How did the group perform in fiscal 2004?

Is Mizuho steadily repaying public funds?

We recorded consolidated Net
Income of ¥627.3 billion, thehighest level ever for the group,
by further improving ourfinancial conditions whilesteadily securing stable profits.

By the end of fiscal 2004, we repaid cumulatively
more than half of the initial amount of publicfunds. We will continue to accumulate Retained
Earnings and aim to complete full repayment of
the public funds by the end of fiscal 2006.
Even after the repayment of public funds, ourconsolidated BIS Capital Adequacy Ratio as ofMarch 31, 2005 was maintained at a high level of
11.91%, sufficient for securing our financial
soundness.

page

Net Income (MHFG)(Trillions of yen)

1.0
0.5

0

Fiscal 2002
Fiscal 2003

Fiscal 2004

(0.5)
(1.0)

74

(1.5)
(2.0)
(2.5)

Net Income¥(2,377.1) bn.

¥406.9 bn.

¥627.3 bn.

page

Did Mizuho see the end of
the non-performing loan (NPL) issue?
We attained the target set under the Japanese government's
Financial Revitalization Program of reducing the NPL ratio by halfby the end of September 2004. As of March 31, 2005, Mizuho's
ratio declined to 2.1% and we have materially seen the end of the
NPL issue.
page

6

page

86

Reduction of NPLs (Disclosed Claims under FRL)(the Three Banks)(Trillions of yen)
6

5

4

3

2

1

Claims forSpecialAttention

Largely surpass thetarget of reducing
NPL ratio by half

Claims with
Collection
Risk
Claims against
Bankrupt andSubstantially
Bankrupt
Obligors

0

NPL balance
NPL ratio

6

Repayment of Public Funds(Trillions of yen)

3

2

Repaidmore than50%

Subordinated
Bonds

Preferred
Stocks1

0

Public Funds

Original amountMarch 2004

March 2005

¥2,949.0 bn.

¥2,274.0 bn.

¥1,466.4 bn.

What is the group’s core business strategy?
In light of the full resolution of financial issues, we entered into a new phase in ourmanagement strategies and worked to significantly expand top-line growth (Gross
Profits). In order to increase profits, we promptly formulated strategies such as
implementing measures tailored to suit each customer segment and business feature,promoting group synergies, and forming business alliances with companies outside
our group.

page

8 12 16 20
page

page

page

In April 2005, we launched our new business strategy in the form of the “Channel toDiscovery” Plan aiming to become “a financial partner that helps customers shape
their future and achieve their dreams.” As a course of action, we will implement the“Business Portfolio Strategy” as well as the “Corporate Management Strategy”
together with our medium-term business plan which was formulated based on
concrete strategic measures.
page

September 2002

March 2003

March 2004

March 2005

¥ 5,424.9 bn.

¥ 4,785.9 bn.

¥ 3,191.0 bn.

¥ 1,495.6 bn.

6.4%

6.2%

4.4%

2.1%

Less than half38

Financial Highlights of Mizuho Financial Group, Inc. (Consolidated)
Millions of yen
2005

For the Fiscal Years ended March 31,

Total Income
Total Expenses
Income before Income Taxes and Minority Interests
Net Income
Cash Dividends*

¥

2004

3,455,653
2,512,594
943,059
627,383
79,929¥Thousands of U.S. dollars
2005

3,342,957
2,461,716
881,240
406,982
77,748$32,172,551
23,392,555
8,779,996
5,841,018
744,151*Non-consolidated basis.

Millions of yen
2005

At March 31,

Total Assets
Securities
Loans and Bills Discounted
Deposits
Total Shareholders' Equity¥ 143,076,236
36,047,035
62,917,336
80,368,058
3,905,726

2004

Thousands of U.S. dollars
2005¥ 137,750,091
32,071,624
66,205,868
77,487,475¥ 3,644,396$ 1,332,056,946
335,602,229
585,767,958
748,236,276$
36,362,786

2004

U.S. dollars
2005

Yen
For the Fiscal Years ended March 31,

2005

Per Share of Common StockNet Income
Cash Dividends per Share*
Common Stock
Preferred StockFirst Series Class I Preferred Stock
Second Series Class II Preferred Stock
Third Series Class III Preferred Stock
Fourth Series Class IV Preferred Stock
Sixth Series Class VI Preferred Stock
Seventh Series Class VII Preferred Stock
Eighth Series Class VIII Preferred Stock
Ninth Series Class IX Preferred Stock
Tenth Series Class X Preferred Stock
Eleventh Series Class XI Preferred Stock
Twelfth Series Class XI Preferred StockThirteenth Series Class XIII Preferred Stock¥

54,625.61¥

36,153.27$

508.57

3,500

3,000

32.59

/
8,200
14,00047,60042,00011,000
8,000
—
5,380
20,000—30,00022,5008,200
14,00047,60042,00011,0008,000
17,5005,380
20,0002,500
30,000/76.34
130.34443.16391.03102.41
74.48
—
50.09
186.20—279.302005

2004

11.91%

11.35%*Non-consolidated basis.

At March 31,

Capital Adequacy
Risk-based Capital Ratio (BIS Capital Ratio)

Ratings
R&I
JCR
Moody's
Standard & Poor's
Fitch
Long Term Short Term Long Term Short Term Long Term Short Term Long Term Short Term Long Term Short Term

Mizuho Financial Group, Inc.
Mizuho Holdings, Inc.
Mizuho Corporate Bank, Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking Co., Ltd.
Mizuho Securities Co., Ltd.

A–
A–
A
A
A
A

a–1
a–1
a–1
a–1
a–1
a–1

—
—
AA–
AA–
A+
AA–

—
—
—
—
—
J–1+

—
—
A1
A1
A1
A1*

P–1
—
P–1
P–1
P–1
P–1*

—
—
A
A
A
—

—
—
A–1
A–1
A–1
—

—
—
A
A
A
—

—
—
F1
F1
F1
—

*Credit ratings for EMTN programme (Joint Medium-term Note Programme with Mizuho International, based on keepwell agreement with Mizuho Corporate Bank).
(As of August 24, 2005)

Mizuho Financial Group
Annual Report
A Message from the President & CEO of Mizuho Financial
Group, Inc.

2

Entering into a New Phase in Our Management Strategies

6

Mizuho Corporate Bank, Ltd.

Aiming for a “Constantly Evolving Business Model”

8

Mizuho Bank, Ltd.

Aiming to Be Number One in Customer Satisfaction andProfitability

12

Securities, Trust and Asset Management
Business Strategies

16

Advanced Financial Services of Mizuho
Business Outline of Mizuho
Targeting Businesses through Customer Segmentation

18
20

Providing Cutting-Edge Solutions
Targeting SMEs and Middle Market Corporations
Approaches to Individual Customers

Environmental Awareness andCommunity Activities of Mizuho

36

Working to Win the Support of Customers

Reinforcement of CSR Activities of Mizuho

38
50
52

Management Structure of Mizuho

53Internal Control Systems of Mizuho

56

Financial Analysis of Mizuho

69

Financial Data of Mizuho Financial Group, Inc.

103

Non-Consolidated Financial Statements ofMizuho Financial Group, Inc. and Four Subsidiaries

153

Senior Executives of Mizuho

163

Office Network of Mizuho

164

Investor Information on Mizuho Financial Group, Inc.

166

Disclosure Policy of Mizuho

168

The “Channel to Discovery” Plan
New Branding Strategy of Mizuho

A Message from the President & CEO of Mizuho Financial Group, Inc.

Further Progress toward Financial Strength and Major
Advances in Profitability
We have implemented decisive management reforms to deal effectively with an increasingly challenging
operating environment since we started operations under a corporate structure with legally separated
subsidiaries according to customer segmentation and business function in April 2002. These reforms
included vigorous steps to resolve the financial issues, raising capital of more than ¥1 trillion, andimplementation of a reorganization of our corporate structure.
In fiscal 2004, we positioned it as “a year of proving the true value of Mizuho,” and to this end weconcentrated our energy and resources on further improving our financial conditions and making majoradvances in profitability. Below are some of our most important accomplishments.

End of the Non-Performing Loan Issue
Our initiatives to improve our financial conditions included attaining the target set under the Japanese
government's Financial Revitalization Program of reducing the non-performing loan (NPL) ratio by halfby the end of September 2004. This was made possible mainly by aggressive steps that led to steadyprogress toward corporate revitalization. We accomplished further reduction in the NPL ratio during
fiscal 2004, and, as of March 31, 2005, this ratio declined to 2.1%, or less than half of the level at theprevious fiscal year end. As a result, we believe we have materially seen the end of the NPL issue. In
addition, along with the reduction in Deferred Tax Assets, the quality of our capital has improved, andwe have taken further steps toward reducing our stockholdings.

2

Repayment of More Than Half of Public Funds
With respect to the repayment of public funds, we have fully redeemed the outstanding SubordinatedBonds and repurchased part of the Preferred Stocks by steadily securing stable profits, enabling us to
repay a total of ¥1,482.6 billion to date, which represents more than half of the initial amount of publicfunds. Even after making these repayments, our consolidated BIS Capital Adequacy Ratio as of March
31, 2005 was maintained at a high level of 11.91%, sufficient for securing our financial soundness.

Completion of Mizuho Bank's IT Systems Integration
Along with these measures to enhance our financial strength, we have also moved forward withmeasures to reform our cost structure. General and Administrative Expenses in fiscal 2004 for Mizuho
Corporate Bank, Mizuho Bank, and their financial subsidiaries specializing in corporate revitalization
were reduced by approximately ¥135.0 billion compared with those in fiscal 2002. In addition, we arepleased to report that Mizuho Bank's IT systems integration, one of the highest priorities for the group,
was completed in December 2004.

Implementation of Strategies to Enhance Top-Line Growth
To reach our objective of making major improvements in our profitability, we entered into a new phasein our management strategies and shifted the management focus toward expanding top-line growth. Inline with this shift, each of our group companies implemented their own strategies customized to suiteach customer segmentation and business feature. In parallel with these initiatives, we worked tostrengthen cooperation among the group companies to take maximum advantage of synergies. We also
moved quickly to make business alliances with companies beyond our group.
Reviewing our activities by principal group companies, Mizuho Corporate Bank has accelerated its
transformation to an “originate to distribute” business model based on asset turnover. Specifically, it has
built a strong presence as the market leader in the expanding domestic syndicated loan business, claiming
approximately 40% of market share in origination, and has also established a specialized section aiming
to expand the loan trading market. In addition, to meet increasingly diverse and sophisticated customer
needs, it has promoted a “deal after deal” marketing strategy that offers customers solutions based on
the widest range of financial services on a continuous, multi-faceted basis, drawing on the comprehensive
capabilities of the group. In its overseas operations, it focused on providing services in Asia, especially in
China, where it has one of the largest networks of any Japanese financial institution, offering highly
professional support to assist its customers in developing their business activities.
Mizuho Securities, being in the top-class in the fixed income and investment banking businesses, has
moved up to within range of performing competitively with Japan's top three leading securities
companies in the area of equity-related businesses as a result of its focusing on this market. In this way,
Mizuho Securities has been making steady progress in expanding the scope of its operations.
Mizuho Bank has identified consulting and loans as the strategic business areas for services toindividuals, and it has emphasized improvement in profitability. In addition, to substantially expand
customer transactions, Mizuho Bank has introduced a new membership service platform, the Mizuho
Mileage Club, which features issuing ATM card with credit card functions with no annual fee, where
accumulated mileage points can be exchanged for additional services of Mizuho as well as of alliancepartners.

3

A Message from the President & CEO of Mizuho Financial Group, Inc.

With regard to businesses with small and medium-sized enterprises (SMEs) and middle market
corporations, Mizuho Bank introduced a strategic loan product that makes it possible to extend
unsecured loans with prompt credit approval, in addition to other unsecured loan products. Also, by
expanding the operations of Mizuho Business Finance Center, Mizuho Bank's subsidiary specializing in
the loan business for small corporations, it has been able to provide ample financing for meeting soundloan demands. Among other activities, it has actively encouraged cooperation among group companies
to provide customers with solutions for their business and financial needs and worked to expand its loan
share to each SME and middle market customer.
Mizuho Trust & Banking concentrated on further strengthening its trust and asset managementbusinesses such as pensions, asset management, real estate, asset securitization and stock transfer
agency. As a result, it posted a major increase in Gross Profits. Also, along with revisions in the TrustBusiness Law, new business opportunities that lead to expansion of trust business market are expected
to emerge. In preparation for these moves, it worked to enhance its framework for offeringsophisticated trust products, services, and solutions to its individual and corporate customers.
In light of the abovementioned improvements in profitability, the reduction in Credit-related Costs,
and the effect of the Supreme Court judgment regarding a corporate tax correction with respect to thewrite-off of credits against Japan Housing Loan amounting to ¥308.4 billion, we took a conservative
approach and recorded losses that would reduce the possible downside risks on our future profits,
including the early adoption of accounting for Impairment of Fixed Assets. As a result of thesedevelopments, we recorded consolidated Ordinary Profits of ¥657.4 billion, and posted consolidated Net
Income of ¥627.3 billion for fiscal 2004 which was the highest level.
We increased our annual Cash Dividend per share of Common Stock by ¥500 to ¥3,500 and madedividend payments on Preferred Stocks as prescribed.

Entering a Future-Minded and Customer-Oriented Phase to
Win Customer Support
As a result of our management actions, our focus has moved on to a future-minded and customeroriented phase that will seek to gain the support of customers. To this end, in April 2005, weannounced our new business strategy in the form of the “Channel to Discovery” Plan, with the objectiveof making Mizuho a world-leading financial group.
As a course of action, we will implement the “Business Portfolio Strategy” where we will shift to a
new business structure made up of three global groups which positions customer needs as a “key”
concept, and seek to build a new business model by maximizing the advantages of each group. Alongwith this strategy, the “Corporate Management Strategy” will be implemented together with our
medium-term business plan which was formulated based on concrete strategic measures.

Realigning into Three Global Groups to Respond to Customer Needs
Under our Business Portfolio Strategy, based on customer needs, we will realign our activities into threeglobal groups: namely, the Global Corporate Group, the Global Retail Group, and the Global Asset &Wealth Management Group.
4The Global Corporate Group will provide highly specialized and cutting-edge products and services byleveraging our comprehensive financial capabilities, using close cooperation between the global corporatebanking sector and the wholesale securities sector to respond to the needs of large and global corporations.
The Global Retail Group will provide top-level products and services with a global reach, through theclose cooperation of leading domestic and international partners who have built strong, well-known
brands, to meet the diverse and global needs of individuals as well as SMEs and middle market
corporations. In April 2005, Mizuho Bank entered into separate business collaborations with two of thebest super-regional banks in the U.S., Wachovia and Wells Fargo respectively, aiming to reinforce thechannel network, and products and services to the highest standard for our retail banking business.
The Global Asset & Wealth Management Group will provide world-class products and services tomeet diverse and sophisticated customer needs in the areas of trust and custody services and privatebanking. In April 2005, Mizuho Trust & Banking entered into a business collaboration with The Bank of
New York, a global leader in the trust banking business, aiming to reinforce our asset management
capabilities, expertise in execution, and asset administration on a global top level in the area of asset
management.
We will also establish Japan's first full-fledged private banking company to provide comprehensive andintegrative services similar to those available in the U.S. and Europe under Japanese laws and regulations.
Through the steady implementation of our Business Portfolio Strategy, we will work to accumulate
Retained Earnings. As a consequence, we aim to repay the remaining amount of public funds during
fiscal 2006.

Becoming “A Financial Partner That Helps Customers Shape Their Future And Achieve
Their Dreams”
Under our Corporate Management Strategy, we have begun preparations to apply for listing on the New
York Stock Exchange as early as feasible to enhance both transparency in our corporate governance andinvestors' confidence. In addition, as a globally active financial group, we will reinforce our commitment
to CSR (Corporate Social Responsibility) activities in order to contribute to the development of theeconomy through active social participation. Moreover, we will strengthen our branding strategy in orderto build a Mizuho brand befitting a global financial services group. Determined to be “a financial partnerthat helps customers shape their future and achieve their dreams,” we will implement the new branding
strategy reflected in our new slogan, “Channel to Discovery.”
As we move forward steadily implementing these business strategies, we are fully committed tostrengthening our competitiveness and profitability as well as increasing our corporate value. I sincerely
look forward to your continuing support as we work to achieve our goals.

July 2005

Terunobu Maeda
President & CEO
Mizuho Financial Group, Inc.
5

Entering into a New Phase in Our Management Strategies
We positioned fiscal 2004 as “a year of proving the true value of Mizuho” and focused on further improving
our financial conditions while working to enhance top-line growth (Gross Profits) and reduce General and
Administrative (G&A) Expenses by entering into a new phase in our management strategies. As aconsequence, we recorded consolidated Net Income of ¥627.3 billion, the highest level ever for the group.

End of the Non-Performing Loan (NPL) Issue
Repayment of Public Funds

NPL Ratio Declined to 2.1%

Repaid More Than Half of Public Funds

During fiscal 2004, we continued to take aggressive steps

With regard to repayment of public funds, we fully

to deal with corporate revitalization centered on ourredeemed remaining Subordinated Bonds of ¥325.0“Corporate Revitalization Project” and disposal of NPLs

billion and also repurchased Preferred Stocks offrom our balance sheet.

¥482.6 billion in fiscal 2004 by steadily securing

As a result, the balance of NPLs (Disclosed Claims

stable profits. To date, we repaid cumulatively more

under the Financial Reconstruction Law (FRL)) for thethan half of the initial amount of ¥2,949.0 billion,

Three Banks as of March 31, 2005 decreased byand the outstanding balance of the public funds was¥1,695.3 billion to ¥1,495.6 billion compared with the

reduced to ¥1,466.4 billion as of March 31, 2005.

previous fiscal year end. Even after achieving the target

Even after the repayment of these public funds,

to cut the NPL ratio by half by the end of September

our consolidated BIS Capital Adequacy Ratio as of2004 as specified in the Financial Revitalization Program,March 31, 2005 was maintained at a high level ofthe ratio continued to decline further to 2.1% as of

11.91%, sufficient for securing our financial soundness.

March 31, 2005, which was less than half of the level of

We will continue to accumulate Retained Earnings

the previous fiscal year end (4.4%). We believe we havebased on our stable profits and aim to complete fullmaterially seen the end of the NPL issue.

repayment of the public funds by the end of fiscal 2006.

In addition, Credit-related Costs decreased by ¥176.7
billion compared with the previous fiscal year to ¥61.2

With respect to actual repurchase, we will act in an appropriatemanner by consulting with the relevant authorities in light of therelated laws and regulations such as the Law of Emergency
Measures for Early Strengthening of Financial Functions.

billion, reflecting Reversal of Reserves for Possible Losses
on Loans mainly due to steady progress in corporate revitalizations and improvement in the business performanceof our customers.

Repayment of Public Funds

Reduction of NPLs (Disclosed Claims under FRL)

(Trillions of yen)(the Three Banks)

3

2(Trillions of yen)
6

Repaidmore than50%

Subordinated
Bonds

5

4

Preferred
Stocks

Largely surpassed thetarget of reducing
NPL ratio by half

3 Claims with

1
2

1

0

Public Funds

Claims forSpecialAttention

Original amountMarch 2004

March 2005

¥2,949.0 bn.

¥2,274.0 bn.

¥1,466.4 bn.

Collection
Risk
Claims against
Bankrupt andSubstantially
Bankrupt
Obligors

0

NPL balance
NPL ratio

September 2002

March 2003

March 2004

March 2005

¥ 5,424.9 bn.

¥ 4,785.9 bn.

¥ 3,191.0 bn.

¥ 1,495.6 bn.

6.4%

6.2%

4.4%

2.1%

Less than half6

Resolution of Other Management Issues

It decreased by approximately ¥135 billion in fiscal 2004

We continued to reduce our stockholdings in order tocompared with fiscal 2002, achieving more than 70% ofstrengthen our financial conditions, which should not be

the initial target.

impacted by the possible fluctuations in stock prices. The

As for our rationalization of total head count, we

stockholdings of the Three Banks were reduced by

reduced it by 3,748 to 22,827 as of March 31, 2005

¥383.5 billion during fiscal 2004. In the meantime,compared with the previous fiscal year end, attaining the

Unrealized Gains on Other Securities (which have market

objective of 24,000 by the end of fiscal 2004 under our

prices) were at a substantial level of ¥936.5 billion as ofBusiness Revitalization Plan.
In addition, Mizuho Bank's IT systems integration, one

March 31, 2005.
The balance of consolidated Net Deferred Tax Assetsof the highest priorities for the group, was completed in(DTAs) as of March 31, 2005 decreased by ¥330.0 billion to

December 2004. We will continue to maintain supervis-¥1,002.8 billion compared with that of March 31, 2004

ing the stable operations of its IT systems.

mainly due to recording positive taxable income. The ratio of
Net DTAs to Tier 1 Capital declined by 9.7 points to 24.0%.

Initiatives to Enhance Top-Line Growth

In addition, to reduce the possible downside risks on

In light of the full resolution of financial issues, we

our future profits, we adopted new accounting rules forentered into a new phase in our management strategies

Impairment of Fixed Assets in fiscal 2004 ahead of theand worked to significantly expand top-line growthrequired application time line and reported Extraordinary(Gross Profits). In order to increase profits, we promptly

Losses on Impairment of Fixed Assets of ¥64.8 billion on

formulated strategies such as implementing measuresan aggregated basis of the Three Banks. We also took atailored to suit each customer segmentation and businessconservative approach and recorded losses including

feature, promoting group synergies, and forming busi-

Write-offs of Deferred Hedge Losses.

ness alliances with companies outside our group.
We have already seen positive signs, but going for-Glossary

ward, we will work harder to achieve greater results.

Accounting for Impairment of Fixed Assets
The principles of accounting for impairment of fixed assets require companies torecognize these losses in their accounts when the value of assets held by companies, including land, buildings, and machinery, declines substantially. All companies in Japan will be required to adopt these accounting principles beginningin fiscal 2005.

Progress in Rationalization of Operations
The Two Banks have set a target of reducing G&A Expensesby ¥190 billion in fiscal 2006 compared with fiscal 2002.

Mizuho(The Three Banks)(SMBC,
bankingaccount)

MTFG(2 Banks)

The Three Banks: Mizuho Corporate Bank + Mizuho Bank + Mizuho Trust &Banking + their financial subsidiaries for corporate revitalization.
The Two Banks: Mizuho Corporate Bank + Mizuho Bank + their financial
subsidiaries for corporate revitalization.
The Holding Companies + the Two Banks: Mizuho Financial Group +Mizuho Holdings + the Two Banks.

Progress in Restructuring Efforts

Comparison of Asset Quality among Mega
Japanese Financial Groups
SMFG

Figures are described as follows:(The Holding Companies + the Two Banks)

UFJ*2

NPL balance(Disclosed Claims
under the FRL)

¥ 1.4 tn.

¥ 1.8 tn.

¥ 1.2 tn.

¥ 1.7 tn.

NPL ratio

2.1%

3.3%

2.6%

4.1%

Credit-related
Costs¥ 61.2 bn.

¥ 954.8 bn.

Employees
Domestic branches
Overseas branches and subsidiaries

March 2003 March 2004
27,90026,575

March 2005
22,827

562

440

424

49

41

40

Note: Based on the Business Revitalization Plan. With respect to the number of domestic
branches, if several branches had been located at one site as a part of the group's
branch-in-branch program, those branches are counted as a single office.

¥ 134.2 bn. ¥ 789.0 bn.*1

Source: Bank disclosures*1. Credit-related Costs Includes income from the collection of write-off claims*2. 2 BanksUFJ Strategic PartnerUFJ Equity InvestmentsUFJ Trust Equity

7 Mizuho Corporate Bank, Ltd.

Aiming for a “Constantly Evolving Business Model”
Since we commenced operations, we have focused on
promoting our “originate to distribute” business model
based on asset turnover and worked to improve ourcapabilities for offering financial and business solutions
to our customers. Going forward, we are endeavoring toenhance the sophistication of our business model andbecome a bank that is “constantly evolving” to respondquickly to changes in the business environment. Our
goal is to contribute to the creation of a better futurefor our customers.
In this report on Mizuho Corporate Bank, we would
like to assist you in understanding our management
strategies by focusing especially on what kind of financial institution we are striving to be and our strategy forreaching that objective.
July 2005
Hiroshi Saito
President & CEO, Mizuho Corporate Bank, Ltd.

We are establishing a global corporate banking group with aconstantly evolving business model.

