,080
0.31%
0.43%

2,135
1,477
0.66%
0.91%

1,736
1,688
1.13%
1.35%

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, 2017 and 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5
Consolidated Statements of Income for the fiscal years ended March 31, 2016, 2017 and 2018 . . . . . .
F-7
Consolidated Statements of Comprehensive Income for the fiscal years ended March 31, 2016, 2017and 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-8
Consolidated Statements of Equity for the fiscal years ended March 31, 2016, 2017 and 2018 . . . . . .
F-9Consolidated Statements of Cash Flows for the fiscal years ended March 31, 2016, 2017 and 2018 . . F-11
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-13

F-1

Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directorsof Mizuho Financial Group, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Mizuho Financial Group, Inc. and subsidiaries(the “Company”) as of March 31, 2018 and 2017, the related consolidated statements of income, comprehensive
income, equity and cash flows for each of the three years in the period ended March 31, 2018, and the related
notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated
financial statements present fairly, in all material respects, the financial position of the Company at March 31,2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended
March 31, 2018, 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) (PCAOB), the Company’s internal control over financial reporting as of March 31, 2018, basedon criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework) and our report dated July 3, 2018 expressed an
unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express
an opinion on the Company’s financial statements based on our audits. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we planand perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks ofmaterial misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts anddisclosures in the financial statements. Our audits also included evaluating the accounting principles used andsignificant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Ernst & Young ShinNihon LLC
We have served as the Company’s auditor for SEC reporting purposes since 2006, and as its Japanese statutory
auditor since 2000, which included the years we served as joint auditors.
Tokyo, Japan
July 3, 2018

F-2

Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directorsof Mizuho Financial Group, Inc.
Opinion on Internal Control over Financial Reporting
We have audited Mizuho Financial Group, Inc. and subsidiaries’ internal control over financial reporting as ofMarch 31, 2018, based on criteria established in Internal Control—Integrated Framework issued by theCommittee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the “COSO criteria”).
In our opinion, Mizuho Financial Group, Inc. and subsidiaries (the “Company”) maintained, in all material
respects, effective internal control over financial reporting as of March 31, 2018, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board(United States) (PCAOB), the consolidated balance sheets of the Company as of March 31, 2018 and 2017, therelated consolidated statements of income, comprehensive income, equity and cash flows for each of the three
years in the period ended March 31, 2018, and the related notes and our report dated July 3, 2018 expressed an
unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting andfor its assessment of the effectiveness of internal control over financial reporting included in the accompanying
Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an
opinion on the Company’s internal control over financial reporting based on our audit. We are a public
accounting firm registered with the PCAOB and are required to be independent with respect to the Company inaccordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities andExchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we planand 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 thata material weakness exists, testing and evaluating the design and operating effectiveness of internal control basedon the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
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.

F-3

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.
/s/ Ernst & Young ShinNihon LLC
Tokyo, Japan
July 3, 2018

F-4

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSMARCH 31, 2017 AND 2018
2017
2018
(in millions of yen)
Assets: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 (including assets pledged that secured parties are permitted to sell or repledge of¥5,861,942 million in 2017 and ¥4,897,190 million in 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments (Note 4):
Available-for-sale securities (including assets pledged that secured parties are permitted to sell or
repledge of ¥442,775 million in 2017 and ¥932,302 million in 2018) . . . . . . . . . . . . . . . . . . . . . . . . .
Held-to-maturity securities (including assets pledged that secured parties are permitted to sell or
repledge of ¥1,050,714 million in 2017 and ¥677,046 million in 2018) . . . . . . . . . . . . . . . . . . . . . . . .
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans (Notes 5 and 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets (Note 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,592,191
45,994,780
1,037,986
8,967,712
3,350,052

1,685,835
46,485,086
720,461
8,080,927
4,408,508

24,998,493

24,302,543

20,557,118

23,665,628

3,817,360
2,517,551
595,069
585,896
82,283,906 83,514,644(479,673)(309,902)
81,804,233
2,041,273
184,171
270,694
95,176
94,14763,5204,992,329

83,204,742
2,116,184
212,596
301,332
95,18484,44757,0885,731,634

200,456,304 204,255,642

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.
2017
2018
(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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

96,07781,8072,099,890
46,1802,149,321
772,290

31,435
95,0482,558,186
48,5652,323,081
811,453

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

5,245,565

5,867,768

See the accompanying Notes to the Consolidated Financial Statements.
F-5

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS—(Continued)
MARCH 31, 2017 AND 2018
2017
2018
(in millions of yen)
Liabilities and equity:
Deposits :Domestic:
Noninterest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign:
Noninterest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due to trust accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call money and funds purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under repurchase agreements (Note 30) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under securities lending transactions (Note 30) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings (Note 12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bank acceptances outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt (including liabilities accounted for at fair value of ¥1,496,488 million in 2017, and¥1,955,636million in 2018) (Notes 12 and 28) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities (Note 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19,063,774
87,358,504

21,068,569
91,206,963

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
209,3092,257,350
22,351,124
3,992,544
2,105,294
16,656,930
1,832,870
1,688,018
13,115,270
212,596
64,501
306,203
232,885

14,529,414
5,026,525

12,955,230
4,705,595

191,684,247

194,751,942

5,826,149
918,894
1,521,163

5,826,383
1,306,141
1,741,894

Commitments and contingencies (Note 24)
Equity:MHFG shareholders’ equity:
Common stock (Note 15)—no par value, authorized 48,000,000,000 shares in 2017 and 2018,
and issued 25,386,307,945 shares in 2017, and 25,389,644,945 shares in 2018 . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income, net of tax (Note 17) . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Treasury stock, at cost—Common stock 19,992,754 shares in 2017, and 24,829,446
shares in 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total MHFG shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4,849)(5,997)

8,261,357
510,700

8,868,421
635,279

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,772,057

9,503,700

Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

200,456,304

204,255,642

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.
2017
2018
(in millions of yen)
Liabilities of consolidated VIEs:
Other short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

60,575
7,723
431,190
1,147,895

31,392
22419,649
1,305,640

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,647,383

1,756,703

See the accompanying Notes to the Consolidated Financial Statements.
F-6

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME
FOR THE FISCAL YEARS ENDED MARCH 31, 2016, 2017 AND 2018
2016
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2017
2018
(in millions of yen)

1,030,802

1,009,094

1,109,776

110,41179,600151,278
6,983
53,007
68,09088,311
77,343
163,114
5,068
91,45374,64788,31986,066202,125
5,699
149,197
120,704

Total interest and dividend income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,500,171

1,509,030

1,761,886

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

213,601
21,031
7,830
66,5796,791
179,575

264,748
21,3993,173
120,578
12,175
179,639382,706
41,514
5,031
243,569
16,166200,950

Total interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

495,407

601,712889,936

Net interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision (credit) for loan losses (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,004,764
34,560907,318
37,668871,950(126,362)

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

970,204

869,650

998,312

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings (losses) of equity method investees—net . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on disposal of premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other noninterest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

804,756
113,553
559,139
263,793
28,96910,223
103,461

825,963
69,453(42,481)333,270
26,785
5,638
149,404

865,711
91,793236,982
297,157
24,3428,225
80,453

Total noninterest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,883,894

1,368,032

1,604,663

Noninterest expenses:
Salaries and employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of goodwill (Note 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Occupancy expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fee and commission expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision (credit) for losses on off-balance-sheet instruments . . . . . . . . . . . . . . . . . . . . . . . . .
Other noninterest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

633,557
548,027
6,222
195,898
164,039(16,447)
126,197

663,166
570,897—
194,955
177,006
19,464
131,819

688,481585,992—
191,592
189,187(30,244)
138,669

Total noninterest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,657,493

1,757,307

1,763,677

Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense (Note 20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,196,605
346,542

480,375
91,244

839,298
237,604

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

850,063(429)

389,131
26,691

601,694
24,086

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

850,492

362,440

577,608

Earnings per common share (Note 19):
Basic net income per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

34.19(in yen)
14.33

22.77

Diluted net income per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33.50

14.28

22.76

See the accompanying Notes to the Consolidated Financial Statements.
F-7

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE FISCAL YEARS ENDED MARCH 31, 2016, 2017 AND 2018
2016

2017
2018
(in millions of yen)

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

850,063

389,131

601,694

Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on available-for-sale securities, net of tax . . . .
Foreign currency translation adjustments, net of tax . . . . . . . . . . . . . . . . . . .
Pension liability adjustments, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(338,822) 51,957
97,428(123,221) (12,322) (29,934)(111,599) 11,922 155,044

Total other comprehensive income (loss), net of tax . . . . . . . . . . . . . . . . . . .

(573,642)

51,557

222,538

Total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Total comprehensive income (loss) attributable to noncontrollinginterests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

276,421440,688824,232(2,373)

26,72425,893

Total comprehensive income attributable to MHFG shareholders . . . . . . . . . . . . .

278,794

413,964

798,339

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-8

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF EQUITY
FOR THE FISCAL YEARS ENDED MARCH 31, 2016, 2017 AND 2018
2016

2017
(in millions of yen)

2018

Preferred stock:
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Conversion to common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

213,121(114,197)

98,924(98,924)——

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

98,924——

5,590,396

5,703,144

5,826,149

114,197

98,924—772
82(1,058)—(1,245)—969(56)(1,009)354
23,824
(1)

546
(53)
(590)
264
67
—

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

5,703,144

5,826,149

5,826,383

Retained earnings:
Balance at beginning of fiscal year, previously reported . . . . . . . . . . . .
Cumulative effect of change in accounting principles, net of tax . . . . . .
Balance at beginning of fiscal year, adjusted . . . . . . . . . . . . . . . . . . . . .
Net income attributable to MHFG shareholders . . . . . . . . . . . . . . . . . . .
Dividends declared . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

89,432—89,432
850,492(195,265)
2,126

746,785(329)
746,456
362,440(190,002)—

918,894—
918,894
577,608(190,361)—

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

746,785

918,894

1,306,141

2,041,005 1,469,308—
330
2,041,005 1,469,638(571,697)
51,525

1,521,163—
1,521,163
220,731

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

1,469,308

1,521,163

1,741,894

Treasury stock, at cost:
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Disposal of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cancellation of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3,616)
(653)
659
—

(3,610)(1,903)663
1(4,849)(2,431)
1,283—

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

(3,610)(4,849)(5,997)

Total MHFG shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,014,551

8,261,357

8,868,421

Common stock:
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 option . . . . . . . . . . . . . . . . .
Performance-based stock compensation program . . . . . . . . . . . . . . . . . .
Change in ownership interests in consolidated subsidiaries . . . . . . . . . .
Cancellation of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accumulated other comprehensive income, net of tax (Note 17):
Balance at beginning of fiscal year, previously reported . . . . . . . . . . . .
Cumulative effect of change in accounting principles . . . . . . . . . . . . . .
Balance at beginning of fiscal year, adjusted . . . . . . . . . . . . . . . . . . . . .
Change during year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

See the accompanying Notes to the Consolidated Financial Statements.
F-9

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF EQUITY—(Continued)
FOR THE FISCAL YEARS ENDED MARCH 31, 2016, 2017 AND 20182016

Noncontrolling interests:
Balance at beginning of fiscal year, previously reported . . . . . . . . . . . .
Cumulative effect of change in accounting principles . . . . . . . . . . . . . .
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 . .

2017(in millions of yen)2018259,506—
259,506(85,809)(2,683)(429)

168,640(10,441)
158,199
328,692(2,914)
26,691

510,700—
510,700
106,740(8,054)24,086

(674)

29

2,145

(352)
(919)

(62)
65

(393)
55

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

168,640

510,700

635,279

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,183,191

8,772,057

9,503,700

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-10

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE FISCAL YEARS ENDED MARCH 31, 2016, 2017 AND 20182016

Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Net income (loss) attributable to noncontrolling interests . . . . . . . . . . . . .

2017(in millions of yen)

2018

850,063(429)

389,131
26,691

601,694
24,086

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

850,492

362,440

577,608

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)

179,158(126,362)(297,157)(24,342)(251,613)
60,011
992,084(518,339)(54,530)(31,842)
16,517(678,854)

Net cash provided by (used in) operating activities . . . . . . . . . . . . . . . . . . . . . .

241,710

1,213,308(157,661)

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
and securities borrowing transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and due from banks acquired in business combination . . . . . . . . . . . . . . . . . . .
Proceeds from sales of investments in subsidiaries (affecting the scope of
consolidation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19,830,288
31,139,716
32,908,551
8,669,730
8,099,488
15,081,435(25,046,188) (34,137,270) (49,725,626)
197,898
291,782
296,260(1,923,627) (5,606,627) (1,971,210)(7,750,251) (10,688,447)(762,722)
385,134
47,506(388,565)—(1,481,661)
12,059(430,913)
301

—

—

54,78622,302(292,201)—948(5,978,075) (12,801,572)(4,387,477)

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,441,731

14,005,565

6,083,800(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(1,696)6
1(1,435)(190,031)(2,914)(67,508)(130,544)
257,774
1,956,007(3,310,804)
76,894(12,949)
3
1(1,611)(190,382)(8,054)

Net cash provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,558,717

11,869,753

4,652,627

Effect of exchange rate changes on cash and due from banks . . . . . . . . . . . . . . . . . . . . . .

(28,061)(11,895)(13,845)

Net increase (decrease) in cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and due from banks at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(205,709)
1,528,306

269,594
1,322,597

93,644
1,592,191

Cash and due from banks at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,322,597

1,592,191

1,685,835

See the accompanying Notes to the Consolidated Financial Statements.
F-11

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS—(Continued)
FOR THE FISCAL YEARS ENDED MARCH 31, 2016, 2017 AND 20182016

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2017(in millions of yen)

435,584
269,364

582,947
246,802

818,593
172,891

63,42016,123—
12,467

—
6,586

—
—

93,04925,893——

See the accompanying Notes to the Consolidated Financial Statements.
F-12

2018

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.
MHFG and its domestic subsidiaries as well as its foreign subsidiaries maintain their accounting records inaccordance with the accounting standards of Japan and those standards of the countries in which they are
domiciled. Certain adjustments and reclassifications have been incorporated in the accompanying consolidated
financial statements to conform them to the accounting principles generally accepted in the United States ofAmerica (“U.S. GAAP”).The consolidated financial statements are stated in Japanese yen, the currency of thecountry 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 an 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”) Accounting Standards
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 included in Other
investments and the Group’s proportionate share of income or loss is included in Equity in earnings (losses) ofequity method investees—net.
The amounts of asset management business fee income and expenses for the fiscal years ended March 31, 2016
and 2017 have been reclassified from Other noninterest income and Other noninterest expenses to Fee andcommission income and Fee and commission expenses, respectively, in order to conform to the current year’s
presentation. Such reclassifications had no effect on net income or shareholder’s equity. In addition, certain othercomparative amounts for the prior period have been reclassified in order to conform to the current year’s
presentation.
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.
F-13

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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.
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.

F-14

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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
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 and
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
included 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.
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
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
amount is in doubt, 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.
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. In obtaining the collateral, the Group evaluates the fair value ofthe 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 an appraising subsidiary which is
independent from the Group’s loan origination departments by using generally accepted valuation techniquessuch 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 thevaluation.

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The formula allowance is applied to groups of loans that are collectively evaluated for impairment. The
evaluation of the inherent loss in respect of these loans involves a high degree of uncertainty, subjectivity andjudgment 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 most recently available data from April 2008 for the corporate portfolio segment, and the most recently
available data for the past six years for the retail portfolio segment, in the case of normal obligors; and (b) byusing the most recently available data from April 2002, in the 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
and standby letters of credit in the same manner as the allowance for loan losses. The Group similarly assesses
probable loss amounts for commitments to invest in securities and commitments to extend credit, taking into
account the probability of drawdowns. 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.
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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
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. Goodwill is not amortized but is tested for impairment at least
annually or more often if events or circumstances indicate there may be impairment. An impairment loss isrecorded to the extent the carrying amount of 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 value
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)of 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.
Stock-based compensation
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

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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
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 all dilutive potential common shares such as stock options and convertible
preferred stock. See Note 19 “Earnings per common share” for the computation of basic and diluted earnings percommon share.
2. Recently issued accounting pronouncements
Recently adopted accounting pronouncements
In June 2014, the FASB issued ASU No.2014-11, “Transfers and Servicing (Topic 860)—Repurchase-toMaturity Transactions, Repurchase Financings, and Disclosures” (“ASU No.2014-11”). The ASU changes theaccounting for repurchase-to-maturity transactions to secured borrowing accounting. For repurchase financing
arrangements, the ASU requires separate accounting for a transfer of a financial asset executed
contemporaneously with a repurchase agreement with the same counterparty, which will result in secured
borrowing accounting for the repurchase agreement. 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 sametransferee entered into in contemplation of the initial transfer that results in the transferor retaining substantiallyall of the exposure to the economic return on the transferred financial asset throughout the term of thetransaction. The ASU also requires an entity to disclose certain information, including risks related to collateralpledged, for repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions thatare 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 to secured borrowings, which are

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
effective for interim periods beginning after March 15, 2015.The adoption of ASU No.2014-11 did not have amaterial 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 AOCI 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.
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.201507”). 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 therequirement to make certain disclosures for all investments that are eligible to be measured at fair value using the
net asset value per share practical expedient. Rather, those disclosures are limited to investments for which theentity has elected to 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.
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Accounting pronouncements issued but not yet effective
In May 2014, the FASB issued ASU No.2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASUNo.2014-09”). The ASU, as amended, 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 is effective for annual periods and interim reporting periods within those annual periods, beginning
after December 15, 2017 under a modified retrospective approach or retrospectively to all periods presented.
Early application is permitted only as of annual reporting periods beginning after December 15, 2016, includinginterim reporting periods within that reporting period. The MHFG Group adopted ASU No.2014-09 on April 1,2018 using the modified retrospective approach. Since there is no material change in timing and amount ofrevenue or the related cost recognition associated with the adoption, the adoption of ASU No.2014-09 and any
subsequent amendments will not have a material impact on the Group’s consolidated results of operations andfinancial condition. However, beginning prospectively in the fiscal year ending March 31, 2019, the Group’s
presentation of certain costs related to securities underwriting will change from a net basis to a gross basis under
the new standard. The change in presentation will not have a material impact on the Group’s results ofoperations. In addition, the Group will expand qualitative and quantitative disclosures pursuant to the newrequirements.
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 adopted ASU
No.2016-01 on April 1, 2018. The Group had ¥2,438 billion of pre-tax, net unrealized gains on equity securities
at March 31, 2018. This amount, net of tax, was reclassified out of AOCI into Retained earnings on April 1,
2018. Concerning the liabilities for which the fair value option has been elected, the adoption of ASU No.201601 will not have a material impact on the Group’s consolidated results of operations or 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, andthe 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 January 2018, the FASB issued an
exposure draft proposing an amendment to the ASU that, if approved, would permit companies the option to
apply the provisions of the ASU either prospectively as of the effective date, without adjusting comparative
periods presented, or using a modified retrospective transition applicable to all prior periods presented. The ASU
is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
years. Early application is permitted. The MHFG Group expects to adopt the ASU and subsequent amendments
on April 1, 2019 and is currently evaluating the potential impact that the adoption will have on its consolidated
results of operations and financial condition, as well as on its disclosures. The Group expects to gross up its
consolidated balance sheets upon recognition of the right-of-use assets and lease liabilities, which will initially bemeasured using the present value of the remaining lease payments.
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 adopted ASU No.2016-16 on April 1, 2018. The
adoption of ASU No. 2016-16 will not have a material impact on the Group’s consolidated results of operations
or 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
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 in
F-24

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
practice 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 reporting
periods for which financial statements have not yet been issued. The MHFG Group adopted ASU No.2017-09 on
April 1, 2018. The adoption of ASU No. 2017-09 will not have a material impact on the Group’s consolidated
results of operations or financial condition.
In August 2017, the FASB issued ASU No.2017-12, “Derivatives and Hedging (Topic 815)—Targeted
Improvements to Accounting for Hedging Activities” (“ASU No.2017-12”). The ASU amends the current
accounting for derivatives and hedging to enable entities to better portray the economic results of risk
management activities in the financial statements. Specifically, the amendments: (1) eliminate the separate
measurement and reporting of hedge ineffectiveness, (2) expand the ability to hedge nonfinancial and financial
risk components, and (3) provide an alternative method for measuring the hedged item in fair value hedges ofinterest rate risk. The ASU is effective for fiscal years beginning after December 15, 2018, and interim periods
within those 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 is permitted, including adoption in any interim
period. The MHFG Group is currently evaluating the potential impact that the adoption of ASU No.2017-12 will
have on its consolidated results of operations and financial condition.
In February 2018, the FASB issued ASU No.2018-02, “Income Statement—Reporting Comprehensive Income(Topic 220)—Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASUNo.2018-02”). The ASU allows a reclassification from accumulated other comprehensive income to retained
earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The ASU is effective for fiscal years
beginning after December 15, 2018, and interim periods within those fiscal years, and should be applied either inthe period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S.
federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. Early application is permitted,
including adoption in any interim period, for reporting periods for which financial statements have not yet been
issued. The MHFG Group does not expect that the adoption of ASU No. 2018-02 will have a material impact on
its consolidated results of operations 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.
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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. DIAM was a joint venture of
MHFG and Dai-ichi Life Holdings, Inc. (“Dai-ichi Life”, formerly The Dai-ichi Life Insurance Company,
Limited), and the rest of the interests of DIAM was owned by Dai-ichi Life. 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 to strengthen and develop 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 managementrelated knowledge and experience accumulated and developed by each of the Integrating 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 reportablesegments 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

F-27

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 on October 1, 2016.
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, 2017 and 2018 are as follows:
Amortized cost

Gross unrealized Gross unrealized
gains
lossesFair value(in millions of yen)

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

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Amortized cost

Gross unrealized Gross unrealized
gains
lossesFair value(in millions of yen)

2018
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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13,334,619
236,711689,297
1,057,852
882,686
117,870
437,115
1,950,947
879,506
1,595,106

7,332
2,903
109
1,043
13,356
1,264
4,132
40,2901,927
2,449,173

9,656
280
3,557
1,102
7,628
281
323
1,410
2,082
11,291

13,332,295
239,334
685,849
1,057,793
888,414
118,853
440,924
1,989,827
879,351
4,032,988

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

21,181,709

2,521,529

37,61023,665,628

Held-to-maturity securities:
Debt securities:
Japanese government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . .
Agency mortgage-backed securities (4) . . . . . . . . . . . . . . . . . . .

1,959,910
557,641

24,472——
20,177

1,984,382
537,464

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

2,517,551

24,472

20,177

2,521,846

Notes :
(1) Agency mortgage-backed securities presented in this line consist of Japanese and Foreign agency mortgage-backed securities, of which
the fair values were ¥708,557 million and ¥134,240 million, respectively, at March 31, 2017, and ¥742,565 million and¥145,849 million, respectively, at March 31, 2018. All Japanese agency mortgage-backed securities are issued by Japan Housing
Finance Agency, a Japanese government-sponsored enterprise. Foreign agency mortgage-backed securities primarily consist of
Government National Mortgage Association (“Ginnie Mae”) securities, which are guaranteed by the United States government.
(2) Other debt securities presented in this line primarily consist of certificates of deposit (“CDs”), of which the total fair values were¥155,138 million at March 31, 2017, and ¥106,101 million at March 31, 2018.
(3) Other debt securities presented in this line primarily consist of CDs and asset-backed securities (“ABS”), of which the total fair values
were ¥258,059 million at March 31, 2017, and ¥313,164 million at March 31, 2018.
(4) All Agency mortgage-backed securities presented in this line 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, 2018 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. All securities,
including 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.

F-29

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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)Amortized cost

Total

Available-for-sale securities:
Debt securities:
Japanese government bonds . . . . . . . . . . . . . . . . . . . . 6,288,570
Japanese local government bonds . . . . . . . . . . . . . . . .
31,962
U.S. Treasury bonds and federal agency securities . . . 610,995
Other foreign government bonds . . . . . . . . . . . . . . . . . 842,041
Agency mortgage-backed securities . . . . . . . . . . . . . .
—Residential mortgage-backed securities . . . . . . . . . . .
—Commercial mortgage-backed securities . . . . . . . . . . .
858
Japanese corporate bonds and other debt securities . . 312,046
Foreign corporate bonds and other debt securities . . . 503,309

5,024,258
118,445—
207,604——
137,409
1,067,186
312,257

1,922,141
81,54178,302
8,207——
224,548
409,419
60,99899,650 13,334,619
4,763
236,711—689,297— 1,057,852
882,686
882,686
117,870
117,870
74,300437,115
162,296 1,950,947
2,942
879,506

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,589,781

6,867,159

2,785,156

1,344,507 19,586,603

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

840,030—

740,103—379,777—— 1,959,910
557,641
557,641

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

840,030

740,103379,777

557,641 2,517,551

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)

Fair value

Total

Available-for-sale securities:
Debt securities:
Japanese government bonds . . . . . . . . . . . . . . . . . . . . 6,286,075
Japanese local government bonds . . . . . . . . . . . . . . . .
32,020U.S. Treasury bonds and federal agency securities . . . 610,406
Other foreign government bonds . . . . . . . . . . . . . . . . . 842,068
Agency mortgage-backed securities . . . . . . . . . . . . . .
—Residential mortgage-backed securities . . . . . . . . . . .
—Commercial mortgage-backed securities . . . . . . . . . . .
859
Japanese corporate bonds and other debt securities . . 312,303
Foreign corporate bonds and other debt securities . . . 503,219

5,026,020
119,496—
207,593——
137,554
1,102,032
312,047

1,920,660
82,99175,443
8,132——
227,413411,127
61,172

99,540 13,332,295
4,827
239,334—
685,849— 1,057,793
888,414
888,414
118,853
118,853
75,098440,924
164,365 1,989,827
2,913
879,351

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,586,950

6,904,742

2,786,938

1,354,010 19,632,640

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

841,850—

746,088—396,444—— 1,984,382
537,464
537,464

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

841,850

746,088396,444537,464 2,521,846

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
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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, 2016, 2017 and 2018. No impairment losses were recognized on held-to-maturity
securities for the periods.
2016
2017
2018
(in millions of yen)

Available-for-sale securities:
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,020
34,041138
12,029

1,015
3,080

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

38,061

12,167

4,095

For the fiscal year ended March 31, 2018, 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. The total other-than-temporary
impairment met the criteria to be immediately recorded in earnings and no portion was recognized in othercomprehensive 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-31

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, 2017 and 2018:
Less than 12 months
Gross
Fair
unrealized
value
losses2017
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) . . . . . . . . . . . . . . . . . . . . . . . . .
30,68812 months or more
Gross
Fair
unrealized
value
losses(in millions of yen)

Total
Fair
value

Gross
unrealized
losses

15,796
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

2018
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 . . . . .
Foreign corporate bonds and other debt securities . . . . . .
Equity securities (marketable) . . . . . . . . . . . . . . . . . . . . . . . . .

8,052,820
28,827515,005
419,648
45,434
11,336
68,723563,831358,410338,243

3,716
139
3,557
1,030
1,116
14
242
933
888
11,2492,868,078
58,998—68,359188,326
16,1297,835
403,069
87,472
366

5,940
141
—
72
6,512
267
81
477
1,194
42

10,920,898
87,825515,005
488,007
233,760
27,46576,558966,900
445,882338,609

9,656
280
3,557
1,102
7,628
281
323
1,410
2,082
11,291

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,402,277

22,884

3,698,632

14,726

14,100,909

37,610

Held-to-maturity securities:
Debt securities:
Agency mortgage-backed securities (2) . . . . . . . . . . . . . .

30,589766

506,875

19,411

537,464

20,177

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

30,589766

506,875

19,411

537,464

20,177

Notes :
(1) Agency mortgage-backed securities presented in this line consist of Japanese and Foreign agency mortgage-backed securities, of which
the fair values were ¥104,270 million and ¥134,118 million, respectively, at March 31, 2017, and ¥88,017 million and¥145,743 million, respectively, at March 31, 2018. All Japanese agency mortgage-backed securities are issued by Japan Housing
Finance Agency, a Japanese government-sponsored enterprise. Foreign agency mortgage-backed securities primarily consist of Ginnie
Mae securities, which are guaranteed by the United States government.
(2) All Agency mortgage-backed securities presented in this line are Ginnie Mae securities.

F-32

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
At March 31, 2018, 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, 2016, 2017 and 2018. See “Consolidated Statements of Cash Flows for the fiscal years
ended March 31, 2016, 2017 and 2018” for the proceeds from sales of investments, the vast majority of which
consists of the proceeds from sales of available-for-sale securities.
2016

2017
2018
(in millions of yen)

Gross realized gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297,344 353,036 314,948
Gross realized losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (45,376) (21,163) (41,044)
Net realized gains (losses) on sales of available-for-sale securities . . . . . . . . . . . .

251,968

331,873

273,904

Other investments
The following table summarizes the composition of Other investments at March 31, 2017 and 2018:
2017
2018
(in millions of yen)

Equity method investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments held by consolidated investment companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other equity interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

249,679
37,462
307,928

280,666
37,735
267,495

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

595,069

585,896

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 ¥132,817 million and ¥152,445 million, at March 31, 2017 and 2018, respectively. The aggregate
market values of these marketable equity securities were ¥273,249 million and ¥324,239 million, respectively.
F-33

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, 2018.
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. Each of these securities is stated atacquisition cost, with an other-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 berecognized.
5. Loans
The table below presents loans outstanding by domicile and industry of borrower at March 31, 2017 and 2018:
2017
2018
(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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,740,097
7,772,006
4,748,974
5,140,202
3,490,378
4,006,387
8,532,246
4,426,233

8,156,341
8,101,668
5,024,018
5,112,673
3,564,869
4,471,423
8,882,125
5,018,387

9,960,176
839,841

9,445,286
883,724

57,656,540

58,660,514

Foreign:
Commercial and industrial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,872,448
Banks and other financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,759,921
Government and public institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
959,948
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
190,724

17,095,604
6,739,846
1,127,740
37,636

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

24,783,041

25,000,826

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

82,439,581
155,675

83,661,340
146,696

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

82,283,906

83,514,644

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-34

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note: Other industries of Domestic includes trade receivables and lease receivables of consolidated VIEs.
Net losses on sales of loans were ¥1,752 million, ¥919 million and ¥87 million, including unrealized losses
related to recording loans held for sale at the lower of cost or fair value for the fiscal years ended March 31,
2016, 2017 and 2018, respectively. The gains and losses on sales of loans are recorded in Other noninterest
income and expenses, 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-35

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 (1)(2)

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.

Intensive control

F

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).

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.

Watch

Definition

Notes:(1) Special attention obligors are watch obligors with debt in TDR or 90 days or more delinquent debt. Loansto such obligors are considered impaired.
(2) The Group classifies loans to special attention, intensive control, substantially bankrupt and bankrupt
obligors as impaired loans.

F-36

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, 2017 and 2018:
Normal obligors
Corporate
Retail (2)Other (3)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 . . . . . . . . . . . . . . . .
Total domestic . . . . . . . . .
Foreign:
Commercial and industrial . . .
Banks and other financial
institutions . . . . . . . . . . . . . .
Government and public
institutions . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . .

Watch obligors excluding
special attention obligors (1)Corporate Retail (2) Other (3)(in millions of yen)

Impaired
loans

Total

7,912,872
6,926,963
4,381,342
4,612,668

90,761586,984
181,525
199,590

67,734
15,585910
22,785

276,771
168,619
95,434
124,846

11,58916,062
23,18932,911

1,314
317
204
501

379,056
57,476
66,370146,901

8,740,097
7,772,006
4,748,974
5,140,202

3,324,148

82,506

1,092

50,3199,698—

22,6153,490,378

3,938,132

1,880

37,907

21,574

353

—

6,541

4,006,387

4,060,949
2,463,390
211,328—
3,275
10,288,916

4,471,297
1,906,756
80,566—
4,613
24,044—410
89,027—
41,179
1,434

—
6,610
104,7028,532,246
4,426,233
10,800,017

37,831,792

11,435,437

6,604,632

766,220

183,239

44,949790,271

57,656,540

14,125,338

173

2,153,757

312,275—

90,722

190,183

16,872,448

6,220,767—

480,806

58,348———6,759,921

956,036
6,535

—
9,439

1,082
173,464

2,801
124

—

—
753

29
401

959,948
190,724

8

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

21,308,676

9,612

2,809,109

373,548

8

91,475

190,613

24,783,041

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

59,140,468

11,445,049

9,413,741

1,139,768

183,247

136,424

980,884

82,439,581

7,705,495
7,317,972
4,535,793
4,636,236

77,947541,778
172,045
177,965

23,343
13,332
141,718
17,305

197,465
172,287
95,223
121,832

9,775
15,466
21,10927,975

246
—
55
476

142,070
40,83358,075130,884

8,156,341
8,101,668
5,024,018
5,112,673

3,414,781

76,532

1,774

35,3398,916—

27,5273,564,869

4,244,101

1,640

196,431

16,716

194—

12,341

4,471,423

3,010,708
2,716,502
222,410—3,536
9,822,244

5,871,417
2,170,442
88,044—
2,708
23,491—
259
81,550—121,201
1,109

—
3,739
90,1628,882,125
5,018,387
10,329,010

37,803,998

10,873,687

8,523,806

665,061

165,244

123,087505,631

58,660,514

14,093,375

209

2,432,189

398,231—64,950106,650

17,095,604

6,223,742—

487,978

28,126———

6,739,846

1,125,921
1,906

—
9,245

—
23,730

—
242

—

—
1,347

1,819
1,160

1,127,740
37,6362018
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 . . . . . . . . .
Foreign:
Commercial and industrial . . .
Banks and other financial
institutions . . . . . . . . . . . . . .
Government and public
institutions . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . .

6

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

21,444,944

9,454

2,943,897

426,599

6

66,297

109,629

25,000,826

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

59,248,942

10,883,141

11,467,703

1,091,660

165,250

189,384

615,260

83,661,340

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.

F-37

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(2) Amounts represent small balance, homogeneous loans which are subject to pool allocations.
(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 includes 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. There are no loans thatare ninety days past due and still accruing. The Group does 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. The table below presents
impaired loans information at March 31, 2017 and 2018:
Recorded investment (1)Notrequiring an
Requiring an allowance
UnpaidAverage
Interest
allowance for for loan
principal Related
recordedincome(2)(3)
loan losses
lossesTotal balance allowance investment recognized (4)(in millions of yen)
2017
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 (5) . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018
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 (5) . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

372,241
46,13058,366
133,466
19,3862,601
6,484
51,893
690,567

6,815
11,346
8,004
13,435
3,229
3,940
126
52,80999,704

379,056
57,476
66,370146,901
22,6156,541
6,610
104,702790,271

383,81266,006
72,261
155,023
23,5686,873
6,740
114,880
829,163

148,777
6,367
20,122
52,341
5,968
962
1,999
4,935
241,471375,895
66,796
66,050148,865
24,035
5,305
6,053
114,104
807,103

2,859
877
1,173
2,261
371
50
91
1,696
9,378

160,563851,130

30,050129,754

190,613 209,129
980,884 1,038,292

61,102
302,573

169,192
976,295

2,040
11,418135,083
31,557
48,691
119,463
25,0198,392
3,650
43,326415,181

6,987
9,276
9,384
11,421
2,508
3,949
89
46,83690,450142,070
40,83358,075130,884
27,527
12,341
3,739
90,162505,631

146,857
48,75264,348
139,556
28,48012,341
3,869
95,338539,541

45,7504,411
13,30542,798
6,862
3,176
3,563
4,315
124,180

218,899
49,92660,198139,333
25,672
8,648
4,537
97,404
604,617

1,869
516
919
1,842
370
78
53
1,402
7,049

63,346
478,527

46,283
136,733

109,629615,260

125,329
664,870

28,333
152,513

151,588756,205

1,042
8,091

Notes:(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-38

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 loans which were collectively 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 loans which were collectively evaluated for impairment at March 31, 2017 and 2018 was ¥302,251 million and¥245,809 million, respectively.
(4) Amounts represent the amount of interest income on impaired loans recognized on a cash basis and included in Interest income on loans
in the consolidated statements of income.
(5) The majority of Total foreign consist of Commercial and Industrial loans.

The remaining balance of impaired loans, which have been partially charged off, was ¥26,513 million and¥29,037 million as of March 31, 2017 and 2018, 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 generally when its obligor rating is E2 or below. The
following table presents modified loans that were determined to be TDRs during the fiscal years ended March 31,2017 and 2018:
Loan forgiveness or debt toequity swaps
Recorded
investment (1)Charge-offs(in millions of yen)Interest rate
reduction and/or
postponement ofprincipal and/orinterest

2017

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

—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—

106,697
18,81845,287
159,649
17,417
7,933
2,518
17,067

Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

——375,386

Total foreign (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

——35,685

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

——411,071

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

—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—

110,624
13,43040,774
148,560
27,294
8,529
246
14,960Total domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

——364,417

Total foreign (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

——44,010Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

——408,427

Foreign:

2018

Foreign:

F-39

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Notes:(1) Amounts represent the book values of loans immediately after the restructurings.
(2) The majority of Total foreign consist of Commercial and Industrial loans.

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, 2017 and 2018 with respect to the loans modified as TDRs
within the previous twelve months:
Recorded investment
2017
2018
(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-40

5,164
2,887
4,471
10,116795
14
2,288
25,735

4,019
80
4,469
25,710
264
130
1,819
36,491

3,213
28,948

4,588
41,079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 31,2017 and 2018:30-59 days
past due60-89 days
past due

90 days or
Total past
more past duedue(in millions 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 . . . . . . . . . . . . . . . . . . . . . . . .
Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,938
3,061
917
1,330
384
—
—
—
32,752

360
947
217
2,834
322
—
—
—
12,291

7,767
32,523
5,914
5,585
1,859
—
—
69
34,846

Total domestic . . . . . . . . . . . . . . . . . . . . .

40,382

16,971

Total foreign (Note) . . . . . . . . . . . . . . . . . . .

546

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

Current

Total

10,06536,531
7,048
9,749
2,565
—
—
69
79,8898,730,032
7,735,475
4,741,926
5,130,453
3,487,813
4,006,387
8,532,246
4,426,164
10,720,128

8,740,097
7,772,006
4,748,974
5,140,202
3,490,378
4,006,387
8,532,246
4,426,233
10,800,017

88,563145,916

57,510,624

57,656,540

216

95,71996,481

24,686,560

24,783,041

40,92817,187

184,282

242,397

82,197,184

82,439,581

2018
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . .

585
1,641
1,977
1,704
356
—
—
33
31,566

470
474
1,142
1,083
639
1,301
—
12
12,426

8,037
28,633
5,051
6,639
1,828
—
—
37
31,444

9,092
30,748
8,170
9,426
2,823
1,301
—
82
75,436

8,147,249
8,070,920
5,015,848
5,103,247
3,562,046
4,470,122
8,882,125
5,018,305
10,253,574

8,156,341
8,101,668
5,024,018
5,112,673
3,564,869
4,471,423
8,882,125
5,018,387
10,329,010

Total domestic . . . . . . . . . . . . . . . . . . . . .

37,862

17,547

81,669137,078

58,523,436

58,660,514

Foreign:

Foreign:
Total foreign (Note) . . . . . . . . . . . . . . . . . . .