8

The Financial Institution We Are Striving to
Be: A Global Corporate Banking Groupnational borders and conventional business cate-Mizuho Corporate Bank, standing at the forefront

only financial institutions that will survive are thoseof the group's global corporate banking opera-with sophisticated financial technology and capa-

tions, must play a core role within the Global

bilities for offering cutting-edge financial services

Corporate Group that will be newly created underthat meet customer needs.

gories. There is no exaggeration in saying that thethe group's “Channel to Discovery” Plan based on

Amid these developments, what we are aiming

the group's future-minded, customer-oriented

to do is evolve our management strategies further

business stance.

and to become a financial institution that is com-A look at the operating environment shows that,

petitive globally and create a business model that is

in addition to Japan's Financial Service Agency's

constantly evolving. Our vision is to be a compre-

regulatory movements as part of its efforts at creat-hensive financial services group with the competi-

ing a “Financial Services Nation,” the structure oftive spirit that drives us to seek out challenges on

corporate banking itself is undergoing major

new business frontiers. Our basic strategy to makechanges as deregulation proceeds and financial

this vision a reality is to establish ourselves as atechnology continues to develop, bringing a trend“Global Corporate Banking Group.”

toward the unbundling of financial services. As a

By “Global,” we mean being able to provide

result, Japanese financial institutions have enteredmaximum quality services in global markets toan era of mega-competition that transcends

meet the needs of customers that conduct their

Management Strategy of Mizuho Corporate Bank
Completion of improvements in corporate structure for becoming a global, top-level institution— As a result of the full resolution of financial issues, we have adopted management strategies
based on a future-minded, customer-oriented business style —An open financial conglomerate
Offer total solutions on a global basis drawing on
the comprehensive capabilities of the group to
meet the sophisticated and diverse needs ofcustomers (One-stop shopping)

Medium-Term Objectives
Profitability befitting a global, top-level institution
Early repayment of public funds
Further improvement in credit ratings
Substantial increase in market capitalization

MHCB Management Strategy

GlobalCorporate Banking

Group

Enhance ourbusiness promotion capabilities
Offer global-class solutions(Integration of commercial banking andinvestment banking)Realize portfolio
management that makes strategicrisk taking possible

Mobilizing Group Powerbusiness activities on a global scale. Therefore, we

In particular, we will work closer with Mizuho Securities.

are aiming to strategically enhance the capabilities

Moreover, in the age of global mega-competition,of our global network and become a financial

speed is extremely important, and we would like togroup that has global-class capabilities for develop-

pursue an alliance strategy, providing financial ser-ing financial services and products.

vices as an “open financial conglomerate.”“Corporate Banking” stands for the integration

To develop the corporate culture needed for theand combination of commercial banking andestablishment of a constantly evolving business

investment banking. We are aiming to substantiallymodel, we must focus on making improvements instrengthen our capabilities for business promotion

our management infrastructure, including human

to corporations as well as financial institutions andresources, administrative functions, businesspublic sector entities, improve our product develop-

processes, and IT.

ment abilities, and thereby position ourselves tooffer solutions and products that meet the needs

Our Management Strategyof these customers. In parallel with this, we are

The following discussion describes our corporate

also working to increase the sophistication of ourstrategy for establishing a Global Corporate

portfolio management systems and generate new

Banking Group.

opportunities for making profits through strategicrisk taking.
And, “Group” is the combined capabilities—notOffering Solutions that Contribute to Increasing
Corporate Value

only of Mizuho Corporate Bank, but also the other

Our strength lies in the breadth and depth of ourmembers of the Mizuho Group, including companies

customer base, which includes corporations as wellproviding securities, trust, and other services—offeredas financial institutions and public sector entities.

seamlessly to provide corporate finance services.

This strength, in turn, is supported by our top-quality

9

Aiming for a “Constantly Evolving Business Model”
products and our strong relationship management

other services—to implement M&A deals, syndicat-

structure, which is centered on our capabilities fored loans, CMS, as well as other services and solu-

offering solutions that respond to customers' finan-tions, with our focus on building customers' corpo-

cial and management needs quickly and accurately.

rate value.

In June 2004, we reorganized our Head Officebusiness promotion divisions by industry to create aChallenging New Domains in the Syndication Business

relationship management structure that features a

Since commencing operations, we have focused onhigher level of professionalism, including the in-promoting our “originate to distribute” business

depth understanding of industry trends. The mem-model based on asset turnover with loan syndica-bers of our relationship management team work

tion as its core. We are working to improve ourclosely with our Industry Research Division, which

capabilities for offering financial and business solu-

conducts an extensive program of research on ations to our customers, and have taken a front-

global basis. The relationship management staff,

runner position in leading the growth of thetherefore, are well prepared to offer total solutions

domestic syndicated loan and loan trading markets.

and strategic advice. In contrast to European andIn fiscal 2004, we offered solutions making use

U.S. financial institutions, we are not focused justof syndication functions in many types of deals

on individual deals but seek to offer solutions thatmeeting corporate financial needs, including cross-will contribute to increasing the value of corporate

border syndicated loans, major LBOs, and total debt

customers and aim to establish a position as a part-

restructuring arrangements aimed at increasing cus-

ner with our customers helping them to formulate

tomers' corporate value. In addition, in our loan trad-

important corporate strategies.

ing operations, we have taken a number of steps to

The key is to offer our customers sophisticatedpromote the expansion of our business in the mar-and continuously evolving solutions through pro-ket such as establishing the Loan Trading Division

moting our “deal after deal” marketing approachin October 2004 and creating the “high-liquiditythat offers customers solutions based on the widestloan” service, which provides an ongoing indica-

range of financial services on a continuous, multi-tion of loan prices, in November of the same year.

faceted basis. We will accomplish this by mobilizing

Especially, in the loan trading business, we havethe full range of capabilities of our group––including

positioned the current fiscal year as “year one for

not only banking but also securities, trust, andloan trading,” with the goal of imparting greater

Trends in Japan's Syndicated Loan Market andMizuho's Share(Trillions of yen)

momentum to market development and we are
implementing a wide range of initiatives to establish an active secondary market.

20

Arrangement of Syndicated
Loans in Japan (Fiscal 2004)

15

Mizuho's
Share:
38%

Considering that enhancing corporate value isan imperative for corporations and that increasing
profitability while advancing the sophistication ofrisk management is a must for financial institutions,and also taking into account the changes in money

10flows in Japan and overseas, we believe that exist5

ing market practices and stereotypes will undergo
substantial changes in the years ahead. We are0

Fiscal1998

Fiscal1999

Fiscal
2000

Fiscal
2001

Fiscal
2002

Fiscal
2003

Sources: Fiscal 1998 – Fiscal 2002: IFR database
Fiscal 2003 – Fiscal 2004: Bank of Japan statistics(Market share calculated by Mizuho Corporate Bank)

10

Fiscal2004

aiming to take significant leaps forward in increasing our market size, and will continue to meet thechallenges of expanding the syndication business.

Building an Even Stronger International Operation

Corporate Revitalizations Move to a New StageIn our international business, we have conducted a

In the challenging field of assisting companies instrategic business realignment aimed at creating a

restructuring and revitalizing their activities, wemore powerful earnings structure and management

have brought together our professionalism andframework. As part of this realignment, we havesophisticated skills to tackle corporate revitalization.

positioned Asia, starting with China, as the group's

Initiatives have included the formation of ourhome market and are focusing our initiatives in thisCorporate Restructuring Business Unit, a special cor-region. As a result, our customers have favorably

porate revitalization section, in October 2002, fol-evaluated our strong presence in Asian markets.

lowed by the establishment of financial subsidiaries

On the other hand, in Europe and the Americas,

specializing in corporate revitalization under our

we have established a position in a range of finan-

Corporate Revitalization Project in July 2003. As acial products and services comparable with banks

result of these efforts, Mizuho Corporate Bank's

based in those regions. In Europe, for example, we

NPL ratio declined to approximately 2.0%, as ofhave compiled a top-class track record in MBOs,

March 31, 2005, and we believe we have materially

and, in both Europe and the Americas, we haveseen the end of the NPL issue.

strengths in asset management and related services

In view of these positive results, we are looking

including the arrangement of CDOs (Collateralized

to move corporate revitalization to its next stage.

Debt Obligations).

To this end, in April 2005, we created our Credit

Going forward, we intend to emphasize theEngineering Division to focus on taking early steps

expansion of our top-line earnings while working

when market evaluations suggest the need for cor-to build an even stronger presence in international

porate and business revitalization. This division isbanking by playing the role of “Value Creation

drawing on its specialized know-how to prepare

Driver” for the group. This will include increasing

business revitalization schemes that will contributeour market presence and introducing cutting-edge

to the enhancement of the corporate value of cor-

products from overseas into Japan.

porate customers as well as offer advice on capital

For our Japanese customers doing business in

structure and other management issues. Throughmarkets overseas, we are working to deepen ourthese services, we intend to respond to customer

relationships by expanding our product and service

needs and proactively develop new business models.

offerings in response to their needs. Also, for ourcustomers based in other countries, we are actively

The senior executives and employees of the Mizuho

investing our resources to enable us to strengthen

Corporate Bank have the drive and depth needed

our marketing and other initiatives. Moreover, weto adapt quickly to changes in the operating envi-

are making strategic upgrades in our internationalronment. By promoting our concept of an “evolv-

network and are considering the formation of

ing business model,” we are striving to become “aalliances that may provide additional impetus forfinancial partner that helps customers shape their

growth of our activities.

future and achieve their dreams” and increase ourcompetitiveness and earning power, as befitting a
top, global banking institution. We sincerely lookforward to your continuing support.

We have the spirit and drive it takes to move into challenging new business frontiers
and are aiming to build the strong competitiveness and earning powerthat will make us one of the top, global banks.
11 Mizuho Bank, Ltd.

Aiming to Be Number One in Customer Satisfaction and Profitability
At present, we are actively engaged in implementing
aggressive strategies to become the best bank inJapan's middle and retail markets as well as to consolidate our position as the number-one financial institution in Japan in terms of customer satisfaction andprofitability. With respect to the allocation of our corporate resources, they are distributed strategically andflexibly with the aim of gaining the solid trust and support of our customers and being a bank that customers
can look to for assistance in meeting their financial needs.
July 2005

Seiji Sugiyama
President & CEO, Mizuho Bank, Ltd.

A year for setting out to rebuild our foundation to achieve
the first stage of dramatic growth.
A Year in Which We Rebuilt Our Foundation
Fiscal 2004 was my first year at the helm of Mizuho

My greatest concern after becoming the head ofMizuho Bank has been “speed.” In the context ofBank, and it could be summed up as a year for

managing Mizuho Bank, my concept of speed hasbuilding the foundation for implementing an

taken on two meanings. One is speed in providing ser-aggressive business strategy. During the year wevices to our customers and the other is speed in ourmaterially saw the end of the NPL issue, as well as

decision-making regarding strategies and other issues.

the successful completion of the major task of inte-

In customer services, speed is a service in itself.

grating our IT systems, which was a massive task

For example, the speed at which we provide hous-completed in eight stages between July andDecember 2004. I would like to express my heart-ing loans to individual customers and lending tofelt appreciation to our customers for their under-

SMEs and middle market corporations is just as
much a part of the service of lending. I am also

standing and cooperation, without which we could

convinced that quickness in making strategic man-not have completed these major undertakings.

agement decisions that support this speed in ser-Turning to the business environment, competi-

12

vice is another important meaning of speed.

tion has become much more intense due to such

To speed up our services for individual cus-

factors as financial deregulation and non-financial

tomers, we took a number of important steps.

institutions entering the banking industry. Against

These included shifting to an integrated develop-

this backdrop, since becoming President & CEO,I have tried to instill in each and every senior execu-

ment and marketing approach covering all steps

tive and employee that they should carry out theirfrom planning and creation of products and services
to sales promotion. Similarly, to impart greater

duties without fear of change and face challenges

speed to our services for corporate customers, wehead on in order that we can become a bankexpanded the credit authorization limits of ourwhere customers in the end will evaluate us as abranch managers, reviewed the credit approval sys-bank they can look to for assistance in meetingtems and delegated greater authority for approving

their financial needs.

credit applications in our Head Office. In addition,

The Strategic “Action CS” Campaign for Achieving Top Bank Status
Japan's Best Bank in the Middle and Retail Markets— To be Number One in Customer Satisfaction and Profitability —Business Reforms
Full-scale efforts to strengthencore businesses by making themost of our capability to offer
information services.
Enhance profitability in the
mass-retail sector.
Strengthen business promotion
capabilities by rebuilding ourchannel network.

Strong trust and support from
customers.
High-profit, high-efficiency
business model.

Management Reforms
Resolute execution of cost
structure reforms.

[Overwhelming strengths]
Strength in providing information
services backed by quality,
volume and speed.

Major review of management resource allocation.
Reforming the personnel
management structure that
underpins business reforms.

to take our customer services to a much higher

its core. Utilizing alliances with top well-known

level, we formed the Business Reform Committee

Japanese and overseas corporations and implement-with the aim of increasing the sophistication anding other strategies, we will offer global-level prod-

efficiency of our internal business processes.

ucts and services to meet the ever more diversified

During the current fiscal year, we intend to draw

and international requirements of our customers.

maximum benefits from these initiatives and moveWe intend to make the current fiscal year a peri-

decisively to implement proactive strategies for expansion. Aimed at achieving major leaps forward, these

od in which we take the first steps toward dramatic
growth aimed at achieving our goal of becoming

business policies are contained in our “Action CS”

the best bank in the middle and retail markets as

package, which is a part of our medium-term strategies.

well as becoming number one in terms of customer
satisfaction and profitability.
Approximately 26 million individual customers

Action CS: The First Step in Achieving
Dramatic Growth

have accounts with us, and about 90,000 SMEs and

The ultimate objective of Action CS is to enable us

middle market corporations have borrowings fromto become the best bank in the middle and retailus. The financial needs of both individuals andmarkets. “Action” is intended to express the strong

companies are becoming increasingly diverse andsophisticated. We intend to respond to these needs

determination of all senior executives and employees
to take appropriate action, and “CS” stands bothfor “Customer Satisfaction” and for “Consultingwith carefully tailored services based on improved

and Solutions.” In other words, “Action CS”

earnings-generating capacity appropriate to the vastmeans we are committed to offering consulting

customer base that supports our operations. To thisservices to individual customers and solutions toend, last fiscal year we embarked on making decisive

our corporate customers.

business and management reforms and adopted

cooperation within our group, while creating an

Action CS stands for the core set of specific strate-measures to create a highly profitable and highly effi-

gies and measures within our group's “Channel tocient business model that will earn the solid trust andsupport of our customers, based on our overwhelm-

Discovery” Plan, which was announced in April 2005,
and also within the medium-term business plan for
the Global Retail Group, which has Mizuho Bank at

ing strengths in providing information services.

13

Aiming to Be Number One in Customer Satisfaction and Profitability
Business Reforms
are strengthening our core businesses, enhancing

Strategies for the Individual Customer
Market: In Tune with the Everyday Lives of Our
Customers

profitability in the mass-retail sector, and rebuilding

Under our Active CS strategy for the individual cus-

our channel network. And as part of our aggressive

tomer market, we are focusing on the following

business strategy, we are dynamically and boldly

three elements.

allocating our resources.
To strengthen our core businesses, in the area

1. Improving our capabilities for providing consulting services to respond to the asset man-

The three principal pillars of our business reforms

of individual customer transactions, we are focusing on developing a consulting structure that willallow us to provide advice sufficiently for customers

agement needs of our customers.
2. Strengthening our promotion program forloans to individuals.

who purchase investment products. We will also

3. Consolidating our position in the mass-retailrespond broadly to customers' loan needs bymarket through our Mizuho Mileage Club andexpanding our Housing Loan Centers and conclud-other programs.

ing tie-ups with credit loan companies.

14

In corporate banking, we are stepping up ouractivities to respond broadly to the financing needs

Specific schemes include enhancing our line-upof quality products to meet a broader range ofof corporate customers, including promotion ofneeds, but we are also adopting a number of othernew transactions in the SME and middle market

approaches. For example, we are increasing thecorporation markets. We are also creating a struc-

number of financial consultants who can provide

ture for providing services that will position us asadvice in response to all kinds of consulting needs ofthe number-one bank in the solutions business.

customers. Thus far, we have trained about 1,000

In the mass-retail area, we are planning to contin-

financial consultants, and we plan to increase theue to expand our “Mizuho Mileage Club” member-number to 2,000 during the current fiscal year. We

ship service, which we introduced in August 2004,
and expand Club-related services that are even moreare also scheduled to expand the number of ourbranches with “Premium Salons,” where ourclosely tuned to the daily lives of our customers bycustomers can visit our consultants to receive

increasing the level and depth of our services.

advice, from approximately 70 at present, to about

To rebuild our channel network, we are creating250. Moreover, we are working with the securities

a new channel and branch structure that will allow

companies in our group and have set up their con-

us to provide tailor-made services to meet cus-sulting booths in about 50 of our branches. Plans

tomer needs and give us a foothold for further

call for increasing this number to approximately 100.

expanding the services we offer.

Similarly, in Internet brokerage transactions, we areManagement Reforms
The three main points of our management reforms areconcluding tie-ups with online securities companies
and plan to actively expand these services.

realigning our cost structure, reviewing the allocation

In the area of private banking, we began to offer

of our management resources, and making reforms

securities introducing agent services in December

in our human resources management structure.

2004. In addition, our group is planning to set up

Especially in cost reforms, we are conducting a

Japan's first full-fledged private banking company

thorough review of all operations and steadily mov-

“Mizuho Private Wealth Management,” in the fall

ing forward with cost reductions. However, to has-of 2005 and we will work closely with this new

ten the implementation of our strategy of improving

company.

customer services, we are allocating management
resources aggressively to bring increases in businessTo expand our unsecured loan business for individuals, we concluded an alliance with Orient

profits and make improvements in our cost ratios.

Corporation in July 2004 and are endeavoring to pro-

Human resources management reforms include

vide responsive, tailor-made services for our cus-strengthening our training regime and assigning per-tomers. In the area of housing loans, we have devel-sonnel to positions that are best suited to their abili-

oped a range of products that respond to differingties. In addition, we are placing more emphasis on

customer needs for interest rates. We have also

the active recruitment of mid-career professionals.

focused sharply on speeding up the loan approvalprocess and are taking other steps to improve related

The preauthorized transaction system involves inter-systems, just as we previously aggressively expanded

nally clarifying our transaction policy for each corpo-

our network of Housing Loan Service Centers.

rate customer beforehand, thus enabling us toIn the mass-retail market, as part of our Mizuho

respond quickly to customers' funding demands

Mileage Club services, in addition to our joint card

when they are made. In addition, in line with this pol-issued with the UC brand, we have also concluded
an alliance with Credit Saison and are working toicy, we are now setting targets for our share of lending to each corporate customer and offering appro-

expand related services. In addition, we have madepriate services to attain these targets. Along with

tie-ups with 14 companies in other industries andthis, we have drastically reviewed our credit approval

are endeavoring to expand our offering of services

process to speed it up and we have also expanded

useful to customers beyond the financial area.

our line-up of loan products to include a broader

Through our alliance with East Japan Railway,

range of unsecured loans that meet the needs of

we are scheduled to begin issuing a revolutionary

companies of all sizes and borrowing requirements.

IC card, the Mizuho Suica Card, that will combine

Also, for small enterprises, we have established thethe functions of ATM cards, credit cards, train tickets, and electronic money.

Mizuho Business Financial Center, a subsidiary specializing in lending to small-scale businesses that pro-To ensure that deposits placed with us by ourvides speedy and supportive services.

customers are held in safe custody as a matter of

We are also placing substantially greater empha-

first priority, we are working to significantly expand

sis on developing new transaction relationships andthe usage of IC ATM cards and are scheduled toare planning to expand the number of staff special-

introduce biometric systems to confirm the identity

izing in new business development from the cur-of cardholders.

rent 180 to 500.
In our solutions business, we are working toStrategies for the Corporate Customer
Market: Aiming to Be Number One in Shareof Transactions and in Providing Solutions

accumulate unique know-how and specialized
expertise to enter new business fields. Especially for

The key points related to corporate banking in ourour know-how in areas where we already have a

Action CS strategy are:track record in providing financing, such as syndi-

1. Increase business profits through expansion incated loans, financing for shipping, real estate andcorporate lending.

SMEs and middle market corporations, we are using

equipment, business matching and cross-referrals,

2. Establish our position in the SME and middle

and M&As. Looking forward, we plan to step up

market corporation markets as the number-recruitment of specialists and strengthen our service

one bank in terms of both share of transactions and solutions business.

delivery capabilities.
In April 2005, we entered into separate businesscollaborations with two of the best U.S. super-

As a result of our proactive efforts at corporate

regional banks, Wachovia and Wells Fargo, aiming torevitalization and preventing the emergence ofreinforce products and services internationalized toadditional NPLs, our credit costs have declined to a

the highest standard for our retail banking business.

low and stable level. We have, therefore, shiftedto a strategy of increasing business profits throughDrawing on the strengths of these partners, oursubstantial expansion in our loan portfolio, while

staff will exert their best efforts to attain the goal

continuing thoroughgoing measures to control risk.
Specific measures include the introduction of aof being Japan's best bank in the middle and retailmarkets. We look forward to your continued sup-preauthorized transaction system and a review of ourport and encouragement.

policy concerning the share of loans to customers.

We will respond to the diverse needs of our individual, SME and middle market
customers by drawing fully on the comprehensive capabilities of our group.
15Securities, Trust and Asset Management Business Strategies

and has raised its market standing to a position close

Basic Strategy for the Securities
Businessto that of Japan's major securities companies.
It has already established a top-level presence inthe area of M&A and other financial advisory services
for Japanese customers, and has a track record in

In addition to pursuing integrated banking and secu-

structured finance that puts it among the market

rities operations based on customer segmentation,

leaders in Japan.

the group's three securities companies—Mizuho

MHSC also aims to satisfy the diversified needs ofSecurities (MHSC), Mizuho Investors Securities (MHIS)

customers who are active at home and abroad by

and Shinko Securities—make the most of their capa-

offering seamless domestic and overseas businessbilities and advantages in order to ensure that theservices through its network of overseas securities

group can maximize its comprehensive strengths.

subsidiaries.

Integrated Banking and Securities
Operations

Mizuho Investors Securities

In the group's “Business Reorganization” implement-tion among group companies through establishinged in March 2003, MHSC was made a subsidiary of

100-joint-branches network with MHBK and starting

Mizuho Corporate Bank (MHCB) and MHIS a sub-securities brokerage business with MHBK (MHBK's

sidiary of Mizuho Bank (MHBK) with the aim of pur-securities introducing agents business) as well as IPO

suing greater synergies by strengthening cooperation

business with group companies. With this as its busi-

between group banks and securities companies inness promotion base, MHIS responds to customers'

accordance with customer segmentation. This resulted

asset investment needs by offering various securities-

in the creation of a framework for providing compre-

related products, and to funding needs of SMEs andhensive solutions that make the most of the respec-

middle market corporations by offering bond andtive functions of the banks and securities companies.

equity underwriting services and consulting services

MHIS is working to proactively strengthen coopera-

More specifically, MHCB utilizes the investment

in connection with their capital structure planning. In

banking function as well as the bond and equity-

this way, it aims to become the customer's first

related capabilities of MHSC to provide a broad

choice as the most trusted securities company byrange of new and more specialized products and ser-providing carefully tailored, high-quality products andvices for customers. MHBK offers its customers

securities services in a speedy manner.

MHIS's bond and equity-related functions and, by
jointly developing branches with MHIS, gives cus-

Shinko Securities

tomers the convenience of “one-stop shopping.”

Shinko Securities is a comprehensive securities company with a nationwide network that offers a fullStrengths and Characteristics of theGroup's Three Securities Companies

range of services from underwriting to brokerage.
Through dynamic and efficient cooperation withgroup companies, it uses its full-line functions to pro-

Mizuho Securities

vide individual customers, and SMEs and middle mar-

MHSC is a wholesale securities company that offers

ket corporations with a wide selection of financial

high-quality, specialized solutions in response to the

products and services.

wide-ranging needs of domestic and international
institutional investors, corporations, financial institu-

The three group securities companies aim to make thetions and public sector entities.

most of their strengths and characteristics, and maxi-

It occupies a top position among the major securities companies in the area of bond underwriting, andboasts a strong presence in bond sales as well. In theequity-related business, it offers a full range of services

16

mize synergies to develop a group presence thatmatches other major securities companies.

MHTB supports customers in formulating effective

Basic Strategy for the TrustBusinessbusiness strategies to deal with management issues
arising from changes in accounting and legal systems, including the introduction of impairment
accounting and revisions to the Company Law.

We recognize that the trust business is a growth sec-

MHTB will continue to identify customers' needs

tor and is working to deliver the best solutions toand to satisfy them by proactively developing newcustomers through Mizuho Trust & Banking (MHTB),

products and services, and creating new trust business.

which offers a full range of trust services, and Trust &Custody Services Bank (TCSB), which offers high-level

Trust & Custody Services Bank

custody services. MHTB quickly and accurately

Based on its advanced systems infrastructure andresponds to increasingly diverse and sophisticatedhighly transparent internal control systems, TCSB

needs of customers by offering various products andprovides financial institutions, institutional investors

services together with group companies through theand other customers with high-quality, high value-franchise system, and with external entities throughadded trust and custody services, and outsourcing

business tie-ups, opening up joint branches and hold-models for comprehensive asset administration ser-ing joint seminars with group companies.

vices. TCSB also responds to customers' high-level
custody requirements through participation in the

Mizuho Trust & Banking“account management institution business” devel-

MHTB accurately meets the diverse needs of cus-

oped in response to Securities Settlement Systems

tomers through original products and services thatand Infrastructure Reform in Japan, and through thedraw on the high level of expertise and rich know-

provision of securities lending services.

how it has built up over many years.
MHTB responds to the asset management andinvestment needs of a wide range of individual customers by offering consulting services in connection
with assets in general, including financial assets andBasic Strategy for the AssetManagement Businessreal estate. It also offers asset investment products
such as “Always” money trusts, which are based on
securitized automobile loan assets, and “Chochiku

In the investment trust and pension markets, we aim

no Tatsujin” automobile loan securitization productto become one of the world's leading players in

for individuals, and asset management products suchterms of both quality and assets under management.

as “Asset Management Trusts” for centralized management of financial assets.