897

450

41,316

42,663

24,958,163

25,000,826

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

38,75917,997

122,985

179,741

83,481,599

83,661,340

Note: The majority of Total foreign consist of Commercial and Industrial loans.

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 business

F-41

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
loans 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
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, 2016, 2017 and2018 are shown below:
Corporate

2016
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

RetailOther(in millions of yen)Total

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

36,92335,423479,6732018
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

407,327

36,92335,423479,673

Provision (credit) for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(123,470)(7,427)

4,535(126,362)

Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(44,621)
12,924(2,118)814(9,123)
1,482(55,862)
15,220Net charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(31,697)(1,304)(7,641)(40,642)

Others (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3,088)—321(2,767)

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

249,072

28,192

32,638309,902

Note: Others includes primarily foreign exchange translation.

F-42

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, 2017 and 2018:
Corporate

RetailOther(in millions of yen)

Total

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

2018
Allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . .

249,072

28,192

32,638309,902of which individually evaluated for impairment . . . . .
of which collectively evaluated for impairment . . . . .

129,789
119,283

2,602
25,5907,383
25,255

139,774
170,128

Loans (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

60,837,559

11,133,862

11,689,919

83,661,340

of which individually evaluated for impairment . . . . .
of which collectively evaluated for impairment . . . . .

593,053
60,244,506

21,364
11,112,498

61,023
11,628,896

675,440
82,985,900

Note: Amounts represent loan balances before deducting unearned income and deferred loan fees.

7. Premises and equipment
Premises and equipment at March 31, 2017 and 2018 consist of the following:
2017
2018
(in millions of yen)

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment and furniture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

575,054807,312
485,407
93,96723,093
1,308,292

566,040
811,911484,102
97,06625,8491,463,786

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Accumulated depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,293,125
1,251,852

3,448,754
1,332,570

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

2,041,273

2,116,184

Depreciation and amortization expense for premises and equipment for the fiscal years ended March 31, 2016,2017 and 2018 was ¥162,676 million, ¥163,769 million and ¥169,346 million, respectively.
Premises and equipment under capital leases, which is primarily comprised of data processing equipment,
amounted to ¥80,430 million and ¥83,734 million at March 31, 2017 and 2018, respectively. Accumulated
F-43

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
depreciation and amortization on such premises and equipment at March 31, 2017 and 2018 amounted to¥40,155 million and ¥42,158 million, respectively.
Depreciation and amortization expense related to Software was reported in General and administrative expenses,
and all other depreciation and amortization expense was reported in Occupancy expenses.
8. Goodwill and intangible assets
Goodwill
The changes in Goodwill during the fiscal years ended March 31, 2016, 2017 and 2018 are as follows:
2016

2017
2018
(in millions of yen)

Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,703
19,097
95,176
Goodwill acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,470 (1) 76,225 (2)—Impairment losses recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,222)——
Foreign exchange translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,854)(146)
8
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,097
95,176
95,184Gross amount of goodwill (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94,473 171,432 170,926
Accumulated impairment losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,376
76,25675,742
Notes:(1) Goodwill acquired is entirely related to the acquisition of Mizuho Real Estate Management Co., Ltd.
(formerly Simplex Real Estate Management Inc.) and Mizuho REIT Management Co., Ltd. (formerly
Simplex 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-44

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, 2017 and 2018:
2017
Gross
carrying
amount2018

Accumulated
amortization

Net
Gross
carrying carrying
amountamount(in millions of yen)

Accumulated
amortization

Net
carrying
amountIntangible assets subject to amortization:
Customer relationships (Note) . . . . . . . . . . . . 126,979
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,814

42,5172,190

84,462 126,979
624
1,847

52,237
1,341

74,742506

Total . . . . . . . . . . . . . . . . . . . . . . . . . . 129,793

44,70785,086 128,826

53,57875,248

9,199

—

9,199

94,147 138,025

53,57884,447

Intangible assets not subject to amortization:
Total . . . . . . . . . . . . . . . . . . . . . . . . . .

9,061

—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138,854

44,707

9,061

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, 2016, 2017, and 2018, the MHFG Group recognized ¥5,254 million,¥7,433 million, and ¥9,812 million, respectively, of amortization expense in respect of intangible assets, reported
in Other noninterest expenses.
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:
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-45

9,288
8,950
8,230
7,697
7,180

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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, 2017 and 2018:
2017
2018
(in billions of yen)Interest-bearing deposits in other banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

51
6,577
8,213
7,468
1,588

37
5,611
6,500
5,229
2,099

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

23,897

19,476

The associated liabilities collateralized by the above assets at March 31, 2017 and 2018 are summarized below:
2017
2018
(in billions of yen)

Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under repurchase agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables under securities lending transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

919
6,109
1,460
686
4,220

256
5,518
1,193
441
3,179

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

13,394

10,587The 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, 2017 and 2018, 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¥44,741 billion and ¥45,325 billion, respectively. These balances included the reserve funds required to be
maintained by the MHFG Group, which amounted to ¥1,462 billion and ¥1,589 billion at March 31, 2017 and2018, respectively.
At March 31, 2017 and 2018, the MHFG Group had received collateral that can be sold or repledged, with a fairvalue of ¥13,395 billion and ¥13,419 billion, respectively, of which ¥12,988 billion and ¥12,655 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.

F-46

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
10. Deposits
The balances of time deposits and certificates of deposit issued by domestic offices in amounts of ¥10 million(approximately US$94 thousand at the Federal Reserve Bank of New York’s noon buying rate on March 31,2018) or more and the balances of these deposits issued by foreign offices in amounts of US$100,000 or more atMarch 31, 2017 and 2018 are as follows:
2017
2018
(in millions of yen)Domestic offices:Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certificates of deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,763,052
5,877,100

17,194,707
5,778,430

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

23,640,152

22,973,137

Foreign offices:Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certificates of deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,862,230
4,754,170

13,426,554
5,604,160

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

19,616,400

19,030,714

The aggregate amount of demand deposits in overdraft status that have been reclassified as loan balances at
March 31, 2017 and 2018 was ¥718 billion and ¥792 billion, respectively.
The balance and remaining maturities of time deposits and certificates of deposit issued by domestic and foreign
offices at March 31, 2018 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,363,333
1,635,033
1,282,400
328,518
361,730
122,211

5,658,280
120,150————

28,021,613
1,755,183
1,282,400
328,518
361,730
122,211

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

26,093,225

5,778,430

31,871,655

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13,360,155
53,837
2,902
764
748
14,6205,362,543
176,331
61,224
4,062——

18,722,698
230,168
64,126
4,826
748
14,620Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13,433,026

5,604,160

19,037,186

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

39,526,251

11,382,590

50,908,841

F-47

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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, 2017 and 2018 are as follows:
2017
2018
(in millions of yen)

Commercial paper and short-term notes issued by consolidated VIEs of asset-backed
commercial paper programs (1) (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
59,60727,985
Commercial paper and short-term notes issued by MHFG and its subsidiaries (1) (3) . . . . .
956,447 1,044,591
Borrowings from the Bank of Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
355,255
432,328
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
105,303
183,114
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,476,612 1,688,018
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¥24,559 million and ¥35,048 million, respectively, at March 31, 2017. At March 31, 2018, all the amounts
represent the outstanding balances of short-term notes.
(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 ¥765,147 million and ¥191,300 million,
respectively, at March 31, 2017, and ¥710,391 million and ¥334,200 million, respectively, at March 31,
2018.

F-48

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Long-term debt
Long-term debt with original maturities of more than one year at March 31, 2017 and 2018 is comprised of thefollowing:
2017
2018
(in millions of yen)

Obligations under capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loan participation borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Senior borrowings and bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subordinated borrowings and bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40,947
90,63911,119,136
3,278,692

36,01089,3539,184,075
3,645,792

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

14,529,414

12,955,230

The following table presents the interest rates and maturities of senior borrowings and bonds, and subordinatedborrowings and bonds:
Interest rates (1)(%)

Maturities (2)

2017
2018
(in millions of yen)

Senior borrowings and bonds:
fixed rate denominated in Japanese yen . . . . . . . 0.00-5.00 Apr. 2018-Dec. 2046 6,011,939 4,146,989
fixed rate denominated in U.S. dollars . . . . . . . . 0.00-7.49 Apr. 2018-Mar. 2048 2,533,715 2,519,845
fixed rate denominated in other currencies . . . . 0.01-9.29 Apr. 2018-May. 2037
172,370
233,842
floating rate denominated in Japanese yen . . . . . 0.00-19.00 Apr. 2018-Mar. 2048
717,056
662,751
floating rate denominated in U.S. dollars . . . . . . 0.00-5.70 Apr. 2018-Jul. 2033 1,557,288 1,469,248
floating rate denominated in other currencies . . 0.00-9.40 Jun. 2018-Sep. 2035
126,768
151,400
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subordinated borrowings and bonds:
fixed rate denominated in Japanese yen . . . . . . .
fixed rate denominated in U.S. dollars . . . . . . . .

11,119,136 9,184,075
0.47-4.26
4.30-4.70

Apr. 2018- Perpetual 2,858,445 3,247,639
Jul. 2022-Oct. 2025
420,247
398,153

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

3,278,692 3,645,792

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

14,397,828 12,829,867

Notes:(1) The interest rates disclosed reflect the range of contractual rates in effect at March 31, 2018.
(2) Maturity information disclosed is the range of maturities at March 31, 2018.
(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.

F-49

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following is a summary of contractual maturities of long-term debt subsequent to March 31, 2018:(in millions of yen)

Fiscal year ending March 31:
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,492,058
1,606,863
1,314,403
1,204,785
1,068,077
5,269,044

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

12,955,230

13. Other assets and liabilities
The following table sets forth the details of other assets and liabilities at March 31, 2017 and 2018:
2017
2018
(in millions of yen)

Other assets:
Accounts receivable:
Receivables from brokers, dealers and customers for securities transactions (1) . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collateral pledged:
Collateral pledged for derivative transactions . . . . . . . . . . . . . . . . . . . . . . . . . .
Margins provided for futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid pension cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities:
Accounts payable:
Payables to brokers, dealers and customers for securities transactions (1) . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Guaranteed trust principal (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collateral accepted:
Collateral accepted for derivative transactions . . . . . . . . . . . . . . . . . . . . . . . . .
Margins accepted for futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unearned income (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Factoring amounts owed to customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,564,295
324,135

1,578,952
368,030

973,404
276,398
336,538
682,592
122,858
26,689685,420

981,390
142,156
965,137
874,191
126,001
86,153609,624

4,992,329

5,731,634

1,400,141
481,809683,324

1,410,785
455,789
761,685

671,691
307,066
134,666
53,4881,294,340

598,524
325,038
130,916—
1,022,858

5,026,525

4,705,595

Notes:(1) Receivables from brokers, dealers and customers for securities transactions include ¥315,870 million and¥372,395 million of such receivables of consolidated VIEs at March 31, 2017 and 2018, respectively.
F-50

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Payables to brokers, dealers and customers for securities transactions include ¥325,090 million and¥422,060 million of such payables of consolidated VIEs at March 31, 2017 and 2018, respectively.
(2) Guaranteed trust principal is the liability of certain consolidated trust arrangements that meet the definitionof a VIE for which the MHFG Group provides guarantees for the repayment of principal. See Note 25“Variable interest entities and securitizations” for further discussion of the guaranteed principal money
trusts.
(3) Unearned income is primarily comprised of refundable loan fees received from consumer loan customers
when loans are made. This income is being deferred and recognized in earnings over the life of the loan.
14. Preferred stock
The composition of preferred stock at March 31, 2016, 2017 and 2018 is as follows:
2016
Class of stock

Eleventh series class XI
preferred stock (2) . . . .
First series class XIV
preferred stock (3) . . . .
Second series class XIV
preferred stock (3) . . . .
Third series class XIV
preferred stock (3) . . . .
Fourth series class XIV
preferred stock (3) . . . .
First series class XV
preferred stock (4) . . . .
Second series class XV
preferred stock (4) . . . .
Third series class XV
preferred stock (4) . . . .
Fourth series class XV
preferred stock (4) . . . .
First series class XVI
preferred stock (5) . . . .
Second series class XVI
preferred stock (5) . . . .
Third series class XVI
preferred stock (5) . . . .
Fourth series class XVI
preferred stock (5) . . . .
Total . . . . . . . . . . . . . . .

Authorized (1)Number of shares
IssuedIn treasury

914,752

914,752,000

914,752,000

815,828,400

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

—

—

—

—

914,752,000

815,828,400

Aggregate amount(in millions of yen)

914,752

F-51

Liquidation Convertible
value per shareor not(in yen)MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2017
Class of stock

Class XI preferredstock . . . . . . . . . . . . .
First series class XIV
preferred stock (3) . . . .
Second series class XIV
preferred stock (3) . . . .
Third series class XIV
preferred stock (3) . . . .
Fourth series class XIV
preferred stock (3) . . . .
First series class XV
preferred stock (4) . . . .
Second series class XV
preferred stock (4) . . . .
Third series class XV
preferred stock (4) . . . .
Fourth series class XV
preferred stock (4) . . . .
First series class XVI
preferred stock (5) . . . .
Second series class XVI
preferred stock (5) . . . .
Third series class XVI
preferred stock (5) . . . .
Fourth series class XVI
preferred stock (5) . . . .
Total . . . . . . . . . . . . . . .

Aggregate amount(in millions of yen)

Authorized (1)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

—

—

—

—

—

—

—

F-52

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2018
Class of stock

First series class XIV
preferred stock (3) . . . .
Second series class XIV
preferred stock (3) . . . .
Third series class XIV
preferred stock (3) . . . .
Fourth series class XIV
preferred stock (3) . . . .
First series class XV
preferred stock (4) . . . .
Second series class XV
preferred stock (4) . . . .
Third series class XV
preferred stock (4) . . . .
Fourth series class XV
preferred stock (4) . . . .
First series class XVI
preferred stock (5) . . . .
Second series class XVI
preferred stock (5) . . . .
Third series class XVI
preferred stock (5) . . . .
Fourth series class XVI
preferred stock (5) . . . .
Total . . . . . . . . . . . . . . .

Aggregate amount(in millions of yen)

Authorized (1)Number of shares
IssuedIn treasury

Liquidation Convertible
value per shareor not(in yen)—

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

—

—

—

—

—

—

—

Notes:(1) The total number of shares authorized to be issued was 4,214,752,000 shares at March 31, 2016 and 2017,and 3,300,000,000 shares at March 31, 2018.
(2) 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.
(3) The total number of authorized shares for each series of class XIV preferred stock cannot exceed
900,000,000.
(4) The total number of authorized shares for each series of class XV preferred stock cannot exceed
900,000,000.
(5) The total number of authorized shares for each series of class XVI preferred stock cannot 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-53

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 preferredstock to meet the requirements of Basel III. Under Basel III, in order for preferred stock issued by a bank holding
company to be included as its regulatory capital under the capital adequacy requirements, the terms and conditionsof 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 the relevant 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 was not possible toinclude 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 loss-absorption clause can be included in the terms
and conditions of class XIV preferred stock, class XV preferred stock and class XVI preferred stock by a resolutionof the board of directors relating to the issuance of the relevant preferred stock. Besides the foregoing lossabsorption 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 preferredstock 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, 2016, 2017 and 2018:

Class of stock

Issuedshares at
March 31,2015

NetchangeIssuedshares at
March 31,2016

Netchange(number of shares)

Issuedshares at
March 31,2017

NetchangeIssuedshares at
March 31,2018

Eleventh series class XI
preferred stock (Note) . . . . . . 914,752,000—

914,752,000 (914,752,000)

—

—

—

Total . . . . . . . . . . . . . . . . . . . . 914,752,000—

914,752,000 (914,752,000)

—

—

—

Aggregate
amount at
March 31,2017

NetchangeAggregate
amount at
March 31,2018

Class of stock

Aggregate
amount at
March 31,2015

NetchangeAggregate
amount at
March 31,2016

Netchange(in millions of yen)

Eleventh series class XI
preferred stock (Note) . . . . . .

914,752—

914,752(914,752)———

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

914,752—

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-54

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, 2016, 2017 and 2018:
2016

2017
(shares)

2018

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 . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,621,897,967

25,030,525,657

25,386,307,945

403,667,690

349,677,288—

4,960,000

6,105,000

3,337,000

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

25,030,525,657

25,386,307,945

25,389,644,945

16. Dividends
The amount available for dividends under Japan’s 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, 2018, MHFG’s capital stock, capital surplus and retained earnings were ¥2,256,549 million,¥1,196,478 million and ¥1,906,557 million, respectively, under Japanese GAAP.
Pursuant to the Companies Act, 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, 2018 was ¥1,200,791 million, of
which ¥1,196,441 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 Japan’s
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, 2018, was ¥1,897,194 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.

F-55

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table shows dividends on preferred stock and common stock during the fiscal years ended
March 31, 2016, 2017 and 2018:2016
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10
7.50

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018Class of stock

989
189,013
190,002

Cash dividends
Per share
In aggregate(in yen)(in millions of yen)

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.50

190,361

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-56

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, 2016, 2017 and 2018 are as follows:
2016

2017
(in millions of yen)

2018

AOCI, balance at beginning of fiscal year, previously reported . . . . . . . . . . . 2,041,005 1,469,308 1,521,163
Cumulative effect of change in accounting principles . . . . . . . . . . . . . . . . . .
—330—
AOCI, balance at beginning of fiscal year, adjusted . . . . . . . . . . . . . . . . . . . . 2,041,005 1,469,638 1,521,163
Net unrealized gains (losses) on available-for-sale securities:
Balance at beginning of fiscal year, previously reported . . . . . . . . 1,747,607 1,409,459 1,461,302
Cumulative effect of change in accounting principles . . . . . . . . . .
—(85)—
Balance at beginning of fiscal year, adjusted . . . . . . . . . . . . . . . . . 1,747,607 1,409,374 1,461,302
Unrealized holding gains (losses) during year . . . . . . . . . . . . (189,479) 273,844
282,141
Less: reclassification adjustments for losses (gains) included
in net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (148,669) (221,916) (186,858)
Change during year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (338,148)
51,92895,283
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,409,459 1,461,302 1,556,585
Foreign currency translation adjustments:
Balance at beginning of fiscal year, previously reported . . . . . . . .
129,179
6,310(5,535)
Cumulative effect of change in accounting principles . . . . . . . . . .
—415—
Balance at beginning of fiscal year, adjusted . . . . . . . . . . . . . . . . .
129,179
6,725(5,535)
Foreign currency translation adjustments during year . . . . . . (122,081)(11,920)(26,936)
Less: reclassification adjustments for losses (gains) included
in net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(788)
(340)
(2,605)
Change during year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (122,869)(12,260)(29,541)
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,310(5,535)(35,076)
Pension liability adjustments:
Balance at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . .
164,21953,53965,396
Unrealized gains (losses) during year . . . . . . . . . . . . . . . . . . . (107,497)
11,561
157,737
Less: reclassification adjustments for losses (gains) included
in net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3,183)296(2,748)Change during year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (110,680)
11,857
154,989
Balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53,53965,396220,385
Total other comprehensive income (loss), net of tax attributable to
MHFG shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (571,697)
51,525
220,731
AOCI, balance at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,469,308 1,521,163 1,741,894

F-57

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, 2018:

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 availablefor-sale securities . . . 269,808 (82,828)
Foreign currencytranslation
adjustments . . . . . . . .
2,605—
Pension liability
adjustments . . . . . . . .
2,560
190
Total . . . . . . . . . . . . . . . . . . . 274,973 (82,638)

Affected line items in
the consolidated
statements ofincome:186,980(122)

186,858

2,605

—

2,605

2,750

(2)

2,748

192,335(124)

192,211

Investment gains(losses)—net
Investment 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 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, October 2014 and December 2017), which presents the details of global regulatory standards onbank 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, better risk coverage, the introduction of a leverage ratio as a backstop to therisk-based requirement, and the introduction of the capital conservation buffer and countercyclical capital buffer
as measures to promote the build-up of capital that can be drawn down in periods of stress, and the introductionof two global liquidity standards. The Financial Services Agency’s revisions to its capital adequacy guidelines
F-58

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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, 2018 being ¥577.5 billion) and existing subordinated debt issued before March 2013 (the amounts
thereof included within Tier 2 capital as of March 31, 2018 being ¥674.8 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 2017 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
additional loss absorption capacity requirement for G-SIBs and domestic systemically important banks
F-59

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(“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 G-SIB and a 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 phasedin 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, and became fully effective in March 2018.
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
2017

Minimum Common Equity Tier 1 capital . . . . . . . . . . . . . . . . . .
Minimum Tier 1 capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minimum total capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Phase-in of deductions from capital . . . . . . . . . . . . . . . . . . . . . .
Phase out of recognition of capital instruments that no longer
qualify as capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital conservation buffer . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Countercyclical capital buffer (1) . . . . . . . . . . . . . . . . . . . . . . . . .
Additional loss absorbency requirements for G-SIBs and
D-SIBs (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

March
2018

March
2019

March
2020

March
2021

March
2022

4.5% 4.5% 4.5% 4.5% 4.5% 4.5%
6.0% 6.0% 6.0% 6.0% 6.0% 6.0%
8.0% 8.0% 8.0% 8.0% 8.0% 8.0%
80.0% 100.0% 100.0% 100.0% 100.0% 100.0%
50.0% 40.0% 30.0% 20.0% 10.0% 0.0%
1.25% 1.875% 2.5% 2.5% 2.5% 2.5%
0.00% 0.01% 0.01% 0.01% 0.01% 0.01%
0.50% 0.75%

1.0%

1.0%

1.0%

1.0%

Notes:(1) Figures assume that the countercyclical capital buffer will continue to be 0.01% after March 2018.
(2) 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-60

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Capital adequacy ratios of MHFG, MHBK, and MHTB as of March 31, 2017 and 2018 calculated in accordancewith Japanese GAAP and the guidelines established by the Financial Services Agency are set forth in thefollowing table:
2017
2018
AmountRatio AmountRatio(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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,857
7,002

6.25
11.34

4,247
7,437

7.135
12.49

4,783
8,212

7.75
13.30

5,140
9,192

8.635
15.44

6,017
10,051

9.75
16.28

6,331
10,86010.635
18.24

2,541
6,304

4.50
11.16

2,400
6,584

4.50
12.34

3,388
7,536

6.00
13.34

3,200
8,330

6.00
15.61

4,517
9,149

8.00
16.20

4,267
9,881

8.00
18.52

112
466

4.50
18.73

112
498

4.50
19.99

149
466

6.00
18.73

149
499

6.00
20.05

199
485

8.00
19.47

199
505

8.00
20.28

2,432
6,057

4.50
11.20

2,312
6,330

4.50
12.32

3,243
7,316

6.00
13.53

3,082
8,081

6.00
15.73

4,324
8,938

8.00
16.53

4,109
9,619

8.00
18.72

113
475

4.50
18.98

112
504

4.50
20.28

150
475

6.00
18.98

149
504

6.00
20.28

200
493

8.00
19.70

199
509

8.00
20.50

Note: The required ratios disclosed above, at March 31, 2017 and 2018, include the transitional capital conservation buffer of 1.25% and1.875%, respectively, the countercyclical capital buffer of 0% and 0.01%, respectively, and the transitional additional loss absorbency
requirements for G-SIBs and D-SIBs of 0.5% and 0.75%, respectively, which are all both in addition to the regulatory minima. The
respective required amounts are determined by applying the ratios to the sum of the risk weighted assets and certain other risk amounts.

F-61

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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, 2018, 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
The following table sets forth the computation of basic and diluted earnings per common share for the fiscal
years ended March 31, 2016, 2017 and 2018:
2016

2017
(in millions of yen)

2018

Net income:Net income attributable to MHFG shareholders . . . . . . . . . . . . . . . .
Less: Net income attributable to preferred shareholders . . . . . . . . . .

850,492
2,430

362,440—

577,608—

Net income attributable to common shareholders . . . . . . . . . . . . . . .

848,062

362,440

577,608

Effect of dilutive securities:
Convertible preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,430

—

—

Net income attributable to common shareholders after
assumed conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

850,492

362,440

577,608

2016

2017(thousands of shares)

2018

Shares:
Weighted average common shares outstanding . . . . . . . . . . . . . . . .

24,806,161

25,285,899

25,366,345

Effect of dilutive securities:
Convertible preferred stock (Note) . . . . . . . . . . . . . . . . . . . . . . . .
Stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

563,044
17,82882,993
11,410—7,586

Weighted average common shares after assumed
conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25,387,033

25,380,302

25,373,931

2016

2017
(in yen)2018

Amounts per common share:
Basic net income per common share . . . . . . . . . . . . . . . . . . . . . . . . .

34.19

14.33

22.77

Diluted net income per common share . . . . . . . . . . . . . . . . . . . . . . .

33.50

14.28

22.76

Note: The number of common shares after assumed conversion of the convertible preferred stock is based on theapplicable conversion prices.
F-62

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
20. Income taxes
Income tax expense
The following table presents the components of Income tax expense for the fiscal years ended March 31, 2016,2017 and 2018:
2016

2017
(in millions of yen)

2018

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

162,408
61,009130,164
68,512

130,573
47,020Total current tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

223,417

198,676

177,593

Deferred:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

127,185(4,060)(99,831)(7,601)

58,078
1,933

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

123,125(107,432)

60,011

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

346,542

91,244

237,604

The preceding table does not reflect the tax effects of items recorded directly in Equity for the fiscal years ended
March 31, 2016, 2017 and 2018. The detailed amounts recorded directly in Equity are as follows:
2016

2017
(in millions of yen)

2018

Net unrealized gains (losses) on available-for-sale securities:
Unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: reclassification adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .

(97,339)(65,207)

112,467(97,729)

123,186(82,828)

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

(162,546)

14,73840,358Foreign currency translation adjustments:
Unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: reclassification adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .

126
—

—
—

—
—

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

126

—

—

Pension liability adjustments:
Unrealized gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: reclassification adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .

(51,661)(1,317)

4,785
178

66,331
190

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

(52,978)

4,963

66,521

Total tax effect before allocation to noncontrolling interests . . . . . . . . . .

(215,398)

19,701

106,879

F-63

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, 2016, 2017 and 2018:
2016
2017
2018
(in millions of yen, except tax rates)

Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,196,605
Effective statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33.06%

480,375
30.86%

839,298
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

395,598(12,888)
1,521(2,208)(1,897)(16,112)148,244(7,521)
1,483(2,165)
112,781 (2)5,217

259,007(9,312)
1,421(2,696)(9,102)(1,972)(1,446)(7,976) (1)—(8,050)647—(159,119) (2)(8,323)—
6,863 (3)—(6,605)

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

346,542

91,244

237,604

Notes:(1) 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 ended March 31, 2018 was 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’s balance ofnet 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.
(2) 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.
(3) On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act, which
includes a reduction in the U.S. federal corporate income tax rate from 35% to 21%. The decrease in theGroup’s balance of net deferred tax assets, reflecting such tax rate reductions, was recognized as an increase
to Income tax expense in the fiscal year ended March 31, 2018. On the same day, the U.S. Securities andExchange Commission issued Staff Accounting Bulletin No. 118, which specifies, among other things, thatreasonable estimates of the income tax effects of tax legislation should be used, if determinable, andprovides for a measurement period not to exceed 12 months for those estimates to be finalized.
Modifications to the Group’s estimates may occur.

F-64

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, 2017 and 2018 are as follows:
2017
2018
(in millions of yen)

Deferred tax assets:
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premises and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net operating loss carryforwards (1) (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance (1) (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

497,629
184,366
14,537
3,594
30,841
452,166
190,083

453,880
126,977
53,336
4,896
1,988
178,256
204,005

1,373,216 1,023,338(438,344) (163,358)

Deferred tax assets, net of valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

934,872

859,980

Deferred tax liabilities:
Available-for-sale securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid pension cost and accrued pension liabilities . . . . . . . . . . . . . . . . . . . . . . . . .
Undistributed earnings of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

724,160
195,620
17,161
74,886764,497
255,239
15,18974,170

Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,011,827

1,109,095

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

(76,955)(249,115)

Notes:(1) The amount includes ¥271,266 million related to MHFG’s net operating loss carryforwards resulting mainly
from intercompany capital transactions as of March 31, 2017. The tax effect of the net operating loss
carryforwards is offset by a full valuation allowance because 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 a holding 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. A portion of the net operating loss carryforwards of ¥264,234 million
that expired as of March 31, 2018, resulted in a significant decrease in the deferred tax asset on the net
operating loss carryforward.
(2) The amount includes ¥115,698 million and ¥110,729 million related to MHSC’s net operating loss
carryforwards resulting mainly from the organizational restructuring of certain foreign subsidiaries as ofMarch 31, 2017 and 2018, respectively. The tax effect of the net operating loss carryforwards issubstantially offset by ¥90,204 million and ¥86,189 million, respectively, of valuation allowance as a resultof 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-65

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, 2017 and 2018:
Deferred tax assets

Deferred tax assets,
Valuation allowance net of valuation allowance(in billions of yen)

2017
Japan (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The United States . . . . . . . . . . . . . . . . . . . . . . . . . .
The United Kingdom (2) . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

388
15
46
3

(362)
(3)
(46)
(3)

26
12
—
—

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

452

(414)

38

2018
Japan (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The United States . . . . . . . . . . . . . . . . . . . . . . . . . .
The United Kingdom (2) . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

117
10
48
3

(88)
(1)
(48)
(2)

29
9
—
1

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

178

(139)

39

Notes:(1) ¥265 billion of the Japan deferred tax assets of ¥388 billion is related to MHFG, which is offset by a fullvaluation allowance, and expired during the fiscal year ended March 31, 2018. In addition, ¥116 billion of
the Japan deferred tax assets is related to MHSC, which is substantially offset by a valuation allowance, andwill expire during the fiscal year ending March 31, 2026.
(2) The United Kingdom net operating loss carryforwards may be carried forward indefinitely for tax purposes.
(3) ¥4 billion of the Japan deferred tax assets of ¥117 billion is related to MHFG, the significant decrease ingross deferred tax and corresponding valuation allowance from the prior year is due to an expiration of the
net operating loss carryforwards. ¥111 billion of the Japan deferred tax assets is related to MHSC, which issubstantially 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-66

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 certain
subsidiaries, 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, 2018, 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,
2018. 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.
MHFG and its principal banking subsidiaries in Japan did not record 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, 2016,2017 and 2018:2016

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

2017
2018
(in millions of yen)

388,551 339,922(1,897) 112,781

438,344(9,102)——(264,234)(46,732) (14,359)(1,650)(46,732) (14,359) (265,884)
339,922438,344

163,358

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
F-67

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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.
The decrease in the fiscal year ended March 31, 2018 of ¥9,102 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.
Net operating loss carryforwards
At March 31, 2018, the MHFG Group had net operating loss carryforwards totaling ¥723 billion. These
carryforwards are scheduled to expire as follows:
Net operating loss
carryforwards(in billions of yen)

Fiscal year ending March 31:
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 and thereafter (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4
—
—
—
16
703

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

723

Note: Including the net operating loss carryforwards which may be carried forward indefinitely in the United
Kingdom.
In addition, included in the net operating loss carryforwards in the above table are MHSC’s net operating loss
carryforwards of ¥362 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-68

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, 2016,2017 and 2018:2016

Total unrecognized tax benefits at beginning of fiscal year . . . . . . . . . . . . . . . . .
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total unrecognized tax benefits at end of fiscal year . . . . . . . . . . . . . . . . . . . . . .

2017
2018
(in millions of yen)

1,632

1,300

1,867

(415)

167

224

181
—
(98)

409
—
(9)

351
—
(97)

1,300

1,867

2,345

The total amount of unrecognized tax benefits including ¥506 million, ¥675 million and ¥888 million of interest
and penalties was ¥1,300 million, ¥1,867 million and ¥2,345 million at March 31, 2016, 2017 and 2018,
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 2009, 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, 2016, 2017 and 2018 were ¥2,820 million,¥3,141 million and ¥2,511 million, respectively.
Pension plans are not fully integrated among subsidiaries of MHFG and plan assets are managed separately byeach plan.
F-69

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, 2016, 2017 and 2018:
2016

2017
2018
(in millions of yen)

Service cost-benefits earned during the fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . 38,032 44,367 43,649
Interest costs on projected benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,479
5,724
7,471
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (40,603) (35,969) (34,916)
Amortization of prior service cost (benefits) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(195)
(195)
214
Amortization of net actuarial loss (gain) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4,108)780
411
Special termination benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,456
3,857
3,960
Net periodic benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,061

18,564

20,789Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) before-tax
for the fiscal years ended March 31, 2017 and 2018 are summarized as follows:
2017
2018
(in millions of yen)

Net actuarial gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of net actuarial loss (gain) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service benefits (cost) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service cost (benefits) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,645 216,777
780
411
—
(348)
(195)
214

Total recognized in other comprehensive income (loss) before-tax . . . . . . . . . . . . . . . . . . . . . .

16,230217,054

As of March 31, 2018, the amounts in Accumulated other comprehensive income (loss), which will be amortizedas prior service costs and actuarial gain over the next fiscal year, are estimated to be ¥152 million and¥7,879 million, respectively.
Weighted-average assumptions used to determine benefit obligations and net periodic benefit cost are as follows:
2016

2017

2018

Weighted-average assumptions used to determine benefit obligations at fiscal
year end:
Discount rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.37%
0.47%
0.43%
Rates of increase in future compensation levels . . . . . . . . . . . . . . . . . . . . 1.80-4.80% 1.80-4.80% 1.80-4.80%
Weighted-average assumptions used to determine net periodic benefit cost
during the year:
Discount rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.76%
0.37%
0.47%
Rates of increase in future compensation levels . . . . . . . . . . . . . . . . . . . . 2.00-4.80% 1.80-4.80% 1.80-4.80%
Expected rates of return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.95%
1.73%
1.58%
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-70

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, 2017 and 2018 for the plans of MHFG and its subsidiaries:
2017
2018
(in millions of yen)

Change in benefit obligations:Benefit obligations at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,495,208 1,545,893
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44,36743,649Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,724
7,471
Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,215
1,233
Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—348
Actuarial loss (gain) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
67,33530,633Foreign exchange translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,159)(32)
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(51,899)(53,167)
Lump-sum payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(13,898)(16,672)
Benefit obligations at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,545,893

1,559,356

Change in plan assets:
Fair value of plan assets at beginning of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . 2,082,996 2,200,812
Actual return (negative return) on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
118,714280,251
Foreign exchange translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3,273)(113)
Partial withdrawal of assets from employee retirement benefits trusts (Note) . . . .
—(66,565)
Employer contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53,05943,279Plan participants’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,215
1,233
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(51,899)(53,167)
Fair value of plan assets at end of fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,200,812

2,405,730

Funded status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

654,919846,374

Amounts recognized in the consolidated balance sheets consist of:Prepaid pension cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued pension liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

682,592(27,673)874,191(27,817)

Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

654,919846,374

Amounts recognized in Accumulated other comprehensive income (loss) before-tax
consist of:Prior service benefits (cost) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net actuarial gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,220)74,044(1,352)291,230

Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

72,824

289,878

Note: During the fiscal year ended March 31, 2018, a subsidiary of MHFG partially withdrew assets from
employee retirement benefit trusts, which were established for the payment of employees’ severance pay
and retirement pensions. Overall, the trusts remain in overfunded status as of March 31, 2018. No gains orlosses have been recognized as a result of this transaction.
The aggregated accumulated benefit obligations of these plans were ¥1,544,039 million and ¥1,559,356 million,
as of March 31, 2017 and 2018, respectively. The defined benefit plans generally employ a multi-variable andnon-linear formula based upon rank and years of service. Employees with service in excess of one year are
qualified to receive lump-sum severance indemnities.
F-71

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In the fiscal year ended March 31, 2017, the Group incorporated employee-level improvements in the mortality
indicators used in the pension benefit calculation, which resulted in an increase of the benefit obligations of¥79,861 million.
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, 2017 and 2018:
2017
2018
(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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57,98030,30659,31931,50356,12530,30659,31931,503

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 and liquidity of a financial instrument among other things. The investments ineach asset category are further diversified across funds, strategies and sectors along with other things. 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-72

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, 2018 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%
34.00%
25.00%
23.00%
11.00%
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, 2017 and2018, 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”.

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) . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan assets measured at net asset value (5) . . .
Total assets at fair value . . . . . . . . . . . . . . . . .

Level 1

2017
Level 2 Level 3

1,162
10

—
—

—
—

1,162
10

1,330
10

—

254
—
—

—

—
—
—

254
2
25

184
—
—

—

111
—

—

—
—

111
2

108
—

—

2

68
—
—

3
7
16

—
—
—

71
7
16

175
—
—

—
124
78 (4)
1

—
—

124
79
338

—

2,201

1,683

2
25

180

Total
Level 1(in billions of yen)

2018
Level 2 Level 3

Total

—
—

1,330
19

—
—
—

184
4
25

5

—
—

108
5

6
9
16

—
—
—

181
9
16

—
110
92 (4) —

—
—

110
92
323

—

2,406

1,899

9

4
25

184

Notes:(1) This class represents equity securities held in the employee retirement benefit trusts of ¥1,162 billion and¥1,330 billion carried at fair value at March 31, 2017 and 2018, respectively, which are well-diversified
across industries.
F-73

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, which is equivalent to fair value.
(4) Amounts primarily include cash and short-term assets carried at fair value.
(5) 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.
There were no returns on and purchases and sales of Level 3 assets during the fiscal years ended March 31, 2017and 2018.
Contributions
The total contribution of approximately ¥52 billion is expected to be paid to the pension plans during the fiscal
year ending March 31, 2019, 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:
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024-2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

67,291
69,08770,332
71,041
71,662353,649

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 exercise price is 1 yen per share. The contractual term of thestock 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-74

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, 2018:
Number ofshares

Weighted-average
exercise price(in yen)

Outstanding at beginning of fiscal year . . . . .
Exercised during fiscal year . . . . . . . . . . . . . .

10,819,000
3,603,000

1
1

Outstanding at end of fiscal year . . . . . . . . . .

7,216,000

1

Exercisable at end of fiscal year . . . . . . . . . .

——Weighted-averageremaining
contractual term(in years)

Aggregate
intrinsic value(in millions of yen)

15.36

1,374

—

—

There were no non-vested stock options remaining as of March 31, 2018.
In May, 2015, MHFG discontinued the stock option program. Thereafter, MHFG has not issued 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.
The following table presents activities related to the performance-based stock compensation for the fiscal year
ended March 31, 2018:

Outstanding as of March 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted during fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested during fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited during fiscal year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding as of March 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of shares

Weighted-average
grant-date fair value(per share in yen)

9,000,000
8,130,000
3,810,594—
13,319,406

158.68196.94158.68—182.04

The weighted average grant date fair value of the performance-based stock compensation for the fiscal years
ended March 31, 2017 and 2018 were ¥158.68 and ¥196.94, respectively.
The total fair value of the performance-based stock compensation that vested for the fiscal year ended March 31,2018 was ¥782 million. There was no performance-based stock compensation that vested prior to the fiscal year
ended March 31, 2018.
The 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 ¥2,425 million.
F-75

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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 years ended March 31, 2017 and 2018 were ¥354 million and ¥868 million, respectively.
As of the fiscal year ended March 31, 2018, the total compensation cost related to non-vested awards not yet
recognized is ¥1,806 million, and this cost will be recognized over 1.92 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.
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, 2017 and 2018. 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.