Our asset management companies Dai-Ichi
Kangyo Asset Management, Fuji Investment

In the area of testamentary trusts, MHTB's experi-Management and DLIBJ Asset Management, all makeenced professionals have earned an excellent reputa-

the most of their individual specialties in offeringtion for their meticulous services and the bank has

high-quality products and services to both group andthe highest testamentary trusts entrusted in the sec-

non-group customers. In the distribution of invest-

tor. In January 2005, MHBK, a trust franchisee,

ment trusts, we offer a widely varied line-up of prod-entered the testamentary trust business, making it

ucts designed to meet the increasingly complex andpossible to offer this service to a larger number ofsophisticated needs of customers.

customers.

In the Japanese defined contribution pension busi-

For corporate customers, MHTB cooperates withness, we are channeling our total resources into pro-group companies in offering optimal solutions in suchviding solutions for corporate management issues by

areas as real estate, securitization, pensions, stock

supporting the formation of assets for individuals totransfer agency business and asset management. In

enjoy in their retirement.

particular, through its sophisticated consulting services,17

Advanced Financial Services of Mizuho
Business Outline of Mizuho
We precisely and swiftly provide products,
services and business solutions to meet the diversified financial needs of our customers
by actively pursuing group synergies.

Adopting an Asset Turnover-BasedBusiness Model

MizuhoSecurities (MHSC)

Ongoing Evolution of the Solutions
Business

Securities
Business

Implementation of International
Business Strategies
Corporate Revitalization Entersa New Phase

ProvidingCutting-Edge
Solutions

Approach to Securities and Investment
Banking
Business Alliance with Nikko Cordial
Group and Nikko Cordial Securities
Using Alliances

Mizuho Corporate Bank(MHCB)MHCB focuses its efforts on corporate
finance, primarily serving large
corporations (such as those listed on
the first sections of domestic stock
exchanges), financial institutions andtheir group companies, public sector
entities, and overseas corporations
including subsidiaries ofJapanese companies.

A wholesale securities
company whose customers
are institutional investors,
corporations, financial
institutions and public
corporations.

MizuhoInvestors
Securities(MHIS)A securities company
that focuses on serving
the group's customers.

MizuhoTrust & Custody
Trust and
Trust & Banking Services Bank
Asset
(MHTB)(TCSB)
A trust bank thatManagement possesses
strengths
A highly specialized
in both theBusinesstrust bank focusing on
corporate andindividual markets.

the custody business.

ShinkoSecurities
A comprehensive
securities company that
focuses on the middle
and retail markets.

DefinedContribution
Plan Services(DCPS)
An entity that specializes
in managing defined
contribution pension plans.

Trust Business

Dai-IchiKangyo AssetManagement
(DKA)

Fuji
Investment
Management(FIMCO)DLIBJ AssetManagement(DIAM)

Expanding Middle Credit Risk Lending

An assetmanagement company.

An assetmanagement company.

An assetmanagement company.

MizuhoAdvisory

MizuhoCorporate

MizuhoGlobalMizuhoProject

MizuhoAsset

An advisory company
with state-of-the-art
know-how concerning
corporate
revitalization.

A financial subsidiaryfor corporate
revitalization.

A financial subsidiaryfor corporate
revitalization.

A financial subsidiaryfor corporate
revitalization.

A financial subsidiaryfor corporate
revitalization.

MizuhoResearch
Institute(MHRI)

MizuhoInformation &Research Institute(MHIR)

MizuhoCapitalMizuhoFactors

A think tank.

An IT-relatedcompany.

A principal
venture capitalcompany.

A factoring company.

Alliance with Orient Corporation

Targeting SMEs andMiddle Market
Corporations

Expanding the Mizuho Business Financial
Center Network

Corporate
Revitalization
Business

Becoming the Top Bank in Providing Solutionsfor SMEs and Middle Market Corporations“Mizuho Mileage Club” Membership
Services Enhanced

Mizuho Bank(MHBK)

Alliance with Credit Saison
Alliance with JR East

Approaches
to Individual
Customers

MHBK serves primarily individuals,
SMEs, and middle market
corporations, and local governments
in Japan.

Other
Businesses

UC Card
A leader among
credit cardcompanies in Japan.

Mizuho's Security Policies
Aiming for No. 1 in Consulting Services
Personal Loans

Overseas
Subsidiaries

Banking Subsidiaries
Derivatives Subsidiaries
Securities Subsidiaries
Trust Banking
Subsidiaries
Asset Management
Subsidiaries

Alliance with Orient Corporation*Note: DKB Information Systems, Fuji Research Institute Corporation and IBJ Systems
were merged to create Mizuho Information & Research Institute on October 1, 2004.

18

19

Advanced Financial Services of Mizuho

Targeting Businesses through Customer Segmentation

Providing Cutting-Edge Solutions
We utilize the group's comprehensive financial services capabilities to provide corporate
customers with cutting-edge solutions.
MHCB, for example, engages in a wide range of financial services on a continuing, multifaceted basis by mobilizing the entire line-up of banking, securities and trust products
offered by the group while adopting a business model based on asset turnover.
MHSC operates as a wholesale securities firm and has established a top-class position in
the bond and equity businesses, M&A and other areas of the financial advisory business,and structured finance. It offers high-quality products and services to satisfy customers'
needs at all times.
As the need for trust services increases, MHTB utilizes its sophisticated expertise to provide trust services to group and non-group companies, and is especially strong in areas likereal estate and asset backed finance (securitization of monetary claims, etc.).

Adopting an Asset Turnover-Based Business Model
Syndication Business Grows in Sophistication
As the preeminent institution in the area of Japan's syndicated loan market, MHCB has been keen and active inpromoting the recent rapid expansion of the market. We provide high value-added services by making active use of
the syndication function to meet all aspects of corporate financial needs. Examples include cross-border syndicatedloan deals timed to take advantage of revisions in the U.S.-Japan Tax Treaty, large LBO transactions and financial
solutions for total debt restructuring aimed at increasing corporate value. Through its commitment to a proactive
involvement in the syndication business as a means of satisfying the needs of both corporate customers and financial institutions, MHCB is seeking new modes of corporate finance that go beyond traditional methodologies.
In order to establish the “originate to distribute” business model (i.e., asset turnover-based business model)
going forward, MHCB set up the Loan Trading Division in October 2004 to reinforce its specialist team, which is
responsible for market-making and broking of loan assets. It has been proactively engaged in expanding the loan
trading market, starting with the arrangement of “high-liquidity loans” providing indications of loan pricings on adaily basis in November 2004, and developing the first investment trust in Japan to incorporate domestic syndicated loans with a view to expanding the investor base in March 2005. It will continue its involvement in various businesses designed to increase the liquidity of loan assets.
Mechanisms of the Syndicated Loan Market and the Loan Trading Market
 Diversification of portfolios
 Diversification of borrowing sources and investment instruments
 Realization of fair borrowing costs

Increasedliquidity ofloan assets

Further expansion of the syndicated loan market (primary market)

A front-runner in both markets, MHCB promotes market-oriented indirect financing.
Improvement and expansion of the loan trading market (secondary market)
Arrangement ofloan assets suitable
for loan trading20 Enhanced flexibility of portfolio management
 Securing returns that match risks
 Greater borrowing capacity/Evolution of risk diversification effectLoan Trading
DivisionestablishedSophisticated Portfolio Management
MHCB is making efforts to enhance the sophistication of its portfolio management, recognizing it as one of theimportant pillars of its “originate to distribute” business model alongside its syndication business. Specifically, it isworking to streamline and improve risk-returns on its overall credit portfolio and has established a portfolio management division within its Financial Control & Accounting Group to realize these objectives. The division makes
use of the loan trading market to strategically buy or sell loans in response to changes in the status of the entire
portfolio of the macro economic situation, i.e., making investments to diversify credit risk and eliminating loans
which are recognized to have an excess concentration of credit risk. MHCB will continue utilizing the credit market
in an attempt to appropriately control credit risk and increase the value of its credit portfolio.

Ongoing Evolution of the Solutions Business
Solutions Business Helps Raise Corporate Value
As part of its continuing evolution, MHCB seeks to respond speedily and appropriately to the financial and management needs of large companies that are rapidly adapting to changes in the business environment. In the solutions business, it endeavors to contribute to raising corporate value for customers. To this end, it is working closely to mobilize all
the banking, securities and trust product lines offered by other group companies, including M&As, syndicated loans and
CMS. In this way, it is striving to add speed and depth to its “deal after deal” marketing approach, which offers thewidest range of financial services on a continuous, multi-faceted basis.
Another issue is the fact that financial institutions must enhance their risk-taking capabilities and rebuild their riskintermediation functions in order to meet the increasingly sophisticated and diversified financial needs of customers. To
respond to customers' business and project needs, MHCB is putting considerable effort into upgrading its lending business by setting up new schemes for breaking down and processing the risks involved.

Trend Setting Products
 Acquisition Finance BusinessWe offer solutions to customers' business restructuring needs through advisory services pertaining to corporate andbusiness acquisitions, and the arrangement of funding. Specifically, we arrange LBO loans and non-recourse loansthat collateralize the cash flows of the firms and businesses targeted for acquisition. The group boasts the best
track record in the acquisition finance business and operates globally.
Mizuho Corporate Advisory and Mizuho Capital Partners provide advisory services in connection with MBOs andfinancial strategies, as well as investments through an MBO fund. In April 2005, Mizuho Corporate Advisory and
MHBK jointly established Mizuho Management Advisory as an MBO advisory company for SMEs and middle market
corporations.

 Structured FinanceOur excellent record in satisfying customers' funding needs domestically by providing ABCP (asset-backed commercial paper) and using asset securitization to improve their management indices puts us in the ideal position to support customers in realizing their financial strategies. We offer wide-ranged securitization solutions for customers
with a variety of assets including future receivables and intellectual property rights centered on accounts and notes
receivable, as well as sophisticated, specialist products and solutions to meet investors' needs for the use of syndication methods.

 Real Estate Non-recourse Loans
Our support for customers' financial strategies in the area of real estate assets extends from the arrangement ofreal estate non-recourse financing to support for real estate development and acquisition projects, and thehandling of accounting for impairment of fixed assets.
We are playing a proactive pioneering role as a leading player in putting together mezzanine finance deals and21

Advanced Financial Services of Mizuho

Targeting Businesses through Customer Segmentation

large-scale development finance projects associated with urban renewal, such as the Tokyo Midtown Project for
redeveloping the site where the Japan Defense Agency offices once stood.

 Defined Contribution Pension BusinessAs a front-runner in the defined contribution (DC) plan business, we provide a wide range of services, such as
reorganization of pension schemes, new DC plan designs, and actual plan administration utilizing human resources
and providing financial solutions.
Specifically, we offer high value-added services which meet the needs of corporate customers and DC plan
participants, such as plan design consulting, back-office outsourcing for Group DC plans, unified administration of
DC and defined benefit pensions, the Mizuho “SogoGata (comprehensive package)” DC Plan and the “Mizuho
Personal DC Plan.”
We will continue our proactive efforts to develop this business by providing valuable information and leadingedge services, with a view to making Mizuho the first choice as partner for any pension plan.

Evolution of e-BusinessWe provide convenient, highly advanced e-solutions to respond to the settlement and cash management needs ofincreasingly sophisticated, globalized customers.

 Mizuho Advanced CMS
Mizuho Advanced CMS is a financial management system for realizing strategic management of group finances on
a consolidated basis.
The system allows flexible tie-ins with centralized group payment and collection operations and schemes toreduce the number of promissory notes issued, as well as management of borrowing among group companies. We
also offer CMS advisory services based on the rich experience we have gained in installing a large number ofsystems, and we offer comprehensive fund management solutions by proposing effective operational methods andconstructive utilization methods.

 Mizuho Global CMS
Mizuho Global CMS offers more efficient cash management to customers with overseas offices. As of the end of
March 2005, this service was offered around the clock in Japanese, English, Chinese and Thai through 22 offices in
15 countries. In Europe, integrated fund management services are offered in an alliance with ABN AMRO Bank andcross-border pooling services and netting services are due to start within 2005.
In China, we are the only Japanese bank to have obtained authorization to offer Internet banking, and in
addition to providing data in the Chinese language, we are working to provide more responsive services throughdata links with ERP (Enterprise Resource Planning) software from a major Chinese software vendor.
Mizuho's CMS Network
Mizuho e-Business Site
Mizuho Advanced CMS
Fund Management Services
Best Receiver
Firm Banking

Improving the efficiency of overseas fund operations
Overseassubsidiaries

Check balances andmove funds in overseas
accounts fromdomestic head office

Overseas affiliates
Overseas affiliates

Overseas regional
headquarters
Branches

Subsidiaries

Branches

Centralizing fundmanagement athead office

Customer's
head office

Various products toimprove efficiency offund operations
Subsidiaries

Improving the efficiency of domestic fund operations

22

Overseassubsidiaries

Mizuho Global CMS

Overseas affiliates Internet Banking—Mizuho e-Business Site
The Mizuho e-Business Site opened for business as an Internet banking service for corporate customers in April
2005. Already offering various services pertaining to foreign exchange and forward exchange contract transactions
over the Internet, domestic exchange transactions and electronic tables are due to be added during fiscal 2005,
with further phased expansion planned thereafter. Using these services as a platform, we will develop this into afull-fledged Web service offering great convenience and high value-added services.

 Expanding Peripheral Fund Settlement and Administration Services
Mizuho e-Market Financial is the first e-procurement scheme set up by a Japanese bank to reduce purchase costs
by combining services ranging from customers' materials procurement and purchasing operations to fund settlements into a single package. Mizuho Shared Service Solution provides strategic support for accounting and peripheral settlement operations to realize a unique comprehensive solution in a linkage with CMS.

Support for Business Risk Control
In the sales and trading business, we are working to solidify our market reputation as a “solutions provider” byoffering risk hedging schemes employing derivatives and optimal solutions that use cutting-edge financial
technologies to satisfy customers' diversified financial and business risk control needs. The line-up has expandedfrom interest and foreign exchange products to commodity derivatives like oil, metal and weather.
Moreover, in a tie-up with Mizuho-DL Financial Technology, a group company specializing in the developmentof financial technology, it is introducing sophisticated risk control methodologies that incorporate dynamic foreignexchange hedges, as well as ALM and correlation analyses and financial engineering approaches.
Glossary
Dynamic foreign exchange hedges
A statistical/probabilistic exchange risk hedging method that eliminates market views and arbitrariness.

Business Risks in the Balance Sheet and Corresponding Solutions
AssetsInvestment products(Interest and currency options)

Cash and Deposits

Risk hedges against uncollectibles(Credit derivatives)

Receivables

Inventory price fluctuation risk hedges(Commodity derivatives)

Inventories

Foreign exchange, interest rates
and stock price risk hedges(Currency/interest rate swaps,
equity derivatives)

Securities,
Loan Receivables,
etc.

Real estate securitization tools(Interest rate swaps)
Risk hedges against earthquake damage
to facilities

Tangible Fixed
AssetsRisk hedges against uncollectibles(Credit derivatives)
Securitization tools(Interest rate swaps)

Guarantee
Money Paid

Liabilities
Borrowings,
Bonds

Improvement in financial balance
Interest rate risk hedge
Bond issue cost contracts
Foreign bond hedges(Currency/interest rate swaps,
interest rate caps)

Reserves

Tools for removing pension liabilities
off the balance sheet and making
effective use of stock holdings(Equity derivatives)

CapitalCapitalCurbing fluctuations in the exchange
adjustment account(Currency swaps)
Hedges against weather-based
earnings deterioration risk
(Weather derivatives)

Solutions for Financial Institutions and Public Sector Entities Financial Institutions
To date, MHCB has strengthened its product line-up to include syndicated loans, investment trusts, derivatives,
foreign exchange and securities lending programs. In addition, it has taken advantage of the removal in 2004 of
the ban on banks engaging in the securities introducing agents business and since April 2005 has been building up
a joint securities sales framework with group securities companies. To a greater extent than ever, it can now offer

23

Advanced Financial Services of Mizuho

Targeting Businesses through Customer Segmentation

more robust, more appropriate solutions to the increasingly sophisticated and diverse needs of investors in suchareas as financial strategy and risk management. Nor do its efforts stop at providing products. With an eye on the
launching of the Book-entry Transfer System for “Corporate Bonds” of JASDEC (Japan Securities Depositary Center)in 2006, it has been putting effort into providing infrastructure by making overall asset management support
available to its financial institution customers. Among other things, this has included accepting entrustment of thecustody operations of TCSB and the issuing and paying agency business.
As customers switch to more aggressive management approaches, we seek to channel the group's financial
functions into proposing even better quality advisory services and solutions to management issues such as capital
policies, the removal of assets off the balance sheet and alliance strategies.

 Public Sector Entities
As special public corporation and government FILP (Fiscal Investment and Loan Program) reforms move ahead,public sector entities face growing needs in such areas as structuring private sector-type finance schemes andincreasing the sophistication of their market risk management.
In response, MHCB endeavors to propose optimal solutions by utilizing research and analysis capabilities thatbring together group know-how and financial technologies such as syndicated loans and derivatives.
In the public bond market, MHCB provides issuers with stable support for funding using its strong record andrich experience as the leading bank in the sector.

Implementation of International Business Strategies
As a leading financial institution in Japan, we offer domestic and overseas customers engaged in global businessactivities the best available solutions by dynamically combining our rich experience in overseas markets with ourpowerful overseas network and our cutting-edge financial products.

Mizuho's Strong Presence in Asia
We are strategically focusing management resources on Asia, where Japanese companies are highly active in developing their business and which we see as our home ground. In May 2005, MHCB further strengthened its solutions
capabilities and increased convenience for customers by establishing the Asia Corporate Banking Division in Singaporeand Hong Kong to bring together its syndication, structured finance, CMS and other product-related functions.
The pace of our customers' business development in China has significantly increased, and we have effectively
supplemented one of the largest networks of any Japanese bank in China through business cooperation agreements with several powerful Chinese local banks and the
local governments of Beijing, Shanghai and elsewhere, creat-

Performance as an Arranger of European
MBOs (LBOs)(2000-2004)

ing a framework to provide close support for our customers'

Ranking Company namebusiness efforts throughout the country. In Japan, we estab-

1

Royal Bank of Scotland

173,506287

lished the China Business Promotion Division within MHCB

2Bank of Scotland

129,984

213

3

HVB Group

102,473137

4

Barclays

97,338146

China, and have established a solid reputation among cus-

5

Calyon86,687152

tomers as an expert in the field.

6

Mizuho Financial Group

66,54787

7

SG Corporate & Investment Banking

65,661126

8

Lloyds TSB Capital Markets

65,397100

9BNP Paribas

61,846

115

10

ING

60,353107

In the Americas and the European markets, we make strate-

11

JP Morgan

57,84373

gic use of flexible relationships with external financial institu-

12

Allied Irish Banks plc

52,96269

tions to offer syndicated loans and various other advanced

13

Deutsche Bank AG

52,450

57

14

Citigroup Inc

51,730

40

15

HSBC

51,34287

to offer comprehensive advisory services on doing business inApproach to the Americas and the European
Markets

products proactively to customers engaging in business at
the global level. In the European MBO market, for example,

24

Amount (millions
No. ofof U.S. dollars) transactions

Source: Dealogic Loanware League Table

the group not only holds a top-tier position but is also active in putting together securitization products such as
CDOs (Collateralized Debt Obligations) that use advanced financial technology. Moreover, we are introducing thetechnologies built up through these activities into Japan and using them in developing financial products that better match our customers' needs.

Corporate Revitalization Enters a New Phase
During fiscal 2004, we materially resolved our NPL issues when we achieved the target set by the Financial
Revitalization Program of halving our NPL ratio. In light of this achievement, MHCB established the Credit
Engineering Division in April 2005 to bring together the highly specialized know-how we accumulated during thecorporate revitalization process to promote and support business that focuses more on enhancing corporate value
and improving market confidence. The new division is engaged in the strategic and highly expert operations necessary to achieve higher corporate value for customers.
Specifically, it is actively engaged in setting up business revitalization schemes, calculating corporate value andsupporting feasibility studies on refinancing and capital policy measures, as well as arranging CLOs (Collateral Loan
Obligations), putting together new schemes to make use of the markets, and tackling as yet unexplored businessareas. When bringing deals to fruition, MHCB contributes to creating corporate value for customers in keeping with
its aspirations as an “open financial conglomerate” by making use of MHSC and other group resources while at thesame time working in broad-based cooperation with foreign investment banks and various types of equity funds.

Approach to Securities and Investment
Banking

Domestic SB League Table(Excluding bank debenture, self-led issues,
retail targeted)

Aiming to become a Market Leader in the
Securities and Investment Banking Businesses* Underwriting amount basis. Total Amount ofIssues: ¥6,327.6 billion (April 2004 - March 2005)

MHSC operates as a wholesale securities firm that offers

Ranking Company name

Underwriting(billions of yen)

Marketshare (%)

1

Nomura Securities

1,223.8

19.34

optimized solutions in the areas of securities and investment

2

Daiwa Securities SMBC

1,154.4

18.24

banking in response to the needs of domestic and interna-

3

Mizuho Securities

1,101.1

17.40

tional institutional investors, corporations, financial institu-

4

Nikko Citigroup

793.5

12.54

5

Mitsubishi Securities

454.2

7.18

6

Goldman Sachs

397.4

6.28

tions consist of the debt, the equities, and the investment

7

Morgan Stanley Securities

259.2

4.10

banking businesses placing financial advisory business, such

8

UFJ Tsubasa Securities

204.8

3.24

as M&As as well as structured finance operations such as

9

Shinko Securities

155.1

2.45

10

Merrill Lynch Japan Securities

148.5

2.35

tions and public sector entities. The three pillars of its opera-

ABS, as its core. Based on this, and making the most of its

M&A Advisory Ranking(Japanese target, any acquirer nation, deals completed)* League table based on number of deals (January 2004 December 2004)
No. ofAmount (millions
Ranking Advisor
transactionsof U.S. dollars)

Source: I-N Information Systems

Overall ABS Bookrunner League Table(ABSs backed by assets in Japan: Domestic
public and private bonds and Eurobonds)* Settlement date basis (April 2004 - March 2005)
Ranking Company name

No. ofAmountMarketissues (billions of yen) share (%)

1

Mizuho Financial Group

109

9,168

1

Mizuho Financial Group

15

335.2

17.6

2

Nomura108

24,271

2

Merrill Lynch

6

330.0

17.3

3

Daiwa Securities SMBC

88

18,044

3

Shinsei Bank

9

312.3

16.4

4

Mitsubishi Tokyo Financial Group

65

8,577

4

Nomura Securities

5

219.9

11.6

5

Nikko Cordial Securities

55

505

5

Daiwa Securities SMBC

8

213.4

11.2

6

UFJ Holdings

49

3,693

6

Lehman Brothers

5

117.5

6.2

7

KPMG Corporate Finance

32

4,751

7

Citigroup

4

100.0

5.3

8

Merrill Lynch

25

8,020

8

Goldman Sachs

3

90.0

4.7

9

ChuoAoyama Audit Corporation

20

1,364

9

Morgan Stanley

2

80.0

4.2

10

PricewaterhouseCoopers

19

1,282

10

CS First Boston

2

74.2

3.9

10

Citigroup

19

8,236

Source: THOMSON DealWatch*Figures for Mizuho Financial Group are the aggregate figures for MHSC
and its overseas securities subsidiaries

Source: Thomson Financial

25

Advanced Financial Services of Mizuho

Targeting Businesses through Customer Segmentation

high-quality human resources and advanced financial technologies, it offers customers high value-added products
and services at all times. It has established a top-class position for itself in many sectors, and competes with the big
firms of Europe and the U.S. as a professional house at the global level through its bases in New York, London,
Zurich and Hong Kong.
In fiscal 2004, MHSC posted Ordinary Profits of ¥50.2 billion on a consolidated basis, and set a new record for
Ordinary Profits on a non-consolidated basis. It remains committed to its goal of becoming a leading investmentbank in Japan.

Strengthening the Equities Business
Since bank securities subsidiaries were allowed to engage in the equities business in October 1999, MHSC has
streamlined and strengthened its full line-up of equity-related services.
In the area of sales and trading operations, it is extending the range of stocks the research division covers, offering high value-added IR services, and working through its global network to secure trading orders for sales ofJapanese stocks. In the process, it is steadily increasing its presence in terms of broker rankings and share ofturnover on the Tokyo Stock Exchange. It is also building up its capabilities for offering solution services in suchareas as basket trading and block trading, and execution services based on its sophisticated systems.
In the area of equity underwriting, backed by a highly experienced staff, superior financial technology and enormous selling power at home and overseas, it offers solutions for dealing

Domestic Public Offering League Table* Underwriting basis, including REITs. Total Amount ofIssues: ¥2,383.2 billion (April 2004 - March 2005)
Underwriting(billions of yen)

Marketshare (%)

Nomura Securities

524.9

22.03

Daiwa Securities SMBC

509.0

21.36

3

Nikko Citigroup

425.3

17.85

deals in which it acts as lead underwriter. It will continue work-

4

Mizuho Securities

183.6

7.70

ing to win large lead manager deals by further strengthening

5

Mitsubishi Securities

156.4

6.56

with customers' needs in areas such as IPOs, and primary and

RankingCompany namesecondary offerings of stocks, thus steadily improving its per-12formance by, among other things, increasing the number of

its sales organization with a view to enhancing its reputation.

Source: I-N Information Systems

Business Alliance with Nikko Cordial Group and Nikko Cordial Securities
In January 2005, MHCB, MHSC, the Nikko Cordial Group and Nikko Cordial Securities signed a formal businesscooperation agreement for the purpose of cooperating in complementing each other's operations by utilizing eachother's business know-how and customer base.
More specifically, MHSC, Nikko Cordial Securities and Nikko Citigroup will undertake a phased expansion of
their cooperation in equity underwriting and marketing activities with a view to greatly expanding their presence inthe market by making services that utilize their respective strengths available to customers.
MHSC and Nikko Cordial Securities will also broaden the range of cooperation to cover alliances for providing
products, and cooperating in principal investments and other securities-related areas.
Following the signing of this business cooperation agreement, MHSC's parent MHCB acquired 94 million sharesof Nikko Cordial Corporation's treasury stock in January 2005.