2017

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

F-76

—
—
5
—
—
5

8,473
2,611
224
36
22
11,366

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

2018

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 . . . . . . . . . . . . . . . . . . . .

1,004,169
155,832
6,189
2,708
335

—
2
—
—
—

7,176
2,695
197
18
23

—
—
9
—
—

7,143
2,382
142
21
19

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

1,169,233

2

10,1099

9,707

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, which was not offset against derivative positions, was included in Other assets
and Other liabilities, respectively, of which the amounts were ¥973 billion and ¥672 billion at March 31, 2017,and ¥981 billion and ¥599 billion at March 31, 2018, 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.
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.

F-77

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes gains and losses information related to fair value hedges for the fiscal years
ended March 31, 2016, 2017 and 2018:2016

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)

Gains (losses) recorded in income
Net gain (loss) excluded
HedgedHedge
from assessment of
items
ineffectivenesseffectiveness(in millions of yen)

2018

Derivatives

Equity-related contracts . . . . . . . . . . . . . . . . . . . . . . .

(23,832)

19,631—(4,201)

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

(23,832)

19,631—(4,201)

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
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.

F-78

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes gains and losses information related to net investment hedges for the fiscal years
ended March 31, 2016, 2017 and 2018:
Gains (losses) recorded in income and other comprehensive income (“OCI”)
2016
2017
2018
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 . . . .

46,697696

16,767

47

(30)

90

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

46,697696

16,767

47

(30)

90

Note: Related to the effective portion of net investment hedges, gains of ¥345 million and ¥41 million werereclassified from Accumulated other comprehensive income to earnings for the fiscal years ended
March 31, 2016 and 2017, respectively. 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, 2018.
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”),
collateralized loan obligations (“CLO”) and other similar assets. Such derivatives are accounted for as trading
positions. The changes in fair value of these instruments are primarily recorded in Trading account gains(losses)—net, even though they are used to mitigate or transform the risk of exposures arising from banking
activities. The net gain (loss) resulting from changes in the fair value of certain credit derivatives where theGroup purchases protection to mitigate its credit risk exposure, related to its corporate loan portfolio, is recorded
in Other noninterest income (expenses).
The following table summarizes gains and losses on derivatives not designated or qualifying as hedges during the
fiscal years ended March 31, 2016, 2017 and 2018:
Gains (losses) recorded in income
2016
2017
2018
(in millions of yen)Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity-related contracts (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit-related contracts (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

319,225 (209,361) (63,260)
65,101
37,129 61,046
21,571
5,131 (94,607)(6,960)(6,694) (2,830)
2,015
742
6,330

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

400,952(173,053) (93,321)

Notes:(1) The net gain (loss) excluded from the assessment of the effectiveness of fair value hedges is not included in
the above table.
F-79

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(2) Amounts include the net loss of ¥5,230 million, ¥7,594 million and ¥754 million on the credit derivatives
hedging the credit risk of loans during the fiscal years ended March 31, 2016, 2017 and 2018, 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, 2017 and
2018:
2017
Notional amount2018
Fair value Notional amount(in billions of yen)

Fair value

Credit protection written:
Investment grade . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-investment grade . . . . . . . . . . . . . . . . . . . . . . . .

1,546
298

21
1

1,105
197

15
4

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

1,844

22

1,302

19

Credit protection purchased . . . . . . . . . . . . . . . . . . . . . . . .

1,994

(23)

1,541

(22)

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, 2017 and 2018:
Maximum payout/Notional amount
2017
2018
(in billions of yen)

One year or less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
After one year through five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
After five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

507
1,020
317

329
831
142

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

1,844

1,302

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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, 2017 and 2018:
2017
2018
(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 credit-risk-related
contingent features were triggered (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

698
658

572
593

40

—

Note: There was no amount that the Group would be required to post as collateral or settle immediately on
March 31, 2018.
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.
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.
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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-relatedlaws, 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.

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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, 2017 and 2018 was ¥249 billion and ¥82 billion, respectively, and was included in Otherliabilities and Trading account liabilities. The total includes the carrying amounts of derivatives that are deemed
to be guarantees, which amounted to ¥228 billion and ¥62 billion at March 31, 2017 and 2018, 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, 2017 and 2018. 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.
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 subparticipation 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.

2017

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

Maximum
potential/Contractualor Notional amountAmount 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

F-83

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Maximum
potential/Contractualor Notional amount2018

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)

2,165
241
164
2,210

1,084
123
32
1,555

908
28
132
614

173
90
—
41

709
13,861
11,654639
13,546
4,911

49
149
4,996

21
166
1,747

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, 2017 and 2018:
2017
2018
(in billions of yen)

Investment grade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-investment grade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,477
1,042

3,930
850

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

4,519

4,780

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.
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.
F-84

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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 31,2017 and 2018:
2017
2018
(in billions of yen)

Commitments to extend credit (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial letters of credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

76,678522

78,448690

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

77,20079,138

Note: 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, 2017 and 2018 were ¥120
billion and ¥90 billion, respectively, and were included in Other liabilities.
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, 2018:
Capitalized leases Operating leases(in millions of yen)

Fiscal year ending March 31:
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11,974
9,879
7,233
4,307
2,496
991

51,99644,41337,89632,23322,55856,897

Total minimum lease/rental payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36,880245,993

Amount representing interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

870

Present value of minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . .

36,010Total rental expense for the fiscal years ended March 31, 2016, 2017 and 2018 was ¥118,400 million,¥113,991 million and ¥117,270 million, respectively.
MHFG leases its head office from a third party and accounts for the lease arrangement as an operating lease.
F-85

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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 ¥49,883 million, ¥41,430 million and ¥32,977 million at March 31,
2016, 2017 and 2018, respectively.
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.
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, structured finance, and funding vehicles. 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 besignificant to the VIE. The MHFG Group reassesses whether it is the primary beneficiary on an ongoing basis aslong as the Group has any continuing involvement with the VIE. There are also other VIEs, where the Group hasdetermined that it is not the primary beneficiary but has significant variable interests. In evaluating thesignificance of the variable interests, the Group comprehensively takes into consideration the extent of its
involvement with each VIE, such as the seniority of its investments, the share of its holding in each tranche andthe variability it expects to absorb, as well as other relevant facts and circumstances. The likelihood of loss is notnecessarily relevant to the determination of significance, and therefore, “significant” does not imply that there ishigh 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 offbalance-sheet liabilities related to the VIEs. Further, this maximum potential loss is disclosed regardless of theprobability of such losses and, therefore, it is not indicative of the ongoing exposure which is managed within theGroup’s risk management framework.

F-86

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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, 2017 and 2018:
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

Significant
unconsolidated VIEs
Maximum
Consolidated assets Total assets exposure to loss
(in billions of yen)
Consolidated VIEs

2018

Asset-backed commercial paper/loan programs . . . . . . . . . . . . . . .
Asset-backed securitizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in securitization products . . . . . . . . . . . . . . . . . . . . . .
Investment funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trust arrangements and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,185
627
374
2,661
21

—
78
—
1,891
—

—

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

5,868

1,969

538

5
—
533
—

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, 2017 and2018:
Assets on balance sheets related to unconsolidated VIEs:

2017
2018
(in billions of yen)

Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

85
254
237

89
210
163

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

576

462

Liabilities on balance sheets and maximum exposure to loss related to unconsolidated VIEs:

2017
2018
(in billions of yen)

Payables under securities lending transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31
1

38
1

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

32

39

Maximum exposure to loss (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

628

538

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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 for offbalance-sheet financing. In substantially all of these structured financing transactions, the transfer of the financial
asset by the client is structured to be bankruptcy remote by use of a bankruptcy remote entity, which is deemed to
be a VIE because its equity holder does not have decision making rights. The MHFG Group receives fees forstructuring 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.
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.
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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.
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 and 2018 in the tables above
include the amounts of these limited partnerships and similar entities.

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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, 2017 and 2018.
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 nonguaranteed 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.
Funding Vehicles
The MHFG Group has established several wholly-owned off-shore vehicles which issue securities, typically
preferred stock that is fully guaranteed by the MHFG Group, to investors unrelated to the MHFG Group to fundpurchases of debt instruments issued by the MHFG Group. These entities are considered VIEs because they lacksufficient equity to finance their activities; however, the MHFG Group’s investment in the vehicles’ equity is nota variable interest because the investment is not considered to be at risk as the entire amount raised by thevehicles was used to purchase debt instruments issued by the MHFG Group. Because the MHFG Group does nothave variable interests in these vehicles, the MHFG Group does not consolidate these entities. Debt instruments
issued by the MHFG Group, which are included in Long-term debt, were ¥970 billion and ¥950 billion atMarch 31, 2017 and 2018, respectively.
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 these
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
securitization 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, 2016, 2017 and 2018, 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 31,2017 and 2018.
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 ¥244 billion and ¥91 billion as of March 31, 2017, and ¥208
billion and ¥89 billion as of March 31, 2018, respectively. Liabilities associated with securitization and loan
participation transactions are presented as Payables under securities lending transactions and Other short-termborrowings 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, 2016, 2017 and 2018 are as follows:
2016

2017
2018
(in millions of yen)

Securities-related business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175,723 165,857
Deposits and lending business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143,763 164,573
Remittance business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,859 108,368
Asset management business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61,80379,426
Trust fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50,49647,379Fees for other customer services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263,112 260,360

180,122
156,426
110,054
100,765
51,868266,476

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

865,711804,756

825,963

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.
Asset management business fees consist of investment trust management fees and investment advisory fees.
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.

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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
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,
2016, 2017 and 2018 are comprised of the following:2016

Trading account gains (losses)—net:
Trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative contracts:
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity-related contracts (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit-related contracts (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2017
2018
(in millions of yen)

156,559

126,332 333,749

319,225 (209,361) (63,260)
65,101
37,129 61,046
17,9701,777 (98,807)(1,731)900(2,076)
2,015
742
6,330

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange gains (losses)—net (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

559,139
113,553(42,481) 236,982
69,453 91,793

Net trading gains (losses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

672,692

26,972 328,775

Notes:(1) Amounts include gains and losses on currency swaps.
(2) The net gain (loss) excluded from the assessment of the effectiveness of fair value hedges is included in theabove table.
(3) Amounts do not include the net loss of ¥5,230 million, ¥7,594 million and ¥754 million on the credit
derivatives hedging the credit risk of loans during the fiscal years ended March 31, 2016, 2017 and 2018,
respectively. The net loss is recorded in Other noninterest expenses.
(4) Amounts include realized and unrealized gains and losses on both derivative instruments and nonderivative
instruments. Amounts on derivative instruments include gains and losses on forward foreign exchange
contracts and currency options. Amounts on nonderivative instruments include translation gains and losses
related to foreign currency-denominated available-for-sale securities 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
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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.
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 and liabilities 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 and over-the-counter derivative contracts in thiscategory 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 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 the procedures performedby the risk management departments or the back offices which are independent from the front offices. The
policies also require the risk management departments to check and verify whether the valuation methodologies
defined in the procedure manuals are fair and proper and the internal audit departments to periodically review thecompliance 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 inthe valuation methodologies and the inputs. For instance, a change in market liquidity due to a delisting or a newlisting 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 rolein identifying whether the valuation methodologies and the inputs need to be changed. The internal valuation
process over the prices broker-dealers provide, primarily for Japanese securitization products, is described in
more detail below in “Available-for-sale securities”. 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 theappropriate authority, either the CEO, the head of risk management, and/or the head 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
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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
hierarchy and the MHFG Group’s valuation techniques used to measure fair values. During the fiscal year ended
March 31, 2018, there were no significant changes made to the Group’s valuation techniques and related inputs.
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. When quoted prices for identical securities areavailable, but not actively traded, such securities are classified in Level 2 of the fair value hierarchy. When noquoted 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 liquidmarket conditions exist for securities, the quoted prices are stale or the prices from independent sources varysignificantly, such securities are generally classified in Level 3 of the fair value hierarchy. The fair values of
securitization products such as RMBS, CMBS, ABS, and CLO are determined primarily by using a discounted
cash flow model. The key inputs used for the model include default rates, recovery rates, prepayment rates, anddiscount rates. In the event that certain key inputs are unobservable or cannot 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.

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MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Available-for-sale securities
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
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 securitization products such as RMBS, CMBS, 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 toincorporate 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, ABS, and CLO, broker quotes are validated by investigating
significant unusual monthly valuation fluctuations and comparing to prices internally computed throughdiscounted cash flow models using assumptions and parameters provided by brokers such as the cash flows ofunderlying assets, yield curve, prepayment speed and credit spread. For the majority of CMBS, the Groupvalidates 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 the valuations 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 the quoted prices areverified through either recent market transactions or a pricing model that can be corroborated by observable
market data.
Other investments
Other investments consist of investments held by consolidated investment companies. These companies typicallyhold investments in marketable and non-marketable equity securities and debt securities. The fair value of themarketable 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 evaluatingsuch securities, the Group firstly considers recent market transactions of identical securities, if applicable.
Thereafter, the Group uses commonly accepted valuation techniques such as earnings multiples based oncomparable public securities. Non-marketable equity securities are generally classified in Level 3 of the fairvalue hierarchy. The fair value of the 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 isunobservable.
Long-term debt
Fair value accounting is elected for certain long-term debt instruments. For a portion of these instruments, fairvalue is based on quoted prices for identical debt trading as a security in inactive markets. These instruments areclassified in Level 2 of the fair value hierarchy. For the remaining instruments, the fair values are determinedusing a discounted cash flow model that considers the embedded derivatives and the terms and payment
structures of the notes. The fair values of the derivatives embedded in such notes are primarily derived by using
the same procedures described in “Derivative financial instruments” above. Such notes are classified in Level 2
or Level 3 depending on the observability of the significant inputs into the model used to determine the fair valueof the embedded derivatives.

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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, 2017 and 2018, including those forwhich the MHFG Group has elected the fair value option, are summarized below:

2017

Level 1

Level 2 Level 3(in billions of yen)

Assets:Trading securities (1):Japanese government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,485
23Japanese local government bonds . . . . . . . . . . . . . . . . . . . . . . . .
—69
U.S. Treasury bonds and federal agency securities . . . . . . . . . .
2,883
80
Other foreign government bonds . . . . . . . . . . . . . . . . . . . . . . . . 1,127
457
Agency mortgage-backed securities . . . . . . . . . . . . . . . . . . . . . .
—1,973
Residential mortgage-backed securities . . . . . . . . . . . . . . . . . . .
——Commercial mortgage-backed securities . . . . . . . . . . . . . . . . . .
—3
Certificates of deposit and commercial paper . . . . . . . . . . . . . . .
—554
Corporate bonds and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 1,449
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,661
20
Trading securities measured at net asset value (2) . . . . . . . . . . . .
Derivative financial instruments:
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37
8,442
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28
2,709
Equity-related contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
31
89
Credit-related contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—33
Other contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
11
Available-for-sale securities:
Japanese government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,543
720
Japanese local government bonds . . . . . . . . . . . . . . . . . . . . . . . .
—284
U.S. Treasury bonds and federal agency securities . . . . . . . . . .
1,144—
Other foreign government bonds . . . . . . . . . . . . . . . . . . . . . . . .
346
589
Agency mortgage-backed securities . . . . . . . . . . . . . . . . . . . . . .
—843
Residential mortgage-backed securities . . . . . . . . . . . . . . . . . . .
—67
Commercial mortgage-backed securities . . . . . . . . . . . . . . . . . .
——Japanese corporate bonds and other debt securities . . . . . . . . . .
—1,834
Foreign corporate bonds and other debt securities . . . . . . . . . . .
—801
Equity securities (marketable) . . . . . . . . . . . . . . . . . . . . . . . . . .
3,717
84
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
——Total assets measured at fair value on a recurring basis . . . . . . . . . . . . . . . 22,006 21,134
Liabilities:
Trading securities sold, not yet purchased . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments:
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-96

Assets/Liabilities
measured
at fair value

—
—
—
—
—
15
—
—
1,052
23

1,508
69
2,963
1,584
1,973
15
3
554
2,504
1,704
678

27
8
14
2
11

8,506
2,745
134
35
23

—
—
—
—
—
77
224
174
110
—
37
1,774

10,263
284
1,144
935
843
144
224
2,008
911
3,801
37
45,592

228

—

2,221

46
8,426
20 2,591
129
61
—
34
1
10
—
903
2,189 12,253

1
—
39
2
11
593
646

8,473
2,611
229
36
22
1,496
15,088

1,993

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

2018

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 . . . . . . . . . . . . . . . . . . . . . .
Certificates of deposit and commercial paper . . . . . . . . . . . . . . . . . .
Corporate bonds and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading securities measured at net asset value (2) . . . . . . . . . . . . . . .
Derivative financial instruments:
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 . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments:
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)

1,375
—
2,442
1,682
—
—
—
25
1,642

43
107
209
480
1,799
—
643
1,992
—

—
—
—
—
—
12
—
1,013
23

1,418
107
2,651
2,162
1,799
12
643
3,030
1,665
705

39
17
82
—
6

7,089
2,667
110
16
8

48
13
5
2
9

7,176
2,697
197
18
23

12,435
—
686
355
—
—
—
—
—
3,912
—
24,698

897
239
—
703
889
65
—
1,827
799
121
—
20,703

—
—
—
—
—
54
441
163
80
—
38
1,901

13,332
239
686
1,058
889
119
441
1,990
879
4,033
38
48,007

2,777

618

4

3,399

42
11
81
—
4
—
2,915

7,074
2,370
69
20
6
1,395
11,552

27
1
1
1
9
561
604

7,143
2,382
151
21
19
1,956
15,071

Notes:(1) Trading securities include foreign currency denominated securities for which the MHFG Group elected thefair value option.
(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, 2017 and 2018 were ¥33 billion and ¥31 billion,
respectively.
(3) Amounts represent items for which the Group elected the fair value option.
F-97

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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, 2017 and 2018:

2017

Change inunrealized
Gains
Gains Transfers Transfers
gains
April 1, (losses) in (losses)
into
out ofSettle- March 31, (losses)
2016 Earnings in OCI Level 3
Level 3 Purchases Sales Issuances ments
2017
still held (6)(in billions of yen)

Assets:Trading securities:
Residential mortgage-backed
securities . . . . . . . . . . . . . . . .
Commercial mortgage-backed
securities . . . . . . . . . . . . . . . .
Corporate bonds and other . . . .
Equity securities . . . . . . . . . . . .
Derivative financial instruments,
net (1):
Interest rate contracts . . . . . . . .
Foreign exchange contracts . . .
Equity-related contracts . . . . . .
Credit-related contracts . . . . . . .
Other contracts . . . . . . . . . . . . .
Available-for-sale securities:
Residential mortgage-backed
securities . . . . . . . . . . . . . . . .
Commercial mortgage-backed
securities . . . . . . . . . . . . . . . .
Japanese corporate bonds andother debt securities . . . . . . .
Foreign corporate bonds andother debt securities . . . . . . .
Other investments . . . . . . . . . . . . . . .
Liabilities:
Trading securities sold, not yetpurchased . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . .

21(1)(2) —

—

—

—

—

—

(5)

15

(1)

2
720
21

— (2)
12(2)
1(2)

—
—
—

—
296
—

—
(39)
—

—
875
3

—
(555)
(2)

—
—
—

(2)
(257)
—

—
1,052
23

—
19
—

26
7
5
(1)
1

(2)(2)
7(2)(31)(2)
1(2)
— (2)

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

2
(6)
1
—
(1)

26
8
(25)
—
—

2
1
(35)
—
—

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)

—
—

—
(12)

(54)
(2)

53
1

—
278

—
(296)

—
593

—
18

1
21

F-98

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

2018

Change inGainsunrealized(losses) Gains Transfers Transfers
gains
April 1,in(losses)
into
out ofSettle- March 31, (losses)
2017 Earnings in OCI Level 3
Level 3 Purchases Sales Issuances ments
2018
still held (6)(in billions of yen)

Assets:Trading securities:
Residential mortgage-backed
securities . . . . . . . . . . . . . . . .
15
Corporate bonds and other . . . . 1,052
Equity securities . . . . . . . . . . . .
23
Derivative financial instruments, net(1):
Interest rate contracts . . . . . . . .
26
Foreign exchange contracts . . .
8Equity-related contracts . . . . . .
(25)
Credit-related contracts . . . . . . . —Other contracts . . . . . . . . . . . . . —Available-for-sale securities:
Residential mortgage-backed
securities . . . . . . . . . . . . . . . .
77
Commercial mortgage-backed
securities . . . . . . . . . . . . . . . . 224
Japanese corporate bonds andother debt securities . . . . . . . 174
Foreign corporate bonds andother debt securities . . . . . . . 110
Other investments . . . . . . . . . . . . . . .
37
Liabilities:
Trading securities sold, not yetpurchased . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . .

—593— (2) —
(20)(2) —(1)(2) —

—
123
—

—
(241)
—

—
1,082
2

—
(631)
(1)

—
—
—

(3)
(352)
—

12
1,013
23

—
(19)
—

(6)(2)
2 (2)
1(2)
— (2)
(1)(2)

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

—
—
—
—
—

1
2
28
1
1

21
12
4
1
—

(1)
5
12
—
—

— (3)

— (4)

—

—

3

(6)

—

(20)

54

—

— (3)

3(4)

—

—

286

(69)

—

(3)

441

—

11(3)

(10)(4)

—

—

17

—

—

(29)

163

11

— (3)
— (3)

(1)(4) 15
—
—

(46)
—

2
14

—
(3)

—
—

—
(10)

80
38

—
—

— (2)
3(5)

—
—

—
(10)

(146)
—

150
—

—
151

—
(171)

4
561

—

—
1

5

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, 2017 and 2018.

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, 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-99

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
During the fiscal year ended March 31, 2018, the transfers into Level 3 included ¥123 billion of Trading
securities, ¥15 billion of Available-for-sale securities and ¥1 billion of Long-term debt. Transfers into Level 3 for
Trading securities and Available-for-sale securities were primarily due to decreased liquidity for certain Foreign
corporate bonds. Transfers into Level 3 for Long-term debt were primarily due to changes in the impact ofunobservable inputs on the value of certain structured notes. During the fiscal year ended March 31, 2018, thetransfers out of Level 3 included ¥241 billion of Trading securities, ¥46 billion of Available-for-sale securitiesand ¥10 billion of Long-term debt. Transfers out of Level 3 for Trading securities were primarily due toincreased 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 andother debt securities. Transfers out of Level 3 for Long-term debt were primarily due to changes in the impact ofunobservable inputs on the value of certain structured notes.
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, 2017 and 2018:2017
Products/Instruments
Trading securities andAvailable-for-salesecurities:
Residential mortgagebacked 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%

8

Internal 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%

Derivative financial
instruments, net:
Interest rate contracts
Foreign exchange
contracts

Long-term debt

F-100

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2018
Products/Instruments
Trading securities andAvailable-for-salesecurities:
Residential mortgagebacked 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)

66

Discounted cash flow
Price-based

Prepayment rate
Default rate
Recovery rate
Discount margin

3%–17%
0%–1%
100%–100%17bps–170bps

7%
0%
100%
50bps

Commercial
mortgage-backed
securities

441

Discounted cash flow
Price-based

Discount margin

9bps – 141bps

28bps

Corporate bonds andother debt
securities

1,256

Discounted cash flow
Price-based

Prepayment rate (1)Default rate (1)Recovery rate (1)Discount margin (1)Discount margin (2)26%–37%
1%–2%
60%–69%12bps–1,165bps
5bps–1,064bps

36%
2%
68%
115bps379bps21

Internal valuation model (3)IR – IR correlation
Default rate (4)23%–100%
0%–63%

Foreign exchange
contracts

12Internal valuation model (3)FX – IR correlation
FX – FX correlation
Default rate (4)16%–53%
61%–61%0%–63%

Equity-related
contracts

4Internal valuation model (3)Equity – IR correlation
Equity volatility

25%–25%12%–41%Credit-related
contracts

1

Internal valuation model (3)Default rate
Credit correlation

0%–3%
27%–100%

561

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%
9%–53%
61%–61%25%–25%55%–70%24%–100%
13%–56%0%–2%
28%–100%

Derivative financial
instruments, 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

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.

F-101

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(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-102

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, 2017 and 2018:
2017

Total

Level 1

Level 2 Level 3(in billions of yen)

Aggregate cost

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

6

2018

Total

Level 1

Assets:Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans held-for-sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Premises and equipment—net . . . . . . . . . . . . . . . . . . . . . . . . . . . .

113
60
1
—

—
—
—
—

—
60
—
—

113
—
1
—

164
74
3
4

Total assets measured at fair value on a nonrecurring basis . . . . .

174

—

60

114

245

6

124
—
1
1

194
8
11
11

13

126

224

7

Level 2 Level 3(in billions of yen)

Aggregate cost

Note: The fair values may not be current as of the dates indicated, but rather as of the date the fair value change
occurred. Accordingly, the carrying values may not equal current fair value.
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.

F-103

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
The MHFG Group elected the fair value option for foreign currency denominated available-for-sale securities tomitigate the volatility in earnings due to the difference in the recognition of foreign exchange risk between
available-for-sale securities and financial liabilities. Following the election of the fair value option, thesesecurities are reported 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 ¥36 billion and ¥21 billion atMarch 31, 2017 and 2018, respectively. The net unrealized gains (losses) resulting from changes in fair values ofthese notes of ¥16 billion and ¥(15) 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, 2017 and 2018, 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.
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, interest-bearing deposits in other 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.
F-104

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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 ¥308 billion and¥267 billion at March 31, 2017 and 2018, respectively, were not included in the disclosure.
Loans
Loans have been fair valued based on the type of loan, credit quality, prepayment assumptions and remaining
maturity. The fair value of 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 collateral dependent impaired loans isdetermined based on the fair value of the underlying collateral.
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.
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.
F-105

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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, 2017and 2018.
The following table shows the carrying amounts and fair values at March 31, 2017 and 2018, 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
amount2017
Estimated fair value
Total
Level 1
Level 2(in billions of yen)

Financial assets:
Cash and due from banks, interest-bearing deposits in otherbanks, call loans and funds sold, and receivables underresale 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
3,097
—

59,880749———
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

F-106

Level 3

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Carrying
amount2018
Estimated fair value
Total
Level 1
Level 2(in billions of yen)

Financial assets:
Cash and due from banks, interest-bearing deposits in otherbanks, call loans and funds sold, and receivables underresale agreements and securities borrowing
transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans, net of allowance for loan losses (Note) . . . . . . . . . . . .

61,381
2,518
83,08861,381
2,522
84,041

1,206
1,984
—

60,175538———
84,041

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

43,921
113,558
3,993
1,688
10,97043,921
113,540
3,993
1,688
10,99522,89861,719———21,023
51,821
3,993
1,688
10,098

—
—
—
—
897

Level 3

Note: Loans, net of allowance for loan losses include items measured at fair value on a nonrecurring basis.
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.

F-107

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table provides information about the offsetting of financial assets and financial liabilities at
March 31, 2017 and 2018. 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)

2017
Assets (1):
Derivatives . . . . . . . . . . . . . . . . . .
Receivables under resaleagreements . . . . . . . . . . . . . . . .
Receivables under securities
borrowing transactions . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . .
Liabilities (1):
Derivatives . . . . . . . . . . . . . . . . . .
Payables under repurchaseagreements . . . . . . . . . . . . . . . .
Payables under securities lendingtransactions . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . .
2018
Assets (1):
Derivatives . . . . . . . . . . . . . . . . . .
Receivables under resaleagreements . . . . . . . . . . . . . . . .
Receivables under securities
borrowing transactions . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . .
Liabilities (1):
Derivatives . . . . . . . . . . . . . . . . . .
Payables under repurchaseagreements . . . . . . . . . . . . . . . .
Payables under securities lendingtransactions . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . .

10,608—

10,608(8,966)

(620)

1,022

8,698

—

8,698

(8,662)

—

36

3,127
22,433——

3,127
22,433(3,116)(20,744)

—
(620)

11
1,069

10,405—

10,405(8,866)

(901)

638

17,446—

17,446(17,391)

—

55

1,458
29,309——1,458
29,309(1,455)(27,712)

—
(901)

3
696

9,341

—

9,341

(7,751)

(520)

1,070

7,804

—

7,804

(7,763)

—

41

3,904
21,049——3,904
21,049(3,874)(19,388)

—
(520)

30
1,141

9,013

—

9,013

(7,758)

(884)

371

15,964—

15,964(15,847)

—

117

1,181
26,158——1,181
26,158(1,179)(24,784)

—
(884)

2
490

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.

F-108

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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, 2017 and 2018:
Overnight andcontinuous

Up to 30 days 31-90 days(in billions of yen)Greater than
90 days

Total

2017
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

19,889Repurchase agreements . . . . . . . . . . . . . . . . .
Securities lending transactions . . . . . . . . . . .

255
1,270

11,669
355

3,676
—

1,057
208

16,657
1,833

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

1,525

12,024

3,676

1,265

18,4902018

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, 2017 and 2018:
Repurchase Securities lending
agreements
transactions(in billions of yen)

2017
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

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,358
14,426
328
406
139

592
303
48
869
21

Total (Note) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,657

1,833

2018

Note: Amounts exceeded the gross amounts recognized in Note 29 “Offsetting of financial assets and financial
liabilities” by ¥985 billion and ¥1,345 billion, at March 31, 2017 and 2018, respectively, which excluded
the amounts relating to master netting agreements or similar agreements where the MHFG Group did nothave the 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 the
F-109

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
amount 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
The banking subsidiaries of MHFG make loans to the MHFG Group’s directors, executive officers, and otherrelated parties. At March 31, 2017 and 2018, outstanding loans to such related parties were not consideredsignificant. At March 31, 2017 and 2018, there were no loans to these related parties that were considered
impaired.
32. Business segment information
The MHFG Group introduced an in-house company system based on its diverse customer segments in
April 2016. The aim of this system is to leverage the Group’s strengths and competitive advantage, which isthe seamless integration of the Group’s 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. These customer
segments are regarded as operating segments.
In line with the aforementioned system, the Group changed the reportable segments 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.
F-110

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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.
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)2016 (3)Retail &Business
BankingCompany

Gross profits . . . . . . . . . . . . . . . . 754.8
General and administrative
expenses . . . . . . . . . . . . . . . . . 702.4
Equity in earnings (losses) ofequity method
investees—net . . . . . . . . . . . . 20.9
Others . . . . . . . . . . . . . . . . . . . . . —Net business profits(losses) (1) . . . . . . . . . . . . . . . .

73.3

Corporate &Institutional
Company

GlobalGlobalAsset
Corporate
Markets
Management
Company Company
Company(in billions of yen)

Others (2)(4)

Total

425.0

400.6

577.7

51.0

12.5

2,221.6

187.0

236.2

170.4

28.1

20.9

1,345.0

1.2
—

0.2
—

—
—

1.1
—

0.8
(48.0)

24.2(48.0)

239.2

164.6

407.3

24.0

(55.6)

852.8

Others (2)(4)

Total

MHFG (Consolidated)

2017

Retail &Business
BankingCompany

Gross profits . . . . . . . . . . . . . . . . 717.2
General and administrative
expenses . . . . . . . . . . . . . . . . . 719.7
Equity in earnings (losses) ofequity method
investees—net . . . . . . . . . . . . 14.9
Others . . . . . . . . . . . . . . . . . . . . . —Net business profits(losses) (1) . . . . . . . . . . . . . . . .

12.4

Corporate &Institutional
Company

GlobalGlobalAsset
Corporate
Markets
Management
Company Company
Company(in billions of yen)

434.1

358.3

539.9

48.9

(5.7)

2,092.7

194.0

244.3

193.8

29.3

39.4

1,420.5

1.0
—

1.0
—

—
—

0.4
—

1.6
(27.7)

18.9(27.7)

241.1

115.0

346.1

20.0

(71.2)

663.4

F-111

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
MHFG (Consolidated)

2018

Retail &Business
BankingCompany

Gross profits . . . . . . . . . . . . . . . . 726.2
General and administrative
expenses . . . . . . . . . . . . . . . . . 723.3
Equity in earnings (losses) ofequity method
investees—net . . . . . . . . . . . . 12.7
Others . . . . . . . . . . . . . . . . . . . . . —Net business profits(losses) (1) . . . . . . . . . . . . . . . .

15.6

Corporate &Institutional
Company

GlobalGlobalAsset
Corporate
Markets
Management
Company Company
Company(in billions of yen)

Others (2)

Total

433.0

352.6

381.7

50.2

(28.3)

1,915.4

197.7

254.8

200.9

27.6

53.8

1,458.1

1.0
—

2.4
—

—
—

3.1
—

2.3
(21.0)

21.5(21.0)

236.3

100.2

180.8

25.7

(100.8)457.8

Notes:(1) 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 plus
equity in earnings (losses) of equity method investees—net and others. Measurement of net business profits
is required for regulatory reporting to the Financial Services Agency.
(2) “Others” includes items which should be eliminated as internal transactions between each segment on aconsolidated basis.
(3) 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.
(4) Beginning on April 1, 2017, new allocation methods for transactions between each segment and “Others”
have been applied. Figures for the fiscal years ended March 31, 2016 and 2017 have been restated for the
new allocation methods and “Equity in earnings (losses) of equity method investees—net” has beenpresented as a new item in connection with the use of the new allocation methods.

F-112

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, 2016,2017 and 2018 presented above to income before income tax expense shown on the consolidated statements ofincome is as follows:
2016
2017
2018
(in billions of yen)

Net business profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

201.3 (387.8) 17.8
(34.6) (37.7) 126.4
188.4 259.6 278.2(3.9)(8.8) (7.4)
10.2
5.6
8.2
16.4
(19.5) 30.2
(34.0)
5.6 (71.9)

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

F-113

1,196.6

663.4

480.4

457.8

839.3

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, 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

Fiscal year ended March 31, 2018:
Total revenue (1) . . . . . . . . . . . . . . . . .
Total expenses (2) . . . . . . . . . . . . . . . .

2,002.4
1,582.5

654.9
478.8

64.0
38.5

197.4
172.6

447.8
254.8

3,366.5
2,527.2

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

419.9

176.1

25.5

24.8

193.0

839.3

Net income . . . . . . . . . . . . . . . . . . . .

231.3

152.7

23.7

21.3

172.7

601.7

Total assets at end of fiscal year . . . .

142,587.8

28,135.9

4,380.4

11,677.8

17,473.7

204,255.6

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
2017
2018
(in millions of yen)

Assets:Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest-bearing deposits in other banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading account assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in subsidiaries and affiliated companies . . . . . . . . . . . . . . . . . . . . . . .
Long-term loans receivable from subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,912
4,278
131,996
8,993,388
2,697,250
345,379

22,264
1,227
176,5939,501,633
3,969,015
344,065

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

12,188,203

14,014,797

Liabilities and shareholders’ equity:
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,156,100
2,697,250
73,496
8,261,357

1,083,135
3,969,015
94,226
8,868,421

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

12,188,203

14,014,797

Condensed statements of income
2016

2017
(in millions of yen)

2018

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

272,070
20,81439,2679,630
1,855

300,530
27,61848,59439,35921,054

227,057
28,98747,94568,86952,672

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

343,636

437,155

425,530

Expenses:
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31,063
15,144
5,973

38,927
48,594
7,708

38,661
74,227
6,329

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

52,18095,229119,217Equity in undistributed net income of subsidiaries . . . . . . . . . . . . . . . . . .

559,553

21,251

272,852

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

851,009517

363,177
737

579,165
1,557

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

850,492

362,440

577,608

F-115

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Condensed statements of cash flows
2016

2017
(in millions of yen)

2018

Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

850,492(546,946)

362,440(40,595)

577,608(302,109)

Net cash provided by operating activities . . . . . . . . . . . . . . . . .

303,546

321,845

275,499

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 . . . . . . . . . . . . . . . . . . . . . . .

(479,948)(165)(2,249)—1,872(2,022,860) (1,344,323)(40,362)(6,649)(65,269)—
13,359—6,691(1,063)

Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . .

(480,490)(2,108,441) (1,352,035)

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 . . . . . . . . . . . . . . . . . . . . . .

(10,000)
479,948(98,800)
5(13)(195,283)
1,001(30,000)
2,022,860—
6(1,435)(190,031)
971(70,000)
1,344,323—
3(1,611)(190,382)
555

Net cash provided by financing activities . . . . . . . . . . . . . . . . .

176,858

1,802,371

1,082,888

Net increase (decrease) in cash and due from banks . . . . . . . . . . . . . . . . .
Cash and due from banks at beginning of fiscal year . . . . . . . . . . . . . . . .

(86)
223

15,775137

6,352
15,912

Cash and due from banks at end of fiscal year . . . . . . . . . . . . . . . . . . . . .

137

15,912

22,264F-116

MIZUHO FINANCIAL GROUP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
35. Subsequent events
Redemption of preferred securities
On June 30, 2018, preferred securities, issued by the MHFG Group’s overseas special purpose company, wereredeemed in full. The special purpose company is not consolidated in accordance with ASC 810 since the Groupis not the primary beneficiary. Thus, the redemption of preferred securities did not reduce Noncontrollinginterests in consolidated subsidiaries, but reduced Long-term debt in the Group’s consolidated balance sheets.
The following table describes the details of the redeemed preferred securities:
IssuerAggregate
redemption amount(in millions)Reason for the redemption¥274,500

Arrival of optional redemption dateMizuho Capital Investment (JPY) 2 Limited . . . . . . . .

F-117

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 1,2018 (English Translation)

1.3

Share Handling Regulations of Mizuho Financial Group, Inc., dated April 1, 2018 (English
Translation)

2.1

Form of American Depositary Receipt

2.2

Form of Deposit Agreement, amended and restated as of April 2, 2018, among the registrant, The
Bank of New York Mellon as Depositary and all owners and holders from time to time ofAmerican Depositary Receipts issued thereunder8

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 7, 2017.
Incorporated by reference to our annual report on Form 20-F (No. 001-33098) filed on July 21, 2016.

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/ Tatsufumi Sakai
Name: Tatsufumi Sakai
Title: President & CEO
July 3, 2018

Exhibit 1.2[ Translation ]Effective from January 8, 2003
As amended on April 1, 2018
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 defined1

in 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.
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;(xiii) Determination of a person to represent the Company in any action between the Company
and a member of the Audit Committee;
3

(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 April 1, 2018)

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.

(Registration of Transfer of Preferred Stock)1.

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.

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.
-6-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-8-following the day (in case where the purchase price pursuant to the preceding Article has not yet been
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 CONSTITUTING LESS 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.

-9-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;(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:
1.

There shall be no handling fees in the case of purchase of shares constituting less than one (1) unit
pursuant to Article 14 (Method of Request for Purchase of Shares Constituting Less Than One (1) Unit)- 10 -

and Article 40 (Method of Request for Purchase of Shares of Preferred Stock Constituting Less Than
One (1) Unit) and in the case 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 of Request for Additional Purchase of Preferred Stock Constituting Less Than One(1) Unit).

- 11 -

Exhibit 2.1

Form of American Depositary Receipt
ofMizuho Financial Group, Inc.

UPON SURRENDER OF THIS RECEIPT, AS A RESULT OF, AND TO THE EXTENT REQUIRED BY, THE
OPERATION OF THE JAPANESE COMPANIES ACT OR ANY OTHER JAPANESE LAW, THE
DEPOSITARY WILL EFFECT THE DELIVERY TO THE OWNER HEREOF, OF SHARES OF MIZUHOFINANCIAL GROUP, INC. REPRESENTED BY THE AMERICAN DEPOSITARY SHARES EVIDENCED
HEREBY ONLY IN 100 SHARE UNITS (OR SUCH OTHER NUMBER OF SHARES AS THE ARTICLESOF INCORPORATION OF MIZUHO FINANCIAL GROUP, INC. MAY PROVIDE AS A “UNIT OFSHARES” FOR THE PURPOSE OF THE JAPANESE COMPANIES ACT, AS SUCH ARTICLES OFINCORPORATION MAY BE AMENDED FROM TIME TO TIME) OR AN INTEGRAL MULTIPLE
THEREOF.
AMERICAN DEPOSITARY SHARES(Each American Depositary Share represents
two (2) deposited Shares)
THE BANK OF NEW YORK MELLONAMERICAN DEPOSITARY RECEIPTFOR COMMON SHARES OFMIZUHO FINANCIAL GROUP, INC.
(INCORPORATED UNDER THE LAWS OF JAPAN)

that

The Bank of New York Mellon, as depositary (hereinafter called the “Depositary”), hereby certifies, or registered assigns IS THE OWNER OFAMERICAN DEPOSITARY SHARES

representing deposited common shares (herein called “Shares”) of Mizuho Financial Group, Inc., incorporated
under the laws of Japan (herein called the “Company”). At the date hereof, each American Depositary Sharerepresents two (2) Shares deposited or subject to deposit under the Deposit Agreement (as such term ishereinafter defined) with a custodian for the Depositary (herein called the “Custodian”) that, as of the date of the
Deposit Agreement, was Mizuho Bank, Ltd. located in Tokyo. The Depositary’s Office is located at a different
address than its principal executive office. Its Office is located at 101 Barclay Street, New York, N.Y. 10286, andits principal executive office is located at 225 Liberty Street, New York, N.Y. 10286.
THE DEPOSITARY’S OFFICE ADDRESS IS
101 BARCLAY STREET, NEW YORK, N.Y. 10286

1

1.

THE DEPOSIT AGREEMENT.

This American Depositary Receipt is one of an issue (herein called “Receipts”), all issued and to be issued
upon the terms and conditions set forth in the amended and restated Deposit Agreement dated as of April 2, 2018
(herein called the “Deposit Agreement”) among the Company, the Depositary, and all Owners and Holders fromtime to time of American Depositary Shares issued thereunder, each of whom by accepting American Depositary
Shares agrees to become a party thereto and become bound by all the terms and conditions thereof. The Deposit
Agreement sets forth the rights of Owners and Holders and the rights and duties of the Depositary in respect of
the Shares deposited thereunder and any and all other securities, property and cash from time to time received in
respect of those Shares and held thereunder (those Shares, securities, property, and cash are herein called“Deposited Securities”). Copies of the Deposit Agreement are on file at the Depositary’s Office in New York
City and at the office of the Custodian.
The statements made on the face and reverse of this Receipt are summaries of certain provisions of the
Deposit Agreement and are qualified by and subject to the detailed provisions of the Deposit Agreement, towhich reference is hereby made. Capitalized terms defined in the Deposit Agreement and not defined herein shallhave the meanings set forth in the Deposit Agreement.
2.

SURRENDER OF AMERICAN DEPOSITARY SHARES AND WITHDRAWAL OF SHARES.

Upon surrender at the Depositary’s Office of American Depositary Shares for the purpose of withdrawal of
the Deposited Securities represented thereby and payment of the fee of the Depositary for the surrender ofAmerican Depositary Shares as provided in Section 5.9 of the Deposit Agreement and payment of all taxes andgovernmental charges payable in connection with that surrender and withdrawal of the Deposited Securities, andsubject to the terms and conditions of the Deposit Agreement, the Owner of those American Depositary Sharesshall be entitled to delivery (to the extent delivery can then be lawfully and practicably made), to or as instructedby that Owner, of the amount of Deposited Securities at the time represented by those American Depositary
Shares, but not any money or other property as to which a record date for distribution to Owners has passed(since money or other property of that kind will be delivered or paid on the scheduled payment date to the Owner
as of that record date). The Depositary shall direct the Custodian with respect to delivery of Deposited Securities
and may charge the surrendering Owner a fee and its expenses for giving that direction by cable (including
SWIFT) or facsimile transmission. That delivery will be made, at the office of the Custodian, except that, at therequest, risk and expense of the surrendering Owner, and for the account of that Owner, the Depositary shalldirect the Custodian to forward any cash or other property comprising, and forward a certificate or certificates, if
applicable, and other proper documents of title, if any, for, the Deposited Securities represented by thesurrendered American Depositary Shares to the Depositary for delivery at the Depositary’s Office or to anotheraddress specified in the order received from the surrendering Owner.
3.

REGISTRATION OF TRANSFER OF AMERICAN DEPOSITARY SHARES; COMBINATION AND
SPLIT-UP OF RECEIPTS; INTERCHANGE OF CERTIFICATED AND UNCERTIFICATEDAMERICAN DEPOSITARY SHARES.

The Depositary, subject to the terms and conditions of the Deposit Agreement, shall register a transfer ofAmerican Depositary Shares on its transfer books upon (i) in the case of certificated American Depositary
Shares, surrender of the Receipt evidencing those American Depositary Shares, by the Owner or by a duly
authorized attorney, properly endorsed or accompanied by proper instruments of transfer or (ii) in the case of
uncertificated American Depositary Shares, receipt from the Owner of a proper instruction (including, for the
avoidance of doubt, instructions through DRS and Profile as provided in Section 2.10 of that Agreement), and, ineither case, duly stamped as may be required by the laws of the State of New York and of the United States ofAmerica. Upon registration of a transfer, the Depositary shall deliver the transferred American Depositary Sharesto or upon the order of the person entitled thereto.
The Depositary, subject to the terms and conditions of the Deposit Agreement, shall upon surrender of a
Receipt or Receipts for the purpose of effecting a split-up or combination of such Receipt or Receipts, execute2and deliver a new Receipt or Receipts for any authorized number of American Depositary Shares requested,
evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered.
The Depositary, upon surrender of certificated American Depositary Shares for the purpose of exchanging
for uncertificated American Depositary Shares, shall cancel the Receipt evidencing those certificated American
Depositary Shares and send the Owner a statement confirming that the Owner is the owner of the same numberof uncertificated American Depositary Shares. The Depositary, upon receipt of a proper instruction (including,for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.10 of the Deposit
Agreement) from the Owner of uncertificated American Depositary Shares for the purpose of exchanging for
certificated American Depositary Shares, shall cancel those uncertificated American Depositary Shares andregister and deliver to the Owner a Receipt evidencing the same number of certificated American Depositary
Shares.
As a condition precedent to the delivery, registration of transfer, or surrender of any American Depositary
Shares or split-up or combination of any Receipt or withdrawal of any Deposited Securities, the Depositary, theCustodian, or Registrar may require payment from the depositor of the Shares or the presenter of the Receipt or
instruction for registration of transfer or surrender of American Depositary Shares not evidenced by a Receipt ofa sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration
fee with respect thereto (including any such tax or charge and fee with respect to Shares being deposited orwithdrawn) and payment of any applicable fees as provided in the Deposit Agreement, may require theproduction of proof satisfactory to it as to the identity and genuineness of any signature and may also requirecompliance with any regulations the Depositary may establish consistent with the provisions of the Deposit
Agreement.
The delivery of American Depositary Shares against deposit of Shares generally or against deposit ofparticular Shares may be suspended, or the registration of transfer of American Depositary Shares in particularinstances may be refused, or the registration of transfer of outstanding American Depositary Shares generally
may be suspended, during any period when the transfer books of the Depositary are closed, or if any such action
is deemed necessary or advisable by the Depositary or the Company at any time or from time to time because of
any requirement of law or of any government or governmental body or commission, or under any provision of
the Deposit Agreement, or for any other reason. Notwithstanding anything to the contrary in the Deposit
Agreement or this Receipt, the surrender of outstanding American Depositary Shares and withdrawal of
Deposited Securities may not be suspended subject only to (i) temporary delays caused by closing the transfer
books of the Depositary or the Company or the Foreign Registrar, if applicable, or the deposit of Shares inconnection with voting at a shareholders’ meeting, or the payment of dividends, (ii) the payment of fees, taxes
and similar charges, and (iii) compliance with any U.S. or foreign laws or governmental regulations relating to
the American Depositary Shares or to the withdrawal of the Deposited Securities. The Depositary shall notknowingly accept for deposit under the Deposit Agreement any Shares that, at the time of deposit, are Restricted
Securities. Upon surrender of American Depositary Shares for the purpose of withdrawal by an Owner to the
Depositary, as a result of, and to the extent required by, the operation of applicable provisions of the JapaneseCompanies Act or any other Japanese law, the Depositary will effect the delivery to such Owner of only that
portion of Shares (and any other Deposited Securities relating to such Shares) comprising a Unit or an integral
multiple thereof (the “deliverable portion”). For the purpose of the foregoing sentence, the deliverable portion
shall be determined on the basis of the aggregate number of Shares represented by the entire amount of theAmerican Depositary Shares surrendered by the same Owner at the same time. The Depositary will promptly
advise such Owner as to the amount of Shares and other Deposited Securities, if any, constituting a
non-deliverable portion and shall deliver to such Owner American Depositary Shares representing such nondeliverable portion. In addition, the Depositary shall notify such Owner of the additional amount of American
Depositary Shares which such Owner would be required to surrender in order for the Depositary to effectdelivery of all the Shares and other Deposited Securities represented by the American Depositary Shares of such
Owner.

3

4.

LIABILITY OF OWNER FOR TAXES.

If any tax or other governmental charge shall become payable by the Custodian or the Depositary withrespect to or in connection with any American Depositary Shares or any Deposited Securities represented by any
American Depositary Shares or in connection with a transaction to which Section 4.8 of the Deposit Agreement
applies, that tax or other governmental charge shall be payable by the Owner of those American Depositary
Shares to the Depositary. The Depositary may refuse to register any transfer of those American Depositary
Shares or any withdrawal of Deposited Securities represented by those American Depositary Shares until thatpayment is made, and may withhold any dividends or other distributions or the proceeds thereof, or may sell forthe account of the Owner any part or all of the Deposited Securities represented by those American Depositary
Shares, and may apply those dividends or other distributions or the net proceeds of any sale of that kind inpayment of that tax or other governmental charge but, even after a sale of that kind, the Owner shall remain liable
for any deficiency. The Depositary shall distribute any net proceeds of a sale made under Section 3.2 of the
Deposit Agreement that are not used to pay taxes or governmental charges to the Owners entitled to them inaccordance with Section 4.1 of the Deposit Agreement. If the number of Shares represented by each American
Depositary Share decreases as a result of a sale of Deposited Securities under Section 3.2 of the Deposit
Agreement, the Depositary may call for surrender of the American Depositary Shares to be exchanged on a
mandatory basis for a lesser number of American Depositary Shares and may sell American Depositary Shares tothe extent necessary to avoid distributing fractions of American Depositary Shares in that exchange anddistribute the net proceeds of that sale to the Owners entitled to them.
5.

WARRANTIES ON DEPOSIT OF SHARES.

Every person depositing Shares under the Deposit Agreement shall be deemed thereby to represent andwarrant that those Shares and each certificate therefor, if applicable, are validly issued, fully paid andnonassessable and were not issued in violation of any preemptive or similar rights of the holders of outstanding
securities of the Company and that the person making that deposit is duly authorized so to do. Every depositing
person shall also be deemed to represent that the Shares, at the time of deposit, are not Restricted Securities. All
representations and warranties deemed made under Section 3.3 of the Deposit Agreement shall survive thedeposit of Shares and delivery of American Depositary Shares.
6.

FILING PROOFS, CERTIFICATES, AND OTHER INFORMATION.

Any person presenting Shares for deposit or any Owner or Holder may be required from time to time to filewith the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, or suchinformation relating to the registration on the books of the Company or the Foreign Registrar, if applicable, to
execute such certificates and to make such representations and warranties, as the Depositary may deem necessaryor proper. The Depositary may withhold the delivery or registration of transfer of any American Depositary
Shares, the distribution of any dividend or other distribution or of the proceeds thereof or the delivery of any
Deposited Securities until that proof or other information is filed or those certificates are executed or those
representations and warranties are made. As conditions of accepting Shares for deposit, the Depositary may
require (i) any certification required by the Depositary or the Custodian in accordance with the provisions of the
Deposit Agreement, (ii) a written order directing the Depositary to deliver to, or upon the written order of, theperson or persons stated in that order, the number of American Depositary Shares representing those Deposited
Shares, (iii) evidence satisfactory to the Depositary that those Shares have been re-registered in the books of theCompany or the Foreign Registrar in the name of the Depositary, a Custodian or a nominee of the Depositary or a
Custodian, (iv) evidence satisfactory to the Depositary that any necessary approval has been granted by any
governmental body in each applicable jurisdiction and (v) an agreement or assignment, or other instrument
satisfactory to the Depositary, that provides for the prompt transfer to the Custodian of any dividend, or right tosubscribe for additional Shares or to receive other property, that any person in whose name those Shares are or
have been recorded may thereafter receive upon or in respect of those Shares, or, in lieu thereof, such agreementof indemnity or other agreement as shall be satisfactory to the Depositary.
4

7.

CHARGES OF DEPOSITARY.

The following charges shall be incurred by any party depositing or withdrawing Shares or by any party
surrendering American Depositary Shares or to whom American Depositary Shares are issued (including,
without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchangeof stock regarding the American Depositary Shares or Deposited Securities or a delivery of American Depositary
Shares pursuant to Section 4.3 of the Deposit Agreement), or by Owners, as applicable: (1) taxes and othergovernmental charges, (2) such registration fees as may from time to time be in effect for the registration oftransfers of Shares generally on the Share register of the Company or Foreign Registrar and applicable totransfers of Shares to or from the name of the Depositary or its nominee or the Custodian or its nominee on themaking of deposits or withdrawals hereunder, (3) such cable (including SWIFT) and facsimile transmission feesand expenses as are expressly provided in the Deposit Agreement, (4) such expenses as are incurred by the
Depositary in the conversion of foreign currency pursuant to Section 4.5 of the Deposit Agreement, (5) a fee of$5.00 or less per 100 American Depositary Shares (or portion thereof) for the delivery of American Depositary
Shares pursuant to Section 2.3, 4.3 or 4.4 of the Deposit Agreement and the surrender of American Depositary
Shares pursuant to Section 2.5 or 6.2 of the Deposit Agreement, (6) a fee of $.05 or less per American Depositary
Share (or portion thereof) for any cash distribution made pursuant to the Deposit Agreement, including, but notlimited to Sections 4.1 through 4.4 and 4.8 of the Deposit Agreement, (7) a fee for the distribution of securities
pursuant to Section 4.2 of the Deposit Agreement or of rights pursuant to Section 4.4 of that Agreement (where
the Depositary will not exercise or sell those rights on behalf of Owners), such fee being in an amount equal to
the fee for the execution and delivery of American Depositary Shares referred to above which would have been
charged as a result of the deposit of such securities under the Deposit Agreement (for purposes of this item 7
treating all such securities as if they were Shares) but which securities are instead distributed by the Depositary to
Owners, (8) in addition to any fee charged under item 6, a fee of $.05 or less per American Depositary Share (orportion thereof) per annum for depositary services, which will be payable as provided in item 9 below, and(9) any other charges payable by the Depositary or the Custodian, any of the Depositary’s or Custodian’s agentsor the agents of the Depositary’s or Custodian’s agents, in connection with the servicing of Shares or other
Deposited Securities (which charges shall be assessed against Owners as of the date or dates set by the
Depositary in accordance with Section 4.6 of the Deposit Agreement and shall be payable at the sole discretion of
the Depositary by billing those Owners for those charges or by deducting those charges from one or more cash
dividends or other cash distributions).
The Depositary may collect any of its fees by deduction from any cash distribution payable, or by selling a
portion of any securities to be distributed, to Owners that are obligated to pay those fees.
The Depositary, subject to Article 8 hereof, may own and deal in any class of securities of the Company andits affiliates and in American Depositary Shares.
From time to time, the Depositary may make payments to the Company to reimburse the Company for costs
and expenses generally arising out of establishment and maintenance of the American Depositary Sharesprogram, waive fees and expenses for services provided by the Depositary or share revenue from the feescollected from Owners or Holders. In performing its duties under the Deposit Agreement, the Depositary may
use brokers, dealers, foreign currency dealers or other service providers that are owned by or affiliated with the
Depositary and that may earn or share fees, spreads or commissions.
8.

PRE-RELEASE OF AMERICAN DEPOSITARY SHARES.

Notwithstanding Section 2.3 of the Deposit Agreement, the Depositary may deliver American Depositary
Shares prior to the receipt of Shares pursuant to Section 2.2 of the Deposit Agreement (a “Pre-Release”). The
Depositary may, pursuant to Section 2.5 of the Deposit Agreement, deliver Shares upon the surrender ofAmerican Depositary Shares that have been Pre-Released, whether or not that surrender is prior to thetermination of that Pre-Release or the Depositary knows that those American Depositary Shares have been
5Pre-Released. The Depositary may receive American Depositary Shares in lieu of Shares in satisfaction of a
Pre-Release. Each Pre-Release must be (a) preceded or accompanied by a written representation from the person
to whom American Depositary Shares or Shares are to be delivered, that such person, or its customer, owns the
Shares or American Depositary Shares to be remitted, as the case may be, (b) at all times fully collateralized withcash or such other collateral as the Depositary deems appropriate, (c) terminable by the Depositary on not morethan five (5) business days’ notice, and (d) subject to all indemnities and credit regulations that the Depositary
deems appropriate. The number of American Depositary Shares outstanding at any time as a result of Pre-Release
will not normally exceed thirty percent (30%) of all American Depositary Shares outstanding; provided,
however, that the Depositary reserves the right to change or disregard that limit from time to time as it reasonably
deems appropriate.
The Depositary may retain for its own account any compensation received by it in connection with
Pre-Release.
9.

TITLE TO AMERICAN DEPOSITARY SHARES.

It is a condition of the American Depositary Shares, and every successive Owner and Holder of American
Depositary Shares, by accepting or holding the same, consents and agrees that American Depositary Shares
evidenced by a Receipt, when the Receipt is properly endorsed or accompanied by proper instruments of transfer,shall be transferable as certificated registered securities under the laws of the State of New York, and that
American Depositary Shares not evidenced by Receipts shall be transferable as uncertificated registeredsecurities under the laws of the State of New York. The Depositary, notwithstanding any notice to the contrary,
may treat the Owner of American Depositary Shares as the absolute owner thereof for the purpose of determining
the person entitled to distribution of dividends or other distributions or to any notice provided for in the Deposit
Agreement and for all other purposes, and neither the Depositary nor the Company shall have any obligation or
be subject to any liability under the Deposit Agreement to any Holder of American Depositary Shares, but only
to the Owner.
10. VALIDITY OF RECEIPT.
This Receipt shall not be entitled to any benefits under the Deposit Agreement or be valid or obligatory forany purpose, unless this Receipt shall have been (i) executed by the Depositary by the manual signature of a duly
authorized officer of the Depositary or (ii) executed by the facsimile signature of a duly authorized officer of the
Depositary and countersigned by the manual signature of a duly authorized signatory of the Depositary or theRegistrar or a co-registrar.
11. REPORTS; INSPECTION OF TRANSFER BOOKS.
The Company is subject to the periodic reporting requirements of the Securities Exchange Act of 1934 and,accordingly, files certain reports with the Securities and Exchange Commission. Those reports will be available
for inspection and copying through the Commission’s EDGAR system or at public reference facilities maintainedby the Commission in Washington, D.C.
The Depositary will make available for inspection by Owners at its Office any reports, notices and othercommunications, including any proxy soliciting material, received from the Company which are both(a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to theholders of those Deposited Securities by the Company. The Company shall furnish reports and communications,
including any proxy soliciting material to which Section 4.9 of the Deposit Agreement applies, to the Depositary
in English, to the extent such materials are required to be translated into English pursuant to any regulations of
the Commission.
The Depositary will keep books for the registration of American Depositary Shares and transfers ofAmerican Depositary Shares, which shall be open for inspection by the Owners at the Depositary’s Office during
6regular business hours, provided that such inspection shall not be for the purpose of communicating with Owners
in the interest of a business or object other than the business of the Company or a matter related to the Deposit
Agreement or the American Depositary Shares.
12. DIVIDENDS AND DISTRIBUTIONS.
Whenever the Depositary receives any cash dividend or other cash distribution on Deposited Securities, theDepositary will, if at the time of receipt thereof any amounts received in a foreign currency can in the judgmentof the Depositary be converted on a reasonable basis into Dollars transferable to the United States, and subject tothe Deposit Agreement, convert that dividend or other cash distribution into Dollars, as promptly as practicable,
and distribute the amount thus received (net of the fees and expenses of the Depositary as provided in Article 7
hereof and Section 5.9 of the Deposit Agreement) to the Owners entitled thereto; provided, however, that if the
Custodian or the Depositary is required to withhold and does withhold from that cash dividend or other cash
distribution an amount on account of taxes or other governmental charges, the amount distributed to the Ownersof the American Depositary Shares representing those Deposited Securities shall be reduced accordingly. If acash distribution would represent a return of all or substantially all the value of the Deposited Securities
underlying American Depositary Shares, the Depositary may require surrender of those American Depositary
Shares and may require payment of or deduct the fee for surrender of American Depositary Shares (whether or
not it is also requiring surrender of American Depositary Shares) as a condition of making that cash distribution.
A distribution of that kind shall be a Termination Option Event.
Subject to the provisions of Section 4.11 and 5.9 of the Deposit Agreement, whenever the Depositary
receives any distribution other than a distribution described in Section 4.1, 4.3 or 4.4 of the Deposit Agreement
on Deposited Securities (but not in exchange for or in conversion or in lieu of Deposited Securities), theDepositary will, as promptly as practicable, cause the securities or property received by it to be distributed to the
Owners entitled thereto, after deduction or upon payment of any fees and expenses of the Depositary and any
taxes or other governmental charges, in any manner that the Depositary deems equitable and practicable foraccomplishing that distribution (which may be a distribution of depositary shares representing the securities
received); provided, however, that if in the reasonable opinion of the Depositary such distribution cannot bemade proportionately among the Owners of Receipts entitled thereto, or if for any other reason the Depositary
deems such distribution not to be lawful and feasible, the Depositary may adopt such other method as it may
deem equitable and practicable for the purpose of effecting such distribution, including, but not limited to, thepublic or private sale of the securities or property thus received, or any part thereof, and distribution of the net
proceeds of any such sale (net of the fees and expenses of the Depositary as provided in Article 7 hereof andSection 5.9 of the Deposit Agreement) to the Owners entitled thereto all in the manner and subject to theconditions set forth in Section 4.1 of the Deposit Agreement. The Depositary may withhold any distribution of
securities under Section 4.2 of the Deposit Agreement if it has not received satisfactory assurances from theCompany that the distribution does not require registration under the Securities Act of 1933. The Depositary may
sell, by public or private sale, an amount of securities or other property it would otherwise distribute under this
Article that is sufficient to pay its fees and expenses in respect of that distribution. If a distribution under
Section 4.2 of the Deposit Agreement would represent a return of all of substantially all the value of the
Deposited Securities underlying American Depositary Shares, the Depositary may require surrender of those
American Depositary Shares and may require payment of or deduct the fee for surrender of American Depositary
Shares (whether or not it is also requiring surrender of American Depositary Shares) as a condition of making
that distribution. A distribution of that kind shall be a Termination Option Event.
Whenever the Depositary receives any distribution consisting of a dividend in, or free distribution of,Shares, the Depositary may deliver to the Owners entitled thereto, an aggregate number of American Depositary
Shares representing the amount of Shares received as that dividend or free distribution, subject to the terms andconditions of the Deposit Agreement with respect to the deposit of Shares and issuance of American Depositary
Shares, including the withholding of any tax or other governmental charge as provided in Section 4.11 of the
Deposit Agreement and the payment of the fees and expenses of the Depositary as provided in Article 7 hereof
7and Section 5.9 of the Deposit Agreement (and the Depositary may sell, by public or private sale, an amount of
Shares received (or American Depositary Shares representing those Shares) sufficient to pay its fees andexpenses in respect of that distribution). In lieu of delivering fractional American Depositary Shares, theDepositary may sell the amount of Shares represented by the aggregate of those fractions (or American
Depositary Shares representing those Shares or, if such sale is not possible with respect to any portion of such
Shares which is less than a full Share, or a full Unit, by sale of such portion to the Company in accordance withthe applicable provisions of Japanese law and the articles of association, or similar documents of the Company)and distribute the net proceeds, all in the manner and subject to the conditions described in Section 4.1of the
Deposit Agreement. No delivery to Owners pursuant to Section 4.3 of the Deposit Agreement shall be
unreasonably delayed by any action of the Depositary or the Custodian. If and to the extent that additional
American Depositary Shares are not delivered and Shares or American Depositary Shares are not sold, each
American Depositary Share shall thenceforth also represent the additional Shares distributed on the Deposited
Securities represented thereby.
If the Company declares a distribution in which holders of Deposited Securities have a right to elect whether
to receive cash, Shares or other securities or a combination of those things, or a right to elect to have a
distribution sold on their behalf, the Depositary may, after consultation with the Company, make that right ofelection available for exercise by Owners any manner the Depositary considers to be lawful and practical. As acondition of making a distribution election right available to Owners, the Depositary may require satisfactory
assurances from the Company that doing so does not require registration of any securities under the Securities
Act of 1933.
If the Depositary determines that any distribution received or to be made by the Depositary (including
Shares and rights to subscribe therefor) is subject to any tax or other governmental charge that the Depositary is
obligated to withhold, the Depositary may sell, by public or private sale, all or a portion of the distributed
property (including Shares and rights to subscribe therefor) in the amounts and manner the Depositary deems
necessary and practicable to pay any those taxes or charges, and the Depositary shall distribute the net proceedsof that sale, after deduction of those taxes or charges, to the Owners entitled thereto in proportion to the numberof American Depositary Shares held by them respectively.
Each Owner and Holder agrees to indemnify the Company, the Depositary, the Custodian and theirrespective directors, employees, agents and affiliates for, and hold each of them harmless against, any claim by
any governmental authority with respect to taxes, additions to tax, penalties or interest arising out of any refundof taxes, reduced withholding at source or other tax benefit received by it. Services for Owners and Holders thatmay permit them to obtain reduced rates of tax withholding at source or reclaim excess tax withheld, and the fees
and costs associated with using services of that kind, are not provided under, and are outside the scope of, theDeposit Agreement.
13. RIGHTS.
(a) If rights are granted to the Depositary in respect of deposited Shares to purchase additional Shares orother securities, the Company and the Depositary shall endeavor to consult as to the actions, if any, theDepositary should take in connection with that grant of rights. The Depositary may, to the extent deemed by it tobe lawful and practical (i) if requested in writing by the Company, grant to all or certain Owners rights to instruct
the Depositary to purchase the securities to which the rights relate and deliver those securities or American
Depositary Shares representing those securities to Owners, (ii) if requested in writing by the Company, deliver
the rights to or to the order of certain Owners, or (iii) sell the rights to the extent practicable and distribute the net
proceeds of that sale to Owners entitled to those proceeds. To the extent rights are not exercised, delivered or
disposed of under (i), (ii) or (iii) above, the Depositary shall permit the rights to lapse unexercised.
(b) If the Depositary will act under (a)(i) above, the Company and the Depositary will enter into a separate
agreement setting forth the conditions and procedures applicable to the particular offering. Upon instruction from8

an applicable Owner in the form the Depositary specified and upon payment by that Owner to the Depositary of
an amount equal to the purchase price of the securities to be received upon the exercise of the rights, theDepositary shall, on behalf of that Owner, exercise the rights and purchase the securities. The purchased
securities shall be delivered to, or as instructed by, the Depositary. The Depositary shall (i) deposit the purchased
Shares under the Deposit Agreement and deliver American Depositary Shares representing those Shares to that
Owner or (ii) deliver or cause the purchased Shares or other securities to be delivered to or to the order of that
Owner. The Depositary will not act under (a)(i) above unless the offer and sale of the securities to which therights relate are registered under the Securities Act of 1933 or the Depositary has received an opinion of UnitedStates counsel that is satisfactory to it to the effect that those securities may be sold and delivered to theapplicable Owners without registration under the Securities Act of 1933.
(c) If the Depositary will act under (a)(ii) above, the Company and the Depositary will enter into aseparate agreement setting forth the conditions and procedures applicable to the particular offering. Upon (i) therequest of an applicable Owner to deliver the rights allocable to the American Depositary Shares of that Owner toan account specified by that Owner to which the rights can be delivered and (ii) receipt of such documents as theCompany and the Depositary agreed to require to comply with applicable law, the Depositary will deliver thoserights as requested by that Owner.
(d) If the Depositary will act under (a)(iii) above, the Depositary will use reasonable efforts to sell therights in proportion to the number of American Depositary Shares held by the applicable Owners and pay the net
proceeds to the Owners otherwise entitled to the rights that were sold, upon an averaged or other practical basis
without regard to any distinctions among such Owners because of exchange restrictions or the date of delivery of
any American Depositary Shares or otherwise.
(e) Payment or deduction of the fees of the Depositary as provided in Section 5.9 of the Deposit
Agreement and payment or deduction of the expenses of the Depositary and any applicable taxes or othergovernmental charges shall be conditions of any delivery of securities or payment of cash proceeds under
Section 4.4 of that Agreement.
(f) The Depositary shall not be responsible for any failure to determine that it may be lawful or feasible to
make rights available to or exercise rights on behalf of Owners in general or any Owner in particular, or to sellrights.
14. CONVERSION OF FOREIGN CURRENCY.
Whenever the Depositary or the Custodian receives foreign currency, by way of dividends or other
distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt
thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis
into Dollars and the resulting Dollars transferred to the United States, the Depositary shall, as promptly aspracticable, convert or cause to be converted by sale or in any other manner that it may determine that foreign
currency into Dollars, and those Dollars shall be distributed to the Owners entitled thereto. A cash distribution
may be made upon an averaged or other practicable basis without regard to any distinctions among Owners basedon exchange restrictions, the date of delivery of any American Depositary Shares or otherwise and shall be net ofany expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.9 of the Deposit
Agreement.
If a conversion of foreign currency or the repatriation or distribution of Dollars can be effected only with theapproval or license of any government or agency thereof, the Depositary may, but will not be required to, file anapplication for that approval or license.
If the Depositary determines that in its judgment any foreign currency received by the Depositary or the
Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any
9approval or license of any government or agency thereof that is required for such conversion is not filed orsought by the Depositary or is not obtained within a reasonable period as determined by the Depositary, theDepositary may distribute the foreign currency received by the Depositary to, or in its discretion may hold suchforeign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners
entitled to receive the same.
If any conversion of foreign currency, in whole or in part, cannot be effected for distribution to some of the
Owners entitled thereto, the Depositary may in its discretion make that conversion and distribution in Dollars to
the extent practicable and permissible to the Owners entitled thereto and may distribute the balance of the foreign
currency received by the Depositary to, or hold that balance uninvested and without liability for interest thereon
for the account of, the Owners entitled thereto.
The Depositary may convert currency itself or through any of its affiliates and, in those cases, acts as
principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person andearns revenue, including, without limitation, transaction spreads, that it will retain for its own account. The
revenue is based on, among other things, the difference between the exchange rate assigned to the currency
conversion made under the Deposit Agreement and the rate that the Depositary or its affiliate receives whenbuying or selling foreign currency for its own account. The Depositary makes no representation that the exchange
rate used or obtained in any currency conversion under the Deposit Agreement will be the most favorable ratethat could be obtained at the time or that the method by which that rate will be determined will be the mostfavorable to Owners, subject to the Depositary’s obligations under Section 5.3 of that Agreement. The
methodology used to determine exchange rates used in currency conversions is available upon request.
15. RECORD DATES.
Whenever a cash dividend, cash distribution or any other distribution is made on Deposited Securities orrights to purchase Shares or other securities are issued with respect to Deposited Securities (which rights will bedelivered to or exercised or sold on behalf of Owners in accordance with Section 4.4 of the Deposit Agreement)or the Depositary receives notice that a distribution or issuance of that kind will be made, or whenever the
Depositary receives notice that a meeting of holders of Shares will be held in respect of which the Company hasrequested the Depositary to send a notice under Section 4.7 of the Deposit Agreement, or whenever the
Depositary will assess a fee or charge against the Owners, or whenever the Depositary causes a change in thenumber of Shares that are represented by each American Depositary Share, or whenever the Depositary
otherwise finds it necessary or convenient, the Depositary shall fix a record date, which shall be the same as, oras near as practicable to, any corresponding record date set by the Company with respect to Shares, (a) for thedetermination of the Owners (i) who shall be entitled to receive the benefit of that dividend or other distribution
or those rights, (ii) who shall be entitled to give instructions for the exercise of voting rights at that meeting,(iii) who shall be responsible for that fee or charge or (iv) for any other purpose for which the record date wasset, or (b) on or after which each American Depositary Share will represent the changed number of Shares.
Subject to the provisions of Sections 4.1 through 4.5 of the Deposit Agreement and to the other terms andconditions of the Deposit Agreement, the Owners on a record date fixed by the Depositary shall be entitled toreceive the amount distributable by the Depositary with respect to that dividend or other distribution or thoserights or the net proceeds of sale thereof in proportion to the number of American Depositary Shares held bythem respectively, to give voting instructions or to act in respect of the other matter for which that record date
was fixed, or be responsible for that fee or charge, as the case may be.
16. VOTING OF DEPOSITED SHARES.
(a) Upon receipt of notice of any meeting of holders of Shares at which holders of Shares will be entitledto vote, if requested in writing by the Company, the Depositary shall, as soon as practicable thereafter,
Disseminate to the Owners a notice, the form of which shall be in the sole discretion of the Depositary, that shallcontain (i) the information contained in the notice of meeting received by the Depositary, (ii) a statement that the10

Owners as of the close of business on a specified record date will be entitled, subject to any applicable provisionof Japanese law and of the articles of association or similar documents of the Company, to instruct the
Depositary as to the exercise of the voting rights pertaining to the amount of Shares represented by theirrespective American Depositary Shares, (iii) a statement as to the manner in which those instructions may be
given or deemed given in accordance with the last sentence of paragraph (b) below if no instruction is received,to the Depositary to give a discretionary proxy to a person designated by the Company, and (iv) the last date on
which the Depositary will accept instructions (the “Instruction Cutoff Date”).
(b) Upon the written request of an Owner of American Depositary Shares, as of the date of the request or,if a record date was specified by the Depositary, as of that record date, received on or before any Instruction
Cutoff Date established by the Depositary, the Depositary may, and if the Depositary sent a notice under thepreceding paragraph shall, endeavor, in so far as practicable, to vote or cause to be voted the amount of deposited
Shares represented by those American Depositary Shares in accordance with the instructions set forth in thatrequest. So long as under the articles of association or other similar documents of the Company and Japanese law
votes may only be cast in respect of one or more whole Units of Shares, (i) the same instructions received from
Owners shall be aggregated and the Depositary shall, subject to applicable law and market practice, endeavor tovote or cause to be voted the number of whole Units in respect of which such instructions as so aggregated havebeen received, in accordance with such instructions, and (ii) such Owners acknowledge and agree that, if the
Depositary has received the same instructions any portion of which, after aggregation of all such instructions,constitutes instructions with respect to less than a whole Unit of Shares, the Depositary will be unable to vote orcause to be voted the Shares to which such portion of the instructions applies. The Depositary shall not vote or
attempt to exercise the right to vote that attaches to the deposited Shares other than in accordance with
instructions given by Owners and received by the Depositary or as provided in the following sentence. If (i) the
Company instructed the Depositary to Disseminate a notice under paragraph (a) above and complied withparagraph (d) below and (ii) no instructions are received by the Depositary from an Owner with respect to amatter and an amount of American Depositary Shares of that Owner on or before the Instruction Cutoff Date, theDepositary shall deem that Owner to have instructed the Depositary to give a discretionary proxy to a person
designated by the Company with respect to that matter and the amount of deposited Shares represented by thatamount of American Depositary Shares and the Depositary shall give a discretionary proxy to a person
designated by the Company to vote that amount of deposited Shares as to that matter, except that no instructionof that kind shall be deemed given and no discretionary proxy shall be given with respect to any matter as towhich the Company informs the Depositary (and the Company agrees to provide such information as promptly aspracticable in writing, if applicable) that (x) the Company does not wish a proxy given, (y) substantial opposition
exists or (z) the matter materially and adversely affects the rights of holders of Shares.
(c) There can be no assurance that Owners generally or any Owner in particular will receive the noticedescribed in paragraph (a) above in time to enable Owners to give instructions to the Depositary prior to theInstruction Cutoff Date.
(d) If the Company will request the Depositary to Disseminate a notice under paragraph (a) above, theCompany shall give the Depositary notice of the meeting, details concerning the matters to be voted upon andcopies of materials to be made available to holders of Shares in connection with the meeting as far in advance ofthe meeting date as practicable.
17.

TENDER AND EXCHANGE OFFERS; REDEMPTION, REPLACEMENT OR CANCELLATION OF
DEPOSITED SECURITIES.

(a) The Depositary shall not tender any Deposited Securities in response to any voluntary cash tender
offer, exchange offer or similar offer made to holders of Deposited Securities (a “Voluntary Offer”), except when
instructed in writing to do so by an Owner surrendering American Depositary Shares and subject to any
conditions or procedures the Depositary may require.