Approach to Principal Finance Business
MHSC has adopted a proactive approach to its principal finance business as part of its efforts to diversify its earnings from the investment banking business. Focusing on its broad customer network, it will search for investment
deals and expand its investments in unlisted stocks.
In April 2004, it established the Principal Finance Strategies Office to promote private equity and other investment operations. In September 2004, it established Polaris Principal Finance as a private equity fund managementcompany in a joint venture with DIAM. Together with Japan Industrial Partners, which has already compiled an
impressive record in corporate reorganization deals centered on strategic carve-outs (spin-offs of business divisions

26

from companies), this has strengthened its ability to deal with a wide range of investment deals.
By strengthening its principal finance business, it will endeavor to secure more business opportunities centeredon IPOs, M&As and other equity business associated with the fund's investment targets.
GlossaryPrincipal FinanceThis kind of investment activity uses Mizuho's own funds to realize earnings through strategic investments made from a medium- to long-term perspective.

Using Alliances
MHSC participates in alliances designed to strengthen its business promotion base and selling power, and expand
its operations as a wholesale securities firm.
Since completing the transfer of the entire business operations of Norinchukin Securities in March 2004, it has
been providing financial institutions connected with agricultural cooperatives throughout Japan with a wide range
of investment products, including investment trusts and bonds. In September 2004, MHSC accepted ¥74.9 billion
in capital from The Norinchukin Bank with a view to expanding its ties with the Bank and financial institutions
connected with agricultural and forestory cooperatives, while further strengthening its own business base andprofitability.
In August 2004, MHSC concluded business cooperation agreements for the entrustment of equities sales with
Monex Securities, Nikko Beans Securities and Monex Beans Holdings (MBH). This alliance enabled MHSC to broaden
its equities-related business base by expanding its sales channels, centered on MHSC's IPO-related lead manager
transactions, to retail customers who utilize the MBH Group's on-line trading system, one of the best in Japan.
It is proactively engaged in the securities introducing agents business to contribute to strengthening its sales of
equities and bonds in the future, and as of the end of March 2005 had alliances with three regional banks.
MHSC concluded a business alliance with Resona Bank in connection with M&As in March 2004, and set up acooperative arrangement on cross-border M&A deals between Japanese and European firms with UBS Securities
Japan in May 2004. In this way, it is further strengthening its already first-class presence in the M&A business bymaking use of both its allies' and our group's customer bases to create new business opportunities.

Trust Business
Expanding the Trust Market
The business environment is changing substantially as a result of alterations to the legal system and reforms of theaccounting system. This increases the number of opportunities for providing solutions that use trust functions tocope with the planned mandatory application of impairment accounting, or revisions to corporate pension schemes.
Furthermore, the December 2004 revisions to the Trust Business Law abolished restrictions that formerly limited
the number of assets that could be placed in trust to six, including money and land. As a result, it is now possible
to entrust intellectual property rights such as patents and copyrights. For all practical purposes, only financial
institutions were originally allowed to participate in the trust business, but it has now been opened up to generalbusiness corporations, and the scope for adopting the franchise system for trust businesses has been expanded.
This means the trust mechanism has come into more general use and the market is expected to grow further.
MHTB sees expansion of the trust market as a new business opportunity and will provide customers withsophisticated trust solutions.

Approach to Real Estate Securitization
In recent years, real estate securitization has come into increasingly active use. Contributing factors include thegrowing need to make more efficient use of assets, the diversification of fund investment and procurement needs, andthe overhaul of strategies relating to real estate holdings in response to the introduction of impairment accounting.

27

Advanced Financial Services of Mizuho

Targeting Businesses through Customer Segmentation

Fully utilizing the know-how it has built up over many years, MHTB is
engaged in a wide range of securitization deals involving office buildings andcommercial facilities. At the same time, it is proactively engaged in real

Securitized Assets (Real Estate)under Administration as Trustee(Trillions of yen)4

estate development methods that utilize securitization mechanisms. MHTB's
capabilities and performance in arranging real estate securitization deals

3

have earned high marks among rating agencies and foreign investors. As ofthe end of March 2005, it boasted the highest balance of securitized assets

2

under administration as trustee with a total in excess of ¥3 trillion.
It will put forward sophisticated proposals that will satisfy all real estate1

needs by making the most of the overall strengths generated through the
combination of its arrangement capabilities and financial functions.

0March 2003

March 2004

March 2005

Approach to Securitization of Monetary Claims and Other Claims
MHTB makes full use of its trust functions in developing stable asset
financing schemes on an order-made basis, and in proposing them to its
customers. Utilizing the high-level structuring capabilities it has built up on
the basis of its performance as the institution with the highest share of
entrustments in the trust business, MHTB proposes various solutions to

Securitization of Monetary Claims
and Other Claims

customer needs for fund procurement, cutbacks in assets and liabilities and(Trillions of yen)

6

better financial indices. At the same time, it provides investors with newinvestment instruments in the form of asset securitization products. In

5particular, outstanding sales of its “Chochiku no Tatsujin” automobile loan

4

securitization product for individuals broke through the ¥500 billion mark3

just two years and eight months after the product was launched.
MHTB is proactively developing new products to satisfy the growing

2

variety and sophistication of customer needs, including funding schemes

1that use music copyrights, Japan's first-ever software copyright trust and0animation copyright trusts.

March 2003

March 2004

March 2005

Pensions Business
The move to reform corporate pensions triggered by the introduction of
accounting standards for retirement benefits is now underway in earnest
following the passage of the Defined Benefit Corporate Pension Law and theDefined Contribution Pension Law. As Japan's structural reforms progress,
and responses to globalization become necessary, corporate pension
schemes are increasingly in need of drastic reform as companies reassess

Retirement Benefit Funds under
Administration as Trustee(Directed money trust for separate
investment + Pension trust + Pension
specific money trust)their human resource programs, strengthen their measures against financial(Trillions of yen)risk, and move ahead with corporate realignments.

17

MHTB responds to customers' broad-based needs as a pension trustee
offering full services ranging from pension planning and consultation topension asset management. In cooperation with Mizuho Pension Research

16

Institute, MHTB provides ALM consultation and risk management services
through highly experienced professionals equipped with the best know-how

15

in the business.
As a “Best Solutions Partner” in the area of corporate pensions, MHTB
will continue to offer appropriate high-quality services and products.

28

0March 2003

March 2004

March 2005

Targeting SMEs and Middle Market Corporations
SMEs and middle market corporations need stable lending responses and answers to management problems. We are responding by making the most of the high levels of expertisepossessed by each group company in our proactive efforts to increase lending and enhance
the solutions business.
Having resolved its NPL and other financial issues, MHBK has switched from a strategy ofraising profits by cutting credit costs to one of raising profits by increasing lending. At thesame time, it has boosted its efforts to promote the solutions business in order to become
the top bank, both in terms of share of transactions with SMEs and middle market corporations, and in terms of providing solutions to them.

Expanding Middle Credit Risk Lending
MHBK is in the midst of switching its lending strategy away from a focus on low credit risk loans towards anincrease in middle credit risk loans (loans offering high returns after adjusting for risk).

Alliance with Orient Corporation
In July 2004, MHBK agreed to form a business alliance with the Orient Corporation (Orico), a major credit sales
company. The main aims of the tie-up are to strengthen financing functions for individuals, SMEs and middle market corporations, and to increase good quality personal loans to individuals.

Launching New Loan Products for SMEs
MHBK is making use of the credit enhancement capabilities offered by Orico and the debt servicer know-how
offered by Japan Collection Service, a member of the Orico group, to develop a number of loan products for SME
customers. On an execution basis, it has already extended loans in excess of ¥250 billion.
This was realized by developing the three breakthrough products that manage risks for the entire product portfolio. “Mizuho Long Partner” provides unsecured working capital for up to seven years, “Mizuho Rising Partner” provides loans to smaller companies with growth potential, and “Mizuho Support 30” assists relatively small-scale companies. Of these, “Mizuho Long Partner” responds to the needs of companies planning IPOs. So long as they meetcertain criteria, guarantees from a customer's representative director are not necessary.
MHBK intends to respond speedily to the financing needs of a wide range of corporate customers by developing
more unsecured loan products in cooperation with Orico.
Sales Performance of Four Products Developed by Mizuho(Billions of yen)
300

(No. of deals)
4,500“Mizuho Support 30”
launched
Amount (execution basis)
No. of transactions

4,000“Mizuho Rising Partner”
launched

3,500

200

3,000

“Mizuho Long Partner”
launched

2,500
2,000

100

“Mizuho Growing Partner”
launched

1,500
1,000
500

0

Jul. Aug.
2003

Sep.

Oct.

Nov.

Dec.

Jan. Feb.
2004

Mar.

Apr.

May.

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan. Feb.
2005

Mar.

0

*Sales of “Mizuho Growing Partner” terminated at the end of September 2004.

29

Advanced Financial Services of Mizuho

Targeting Businesses through Customer Segmentation

In the second half of fiscal 2004, more proactive efforts to increase middle credit risk lending in particular resulted in an increase of approximately ¥420 billion in loans (including private bond issues), and an expansion of market
share. In the area of transactions with new customers, too, it mobilized more staff to specialize in new loans andstrove to increase new lending, with the result that lending increased by around ¥570 billion in fiscal 2004.
In order to strengthen its ability to take risks proactively without relying on collateral, it strengthened its line-upof unsecured loan products and launched its new ¥1 trillion “Super Wide” strategic loan fund in October 2004.
Standardizing screening procedures that focus on customer cash flow have made it possible to make speedy decisions on extending up to ¥500 million in unsecured loans for a maximum of five years.
MHBK has adopted a proactive approach to meeting customers' funding demands by expanding the “Partner
Series” of unsecured loan products and offering various fund procurement schemes as a means of satisfying thevaried needs of SMEs and middle market corporations.

Expanding the Mizuho Business Financial Center Network
MHBK has concentrated its overall lending operations for small-scale companies in the Mizuho Business Financial
Center, a subsidiary specializing in lending, and is proactively engaged in extending loans to small-scale businesses.
During fiscal 2005 it plans to enhance the network aggressively by increasing the number of centers from 19 at
the end of March 2005 to 100 by the end of the fiscal year. Increasing the number of staff with expertise in thelending business to 600, it is promoting loans with guarantees by the Credit Guarantee Corporation, as well as salesof the “Mizuho Advance Partner,” an unsecured loan product that uses an automatic credit-scoring model.
Mizuho Business Financial Center specializes in small-scale enterprises and is manned by veteran staffers, so it iswell-positioned to continue offering carefully tailored responses, including helpful business consultations and guidance on policy-based loans.

Becoming the Top Bank in Providing Solutions for SMEs and Middle Market
Corporations
Enhancing Solution Business Promotion
Working as the Mizuho Business Supply Chain, a team of approximately 300 MHBK professionals specializing in corporate banking is working together with its branches to provide solutions that make the most of the bank's expertise as a specialist in transactions with SMEs and middle market corporations.
The solutions offered are very diverse, ranging from financing deals in areas like structured finance and syndicated loans to solutions associated with business strategies such as M&As and MBOs, business matching services, consulting services for hospitals, and advisory services on overseas expansion and foreign exchange-related issues. The
excellent reputation the team has earned in providing solutions has led to an increase in lending.

Business Matching
MHBK is proactively engaged in business matching services for introducing its customers to other Mizuho Groupcustomers who best match their varied business needs. These services extend to introducing new sales vendors andsuppliers, partner enterprises for diversification into new product development and partnerships in franchise chains,
as well as companies possessing effective information pertaining to cost reduction.
“Business Matching Forums” are designed to bring corporate customers together to engage in individual businessnegotiations and have been extremely well received. Each event features a specific theme—such as companies withmultiple stores or mail-order firms—and MHBK will continue to hold these forums periodically in response to customers' needs.

30

Mobilizing Group Strengths
 Support for New Businesses
In the new business market, MHBK's know-how is far superior to that of other banks, and it prepares proposals on
making use of grant schemes through the Charitable Trust for Mizuho New Business Fund for customers possessing
core technologies with promising business potential, even if they are recently established venture firms. It is also
actively providing finance through copyright trust schemes and other intellectual property finance, as well as loans
with stock purchase warrants.
It responds to IPO needs through multi-faceted collaborations with other group companies: Mizuho Capital
serves as a venture capital investor and provides advice on going public; MHIS provides broadly based support as asecurities company; and MHTB provides advisory and stock transfer agency services.

 MHIS's IPO Support Business
MHIS responds proactively to the IPO needs of the group's SME and middle market corporation customers incooperation with MHBK, MHTB and Mizuho Capital.
MHIS posted a very strong performance in fiscal 2004. It served as lead managing underwriter for a total of 12
companies, ranked within the top five in the league tables in terms of deals handled, and was involved in underwriting approximately 40% of the 172 new company listings on the stock markets.

 “Noteless” Service Utilizing Trusts
MHTB led the industry in developing the “Noteless” lump-sum accounts receivable trust scheme, offering it to thegroup's SME and middle market corporation customers in a tie-up with MHBK.
“Noteless” is a product whereby account receivables are accepted in trust from customers who have dealings withlarge corporations in such a way as to provide them with a service that allows due-date collections and pre-maturity
conversion into funds of the receivables in question. “Noteless” has been well received because it reduces the cost of
issuing notes and allows fund procurement on more favorable terms than discounting bills. At the end of March
2005, the entrusted balance was close to ¥1 trillion, giving MHTB the best performance in the industry in this area.

 Responding to Overseas Business Expansion Needs
In order to satisfy the needs of Japanese companies that are increasingly active in China and other Asian markets,
specialist staff who are well-versed in overseas business provide assistance in customers' local projects through thegroup's overseas network, which is one of the most extensive of any Japanese bank.
Our specialist staff cooperates with the relevant departments to offer the CMS, which provides management
support for the accounts of overseas offices including subsidiaries from their head offices, and to provide operational support for foreign exchange and foreign trade, and solutions to risk mitigation needs.

Securities Introducing Agents Business
In March 2005, MHBK established the Asset Management Office for Corporate and launched its securities introducing agents business aimed at corporate customers. The bank has long offered various kinds of investment products to customers who hold investment assets, but taking advantage of the removal of the ban on banks engaging
in the securities introducing agents business, it has been proactively responding to customers' varied needs byengaging in solicitation and agency businesses in connection with structured bonds and other instruments, whichwere once the exclusive province of securities companies.
The Asset Management Office for Corporate specializes in proposing solutions to corporate customers' investment needs, and its highly expert staff offers not only securities introducing agent services but also investment
trusts and other products to suit customers' requirements.

31Advanced Financial Services of Mizuho

Targeting Businesses through Customer Segmentation

Approaches to Individual Customers
We are utilizing the group's comprehensive financial capabilities to provide individual customers with high-quality financial services.
MHBK is working to strengthen its sales of investment management products by enhancing its consulting functions, and to build a high-profit, high-efficiency business model byreinforcing its efforts in the area of housing and unsecured loans. It is also strengthening
its profit base among its 26 million individual customers by encouraging them to deepen,
expand and consolidate their banking transactions with MHBK, offering highly convenient
products and services such as the “Mizuho Mileage Club” and an expanded channel network.
It is responding to customers' increasingly diverse and sophisticated needs by opening
joint branches with group securities companies, and initiating a franchise system for trust
business and securities introducing agents business.

“Mizuho Mileage Club” Membership Services Enhanced
Large numbers of customers have signed up for the “Mizuho Mileage Club” membership service, which waslaunched in August 2004.
From April 2005, we started issuing the “Mizuho Mileage Club Card (Saison)” in an alliance with Credit Saison,
Japan's largest retail industry-based credit card company, adding to the cards already issued under the UC(MasterCard) brand. This has made the functions and services offered by the Saison Card, the leading brand in

Alliance with Credit Saison
In December 2004, MHFG, MHBK, UC Card and Credit Saison, Japan's largest retail industry-based credit cardcompany, signed the “Comprehensive Strategic Business Alliance Agreement” in the credit card business. This will
result in the creation of the strongest business structure in the sector, crossing the boundaries between banking
and retailing by offering the 26 million individual customers of MHBK and the 16 million holders of Credit Saison
cards an extremely convenient and innovative service.
Specifically, MHBK and Credit Saison plan to issue cash cards equipped with credit card functions that combine
services provided by MHBK to its “Mizuho Mileage Club” members. Consideration will also be given to integrating
the businesses of UC Card and Credit Saison. This will include consolidating the card-issuing business of UC Card,and UC Card's integration of the management of the member stores and processing business of Credit Saison,
which will realize a business structure that will be able to provide cutting-edge products and services speedily andat low cost.

Credit Saison's Strengths
 High Growth Potential
Saison has continued to grow rapidly on the strength of32

 Overwhelming Support from Leading
Consumer Segments

its high brand recognition, the strongest new cardhold-

Owing to its roots in the retail industry sector, its mem-er recruiting mechanism in the business, and marketing

bership is characterized by the fact that female card-

capabilities that generate high usage.

holders account for 67% of the total, and people aged

Credit card turnover: ¥2,596.2 billion (7.8%)

below 40 for 42%.

Total number of cardholders: 16.9 million (6.5%)*As of the end of March 2005 (Figures in parentheses indicate year-

Number of active cardholders: 8.83 million (5.0%)

on-year changes.)the industry and an eminently strong brand among

Alliance with JR East

women and younger age groups, as well as a wide

In March 2005, MHBK and the East Japan Railway

range of international brand names in credit cards,

Company (JR East) signed a letter of basic understanding

including Visa and JCB, more available to customers.

in connection with the card business.

In February 2005, we also initiated affiliations

This alliance aims to provide services that transcendwith a number of well-known firms transcending

the boundaries between banking and transportation by

the boundaries of the financial sector to offer thedesigning a revolutionary card that combines MHBK's“Partners Service.” This represents a completely new

ATM card and JR East's Suica to provide ATM card, credit

type of service that allows the granting of bonus

card, train ticket and electronic money functions in a sin-points and the conversion of points among corpo-

gle IC card.

rate partners involved in the alliance. As a result of

The goal is to expand MHBK's customer base and raise

efforts to expand the alliance, 14 companies hadcustomer satisfaction by issuing cards that offer evenjoined as of May 2005, including airlines, depart-

greater convenience to the over 11 million Suica users as

ment stores, volume retailers and mail-order sales

well as MHBK's 26 million individual customers.

companies.

Mizuho's Security Policies
Since March 2005, MHBK has shifted to using IC ATM cards for all saving account ATM cards issued to individual
customers as part of its measures against counterfeiting. Since IC ATM cards carry IC chips that are difficult to fabricate, depositors are very interested and applications for approximately half a million cards were received within
two months of their launch. MHBK has also boosted security by raising the ceiling on the amount that can be withdrawn in any one-day period to ¥5 million in the case of ATMs that are designed to read IC ATM cards, but lowering the ceiling to ¥500,000 in the case of ATMs that are not.
MHBK is working to popularize IC ATM cards still further while taking further steps to enhance security in taking
care of customers' invaluable assets, including work on using biometrics for identification.

Aiming for No. 1 in Consulting Services
MHBK is striving to become the leader in consulting services to ensure that it is the customer's bank of choice as alifetime advisor at various life stages. To this end, it is working to train and deploy more expert personnel, build a
new in-branch organization and improve its information infrastructure.
By the end of fiscal 2005, it will respond to customers' increasingly sophisticated needs by training and deploying
2,000 financial consultants who specialize in business promotion for individual customers and can respond to allkinds of consulting needs.
Currently, it has established “Premium Salons” at approximately 70 branches to provide customers with space forthorough consultations on asset management using TV phones and life plan simulations, and it plans to expand thisto approximately 250 branches eventually.
It will also establish “Comprehensive Reception and Information Desks” and deploy “Lobby Concierges” to assist
customers in completing their business at branches more smoothly.

Expansion of Product and Service Line-Up
To support customers' asset investment needs, we offer a wide range of products and proposals tailored to theneeds of customers.
MHBK has created a new line-up of four key, carefully selected products and launched its own Inflation-Index
Bonds Fund (Quarterly Distribution.) It is also expanding its JGB services for individuals, in the process becoming thefirst Japanese bank not to charge government bond account administration fees.

33

Advanced Financial Services of Mizuho

Targeting Businesses through Customer Segmentation

Since December 2004, MHBK's private banking operations have been engaged in the securities introducing
agents business, promoting services that involve cooperation between banking and securities, so as to respond
more rapidly to customers' increasingly diverse and sophisticated needs. In combination with its expansion of the
network of joint branches with group securities companies by setting up their booths within the lobbies of MHBK
branches, this represents part of MHBK's efforts to satisfy customers' securities transaction requirements.
More recently, it has started offering securities introducing agent services via the Internet, allying with the leader
in the online securities business, Monex Beans Holdings, and group securities company, MHIS, to offer high-quality
online securities introducing agent services. This allows us to make the most of the group's comprehensive
strengths while enabling MHBK to strengthen its efforts in the securities business to provide more direct, more
rapid responses to customers' diverse asset management needs than ever before.
Using the franchise system for trust businesses, MHBK handles MHTB's asset management products at all its
branches. Following the December 2004 revisions of the Trust Business Law, MHBK started handling testamentary
trusts from January 2005.
It will continue to use the group's all-round financial capabilities to provide even higher quality services.

MHTB's Testamentary Trust Business
MHTB's testamentary trust business covers a variety of services. The first involves consent to undertake the execution of wills so that their provisions are fulfilled, and covers everything from assistance in drawing up andkeeping wills, to acting as executor in carrying out the various procedures when an inheritance arises. The second involves will custody services, namely holding wills in safe custody and transferring them to the designatedrecipient when an inheritance arises. And the third involves being entrusted by all heirs to act as their agent in
the inheritance and thus the distribution of the estate.
Using the specialist know-how it has built up over many years to satisfy customer needs, MHTB has been
entrusted with over 10,000 testamentary trusts, more than any other Japanese bank.
Furthermore, focusing on the fact that real estate accounts for a particularly high proportion of inheritedassets in Japan, MHTB assists as a sales intermediary along with group company Mizuho Trust Realty Company,
which boasts one of the best records in the real estate business.

Personal Loans
Strengthening the Housing Loan Business
During the second half of fiscal 2004, MHBK expanded its housing loan campaign as part of its efforts to respond to
customers' constantly diversifying needs.
The original special interest rate loan campaign that was offered on a time-limited basis, and the addition of 5and 10-year fixed interest loans to this campaign, have been well received, and continues through the first half of fiscal 2005 (time limit for applications September 30, 2005).
To respond to customers' longer term fixed-interest needs, the “Flat 35” securitization-type housing loan product, offered in cooperation with the Government Housing Loan Corporation, provides a fixed-interest rate throughout the entire period of the loan up to a maximum of 35 years. This, too, has proven popular, giving MHBK thenumber-one spot among financial institutions on a results basis in fiscal 2004.
MHBK also held a total of four weekend consultations for housing loans to assist customers who cannot otherwise visit its offices on regular business days with their refinancing and other needs. Since large numbers of customers attended, it continues to hold these consultations during fiscal 2005.
In addition to expanding its Housing Loan Business Promotion Centers as a means of strengthening its
relationships with real estate vendors, it has reconfigured its housing loan screening processes and taken steps to
speed them up.

34

In the retail market, MHCB and MHBK use their vast
domestic corporate transaction base to proactively promotebusiness with employees of its corporate customers
centering on housing loans.

“Flat 35” Results (cumulative)(Billions of yen)
60
Actual amountNo. of deals executed
50(No. of deals)
3,000
2,500

40

2,000

30

1,500

20

1,000

10

500

0

2004
2005
Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar.

0

Alliance with Orient Corporation
Expanding Sales of Captive Loans for Installment Sales for Individual Commodities
Using Orico's affiliated merchant base, which underpins the strongest installment sales for individual commodities
of any Japanese credit sales company, MHBK has greatly reinforced its captive loan business based on its loans with
Orico guarantees. At the end of fiscal 2004, the balance was approximately ¥190 billion, an increase of ¥150
billion compared with the end of the preceding fiscal year.
MHBK's efforts to utilize one of its main strengths, its vast corporate customer base, to introduce new affiliatedstores to Orico has resulted in the conclusion of participating merchant contracts with over 2,000 companies,
expanding both Orico's affiliated merchant base and profit-earning opportunities.
GlossaryInstallment Sales for Individual Commodities
When customers purchase relatively expensive products and services such as cars and consumer electrical appliances, the credit sales company pays the purchaseprice on the customer's behalf, and then collects it in installments from the customer.

Captive Loans
Orico is entrusted with the business of guaranteeing and recovering payments associated with exclusive sales tie-up loans extended through Orico's affiliatedmerchants.

Transfer of Guarantee Business
In April 2005, MHBK transferred its entire unsecured personal loan guarantee business from UC Card to Orico. This
resulted in faster, more finely tuned services for customers.

New Loan Product for Individuals Launched
MHBK is currently developing the new Mizuho Orico Loan Card (provisional name), which will provide individuals
with unsecured loans guaranteed by Orico.
Orico's core customer base constitutes the nucleus of the customers with whom MHBK should expand its
transactions from now on. Making use of Orico's know-how in areas like credit screening and marketing, MHBK
will endeavor to strengthen its unsecured personal loan business. MHBK will work to promote greater usage by awider range of customers by speeding up the credit screening process and expanding the range, convenience andsimplicity of customer application channels, including the Internet and mobile phones.
In March 2005, it also started handling new loan products secured with Orico guarantees.

35

Environmental Awareness and Community Activities of Mizuho

Environmental Activities
We are conscious of our social responsibility to take into account environmental issues as we try tomaintain a balance between economic development and environmental preservation. As such, we takea self-motivated and proactive approach to environmental issues.
In compliance with laws and ordinances relating to the environment, we are working to contribute to the protectionof the environment through energy and resource conservation efforts that include separating and collecting garbage
by type and using recycled materials. At the same time, we are tackling environmental issues as a financial institution
by supporting customers' programs for dealing with the environment and offering financial products and services
that contribute to environmental preservation.

 Developing Environment-Related Financial Products and Advisory Services
Description of products and services

Services related to global warming

The latest information on greenhouse gas emissions, trading and advisory services concerning the creation of
trading systems, creation of schemes concerning CDM/JI (clean development mechanisms and joint implementation*) investments, and the development of funding methods for validation and carbon funds.

Project finance

Advisory services for CDM/JI investments, arranging finance for wind power generation and garbage incineration facilities.

Natural energy-related products

Trading in wind speed (for wind power) and precipitation (for hydroelectric power) derivatives.

Environmental
management consulting

Preparation of environmental IR strategies, introduction of environmental accounting and acquisition of
ISO14001 certification.

LCA support services

Implementation of LCA (life cycle assessments) in connection with products and services.

 CDM/JI: The mechanisms adopted under the Kyoto Protocol for greenhouse gas emission reduction projects.

 Adoption of the “Equator Principles”
In October 2003, MHCB became the first Japanese bank, and the 18th bank worldwide, to adopt the Equator
Principles, which are a standardized framework employed by private banks to monitor, from the standpoint of afinancial institution, whether projects financed through project finance schemes have taken into consideration theenvironmental and social impact that projects may have on the local community.
Ten major banks such as Citigroup implemented the Equator Principles in June 2003, and as of April 2005, 30
major banks around the world have adopted the Principles.

Community Activities
We have established a basic approach to and guidelines for community activities, and are engaged innumerous programs at home and overseas.
To fulfill our role as a “good corporate citizen” in local communities, we have adopted a proactive
policy of contributing to society in five areas laid down by our guidelines: (1) nurturing young
people; (2) supporting social welfare; (3) promoting the arts, culture and academic studies; (4)assisting international exchange; and (5) endorsing global environmental preservation.

 Traffic Safety Campaign

Presentation of Yellow Badges.

As part of the group's annual “Yellow Badge Traffic Safety Campaign,” we provide first graders
throughout Japan with yellow badges that, when worn, signify they are automatically covered bytraffic accident insurance. 2005 marks the 41st year of this campaign, which started in 1965, andis sponsored by MHFG, Sompo Japan Insurance, The Meiji Yasuda Life Insurance Company and The
Dai-ichi Mutual Life Insurance Company. The campaign has now provided insurance coverage for a
total of 50.56 million children in Japan.

36

First graders taking part in
Yellow Badge Traffic Safety
Campaign activities.

 Support for the “All-Japan Elementary and Junior High SchoolStudents' Environmental Art Contest”
Since 1997, we have supported the “All-Japan Elementary and Junior High SchoolStudents' Environmental Art Contest,” which promotes environmental education among
elementary and junior high school students. Winners are presented with books containing
Winners of Mizuho's Environmental Art
Contest.

the winning entries.

 Mizuho Charity Fund
In August 2002, we established the Mizuho Charity Fund as a fund collection method topromote community activities by the group's staff. Contributions in units of ¥100 arecollected directly from Mizuho employees' monthly salaries and donated to groupphilanthropic foundations to purchase vehicles to be presented to welfare facilities,
Presentation of relief money for earthquake
victims in Niigata.

donated as relief aid for natural disasters and contributed to volunteer organizations
selected from groups recommended by employees.

 Activities of Philanthropic Foundations in Japan
We support welfare assistance for senior citizens and the physically challenged,
educational support and scholarships, international exchange, and academic researchthrough the following foundations.
Presentation of vehicle for use by a welfare
facility.

Mizuho Education Welfare
Foundation
Assistance for education in rural
areas, education of physically challenged children and welfare forsenior citizens. (Grants, donations ofathletic equipment and welfare vehicles.)Mizuho Welfare Foundation
Assistance in connection with thewelfare of the disabled. (Grants,
donations of electrically powered
wheelchairs and welfare vehicles.
Funds for translating books into
Braille for visually impaired university
students.)

Mizuho International Foundation
Scholarships for foreign students
studying in Japan. Training for personnel to undertake work in the areaof international exchange.

Mizuho Foundation for the
Promotion of Sciences
Donation of children's books to elementary
schools in rural areas.

Mizuho Scholarship Foundation
Scholastic loans for deserving students facing economic hardship.

Research grants in the areas of engineering and law. Public essay contests
in the areas of law and economics.
Scholarships for foreign students
studying in Japan.

Support for Art and Culture Coming-of-Age Day Concert
This year's “Coming-of-Age Day Concert” took place at the Suntory Hall in Tokyoon the Coming-of-Age Day national holiday in January. The concerts have been held annually since 1990 with a view tosupporting young artists and popularizing classical music among the next generation of young people. One hundred
people who become 20 years old, the legal age of adulthood in Japan, are invited through a drawing to attend theevent each year.

 World Police Band Concert
To promote international exchange, art and culture, we sponsored the World Police Band
Concert featuring performances by police department bands from around the world. The
2005 tour marked the 10th anniversary, and in addition to the five bands from police
departments in Japan, bands from six countries also took part in the event. Beginningwith the concert held at the 2005 World Exposition in Aichi on April 30, the band also
performed in the cities of Tokyo, Yokohama and Chiba.

 MIZUHO STREET GALLERY
In order to promote the work of and support young artists, we make available
the MIZUHO STREET GALLERY in the form of space in the window display areas of Mizuho Bank's Ginza Chuo Branch.
37

Working to Win the Support of Customers

The “Channel to Discovery” Plan

Management Reforms of Mizuho

2005

2004

2003

2002

DecemberCompleted MHBK's IT systems integration

September

Reduced NPL ratio by half, six months aheadof the target under the Financial
Revitalization Program

July

Launched “Corporate Revitalization Project”

March

Implemented Business Reorganization(Reorganization of corporate structure)

February

Resolved financial issues (Note 2), raised ¥1.1 trillion in capital

November

Launched “Change & Speed-Up Program” (Note 1)

April

Started operations under a corporate structure with legally separated subsidiaries
according to customer segmentation and business function

April

Announced new business strategy, the “Channel to Discovery” Plan

March

Repaid cumulatively more than 50% of public funds

Launched MHCB and MHBK

Note 1: Change and acceleration of the deployment of business strategies, acceleration of cost structure reforms, strengthening of corporate
governance and reinforcement of a merit-based remuneration system.
2. Prompt resolution of NPL issue, further reduction of stockholding risks and conservative valuation of deferred tax assets.

38

39

Working to Win the Support of Customers

Launch of the “Channel to Discovery” Plan

Overview of the “Channel to Discovery” Plan

We established our corporate structure under a holding company to reorganize ourFull Repayment of Public Funds

existing operations into legally separate subsidiaries according to customer segmentation

We intend to fully repay the remaining amount of public funds during fiscal 2006.

Page 42and business function in April 2002. In response to the increasingly severe business environment, we have taken speedy and decisive actions such as realignments in our management systems. As a result of such management actions, we have achieved successful results

New Dimension to Business Portfolio Strategy

Page 42such as resolution of financial issues and acceleration of cost-cutting efforts. Furthermore,

We will realign our business structure into three global groups. The Global Corporate Group

we have completed MHBK's IT systems integration—one of the top management priorities.

responds to the needs of large and global corporations, the Global Retail Group to the

In addition, we have already repaid approximately 50% of total public funds.
Management focus has moved beyond the emergency-reaction phase aiming at financial
stability into a future-minded and customer-oriented phase that will seek to gain the support of customers. Hence, we have implemented a new business strategy, the “Channel toDiscovery” Plan, in order to make a breakthrough to become a world-leading financial group.

needs of individuals, SMEs and middle market corporations, and the Global Asset & WealthManagement Group to customers' needs in the business areas of trust and custody, andprivate banking.
Establishment of Japan's first full-fledged private banking company (Fall 2005)
Reorganize UC Card and Mizuho Capital by placing them under MHBK (second half of 2005)
MHBK entered into separate business collaborations with Wachovia Bank (“Wachovia”) andAs a course of action, we will implement the “Business Portfolio Strategy” where we will
shift to a new business structure constituent of three global groups which positions customer needs as a “key” concept, and seeks to build a new business model by maximizing theadvantages of each group. Along with this strategy, the “Corporate Management Strategy”

Wells Fargo Bank (“Wells Fargo”) respectively (April 2005)
MHTB entered into a business collaboration with The Bank of New York. MHBK also enteredinto a business collaboration with The Bank of New York in the area of distribution of
investment trust in Japan (April 2005)

will be implemented together with our medium-term business plan which was formulated

Re-formation of MHHD into a new advisory company (Fall 2005)

based on concrete strategic measures.

Completion of the role of financial subsidiaries specializing in corporate revitalization(during fiscal 2005)

Concept of the “Channel to Discovery” Plan

Implementation of Corporate Management Strategy

Page 46

Preparations to apply for listing on the New York Stock Exchange (“NYSE”).
We are aiming to be an “enterprising, open, and leading-edge” financial group from the

Further promotion of CSR (Corporate Social Responsibility) activities befitting a globally

customers' point of view.

active financial group.

“Enterprising”“Open”“Leading-edge”

Establishment of a new branding strategy with a view to brand innovation—a new, futureminded and customer-oriented phase.

“Enterprising” means we“Open” means we listen“Leading-edge” means

have the passion andsincerely to our customers

we help our customers

power to help customers

and treat them withachieve a better andDrawing up a New Medium-Term Business Plan

find the right path.

fairness and kindness any

brighter future because of

We aim for Net Business Profits of the core banks of ¥1.18 trillion and consolidated Net

time we have the chance.

our innovative mindset.

Income of ¥650 billion in fiscal 2007.

Page 48

 The above mentioned is subject to the appropriate regulatory approval and other procedures in Japan and all other relevant
countries.
 This report contains statements concerning the group's future performance. These statements, however, do not guarantee
the ultimate outcome of the group's performance in the future, and take into consideration the risks and uncertainties that
may be caused by such factors as changes in the business environment.

40

41

Full Repayment of Public Funds

Implementation of the
New Corporate Management Strategy

New Dimension to Business
Portfolio Strategy

Full Repayment of
Public Funds

Working to Win the Support of Customers

Drawing up a New Medium-TermBusiness Plan

We intend to fully repay the remaining amount ofpublic funds during fiscal 2006 by steadily accumulating

We have completed redemptions of subordinated bonds

Retained Earnings through the implementation of theof public funds in March 2005. Currently, the remaining

new medium-term business plan. We expect to maintainpreferred stocks of public funds amount to ¥1,466.4

a sufficient BIS Capital Adequacy Ratio even after webillion, which means that including subordinated bonds,

have fully repaid the public funds.

we have repaid approximately half of total public funds.

New Dimension to Business Portfolio
Strategy

Overview of Reorganization ~Formation of Global Group~[Before Reorganization][After Reorganization]

Mizuho Financial Group, Inc.

Based on our customer needs, we will realign ourbusiness structure into three global groups; the Global

GlobalCorporate
Group

Corporate Group, the Global Retail Group and the
Global Asset & Wealth Management Group.

specialized and cutting-edge products andGroup
Strategy
Affiliates

Mizuho Information & ResearchInstitute, Inc.

Mizuho Research Institute Ltd.

New Advisory Company

Mizuho Private WealthManagement Co., Ltd. <New>

Mizuho Trust & Banking
Co., Ltd.

Asset Management Companies(DKA, FIMCO, DIAM )Trust & Custody Services Bank, Ltd.

Mizuho Investors Securities
Co., Ltd.

Mizuho Securities Co., Ltd.

Shinko Securities
Co., Ltd.

services by leveraging our comprehensive
financial capability, with close cooperation
between the global corporate banking sector
and the wholesale securities sector in responseto the needs of large and global corporations.

The Global Retail GroupThe Global Retail Group provides top-level products and services on a global scale, with close
cooperation with leading domestic and international companies in response to the diversified
and globalized needs of individuals as well as
SMEs and middle market corporations in Japan.

The Global Asset & Wealth Management
Mizuho Capital Co., Ltd.

UC Card Co., Ltd.

Mizuho Asset, Ltd.

Mizuho Project, Ltd.

Mizuho Global, Ltd.

Mizuho Corporate, Ltd.

Mizuho Advisory, Inc.

The Global Corporate Group provides highly

GlobalAsset & WealthManagement
Group

GlobalRetailGroup

Mizuho Bank, Ltd.

Mizuho Corporate Bank, Ltd.

Mizuho Information & ResearchInstitute, Inc.

Banking & Securities
Business Sector

Mizuho Research Institute Ltd.

Mizuho Investors
Securities Co., Ltd.

Mizuho Securities
Co., Ltd.

Shinko Securities
Co., Ltd.

Mizuho Capital Co., Ltd.

Mizuho Bank, Ltd.

Mizuho Corporate
Bank, Ltd.

Trust & AssetManagement Sector

UC Card Co., Ltd.

Mizuho Trust & Banking
Co., Ltd.

corporations and enhance global business alliances.

Asset Management Companies(DKA, FIMCO, DIAM )Mizuho Holdings, Inc.

Trust & Custody Services Bank, Ltd.

Under this structure, we will establish new business

The Global Corporate Group

Mizuho Financial Group, Inc.

Group
The Global Asset & Wealth Management Group
provides top-level products and services on a
global scale in response to the diversified andadvanced customers' needs in the business areasof trust and custody, and private banking.

Corporate Revitalization Project

42

43

Full Repayment of
Public Funds

Working to Win the Support of Customers

New Dimension to Business
Portfolio Strategy

We will establish Japan's first full-fledged private banking

Establishment of Japan's First Full-Fledged Private

Outline of the New Private Banking Company

Banking Company

Company name

Mizuho Private Wealth Management Co., Ltd.

company, “Mizuho Private Wealth Management,” toWe will establish a business promotion structure by cus-

Head office

1-1-5 Uchisaiwai-cho, Chiyoda-ku, Tokyo

provide comprehensive and integrative services similar to

tomer segmentation in the retail banking business in

Outline of businessComprehensive consultation business:
Provide comprehensive consultation services on
financial/non-financial services for ultra-highnet-worth customers.

those available in the U.S. and Europe to the extent

order to offer the best solutions to customers' diversified

Business Structure of Individual Consulting Business
New PB company

Ultra-high-net-worth
customers *1

Customers with
consulting needs

Provide the best solution according toeach customer's needs

High-net-worth
customers *2

Japan's first full-fledged privatebanking company offering firstclass financial/non-financial
services.

Capital¥5 billion (100% wholly owned subsidiary of
MHFG)

Representative

Fumio Watanabe (former Managing Executive
Officer of MHBK)

Based on the open-architecture concept of “providing
to offer products and services of the highest level. With
regard to non-financial services, we will provide premium

Number of employees Approx. 70

services to meet customers' diverse needs in relation toDate of establishment Scheduled for Autumn 2005

art, automobiles and other similar areas, in collaboration
with prestigious companies, as well as high-quality solu-

Group companies

tions in connection with areas such as philanthropy andPrivate bankers that are spread
across the group will provide
sophisticated services by fully
utilizing the group network.
The group companies will offer
professional consulting services
to customers through theirconsulting desks.

Products and services
providing company

permitted under Japanese laws and regulations.
customers with the best around the globe,” we will seek

concierge services.

Drawing up a New Medium-TermBusiness Plan

Overview of Mizuho's Private Banking Businessfor Ultra-High-Net-Worth Customers

Ultra-high-net-worth customers

needs in each segment.

Implementation of the
New Corporate Management Strategy[Product/
serviceline-up]
PB company
Banking
Customerproducts
Provideneeds
Securities
comprehensive
products
consultation
Trust
services on
products
Collabofinancial/nonration etc. Off-shore
financial services
products
Consulting (incl. follow-up)
Casualty
insuranceLifeinsurance

Order-madeKyoritsu Insurance
Brokers of Japan

Real estate
Art advisory

Open architecture

Provide best solutions(Financial/non-financial services)

Alliance
partners

Motoradvisory

Galerie
NichidoCornes & Co.

Philanthropy
Concierge
services*1: Customers who have entrusted the group with extremely large amounts of investment
assets.
*2: Customers who have entrusted the group with large amounts of investment assets.

Reorganize Strategic Subsidiaries in the RetailUC Card

synergies in the retail business in order to provide

corporations in the corporate market. By fully utilizing the

Banking Business and Place them under MHBK

Through a strategic alliance with Credit Saison, we arecustomers the best possible services.

broad domestic channel network of MHBK, further

In pursuit of further synergies in the retail banking

developing a new type of credit card business that can

Mizuho Capitalpromotion of referrals from start-up companies to Mizuho

business, the two strategic retail subsidiaries, UC Card

provide customers with cutting-edge products andMizuho Capital, the group's principal venture capital

Capital will be reinforced.

and Mizuho Capital, currently placed under MHFG, will

services at low cost. Our group's credit card company,

company, will strengthen its collaboration with MHBK,

be reorganized as subsidiaries of MHBK in the second

UC Card, will be placed under MHBK to ensure further

which serves primarily SMEs and middle market

Business Collaborations with Wachovia and Wells

Contents of the Collaborations

Collaborating Parties

Fargo

Referral ofcustomers

The mutual referral of customers for the
purpose of opening accounts and utilizing cash
management services in Japan and U.S.

Cash management
product

Enable to check account information and makecash transfer between Japan and U.S. byutilizing SWIFT.

Trade financeAppoint the other party as the “Advising
Bank” when issuing import letters of credits,
and as “Collecting Bank” when collecting export related documentation (only with Wachovia).
Participate the risks of trade finance transactions to the other party (e.g., Forfaiting (without recourse), L/C Confirmation, Open Account-based Discount).

half of fiscal 2005.

As a result of economic/financial globalization anddevelopment of information technology, customers'
needs in the retail banking business have outstretched
the domestic standard, being diversified and sophisticated toward a global standard.
In order to swiftly and efficiently respond to customers' needs, it is requisite to reinforce our international
channel network, and product and service line-up to a
global top-level.
In April 2005, MHBK entered into separate businesscollaborations with two of the best U.S. super-regional

Distribution of
investment trust
products in Japanbanks, Wachovia and Wells Fargo respectively, aiming toreinforce the channel network, and products and services
internationalized to the highest standard for our retail

Mutual website
links

Investment trust management companies ofMizuho group will create a product using theasset management expertise of Wachovia groupand Wells Fargo group, and MHBK will distribute the products.
MHBK and Wachovia will link websites andcreate a webpage with regard to collaboration.

With Wachovia’s channel network covering the eastern part of the U.S. and Wells Fargo's covering the western and mid-western part of
the U.S., the collaborations with the two banks will enable MHBK to have coast-to-coast coverage of the U.S.
(As of Dec. 31, 2004)

Wachovia

Wells Fargo

Bank name

Wachovia Bank, N.A.

Wells Fargo Bank, N. A.

Holding company

Wachovia Corporation

Wells Fargo & Company

Head officeCharlotte, N.C., USA

San Francisco, C.A., USA

Chairman & CEO

G. Kennedy Thompson

Richard M. Kovacevich

Number of branches

Approx. 3,300

Approx. 3,100

Number of employees (*)

Approx. 96,000

Approx. 150,000

Long-term credit ratings (**)

«Moody's» Aa2«S&P» AA-

«Moody's» Aaa«S&P» AA

Total shareholders' equity (*)

US$ 47.3 billion

US$ 37.8 billion

Total assets (*)

US$ 493.3 billion

US$ 427.8 billion

Market capitalization (*)

US$ 83.5 billion

US$ 105.0 billion(*) Figures on a holding company basis.
(**) As of April 30, 2005.

banking business.
44

45

Business Collaborations with The Bank of New
York
Due to the prolonged difficult environment for asset

New Dimension to Business
Portfolio Strategy

Full Repayment of
Public Funds

Working to Win the Support of Customers

MHBK also entered into a business collaboration withThe Bank of New York in the area of distribution of
investment trust products in Japan.

management under extremely low interest rates and therevision of corporate accounting methods, asset
management companies need products and services tomeet the diversified and sophisticated needs of their
In April 2005, MHTB entered into a business

The Bank of New York

Offer investment strategies utilizing The Bank
Establishment of“Mizuho-The Bankof New York group's alternative investment caof New York Global pabilities such as Ivy Asset Management Corp.
Management”
and MHTB's REIT investment products, to customers such as Japanese corporate pension
funds in the growing alternative investment
market.
Enhance performance by utilizing The Bank of
New York's advanced expertise in execution.

Bank name

The Bank of New York

Holding company

The Bank of New York Company, Inc.

Head office

New York, N.Y., USA

Chairman & CEO

Thomas A. Renyi

Number of branches

Approx. 341

Number of employees (*)

Approx. 23,000

Long-term credit ratings«Moody's» Aa2«S&P» AA-

Total shareholders' equity (*)

US$ 9.3 billion

Total assets (*)

US$ 94.5 billion

Market capitalization (*)

US$ 26.0 billion

collaboration with The Bank of New York, a global leader
in the trust banking business, aiming to reinforce asset

Global custodybusinessmanagement capabilities, expertise in execution, andDrawing up a New Medium-TermBusiness Plan

Contents of the Collaborations

Distribution of
investment trust
products in Japancustomers.

Implementation of the
New Corporate Management Strategy

asset administration on a global top level in the area of

Our group's asset management company will establish an investment trust utilizing The Bank of
New York group's asset management capabilities. The new products will be distributed by
MHTB together with MHBK.
With respect to the above-mentioned “MizuhoThe Bank of New York Global Management” anddistribution of investment trust, our group will be
the custodian in Japan, while The Bank of New
York group will be the custodian outside Japan.

(As of Dec. 31, 2004)(*) Figures on a holding company basis.

asset management.

Re-Formation of MHHD into a New Advisorysubsidiaries, as well as between the bank subsidiaries

consequently contribute to the revitalization of regional

Company

and the securities subsidiaries, with Mizuho Advisory's

economies in Japan, and furthermore, to realize aexpertise in corporate revitalization.

financial services nation.

In fall 2005, we will re-form MHHD into a new advisory
company for offering advice to financial institutions. We

The re-formed company will provide our full-scale andwill integrate its expertise as a bank holding company inadvanced expertise to regional financial institutions as agroup management and coordination between bankleading Japanese financial group, which will

Completion of the Role of Financial Subsidiaries
for Corporate Revitalization

period of three years.
Under this project, four financial subsidiaries specializ-

At the end of March 2005, the aggregate NPL balance
for the Three Banks and four financial subsidiaries

the “Corporate Revitalization Project” approximately one
year ahead of schedule.

Since July 2003, we have been channeling all our efforts

ing in corporate revitalization and an advisory company

specializing in corporate revitalization decreased byinto the early achievement of our corporate customers'

excute necessary measures to support customers' turn-¥1,695.3 billion to ¥1,495.6 billion. The fact that weroles as the “Corporate Revitalization Project” comes torevitalization and a further reinforcement of the credit

around according to action plans determined by thevirtually halved the NPL ratio by the end of September

an end, they will terminate their operations during fiscal

creation function through the “Corporate Revitalizationgroup for approximately 1,000 targeted companies (total

2004 and further reduced the ratio to 2.1% at the end

2005.

Project,” which was scheduled for completion over aamount of loans is approximately ¥4,500 billion).

of March 2005 meant that we achieved the target set bydeemed to be of the highest global standards for leading

the main pillars in our strategy to create new corporate

partner that helps customers shape their future andglobal companies, and to establish disclosure and internal

value and hence achieve sustainable growth. Moreachieve their dreams,” we will implement the new brandcontrol practices in compliance with the U.S. Sarbanes-

specifically, we have established a CSR Committee tostrategy reflected in our new slogan, “Channel toOxley Act, U.S. corporate reform legislation that sets thefurther promote CSR activities in such areas as

Discovery.”global financial services group, MHFG will implement thestrictest standards in the world today.

environmental awareness and support for financial

following strategies.

* This statement does not constitute an offer of any securities of MHFG for sale.

education.

Implementation of Corporate
Management Strategy
In order to realize corporate management befitting a

Since the four financial subsidiaries will complete their

The Public Relations Division of MHFG will adopt a
new identity and become the Corporate Communications Division, which is more consistent with an organiza-

Listing on the NYSE
We have begun preparations to apply for listing on the

Establishment of a New Branding Strategy withtion committed to mutual interaction with customers

Globally Active Financial Groupa View to Brand Innovation—a New, Future-and society.