11

(b) If the Depositary receives a written notice that Deposited Securities have been redeemed for cash orotherwise purchased for cash in a transaction that is mandatory and binding on the Depositary as a holder of
those Deposited Securities (a “Redemption” (including all forms and tenses of that term)), the Depositary, at theexpense of the Company, shall (i) if required, surrender Deposited Securities that have been redeemed to theissuer of those securities or its agent on the redemption date, (ii) Disseminate a notice to Owners (A) notifying
them of that Redemption, (B) calling for surrender of a corresponding number of American Depositary Sharesand (C) notifying them that the called American Depositary Shares have been converted into a right only toreceive the money received by the Depositary upon that Redemption and those net proceeds shall be the
Deposited Securities to which Owners of those converted American Depositary Shares shall be entitled uponsurrenders of those American Depositary Shares in accordance with Section 2.5 or 6.2 of the Deposit Agreementand (iii) distribute the money received upon that Redemption to the Owners entitled to it upon surrender by themof called American Depositary Shares in accordance with Section 2.5 of that Agreement (and, for the avoidanceof doubt, Owners shall not be entitled to receive that money under Section 4.1 of that Agreement). If the
Redemption affects less than all the Deposited Securities, the Depositary shall call for surrender a corresponding
portion of the outstanding American Depositary Shares and only those American Depositary Shares willautomatically be converted into a right to receive the net proceeds of the Redemption. The Depositary shallallocate the American Depositary Shares converted under the preceding sentence among the Owners pro-rata totheir respective holdings of American Depositary Shares immediately prior to the Redemption, except that theallocations may be adjusted so that no fraction of a converted American Depositary Share is allocated to any
Owner. A Redemption of all or substantially all of the Deposited Securities shall be a Termination Option Event.
(c) If the Depositary is notified of or there occurs any change in nominal value or any subdivision,
combination or any other reclassification of the Deposited Securities or any recapitalization, reorganization, saleof assets substantially as an entirety, merger or consolidation affecting the issuer of the Deposited Securities or towhich it is a party that is mandatory and binding on the Depositary as a holder of Deposited Securities and, as aresult, securities or other property have been or will be delivered in exchange, conversion, replacement or in lieu
of, Deposited Securities (a “Replacement”), the Depositary shall, if required, surrender the old Deposited
Securities affected by that Replacement of Shares and hold, as new Deposited Securities under the Deposit
Agreement, the new securities or other property delivered to it in that Replacement. However, the Depositary
may elect to sell those new Deposited Securities if in the reasonable opinion of the Depositary it is not lawful or
not practical for it to hold those new Deposited Securities under the Deposit Agreement because those new
Deposited Securities may not be distributed to Owners without registration under the Securities Act of 1933 orfor any other reason, at public or private sale, at such places and on such terms as it deems proper and proceed asif those new Deposited Securities had been Redeemed under paragraph (b) above, provided that the Depositary
shall provide the Company with prior notice as promptly as practicable if the Depositary becomes aware that a
Termination Option Event may take place. A Replacement shall be a Termination Option Event, provided thatthe Depositary shall provide the Company with prior notice as promptly as practicable if the Depositary becomesaware that a Termination Option Event may take place.
(d) In the case of a Replacement where the new Deposited Securities will continue to be held under the
Deposit Agreement, the Depositary may call for the surrender of outstanding Receipts to be exchanged for new
Receipts specifically describing the new Deposited Securities and the number of those new Deposited Securities
represented by each American Depositary Share. If the number of Shares represented by each American
Depositary Share decreases as a result of a Replacement, the Depositary may call for surrender of the American
Depositary Shares to be exchanged on a mandatory basis for a lesser number of American Depositary Shares andmay sell American Depositary Shares to the extent necessary to avoid distributing fractions of American
Depositary Shares in that exchange and distribute the net proceeds of that sale to the Owners entitled to them.
(e) If there are no Deposited Securities with respect to American Depositary Shares, including if the
Deposited Securities are cancelled, or the Deposited Securities with respect to American Depositary Shares
become apparently worthless, the Depositary may call for surrender of those American Depositary Shares or may
cancel those American Depositary Shares, upon notice to Owners, and a Termination Option Event occurs.
1218. LIABILITY OF THE COMPANY AND DEPOSITARY.
Neither the Depositary nor the Company nor any of their respective directors, employees, agents or affiliates
shall incur any liability to any Owner or Holder:(i) if by reason of (A) any provision of any present or future law or regulation or other act of the governmentof the United States, any State of the United States or any other state or jurisdiction, or of any governmental or
regulatory authority or stock exchange; (B) (in the case of the Depositary only) any provision, present or future,of the articles of association or similar document of the Company, or by reason of any provision of any securities
issued or distributed by the Company, or any offering or distribution thereof; or (C) any event or circumstance,
whether natural or caused by a person or persons, that is beyond the ability of the Depositary or the Company, as
the case may be, to prevent or counteract by reasonable care or effort (including, but not limited to earthquakes,
floods, severe storms, fires, explosions, war, terrorism, civil unrest, labor disputes or criminal acts; interruptions
or malfunctions of utility services, Internet or other communications lines or systems; unauthorized access to or
attacks on computer systems or websites; or other failures or malfunctions of computer hardware or software orother systems or equipment), the Depositary or the Company is, directly or indirectly, prevented from, forbidden
to or delayed in, or could be subject to any civil or criminal penalty on account of doing or performing andtherefore does not do or perform, any act or thing that, by the terms of the Deposit Agreement or the Deposited
Securities, it is provided shall be done or performed;(ii) for any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement(including any determination by the Depositary to take, or not take, any action that the Deposit Agreement
provides the Depositary may take);(iii) for the inability of any Owner or Holder to benefit from any distribution, offering, right or other benefit
that is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement,
made available to Owners or Holders; or(iv) for any special, consequential or punitive damages for any breach of the terms of the Deposit
Agreement.
Where, by the terms of a distribution to which Section 4.1, 4.2 or 4.3 of the Deposit Agreement applies, oran offering to which Section 4.4 of that Agreement applies, or for any other reason, that distribution or offering
may not be made available to Owners, and the Depositary may not dispose of that distribution or offering on
behalf of Owners and make the net proceeds available to Owners, then the Depositary shall not make that
distribution or offering available to Owners, and shall allow any rights, if applicable, to lapse.
Neither the Company nor the Depositary assumes any obligation or shall be subject to any liability under the
Deposit Agreement to Owners or Holders, except that they agree to perform their obligations specifically set
forth in the Deposit Agreement without negligence or bad faith. The Depositary shall not be subject to any
liability with respect to the validity or worth of the Deposited Securities. Neither the Depositary nor theCompany shall be under any obligation to appear in, prosecute or defend any action, suit, or other proceeding inrespect of any Deposited Securities or in respect of the American Depositary Shares, on behalf of any Owner orHolder or other person. Neither the Depositary nor the Company shall be liable for any action or non-action by itin reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares fordeposit, any Owner or Holder, or any other person believed by it in good faith to be competent to give suchadvice or information. Each of the Depositary and the Company may rely, and shall be protected in relying upon,
any written notice, request, direction or other document believed by it to be genuine and to have been signed orpresented by the proper party or parties. The Depositary shall not be liable for any acts or omissions made by asuccessor depositary whether in connection with a previous act or omission of the Depositary or in connection
with a matter arising wholly after the removal or resignation of the Depositary, provided that in connection with
the issue out of which such potential liability arises, the Depositary performed its obligations without negligence13

or bad faith while it acted as Depositary. The Depositary shall not be liable for the acts or omissions of any
securities depository, clearing agency or settlement system in connection with or arising out of book-entry
settlement of American Depositary Shares or Deposited Securities or otherwise. In the absence of bad faith on its
part, the Depositary shall not be responsible for any failure to carry out any instructions to vote any of the
Deposited Securities or for the manner in which any such vote is cast or the effect of any such vote. The
Depositary shall have no duty to make any determination or provide any information as to the tax status of theCompany or any liability for any tax consequences that may be incurred by Owners or Holders as a result ofowning or holding American Depositary Shares. No disclaimer of liability under the Securities Act of 1933 isintended by any provision of the Deposit Agreement.
19. RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF SUCCESSORCUSTODIAN.
The Depositary may at any time resign as Depositary under the Deposit Agreement by written notice of its
election so to do delivered to the Company, to become effective upon the appointment of a successor depositaryand its acceptance of such appointment as provided in the Deposit Agreement. The Depositary may at any time
be removed by the Company by 90 days’ prior written notice of that removal, to become effective upon the laterof (i) the 90th day after delivery of the notice to the Depositary and (ii) the appointment of a successor depositaryand its acceptance of its appointment as provided in the Deposit Agreement. The Depositary in its discretion may
at any time appoint a substitute or additional custodian or custodians.
20. AMENDMENT.
The form of the Receipts and any provisions of the Deposit Agreement may at any time and from time totime be amended by agreement between the Company and the Depositary without the consent of Owners orHolders in any respect which they may deem necessary or desirable. Any amendment that would impose or
increase any fees or charges (other than taxes and other governmental charges, registration fees, cable, telex or
facsimile transmission costs, delivery costs or other such expenses), or that would otherwise prejudice any
substantial existing right of Owners, shall, however, not become effective as to outstanding American Depositary
Shares until the expiration of 30 days after notice of that amendment has been Disseminated to the Owners ofoutstanding American Depositary Shares. Every Owner and Holder, at the time any amendment so becomes
effective, shall be deemed, by continuing to hold American Depositary Shares or any interest therein, to consent
and agree to that amendment and to be bound by the Deposit Agreement as amended thereby. Upon theeffectiveness of an amendment to the form of Receipt, including a change in the number of Shares represented byeach American Depositary Share, the Depositary may call for surrender of Receipts to be replaced with new
Receipts in the amended form or call for surrender of American Depositary Shares to effect that change of ratio.
In no event shall any amendment impair the right of the Owner to surrender American Depositary Shares andreceive delivery of the Deposited Securities represented thereby, except in order to comply with mandatory
provisions of applicable law.
21. TERMINATION OF DEPOSIT AGREEMENT.
(a) The Company may initiate termination of the Deposit Agreement by notice to the Depositary. The
Depositary may initiate termination of the Deposit Agreement if (i) at any time 60 days shall have expired after
the Depositary delivered to the Company a written resignation notice and a successor depositary has not been
appointed and accepted its appointment as provided in Section 5.4 of that Agreement, (ii) an Insolvency Event orDelisting Event occurs with respect to the Company or (iii) a Termination Option Event has occurred. If
termination of the Deposit Agreement is initiated, the Depositary shall Disseminate a notice of termination to the
Owners of all American Depositary Shares then outstanding setting a date for termination (the “Termination
Date”), which shall be at least 90 days after the date of that notice, and the Deposit Agreement shall terminate onthat Termination Date.
14

(b) After the Termination Date, the Company shall be discharged from all obligations under the Deposit
Agreement except for its obligations to the Depositary under Sections 5.8 and 5.9 of that Agreement.
(c) At any time after the Termination Date, the Depositary may sell the Deposited Securities then held
under the Deposit Agreement (or, if such sale is not possible with respect to any portion of such Shares which isless than a full Share, or a full Unit, by sale of such portion to the Company in accordance with the applicableprovisions of Japanese law and the articles of association, or similar documents of the Company) and may
thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by ithereunder, unsegregated and without liability for interest, for the pro rata benefit of the Owners of American
Depositary Shares that remain outstanding, and those Owners will be general creditors of the Depositary withrespect to those net proceeds and that other cash. After making that sale, the Depositary shall be discharged fromall obligations under the Deposit Agreement, except (i) to account for the net proceeds and other cash (after
deducting, in each case, the fee of the Depositary for the surrender of American Depositary Shares, any expenses
for the account of the Owner of such American Depositary Shares in accordance with the terms and conditions of
the Deposit Agreement and any applicable taxes or governmental charges) and (ii) for its obligations under
Section 5.8 of that Agreement and (iii) to act as provided in paragraph (d) below.
(d) After the Termination Date, the Depositary shall continue to receive dividends and other distributions
pertaining to Deposited Securities (that have not been sold), may sell rights and other property as provided in the
Deposit Agreement and shall deliver Deposited Securities (or sale proceeds) upon surrender of American
Depositary Shares (after payment or upon deduction, in each case, of the fee of the Depositary for the surrenderof American Depositary Shares, any expenses for the account of the Owner of those American Depositary Sharesin accordance with the terms and conditions of the Deposit Agreement and any applicable taxes or governmental
charges). After the Termination Date, the Depositary shall not accept deposits of Shares or deliver American
Depositary Shares. After the Termination Date, (i) the Depositary may refuse to accept surrenders of American
Depositary Shares for the purpose of withdrawal of Deposited Securities (that have not been sold) if in its
judgment the requested withdrawal would interfere with its efforts to sell the Deposited Securities, (ii) the
Depositary will not be required to deliver cash proceeds of the sale of Deposited Securities until all Deposited
Securities have been sold and (iii) the Depositary may discontinue the registration of transfers of American
Depositary Shares and suspend the distribution of dividends and other distributions on Deposited Securities to
the Owners and need not give any further notices or perform any further acts under the Deposit Agreement
except as provided in Section 6.2 of that Agreement.
22. DTC DIRECT REGISTRATION SYSTEM AND PROFILE MODIFICATION SYSTEM.
(a) Notwithstanding the provisions of Section 2.4 of the Deposit Agreement, the parties acknowledge that
DTC’s Direct Registration System (“DRS”) and Profile Modification System (“Profile”) apply to the American
Depositary Shares upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC thatfacilitates interchange between registered holding of uncertificated securities and holding of security entitlementsin those securities through DTC and a DTC participant. Profile is a required feature of DRS that allows a DTC
participant, claiming to act on behalf of an Owner of American Depositary Shares, to direct the Depositary toregister a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American
Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary of priorauthorization from the Owner to register that transfer.
(b) In connection with DRS/Profile, the parties acknowledge that the Depositary will not determine
whether the DTC participant that is claiming to be acting on behalf of an Owner in requesting registration oftransfer and delivery described in paragraph (a) above has the actual authority to act on behalf of that Owner(notwithstanding any requirements under the Uniform Commercial Code). For the avoidance of doubt, theprovisions of Sections 5.3 and 5.8 of the Deposit Agreement apply to the matters arising from the use of the
DRS/Profile. The parties agree that the Depositary’s reliance on and compliance with instructions received by the
Depositary through the DRS/Profile system and otherwise in accordance with the Deposit Agreement, shall notconstitute negligence or bad faith on the part of the Depositary.
15

23. APPOINTMENT OF AGENT FOR SERVICE OF PROCESS; SUBMISSION TO JURISDICTION; JURYTRIAL WAIVER; WAIVER OF IMMUNITIES.
The Company has (i) appointed Mizuho Bank, Ltd., New York Branch, located in the State of New Yorkwith offices at 1251 Avenue of the Americas, New York, NY 10020, as the Company’s authorized agent uponwhich process may be served in any suit or proceeding arising out of or relating to the Shares or Deposited
Securities, the American Depositary Shares, the Receipts or this Agreement, (ii) consented and submitted to thejurisdiction of any state or federal court in the State of New York in which any such suit or proceeding may beinstituted, and (iii) agreed that service of process upon said authorized agent shall be deemed in every respect
effective service of process upon the Company in any such suit or proceeding.
EACH PARTY TO THE DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT,EACH OWNER AND HOLDER) THEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENTPERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT,
ACTION OR PROCEEDING AGAINST THE COMPANY AND/OR THE DEPOSITARY DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITEDSECURITIES, THE AMERICAN DEPOSITARY SHARES OR THE RECEIPTS, THE DEPOSIT
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH
HEREOF OR THEREOF, INCLUDING WITHOUT LIMITATION ANY QUESTION REGARDING
EXISTENCE, VALIDITY OR TERMINATION (WHETHER BASED ON CONTRACT, TORT OR ANYOTHER THEORY).
To the extent that the Company or any of its properties, assets or revenues may have or hereafter become
entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any
legal action, suit or proceeding, from the giving of any relief in any respect thereof, from setoff or counterclaim,from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, fromattachment in aid of execution or judgment, or other legal process or proceeding for the giving of any relief or forthe enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, withrespect to its obligations, liabilities or any other matter under or arising out of or in connection with the Shares or
Deposited Securities, the American Depositary Shares, the Receipts or the Deposit Agreement, the Company, tothe fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or
claim, any such immunity and consents to such relief and enforcement.
24. DISCLOSURE OF INTERESTS.
When required in order to comply with applicable laws and regulations or the articles of association orsimilar document of the Company, the Company may from time to time request each Owner and Holder toprovide to the Depositary information relating to: (a) the capacity in which it holds American Depositary
Shares, (b) the identity of any Holders or other persons or entities then or previously interested in those American
Depositary Shares and the nature of those interests and (c) any other matter where disclosure of such matter isrequired for that compliance. Each Owner and Holder agrees to provide all information known to it in response toa request made pursuant to Section 3.4 of the Deposit Agreement. Each Holder consents to the disclosure by the
Owner or other Holder through which it holds American Depositary Shares, directly or indirectly, of all
information responsive to a request made pursuant to that Section relating to that Holder that is known to that
Owner or other Holder.

16

Exhibit 2.2

Form of Deposit Agreement

MIZUHO FINANCIAL GROUP, INC.
AND
THE BANK OF NEW YORK MELLONAs DepositaryAND
OWNERS AND HOLDERS OF AMERICAN DEPOSITARY SHARES
Amended and Restated Deposit Agreement
Dated as of April 2, 2018

-ii-

TABLE OF CONTENTS
ARTICLE 1.
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.1.
American Depositary Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.2.
Commission. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.3.
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.4.
Custodian. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.5.
Delisting Event. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.6.
Deliver; Surrender. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.7.
Deposit Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.8.
Depositary; Depositary’s Office. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.9.
Deposited Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.10.
Disseminate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.11.
Dollars. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.12.
DTC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.13.
Foreign Registrar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.14.
Holder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.15.
Insolvency Event. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.16.
Owner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.17.
Receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.18.
Registrar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.19.
Replacement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.20.
Restricted Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.21.
Securities Act of 1933. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.22.
Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.23.
SWIFT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.24.
Termination Option Event. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 1.25.
Unit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1
1
2
2
2
2
2
2
3
3
3
3
3
3
3
3
4
4
4
4
4
4
4
4
5
5

ARTICLE 2.
FORM OF RECEIPTS, DEPOSIT OF SHARES, DELIVERY, TRANSFER AND
SURRENDER OF AMERICAN DEPOSITARY SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.1.
Form of Receipts; Registration and Transferability of American Depositary
Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.2.
Deposit of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.3.
Delivery of American Depositary Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.4.
Registration of Transfer of American Depositary Shares; Combination andSplit-up of Receipts; Interchange of Certificated and UncertificatedAmerican Depositary Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.5.
Surrender of American Depositary Shares and Withdrawal of Deposited
Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.6.
Limitations on Delivery, Transfer and Surrender of American Depositary
Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.7.
Lost Receipts, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.8.
Cancellation and Destruction of Surrendered Receipts. . . . . . . . . . . . . . . . . .
SECTION 2.9.
Pre-Release of American Depositary Shares. . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 2.10.
DTC Direct Registration System and Profile Modification System. . . . . . . .

8
8
9
9
9

ARTICLE 3.
CERTAIN OBLIGATIONS OF OWNERS AND HOLDERS OF AMERICANDEPOSITARY SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.1.
Filing Proofs, Certificates and Other Information. . . . . . . . . . . . . . . . . . . . . .
SECTION 3.2.
Liability of Owner for Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.3.
Warranties on Deposit of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 3.4.
Disclosure of Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10
10
10
10
10

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5
5
5
6

6
7

ARTICLE 4.
THE DEPOSITED SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.1.
Cash Distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.2.
Distributions Other Than Cash, Shares or Rights. . . . . . . . . . . . . . . . . . . . . .
SECTION 4.3.
Distributions in Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.4.
Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.5.
Conversion of Foreign Currency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.6.
Fixing of Record Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.7.
Voting of Deposited Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.8.
Tender and Exchange Offers; Redemption, Replacement or Cancellation of
Deposited Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.9.
Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.10.
Lists of Owners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 4.11.
Withholding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11
11
11
12
12
13
14
14

ARTICLE 5.
THE DEPOSITARY, THE CUSTODIANS AND THE COMPANY . . . . . . . . . . .
SECTION 5.1.
Maintenance of Office and Transfer Books by the Depositary. . . . . . . . . . . .
SECTION 5.2.
Prevention or Delay of Performance by the Company or the Depositary. . . .
SECTION 5.3.
Obligations of the Depositary and the Company. . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.4.
Resignation and Removal of the Depositary. . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.5.
The Custodians. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.6.
Notices and Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.7.
Distribution of Additional Shares, Rights, etc. . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.8.
Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.9.
Charges of Depositary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.10.
Retention of Depositary Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.11.
Exclusivity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 5.12.
Change in Unit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17
17
18
18
19
20
20
21
21
21
22
22
22

ARTICLE 6.
AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.1.
Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 6.2.
Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23
23
23

ARTICLE 7.
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.1.
Counterparts; Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.2.
No Third Party Beneficiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.3.
Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.4.
Owners and Holders as Parties; Binding Effect. . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.5.
Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.6.
Appointment of Agent for Service of Process; Submission to Jurisdiction;
Jury Trial Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.7.
Waiver of Immunities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECTION 7.8.
Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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24
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24
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15
17
17
17

25
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AMENDED AND RESTATED DEPOSIT AGREEMENTAMENDED AND RESTATED DEPOSIT AGREEMENT dated as ofamong
MIZUHO FINANCIAL GROUP, INC., a company incorporated under the laws of Japan (herein called theCompany), THE BANK OF NEW YORK MELLON, a New York banking corporation (herein called the
Depositary), and all Owners and Holders (each as hereinafter defined) from time to time of American Depositary
Shares issued hereunder.
W I T N E S S E T H:
WHEREAS, the Company and the Depositary entered into a Deposit Agreement dated as of
October 31, 2006 (the “Prior Deposit Agreement”) for the purposes stated therein; andWHEREAS, the Company and the Depositary now wish to amend and restate the Prior Deposit
Agreement in the form of this amended and restated Deposit Agreement; andWHEREAS, the Company desires to provide, as set forth in this amended and restated Deposit
Agreement, for the deposit of Shares (as hereinafter defined) of the Company from time to time with the
Depositary or with the Custodian (as hereinafter defined) under this amended and restated Deposit Agreement,
for the creation of American Depositary Shares representing the Shares so deposited and for the execution anddelivery of American Depositary Receipts evidencing the American Depositary Shares; andWHEREAS, the American Depositary Receipts are to be substantially in the form of Exhibit A
annexed to this amended and restated Deposit Agreement, with appropriate insertions, modifications andomissions, as set forth in this amended and restated Deposit Agreement;
NOW, THEREFORE, in consideration of the premises, it is agreed by and between the parties
hereto that the Prior Deposit Agreement is hereby amended and restated as follows:
ARTICLE 1.

DEFINITIONS

The following definitions shall for all purposes, unless otherwise clearly indicated, apply to therespective terms used in this Deposit Agreement:
SECTION 1.1.

American Depositary Shares.

The term “American Depositary Shares” shall mean the securities created under this Deposit
Agreement representing rights with respect to the Deposited Securities. American Depositary Shares may becertificated securities evidenced by Receipts or uncertificated securities. The form of Receipt annexed as Exhibit
A to this Deposit Agreement shall be the prospectus required under the Securities Act of 1933 for sales of bothcertificated and uncertificated American Depositary Shares. Except for those provisions of this Deposit
Agreement that refer specifically to Receipts, all the provisions of this Deposit Agreement shall apply to bothcertificated and uncertificated American Depositary Shares.
Each American Depositary Share shall represent the number of Shares specified in Exhibit A tothis Deposit Agreement, except that, if there is a distribution upon Deposited Securities covered by Section 4.3, achange in Deposited Securities covered by Section 4.8 with respect to which additional American Depositary
Shares are not delivered or a sale of Deposited Securities under Section 3.2 or 4.8, each American Depositary
Share shall thereafter represent the amount of Shares or other Deposited Securities that are then on deposit per
American Depositary Share after giving effect to that distribution, change or sale.
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SECTION 1.2.

Commission.

The term “Commission” shall mean the Securities and Exchange Commission of the United States
or any successor governmental agency in the United States.
SECTION 1.3.

Company.

The term “Company” shall mean Mizuho Financial Group, Inc., a company incorporated under
the laws of Japan, and its successors.
SECTION 1.4.

Custodian.

The term “Custodian” shall mean Mizuho Bank, Ltd., as custodian for the Depositary in Tokyo forthe purposes of this Deposit Agreement, and any other firm or corporation the Depositary appoints under
Section 5.5 as a substitute or additional custodian under this Deposit Agreement, and shall also mean all of themcollectively.
SECTION 1.5.

Delisting Event.

A “Delisting Event” occurs if the American Depositary Shares are delisted from a securities
exchange on which the American Depositary Shares were listed and the Company has not listed or applied to list
the American Depositary Shares on any other securities exchange.
SECTION 1.6.

Deliver; Surrender.

(a) The term “deliver”, or its noun form, when used with respect to Shares or other Deposited
Securities, shall mean (i) book-entry transfer of those Shares or other Deposited Securities to an accountmaintained by an institution authorized under applicable law to effect transfers of such securities designated by
the person entitled to that delivery or (ii) physical transfer of certificates evidencing those Shares or other
Deposited Securities registered in the name of, or duly endorsed or accompanied by proper instruments oftransfer to, the person entitled to that delivery.
(b) The term “deliver”, or its noun form, when used with respect to American Depositary
Shares, shall mean (i) registration of those American Depositary Shares in the name of DTC or its nominee andbook-entry transfer of those American Depositary Shares to an account at DTC designated by the person entitledto that delivery, (ii) registration of those American Depositary Shares not evidenced by a Receipt on the books of
the Depositary in the name requested by the person entitled to that delivery and mailing to that person of astatement confirming that registration or (iii) if requested by the person entitled to that delivery, execution anddelivery at the Depositary’s Office to the person entitled to that delivery of one or more Receipts evidencing
those American Depositary Shares registered in the name requested by that person.
(c) The term “surrender”, when used with respect to American Depositary Shares, shall mean(i) one or more book-entry transfers of American Depositary Shares to the DTC account of the Depositary,(ii) delivery to the Depositary at its Office of an instruction to surrender American Depositary Shares notevidenced by a Receipt or (iii) surrender to the Depositary at its Office of one or more Receipts evidencing
American Depositary Shares.
SECTION 1.7.

Deposit Agreement.

The term “Deposit Agreement” shall mean this Amended and Restated Deposit Agreement, as it
may be amended from time to time in accordance with the provisions of this Deposit Agreement.
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SECTION 1.8.

Depositary; Depositary’s Office.

The term “Depositary” shall mean The Bank of New York Mellon, a New York banking
corporation, and any successor as depositary under this Deposit Agreement. The term “Office”, when used withrespect to the Depositary, shall mean the office at which its depositary receipts business is administered, which,at the date of this Deposit Agreement, is located at 101 Barclay Street, New York, New York 10286.
SECTION 1.9.

Deposited Securities.

The term “Deposited Securities” as of any time shall mean Shares at such time deposited ordeemed to be deposited under this Deposit Agreement, including without limitation, Shares that have not beensuccessfully delivered upon surrender of American Depositary Shares, and any and all other securities, property
and cash received by the Depositary or the Custodian in respect of Deposited Securities and at that time held
under this Deposit Agreement.
SECTION 1.10. Disseminate.
The term “Disseminate,” when referring to a notice or other information to be sent by the
Depositary to Owners, shall mean (i) sending that information to Owners in paper form by mail or another meansor (ii) with the consent of Owners, another procedure that has the effect of making the information available to
Owners, which may include (A) sending the information by electronic mail or electronic messaging or(B) sending in paper form or by electronic mail or messaging a statement that the information is available andmay be accessed by the Owner on an Internet website and that it will be sent in paper form upon request by the
Owner, when that information is so available and is sent in paper form as promptly as practicable upon request.
SECTION 1.11. Dollars.
The term “Dollars” shall mean United States dollars.
SECTION 1.12. DTC.
The term “DTC” shall mean The Depository Trust Company or its successor.
SECTION 1.13. Foreign Registrar.
The term “Foreign Registrar” shall mean the entity that carries out the duties of registrar for the
Shares and any other agent of the Company for the transfer and registration of Shares, including, without
limitation, any securities depository for the Shares.
SECTION 1.14. Holder.
The term “Holder” shall mean any person holding a Receipt or a security entitlement or otherinterest in American Depositary Shares, whether for its own account or for the account of another person, but thatis not the Owner of that Receipt or those American Depositary Shares.
SECTION 1.15. Insolvency Event.
An “Insolvency Event” occurs if the Company institutes proceedings to be adjudicated asbankrupt or insolvent, consents to the institution of bankruptcy or insolvency proceedings against it, files apetition or answer or consent seeking reorganization or relief under any applicable law in respect of bankruptcy
or insolvency, consents to the filing of any petition of that kind or to the appointment of a receiver, liquidator,
assignee, trustee, custodian or sequestrator (or other similar official) of it or any substantial part of its property or
makes an assignment for the benefit of creditors, or admits in writing its inability to pay its debts generally as
they become due in the ordinary course of business.
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SECTION 1.16. Owner.
The term “Owner” shall mean the person in whose name American Depositary Shares areregistered on the books of the Depositary maintained for that purpose.
SECTION 1.17. Receipts.
The term “Receipts” shall mean the American Depositary Receipts issued under this Deposit
Agreement evidencing certificated American Depositary Shares, as the same may be amended from time to timein accordance with the provisions of this Deposit Agreement.
SECTION 1.18. Registrar.
The term “Registrar” shall mean any corporation or other entity that is appointed by the
Depositary to register American Depositary Shares and transfers of American Depositary Shares as provided inthis Deposit Agreement.
SECTION 1.19. Replacement.
The term “Replacement” shall have the meaning assigned to it in Section 4.8.
SECTION 1.20. Restricted Securities.
The term “Restricted Securities” shall mean Shares that (i) are “restricted securities,” as defined inRule 144 under the Securities Act of 1933, except for Shares that could be resold in reliance on Rule 144 without
any conditions, (ii) are beneficially owned by an officer, director (or person performing similar functions) orother affiliate of the Company, (iii) otherwise would require registration under the Securities Act of 1933 inconnection with the public offer and sale thereof in the United States or (iv) are subject to other restrictions onsale or deposit under the laws of Japan, a shareholder agreement or the articles of association or similar
document of the Company.
SECTION 1.21. Securities Act of 1933.
The term “Securities Act of 1933” shall mean the United States Securities Act of 1933, as fromtime to time amended.
SECTION 1.22. Shares.
The term “Shares” shall mean common shares of the Company that are validly issued andoutstanding, fully paid and nonassessable and that were not issued in violation of any pre-emptive or similar
rights of the holders of outstanding securities of the Company; provided, however, that, if there shall occur any
change in nominal or par value, a split-up or consolidation or any other reclassification or, upon the occurrenceof an event described in Section 4.8, an exchange or conversion in respect of the Shares of the Company, theterm “Shares” shall thereafter also mean the successor securities resulting from such change in nominal value,
split-up or consolidation or such other reclassification or such exchange or conversion.
SECTION 1.23. SWIFT.
The term “SWIFT” shall mean the financial messaging network operated by the Society for
Worldwide Interbank Financial Telecommunication, or its successor.

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SECTION 1.24. Termination Option Event.
The term “Termination Option Event” shall mean an event of a kind defined as such in
Section 4.1, 4.2 or 4.8.
SECTION 1.25. Unit.
The term “Unit” shall mean such number of Shares, if any, as the Articles of Incorporation of theCompany, as amended from time to time, may provide as a “Unit of Shares”.
ARTICLE 2. FORM OF RECEIPTS, DEPOSIT OF SHARES, DELIVERY, TRANSFER AND
SURRENDER OF AMERICAN DEPOSITARY SHARESSECTION 2.1.

Form of Receipts; Registration and Transferability of American Depositary Shares.

Definitive Receipts shall be substantially in the form set forth in Exhibit A to this Deposit
Agreement, with appropriate insertions, modifications and omissions, as permitted under this Deposit
Agreement. No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory
for any purpose, unless that Receipt has been (i) executed by the Depositary by the manual signature of a duly
authorized officer of the Depositary or (ii) executed by the facsimile signature of a duly authorized officer of the
Depositary and countersigned by the manual signature of a duly authorized signatory of the Depositary or theRegistrar or a co-registrar. The Depositary shall maintain books on which (x) each Receipt so executed anddelivered as provided in this Deposit Agreement and each transfer of that Receipt and (y) all American
Depositary Shares delivered as provided in this Deposit Agreement and all registrations of transfer of American
Depositary Shares, shall be registered. A Receipt bearing the facsimile signature of a person that was at any time
a proper officer of the Depositary shall, subject to the other provisions of this paragraph, bind the Depositary,even if that person was not a proper officer of the Depositary on the date of issuance of that Receipt.
The Receipts and statements confirming registration of American Depositary Shares may haveincorporated in or attached to them such legends or recitals or modifications not inconsistent with the provisionsof this Deposit Agreement as may be required by the Depositary or required to comply with any applicable law
or regulations thereunder or with the rules and regulations of any securities exchange upon which American
Depositary Shares may be listed or to conform with any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular Receipts and American Depositary Shares are subject by reasonof the date of issuance of the underlying Deposited Securities or otherwise.
American Depositary Shares evidenced by a Receipt, when the Receipt is properly endorsed or
accompanied by proper instruments of transfer, shall be transferable as certificated registered securities under thelaws of the State of New York. American Depositary Shares not evidenced by Receipts shall be transferable asuncertificated registered securities under the laws of the State of New York. The Depositary, notwithstanding any
notice to the contrary, may treat the Owner of American Depositary Shares as the absolute owner thereof for the
purpose of determining the person entitled to distribution of dividends or other distributions or to any noticeprovided for in this Deposit Agreement and for all other purposes, and neither the Depositary nor the Company
shall have any obligation or be subject to any liability under this Deposit Agreement to any Holder of American
Depositary Shares (but only to the Owner of those American Depositary Shares).
SECTION 2.2.

Deposit of Shares.

Subject to the terms and conditions of this Deposit Agreement, Shares or evidence of rights toreceive Shares may be deposited under this Deposit Agreement by delivery thereof to any Custodian,accompanied by any appropriate instruments or instructions for transfer, or endorsement, in form satisfactory to
the Custodian.
As conditions of accepting Shares for deposit, the Depositary may require (i) any certification
required by the Depositary or the Custodian in accordance with the provisions of this Deposit Agreement, (ii) a-5-written order directing the Depositary to deliver to, or upon the written order of, the person or persons stated inthat order American Depositary Shares representing those deposited Shares, (iii) evidence satisfactory to the
Depositary that those Shares have been re-registered in the books of the Company or the Foreign Registrar in thename of the Depositary, a Custodian or a nominee of the Depositary or a Custodian, (iv) evidence satisfactory to
the Depositary that any necessary approval has been granted by any governmental body in each applicablejurisdiction and (v) an agreement or assignment, or other instrument satisfactory to the Depositary, that provides
for the prompt transfer to the Custodian of any dividend, or right to subscribe for additional Shares or to receive
other property, that any person in whose name those Shares are or have been recorded may thereafter receive
upon or in respect of those Shares, or, in lieu thereof, such agreement of indemnity or other agreement as shall besatisfactory to the Depositary.
At the request and risk and expense of a person proposing to deposit Shares, and for the account ofthat person, the Depositary may receive certificates for Shares to be deposited, together with the other
instruments specified in this Section, for the purpose of forwarding those Share certificates to the Custodian fordeposit under this Deposit Agreement.
The Depositary shall instruct each Custodian that, upon each delivery to a Custodian of acertificate or certificates for Shares to be deposited under this Deposit Agreement, together with the otherdocuments specified in this Section, that Custodian shall, as soon as transfer and recordation can beaccomplished, present that certificate or those certificates to the Company or the Foreign Registrar, if applicable,
for transfer and recordation of the Shares being deposited in the name of the Depositary or its nominee or that
Custodian or its nominee.
Deposited Securities shall be held by the Depositary or by a Custodian for the account and to theorder of the Depositary or at such other place or places as the Depositary shall determine. The Depositary shall,as soon as practicable, provide written notice to the Company if Deposited Securities will be held other than by
the Depositary or a Custodian.
SECTION 2.3.

Delivery of American Depositary Shares.

The Depositary shall instruct each Custodian that, upon receipt by that Custodian of any deposit
pursuant to Section 2.2, together with the other documents or evidence required under that Section, that
Custodian shall notify the Depositary of that deposit and the person or persons to whom or upon whose written
order American Depositary Shares are deliverable in respect thereof. Upon receiving a notice of a deposit from a
Custodian, or upon the receipt of Shares or evidence of the right to receive Shares by the Depositary, theDepositary, subject to the terms and conditions of this Deposit Agreement, shall deliver, to or upon the order ofthe person or persons entitled thereto, the number of American Depositary Shares issuable in respect of that
deposit, but only upon payment to the Depositary of the fees and expenses of the Depositary for the delivery of
those American Depositary Shares as provided in Section 5.9, and of all taxes and governmental charges and fees
payable in connection with that deposit and the transfer of the deposited Shares. However, the Depositary shalldeliver only whole numbers of American Depositary Shares.
SECTION 2.4. Registration of Transfer of American Depositary Shares; Combination and Split-up of
Receipts; Interchange of Certificated and Uncertificated American Depositary Shares.
The Depositary, subject to the terms and conditions of this Deposit Agreement, shall register atransfer of American Depositary Shares on its transfer books upon (i) in the case of certificated American
Depositary Shares, surrender of the Receipt evidencing those American Depositary Shares, by the Owner or by aduly authorized attorney, properly endorsed or accompanied by proper instruments of transfer or (ii) in the caseof uncertificated American Depositary Shares, receipt from the Owner of a proper instruction (including, for the
avoidance of doubt, instructions through DRS and Profile as provided in Section 2.10), and, in either case, duly
stamped as may be required by the laws of the State of New York and of the United States of America. Upon-6-

registration of a transfer, the Depositary shall deliver the transferred American Depositary Shares to or upon theorder of the person entitled thereto.
The Depositary, subject to the terms and conditions of this Deposit Agreement, shall uponsurrender of a Receipt or Receipts for the purpose of effecting a split-up or combination of such Receipt or
Receipts, execute and deliver a new Receipt or Receipts for any authorized number of American Depositary
Shares requested, evidencing the same aggregate number of American Depositary Shares as the Receipt or
Receipts surrendered.
The Depositary, upon surrender of certificated American Depositary Shares for the purpose of
exchanging for uncertificated American Depositary Shares, shall cancel the Receipt evidencing those certificatedAmerican Depositary Shares and send the Owner a statement confirming that the Owner is the owner of the same
number of uncertificated American Depositary Shares. The Depositary, upon receipt of a proper instruction(including, for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.10) fromthe Owner of uncertificated American Depositary Shares for the purpose of exchanging for certificated American
Depositary Shares, shall cancel those uncertificated American Depositary Shares and register and deliver to the
Owner a Receipt evidencing the same number of certificated American Depositary Shares.
The Depositary may appoint one or more co-transfer agents for the purpose of effecting
registration of transfers of American Depositary Shares and combinations and split-ups of Receipts at designatedtransfer offices on behalf of the Depositary. In carrying out its functions, a co-transfer agent may require
evidence of authority and compliance with applicable laws and other requirements by Owners or persons entitled
to American Depositary Shares and will be entitled to protection and indemnity to the same extent as the
Depositary.
SECTION 2.5.

Surrender of American Depositary Shares and Withdrawal of Deposited Securities.

Upon surrender at the Depositary’s Office of American Depositary Shares for the purpose ofwithdrawal of the Deposited Securities represented thereby and payment of the fee of the Depositary for thesurrender of American Depositary Shares as provided in Section 5.9 and payment of all taxes and governmental
charges payable in connection with that surrender and withdrawal of the Deposited Securities, and subject to theterms and conditions of this Deposit Agreement, the Owner of those American Depositary Shares shall beentitled to delivery (to the extent delivery can then be lawfully and practicably made), to or as instructed by that
Owner, of the amount of Deposited Securities at the time represented by those American Depositary Shares, but
not any money or other property as to which a record date for distribution to Owners has passed (since money orother property of that kind will be delivered or paid on the scheduled payment date to the Owner as of that recorddate). That delivery shall be made, as provided in this Section, without unreasonable delay.
As a condition of accepting a surrender of American Depositary Shares for the purpose ofwithdrawal of Deposited Securities, the Depositary may require (i) that each surrendered Receipt be properly
endorsed in blank or accompanied by proper instruments of transfer in blank and (ii) that the surrendering Owner
execute and deliver to the Depositary a written order directing the Depositary to cause the Deposited Securities
being withdrawn to be delivered to or upon the written order of a person or persons designated in that order.
Thereupon, the Depositary shall direct the Custodian to deliver, subject to Sections 2.6, 3.1 and
3.2, the other terms and conditions of this Deposit Agreement and local market rules and practices, to thesurrendering Owner or to or upon the written order of the person or persons designated in the order delivered to
the Depositary as above provided, the amount of Deposited Securities represented by the surrendered American
Depositary Shares, and the Depositary may charge the surrendering Owner a fee and its expenses for giving that
direction by cable (including SWIFT) or facsimile transmission.
At the request, risk and expense of an Owner surrendering American Depositary Shares forwithdrawal of Deposited Securities, and for the account of that Owner, the Depositary shall direct the Custodian-7-

to forward any cash or other property comprising, and forward a certificate or certificates, if applicable, and otherproper documents of title, if any, for, the Deposited Securities represented by the surrendered American
Depositary Shares to the Depositary for delivery at the Depositary’s Office or to another address specified in theorder received from the surrendering Owner.
SECTION 2.6.

Limitations on Delivery, Transfer and Surrender of American Depositary Shares.

As a condition precedent to the delivery, registration of transfer or surrender of any American
Depositary Shares or split-up or combination of any Receipt or withdrawal of any Deposited Securities, theDepositary, Custodian or Registrar may require payment from the depositor of Shares or the presenter of theReceipt or instruction for registration of transfer or surrender of American Depositary Shares not evidenced by a
Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer orregistration fee with respect thereto (including any such tax or charge and fee with respect to Shares being
deposited or withdrawn) and payment of any applicable fees as provided in this Deposit Agreement, may require
the production of proof satisfactory to it as to the identity and genuineness of any signature and may also requirecompliance with any regulations the Depositary may establish consistent with the provisions of this Deposit
Agreement, including, without limitation, this Section 2.6.
The delivery of American Depositary Shares against deposit of Shares generally or against depositof particular Shares may be suspended, or the registration of transfer of American Depositary Shares in particularinstances may be refused, or the registration of transfer of outstanding American Depositary Shares generally
may be suspended, during any period when the transfer books of the Depositary are closed, or if any such action
is deemed necessary or advisable by the Depositary or the Company at any time or from time to time because of
any requirement of law or of any government or governmental body or commission, or under any provision ofthis Deposit Agreement, or for any other reason. Notwithstanding anything to the contrary in this Deposit
Agreement, the surrender of outstanding American Depositary Shares and withdrawal of Deposited Securities
may not be suspended, subject only to (i) temporary delays caused by closing of the transfer books of the
Depositary or the Company or the Foreign Registrar, if applicable, or the deposit of Shares in connection withvoting at a shareholders’ meeting, or the payment of dividends, (ii) the payment of fees, taxes and similar
charges, and (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the American
Depositary Shares or to the withdrawal of the Deposited Securities.
The Depositary shall not knowingly accept for deposit under this Deposit Agreement any Shares
that, at the time of deposit, are Restricted Securities.
Upon surrender of American Depositary Shares for the purpose of withdrawal by an Owner to the
Depositary, as a result of, and to the extent required by, the operation of applicable provisions of the Companies
Act of Japan (Act No. 86 of 2005, as amended, the “Companies Act”) or any other Japanese law, the Depositary
will effect the delivery to such Owner of only that portion of Shares (and any other Deposited Securities relating
to such Shares) comprising a Unit or an integral multiple thereof (the “deliverable portion”). For the purpose of
the foregoing sentence, the deliverable portion shall be determined on the basis of the aggregate number of
Shares represented by the entire amount of the American Depositary Shares surrendered by the same Owner at
the same time. The Depositary will promptly advise such Owner as to the amount of Shares and other Deposited
Securities, if any, constituting a non-deliverable portion and shall deliver to such Owner American Depositary
Shares representing such non-deliverable portion. In addition, the Depositary shall notify such Owner of theadditional amount of American Depositary Shares which such Owner would be required to surrender in order for
the Depositary to effect delivery of all the Shares and other Deposited Securities represented by the American
Depositary Shares of such Owner.
SECTION 2.7.

Lost Receipts, etc.

If a Receipt is mutilated, destroyed, lost or stolen, the Depositary shall deliver to the Owner theAmerican Depositary Shares evidenced by that Receipt in uncertificated form or, if requested by the Owner,-8-execute and deliver a new Receipt of like tenor in exchange and substitution for such mutilated Receipt, uponsurrender and cancellation of that mutilated Receipt, or in lieu of and in substitution for that destroyed, lost or
stolen Receipt. However, before the Depositary will deliver American Depositary Shares in uncertificated formor execute and deliver a new Receipt, in substitution for a destroyed, lost or stolen Receipt, the Owner must(a) file with the Depositary (i) a request for that replacement before the Depositary has notice that the Receipt has
been acquired by a bona fide purchaser and (ii) a sufficient indemnity bond and (b) satisfy any other reasonablerequirements imposed by the Depositary.
SECTION 2.8.

Cancellation and Destruction of Surrendered Receipts.

The Depositary shall cancel all Receipts surrendered to it and is authorized to destroy Receipts socancelled.
SECTION 2.9.

Pre-Release of American Depositary Shares.

Notwithstanding Section 2.3, the Depositary may deliver American Depositary Shares prior to thereceipt of Shares pursuant to Section 2.2 (a “Pre-Release”). The Depositary may, pursuant to Section 2.5, deliver
Shares upon the surrender of American Depositary Shares that have been Pre-Released, whether or not thatsurrender is prior to the termination of that Pre-Release or the Depositary knows that those American Depositary
Shares have been Pre-Released. The Depositary may receive American Depositary Shares in lieu of Shares insatisfaction of a Pre-Release. Each Pre-Release must be (a) preceded or accompanied by a written representationfrom the person to whom American Depositary Shares or Shares are to be delivered, that such person, or its
customer, owns the Shares or American Depositary Shares to be remitted, as the case may be, (b) at all times
fully collateralized with cash or such other collateral as the Depositary deems appropriate, (c) terminable by the
Depositary on not more than five (5) business days’ notice, and (d) subject to all indemnities and credit
regulations that the Depositary deems appropriate. The number of American Depositary Shares outstanding at
any time as a result of Pre-Release will not normally exceed thirty percent (30%) of all American Depositary
Shares outstanding; provided, however, that the Depositary reserves the right to change or disregard that limit
from time to time as it reasonably deems appropriate.
The Depositary may retain for its own account any compensation received by it in connection with
Pre-Release.
SECTION 2.10. DTC Direct Registration System and Profile Modification System.
(a) Notwithstanding the provisions of Section 2.4, the parties acknowledge that DTC’s Direct
Registration System (“DRS”) and Profile Modification System (“Profile”) apply to the American Depositary
Shares upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC that facilitatesinterchange between registered holding of uncertificated securities and holding of security entitlements in thosesecurities through DTC and a DTC participant. Profile is a required feature of DRS that allows a DTC
participant, claiming to act on behalf of an Owner of American Depositary Shares, to direct the Depositary toregister a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American
Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary of priorauthorization from the Owner to register that transfer.
(b) In connection with DRS/Profile, the parties acknowledge that the Depositary will not
determine whether the DTC participant that is claiming to be acting on behalf of an Owner in requesting a
registration of transfer and delivery as described in paragraph (a) above has the actual authority to act on behalfof that Owner (notwithstanding any requirements under the Uniform Commercial Code). For the avoidance of
doubt, the provisions of Sections 5.3 and 5.8 apply to the matters arising from the use of the DRS/Profile. The
parties agree that the Depositary’s reliance on and compliance with instructions received by the Depositarythrough the DRS/Profile system and otherwise in accordance with this Deposit Agreement shall not constitutenegligence or bad faith on the part of the Depositary.
-9-ARTICLE 3. CERTAIN OBLIGATIONS OF OWNERS AND HOLDERS OF AMERICANDEPOSITARY SHARESSECTION 3.1.

Filing Proofs, Certificates and Other Information.

Any person presenting Shares for deposit or any Owner or Holder may be required from time totime to file with the Depositary or the Custodian such proof of citizenship or residence, exchange control
approval, or such information relating to the registration on the books of the Company or the Foreign Registrar, if
applicable, to execute such certificates and to make such representations and warranties, as the Depositary may
deem necessary or proper. The Depositary may withhold the delivery or registration of transfer of American
Depositary Shares, the distribution of any dividend or other distribution or of the proceeds thereof or the deliveryof any Deposited Securities until that proof or other information is filed or those certificates are executed or those
representations and warranties are made. The Depositary shall provide the Company, upon the Company’s
written request and at the Company’s expense, as promptly as practicable, with copies of any information orother materials that it receives pursuant to this Section 3.1, to the extent that disclosure is permitted underapplicable law.
SECTION 3.2.

Liability of Owner for Taxes.

If any tax or other governmental charge shall become payable by the Custodian or the Depositary
with respect to or in connection with any American Depositary Shares or any Deposited Securities represented by
any American Depositary Shares or in connection with a transaction to which Section 4.8 applies, that tax orother governmental charge shall be payable by the Owner of those American Depositary Shares to the
Depositary. The Depositary may refuse to register any transfer of those American Depositary Shares or any
withdrawal of Deposited Securities represented by those American Depositary Shares until that payment is made,and may withhold any dividends or other distributions or the proceeds thereof, or may sell for the account of the
Owner any part or all of the Deposited Securities represented by those American Depositary Shares and apply
those dividends or other distributions or the net proceeds of any sale of that kind in payment of that tax or othergovernmental charge but, even after a sale of that kind, the Owner of those American Depositary Shares shallremain liable for any deficiency. The Depositary shall distribute any net proceeds of a sale made under thisSection that are not used to pay taxes or governmental charges to the Owners entitled to them in accordance with
Section 4.1. If the number of Shares represented by each American Depositary Share decreases as a result of asale of Deposited Securities under this Section, the Depositary may call for surrender of the American Depositary
Shares to be exchanged on a mandatory basis for a lesser number of American Depositary Shares and may sellAmerican Depositary Shares to the extent necessary to avoid distributing fractions of American Depositary
Shares in that exchange and distribute the net proceeds of that sale to the Owners entitled to them.
SECTION 3.3.

Warranties on Deposit of Shares.

Every person depositing Shares under this Deposit Agreement shall be deemed thereby torepresent and warrant that those Shares and each certificate therefor, if applicable, are validly issued, fully paid
and nonassessable and were not issued in violation of any preemptive or similar rights of the holders ofoutstanding securities of the Company and that the person making that deposit is duly authorized so to do. Every
depositing person shall also be deemed to represent that the Shares, at the time of deposit, are not Restricted
Securities. All representations and warranties deemed made under this Section shall survive the deposit of Sharesand delivery of American Depositary Shares.
SECTION 3.4.

Disclosure of Interests.

When required in order to comply with applicable laws and regulations or the articles ofassociation or similar document of the Company, the Company may from time to time request each Owner andHolder to provide to the Depositary information relating to: (a) the capacity in which it holds American
Depositary Shares, (b) the identity of any Holders or other persons or entities then or previously interested in- 10 -

those American Depositary Shares and the nature of those interests and (c) any other matter where disclosure ofsuch matter is required for that compliance. Each Owner and Holder agrees to provide all information known to it
in response to a request made pursuant to this Section. Each Holder consents to the disclosure by the Owner or
any other Holder through which it holds American Depositary Shares, directly or indirectly, of all information
responsive to a request made pursuant to this Section relating to that Holder that is known to that Owner or other
Holder. The Depositary agrees to use reasonable efforts to comply with written instructions requesting that the
Depositary forward any request authorized under this Section to the Owners and to forward to the Company any
responses it receives in response to that request. The Depositary may charge the Company a fee and its expenses
for complying with requests under this Section 3.4.
ARTICLE 4.

THE DEPOSITED SECURITIESSECTION 4.1.

Cash Distributions.

Whenever the Depositary receives any cash dividend or other cash distribution on Deposited
Securities, the Depositary shall, subject to the provisions of Section 4.5, convert that dividend or other
distribution into Dollars, as promptly as practicable, and distribute the amount thus received (net of the fees andexpenses of the Depositary as provided in Section 5.9) to the Owners entitled thereto, in proportion to the numberof American Depositary Shares representing those Deposited Securities held by them respectively; provided,
however, that if the Custodian or the Depositary shall be required to withhold and does withhold from that cash
dividend or other cash distribution an amount on account of taxes or other governmental charges, the amount
distributed to the Owners of the American Depositary Shares representing those Deposited Securities shall be
reduced accordingly. However, the Depositary will not pay any Owner a fraction of one cent, but will round each
Owner’s entitlement to the nearest whole cent.
The Company or its agent will remit to the appropriate governmental agency in each applicablejurisdiction all amounts withheld and owing to such agency. The Depositary will forward to the Company or its
agent such information from its records as the Company may reasonably request to enable the Company or its
agent to file necessary reports with governmental agencies.
If a cash distribution would represent a return of all or substantially all the value of the Deposited
Securities underlying American Depositary Shares, the Depositary may require surrender of those American
Depositary Shares and may require payment of or deduct the fee for surrender of American Depositary Shares(whether or not it is also requiring surrender of American Depositary Shares) as a condition of making that cash
distribution. A distribution of that kind shall be a Termination Option Event.
SECTION 4.2.

Distributions Other Than Cash, Shares or Rights.

Subject to the provisions of Sections 4.11 and 5.9, whenever the Depositary receives any
distribution other than a distribution described in Section 4.1, 4.3 or 4.4 on Deposited Securities (but not in
exchange for or in conversion or in lieu of Deposited Securities), the Depositary shall, as promptly as practicable,cause the securities or property received by it to be distributed to the Owners entitled thereto, after deduction or
upon payment of any fees and expenses of the Depositary and any taxes or other governmental charges, in
proportion to the number of American Depositary Shares representing such Deposited Securities held by them
respectively, in any manner that the Depositary deems equitable and practicable for accomplishing that
distribution (which may be a distribution of depositary shares representing the securities received); provided,
however, that if in the reasonable opinion of the Depositary such distribution cannot be made proportionately
among the Owners entitled thereto, or if for any other reason (including, but not limited to, any requirement that
the Company or the Depositary withhold an amount on account of taxes or other governmental charges or that
securities received must be registered under the Securities Act of 1933 in order to be distributed to Owners orHolders) the Depositary deems such distribution not to be lawful and feasible, the Depositary may adopt suchother method as it may deem equitable and practicable for the purpose of effecting such distribution, including,- 11 -

but not limited to, the public or private sale of the securities or property thus received, or any part thereof, anddistribution of the net proceeds of any such sale (net of the fees and expenses of the Depositary as provided in
Section 5.9) to the Owners entitled thereto, all in the manner and subject to the conditions set forth in Section 4.1.
The Depositary may withhold any distribution of securities under this Section 4.2 if it has not received
satisfactory assurances from the Company that the distribution does not require registration under the Securities
Act of 1933. The Depositary may sell, by public or private sale, an amount of securities or other property it
would otherwise distribute under this Section 4.2 that is sufficient to pay its fees and expenses in respect of that
distribution.
If a distribution under this Section 4.2 would represent a return of all or substantially all the valueof the Deposited Securities underlying American Depositary Shares, the Depositary may require surrender of
those American Depositary Shares and may require payment of or deduct the fee for surrender of American
Depositary Shares (whether or not it is also requiring surrender of American Depositary Shares) as a condition of
making that distribution. A distribution of that kind shall be a Termination Option Event.
SECTION 4.3.

Distributions in Shares.

Whenever the Depositary receives any distribution on Deposited Securities consisting of adividend in, or free distribution of, Shares, the Depositary may, and shall if the Company so requests in writing,deliver to the Owners entitled thereto, in proportion to the number of American Depositary Shares representing
those Deposited Securities held by them respectively, an aggregate number of American Depositary Shares
representing the amount of Shares received as that dividend or free distribution, subject to the terms andconditions of this Deposit Agreement with respect to the deposit of Shares and issuance of American Depositary
Shares, including withholding of any tax or governmental charge as provided in Section 4.11 and payment of thefees and expenses of the Depositary as provided in Section 5.9 (and the Depositary may sell, by public or privatesale, an amount of the Shares received (or American Depositary Shares representing those Shares) sufficient to
pay its fees and expenses in respect of that distribution). In lieu of delivering fractional American Depositary
Shares, the Depositary may sell the amount of Shares represented by the aggregate of those fractions (orAmerican Depositary Shares representing those Shares or, if such sale is not possible with respect to any portionof such Shares which is less than a full Share, or a full Unit, by sale of such portion to the Company inaccordance with the applicable provisions of Japanese law and the articles of association, or similar documents of
the Company) and distribute the net proceeds, all in the manner and subject to the conditions described in
Section 4.1. No delivery to Owners pursuant to this Section 4.3 shall be unreasonably delayed by any action of
the Depositary or the Custodian. If and to the extent that additional American Depositary Shares are not delivered
and Shares or American Depositary Shares are not sold, each American Depositary Share shall thenceforth also
represent the additional Shares distributed on the Deposited Securities represented thereby.
If the Company declares a distribution in which holders of Deposited Securities have a right toelect whether to receive cash, Shares or other securities or a combination of those things, or a right to elect tohave a distribution sold on their behalf, the Depositary may, after consultation with the Company, make that rightof election available for exercise by Owners in any manner the Depositary considers to be lawful and practical.
As a condition of making a distribution election right available to Owners, the Depositary may requiresatisfactory assurances from the Company that doing so does not require registration of any securities under the
Securities Act of 1933.
SECTION 4.4.

Rights.

(a) If rights are granted to the Depositary in respect of deposited Shares to purchase additional
Shares or other securities, the Company and the Depositary shall endeavor to consult as to the actions, if any, theDepositary should take in connection with that grant of rights. The Depositary may, to the extent deemed by it tobe lawful and practical (i) if requested in writing by the Company, grant to all or certain Owners rights to instruct
the Depositary to purchase the securities to which the rights relate and deliver those securities or American- 12 -

Depositary Shares representing those securities to Owners, (ii) if requested in writing by the Company, deliver
the rights to or to the order of certain Owners, or (iii) sell the rights to the extent practicable and distribute the net
proceeds of that sale to Owners entitled to those proceeds. To the extent rights are not exercised, delivered or
disposed of under (i), (ii) or (iii) above, the Depositary shall permit the rights to lapse unexercised.
(b) If the Depositary will act under (a)(i) above, the Company and the Depositary will enter into
a separate agreement setting forth the conditions and procedures applicable to the particular offering. Upon
instruction from an applicable Owner in the form the Depositary specified and upon payment by that Owner tothe Depositary of an amount equal to the purchase price of the securities to be received upon the exercise of therights, the Depositary shall, on behalf of that Owner, exercise the rights and purchase the securities. The
purchased securities shall be delivered to, or as instructed by, the Depositary. The Depositary shall (i) deposit thepurchased Shares under this Deposit Agreement and deliver American Depositary Shares representing thoseShares to that Owner or (ii) deliver or cause the purchased Shares or other securities to be delivered to or to theorder of that Owner. The Depositary will not act under (a)(i) above unless the offer and sale of the securities towhich the rights relate are registered under the Securities Act of 1933 or the Depositary has received an opinionof United States counsel that is satisfactory to it to the effect that those securities may be sold and delivered tothe applicable Owners without registration under the Securities Act of 1933.
(c) If the Depositary will act under (a)(ii) above, the Company and the Depositary will enter into
a separate agreement setting forth the conditions and procedures applicable to the particular offering. Upon(i) the request of an applicable Owner to deliver the rights allocable to the American Depositary Shares of that
Owner to an account specified by that Owner to which the rights can be delivered and (ii) receipt of such
documents as the Company and the Depositary agreed to require to comply with applicable law, the Depositary
will deliver those rights as requested by that Owner.
(d) If the Depositary will act under (a)(iii) above, the Depositary will use reasonable efforts tosell the rights in proportion to the number of American Depositary Shares held by the applicable Owners and pay
the net proceeds to the Owners otherwise entitled to the rights that were sold, upon an averaged or other practicalbasis without regard to any distinctions among such Owners because of exchange restrictions or the date ofdelivery of any American Depositary Shares or otherwise.
(e) Payment or deduction of the fees of the Depositary as provided in Section 5.9 and payment
or deduction of the expenses of the Depositary and any applicable taxes or other governmental charges shall be
conditions of any delivery of securities or payment of cash proceeds under this Section 4.4.
(f) The Depositary shall not be responsible for any failure to determine that it may be lawful orfeasible to make rights available to or exercise rights on behalf of Owners in general or any Owner in particular,
or to sell rights.
SECTION 4.5.

Conversion of Foreign Currency.

Whenever the Depositary or the Custodian receives foreign currency, by way of dividends or other
distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt
thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis
into Dollars and the resulting Dollars transferred to the United States, the Depositary shall, as promptly aspracticable, convert or cause to be converted by sale or in any other manner that it may determine that foreign
currency into Dollars, and those Dollars shall be distributed to the Owners entitled thereto. A cash distribution
may be made upon an averaged or other practicable basis without regard to any distinctions among Owners basedon exchange restrictions, the date of delivery of any American Depositary Shares or otherwise and shall be net ofany expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.9.
If a conversion of foreign currency or the repatriation or distribution of Dollars can be effected
only with the approval or license of any government or agency thereof, the Depositary may, but will not be
required to, file an application for that approval or license.
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If the Depositary determines that in its judgment any foreign currency received by the Depositaryor the Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any
approval or license of any government or agency thereof that is required for such conversion is not filed orsought by the Depositary or is not obtained within a reasonable period as determined by the Depositary, theDepositary may distribute the foreign currency received by the Depositary to, or in its discretion may hold suchforeign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners
entitled to receive the same.
If any conversion of foreign currency, in whole or in part, cannot be effected for distribution tosome of the Owners entitled thereto, the Depositary may in its discretion make that conversion and distribution in
Dollars to the extent practicable and permissible to the Owners entitled thereto and may distribute the balance ofthe foreign currency received by the Depositary to, or hold that balance uninvested and without liability forinterest thereon for the account of, the Owners entitled thereto.
The Depositary may convert currency itself or through any of its affiliates and, in those cases, acts
as principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person andearns revenue, including, without limitation, transaction spreads, that it will retain for its own account. The
revenue is based on, among other things, the difference between the exchange rate assigned to the currency
conversion made under this Deposit Agreement and the rate that the Depositary or its affiliate receives whenbuying or selling foreign currency for its own account. The Depositary makes no representation that the exchange
rate used or obtained in any currency conversion under this Deposit Agreement will be the most favorable ratethat could be obtained at the time or that the method by which that rate will be determined will be the mostfavorable to Owners, subject to the Depositary’s obligations under Section 5.3. The methodology used todetermine exchange rates used in currency conversions is available upon request.
SECTION 4.6.

Fixing of Record Date.

Whenever a cash dividend, cash distribution or any other distribution is made on Deposited
Securities or rights to purchase Shares or other securities are issued with respect to Deposited Securities (whichrights will be delivered to or exercised or sold on behalf of Owners in accordance with Section 4.4) or the
Depositary receives notice that a distribution or issuance of that kind will be made, or whenever the Depositary
receives notice that a meeting of holders of Shares will be held in respect of which the Company has requested
the Depositary to send a notice under Section 4.7, or whenever the Depositary will assess a fee or charge against
the Owners, or whenever the Depositary causes a change in the number of Shares that are represented by each
American Depositary Share, or whenever the Depositary otherwise finds it necessary or convenient, theDepositary shall fix a record date, which shall be the same as, or as near as practicable to, any corresponding
record date set by the Company with respect to Shares, (a) for the determination of the Owners (i) who shall beentitled to receive the benefit of that dividend or other distribution or those rights, (ii) who shall be entitled togive instructions for the exercise of voting rights at that meeting or (iii) who shall be responsible for that fee or
charge or (iv) for any other purpose for which the record date was set, or (b) on or after which each American
Depositary Share will represent the changed number of Shares. Subject to the provisions of Sections 4.1 through
4.5 and to the other terms and conditions of this Deposit Agreement, the Owners on a record date fixed by the
Depositary shall be entitled to receive the amount distributable by the Depositary with respect to that dividend orother distribution or those rights or the net proceeds of sale thereof in proportion to the number of American
Depositary Shares held by them respectively, to give voting instructions or to act in respect of the other matterfor which that record date was fixed, or be responsible for that fee or charge, as the case may be.
SECTION 4.7.

Voting of Deposited Shares.

(a) Upon receipt of notice of any meeting of holders of Shares at which holders of Shares will beentitled to vote, if requested in writing by the Company, the Depositary shall, as soon as practicable thereafter,
Disseminate to the Owners a notice, the form of which shall be in the sole discretion of the Depositary, that shallcontain (i) the information contained in the notice of meeting received by the Depositary, (ii) a statement that the- 14 -

Owners as of the close of business on a specified record date will be entitled, subject to any applicable provisionof Japanese law and of the articles of association or similar documents of the Company, to instruct the
Depositary as to the exercise of the voting rights pertaining to the amount of Shares represented by theirrespective American Depositary Shares, (iii) a statement as to the manner in which those instructions may be
given or deemed given in accordance with the last sentence of paragraph (b) below if no instruction is received,to the Depositary to give a discretionary proxy to a person designated by the Company, and (iv) the last date on
which the Depositary will accept instructions (the “Instruction Cutoff Date”).
(b) Upon the written request of an Owner of American Depositary Shares, as of the date of therequest or, if a record date was specified by the Depositary, as of that record date, received on or before any
Instruction Cutoff Date established by the Depositary, the Depositary may, and if the Depositary sent a noticeunder the preceding paragraph shall, endeavor, in so far as practicable, to vote or cause to be voted the amount ofdeposited Shares represented by those American Depositary Shares in accordance with the instructions set forthin that request. So long as under the articles of association or other similar documents of the Company andJapanese law votes may only be cast in respect of one or more whole Units of Shares, (i) the same instructions
received from Owners shall be aggregated and the Depositary shall, subject to applicable law and market
practice, endeavor to vote or cause to be voted the number of whole Units in respect of which such instructions as
so aggregated have been received, in accordance with such instructions, and (ii) such Owners acknowledge andagree that, if the Depositary has received the same instructions any portion of which, after aggregation of all such
instructions, constitutes instructions with respect to less than a whole Unit of Shares, the Depositary will be
unable to vote or cause to be voted the Shares to which such portion of the instructions applies. The Depositary
shall not vote or attempt to exercise the right to vote that attaches to the deposited Shares other than inaccordance with instructions given by Owners and received by the Depositary or as provided in the following
sentence. If (i) the Company instructed the Depositary to Disseminate a notice under paragraph (a) above andcomplied with paragraph (d) below and (ii) no instructions are received by the Depositary from an Owner withrespect to a matter and an amount of American Depositary Shares of that Owner on or before the Instruction
Cutoff Date, the Depositary shall deem that Owner to have instructed the Depositary to give a discretionary
proxy to a person designated by the Company with respect to that matter and the amount of deposited Shares
represented by that amount of American Depositary Shares and the Depositary shall give a discretionary proxy toa person designated by the Company to vote that amount of deposited Shares as to that matter, except that no
instruction of that kind shall be deemed given and no discretionary proxy shall be given with respect to any
matter as to which the Company informs the Depositary (and the Company agrees to provide such information as
promptly as practicable in writing, if applicable) that (x) the Company does not wish a proxy given,(y) substantial opposition exists or (z) the matter materially and adversely affects the rights of holders of Shares.
(c) There can be no assurance that Owners generally or any Owner in particular will receive thenotice described in paragraph (a) above in time to enable Owners to give instructions to the Depositary prior to
the Instruction Cutoff Date.
(d) If the Company will request the Depositary to Disseminate a notice under paragraph(a) above, the Company shall give the Depositary notice of the meeting, details concerning the matters to bevoted upon and copies of materials to be made available to holders of Shares in connection with the meeting as
far in advance of the meeting date as practicable.
SECTION 4.8.
Securities.

Tender and Exchange Offers; Redemption, Replacement or Cancellation of Deposited(a) The Depositary shall not tender any Deposited Securities in response to any voluntary cash
tender offer, exchange offer or similar offer made to holders of Deposited Securities (a “Voluntary Offer”),
except when instructed in writing to do so by an Owner surrendering American Depositary Shares and subject toany conditions or procedures the Depositary may require.
- 15 -

(b) If the Depositary receives a written notice that Deposited Securities have been redeemed for
cash or otherwise purchased for cash in a transaction that is mandatory and binding on the Depositary as a holderof those Deposited Securities (a “Redemption” (including all forms and tenses of that term)), the Depositary, atthe expense of the Company, shall (i) if required, surrender Deposited Securities that have been redeemed to theissuer of those securities or its agent on the redemption date, (ii) Disseminate a notice to Owners (A) notifying
them of that Redemption, (B) calling for surrender of a corresponding number of American Depositary Sharesand (C) notifying them that the called American Depositary Shares have been converted into a right only toreceive the money received by the Depositary upon that Redemption and those net proceeds shall be the
Deposited Securities to which Owners of those converted American Depositary Shares shall be entitled uponsurrenders of those American Depositary Shares in accordance with Section 2.5 or 6.2 and (iii) distribute themoney received upon that Redemption to the Owners entitled to it upon surrender by them of called American
Depositary Shares in accordance with Section 2.5 (and, for the avoidance of doubt, Owners shall not be entitled
to receive that money under Section 4.1). If the Redemption affects less than all the Deposited Securities, theDepositary shall call for surrender a corresponding portion of the outstanding American Depositary Shares andonly those American Depositary Shares will automatically be converted into a right to receive the net proceeds of
the Redemption. The Depositary shall allocate the American Depositary Shares converted under the preceding
sentence among the Owners pro-rata to their respective holdings of American Depositary Shares immediately
prior to the Redemption, except that the allocations may be adjusted so that no fraction of a converted American
Depositary Share is allocated to any Owner. A Redemption of all or substantially all of the Deposited Securities
shall be a Termination Option Event.
(c) If the Depositary is notified of or there occurs any change in nominal value or any
subdivision, combination or any other reclassification of the Deposited Securities or any recapitalization,
reorganization, sale of assets substantially as an entirety, merger or consolidation affecting the issuer of the
Deposited Securities or to which it is a party that is mandatory and binding on the Depositary as a holder ofDeposited Securities and, as a result, securities or other property have been or will be delivered in exchange,
conversion, replacement or in lieu of, Deposited Securities (a “Replacement”), the Depositary shall, if required,surrender the old Deposited Securities affected by that Replacement of Shares and hold, as new Deposited
Securities under this Deposit Agreement, the new securities or other property delivered to it in that Replacement.
However, the Depositary may elect to sell those new Deposited Securities if in the reasonable opinion of the
Depositary it is not lawful or not practical for it to hold those new Deposited Securities under this Deposit
Agreement because those new Deposited Securities may not be distributed to Owners without registration under
the Securities Act of 1933 or for any other reason, at public or private sale, at such places and on such terms as it
deems proper and proceed as if those new Deposited Securities had been Redeemed under paragraph (b) above.
A Replacement shall be a Termination Option Event, provided that the Depositary shall provide the Company
with prior notice as promptly as practicable if the Depositary becomes aware that a Termination Option Event
may take place.
(d) In the case of a Replacement where the new Deposited Securities will continue to be held
under this Deposit Agreement, the Depositary may call for the surrender of outstanding Receipts to be exchanged
for new Receipts specifically describing the new Deposited Securities and the number of those new Deposited
Securities represented by each American Depositary Share. If the number of Shares represented by each
American Depositary Share decreases as a result of a Replacement, the Depositary may call for surrender of theAmerican Depositary Shares to be exchanged on a mandatory basis for a lesser number of American Depositary
Shares and may sell American Depositary Shares to the extent necessary to avoid distributing fractions ofAmerican Depositary Shares in that exchange and distribute the net proceeds of that sale to the Owners entitledto them.
(e) If there are no Deposited Securities with respect to American Depositary Shares, including if
the Deposited Securities are cancelled, or the Deposited Securities with respect to American Depositary Shares havebecome apparently worthless, the Depositary may call for surrender of those American Depositary Shares or may
cancel those American Depositary Shares, upon notice to Owners, and a Termination Option Event occurs.
- 16 -

SECTION 4.9.

Reports.

The Depositary shall make available for inspection by Owners at its Office any reports andcommunications, including any proxy solicitation material, received from the Company which are both(a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to theholders of those Deposited Securities by the Company. The Company shall furnish reports and communications,
including any proxy soliciting material to which this Section applies, to the Depositary in English, to the extent
those materials are required to be translated into English pursuant to any regulations of the Commission.
SECTION 4.10. Lists of Owners.
Upon written request by the Company, the Depositary shall, at the expense of the Company,
furnish to it a list, as of a recent date, of the names, addresses and American Depositary Share holdings of all
Owners.
SECTION 4.11. Withholding.
If the Depositary determines that any distribution received or to be made by the Depositary(including Shares and rights to subscribe therefor) is subject to any tax or other governmental charge that the
Depositary is obligated to withhold, the Depositary may sell, by public or private sale, all or a portion of the
distributed property (including Shares and rights to subscribe therefor) in the amounts and manner the Depositary
deems necessary and practicable to pay those taxes or charges, and the Depositary shall distribute the net
proceeds of that sale, after deduction of those taxes or charges, to the Owners entitled thereto in proportion to thenumber of American Depositary Shares held by them respectively.
Services for Owners and Holders that may permit them to obtain reduced rates of tax withholding
at source or reclaim excess tax withheld, and the fees and costs associated with using services of that kind, are
not provided under, and are outside the scope of, this Deposit Agreement.
Each Owner and Holder agrees to indemnify the Company, the Depositary, the Custodian andtheir respective directors, employees, agents and affiliates for, and hold each of them harmless against, any claim
by any governmental authority with respect to taxes, additions to tax, penalties or interest arising out of any
refund of taxes, reduced withholding at source or other tax benefit received by it.
Upon reasonable written request, the Company shall have the right to inspect registration recordsof the Depositary relating to the American Depositary Shares during the Depositary’s normal business hours,
and, at the Company’s expense, to take copies of those records and require the Depositary and the Registrar to
supply copies of any part of those records.
ARTICLE 5.

THE DEPOSITARY, THE CUSTODIANS AND THE COMPANYSECTION 5.1.

Maintenance of Office and Transfer Books by the Depositary.

Until termination of this Deposit Agreement in accordance with its terms, the Depositary shallmaintain facilities for the execution and delivery, registration, registration of transfers and surrender of American
Depositary Shares in accordance with the provisions of this Deposit Agreement.
The Depositary shall keep books for the registration of American Depositary Shares, which shallbe open for inspection by the Owners at the Depositary’s Office during regular business hours, provided thatsuch inspection is not for the purpose of communicating with Owners in the interest of a business or object otherthan the business of the Company or a matter related to this Deposit Agreement or the American Depositary
Shares.

- 17 -

The Depositary may close the transfer books, at any time or from time to time, when deemed
expedient by it in connection with the performance of its duties under this Deposit Agreement or upon the written
request of the Company.
If any American Depositary Shares are listed on one or more stock exchanges, the Depositary
shall act as Registrar or appoint a Registrar or one or more co-registrars for registry of those American
Depositary Shares in accordance with any requirements of that exchange or those exchanges.
SECTION 5.2.

Prevention or Delay of Performance by the Company or the Depositary.

Neither the Depositary nor the Company nor any of their respective directors, employees, agentsor affiliates shall incur any liability to any Owner or Holder:(i) if by reason of (A) any provision of any present or future law or regulation or other act of thegovernment of the United States, any State of the United States or any other state or jurisdiction, or of any
governmental or regulatory authority or stock exchange; (B) (in the case of the Depositary only) any provision,present or future, of the articles of association or similar document of the Company, or by reason of any
provision of any securities issued or distributed by the Company, or any offering or distribution thereof; or(C) any event or circumstance, whether natural or caused by a person or persons, that is beyond the ability of the
Depositary or the Company, as the case may be, to prevent or counteract by reasonable care or effort (including,but not limited to earthquakes, floods, severe storms, fires, explosions, war, terrorism, civil unrest, labor disputes
or criminal acts; interruptions or malfunctions of utility services, Internet or other communications lines orsystems; unauthorized access to or attacks on computer systems or websites; or other failures or malfunctions ofcomputer hardware or software or other systems or equipment), the Depositary or the Company is, directly or
indirectly, prevented from, forbidden to or delayed in, or could be subject to any civil or criminal penalty on
account of doing or performing and therefore does not do or perform, any act or thing that, by the terms of thisDeposit Agreement or the Deposited Securities, it is provided shall be done or performed;(ii) for any exercise of, or failure to exercise, any discretion provided for in this Deposit
Agreement (including any determination by the Depositary to take, or not take, any action that this Deposit
Agreement provides the Depositary may take);(iii) for the inability of any Owner or Holder to benefit from any distribution, offering, right orother benefit that is made available to holders of Deposited Securities but is not, under the terms of this Deposit
Agreement, made available to Owners or Holders; or(iv) for any special, consequential or punitive damages for any breach of the terms of this Deposit
Agreement.
Where, by the terms of a distribution to which Section 4.1, 4.2 or 4.3 applies, or an offering towhich Section 4.4 applies, or for any other reason, that distribution or offering may not be made available to
Owners, and the Depositary may not dispose of that distribution or offering on behalf of Owners and make thenet proceeds available to Owners, then the Depositary shall not make that distribution or offering available to
Owners, and shall allow any rights, if applicable, to lapse.
SECTION 5.3.

Obligations of the Depositary and the Company.

The Company assumes no obligation nor shall it be subject to any liability under this Deposit
Agreement to any Owner or Holder, except that the Company agrees to perform its obligations specifically set
forth in this Deposit Agreement without negligence or bad faith.
The Depositary assumes no obligation nor shall it be subject to any liability under this Deposit
Agreement to any Owner or Holder (including, without limitation, liability with respect to the validity or worth- 18 -

of the Deposited Securities), except that the Depositary agrees to perform its obligations specifically set forth in
this Deposit Agreement without negligence or bad faith.
Neither the Depositary nor the Company shall be under any obligation to appear in, prosecute or
defend any action, suit or other proceeding in respect of any Deposited Securities or in respect of the American
Depositary Shares on behalf of any Owner or Holder or any other person.
Each of the Depositary and the Company may rely, and shall be protected in relying upon, any
written notice, request, direction or other document believed by it to be genuine and to have been signed orpresented by the proper party or parties.
Neither the Depositary nor the Company shall be liable for any action or non-action by it inreliance upon the advice of or information from legal counsel, accountants, any person presenting Shares fordeposit, any Owner or any other person believed by it in good faith to be competent to give such advice orinformation.
The Depositary shall not be liable for any acts or omissions made by a successor depositary
whether in connection with a previous act or omission of the Depositary or in connection with any matter arisingwholly after the removal or resignation of the Depositary, provided that in connection with the issue out of whichsuch potential liability arises the Depositary performed its obligations without negligence or bad faith while it
acted as Depositary.
The Depositary shall not be liable for the acts or omissions of any securities depository, clearing
agency or settlement system in connection with or arising out of book-entry settlement of American Depositary
Shares or Deposited Securities or otherwise.
In the absence of bad faith on its part, the Depositary shall not be responsible for any failure tocarry out any instructions to vote any of the Deposited Securities, or for the manner in which any such vote is
cast or the effect of any such vote.
The Depositary shall have no duty to make any determination or provide any information as to thetax status of the Company or any liability for any tax consequences that may be incurred by Owners or Holders
as a result of owning or holding American Depositary Shares.
No disclaimer of liability under the Securities Act of 1933 is intended by any provision of thisDeposit Agreement.
SECTION 5.4.