Minded and Customer-Oriented Phase

NYSE as early as feasible to enhance both transparency in

As a globally active financial group, we will reinforce ourour corporate governance and investors' confidence.

commitment to CSR activities in order to contribute to

We will strengthen our branding strategy in order to

As part of our preparations for listing on the NYSE,

the development of the economy through active social

build a Mizuho brand befitting a global financial services

participation.

group advancing into a new, future-minded andwe will seek to provide investors with disclosure based on
U.S. generally accepted accounting principles, which are46

Further Promotion of CSR Activities Befitting a

We have therefore positioned CSR activities as one ofcustomer-oriented phase. Determined to be “a financial

47

Full Repayment of
Public Funds

Working to Win the Support of Customers

We will dramatically enhance quality and potential of

Overview of the Medium-Term Business Plan

Drawing up a New Medium-TermBusiness Plan

(Billions of yen)initiated a new medium-term business plan. The plan
was developed in order to establish a stable earning baseunderpinned by the support of customers, the mainconcept of the “Channel to Discovery” Plan. The main
strategic points are presented at right on the opposite

Fiscal 2007 (Plan)
Establish a stableearning basesupported by customers

Having resolved our financial issues as of fiscal 2004, we

Resolution of financial issues

Overview of the Medium-Term Business Plan

Consolidated
Net Income

MHFG(Change from fiscal 2004)

New Dimension to Business
Portfolio Strategy

Net BusinessProfits

650.0(330.0)

2

290.0

2

1,180.0(380.0)

Global Corporate Group1

Global Retail Group

1

290.0

2

630.0

Global Asset & WealthManagement Group

1

40.0

2

90.0

460.0

1 Aggregated figures of core banking subsidiary and securities subsidiary (non-consolidated).
2 Figures of core banking subsidiary (non-consolidated).

our products and services to win our customers'
support.

Implementation of the
New Corporate Management Strategy

Drawing up a New Medium-TermBusiness Plan

This should enable us to achieve Net Business Profits
of the core banks of ¥1.18 trillion in fiscal 2007, the final
year of the medium-term business plan.

We will enhance our top-line growth by proactively

By promoting each group company's strategic meas-

devoting management resources to better serving

ures to improve profitability, we will strive to boost

customers' needs.

Net Business Profits in fiscal 2007 by approximately¥380 billion compared with fiscal 2004.

PointsWe will improve the level of Gross Profits by drasticallySteadily increasing Net Business Profits should enable

devoting management resources to new strategic

us to achieve consolidated Net Income of ¥650 billion

measures in response to customers' needs. We will also

by fiscal 2007.

continue with intensive rationalization of existing

page.

businesses.

Earnings Estimates for Core Banks in Each Group
Global Corporate Group

Global Retail Group

Global Asset & Wealth Management Group(Billions of yen)(Billions of yen)

Fiscal 2007 (Plan)

Change from fiscal 2004

Gross Profits

680.0

100.0

Gross Profits

General &Administration Expenses

220.0

10.0

Net Business Profits

460.0

90.0

(Billions of yen)

Fiscal 2007 (Plan)

Change from fiscal 2004

Fiscal 2007 (Plan)

1,150.0

250.0

Gross Profits

180.0

33.0

General &Administration Expenses

520.0(30.0)

General &Administration Expenses

90.0

17.0

Net Business Profits

630.0

280.0

Net Business Profits

90.0

13.0

Change from fiscal 2004

PointsPointsPointsWe will improve earning power by offering highlyWe will promote business by enhancing consulting

In fiscal 2007, we expect Gross Profits and Net Businesssophisticated solutions designed to raise corporate

functions, such as assigning 2,000 financial consultants

Profits to increase by ¥33 billion and ¥13 billion

value for customers, further expanding the syndicationand conducting database marketing.

respectively compared with fiscal 2004 throughbusiness, strengthening strategic risk-taking capability
through proactive portfolio management, andallocating strategic resources to the international
business sector.
In fiscal 2007, we expect to raise Gross Profits by

We will increase sales of investment products bymanagement, custody and administration, as well as

global alliances.

property management of real estate.

We will increase loans to middle credit risk
corporations and promote our solution businessapproximately ¥100 billion compared with fiscal 2004,

through strategic funds and development of new

and to achieve a ratio of non-interest income to Gross

products.

Profits of approximately 45%, which is equivalent to
the ratios of major U.S. banks.
We will provide seamless financial services by

aggressive allocation of management resources to asset

expanding the line-up of products offered throughIn fiscal 2007, we expect to increase Gross Profits by¥250 million compared with fiscal 2004.
We will boldly channel management resources into

integrating the group's financial functions as well as

new strategic measures to win customers' support andthrough synergetic cooperation with Mizuho Securities.

continue extensive rationalization of our existing
businesses. As a result, we expect General &Administration Expenses in fiscal 2007 to decline byaround ¥30 billion compared with fiscal 2004 and theoverhead cost ratio to reach approximately 45%.

48

49

Working to Win the Support of Customers

New Branding Strategy of Mizuho

As we enter a future-minded and customer-oriented phase designed to win customer support, we have adopted a new
brand strategy for establishing a Mizuho brand befitting a world-leading financial group.

All senior executives and employees are working to increase the Mizuho brand's market penetration in order to realize
Mizuho's “Brand Vision,” which is to become “a financial partner that helps customers shape their future and achieve their
dreams.” To this end, we are involved in various kinds of communications activities under the group's new unified brandslogan, “Channel to Discovery.”

Brand Vision

Brand Promise
In order to establish the new “Mizuho Brand,” we promise our customers

We aim to becomethat we will put into practice the following:“A financial partner that helps customers shape their future and achieve their
dreams.”To customers ranging from domestic retail, corporate to international,
Mizuho Financial Group is comprised of enterprising, spirited professionals
who use creative and original methods to respond to customers needs
today, while helping them achieve a bright future tomorrow.

Brand Slogan

Because we want to play a meaningful role in our customers' lives byalways being available to them, we offer a full range of leading-edge
products and services designed to help them achieve their goals and maketheir lives more enjoyable and gratifying.

The slogan expresses the role Mizuho will play, not only to realize today's dreams,

Brand Strength

but also to discover new possibilities that lie ahead and to create a better future.

In order to fulfill Mizuho's promise, we will share our strengths and objectives embodied in“Discovery” stands for Mizuho's customers discovering their dreams

the expression “enterprising, open, and leading-edge,” and by putting them into practice,and new possibilities, andstrive to become “a financial partner that helps customers shape their future and“Channel” stands for the role Mizuho will play in providing the ways

achieve their dreams.”

and means to its customers so that they can realize their dreams
and new possibilities.

EnterprisingOpen

Leading-edge“Enterprising” means we have the“Open” means we are flexible and“Leading-edge” means we have thepassion and power to help

are open to new ideas and new ways

foresight to “light the future.”customers find the right path.

to serve customers.

In other words, each of us should

We listen sincerely to our custom-

anticipate how society and custom-business and each of us is empow-

ers and treat them with fairness anders change. As a result of this, we in-ered to make a difference in our cus-

kindness any time we have thetroduce the most advanced andtomers' lives. We keep focused on

chance.

unique products and services to bet-

We think creatively about ourour customer needs and continuous-

We want to be open all the time.

Brand Colors

The logo is the symbol used for the Mizuho

For the brand logo, we use Mizuho's two brand

brand.

colors.

ter serve our customers. Because ofly strive to help them achieve their

our innovative mindset, we help our

dreams.

customers achieve a better andWe act enterprising all the time.

Brand Logobrighter future.
We want to be at the leadingedge all the time.

50

51

Working to Win the Support of Customers

Reinforcement of CSR Activities of Mizuho

Mindful of our mission to contribute to the ongoing development of the economy through active social participation as a
globally active financial group, we will reinforce our commitment to CSR activities.
In particular, we will position CSR activities as one of the main pillars of our group business strategy for creating new
corporate value and achieving sustainable growth. The following are the key points of our commitment:

Involvement in Environmental Awareness
By recognizing the immediate importance of curbing and alleviating environmental impact as a globally sharedchallenge, we will seek to provide financial services that are in line with environmental preservation policies,
such as measures to prevent global warming, while at the same time reducing our own consumption of
resources.

Supporting Financial Education
We will support financial education programs for the development of the next
generation so they can acquire financial knowledge and the ability to resolve theissues they may face in their daily lives.

Enhancement of Corporate Governance
We will further enhance corporate governance in order to sustain maximum fairness
and integrity in our corporate activities and thus win high levels of acceptance in the global
financial and capital markets.

Highly Responsive Communications
We will realize responsive communications between stakeholders by ensuring transparency in corporate
activities through further promoting information disclosure.

Promotion of Group-wide Approach to CSR
The group's holding company, MHFG, will promote a group-wide approach to CSR activities by establishing a new CSR
Committee with a view to integrating the existing CSR activities of the group companies.

The new CSR Promotion Office established within the Corporate Communications Division will play a central role instrengthening CSR throughout the group in line with these policies.

52Management Structure of Mizuho
Committee, both of which include outside Directors.

Management Framework of Mizuho

MHFG has adopted a corporate auditor system

Group Management Framework

whereby Corporate Auditors monitor whether operational

MHFG, as the financial holding company, is working to

execution by Directors is legal by attending board meetings

strengthen the group's comprehensive financial services

and expressing their views.

capabilities by directly managing the core group companies* and maximizing the benefits of customer segmenta-

 Execution of Duties

tion based on legally separate subsidiaries, thereby realiz-

In respect of excution of duties, MHFG has adopted theing synergies within the group and enhancing the special-

Executive Officer System in order to separate theization of individual group companies.

managerial auditing function from the execution of duties,

Group companies meanwhile carry out their businesses

and clarify lines of authority and responsibility. The

in their respective sectors in line with the basic policies set

President & CEO controls MHFG's overall business withby MHFG.

ultimate responsibility for execution of duties. In addition
to establishing the Executive Management Committee as

MHFG's Corporate Governance Structure

an advisory body to the President & CEO to serve as a

We devote our efforts to make our corporate management

forum for discussing important issues concerning themore transparent and efficient and carry out our businessexecution of duties of MHFG, MHFG has set up Businessactivities with integrity and fairness in conformity with

Policy Committees including the Compliance Committee,social standards. To this end, we position compliance as

the Information Security Management Committee and theone of the fundamental principles of sound business

Disclosure Committee to facilitate the discussion andmanagement and complies strictly with all laws,

coordination of company-wide issues of concern to theordinances, rules and regulations.

Executive Officers.

 Board of Directors and Corporate Auditors

fulfill an internal audit function under the chairmanship of

MHFG's Board of Directors sets management policies,

the President & CEO by checking whether operational

determines important matters for MHFG and its group

execution is appropriate from the viewpoint of audit. Outsidecompanies, and supervises the manner in which Directors

specialists (currently one lawyer and one accountant)and Executive Officers fulfill their duties. Outside Directors

participate in the Internal Audit Committee as special

participate in board meetings from a position that ismembers to reinforce its expertise and objectivity.

MHFG has also set up the Internal Audit Committee toindependent of the actual execution of duties to

MHFG has also established an advisory board of outside

strengthen the management and monitoring functions ofexperts who offer objective evaluations and advice fromthe Board of Directors.

an independent standpoint, aiming for a more open style

To ensure transparency and objectivity in personnelof management.

matters relating to the Board of Directors and Directors'
remuneration, MHFG has established two advisory bodies:
the Nominating Committee and the Compensation
Management Structure of Mizuho*Core group companies:
MHCB, MHBK, MHTB, MHSC, MHIS, TCSB, DKA, FIMCO, DIAM, UC Card,
MHRI, MHIR, Mizuho Capital, Mizuho Advisory

General Meeting of Shareholders
Corporate Auditors (*2) ;Board of Corporate Auditors
Board of Directors (*1)

Nominating Committee
Compensation Committee

Executive Management Committee
Business Policy Committees

President & CEO

Internal Audit Committee*1. Three of the nine Directors are outside Directors.
*2. Three of the five Corporate Auditors are outside Auditors.

(As of June 28, 2005)

53

Management Structure of Mizuho

Profit Management System of Mizuho

Basically, the group companies have adopted acommon profit management system and framework, but

Profit Management System Based on Legally
Separate Subsidiaries in Accordance with
Customer Segmentation and Business Functionsin actual operations, each takes a flexible and swift

We have adopted the basic policy of reinforcing our

Consolidated Profit Management

financial strength by vigorously increasing profitability andWhile each core group company works to enhance its own

cutting costs. Centered on MHFG, we conduct profit

profitability, we manage their profits on a consolidated

management for the group based primarily on the group'sbasis as a means of building an optimal business portfolio

core companies.

that is balanced for the entire group.

approach best suited for its individual business models.

More specifically, we have clarified the strategicSpecifically, in addition to the core group companies,

positions of the core group companies within the group

we formulate profit plans and manage performance foron the basis of our group business portfolio strategy and,the strategically important subsidiaries and include theirhaving ensured their autonomy and independence while

profits with those of the core group companies.

bringing them closer together through the unifying forceof MHFG, we are seeking to maximize group corporate

Allocation of Risk Capitalvalue.

In an environment where the financial sector faces

Based on the core group companies, MHFG is making

progressive deregulation and globalization, and financial

efforts to optimize its business portfolio, managing profits

technology grows in sophistication, financial institutions

through the following:must strengthen their profitability while managing various• formulating plans for net business profits and net

types of risk.

income, and carrying out performance management,

Based on MHFG's business portfolio strategy, we have• allocating management resources such as personnel,

built a management structure under which optimized

investment and risk capital, andbusiness activities are conducted within the limits of• risk controls and profitability assessments based onallocation of risk capital.

allocations of risk capital drawn from equity capital andother sources.

Further, most of the core group companies establish

Under this framework, RAROC is used as an index totheir own profit plans for and manage the performance ofevaluate performance in terms of return on allocated risk

their respective company's business group/units based on

capital at the level of the holding company and the core

the management policy, overall profit plans and resourcegroup companies. Our aim as a group is to improve capital

allocations drawn up by MHFG.

efficiency by allocating resources more efficiently based on

The above group companies have also introduced thethe results of these evaluations.

allocation of risk capital among each company's businessgroups/units, which is one of the most importantmanagement frameworks of the group. Each group

 RAROC (Risk-Adjusted Return on Capital)

that risk capital and RAROC is then used as a performance

RAROC is a measure of the profitability of allocated capital and is used as anindex for assessing capital efficiency. RAROC is calculated by dividing riskadjusted profits (profits adjusted to reflect statistically expected risk) by capital.

index to evaluate the return on allocated risk capital.

Risk capital allocation

54

Glossary

company engages in business activities within the limits of

Allocation of risk capital to the core group companies

Management resources allocation function

Risk-based profitability assessments

Risk control function

Management to preserve allocated risk capitalHuman Resources System of Mizuho

Optimizing Uniqueness of Group Companies
and Synergies

Vision for Human Resources: ROE on Human
Resources Investment

Employees are employed by one of the group companies

The group and its employees have set a shared vision for

the aim of creating a group of specialists that can deliverhuman resources as follows:

maximum innovativeness and speed.

(MHFG, MHHD, MHCB, MHBK, MHTB, MHSC, MHIR) with

“We promote the “ROE” principle for human resources

At the same time, facilitated by the group's common

with a view to lasting value creation and creating ancompensation system (group-wide common platform for

attractive and fulfilling working environment forhuman resources), we are able to maximize group synergy

employees.”

through cross-company personnel transfers to place theIn this vision, “ROE” stands for the following:right person in the right job.

Responsibility: Observe the principles of independentjudgment and self-accountability.

Promoting the “Professional Career Path”

Opportunity: Provide equal opportunity.

We have put in place multi-featured compensation

Employability: Develop expertise to enhancesystems that meet the needs of employees and thecompetitiveness.

increasingly fluid labor market.
One example is the promotion of the “Professional

Establishing a Corporate Culture Full of Vitality

Career Path,” with a salary system that is in line withWe have established the following five values as themarket standards.

group's common code of conduct. These values, serving as
the axis of our personnel evaluation system used bygeneral managers, along with the 360-degree employee

Rejuvenating the Organization and Pursuing
Specialization

performance evaluation*, shall be instilled in all employees

In January 2003, we launched an internal job applicationof the group.

system for branch general manager positions to encourage(1) Possessing a “customer-first” corporate objective.

the quick development and advancement of younger(2) Facing the challenges of innovation.

employees. As of May 31, 2005, we achieved a dynamic(3) Being rational and fair in making decisions.

rejuvenation of the organization by selecting 47 applicants(4) Placing importance on speed.

in their thirties and appointing them as branch general(5) Being accountable for all actions.

managers.

*Personnel evaluation scheme whereby personal evaluations of managers
involve subordinates and persons from other divisions with whom they
have close working relationships.

We also introduced a group-wide job application system
to encourage employees to acquire greater specialization inwhich employees can apply for specific positions throughout
the group. We intend to strengthen this scheme further by
expanding the number of positions available.

Common Platform for Human Resources
MHFG

MHHD

MHCB

MHBK

MHTB

MHSC

MHIR

Management-class platform
Reflect the independenceof each group company
through market pricing,risk/return structure
and value-added.

Promote cross-company personnel exchanges using a portable retirement benefits system, etc.,
while maintaining the culture and autonomy of each group company.

Proactive personnel exchanges across group companies.

CommonPlatform

Welfare benefits platform(Health insurance association, employees' pension funds, cafeteria plan, etc.)
Human resources framework platform(Career paths, job groups, job grades, group internal recruiting system, etc.)(As of June 28, 2005)55

Internal Control Systems of Mizuho
Compliance Structureaware of its contents and act in accordance with them.
Each group company has also prepared a compliance

Basic Compliance Policy

manual, which serves as a practical guidebook for

We are acutely conscious at all times of our social

rigorously enforcing compliance, clarifying the laws andresponsibilities and public mission as Japan's leading

regulations that group companies must observe incomprehensive financial services group. We, therefore,

pursuing their business activities and the compliancework to ensure that we observe all laws and regulations,activities they should follow.

and pursue corporate activities in a fair and honest

Again, we are doing our utmost to ensure that senior

manner that conform to the norms accepted by society.

executives and employees are fully acquainted with thePlacing thoroughgoing compliance as one of thecontents of these manuals through compliance training.

fundamental principles of sound business management,

To check compliance levels, we have establishedeach group company pursues compliance and establishes

measures for ensuring that compliance is thoroughly

its own compliance structure in line with the basic policies

enforced through primary self-checks by individual units

indicated by MHFG.

and secondary checks by the internal audit section.
Each fiscal year, group companies also draw up

Compliance Structurecompliance programs containing concrete measures forAlong with overseeing compliance matters in general atensuring that compliance is thoroughly enforced, including

each company, the CEOs of MHFG, MHCB and MHBK also

various measures associated with establishing ahead their respective Compliance Committees, wherecompliance framework, training and checks. Progress inimportant matters concerning compliance are discussed.

implementing the programs is monitored every half-year.

Moreover, the above companies have establishedindividual compliance divisions under the CCOs. These
divisions are responsible for compliance planning andimplementation, and control compliance management
throughout each company. The head of every organizational
unit is responsible for guidance and implementation inCompliance Structure

connection with compliance, while the compliance

MHFG

officer/compliance administrator is deployed to check theBoard of Directors

status of compliance.
Other core group companies such as MHTB and MHSC
have also established compliance structures that suit thecharacteristics of their respective business sectors.
MHFG monitors the status of compliance throughout
the group from reports submitted by the core group

President & CEO, Compliance Committee(Chairman: President & CEO)
Chief Compliance Officer (CCO)(Compliance and Legal Affairs Division)
Every organizational unit
Compliance Officer/
Head of each unit
Compliance Administrator

companies, and adopts appropriate responses whenevernecessary.
Compliance at subsidiaries of the core groupcompanies is monitored and managed by the core group

MHHD
Joint management by
MHFG and MHHD

companies themselves.
MHHD cooperates with MHFG in managing compliance
at MHCB, MHBK, MHSC, MHIS and their group companies.

MHCB
MHBK
MHSC
MHIS

core group companies
other than those to the left
(10 companies)

Subsidiaries of
the above group companies

Subsidiaries of
the above group companies

MHTB and otherCompliance Activities
Furthermore, we have drawn up the Mizuho Code of
Conduct, which establishes clear and concrete standards of
ethical behavior, distributing it to all senior executives andemployees of the group and ensuring that they are well56

(As of June 28, 2005)

Information Security Management System

the core group companies is monitored and managed by
the core group companies themselves. In every organiza-

Basic Approachtional unit, the head of each unit is also responsible for

As the advanced information-telecommunication society

information security management, and an Information

evolves and use of information increases exponentially,

Security Management Officer is appointed to check onappropriate protection of the informational assets held by

how information is handled and ensure that personnel are

a company becomes a social responsibility, while appropri-

fully aware of and well trained in safety management

ate usage of the same assets becomes the foundation of

measures.

the company's competitiveness. As a provider of compre-

Based on this information security management system,

hensive financial services in Japan and abroad, we believe

we have drawn up and published privacy policies that com-that appropriate protection and use of informational

ply with the Law Concerning the Protection of Personal

resources are extremely important issues.

Information, which came into full force in April 2005. We

We are striving to strengthen our information security

are also building a system to deal with requests for disclo-

management system, defining information security man-sure, and strengthening our safety management measures.

agement as all acts associated with the appropriate protection and use of group informational assets. This includes

Information Security Management System

adopting information security management measures toensure the confidentiality, integrity and availability of our

Board of Directors

MHFG

informational assets, and responding to requests for disclo-

President & CEO

Executive Management Committee

sure from “data subjects” (the people to whom specificInformation Security
Management Committee

information pertains) concerning personal information.

Overview of the Information Security
Management System
We have clarified the group management system as well

Chief Information Security Officer(Division in charge: Information Security Management
Division, Compliance and Legal Affairs Division)
Every organizational unit
Head of each unit

Information Security Officer

as management methods for information security management, and each company has drawn up its own regulations concerning information security management. It isalso building an information security management system,
stipulating that the compliance departments of the individual companies are to act as information security management departments.

MHHD
Joint management by
MHFG and MHHD
MHCB
MHBK
MHSC
MHIS

core group companies
other than those to the left
(10 companies)

Subsidiaries of
the above group companies

Subsidiaries of
the above group companies

MHTB and other

The Board of Directors of MHFG makes decisions onimportant matters concerning group information security
management, and the Information Security Management
Committee handles discussions and coordination of crossdivisional issues relating to overall group information security management. In addition to appointing a Chief

Strengthening Disclosure Controls

Information Security Officer who supervises planning, proposals and implementation in connection with overall

MHFG has established the Disclosure Committee as one ofgroup information security management, the Information

its Business Policy Committees to discuss and coordinate

Security Management Office has been established withinmatters concerning disclosure so as to strengthen its dis-

the Compliance and Legal Affairs Division to specialize inclosure controls. Reports on the practice of timely disclo-

information security management and provide centralizedsures are submitted to the Disclosure Committee once

monitoring and control of the information security man-every quarter.

agement situation at core group companies. The information security management situation at subsidiaries of(As of June 28, 2005)57

Internal Control Systems of Mizuho

Risk Management Structure

Overview of the Risk Management Structure
Each group subsidiary adopts the most appropriate risk

Commitment to Risk Management

management measures for its business and the size andnature of its risk exposures, while MHFG controls risk man-

Basic Approachagement for the group as a whole.

Further progress in financial deregulation and internation-

More specifically, MHFG regularly and as required

alization has led to rapid growth in the diversity and com-receives reports and applications concerning the risk man-plexity of banking operations, exposing financial institu-

agement situation from core group companies and gives

tions more than ever to various kinds of risk, including

them appropriate instructions concerning risk manage-credit, market operations, IT, legal, settlement, and otherment. MHHD cooperates with MHFG in managing the risk

risks. In order to raise our corporate value while ensuringof MHCB, MHBK, MHSC, MHIS and their group companies.

that the business of both the group as a whole and indi-

Each core group company also has its own system forvidual group companies remains healthy and stable, wemanaging different types of risk, regularly and as required

are well aware that adopting risk management and con-receiving reports on the status of risk at their own grouptrol measures that match our operations and their inherent

companies, and giving them appropriate instructions onrisks is an issue of key importance to management. For

risk management.

this reason we are taking steps to strengthen our risk
management structure.
MHFG's Board of Directors has laid down Basic Policies
for Risk Management that are applicable to the entire
group. These policies clearly define the kinds of risks to be
managed, establish the organizational structure and provide for the human resources training necessary for appropriate levels of risk management. They also provide for
audits to measure the effectiveness and suitability of therisk management structure. In line with these basic policies, we are adopting various measures to strengthen andenhance the sophistication of our risk management system.

The Mizuho Financial Group's Risk Management StructureManage overall group risk
Set risk management policies.
Give instructions concerning
risk management.

Core group companies

MHFG
Report on therisk management situation.

MHHD

Manage risk in cooperation
with MHFGManage risk for MHCB
and three other companies

58

Manage risk of core group companies

MHTB
TCSB, etc.
MHCB
MHBK
MHSC
MHIS

Give instructions
concerning
risk management.

Report on the risk
management situation.

Subsidiaries
managed by thecore groupcompanies

General Concept of Risk Management

More specifically, MHFG allocates risk capital to thecore group companies, including their own group compa-

Basic Approachnies, to control risk within the limits set for each company.

We classify our risk exposures by risk factor into credit risk,

MHFG also controls risk within managerially tolerable lim-

market risk, liquidity risk, operational risk and so on, andits by working to ensure that the overall risk held by the

manage each type of risk according to its characteristics.

group on a consolidated basis does not exceed the capitalIn addition to managing each type of risk individually,

account and other measures of financial strength. To

we have established a risk management structure to iden-

ensure the ongoing financial health of MHFG and the coretify and evaluate overall risk and, where necessary, togroup companies, we regularly monitor the manner indevise appropriate responses in order to keep risk within

which this risk capital is being used in order to obtain amanagerially tolerable limits in both qualitative and quanti-

proper grasp of the risk profile within this framework.

tative terms.

Reports are also submitted to the Board of Directors andIn line with the basic policies laid down by MHFG inother committees of each company. Risk capital is allocat-

connection with risk management, the group identifies

ed to MHCB and MHBK by risk category, and frameworks

risk broadly and all-inclusively as it takes a proactive andhave been established within the individual banks to fur-progressively sophisticated approach to risk management

ther allocate it to their business units.

that includes methodologies for operations such as settlement and trust businesses that involve exposures to multiple categories of risk.