Resignation and Removal of the Depositary.

The Depositary may at any time resign as Depositary hereunder by written notice of its election soto do delivered to the Company, to become effective upon the appointment of a successor depositary and its
acceptance of that appointment as provided in this Section. The effect of resignation if a successor depositary is
not appointed is provided for in Section 6.2.
The Depositary may at any time be removed by the Company by 90 days’ prior written notice ofthat removal, to become effective upon the later of (i) the 90th day after delivery of the notice to the Depositaryand (ii) the appointment of a successor depositary and its acceptance of its appointment as provided in thisSection.
If the Depositary resigns or is removed, the Company shall use its best efforts to appoint a
successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, The
City of New York. Every successor depositary shall execute and deliver to the Company an instrument in writing
accepting its appointment under this Deposit Agreement. If the Depositary receives notice from the Company
that a successor depositary has been appointed following its resignation or removal, the Depositary, upon
- 19 -

payment of all sums due it from the Company, shall deliver to its successor a register listing all the Owners andtheir respective holdings of outstanding American Depositary Shares and shall deliver the Deposited Securities to
or to the order of its successor. When the Depositary has taken the actions specified in the preceding sentence(i) the successor shall become the Depositary and shall have all the rights and shall assume all the duties of the
Depositary under this Deposit Agreement and (ii) the predecessor depositary shall cease to be the Depositary andshall be discharged and released from all obligations under this Deposit Agreement, except for its duties under
Section 5.8 with respect to the time before that discharge. A successor Depositary shall notify the Owners of its
appointment as soon as practical after assuming the duties of Depositary.
Any corporation or other entity into or with which the Depositary may be merged or consolidated
shall be the successor of the Depositary without the execution or filing of any document or any further act.
SECTION 5.5.

The Custodians.

The Custodian shall be subject at all times and in all respects to the directions of the Depositaryand shall be responsible solely to it. The Depositary in its discretion may at any time appoint a substitute or
additional custodian or custodians, each of which shall thereafter be one of the Custodians under this Deposit
Agreement. If the Depositary receives notice that a Custodian is resigning and, upon the effectiveness of that
resignation there would be no Custodian acting under this Deposit Agreement, the Depositary shall, as promptly
as practicable after receiving that notice, appoint a substitute custodian or custodians, each of which shallthereafter be a Custodian under this Deposit Agreement. The Depositary shall require any Custodian that resigns
or is removed to deliver all Deposited Securities held by it to another Custodian.
SECTION 5.6.

Notices and Reports.

If the Company takes or decides to take any corporate action of a kind that is addressed in
Sections 4.1 to 4.4, or 4.6 to 4.8, or that effects or will effect a change of the name or legal structure of theCompany, or that effects or will effect a change to the Shares, the Company shall notify the Depositary and theCustodian of that action or decision as soon as it is lawful and practical to give that notice. The notice orsummary of that notice shall be in English and shall include all details that the Company is required to include in
any notice to any governmental or regulatory authority or securities exchange or is required to make available
generally to holders of Shares by publication or otherwise.
The Company will arrange for the translation into English or preparation of an English summary,
if not already in English, to the extent required pursuant to any regulations of the Commission, and the prompttransmittal by the Company to the Depositary and the Custodian of all notices and any other reports andcommunications which are made generally available by the Company to holders of its Shares. If requested inwriting by the Company, the Depositary will Disseminate, as soon as practicable, at the Company’s expense,
those notices, reports and communications to all Owners or otherwise make them available to Owners in amanner that the Company specifies as substantially equivalent to the manner in which those communications are
made available to holders of Shares and compliant with the requirements of any securities exchange on which theAmerican Depositary Shares are listed. The Company will timely provide the Depositary with the quantity ofsuch notices, reports, and communications, as requested by the Depositary from time to time, in order for the
Depositary to effect that Dissemination.
The Company represents that as of the date of this Deposit Agreement, the statements in
Article 11 of the Receipt with respect to the Company’s obligation to file periodic reports under the United States
Securities Exchange Act of 1934, as amended, are true and correct. The Company agrees to promptly notify the
Depositary upon becoming aware of any change in the truth of any of those statements.

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SECTION 5.7.

Distribution of Additional Shares, Rights, etc.

If the Company or any affiliate of the Company determines to make any issuance or distributionof (1) additional Shares, (2) rights to subscribe for Shares, (3) securities convertible into Shares, or (4) rights to
subscribe for such securities (each a “Distribution”), the Company shall notify the Depositary in writing in
English as promptly as practicable and in any event before the Distribution starts and, if requested in writing by
the Depositary, the Company shall promptly furnish to the Depositary either (i) evidence satisfactory to the
Depositary that the Distribution is registered under the Securities Act of 1933 or (ii) a written opinion from U.S.
counsel for the Company that is reasonably satisfactory to the Depositary, stating that the Distribution does not
require, or, if made in the United States, would not require, registration under the Securities Act of 1933.
The Company agrees with the Depositary that neither the Company nor any company controlled
by, controlling or under common control with the Company will at any time deposit any Shares that, at the timeof deposit, are Restricted Securities.
SECTION 5.8.

Indemnification.

The Company agrees to indemnify the Depositary, its directors, employees, agents and affiliatesand each Custodian against, and hold each of them harmless from, any liability or expense (including, but notlimited to any fees and expenses incurred in seeking, enforcing or collecting such indemnity and the reasonable
fees and expenses of counsel) that may arise out of or in connection with (a) any registration with theCommission of American Depositary Shares or Deposited Securities or the offer or sale thereof in the UnitedStates or (b) acts performed or omitted, pursuant to the provisions of or in connection with this Deposit
Agreement and the American Depositary Shares, as the same may be amended, modified or supplemented fromtime to time, (i) by either the Depositary or a Custodian or their respective directors, employees, agents andaffiliates, except for any liability or expense arising out of the negligence or bad faith of either of them, or (ii) by
the Company or any of its directors, employees, agents and affiliates.
The indemnities contained in the preceding paragraph shall not extend to any liability or expense
which arises solely and exclusively out of a Pre-Release (as defined in Section 2.9) of American Depositary
Shares in accordance with Section 2.9 and which would not otherwise have arisen had those American
Depositary Shares not been the subject of a Pre-Release pursuant to Section 2.9; provided, however, that theindemnities provided in the preceding paragraph shall apply to any such liability or expense (i) to the extent thatsuch liability or expense would have arisen had those American Depositary Shares not be the subject of a
Pre-Release, or (ii) which may arise out of any misstatement or alleged misstatement or omission or allegedomission in any registration statement, proxy statement, prospectus (or placement memorandum), or preliminary
prospectus (or preliminary placement memorandum) relating to the offer or sale of American Depositary Shares,
except to the extent any such liability or expense arises out of (i) information relating to the Depositary or any
Custodian (other than the Company), as applicable, furnished in writing and not materially changed or altered by
the Company expressly for use in any of the foregoing documents, or, (ii) if such information is provided, thefailure to state a material fact necessary to make the information provided not misleading.
The Depositary agrees to indemnify the Company, its directors, employees, agents and affiliates
and hold them harmless from any liability or expense (including, but not limited to any fees and expenses
incurred in seeking, enforcing or collecting such indemnity and the reasonable fees and expenses of counsel) that
may arise out of acts performed or omitted by the Depositary or any Custodian or their respective directors,
employees, agents and affiliates due to their negligence or bad faith.
SECTION 5.9.

Charges of Depositary.

The following charges shall be incurred by any party depositing or withdrawing Shares or by any
party surrendering American Depositary Shares or to whom American Depositary Shares are issued (including,- 21 -

without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchangeof stock regarding the American Depositary Shares or Deposited Securities or a delivery of American Depositary
Shares pursuant to Section 4.3), or by Owners, as applicable: (1) taxes and other governmental charges, (2) suchregistration fees as may from time to time be in effect for the registration of transfers of Shares generally on the
Share register of the Company or Foreign Registrar and applicable to transfers of Shares to or from the name of
the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals
hereunder, (3) such cable (including SWIFT) and facsimile transmission fees and expenses as are expressly
provided in this Deposit Agreement, (4) such expenses as are incurred by the Depositary in the conversion offoreign currency pursuant to Section 4.5, (5) a fee of $5.00 or less per 100 American Depositary Shares (orportion thereof) for the delivery of American Depositary Shares pursuant to Section 2.3, 4.3 or 4.4 and thesurrender of American Depositary Shares pursuant to Section 2.5 or 6.2, (6) a fee of $.05 or less per American
Depositary Share (or portion thereof) for any cash distribution made pursuant to this Deposit Agreement,
including, but not limited to Sections 4.1 through 4.4 and Section 4.8, (7) a fee for the distribution of securities
pursuant to Section 4.2 or of rights pursuant to Section 4.4 (where the Depositary will not exercise or sell thoserights on behalf of Owners), such fee being in an amount equal to the fee for the execution and delivery ofAmerican Depositary Shares referred to above which would have been charged as a result of the deposit of suchsecurities under this Deposit Agreement (for purposes of this item 7 treating all such securities as if they were
Shares) but which securities are instead distributed by the Depositary to Owners, (8) in addition to any fee
charged under item 6 above, a fee of $.05 or less per American Depositary Share (or portion thereof) per annum
for depositary services, which will be payable as provided in item 9 below, and (9) any other charges payable by
the Depositary or the Custodian, any of the Depositary’s or Custodian’s agents or the agents of the Depositary’sor Custodian’s agents, in connection with the servicing of Shares or other Deposited Securities (which charges
shall be assessed against Owners as of the date or dates set by the Depositary in accordance with Section 4.6 andshall be payable at the sole discretion of the Depositary by billing those Owners for those charges or by
deducting those charges from one or more cash dividends or other cash distributions).
The Depositary may collect any of its fees by deduction from any cash distribution payable, or by
selling a portion of any securities to be distributed, to Owners that are obligated to pay those fees.
In performing its duties under this Deposit Agreement, the Depositary may use brokers, dealers,foreign currency dealers or other service providers that are owned by or affiliated with the Depositary and that
may earn or share fees, spreads or commissions.
The Depositary, subject to Section 2.9, may own and deal in any class of securities of theCompany and its affiliates and in American Depositary Shares.
SECTION 5.10. Retention of Depositary Documents.
The Depositary is authorized to destroy those documents, records, bills and other data compiled
during the term of this Deposit Agreement at the times permitted by the laws or regulations governing the
Depositary, unless the Company requests that those papers be retained for a longer period or be turned over to theCompany or to a successor depositary.
SECTION 5.11. Exclusivity.
Without prejudice to the Company’s rights under Section 5.4, the Company agrees not to appoint
any other depositary for issuance of depositary shares, depositary receipts or any similar securities or instruments
so long as The Bank of New York Mellon is acting as Depositary under this Deposit Agreement.
SECTION 5.12. Change in Unit.
The Company agrees that it shall give notice to the Depositary of any proposed amendment to its
Articles of Incorporation which would change the number of Shares previously designated as a Unit. Such notice- 22 -

shall be given as far in advance of the date on which such amendment is scheduled to become effective as ispracticable under the circumstances.
ARTICLE 6.

AMENDMENT AND TERMINATIONSECTION 6.1.

Amendment.

The form of the Receipts and any provisions of this Deposit Agreement may at any time and fromtime to time be amended by agreement between the Company and the Depositary without the consent of Owners
or Holders in any respect that they may deem necessary or desirable. Any amendment that would impose or
increase any fees or charges (other than taxes and other governmental charges, registration fees, cable, telex or
facsimile transmission costs, delivery costs or other such expenses), or that would otherwise prejudice any
substantial existing right of Owners, shall, however, not become effective as to outstanding American Depositary
Shares until the expiration of 30 days after notice of that amendment has been Disseminated to the Owners ofoutstanding American Depositary Shares. Every Owner and Holder, at the time any amendment so becomes
effective, shall be deemed, by continuing to hold American Depositary Shares or any interest therein, to consent
and agree to that amendment and to be bound by this Deposit Agreement as amended thereby. Upon theeffectiveness of an amendment to the form of Receipt, including a change in the number of Shares represented byeach American Depositary Share, the Depositary may call for surrender of Receipts to be replaced with new
Receipts in the amended form or call for surrender of American Depositary Shares to effect that change of ratio.
In no event shall any amendment impair the right of the Owner to surrender American Depositary Shares andreceive delivery of the Deposited Securities represented thereby, except in order to comply with mandatory
provisions of applicable law.
SECTION 6.2.

Termination.

(a) The Company may initiate termination of this Deposit Agreement by notice to the
Depositary. The Depositary may initiate termination of this Deposit Agreement if (i) at any time 60 days shallhave expired after the Depositary delivered to the Company a written resignation notice and a successor
depositary has not been appointed and accepted its appointment as provided in Section 5.4, (ii) an Insolvency
Event or Delisting Event occurs with respect to the Company or (iii) a Termination Option Event has occurred. If
termination of this Deposit Agreement is initiated, the Depositary shall Disseminate a notice of termination to the
Owners of all American Depositary Shares then outstanding setting a date for termination (the “Termination
Date”), which shall be at least 90 days after the date of that notice, and this Deposit Agreement shall terminate onthat Termination Date.
(b) After the Termination Date, the Company shall be discharged from all obligations under thisDeposit Agreement except for its obligations to the Depositary under Sections 5.8 and 5.9.
(c) At any time after the Termination Date, the Depositary may sell the Deposited Securities
then held under this Deposit Agreement (or, if such sale is not possible with respect to any portion of such Shares
which is less than a full Share, or a full Unit, by sale of such portion to the Company in accordance with theapplicable provisions of Japanese law and the articles of association, or similar documents of the Company) andmay thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by ithereunder, unsegregated and without liability for interest, for the pro rata benefit of the Owners of American
Depositary Shares that remain outstanding, and those Owners will be general creditors of the Depositary withrespect to those net proceeds and that other cash. After making that sale, the Depositary shall be discharged fromall obligations under this Deposit Agreement, except (i) to account for the net proceeds and other cash (after
deducting, in each case, the fee of the Depositary for the surrender of American Depositary Shares, any expenses
for the account of the Owner of such American Depositary Shares in accordance with the terms and conditions of
this Deposit Agreement and any applicable taxes or governmental charges) and (ii) for its obligations under
Section 5.8 and (iii) to act as provided in paragraph (d) below.
- 23 -

(d) After the Termination Date, the Depositary shall continue to receive dividends and other
distributions pertaining to Deposited Securities (that have not been sold), may sell rights and other property as
provided in this Deposit Agreement and shall deliver Deposited Securities (or sale proceeds) upon surrender ofAmerican Depositary Shares (after payment or upon deduction, in each case, of the fee of the Depositary for thesurrender of American Depositary Shares, any expenses for the account of the Owner of those American
Depositary Shares in accordance with the terms and conditions of this Deposit Agreement and any applicabletaxes or governmental charges). After the Termination Date, the Depositary shall not accept deposits of Shares ordeliver American Depositary Shares. After the Termination Date, (i) the Depositary may refuse to accept
surrenders of American Depositary Shares for the purpose of withdrawal of Deposited Securities (that have notbeen sold) if in its judgment the requested withdrawal would interfere with its efforts to sell the Deposited
Securities, (ii) the Depositary will not be required to deliver cash proceeds of the sale of Deposited Securities
until all Deposited Securities have been sold and (iii) the Depositary may discontinue the registration of transfersof American Depositary Shares and suspend the distribution of dividends and other distributions on Deposited
Securities to the Owners and need not give any further notices or perform any further acts under this Deposit
Agreement except as provided in this Section.
ARTICLE 7.

MISCELLANEOUS

SECTION 7.1.

Counterparts; Signatures.

This Deposit Agreement may be executed in any number of counterparts, each of which shall bedeemed an original and all of those counterparts shall constitute one and the same instrument. Copies of thisDeposit Agreement shall be filed with the Depositary and the Custodians and shall be open to inspection by any
Owner or Holder during regular business hours.
Any manual signature on this Deposit Agreement that is faxed, scanned or photocopied, and any
electronic signature valid under the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. §7001, et. seq., shall for all purposes have the same validity, legal effect and admissibility in evidence as an
original manual signature, and the parties hereby waive any objection to the contrary.
SECTION 7.2.

No Third Party Beneficiaries.

This Deposit Agreement is for the exclusive benefit of the Company, the Depositary, the Owners
and the Holders and their respective successors and shall not be deemed to give any legal or equitable right,
remedy or claim whatsoever to any other person.
SECTION 7.3.

Severability.

In case any one or more of the provisions contained in this Deposit Agreement or in a Receipt
should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained in this Deposit Agreement or that Receipt shall in no way be affected,
prejudiced or disturbed thereby.
SECTION 7.4.

Owners and Holders as Parties; Binding Effect.

The Owners and Holders from time to time shall be parties to this Deposit Agreement and shall bebound by all of the terms and conditions of this Deposit Agreement and of the Receipts by acceptance ofAmerican Depositary Shares or any interest therein.
SECTION 7.5.

Notices.

Any and all notices to be given to the Company shall be in writing and shall be deemed to havebeen duly given if personally delivered or sent by domestic first class or international air mail or air courier or- 24 -

sent by facsimile transmission or email attaching a pdf or similar bit-mapped image of a signed writing, provided
that receipt of the facsimile transmission or email has been confirmed by the recipient, addressed to Mizuho
Financial Group, Inc., 1-5-5 Otemachi, Chiyoda-ku, Tokyo 100-8176, Japan, Attention: Administration
Department, or any other place to which the Company may have transferred its principal office with notice to the
Depositary.
Any and all notices to be given to the Depositary shall be in writing and shall be deemed to havebeen duly given if in English and personally delivered or sent by first class domestic or international air mail or
air courier or sent by facsimile transmission or email attaching a pdf or similar bit-mapped image of a signed
writing, addressed to The Bank of New York Mellon, 101 Barclay Street, New York, New York 10286,
Attention: Depositary Receipt Administration, or any other place to which the Depositary may have transferred
its Office with notice to the Company.
Delivery of a notice to the Company or Depositary by mail or air courier shall be deemed effected
when deposited, postage prepaid, in a post-office letter box or received by an air courier service. Delivery of anotice to the Company or Depositary sent by facsimile transmission or email shall be deemed effected when therecipient acknowledges receipt of that notice.
A notice to be given to an Owner shall be deemed to have been duly given when Disseminated tothat Owner. Dissemination in paper form will be effective when personally delivered or sent by first classdomestic or international air mail or air courier, addressed to that Owner at the address of that Owner as it
appears on the transfer books for American Depositary Shares of the Depositary, or, if that Owner has filed with
the Depositary a written request that notices intended for that Owner be mailed to some other address, at theaddress designated in that request. Dissemination in electronic form will be effective when sent in the mannerconsented to by the Owner to the electronic address most recently provided by the Owner for that purpose.
SECTION 7.6.

Appointment of Agent for Service of Process; Submission to Jurisdiction; Jury Trial

Waiver.
The Company hereby (i) designates and appoints the person named in Exhibit A to this Deposit
Agreement, located in the State of New York, as the Company’s authorized agent upon which process may beserved in any suit or proceeding arising out of or relating to the Shares or Deposited Securities, the American
Depositary Shares, the Receipts or this Deposit Agreement (a “Proceeding”), (ii) consents and submits to thejurisdiction of any state or federal court in the State of New York in which any Proceeding may be instituted and(iii) agrees that service of process upon said authorized agent shall be deemed in every respect effective serviceof process upon the Company in any Proceeding. The Company agrees to deliver to the Depositary, upon theexecution and delivery of this Deposit Agreement, a written acceptance by the agent named in Exhibit A to thisDeposit Agreement of its appointment as process agent. The Company further agrees to take any and all action,
including the filing of any and all such documents and instruments, as may be necessary to continue thatdesignation and appointment in full force and effect, or to appoint and maintain the appointment of anotherprocess agent located in the United States as required above, and to deliver to the Depositary a written acceptanceby that agent of that appointment, for so long as any American Depositary Shares or Receipts remain outstandingor this Deposit Agreement remains in force. In the event the Company fails to maintain the designation andappointment of a process agent in the United States in full force and effect, the Company hereby waives personal
service of process upon it and consents that a service of process in connection with a Proceeding may be made bycertified or registered mail, return receipt requested, directed to the Company at its address last specified for
notices under this Deposit Agreement, and service so made shall be deemed completed five (5) days after thesame shall have been so mailed.
EACH PARTY TO THIS DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF
DOUBT, EACH OWNER AND HOLDER) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN- 25 -

ANY SUIT, ACTION OR PROCEEDING AGAINST THE COMPANY AND/OR THE DEPOSITARYDIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHERDEPOSITED SECURITIES, THE AMERICAN DEPOSITARY SHARES OR THE RECEIPTS, THISDEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE
BREACH HEREOF OR THEREOF, INCLUDING, WITHOUT LIMITATION, ANY QUESTIONREGARDING EXISTENCE, VALIDITY OR TERMINATION (WHETHER BASED ON CONTRACT, TORTOR ANY OTHER THEORY).
SECTION 7.7.

Waiver of Immunities.

To the extent that the Company or any of its properties, assets or revenues may have or may
hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty orotherwise, from any legal action, suit or proceeding, from the giving of any relief in any respect thereof, fromsetoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior
to judgment, from attachment in aid of execution or judgment, or from execution of judgment, or other legal
process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction inwhich proceedings may at any time be commenced, with respect to its obligations, liabilities or any other matter
under or arising out of or in connection with the Shares or Deposited Securities, the American Depositary Shares,
the Receipts or this Deposit Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably
and unconditionally waives, and agrees not to plead or claim, any immunity of that kind and consents to relief
and enforcement as provided above.
SECTION 7.8.

Governing Law.

This Deposit Agreement and the Receipts shall be interpreted in accordance with and all rights
hereunder and thereunder and provisions hereof and thereof shall be governed by the laws of the State of New
York.

- 26 -

IN WITNESS WHEREOF, MIZUHO FINANCIAL GROUP, INC. and THE BANK OF NEWYORK MELLON have duly executed this Deposit Agreement as of the day and year first set forth above and all
Owners and Holders shall become parties hereto upon acceptance by them of American Depositary Shares or any
interest therein.
MIZUHO FINANCIAL GROUP, INC.
By:
Name: Makoto Umemiya
Title: Chief Financial Officer
THE BANK OF NEW YORK MELLON,
as Depositary
By:
Name:
Title:- 27 -

EXHIBIT A
UPON SURRENDER OF THIS RECEIPT, AS A RESULT OF, AND TO THE EXTENT REQUIRED BY, THE
OPERATION OF THE JAPANESE COMPANIES ACT OR ANY OTHER JAPANESE LAW, THE
DEPOSITARY WILL EFFECT THE DELIVERY TO THE OWNER HEREOF, OF SHARES OF MIZUHOFINANCIAL GROUP, INC. REPRESENTED BY THE AMERICAN DEPOSITARY SHARES EVIDENCED
HEREBY ONLY IN 100 SHARE UNITS (OR SUCH OTHER NUMBER OF SHARES AS THE ARTICLESOF INCORPORATION OF MIZUHO FINANCIAL GROUP, INC. MAY PROVIDE AS A “UNIT OFSHARES” FOR THE PURPOSE OF THE JAPANESE COMPANIES ACT, AS SUCH ARTICLES OFINCORPORATION MAY BE AMENDED FROM TIME TO TIME) OR AN INTEGRAL MULTIPLE
THEREOF.
AMERICAN DEPOSITARY SHARES(Each American Depositary Share represents
two (2) deposited Shares)
THE BANK OF NEW YORK MELLONAMERICAN DEPOSITARY RECEIPTFOR COMMON SHARES OFMIZUHO FINANCIAL GROUP, INC.
(INCORPORATED UNDER THE LAWS OF JAPAN)

certifies that

The Bank of New York Mellon, as depositary (hereinafter called the “Depositary”), hereby, or registered assigns IS THE OWNER OFAMERICAN DEPOSITARY SHARES
representing deposited common shares (herein called “Shares”) of Mizuho Financial Group, Inc., incorporated
under the laws of Japan (herein called the “Company”). At the date hereof, each American Depositary Sharerepresents two (2) Shares deposited or subject to deposit under the Deposit Agreement (as such term ishereinafter defined) with a custodian for the Depositary (herein called the “Custodian”) that, as of the date of the
Deposit Agreement, was Mizuho Bank, Ltd. located in Tokyo. The Depositary’s Office is located at a different
address than its principal executive office. Its Office is located at 101 Barclay Street, New York, N.Y. 10286, andits principal executive office is located at 225 Liberty Street, New York, N.Y. 10286.
THE DEPOSITARY’S OFFICE ADDRESS IS
101 BARCLAY STREET, NEW YORK, N.Y. 10286

A-1

1.

THE DEPOSIT AGREEMENT.

This American Depositary Receipt is one of an issue (herein called “Receipts”), all issued and to be issued
upon the terms and conditions set forth in the amended and restated Deposit Agreement dated as of(herein called the “Deposit Agreement”) among the Company, the Depositary, and all Owners and Holders fromtime to time of American Depositary Shares issued thereunder, each of whom by accepting American Depositary
Shares agrees to become a party thereto and become bound by all the terms and conditions thereof. The Deposit
Agreement sets forth the rights of Owners and Holders and the rights and duties of the Depositary in respect of
the Shares deposited thereunder and any and all other securities, property and cash from time to time received in
respect of those Shares and held thereunder (those Shares, securities, property, and cash are herein called“Deposited Securities”). Copies of the Deposit Agreement are on file at the Depositary’s Office in New York
City and at the office of the Custodian.
The statements made on the face and reverse of this Receipt are summaries of certain provisions of the
Deposit Agreement and are qualified by and subject to the detailed provisions of the Deposit Agreement, towhich reference is hereby made. Capitalized terms defined in the Deposit Agreement and not defined herein shallhave the meanings set forth in the Deposit Agreement.
2.

SURRENDER OF AMERICAN DEPOSITARY SHARES AND WITHDRAWAL OF SHARES.

Upon surrender at the Depositary’s Office of American Depositary Shares for the purpose of withdrawal of
the Deposited Securities represented thereby and payment of the fee of the Depositary for the surrender ofAmerican Depositary Shares as provided in Section 5.9 of the Deposit Agreement and payment of all taxes andgovernmental charges payable in connection with that surrender and withdrawal of the Deposited Securities, andsubject to the terms and conditions of the Deposit Agreement, the Owner of those American Depositary Sharesshall be entitled to delivery (to the extent delivery can then be lawfully and practicably made), to or as instructedby that Owner, of the amount of Deposited Securities at the time represented by those American Depositary
Shares, but not any money or other property as to which a record date for distribution to Owners has passed(since money or other property of that kind will be delivered or paid on the scheduled payment date to the Owner
as of that record date). The Depositary shall direct the Custodian with respect to delivery of Deposited Securities
and may charge the surrendering Owner a fee and its expenses for giving that direction by cable (including
SWIFT) or facsimile transmission. That delivery will be made, at the office of the Custodian, except that, at therequest, risk and expense of the surrendering Owner, and for the account of that Owner, the Depositary shalldirect the Custodian to forward any cash or other property comprising, and forward a certificate or certificates, if
applicable, and other proper documents of title, if any, for, the Deposited Securities represented by thesurrendered American Depositary Shares to the Depositary for delivery at the Depositary’s Office or to anotheraddress specified in the order received from the surrendering Owner.
3.

REGISTRATION OF TRANSFER OF AMERICAN DEPOSITARY SHARES; COMBINATION AND
SPLIT-UP OF RECEIPTS; INTERCHANGE OF CERTIFICATED AND UNCERTIFICATEDAMERICAN DEPOSITARY SHARES.

The Depositary, subject to the terms and conditions of the Deposit Agreement, shall register a transfer ofAmerican Depositary Shares on its transfer books upon (i) in the case of certificated American Depositary
Shares, surrender of the Receipt evidencing those American Depositary Shares, by the Owner or by a duly
authorized attorney, properly endorsed or accompanied by proper instruments of transfer or (ii) in the case of
uncertificated American Depositary Shares, receipt from the Owner of a proper instruction (including, for the
avoidance of doubt, instructions through DRS and Profile as provided in Section 2.10 of that Agreement), and, ineither case, duly stamped as may be required by the laws of the State of New York and of the United States ofAmerica. Upon registration of a transfer, the Depositary shall deliver the transferred American Depositary Sharesto or upon the order of the person entitled thereto.
The Depositary, subject to the terms and conditions of the Deposit Agreement, shall upon surrender of a
Receipt or Receipts for the purpose of effecting a split-up or combination of such Receipt or Receipts, execute
A-2and deliver a new Receipt or Receipts for any authorized number of American Depositary Shares requested,
evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered.
The Depositary, upon surrender of certificated American Depositary Shares for the purpose of exchanging
for uncertificated American Depositary Shares, shall cancel the Receipt evidencing those certificated American
Depositary Shares and send the Owner a statement confirming that the Owner is the owner of the same numberof uncertificated American Depositary Shares. The Depositary, upon receipt of a proper instruction (including,for the avoidance of doubt, instructions through DRS and Profile as provided in Section 2.10 of the Deposit
Agreement) from the Owner of uncertificated American Depositary Shares for the purpose of exchanging for
certificated American Depositary Shares, shall cancel those uncertificated American Depositary Shares andregister and deliver to the Owner a Receipt evidencing the same number of certificated American Depositary
Shares.
As a condition precedent to the delivery, registration of transfer, or surrender of any American Depositary
Shares or split-up or combination of any Receipt or withdrawal of any Deposited Securities, the Depositary, theCustodian, or Registrar may require payment from the depositor of the Shares or the presenter of the Receipt or
instruction for registration of transfer or surrender of American Depositary Shares not evidenced by a Receipt ofa sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration
fee with respect thereto (including any such tax or charge and fee with respect to Shares being deposited orwithdrawn) and payment of any applicable fees as provided in the Deposit Agreement, may require theproduction of proof satisfactory to it as to the identity and genuineness of any signature and may also requirecompliance with any regulations the Depositary may establish consistent with the provisions of the Deposit
Agreement.
The delivery of American Depositary Shares against deposit of Shares generally or against deposit ofparticular Shares may be suspended, or the registration of transfer of American Depositary Shares in particularinstances may be refused, or the registration of transfer of outstanding American Depositary Shares generally
may be suspended, during any period when the transfer books of the Depositary are closed, or if any such action
is deemed necessary or advisable by the Depositary or the Company at any time or from time to time because of
any requirement of law or of any government or governmental body or commission, or under any provision of
the Deposit Agreement, or for any other reason. Notwithstanding anything to the contrary in the Deposit
Agreement or this Receipt, the surrender of outstanding American Depositary Shares and withdrawal of
Deposited Securities may not be suspended subject only to (i) temporary delays caused by closing the transfer
books of the Depositary or the Company or the Foreign Registrar, if applicable, or the deposit of Shares inconnection with voting at a shareholders’ meeting, or the payment of dividends, (ii) the payment of fees, taxes
and similar charges, and (iii) compliance with any U.S. or foreign laws or governmental regulations relating to
the American Depositary Shares or to the withdrawal of the Deposited Securities. The Depositary shall notknowingly accept for deposit under the Deposit Agreement any Shares that, at the time of deposit, are Restricted
Securities. Upon surrender of American Depositary Shares for the purpose of withdrawal by an Owner to the
Depositary, as a result of, and to the extent required by, the operation of applicable provisions of the JapaneseCompanies Act or any other Japanese law, the Depositary will effect the delivery to such Owner of only that
portion of Shares (and any other Deposited Securities relating to such Shares) comprising a Unit or an integral
multiple thereof (the “deliverable portion”). For the purpose of the foregoing sentence, the deliverable portion
shall be determined on the basis of the aggregate number of Shares represented by the entire amount of theAmerican Depositary Shares surrendered by the same Owner at the same time. The Depositary will promptly
advise such Owner as to the amount of Shares and other Deposited Securities, if any, constituting a
non-deliverable portion and shall deliver to such Owner American Depositary Shares representing such nondeliverable portion. In addition, the Depositary shall notify such Owner of the additional amount of American
Depositary Shares which such Owner would be required to surrender in order for the Depositary to effectdelivery of all the Shares and other Deposited Securities represented by the American Depositary Shares of such
Owner.
A-3

4.

LIABILITY OF OWNER FOR TAXES.

If any tax or other governmental charge shall become payable by the Custodian or the Depositary withrespect to or in connection with any American Depositary Shares or any Deposited Securities represented by any
American Depositary Shares or in connection with a transaction to which Section 4.8 of the Deposit Agreement
applies, that tax or other governmental charge shall be payable by the Owner of those American Depositary
Shares to the Depositary. The Depositary may refuse to register any transfer of those American Depositary
Shares or any withdrawal of Deposited Securities represented by those American Depositary Shares until thatpayment is made, and may withhold any dividends or other distributions or the proceeds thereof, or may sell forthe account of the Owner any part or all of the Deposited Securities represented by those American Depositary
Shares, and may apply those dividends or other distributions or the net proceeds of any sale of that kind inpayment of that tax or other governmental charge but, even after a sale of that kind, the Owner shall remain liable
for any deficiency. The Depositary shall distribute any net proceeds of a sale made under Section 3.2 of the
Deposit Agreement that are not used to pay taxes or governmental charges to the Owners entitled to them inaccordance with Section 4.1 of the Deposit Agreement. If the number of Shares represented by each American
Depositary Share decreases as a result of a sale of Deposited Securities under Section 3.2 of the Deposit
Agreement, the Depositary may call for surrender of the American Depositary Shares to be exchanged on a
mandatory basis for a lesser number of American Depositary Shares and may sell American Depositary Shares tothe extent necessary to avoid distributing fractions of American Depositary Shares in that exchange anddistribute the net proceeds of that sale to the Owners entitled to them.
5.

WARRANTIES ON DEPOSIT OF SHARES.

Every person depositing Shares under the Deposit Agreement shall be deemed thereby to represent andwarrant that those Shares and each certificate therefor, if applicable, are validly issued, fully paid andnonassessable and were not issued in violation of any preemptive or similar rights of the holders of outstanding
securities of the Company and that the person making that deposit is duly authorized so to do. Every depositing
person shall also be deemed to represent that the Shares, at the time of deposit, are not Restricted Securities. All
representations and warranties deemed made under Section 3.3 of the Deposit Agreement shall survive thedeposit of Shares and delivery of American Depositary Shares.
6.

FILING PROOFS, CERTIFICATES, AND OTHER INFORMATION.

Any person presenting Shares for deposit or any Owner or Holder may be required from time to time to filewith the Depositary or the Custodian such proof of citizenship or residence, exchange control approval, or suchinformation relating to the registration on the books of the Company or the Foreign Registrar, if applicable, to
execute such certificates and to make such representations and warranties, as the Depositary may deem necessaryor proper. The Depositary may withhold the delivery or registration of transfer of any American Depositary
Shares, the distribution of any dividend or other distribution or of the proceeds thereof or the delivery of any
Deposited Securities until that proof or other information is filed or those certificates are executed or those
representations and warranties are made. As conditions of accepting Shares for deposit, the Depositary may
require (i) any certification required by the Depositary or the Custodian in accordance with the provisions of the
Deposit Agreement, (ii) a written order directing the Depositary to deliver to, or upon the written order of, theperson or persons stated in that order, the number of American Depositary Shares representing those Deposited
Shares, (iii) evidence satisfactory to the Depositary that those Shares have been re-registered in the books of theCompany or the Foreign Registrar in the name of the Depositary, a Custodian or a nominee of the Depositary or a
Custodian, (iv) evidence satisfactory to the Depositary that any necessary approval has been granted by any
governmental body in each applicable jurisdiction and (v) an agreement or assignment, or other instrument
satisfactory to the Depositary, that provides for the prompt transfer to the Custodian of any dividend, or right tosubscribe for additional Shares or to receive other property, that any person in whose name those Shares are or
have been recorded may thereafter receive upon or in respect of those Shares, or, in lieu thereof, such agreementof indemnity or other agreement as shall be satisfactory to the Depositary.
A-4

7.

CHARGES OF DEPOSITARY.

The following charges shall be incurred by any party depositing or withdrawing Shares or by any party
surrendering American Depositary Shares or to whom American Depositary Shares are issued (including,
without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchangeof stock regarding the American Depositary Shares or Deposited Securities or a delivery of American Depositary
Shares pursuant to Section 4.3 of the Deposit Agreement), or by Owners, as applicable: (1) taxes and othergovernmental charges, (2) such registration fees as may from time to time be in effect for the registration oftransfers of Shares generally on the Share register of the Company or Foreign Registrar and applicable totransfers of Shares to or from the name of the Depositary or its nominee or the Custodian or its nominee on themaking of deposits or withdrawals hereunder, (3) such cable (including SWIFT) and facsimile transmission feesand expenses as are expressly provided in the Deposit Agreement, (4) such expenses as are incurred by the
Depositary in the conversion of foreign currency pursuant to Section 4.5 of the Deposit Agreement, (5) a fee of$5.00 or less per 100 American Depositary Shares (or portion thereof) for the delivery of American Depositary
Shares pursuant to Section 2.3, 4.3 or 4.4 of the Deposit Agreement and the surrender of American Depositary
Shares pursuant to Section 2.5 or 6.2 of the Deposit Agreement, (6) a fee of $.05 or less per American Depositary
Share (or portion thereof) for any cash distribution made pursuant to the Deposit Agreement, including, but notlimited to Sections 4.1 through 4.4 and 4.8 of the Deposit Agreement, (7) a fee for the distribution of securities
pursuant to Section 4.2 of the Deposit Agreement or of rights pursuant to Section 4.4 of that Agreement (where
the Depositary will not exercise or sell those rights on behalf of Owners), such fee being in an amount equal to
the fee for the execution and delivery of American Depositary Shares referred to above which would have been
charged as a result of the deposit of such securities under the Deposit Agreement (for purposes of this item 7
treating all such securities as if they were Shares) but which securities are instead distributed by the Depositary to
Owners, (8) in addition to any fee charged under item 6, a fee of $.05 or less per American Depositary Share (orportion thereof) per annum for depositary services, which will be payable as provided in item 9 below, and(9) any other charges payable by the Depositary or the Custodian, any of the Depositary’s or Custodian’s agentsor the agents of the Depositary’s or Custodian’s agents, in connection with the servicing of Shares or other
Deposited Securities (which charges shall be assessed against Owners as of the date or dates set by the
Depositary in accordance with Section 4.6 of the Deposit Agreement and shall be payable at the sole discretion of
the Depositary by billing those Owners for those charges or by deducting those charges from one or more cash
dividends or other cash distributions).
The Depositary may collect any of its fees by deduction from any cash distribution payable, or by selling a
portion of any securities to be distributed, to Owners that are obligated to pay those fees.
The Depositary, subject to Article 8 hereof, may own and deal in any class of securities of the Company andits affiliates and in American Depositary Shares.
From time to time, the Depositary may make payments to the Company to reimburse the Company for costs
and expenses generally arising out of establishment and maintenance of the American Depositary Sharesprogram, waive fees and expenses for services provided by the Depositary or share revenue from the feescollected from Owners or Holders. In performing its duties under the Deposit Agreement, the Depositary may
use brokers, dealers, foreign currency dealers or other service providers that are owned by or affiliated with the
Depositary and that may earn or share fees, spreads or commissions.
8.