Risk Capital Allocation
We endeavor to obtain the clearest possible grasp of thegroup's overall risk exposure, and have implemented measures to keep such risks within the group's financial basein accordance with the risk capital allocation framework.

Allocation of Risk Capital(Example)
MHCB

MHFG
The group's risk
exposureMHCB
MHBK

Capital account, etc.

Core groupcompanies'
risk exposure*

MHTB

Allocated risk capital

The group's financial
strength

Risk limits, etc., based on risk capital are set, and controls are
imposed on each type of risk.

Credit risk
Market risk

Allocation toeach business unit

Equity risk
Operational riskGroupcompanies, etc.

MHSC
MHBK

Other risk exposure*Including risk exposures of the subsidiaries of the core group companies.

MHTB
MHSC

* For matters relating to risk management, compliance management and internal audits of other group companies, MHHD manages these companies through the four core subsidiaries.

59Internal Control Systems of Mizuho

second is to manage the portfolio using statistical methods

Credit Risk Management

to measure the potential for credit risk in order to identify

Basic Approach

it and devise appropriate responses. MHHD and MHFG

We define credit risk as the group's exposure to the risk

jointly manage risk for their group companies.

that it might incur losses because of a decline in, or total
loss of, the value of assets (including off-balance-sheet

Credit Risk Management Structure

assets) as a result of deterioration in a counterparty's

 MHFG's Credit Risk Management Structure

financial position. The group has already established the

MHFG's Board of Directors determines the most important

methods and structures necessary for grasping and man-matters pertaining to credit risk. In addition, the Portfolio

aging credit risk, which has become increasingly complex

Management Committee discusses and coordinates basic

because of financial deregulation, internationalization andcredit risk policy and overall credit portfolio management

the growing sophistication of transactions.

and monitoring for the group. The Chief Risk Officer

MHFG manages credit risk for the group as a whole.

(CRO) is responsible for matters relating to credit risk man-More specifically, we have adopted two different but

agement planning and operations. The Risk Management

mutually complementary approaches toward credit risk

Division and the Credit Risk Management Division jointly

management. The first of these is to curb losses arisingmonitor, analyze and submit suggestions concerning credit

from the emergence of credit risk by controlling the entire

risk, and formulate and execute plans in connection withprocess for each individual transaction, from granting thebasic matters pertaining to credit risk management.

credit through to recovery, on the basis of assessments of

 Credit Risk Management at Core Group Companies

the credit standings of the counterparties involved. The

Core group companies manage their credit risk according
to the scale and nature of their exposures in line with the
Basic Policy for Credit Risk Management set forth by

Credit Risk Management Structure

MHFG. Each company's Board of Directors determines key

MHFG

Board of Directors

matters pertaining to credit risk.
MHCB, MHBK and MHTB (the Three Banks) have each

CEO

Head of Risk Management
Group (CRO)

Executive Management
Committee

established Business Policy Committees to discuss andPortfolio Management
Committee

coordinate overall management of their individual credit
portfolios and transaction policies towards borrowers. The
senior executive officer responsible for risk management

Risk Management Division, Credit Risk Management Division

oversees matters relating to credit risk management planning and operations. The Credit Risk Management Division•Set risk management policies•Give instructions concerning
risk management•Report on the risk
management situation

Core group companies
MHCB

MHBK

MHTB

MHSC

Other coregroup
companies

is in charge of credit management, and measuring andmonitoring credit risk, and regularly present reports on therisk management situation to MHFG. Individual credit
examination divisions approve individual transactions inaccordance with the lines of authority stipulated by thebasic policies for credit risk management. To provide
checks and balances, the Three Banks have also estab-

Board of Directors

The Three Banks

lished Credit Review Divisions to function as internal auditors that are independent of the business divisions.

CEO

Executive Management Committee
Business Policy Committees

Senior executive officers
responsible for risk management
Divisions responsible for credit risk management(Risk Management Division, Credit Risk Management Division)

 Individual Credit Management
One of the most important elements of the Three Banks'
risk management infrastructure is the use of a 16-gradeunified credit rating system. In principle, credit ratings apply
to all borrowers and are subject to regular reviews at least
once a year to promptly reflect their term-end corporate

60

Connection between Credit Ratings, Definition of Obligor Classifications of Self-Assessments,
Claims Disclosed under the FRL and Non-Accrual, Past Due & Restructured Loans
Definition of
ObligorClassifications of
Self-Assessment

NormalObligors

Watch
Obligors

CreditRatings(MajorCategory)

Definition of Ratings

A1–A3

Obligors whose certainty of debt fulfillment is very high, hence their levelof credit risk is excellent.

B1–B2

Obligors whose certainty of debt fulfillment poses no problems for theforeseeable future, hence their level of credit risk is sufficient.

C1–C3

Obligors whose certainty of debt fulfillment and their level of credit riskpose no problems for the foreseeable future.

D1–D3

Obligors whose current certainty of debt fulfillment poses no problems,
however, their resistance to future environmental changes is low.

E1–E2

Obligors who require close watching going forward because there areproblems with their borrowings, such as reduced or suspended interest
payments, problems with fulfillment such as de facto postponements ofprincipal or interest payments, or problems with their financial positions as
a result of their poor or unstable business conditions.

Claims Disclosed
under the FRL

Obligors who are not yet bankrupt but are in financial difficulties and are deemed
to be very likely to go bankrupt in the future because they are finding it difficult
to make progress in implementing their management improvement plans (including obligors who are receiving ongoing support from financial institutions).

Intensive
Control
Obligors

F1

Substantially
Bankrupt
Obligors

G1

Obligors who have not yet gone legally or formally bankrupt but who aresubstantially bankrupt because they are in serious financial difficulties andare not deemed to be capable of restructuring.

Bankrupt
Obligors

H1

Obligors who have already gone bankrupt, from both a legal and/or formal
perspective.

Non-Accrual, Past
Due & Restructured
Loans

Normal Claims

Claims for Special
Attention

Claims with
Collection Risk
Claims against
Bankrupt andSubstantially
Bankrupt Obligors,
and equivalent

Restructured Loans
Loans Past Due for
3 Months or More

Non-Accrual
Delinquent Loans

Loans to Bankrupt
Obligors

results, as well as special reviews as required whenever amonitor the status of their portfolios. They are alsoborrower's credit standing changes. This enables the Three

improving their credit decisions and post-transaction man-Banks to monitor both individual borrowers and the statusagement functions by examining individual transactionsof the overall portfolio in a timely fashion. Since we con-from these viewpoints, providing internal audits and risksider credit ratings to be a primary phase of the self-

management guidance to individual business promotion

assessment process described below, they are linked to theoffices. MHSC and other core group companies follow

obligor classifications used in asset self-assessments.

credit risk management procedures that suit the character-(Please refer to the figure “Connection between Credit

istics of their respective business sectors.

Ratings, Definition of Obligor Classifications of SelfAssessments, Claims Disclosed under the FRL and Non-

Portfolio Management

Accrual, Past Due & Restructured Loans.”)

 Expected Loss and Unexpected Loss

Self-assessments of assets are used to ascertain the sta-

Portfolio-based credit risk management uses statistical meth-tus of assets both as an integral part of credit risk manage-

ods to calculate the possibility that our credit portfolio may

ment and in preparations for making the appropriate write-

generate bad debt losses. There are two key figures:

offs and provisions based on corporate accounting princi-“expected loss” is the average amount of loss forecast forples. Specifically, the Credit Risk Management Division is in

the next 12 months; “unexpected loss” is the maximum excess

charge of overall control of self-assessment of assets, coop-

amount in the case where losses exceed the expected loss.

erating with the administrative divisions specified for each

“Expected loss” is covered out of profits on credit transac-

type of asset, including loan portfolios and securities in exe-

tions, and is used as a reference value when setting transac-

cuting and managing self-assessments. This results in ation guidelines. “Unexpected loss” is covered out of total capi-

structure that allows the group to identify and control thetal when it actually materializes. The credit portfolio is there-

actual quality of assets.

fore monitored from various angles to ensure that unexpect-

The Three Banks thus use the unified credit rating

ed losses are kept within the level of the allocated risk capi-

system and credit risk measurement tools to ascertain andtal, and limits are applied to the portfolio where necessary.

61

Internal Control Systems of Mizuho

and middle market corporations, public sector entities andExpected Loss and Unexpected Loss Amounts

other customers in Japan.
Making the most of the features of each bank's respec-

Frequency
Average

This amount depends on theconfidence interval. For
example, if the confidence
interval is set at 99%, it is the
9,900th smallest loss figureout of 10,000 trials.

tive portfolios, the two banks endeavor to reduce expected loss while simultaneously using financial technology instrategic acquisitions and sales of assets. While keeping a
sharp eye on the potential for unexpected losses, they also
aim to raise overall group capital efficiency, boost profitability and shareholder value, and enhance the sophisti-

Loss amount

Expectedloss amounts

cation of their credit risk management using this as a base.

Maximum loss amounts

To control credit concentration in certain companies,

Unexpected loss amounts

MHTB and MHSC have set credit limits according to their customers' creditworthiness, and control their portfolios in an
appropriate manner by confirming adherence to these limits.

 Risk Control Methods
We recognize two types of risk arising from allowing too

MHCB's Credit Portfolio

large a proportion of overall credit risk to be allocated in

Other

Asia

certain areas. One type is “credit concentration risk,”

Europewhich stems from granting too much to certain individual
counterparties; the other type is “chain reaction default

North AmericaJapanrisk,” which stems from granting too much credit to certain corporate groupings, industrial sectors, etc. We manage these various risks in line with specific guidelines set
for each. The individual risk management divisions are
responsible for monitoring adherence to these guidelines
and reporting to the Business Policy Committees. (Please

MHBK's Credit Portfolio

refer to the figure “Allocation of Risk Capital and Control

Public sector
entitiesof Credit Risk.”)

Other
Individuals

 Portfolios of Most of the Core Group Companies
MHCB's portfolios are notable for their international diver-

Domestic SMEs, andmiddle market corporationssification between certain listed domestic companies andother major Japanese enterprises, and overseas corporations. MHBK's portfolios are diversified among relatively
small accounts centered on individuals, domestic corpora-(Including financial subsidiaries specializing in corporate revitalization)

tions such as small and medium-sized enterprises (SMEs)

Allocation of Risk Capital and Control of Credit Risk
Allocation of risk capitalUnexpected loss amounts

Credit concentration risk
 Individual company ratings-based
credit guidelines

MHCB: Sets , , , 
MHBK: Sets , , 
MHTB: Sets , 62

Chain reaction default risk

Control

Equivalent to credit concentration risk amounts

 Corporate group-based credit guidelines Geographical area/country-based
credit guidelines
 Industrial sector-based credit guidelines

Equivalent to chain reaction default risk amounts

Market and Liquidity Risk Management

the core group companies. For trading and banking activities, limits are set for Value at Risk (VAR) and for losses.

Basic Approach

For banking activities, position limits based on interest rate

We define market risk as the risk that the group could

sensitivity are also set as needed.

incur losses because of fluctuations in interest rates, stock

These limits are discussed and coordinated by the ALM

prices and foreign exchange rates. Our definition includes& Market Risk Management Committee, discussed further

the risk of losses incurred when it becomes impossible toby the Executive Management Committee, then deter-

execute transactions in the market because of market con-mined by the CEO. Various factors are taken into account,fusion, or losses arising from transactions at prices that areincluding business strategies, historical limit usage ratios,

significantly less favorable than usual (market liquidity

risk-bearing capacity (profits, total capital and risk man-risk). We define liquidity risk as the risk of losses arising

agement systems), profit targets and the market liquidity

when the group faces funding difficulties because a deteri-of the products involved.

oration in its financial position makes it difficult to raise Market Risk Management at Core Group Companies

the necessary funds, or when it is forced to procure funds

The core group companies that account for most of theat much higher interest rates than usual.

group's exposure to market risk (MHCB, MHBK, MHTB and

MHFG manages market and liquidity risk for the group

MHSC) have formulated their basic policies in line with theas a whole. More specifically, MHFG formulates the Basic

Basic Policy for Market Risk Management drawn up by MHFG.

Policies for Market and Liquidity Risk Management for the

Their Boards of Directors determine important mattersentire group, and manages risk for the core group companies. MHFG monitors and manages the overall market andMarket and Liquidity Risk Management Structure

liquidity risk management profile for the group. MHHD
and MHFG jointly manage risk for their group companies.

MHFG's Board of Directors determines key matters per-Executive Management
Committee

CEO

Market Risk Management Structure Market Risk Management

MHFG

Board of Directors

ALM & Market Risk
Management Committee

Head of Risk Management
Group (CRO)taining to market risk management policies. The ALM &Risk Management DivisionMarket Risk Management Committee broadly discusses
and coordinates matters relating to basic ALM policies, riskplanning and market risk management, proposing
responses to emergencies such as sudden market changes.

•Set risk management policies•Approve limits•Give instructions concerning
risk management•Report on the risk
management situation•Apply for limits

The CRO is responsible for matters relating to market riskCore group companies

management planning and operations. The Risk Management
Division is responsible for monitoring market risk, reports
and analyses, proposals, and setting limits and guidelines,

MHCB

MHBK

MHTB

MHSC

Other
core groupcompanies

and for formulating and implementing plans relating tomarket risk management.
The Risk Management Division assesses and manages
overall group market risk. It also receives reports from core

Board of Directors
CEOgroup companies on their market risk management thatenable it to obtain a solid grasp of the risk situation, sub-Senior executive officers
responsible for risk management

Core group companies
Executive Management Committee
ALM & Market Risk
Management Committee

Officesmitting reports to the CEO on a daily basis and to theBoard of Directors and the Executive Management
Committee on a regular basis.

Risk Management Division

Middle Offices
Front Offices

To manage market risk, limits that correspond to risk
capital allocations are set according to the risk profiles of63

Internal Control Systems of Mizuho

relating to market risk management while their CEOs are

the cash flow management situation and for planning andresponsible for controlling market risk. The Business Policy

implementing cash flow management. Reports on theCommittees such as the ALM & Market Risk Management

cash flow situation are submitted to the ALM & Market

Committee are responsible for overall discussion and coor-

Risk Management Committee, the Executive Management

dination of market risk management. Specifically, theCommittee and the CEO.

committees discuss and coordinate matters relating to

MHFG measures liquidity risk using indices pertaining tobasic ALM policies, risk planning, and market risk manage-

cash flow such as limits on funds raised in the market.

ment, proposing responses to emergencies such as sudden

Limits on liquidity risk are discussed and coordinated bymarket changes. The CRO of each company is responsible

the ALM & Market Risk Management Committee, dis-for matters pertaining to planning and running market risk

cussed further by the Executive Management Committee,

management. Based on a common group risk capital allo-

then determined by the CEO. MHFG has established classi-

cation framework, the above-mentioned companies man-fications for the cash flow conditions affecting the group,

age market risk by setting limits according to the risk capi-

ranging from “normal” to “cause for concern” and “criti-

tal allocated to market risk by MHFG.
These companies have established specialist company-cal,” and has laid down response procedures for dealing
with cases which are deemed to fall into the “cause forwide market risk management divisions to provide inte-concern” or “critical” categories.

grated monitoring of market risk, submit reports, analyses Liquidity Risk Management at Core Group Companies

and proposals, set limits, and formulate and implement

The liquidity risk management structures of MHCB, MHBK,

plans relating to market risk management. The risk man-

MHTB and MHSC are basically the same as the aforemen-agement divisions of each company submit reports on thetioned market risk management structures, but the senior

status of market risk management to the CEO and top

executives responsible for risk management are responsi-

management on a daily basis, and to the Board ofble for matters pertaining to planning and running liquidi-

Directors and the Executive Management Committee on aty risk management, while the senior executives of theregular basis. They also provide regular reports to MHFG.

ALM and trading units are in charge of matters pertaining

To provide a system of mutual checks and balances into planning and running cash flow management.

market operations, they have established middle offices

The methodologies used for ensuring precise control of

specializing in risk management that are independent ofliquidity risk include the formulation of management

their front offices, which engage in market transactions,indices pertaining to cash flow, such as limits on funds

and their back offices, which are responsible for bookraised in the market. Like MHFG, the above-mentioned

entries and settlements. When VAR is not adequate tocompanies have established classifications for the cash

control risk, the middle offices manage risk using addition-

flow conditions affecting them, ranging from “normal” toal risk indices such as 10 Basis Point Value (BPV), carry out“cause for concern” and “critical,’ and have laid downstress tests, and set stop loss limits as needed. They moni-

response procedures for dealing with cases which are

tor their market liquidity risk for individual financial prod-

deemed to fall into the “cause for concern” or “critical”

ucts in the market while taking turnover and other factors

categories.

into consideration.

Each company has adopted stringent controls that callfor the submission of reports on liquidity risk management

Liquidity Risk Management Structure

and cash flow management to the ALM & Market Risk

 Liquidity Risk Management

Management Committee and other Business Policy

MHFG's liquidity risk management structure is fundamental-

Committees, the Executive Management Committee andly the same as the market risk management structure

the CEO.

described above. However, the head of the Financial

64

Control & Accounting Group of MHFG is additionally

Status of Market Risk

responsible for matters relating to planning and running Status of MHFG's Market Risk

cash flow management operations, while the Financial

The graph on page 65 depicts the status of VAR in fiscal

Planning Division is responsible for monitoring and adjusting

2004 (ended March 31, 2005).

MHFG's Fiscal 2004 VAR

MHFG's Fiscal 2004 Back Testing

Banking activities

Profits/losses (assumptive basis) (billions of yen)

(VAR, billions of yen)

(%)

350.0

1.4
VAR

300.0

1.2

250.0

1.0

200.0

0.8
0.6

150.0

Maximum: ¥301.5 billion
Minimum: ¥186.1 billion
Average: ¥235.8 billion

100.0
50.0

4.0

JGB Yield (5-Year)

0.4

2.0
0

(2.0)
(4.0)

0.2
04.11.11
04.11.25
04.12.09
04.12.23
05.01.06
05.01.20
05.02.03
05.02.17
05.03.03
05.03.17
05.03.31

04.09.02
04.09.16
04.09.30
04.10.14
04.10.28

04.08.05
04.08.19

04.04.29
04.05.13
04.05.27
04.06.10
04.06.24
04.07.08
04.07.22

04.04.01
04.04.15

0
0.0

1.0

2.0

3.0

Quantitative standards used for calculating VAR
Confidence interval: one-tailed 99.0%
Holding period: 1 month
Historical observation period: 1 year

4.0

5.0

VAR (billions of yen)

0.0

our internal models are sufficiently accurate in measuring
our group's market risk exposure.

 Stress Testing

Trading activities

As a market risk measurement method, VAR is based on(VAR, billions of yen)statistical assumptions. For this reason, we carry out stress

5.0

testing to simulate the levels of losses that could be
4.0

incurred in cases where the market moves suddenly to lev-

3.0

els that exceed these assumptions.

2.0

The stress testing methods used include one method

Maximum: ¥4.3 billion
Minimum: ¥2.0 billion
Average: ¥2.9 billion

1.0that calculates losses on the basis of the largest fluctua05.03.17
05.03.31

05.03.03

04.12.23
05.01.06
05.01.20
05.02.03
05.02.17

04.10.14
04.10.28
04.11.11
04.11.25
04.12.09

04.09.30

04.08.19
04.09.02
04.09.16

04.04.29
04.05.13
04.05.27
04.06.10
04.06.24
04.07.08
04.07.22
04.08.05

04.04.01
04.04.15

tions occurring over a period of more than five years, and0

Quantitative standards used for calculating VAR
Confidence interval: one-tailed 99.0%
Holding period: 1 day
Historical observation period: 1 year

another that calculates losses on the basis of market fluctuations occurring during historical market events.
The figure below shows the assumed maximum loss
results of stress testing in trading activities using the above
methods.

MHFG's Fiscal 2004 Interest Rate Sensitivity by Maturity
At March 31, 2005 (billions of yen)Over 1 year,
up to and1 year or lessTotal
including Over 5 years
5 years
Interest rate sensitivity(10BPV)

(5)

(34)

(5)

(44)

We conduct interest rate sensitivity analyses in connec-

MHFG's Fiscal 2004 Stress Testing
At March 31, 2005 (billions of yen)
Assumed maximum losses
Maximum loss result calculated by stress testing

9.2

 Outlier Framework (Basel II)tion with interest rate risk, which constitutes the main

The Basel Committee on Banking Supervision is currently

form of market risk facing the group. The above table

reviewing capital adequacy requirements. As part of the

depicts the interest rate sensitivity of yen currency banking

review, the losses arising from the banking book in hypo-

operations, by maturity, as of the end of March 2005.

thetical interest rate shock scenarios under certain stress Back Testing

conditions are estimated, then compared with broadly-

In order to confirm the effectiveness of market risk mea-

defined capital (Tier 1 capital plus Tier 2 capital). If thesurements using VAR, MHFG carries out regular back tests

interest rate risk in the banking book leads to an economic

to compare VAR and profits/losses.

value decline of more than 20% of the sum of Tier 1 and

The graph below depicts daily VAR on trading activities

Tier 2 capital, the bank will be deemed an “outlier” andin fiscal 2004, and the corresponding paired distribution of

may be required to reduce its risk or adopt other respons-

profits and losses. There was no case where profits/losses

es. Since studies on disclosing these ratios are underway,

exceeded VAR during the period, and this confirms that

MHFG has led the way in reviewing its capital adequacy

65Internal Control Systems of Mizuho

requirements and measures losses arising from banking

Operational Risk Managementbook each month as part of its stress tests. However, it ispossible that the results of test measurements of the losses

We define operational risk as the risk of loss that our

may change depending on the details of the revised capi-

group may incur resulting from inadequate or failed inter-tal adequacy requirements to be finalized in the future.

nal processes, people and systems, or from external

The figure below shows the results of estimates of loss-

events.

es in banking book in cases where interest rate fluctua-

We recognize that operational risk includes IT risk,

tions occur under stress conditions. The results of esti-

operations risk, legal risk, human resources risk, tangible

mates of losses on banking book show that they are 5.4%

asset risk, regulatory risk, and reputational risk, and haveof broadly-defined capital. Since the amount of risk on thelaid down risk management policies concerning risk man-banking book is therefore well within controllable limits,

agement structures and methods for each kind of risk.

the bank does not fall under the “outlier” category.

MHCB, MHBK, MHTB, MHSC, MHIS and TCSB also manage risks in an appropriate manner in line with risk management policies they have laid down concerning each

MHFG's Fiscal 2004 Estimates under the Outlier
Framework

type of risk.

At March 31, 2005 (billions of yen)Amount Broadly-defined Loss ratioof loss
capital to capital
Estimates under the Outlier Framework

429.6

8,020.2

5.4%

We are working to improve and strengthen our management methods and structures in order to recognize, evaluate, monitor and control the various types of operationalrisk arising from the growing sophistication and diversity offinancial operations and the progress in computerization.

Glossary Interest Rate Shock Scenario under the Outlier Framework
For this interest rate shock scenario, we generate annual rate fluctuation data for
5 years derived from daily raw historical interest rate data of the past 6 years, andthen apply the actual fluctuation data (i.e. rise of interest rates) at 99.0 percent
confidence level to the shock scenario. On MHFG's current banking book, a risein interest rates causes losses.

MHFG, MHCB and MHBK have laid down rules for data
gathering, and in addition to developing a common loss

Operational Risk Management Structure

MHFG

Board of Directors

Executive Management
Committee

CEO
Senior executive officers
responsible for each typeof risk management

Operational risk management(Risk Management Division)

IT risk management
division
Operations risk
management division•Set risk management policies•Give instructions concerning
risk management

Divisions
responsible foreach type of risk
management•Report on the risk
management situation

Core group companies
MHCB, MHBK, MHTB, MHSC,
MHIS, TCSB, etc.

66database for the entire group, measure operational risk onof informational assets relating to systems in line with thea regular basis.

Basic Policy for IT Risk Management and the Information

The Basel Committee on Banking Supervision is cur-

Security Policy. More specifically, we are pushing ahead

rently working toward the introduction of new BIS ruleswith various efforts, identifying and evaluating IT-related(Basel II), which will include operational risk as well as

risk, implementing risk mitigation measures based onmarket and credit risk within capital adequacy guidelines.

these evaluation results, ensuring thoroughgoing project

We are participating in the international forum on the

management in such areas as process management in sys-

new BIS rules, and are proactively pursuing more sophisti-

tems development and quality control, and strengthening

cated operational risk management across the entire

security to prevent information leaks. Further, we aregroup.

working on improving the effectiveness of our emergency
responses by improving our backup systems and holding

Operations Risk Management

drills and taking other steps to minimize the impact of any

Operations risk is the risk that customers may suffer ser-possible system failures or disasters on customers.

vice disruptions, or that customers or the group may incur

We are well aware that this kind of risk has a direct

losses because senior executives or employees fail to fulfill

impact on services to customers and are working hard totheir tasks properly, cause accidents or act improperly.

build a management structure that is better attuned to the

In line with the Basic Policy for Operations Risk

situation.