PRE-RELEASE OF AMERICAN DEPOSITARY SHARES.

Notwithstanding Section 2.3 of the Deposit Agreement, the Depositary may deliver American Depositary
Shares prior to the receipt of Shares pursuant to Section 2.2 of the Deposit Agreement (a “Pre-Release”). The
Depositary may, pursuant to Section 2.5 of the Deposit Agreement, deliver Shares upon the surrender ofAmerican Depositary Shares that have been Pre-Released, whether or not that surrender is prior to thetermination of that Pre-Release or the Depositary knows that those American Depositary Shares have been
A-5

Pre-Released. The Depositary may receive American Depositary Shares in lieu of Shares in satisfaction of a
Pre-Release. Each Pre-Release must be (a) preceded or accompanied by a written representation from the person
to whom American Depositary Shares or Shares are to be delivered, that such person, or its customer, owns the
Shares or American Depositary Shares to be remitted, as the case may be, (b) at all times fully collateralized withcash or such other collateral as the Depositary deems appropriate, (c) terminable by the Depositary on not morethan five (5) business days’ notice, and (d) subject to all indemnities and credit regulations that the Depositary
deems appropriate. The number of American Depositary Shares outstanding at any time as a result of Pre-Release
will not normally exceed thirty percent (30%) of all American Depositary Shares outstanding; provided,
however, that the Depositary reserves the right to change or disregard that limit from time to time as it reasonably
deems appropriate.
The Depositary may retain for its own account any compensation received by it in connection with
Pre-Release.
9.

TITLE TO AMERICAN DEPOSITARY SHARES.

It is a condition of the American Depositary Shares, and every successive Owner and Holder of American
Depositary Shares, by accepting or holding the same, consents and agrees that American Depositary Shares
evidenced by a Receipt, when the Receipt is properly endorsed or accompanied by proper instruments of transfer,shall be transferable as certificated registered securities under the laws of the State of New York, and that
American Depositary Shares not evidenced by Receipts shall be transferable as uncertificated registeredsecurities under the laws of the State of New York. The Depositary, notwithstanding any notice to the contrary,
may treat the Owner of American Depositary Shares as the absolute owner thereof for the purpose of determining
the person entitled to distribution of dividends or other distributions or to any notice provided for in the Deposit
Agreement and for all other purposes, and neither the Depositary nor the Company shall have any obligation or
be subject to any liability under the Deposit Agreement to any Holder of American Depositary Shares, but only
to the Owner.
10. VALIDITY OF RECEIPT.
This Receipt shall not be entitled to any benefits under the Deposit Agreement or be valid or obligatory forany purpose, unless this Receipt shall have been (i) executed by the Depositary by the manual signature of a duly
authorized officer of the Depositary or (ii) executed by the facsimile signature of a duly authorized officer of the
Depositary and countersigned by the manual signature of a duly authorized signatory of the Depositary or theRegistrar or a co-registrar.
11. REPORTS; INSPECTION OF TRANSFER BOOKS.
The Company is subject to the periodic reporting requirements of the Securities Exchange Act of 1934 and,accordingly, files certain reports with the Securities and Exchange Commission. Those reports will be available
for inspection and copying through the Commission’s EDGAR system or at public reference facilities maintainedby the Commission in Washington, D.C.
The Depositary will make available for inspection by Owners at its Office any reports, notices and othercommunications, including any proxy soliciting material, received from the Company which are both(a) received by the Depositary as the holder of the Deposited Securities and (b) made generally available to theholders of those Deposited Securities by the Company. The Company shall furnish reports and communications,
including any proxy soliciting material to which Section 4.9 of the Deposit Agreement applies, to the Depositary
in English, to the extent such materials are required to be translated into English pursuant to any regulations of
the Commission.
The Depositary will keep books for the registration of American Depositary Shares and transfers ofAmerican Depositary Shares, which shall be open for inspection by the Owners at the Depositary’s Office during
A-6

regular business hours, provided that such inspection shall not be for the purpose of communicating with Owners
in the interest of a business or object other than the business of the Company or a matter related to the Deposit
Agreement or the American Depositary Shares.
12. DIVIDENDS AND DISTRIBUTIONS.
Whenever the Depositary receives any cash dividend or other cash distribution on Deposited Securities, theDepositary will, if at the time of receipt thereof any amounts received in a foreign currency can in the judgmentof the Depositary be converted on a reasonable basis into Dollars transferable to the United States, and subject tothe Deposit Agreement, convert that dividend or other cash distribution into Dollars, as promptly as practicable,
and distribute the amount thus received (net of the fees and expenses of the Depositary as provided in Article 7
hereof and Section 5.9 of the Deposit Agreement) to the Owners entitled thereto; provided, however, that if the
Custodian or the Depositary is required to withhold and does withhold from that cash dividend or other cash
distribution an amount on account of taxes or other governmental charges, the amount distributed to the Ownersof the American Depositary Shares representing those Deposited Securities shall be reduced accordingly. If acash distribution would represent a return of all or substantially all the value of the Deposited Securities
underlying American Depositary Shares, the Depositary may require surrender of those American Depositary
Shares and may require payment of or deduct the fee for surrender of American Depositary Shares (whether or
not it is also requiring surrender of American Depositary Shares) as a condition of making that cash distribution.
A distribution of that kind shall be a Termination Option Event.
Subject to the provisions of Section 4.11 and 5.9 of the Deposit Agreement, whenever the Depositary
receives any distribution other than a distribution described in Section 4.1, 4.3 or 4.4 of the Deposit Agreement
on Deposited Securities (but not in exchange for or in conversion or in lieu of Deposited Securities), theDepositary will, as promptly as practicable, cause the securities or property received by it to be distributed to the
Owners entitled thereto, after deduction or upon payment of any fees and expenses of the Depositary and any
taxes or other governmental charges, in any manner that the Depositary deems equitable and practicable foraccomplishing that distribution (which may be a distribution of depositary shares representing the securities
received); provided, however, that if in the reasonable opinion of the Depositary such distribution cannot bemade proportionately among the Owners of Receipts entitled thereto, or if for any other reason the Depositary
deems such distribution not to be lawful and feasible, the Depositary may adopt such other method as it may
deem equitable and practicable for the purpose of effecting such distribution, including, but not limited to, thepublic or private sale of the securities or property thus received, or any part thereof, and distribution of the net
proceeds of any such sale (net of the fees and expenses of the Depositary as provided in Article 7 hereof andSection 5.9 of the Deposit Agreement) to the Owners entitled thereto all in the manner and subject to theconditions set forth in Section 4.1 of the Deposit Agreement. The Depositary may withhold any distribution of
securities under Section 4.2 of the Deposit Agreement if it has not received satisfactory assurances from theCompany that the distribution does not require registration under the Securities Act of 1933. The Depositary may
sell, by public or private sale, an amount of securities or other property it would otherwise distribute under this
Article that is sufficient to pay its fees and expenses in respect of that distribution. If a distribution under
Section 4.2 of the Deposit Agreement would represent a return of all of substantially all the value of the
Deposited Securities underlying American Depositary Shares, the Depositary may require surrender of those
American Depositary Shares and may require payment of or deduct the fee for surrender of American Depositary
Shares (whether or not it is also requiring surrender of American Depositary Shares) as a condition of making
that distribution. A distribution of that kind shall be a Termination Option Event.
Whenever the Depositary receives any distribution consisting of a dividend in, or free distribution of,Shares, the Depositary may deliver to the Owners entitled thereto, an aggregate number of American Depositary
Shares representing the amount of Shares received as that dividend or free distribution, subject to the terms andconditions of the Deposit Agreement with respect to the deposit of Shares and issuance of American Depositary
Shares, including the withholding of any tax or other governmental charge as provided in Section 4.11 of the
Deposit Agreement and the payment of the fees and expenses of the Depositary as provided in Article 7 hereof
A-7and Section 5.9 of the Deposit Agreement (and the Depositary may sell, by public or private sale, an amount of
Shares received (or American Depositary Shares representing those Shares) sufficient to pay its fees andexpenses in respect of that distribution). In lieu of delivering fractional American Depositary Shares, theDepositary may sell the amount of Shares represented by the aggregate of those fractions (or American
Depositary Shares representing those Shares or, if such sale is not possible with respect to any portion of such
Shares which is less than a full Share, or a full Unit, by sale of such portion to the Company in accordance withthe applicable provisions of Japanese law and the articles of association, or similar documents of the Company)and distribute the net proceeds, all in the manner and subject to the conditions described in Section 4.1 of the
Deposit Agreement. No delivery to Owners pursuant to Section 4.3 of the Deposit Agreement shall be
unreasonably delayed by any action of the Depositary or the Custodian. If and to the extent that additional
American Depositary Shares are not delivered and Shares or American Depositary Shares are not sold, each
American Depositary Share shall thenceforth also represent the additional Shares distributed on the Deposited
Securities represented thereby.
If the Company declares a distribution in which holders of Deposited Securities have a right to elect whether
to receive cash, Shares or other securities or a combination of those things, or a right to elect to have a
distribution sold on their behalf, the Depositary may, after consultation with the Company, make that right ofelection available for exercise by Owners any manner the Depositary considers to be lawful and practical. As acondition of making a distribution election right available to Owners, the Depositary may require satisfactory
assurances from the Company that doing so does not require registration of any securities under the Securities
Act of 1933.
If the Depositary determines that any distribution received or to be made by the Depositary (including
Shares and rights to subscribe therefor) is subject to any tax or other governmental charge that the Depositary is
obligated to withhold, the Depositary may sell, by public or private sale, all or a portion of the distributed
property (including Shares and rights to subscribe therefor) in the amounts and manner the Depositary deems
necessary and practicable to pay any those taxes or charges, and the Depositary shall distribute the net proceedsof that sale, after deduction of those taxes or charges, to the Owners entitled thereto in proportion to the numberof American Depositary Shares held by them respectively.
Each Owner and Holder agrees to indemnify the Company, the Depositary, the Custodian and theirrespective directors, employees, agents and affiliates for, and hold each of them harmless against, any claim by
any governmental authority with respect to taxes, additions to tax, penalties or interest arising out of any refundof taxes, reduced withholding at source or other tax benefit received by it. Services for Owners and Holders thatmay permit them to obtain reduced rates of tax withholding at source or reclaim excess tax withheld, and the fees
and costs associated with using services of that kind, are not provided under, and are outside the scope of, theDeposit Agreement.
13. RIGHTS.
(a) If rights are granted to the Depositary in respect of deposited Shares to purchase additional Shares orother securities, the Company and the Depositary shall endeavor to consult as to the actions, if any, theDepositary should take in connection with that grant of rights. The Depositary may, to the extent deemed by it tobe lawful and practical (i) if requested in writing by the Company, grant to all or certain Owners rights to instruct
the Depositary to purchase the securities to which the rights relate and deliver those securities or American
Depositary Shares representing those securities to Owners, (ii) if requested in writing by the Company, deliver
the rights to or to the order of certain Owners, or (iii) sell the rights to the extent practicable and distribute the net
proceeds of that sale to Owners entitled to those proceeds. To the extent rights are not exercised, delivered or
disposed of under (i), (ii) or (iii) above, the Depositary shall permit the rights to lapse unexercised.
(b) If the Depositary will act under (a)(i) above, the Company and the Depositary will enter into a separate
agreement setting forth the conditions and procedures applicable to the particular offering. Upon instruction fromA-8

an applicable Owner in the form the Depositary specified and upon payment by that Owner to the Depositary of
an amount equal to the purchase price of the securities to be received upon the exercise of the rights, theDepositary shall, on behalf of that Owner, exercise the rights and purchase the securities. The purchased
securities shall be delivered to, or as instructed by, the Depositary. The Depositary shall (i) deposit the purchased
Shares under the Deposit Agreement and deliver American Depositary Shares representing those Shares to that
Owner or (ii) deliver or cause the purchased Shares or other securities to be delivered to or to the order of that
Owner. The Depositary will not act under (a)(i) above unless the offer and sale of the securities to which therights relate are registered under the Securities Act of 1933 or the Depositary has received an opinion of UnitedStates counsel that is satisfactory to it to the effect that those securities may be sold and delivered to theapplicable Owners without registration under the Securities Act of 1933.
(c) If the Depositary will act under (a)(ii) above, the Company and the Depositary will enter into aseparate agreement setting forth the conditions and procedures applicable to the particular offering. Upon (i) therequest of an applicable Owner to deliver the rights allocable to the American Depositary Shares of that Owner toan account specified by that Owner to which the rights can be delivered and (ii) receipt of such documents as theCompany and the Depositary agreed to require to comply with applicable law, the Depositary will deliver thoserights as requested by that Owner.
(d) If the Depositary will act under (a)(iii) above, the Depositary will use reasonable efforts to sell therights in proportion to the number of American Depositary Shares held by the applicable Owners and pay the net
proceeds to the Owners otherwise entitled to the rights that were sold, upon an averaged or other practical basis
without regard to any distinctions among such Owners because of exchange restrictions or the date of delivery of
any American Depositary Shares or otherwise.
(e) Payment or deduction of the fees of the Depositary as provided in Section 5.9 of the Deposit
Agreement and payment or deduction of the expenses of the Depositary and any applicable taxes or othergovernmental charges shall be conditions of any delivery of securities or payment of cash proceeds under
Section 4.4 of that Agreement.
(f) The Depositary shall not be responsible for any failure to determine that it may be lawful or feasible to
make rights available to or exercise rights on behalf of Owners in general or any Owner in particular, or to sellrights.
14. CONVERSION OF FOREIGN CURRENCY.
Whenever the Depositary or the Custodian receives foreign currency, by way of dividends or other
distributions or the net proceeds from the sale of securities, property or rights, and if at the time of the receipt
thereof the foreign currency so received can in the judgment of the Depositary be converted on a reasonable basis
into Dollars and the resulting Dollars transferred to the United States, the Depositary shall, as promptly aspracticable, convert or cause to be converted by sale or in any other manner that it may determine that foreign
currency into Dollars, and those Dollars shall be distributed to the Owners entitled thereto. A cash distribution
may be made upon an averaged or other practicable basis without regard to any distinctions among Owners basedon exchange restrictions, the date of delivery of any American Depositary Shares or otherwise and shall be net ofany expenses of conversion into Dollars incurred by the Depositary as provided in Section 5.9 of the Deposit
Agreement.
If a conversion of foreign currency or the repatriation or distribution of Dollars can be effected only with theapproval or license of any government or agency thereof, the Depositary may, but will not be required to, file anapplication for that approval or license.
If the Depositary determines that in its judgment any foreign currency received by the Depositary or the
Custodian is not convertible on a reasonable basis into Dollars transferable to the United States, or if any
A-9approval or license of any government or agency thereof that is required for such conversion is not filed orsought by the Depositary or is not obtained within a reasonable period as determined by the Depositary, theDepositary may distribute the foreign currency received by the Depositary to, or in its discretion may hold suchforeign currency uninvested and without liability for interest thereon for the respective accounts of, the Owners
entitled to receive the same.
If any conversion of foreign currency, in whole or in part, cannot be effected for distribution to some of the
Owners entitled thereto, the Depositary may in its discretion make that conversion and distribution in Dollars to
the extent practicable and permissible to the Owners entitled thereto and may distribute the balance of the foreign
currency received by the Depositary to, or hold that balance uninvested and without liability for interest thereon
for the account of, the Owners entitled thereto.
The Depositary may convert currency itself or through any of its affiliates and, in those cases, acts as
principal for its own account and not as agent, advisor, broker or fiduciary on behalf of any other person andearns revenue, including, without limitation, transaction spreads, that it will retain for its own account. The
revenue is based on, among other things, the difference between the exchange rate assigned to the currency
conversion made under the Deposit Agreement and the rate that the Depositary or its affiliate receives whenbuying or selling foreign currency for its own account. The Depositary makes no representation that the exchange
rate used or obtained in any currency conversion under the Deposit Agreement will be the most favorable ratethat could be obtained at the time or that the method by which that rate will be determined will be the mostfavorable to Owners, subject to the Depositary’s obligations under Section 5.3 of that Agreement. The
methodology used to determine exchange rates used in currency conversions is available upon request.
15. RECORD DATES.
Whenever a cash dividend, cash distribution or any other distribution is made on Deposited Securities orrights to purchase Shares or other securities are issued with respect to Deposited Securities (which rights will bedelivered to or exercised or sold on behalf of Owners in accordance with Section 4.4 of the Deposit Agreement)or the Depositary receives notice that a distribution or issuance of that kind will be made, or whenever the
Depositary receives notice that a meeting of holders of Shares will be held in respect of which the Company hasrequested the Depositary to send a notice under Section 4.7 of the Deposit Agreement, or whenever the
Depositary will assess a fee or charge against the Owners, or whenever the Depositary causes a change in thenumber of Shares that are represented by each American Depositary Share, or whenever the Depositary
otherwise finds it necessary or convenient, the Depositary shall fix a record date, which shall be the same as, oras near as practicable to, any corresponding record date set by the Company with respect to Shares, (a) for thedetermination of the Owners (i) who shall be entitled to receive the benefit of that dividend or other distribution
or those rights, (ii) who shall be entitled to give instructions for the exercise of voting rights at that meeting,(iii) who shall be responsible for that fee or charge or (iv) for any other purpose for which the record date wasset, or (b) on or after which each American Depositary Share will represent the changed number of Shares.
Subject to the provisions of Sections 4.1 through 4.5 of the Deposit Agreement and to the other terms andconditions of the Deposit Agreement, the Owners on a record date fixed by the Depositary shall be entitled toreceive the amount distributable by the Depositary with respect to that dividend or other distribution or thoserights or the net proceeds of sale thereof in proportion to the number of American Depositary Shares held bythem respectively, to give voting instructions or to act in respect of the other matter for which that record date
was fixed, or be responsible for that fee or charge, as the case may be.
16. VOTING OF DEPOSITED SHARES.
(a) Upon receipt of notice of any meeting of holders of Shares at which holders of Shares will be entitledto vote, if requested in writing by the Company, the Depositary shall, as soon as practicable thereafter,
Disseminate to the Owners a notice, the form of which shall be in the sole discretion of the Depositary, that shallcontain (i) the information contained in the notice of meeting received by the Depositary, (ii) a statement that the
A-10

Owners as of the close of business on a specified record date will be entitled, subject to any applicable provisionof Japanese law and of the articles of association or similar documents of the Company, to instruct the
Depositary as to the exercise of the voting rights pertaining to the amount of Shares represented by theirrespective American Depositary Shares, (iii) a statement as to the manner in which those instructions may be
given or deemed given in accordance with the last sentence of paragraph (b) below if no instruction is received,to the Depositary to give a discretionary proxy to a person designated by the Company, and (iv) the last date on
which the Depositary will accept instructions (the “Instruction Cutoff Date”).
(b) Upon the written request of an Owner of American Depositary Shares, as of the date of the request or,if a record date was specified by the Depositary, as of that record date, received on or before any Instruction
Cutoff Date established by the Depositary, the Depositary may, and if the Depositary sent a notice under thepreceding paragraph shall, endeavor, in so far as practicable, to vote or cause to be voted the amount of deposited
Shares represented by those American Depositary Shares in accordance with the instructions set forth in thatrequest. So long as under the articles of association or other similar documents of the Company and Japanese law
votes may only be cast in respect of one or more whole Units of Shares, (i) the same instructions received from
Owners shall be aggregated and the Depositary shall, subject to applicable law and market practice, endeavor tovote or cause to be voted the number of whole Units in respect of which such instructions as so aggregated havebeen received, in accordance with such instructions, and (ii) such Owners acknowledge and agree that, if the
Depositary has received the same instructions any portion of which, after aggregation of all such instructions,constitutes instructions with respect to less than a whole Unit of Shares, the Depositary will be unable to vote orcause to be voted the Shares to which such portion of the instructions applies. The Depositary shall not vote or
attempt to exercise the right to vote that attaches to the deposited Shares other than in accordance with
instructions given by Owners and received by the Depositary or as provided in the following sentence. If (i) the
Company instructed the Depositary to Disseminate a notice under paragraph (a) above and complied withparagraph (d) below and (ii) no instructions are received by the Depositary from an Owner with respect to amatter and an amount of American Depositary Shares of that Owner on or before the Instruction Cutoff Date, theDepositary shall deem that Owner to have instructed the Depositary to give a discretionary proxy to a person
designated by the Company with respect to that matter and the amount of deposited Shares represented by thatamount of American Depositary Shares and the Depositary shall give a discretionary proxy to a person
designated by the Company to vote that amount of deposited Shares as to that matter, except that no instructionof that kind shall be deemed given and no discretionary proxy shall be given with respect to any matter as towhich the Company informs the Depositary (and the Company agrees to provide such information as promptly aspracticable in writing, if applicable) that (x) the Company does not wish a proxy given, (y) substantial opposition
exists or (z) the matter materially and adversely affects the rights of holders of Shares.
(c) There can be no assurance that Owners generally or any Owner in particular will receive the noticedescribed in paragraph (a) above in time to enable Owners to give instructions to the Depositary prior to theInstruction Cutoff Date.
(d) If the Company will request the Depositary to Disseminate a notice under paragraph (a) above, theCompany shall give the Depositary notice of the meeting, details concerning the matters to be voted upon andcopies of materials to be made available to holders of Shares in connection with the meeting as far in advance ofthe meeting date as practicable.
17. TENDER AND EXCHANGE OFFERS; REDEMPTION, REPLACEMENT OR CANCELLATION OF
DEPOSITED SECURITIES.
(a) The Depositary shall not tender any Deposited Securities in response to any voluntary cash tender
offer, exchange offer or similar offer made to holders of Deposited Securities (a “Voluntary Offer”), except when
instructed in writing to do so by an Owner surrendering American Depositary Shares and subject to any
conditions or procedures the Depositary may require.
A-11

(b) If the Depositary receives a written notice that Deposited Securities have been redeemed for cash orotherwise purchased for cash in a transaction that is mandatory and binding on the Depositary as a holder of
those Deposited Securities (a “Redemption” (including all forms and tenses of that term)), the Depositary, at theexpense of the Company, shall (i) if required, surrender Deposited Securities that have been redeemed to theissuer of those securities or its agent on the redemption date, (ii) Disseminate a notice to Owners (A) notifying
them of that Redemption, (B) calling for surrender of a corresponding number of American Depositary Sharesand (C) notifying them that the called American Depositary Shares have been converted into a right only toreceive the money received by the Depositary upon that Redemption and those net proceeds shall be the
Deposited Securities to which Owners of those converted American Depositary Shares shall be entitled uponsurrenders of those American Depositary Shares in accordance with Section 2.5 or 6.2 of the Deposit Agreementand (iii) distribute the money received upon that Redemption to the Owners entitled to it upon surrender by themof called American Depositary Shares in accordance with Section 2.5 of that Agreement (and, for the avoidanceof doubt, Owners shall not be entitled to receive that money under Section 4.1 of that Agreement). If the
Redemption affects less than all the Deposited Securities, the Depositary shall call for surrender a corresponding
portion of the outstanding American Depositary Shares and only those American Depositary Shares willautomatically be converted into a right to receive the net proceeds of the Redemption. The Depositary shallallocate the American Depositary Shares converted under the preceding sentence among the Owners pro-rata totheir respective holdings of American Depositary Shares immediately prior to the Redemption, except that theallocations may be adjusted so that no fraction of a converted American Depositary Share is allocated to any
Owner. A Redemption of all or substantially all of the Deposited Securities shall be a Termination Option Event.
(c) If the Depositary is notified of or there occurs any change in nominal value or any subdivision,
combination or any other reclassification of the Deposited Securities or any recapitalization, reorganization, saleof assets substantially as an entirety, merger or consolidation affecting the issuer of the Deposited Securities or towhich it is a party that is mandatory and binding on the Depositary as a holder of Deposited Securities and, as aresult, securities or other property have been or will be delivered in exchange, conversion, replacement or in lieu
of, Deposited Securities (a “Replacement”), the Depositary shall, if required, surrender the old Deposited
Securities affected by that Replacement of Shares and hold, as new Deposited Securities under the Deposit
Agreement, the new securities or other property delivered to it in that Replacement. However, the Depositary
may elect to sell those new Deposited Securities if in the reasonable opinion of the Depositary it is not lawful or
not practical for it to hold those new Deposited Securities under the Deposit Agreement because those new
Deposited Securities may not be distributed to Owners without registration under the Securities Act of 1933 orfor any other reason, at public or private sale, at such places and on such terms as it deems proper and proceed asif those new Deposited Securities had been Redeemed under paragraph (b) above, provided that the Depositary
shall provide the Company with prior notice as promptly as practicable if the Depositary becomes aware that a
Termination Option Event may take place. A Replacement shall be a Termination Option Event, provided thatthe Depositary shall provide the Company with prior notice as promptly as practicable if the Depositary becomesaware that a Termination Option Event may take place.
(d) In the case of a Replacement where the new Deposited Securities will continue to be held under the
Deposit Agreement, the Depositary may call for the surrender of outstanding Receipts to be exchanged for new
Receipts specifically describing the new Deposited Securities and the number of those new Deposited Securities
represented by each American Depositary Share. If the number of Shares represented by each American
Depositary Share decreases as a result of a Replacement, the Depositary may call for surrender of the American
Depositary Shares to be exchanged on a mandatory basis for a lesser number of American Depositary Shares andmay sell American Depositary Shares to the extent necessary to avoid distributing fractions of American
Depositary Shares in that exchange and distribute the net proceeds of that sale to the Owners entitled to them.
(e) If there are no Deposited Securities with respect to American Depositary Shares, including if the
Deposited Securities are cancelled, or the Deposited Securities with respect to American Depositary Shares
become apparently worthless, the Depositary may call for surrender of those American Depositary Shares or may
cancel those American Depositary Shares, upon notice to Owners, and a Termination Option Event occurs.
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18. LIABILITY OF THE COMPANY AND DEPOSITARY.
Neither the Depositary nor the Company nor any of their respective directors, employees, agents or affiliates
shall incur any liability to any Owner or Holder:(i) if by reason of (A) any provision of any present or future law or regulation or other act of the governmentof the United States, any State of the United States or any other state or jurisdiction, or of any governmental or
regulatory authority or stock exchange; (B) (in the case of the Depositary only) any provision, present or future,of the articles of association or similar document of the Company, or by reason of any provision of any securities
issued or distributed by the Company, or any offering or distribution thereof; or (C) any event or circumstance,
whether natural or caused by a person or persons, that is beyond the ability of the Depositary or the Company, as
the case may be, to prevent or counteract by reasonable care or effort (including, but not limited to earthquakes,
floods, severe storms, fires, explosions, war, terrorism, civil unrest, labor disputes or criminal acts; interruptions
or malfunctions of utility services, Internet or other communications lines or systems; unauthorized access to or
attacks on computer systems or websites; or other failures or malfunctions of computer hardware or software orother systems or equipment), the Depositary or the Company is, directly or indirectly, prevented from, forbidden
to or delayed in, or could be subject to any civil or criminal penalty on account of doing or performing andtherefore does not do or perform, any act or thing that, by the terms of the Deposit Agreement or the Deposited
Securities, it is provided shall be done or performed;(ii) for any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement(including any determination by the Depositary to take, or not take, any action that the Deposit Agreement
provides the Depositary may take);(iii) for the inability of any Owner or Holder to benefit from any distribution, offering, right or other benefit
that is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement,
made available to Owners or Holders; or(iv) for any special, consequential or punitive damages for any breach of the terms of the Deposit
Agreement.
Where, by the terms of a distribution to which Section 4.1, 4.2 or 4.3 of the Deposit Agreement applies, oran offering to which Section 4.4 of that Agreement applies, or for any other reason, that distribution or offering
may not be made available to Owners, and the Depositary may not dispose of that distribution or offering on
behalf of Owners and make the net proceeds available to Owners, then the Depositary shall not make that
distribution or offering available to Owners, and shall allow any rights, if applicable, to lapse.
Neither the Company nor the Depositary assumes any obligation or shall be subject to any liability under the
Deposit Agreement to Owners or Holders, except that they agree to perform their obligations specifically set
forth in the Deposit Agreement without negligence or bad faith. The Depositary shall not be subject to any
liability with respect to the validity or worth of the Deposited Securities. Neither the Depositary nor theCompany shall be under any obligation to appear in, prosecute or defend any action, suit, or other proceeding inrespect of any Deposited Securities or in respect of the American Depositary Shares, on behalf of any Owner orHolder or other person. Neither the Depositary nor the Company shall be liable for any action or non-action by itin reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares fordeposit, any Owner or Holder, or any other person believed by it in good faith to be competent to give suchadvice or information. Each of the Depositary and the Company may rely, and shall be protected in relying upon,
any written notice, request, direction or other document believed by it to be genuine and to have been signed orpresented by the proper party or parties. The Depositary shall not be liable for any acts or omissions made by asuccessor depositary whether in connection with a previous act or omission of the Depositary or in connection
with a matter arising wholly after the removal or resignation of the Depositary, provided that in connection with
the issue out of which such potential liability arises, the Depositary performed its obligations without negligence
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or bad faith while it acted as Depositary. The Depositary shall not be liable for the acts or omissions of any
securities depository, clearing agency or settlement system in connection with or arising out of book-entry
settlement of American Depositary Shares or Deposited Securities or otherwise. In the absence of bad faith on its
part, the Depositary shall not be responsible for any failure to carry out any instructions to vote any of the
Deposited Securities or for the manner in which any such vote is cast or the effect of any such vote. The
Depositary shall have no duty to make any determination or provide any information as to the tax status of theCompany or any liability for any tax consequences that may be incurred by Owners or Holders as a result ofowning or holding American Depositary Shares. No disclaimer of liability under the Securities Act of 1933 isintended by any provision of the Deposit Agreement.
19. RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF SUCCESSORCUSTODIAN.
The Depositary may at any time resign as Depositary under the Deposit Agreement by written notice of its
election so to do delivered to the Company, to become effective upon the appointment of a successor depositaryand its acceptance of such appointment as provided in the Deposit Agreement. The Depositary may at any time
be removed by the Company by 90 days’ prior written notice of that removal, to become effective upon the laterof (i) the 90th day after delivery of the notice to the Depositary and (ii) the appointment of a successor depositaryand its acceptance of its appointment as provided in the Deposit Agreement. The Depositary in its discretion may
at any time appoint a substitute or additional custodian or custodians.
20. AMENDMENT.
The form of the Receipts and any provisions of the Deposit Agreement may at any time and from time totime be amended by agreement between the Company and the Depositary without the consent of Owners orHolders in any respect which they may deem necessary or desirable. Any amendment that would impose or
increase any fees or charges (other than taxes and other governmental charges, registration fees, cable, telex or
facsimile transmission costs, delivery costs or other such expenses), or that would otherwise prejudice any
substantial existing right of Owners, shall, however, not become effective as to outstanding American Depositary
Shares until the expiration of 30 days after notice of that amendment has been Disseminated to the Owners ofoutstanding American Depositary Shares. Every Owner and Holder, at the time any amendment so becomes
effective, shall be deemed, by continuing to hold American Depositary Shares or any interest therein, to consent
and agree to that amendment and to be bound by the Deposit Agreement as amended thereby. Upon theeffectiveness of an amendment to the form of Receipt, including a change in the number of Shares represented byeach American Depositary Share, the Depositary may call for surrender of Receipts to be replaced with new
Receipts in the amended form or call for surrender of American Depositary Shares to effect that change of ratio.
In no event shall any amendment impair the right of the Owner to surrender American Depositary Shares andreceive delivery of the Deposited Securities represented thereby, except in order to comply with mandatory
provisions of applicable law.
21. TERMINATION OF DEPOSIT AGREEMENT.
(a) The Company may initiate termination of the Deposit Agreement by notice to the Depositary. The
Depositary may initiate termination of the Deposit Agreement if (i) at any time 60 days shall have expired after
the Depositary delivered to the Company a written resignation notice and a successor depositary has not been
appointed and accepted its appointment as provided in Section 5.4 of that Agreement, (ii) an Insolvency Event orDelisting Event occurs with respect to the Company or (iii) a Termination Option Event has occurred. If
termination of the Deposit Agreement is initiated, the Depositary shall Disseminate a notice of termination to the
Owners of all American Depositary Shares then outstanding setting a date for termination (the “Termination
Date”), which shall be at least 90 days after the date of that notice, and the Deposit Agreement shall terminate onthat Termination Date.
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(b) After the Termination Date, the Company shall be discharged from all obligations under the Deposit
Agreement except for its obligations to the Depositary under Sections 5.8 and 5.9 of that Agreement.
(c) At any time after the Termination Date, the Depositary may sell the Deposited Securities then held
under the Deposit Agreement (or, if such sale is not possible with respect to any portion of such Shares which isless than a full Share, or a full Unit, by sale of such portion to the Company in accordance with the applicableprovisions of Japanese law and the articles of association, or similar documents of the Company) and may
thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by ithereunder, unsegregated and without liability for interest, for the pro rata benefit of the Owners of American
Depositary Shares that remain outstanding, and those Owners will be general creditors of the Depositary withrespect to those net proceeds and that other cash. After making that sale, the Depositary shall be discharged fromall obligations under the Deposit Agreement, except (i) to account for the net proceeds and other cash (after
deducting, in each case, the fee of the Depositary for the surrender of American Depositary Shares, any expenses
for the account of the Owner of such American Depositary Shares in accordance with the terms and conditions of
the Deposit Agreement and any applicable taxes or governmental charges) and (ii) for its obligations under
Section 5.8 of that Agreement and (iii) to act as provided in paragraph (d) below.
(d) After the Termination Date, the Depositary shall continue to receive dividends and other distributions
pertaining to Deposited Securities (that have not been sold), may sell rights and other property as provided in the
Deposit Agreement and shall deliver Deposited Securities (or sale proceeds) upon surrender of American
Depositary Shares (after payment or upon deduction, in each case, of the fee of the Depositary for the surrenderof American Depositary Shares, any expenses for the account of the Owner of those American Depositary Sharesin accordance with the terms and conditions of the Deposit Agreement and any applicable taxes or governmental
charges). After the Termination Date, the Depositary shall not accept deposits of Shares or deliver American
Depositary Shares. After the Termination Date, (i) the Depositary may refuse to accept surrenders of American
Depositary Shares for the purpose of withdrawal of Deposited Securities (that have not been sold) if in its
judgment the requested withdrawal would interfere with its efforts to sell the Deposited Securities, (ii) the
Depositary will not be required to deliver cash proceeds of the sale of Deposited Securities until all Deposited
Securities have been sold and (iii) the Depositary may discontinue the registration of transfers of American
Depositary Shares and suspend the distribution of dividends and other distributions on Deposited Securities to
the Owners and need not give any further notices or perform any further acts under the Deposit Agreement
except as provided in Section 6.2 of that Agreement.
22. DTC DIRECT REGISTRATION SYSTEM AND PROFILE MODIFICATION SYSTEM.
(a) Notwithstanding the provisions of Section 2.4 of the Deposit Agreement, the parties acknowledge that
DTC’s Direct Registration System (“DRS”) and Profile Modification System (“Profile”) apply to the American
Depositary Shares upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC thatfacilitates interchange between registered holding of uncertificated securities and holding of security entitlementsin those securities through DTC and a DTC participant. Profile is a required feature of DRS that allows a DTC
participant, claiming to act on behalf of an Owner of American Depositary Shares, to direct the Depositary toregister a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American
Depositary Shares to the DTC account of that DTC participant without receipt by the Depositary of priorauthorization from the Owner to register that transfer.
(b) In connection with DRS/Profile, the parties acknowledge that the Depositary will not determine
whether the DTC participant that is claiming to be acting on behalf of an Owner in requesting registration oftransfer and delivery described in paragraph (a) above has the actual authority to act on behalf of that Owner(notwithstanding any requirements under the Uniform Commercial Code). For the avoidance of doubt, theprovisions of Sections 5.3 and 5.8 of the Deposit Agreement apply to the matters arising from the use of the
DRS/Profile. The parties agree that the Depositary’s reliance on and compliance with instructions received by the
Depositary through the DRS/Profile system and otherwise in accordance with the Deposit Agreement, shall notconstitute negligence or bad faith on the part of the Depositary.
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23. APPOINTMENT OF AGENT FOR SERVICE OF PROCESS; SUBMISSION TO JURISDICTION; JURYTRIAL WAIVER; WAIVER OF IMMUNITIES.
The Company has (i) appointed Mizuho Bank, Ltd., New York Branch, located in the State of New Yorkwith offices at 1251 Avenue of the Americas, New York, NY 10020, as the Company’s authorized agent uponwhich process may be served in any suit or proceeding arising out of or relating to the Shares or Deposited
Securities, the American Depositary Shares, the Receipts or this Agreement, (ii) consented and submitted to thejurisdiction of any state or federal court in the State of New York in which any such suit or proceeding may beinstituted, and (iii) agreed that service of process upon said authorized agent shall be deemed in every respect
effective service of process upon the Company in any such suit or proceeding.
EACH PARTY TO THE DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT,EACH OWNER AND HOLDER) THEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENTPERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT,
ACTION OR PROCEEDING AGAINST THE COMPANY AND/OR THE DEPOSITARY DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITEDSECURITIES, THE AMERICAN DEPOSITARY SHARES OR THE RECEIPTS, THE DEPOSIT
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH
HEREOF OR THEREOF, INCLUDING WITHOUT LIMITATION ANY QUESTION REGARDING
EXISTENCE, VALIDITY OR TERMINATION (WHETHER BASED ON CONTRACT, TORT OR ANYOTHER THEORY).
To the extent that the Company or any of its properties, assets or revenues may have or hereafter become
entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any
legal action, suit or proceeding, from the giving of any relief in any respect thereof, from setoff or counterclaim,from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, fromattachment in aid of execution or judgment, or other legal process or proceeding for the giving of any relief or forthe enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, withrespect to its obligations, liabilities or any other matter under or arising out of or in connection with the Shares or
Deposited Securities, the American Depositary Shares, the Receipts or the Deposit Agreement, the Company, tothe fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or
claim, any such immunity and consents to such relief and enforcement.
24. DISCLOSURE OF INTERESTS.
When required in order to comply with applicable laws and regulations or the articles of association orsimilar document of the Company, the Company may from time to time request each Owner and Holder toprovide to the Depositary information relating to: (a) the capacity in which it holds American Depositary
Shares, (b) the identity of any Holders or other persons or entities then or previously interested in those American
Depositary Shares and the nature of those interests and (c) any other matter where disclosure of such matter isrequired for that compliance. Each Owner and Holder agrees to provide all information known to it in response toa request made pursuant to Section 3.4 of the Deposit Agreement. Each Holder consents to the disclosure by the
Owner or other Holder through which it holds American Depositary Shares, directly or indirectly, of all
information responsive to a request made pursuant to that Section relating to that Holder that is known to that
Owner or other Holder.

A-16

Exhibit 12.1
CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Tatsufumi Sakai, 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 3, 2018
By: /s/ Tatsufumi Sakai
Name: Tatsufumi Sakai
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 3, 2018
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, 2018 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.
Tatsufumi Sakai, 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 3, 2018
By: /s/ Tatsufumi Sakai
Name: Tatsufumi Sakai
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 3, 2018, 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, 2018.
/s/ Ernst & Young ShinNihon LLC
Tokyo, Japan
July 3, 2018