Management, we have established a structure for improving operations by identifying and adopting appropriate

Reputational Risk Management

measures for mitigating operations risk. More specifically,

Reputational risk is the risk of incurring tangible or intangi-

we have laid down clearly defined procedures for handling

ble losses as a result of damage caused to the group's

operations and periodically checking the status of opera-

credibility or the Mizuho brand when market players learn

tional processes. Progress has been made in strengthening

about or the media report various risk events that actuallyoperational guidance from head office and instructions inarise in connection with the group's operating activities, ororder to improve the operational expertise of staff and thefalse rumors or vicious slanders.

risk management capabilities of managers. We are also

When MHFG receives reports from group companies

moving ahead with other policies, including the introduc-concerning certain information that may have a serious

tion of IT, office automation and centralization in order to

impact on group management, it identifies and manages

ensure efficient operations that reduce human error to a

the reputational risk for the group as a whole on an inte-

minimum. Further, we are working on improving thegrated basis, using the framework it has established for

effectiveness of our emergency responses by holding drills

dealing with such reputational risk in a manner appropri-

and taking other steps to minimize the impact of any pos-

ate to its scale and nature.

sible system failure or disaster on customers.

The group also works to quickly identify rumors andWe are well aware that this kind of risk has a direct

minimize possible losses by devising appropriate respons-

impact on services to customers and are working hard toes depending on the urgency and possible impact ofbuild a management structure that is better attuned to thethe situation.

situation.

(As of June 28, 2005)

IT Risk Management
IT risk is the risk that customers may suffer service disruptions, or that customers or the group may incur losses arising from system defects such as failures, faults, or incompleteness in computer operations, or illegal or unauthorized use of computer systems.
We continue to make determined efforts to ensure thestability of our IT operations and the protection and safety67Internal Control Systems of Mizuho

Internal Audit Structure

MHCB and MHBK have established Internal Audit
Divisions and Credit Review Divisions as internal audit

Basic Approach

divisions to carry out the audits at domestic and overseas

We define internal audits as an integrated process forbusiness offices, head office divisions and group

evaluating the extent to which internal control achieves its

companies. Specifically, the Internal Audit Divisions assess

objectives in key areas—appropriate risk management,

the suitability and effectiveness of business activities

efficient and effective business operations, reliableassociated with compliance and risk management. The

financial reporting, and compliance with laws, regulations

Credit Review Divisions audit credit ratings and the status

and internal rules. They are conducted from an objectiveof credit management in addition to auditing self-and comprehensive standpoint, independently ofassessment of assets, in order to verify the correctness andoperational reporting lines, and extend as far as offering

suitability of matters deemed necessary from theadvice, guidance and remedial recommendations inviewpoint of assuring the soundness of the assets inconnection with any problems that may be uncovered.

question.

Through this integrated process, internal audits assist

Other Core Group Companies

the Boards of Directors of individual group companies in

MHTB, MHSC and other core group companies haveefficiently and effectively fulfilling their managerial duties

also established effective and efficient internal audit

under the self-responsibility principle.

structures that suit the characteristics of their respective

In line with the Basic Policy for Internal Audit laid downbusiness sectors.

by MHFG, the core group companies conduct internal
audits, which include the auditing of their own

Internal Audit Management Structure

subsidiaries. Also, in order to grasp the situation withrespect to risk controls across the group, group companies

MHFG

carry out internal audits focusing on risks that are

Board of Directors

common to the group as a whole.

President & CEO
Chairman of Internal
Audit Committee

Internal Audit Management StructureInternal Audit CommitteeMHFG
MHFG has established the Internal Audit Committee

Everyorganizational
unit(Chairman: President & CEO) that is independent ofbusiness promotion divisions to discuss and make

Audit

Head of Internal
Audit Group
Division in charge:
Internal Audit Division

audits at the core group companies through examining
above reports. The Internal Audit Committee of MHFG
discusses and makes decisions on the results of
examinations and important matters pertaining to thegroup's internal audits. After it reaches decisions thereon,
reports are submitted to the Board of Directors.

MHHD
DivisionEveryin charge:
organiAudit Internalzational
Audit
unit
Division

Report the results ofinternal audit, etc.

Advice, guidance andremedial recommendations

MHFG grasps and manages the status of conducting

Advice, guidance andremedial recommendations

decisions on important matters concerning internal audit.

Joint management by
MHFG and MHHD

MHHD
MHHD cooperates with MHFG in managing matters relating
to internal audits at MHCB, MHBK, MHSC and MHIS.

MHCB and MHBK

MHCB
MHBK
MHSC
MHIS

MHTB and othercore group companies
other than those to
the left (10 companies)

Subsidiaries of the abovegroup companies

Subsidiaries of the abovegroup companies

MHCB and MHBK have also established Internal Audit
Committees that are independent of business promotion
divisions to ensure the independence of the internal audit
divisions.
(As of June 28, 2005)

68

Financial Analysis of Mizuho
Key Indicators of Mizuho Financial Group, Inc.

70

Financial and Economic Environment

72

Results for the Fiscal Year ended March 31, 2005

74

Improvement of Asset Quality

86

69

Financial Analysis of Mizuho

Key Indicators of Mizuho Financial Group, Inc.

Key Indicators of Mizuho Financial Group, Inc. (Consolidated)
Billions of yen

As of or for the Fiscal Years ended March 31,

2005

3,455.6
627.3
3,905.7
143,076.2
80,368.0
7,795.0
62,917.3
36,047.0

2004¥

3,342.9406.9
3,644.3
137,750.0
77,487.4
9,459.5
66,205.8
32,071.6

2003

Total Income
Net Income (Loss)
Total Shareholders' Equity
Total Assets
Deposits
Debentures
Loans and Bills Discounted
Securities¥¥

3,441.8(2,377.1)
2,861.0
134,032.7
72,222.6
11,696.3
69,210.0
23,816.5

Total Shareholders' Equity per Share (Yen) (Note 1)
Net Income (Loss) per Share (Yen) (Note 1)
Diluted Net Income per Share (Yen) (Note 1) (Note 2)

131,016.15
54,625.61
37,719.13

61,980.34
36,153.27
18,754.94(20,376.71)(254,524.65)—

Risk-based Capital Ratio (BIS Capital Ratio)

11.91%

11.35%

9.53%

Net Return on Equity
PER (Times) (Note 2)

54.3%
9.28 x135.2%
12.39 x(183.7)%—xCash Flow from Operating Activities
Cash Flow from Investing Activities
Cash Flow from Financing Activities

4,418.0(3,788.1)(557.7)

6,014.9(7,402.2)(130.9)(2,196.1)(206.3)(394.0)Cash and Cash Equivalents at the End of the Year5,602.0

5,529.6

7,048.5

Notes: 1. “Total Shareholders' Equity per Share,” “Net Income (Loss) per Share” and “Diluted Net Income per Share” are calculated in accordance with “Accounting Standard for Earnings per Share”(Financial Accounting Standard No. 2) and “Implementation Guidance for Accounting Standard for Earnings per Share” (Financial Accounting Standards Implementation Guidance No. 4).
2. “Diluted Net Income per Share” and “PER” for the fiscal year ended March 31, 2003 are not required to be disclosed due to loss position.

70

Key Indicators of Mizuho Financial Group, Inc. (Non-Consolidated)
Billions of yen

As of or for the Fiscal Years ended March 31,

Operating Income
Net Income
Common Stock and Preferred Stock
Number of Shares Issued
and Outstanding

Common StockFirst Series Class I Preferred Stock
Second Series Class II Preferred Stock
Third Series Class III Preferred Stock
Fourth Series Class IV Preferred Stock
Sixth Series Class VI Preferred Stock
Seventh Series Class VII Preferred Stock
Eighth Series Class VIII Preferred Stock
Ninth Series Class IX Preferred Stock
Tenth Series Class X Preferred Stock
Eleventh Series Class XI Preferred Stock
Twelfth Series Class XI Preferred StockThirteenth Series Class XIII Preferred Stock

Total Shareholders' Equity
Total Assets
Total Shareholders' Equity per Share (Yen) (Note 1)
Common Stock
Dividends per Share (Yen)First Series Class I Preferred Stock(Interim Dividends per Share) (Yen)
Second Series Class II Preferred Stock
Third Series Class III Preferred Stock
Fourth Series Class IV Preferred Stock
Sixth Series Class VI Preferred Stock
Seventh Series Class VII Preferred Stock
Eighth Series Class VIII Preferred Stock
Ninth Series Class IX Preferred Stock
Tenth Series Class X Preferred Stock
Eleventh Series Class XI Preferred Stock
Twelfth Series Class XI Preferred StockThirteenth Series Class XIII Preferred Stock
Common StockFirst Series Class I Preferred Stock
Second Series Class II Preferred Stock
Third Series Class III Preferred Stock
Fourth Series Class IV Preferred Stock
Sixth Series Class VI Preferred Stock
Seventh Series Class VII Preferred Stock
Eighth Series Class VIII Preferred Stock
Ninth Series Class IX Preferred Stock
Tenth Series Class X Preferred Stock
Eleventh Series Class XI Preferred Stock
Twelfth Series Class XI Preferred StockThirteenth Series Class XIII Preferred Stock
Net Loss per Share (Yen) (Note 1)
Diluted Net Income per Share (Yen) (Note 1) (Note 2)
PER (Times) (Note 2)
Dividend Propensity (Note 3)

2005

2004

2003

¥ 26.430.8¥ 25.7
9.9

¥ 0.9
0.0

1,540.9
12,003,995.49 shares/
100,000 shares
100,000 shares
150,000 shares
150,000 shares
125,000 shares
125,000 shares
33,000 shares
140,000 shares
943,740 shares/
36,690 shares

1,540.9
11,926,964.67 shares
33,000 shares
100,000 shares
100,000 shares
150,000 shares
150,000 shares
125,000 shares
125,000 shares
140,000 shares
140,000 shares
943,740 shares
5,500 shares
36,690 shares

1,540.9
10,582,426.71 shares
33,000 shares
100,000 shares
100,000 shares
150,000 shares
150,000 shares
125,000 shares
125,000 shares
140,000 shares
140,000 shares
943,740 shares
101,500 shares
36,690 shares

2,986.2
3,178.6

3,533.4
3,600.0

3,545.8
3,595.6

41,782.20
3,500
/
8,200
14,00047,60042,00011,000
8,000
—
5,380
20,000—30,000
—
/
—
—
—
—
—
—
—
—
—
—
—
(588.84)—

46,670.33
3,000
22,5008,200
14,00047,60042,00011,0008,000
17,5005,380
20,0002,500
30,000
—
—
—
—
—
—
—
—
—
—
—
—
—
(2,846.42)—

46,568.86—
22,5008,200
14,00047,60042,00011,0008,000
17,500
5,380
165
21
247
/
/
/
/
/
/
/
/
/
/
/
/
/
(8,663.01)
—

—x
—%

—x
—%

—x
—%

Notes: 1. “Total Shareholders' Equity per Share,” “Net Loss per Share” and “Diluted Net Income per Share” are calculated in accordance with “Accounting Standard for Earnings per Share” (Financial
Accounting Standard No. 2) and “Implementation Guidance for Accounting Standard for Earnings per Share” (Financial Accounting Standards Implementation Guidance No. 4).
2. “Diluted Net Income per Share” and “PER” for the fiscal years ended March 31, 2003, 2004 and 2005 are not required to be disclosed due to loss position.
3. Dividend Propensity : Cash Dividends Declared per Share (Common Stock) / Net Income per Share (Common Stock). Dividend Propensity is not required to be disclosed due to passing dividends
for common stock for the fiscal year ended March 31,2003, and due to loss position of earnings per share for the fiscal years ended March 31, 2004 and 2005.

71

Financial Analysis of Mizuho

Financial and Economic Environment

Economic Conditions in Japan and Overseas
Looking at global economic conditions in the fiscal year ended March 31, 2005, there were concerns that rising crude oil prices
would lead to a slowdown in the U.S. economy. However, expansion continued as vigorous corporate activity and the resulting
improvements in the employment situation fueled gradual growth in consumer spending and firm growth in capital expenditure.
The European economies recovered gradually in the first half of the fiscal year on the back of rising exports, but growth slowed in
the second half because exports were curbed by the strengthening euro. In Asia, robust consumption and rising exports supported firm economics, although inventory adjustments led to a slowdown in the IT- and digital electronics-related sectors. In
China, the Chinese government adhered to its austerity policies, but the economy continued its strong expansion.
In Japan, production stagnated through the year-end because of inventory adjustments in the IT- and digital electronics-related
sectors and sluggish exports, while consumer spending cooled as a result of natural calamities such as typhoons and earthquakes,
as well as an unusually warm winter. However, the economy continued to recover as improvements in corporate performance led
to an increase in capital expenditure and an improvement in household incomes boosted consumer spending. However, deflationand other risk factors continue to cloud the outlook for full-scale economic expansion.

Financial Sector
Looking back at Japan's financial markets in fiscal 2004, stock prices were weak in the first half but turned upward towards the
fiscal year-end on expectations of an improvement in the Japanese domestic economy. Long-term interest rates rose temporarily
during the first half of the fiscal year but fell later on concerns over a slowdown in the economy. However, the downward trend
came to a halt as the new calendar year began.
In the financial sector, NPL disposals and most of the other financial issues that needed to be resolved had been cleared up by
the end of the fiscal year. Ongoing realignment and the formation of tie-ups within the financial sector continued to accelerate.
There was also progress in deregulation, including the removal of the ban on banks engaging in the stock-broking business. In
light of these environmental changes, ensuring competitive advantage and further strengthening profitability are all matters ofconsiderable importance for financial institutions.

72

Trends in Interest Rates in Japan
(%)

(%)

2.5

0.40
0.35

2.0

0.30

Newly Issued Government Bond Yield (10-Year) (left scale)Long-Term Prime Rate (left scale)

0.25
1.5
0.20

Short-Term Prime Rate (left scale)
0.15
1.0
0.10

Euroyen TIBOR (3-month) (right scale)

0.05

0.5

0.00

Call Rate (Uncollateralized overnight) (right scale)
0.0(0.05)

Jan. 2004

Apr. 2004

July 2004

Oct. 2004

Jan. 2005

Apr. 2005

Trends in TOPIX and Yen / Dollar Exchange Rate
(Point)(Yen / Dollar)
125

1,300

TOPIX (left scale)
1,200

120

1,100
115
1,000
110
900

Yen / Dollar Exchange Rate(right scale)
105

800

700

Jan. 2004

Apr. 2004

July 2004

Oct. 2004

Jan. 2005

Apr. 2005

100

73

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2005

Consolidated Accounts of Mizuho Financial Group, Inc. (MHFG)
1. Scope of Consolidation and Application of the Equity Method
Companies

At March 31,

2005

2004

ChangeNumber of consolidated subsidiaries
Number of affiliates under the equity method

118
20

118
28

—
(8)

The number of MHFG's consolidated subsidiaries is 118, and the number of affiliates under the equity method decreased by 8 to20 from the end of the previous fiscal year.
The major consolidated subsidiaries are Mizuho Holdings, Inc. (MHHD), Mizuho Corporate Bank, Ltd. (MHCB), Mizuho Bank,
Ltd. (MHBK), Mizuho Trust & Banking Co., Ltd. (MHTB), and Mizuho Securities Co., Ltd. (MHSC). The major affiliates under theequity method are The Chiba Kogyo Bank, Ltd. and Shinko Securities Co., Ltd.

2. Consolidated Profits and Losses
Billions of yen

For the Fiscal Years ended March 31,

Consolidated Gross Profits
Net Interest Income
Fiduciary Income
Net Fee and Commission Income
Net Trading Income
Net Other Operating Income

2005

¥

General and Administrative Expenses
Expenses related to Portfolio Problems +Provision for General Reserve for Possible Losses on Loans

1,993.0
1,106.4
63.2
472.6
165.0
185.7

2004

¥

1,091.3

2,112.3
1,185.0
62.0
426.6
231.8
206.8

Change¥(119.2)(78.5)
1.1
46.0(66.7)(21.1)

1,125.9(34.5)

231.9

302.7

(70.7)

210.3

190.8

19.5

Equity in Income from Investments in Affiliates

1.4

1.7

(0.3)

Other

61.4

4.9

56.4

Income before Income Taxes and Minority Interests

943.0

881.2

61.8

Income Taxes–Current

41.0

28.0

12.9

Net Gains related to Stocks

Income Taxes–Refund

21.2

—

21.2

Income Taxes–Deferred

235.2

387.8

(152.6)

Minority Interests in Net Income

60.6

58.3

2.2

Net Income

627.3

406.9

220.4

Net Income per Share of Common Stock (Yen)

54,625.61

36,153.27

18,472.34

Credit-related Costs

¥

93.9

¥

298.8

¥

( 204.9)(Reference) Consolidated Net Business Profits

¥

912.5

¥

1,011.9¥( 99.3)

Notes: 1. Consolidated Gross Profits = Net Interest Income + Fiduciary Income + Net Fee and Commission Income + Net Trading Income + Net Other Operating Income.
2. Credit-related Costs = Expenses related to Portfolio Problems + Provision for General Reserve for Possible Losses on Loans + Reversal of Reserves for Possible Losses on Loans, etc. + Credit Costs
for Trust Accounts.
3. Consolidated Net Business Profits = Consolidated Gross Profits - General and Administrative Expenses (Excluding Non-recurring Losses) + Equity in Income from Investments in Affiliates and otherconsolidation adjustments.
4. Note that unlike in previous terms, there is no reclassification for Reversal of Reserves for Possible Losses on Loans, etc.

74

(1) Consolidated Gross Profits
Consolidated Gross Profits decreased by ¥119.2 billion to ¥1,993.0 billion in comparison with the previous fiscal year.
Net Interest Income decreased by ¥78.5 billion to ¥1,106.4 billion as a result of weak demand for funds.
Fiduciary Income increased by ¥1.1 billion to ¥63.2 billion.
Net Fee and Commission Income increased by ¥46.0 billion to ¥472.6 billion as a result of increases in fees from loan syndication-related business, sales of investment trusts and insurance.
Net Trading Income decreased by ¥66.7 billion to ¥165.0 billion, and Net Other Operating Income decreased by ¥21.1 billion to¥185.7 billion. This was as a result of unfavorable Net Gains related to Bonds, reflecting market conditions.
(2) General and Administrative Expenses
General and Administrative Expenses decreased by ¥34.5 billion to ¥1,091.3 billion as a result of ongoing cost-cutting measures.
(3) Credit-Related Costs
Credit-related Costs decreased by ¥204.9 billion to ¥93.9 billion as a result of the steady progress in revitalization and continued
removal of problem loans from the balance sheet.
“Expenses related to Portfolio Problems + Provision for General Reserve for Possible Losses on Loans” also decreased by ¥70.7
billion to ¥231.9 billion.
(4) Net Gains Related to Stocks
Net Gains related to Stocks increased by ¥19.5 billion to ¥210.3 billion as a result of ongoing efforts to decrease stockholdings to
reduce stockholding risk, and a decrease in preferred-stockholdings as a consequence of the general improvement in the performance of our corporate clients.
(5) Equity in Income from Investments in Affiliates
Equity in Income from Investments in Affiliates decreased by ¥0.3 billion to ¥1.4 billion.
(6) Other
Other increased by ¥56.4 billion to record a gain of ¥61.4 billion. Major components are as follows:• Reversal of Reserve for Contingencies of ¥131.1 billion and the receipt of interest on the refund of provisional tax paymentsof ¥102.1 billion, resulting from a ruling by the Supreme Court in favor of the petition of MHCB for rescission of a correction
notice from the Tokyo Regional Taxation Bureau• Reversal of Reserves for Possible Losses on Loans of ¥143.2 billion• Impairment of Fixed Assets which was applied beginning this fiscal year of ¥67.1 billion• Write-offs of Deferred Hedge Losses of ¥67.0 billion• Valuation losses on investments in overseas subsidiaries of ¥59.6 billion• Amortization of Unrecognized Net Obligation at Date of Initial Application of the New Accounting Standard for Employee
Retirement Benefits of ¥24.5 billion(7) Net Income
As a result of the above, Income before Income Taxes and Minority Interests amounted to ¥943.0 billion.
Net Income increased by ¥220.4 billion to ¥627.3 billion, a new record, after reflecting Income Taxes-Current, -Refund, Deferred, and Minority Interests in Net Income.

75

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2005

Use and Source of Funds (Consolidated)
Billions of yen

For the Fiscal Years ended March 31,

Use of Funds
Due from Banks
Call Loans and Bills Purchased
Receivables under Resale Agreements
Guarantee Deposits Paid under Securities
Borrowing Transactions
Securities
Loans and Bills Discounted

Average balance
2005
2004

¥ 112,846.2
1,719.8
1,271.5
4,937.6¥ 111,512.0
1,721.4
1,717.1
4,173.4

7,603.1
33,073.0
63,767.4

7,048.8
27,241.9
67,464.4

Source of Funds¥ 115,568.6
Deposits
76,900.8
Debentures
8,590.0
Call Money and Bills Sold
8,764.4
Payables under Repurchase Agreements
8,902.5
Guarantee Deposits Received under Securities
Lending Transactions
7,156.4
Commercial Paper
1,066.8
Borrowed Money
2,135.3¥ 113,899.6
73,418.0
10,648.5
10,251.5
8,300.2
5,682.4
831.6
1,515.8¥¥

Change2005

Interest
2004

1,334.1(1.5)(445.5)764.1¥ 1,584.4
29.7
5.0
110.2

¥ 1,622.7
24.8
5.1
74.2

554.3
5,831.0(3,697.0)

3.6
290.6
1,065.1

1.7
296.7
1,183.7

1,668.9
3,482.8(2,058.5)(1,487.0)
602.2
1,474.0
235.2
619.4

¥

477.9
125.9
68.6
2.9
154.0

¥

437.6
112.8
92.7
2.8
116.3

Change¥(38.2)
4.8
(0.0)
35.9
1.8
(6.0)
(118.5)

¥

40.2
13.0
(24.0)
0.0
37.6

12.7
1.0
26.5

12.1
1.0
34.5

0.6
0.0
(7.9)

For the Fiscal Years ended March 31,

2005

Yield
2004

ChangeUse of Funds
Due from Banks
Call Loans and Bills Purchased
Receivables under Resale Agreements
Guarantee Deposits Paid under Securities
Borrowing Transactions
Securities
Loans and Bills Discounted

1.40%
1.72
0.39
2.23

1.45%
1.44
0.30
1.78

(0.05)%
0.28
0.09
0.45

0.04
0.87
1.67

0.02
1.08
1.75

0.02
(0.21)(0.08)

Source of Funds
Deposits
Debentures
Call Money and Bills Sold
Payables under Repurchase Agreements
Guarantee Deposits Received under Securities
Lending Transactions
Commercial Paper
Borrowed Money

0.41%
0.16
0.79
0.03
1.72

0.38%
0.15
0.87
0.02
1.40

0.02%
0.01
(0.07)
0.00
0.32

0.17
0.09
1.24

0.21
0.12
2.27

(0.03)(0.02)(1.03)%

76

Net Fee and Commission Income (Consolidated)
Billions of yen

For the Fiscal Years ended March 31,

2005

2004

Change¥ 472.6¥ 426.6¥ 46.0Fee and Commission Income
Deposits, Debentures and Lending Business
Remittance Business
Securities-related Business
Trust-related BusinessAgency Business
Guarantee Business
Safe Custody and Safety Deposit Box Business¥ 566.1
126.0
113.7
105.3
45.4
40.0
25.6
6.6

¥ 515.3
106.1
116.4
92.4
37.1
36.7
22.9
6.9

¥ 50.7
19.9
(2.6)
12.9
8.2
3.2
2.6
(0.2)

Fee and Commission Expenses
Remittance Business

¥

¥

¥

Net Fee and Commission Income

93.4
28.9

88.7
28.9

4.7
0.0

3. Consolidated Assets and Liabilities
Billions of yen

At March 31,

2005

2004

ChangeTotal Assets
Cash and Due from Banks
Trading Assets
Securities
Loans and Bills Discounted¥ 143,076.2
6,808.9
11,047.6
36,047.0
62,917.3¥ 137,750.0
6,813.5
8,016.5
32,071.6
66,205.8¥ 5,326.1(4.5)
3,031.0
3,975.4(3,288.5)

Total Liabilities
Deposits
Debentures
Call Money and Bills Sold

138,042.1
80,368.0
7,795.0
8,359.9

133,069.5
77,487.4
9,459.5
8,680.5

4,972.5
2,880.5(1,664.4)(320.6)

1,128.3

1,036.1

92.2

Minority Interests
Total Shareholders' Equity
Net Unrealized Gains on Other Securities, net of Taxes¥

3,905.7
538.0¥

3,644.3
392.7

¥

261.3
145.2

(1) Assets
Securities increased by ¥3,975.4 billion from the end of the previous fiscal year to ¥36,047.0 billion. Net Unrealized Gains on
Other Securities which have fair values were ¥996.7 billion.
Loans and Bills Discounted decreased by ¥3,288.5 billion to ¥62,917.3 billion. Non-Accrual, Past Due & Restructured Loansamounted to ¥1,537.9 billion, or 2.44% of total Loans and Bills Discounted.
Total Assets increased by ¥5,326.1 billion to ¥143,076.2 billion.
(2) Liabilities and Minority Interests
Deposits increased by ¥2,880.5 billion to ¥80,368.0 billion.
Debentures decreased by ¥1,664.4 billion to ¥7,795.0 billion.
Total Liabilities increased by ¥4,972.5 billion to ¥138,042.1 billion.
Minority Interests increased by ¥92.2 billion to ¥1,128.3 billion.
(3) Shareholders' Equity
Total Shareholders' Equity increased by ¥261.3 billion to ¥3,905.7 billion.
As a result of record high Net Income, the consolidated Capital Adequacy Ratio (BIS Capital Ratio) stood at 11.91%, continuing
at a satisfactory level after the repayment of public funds. (Please refer to Page 79 for details.)

77

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2005

Fair Value of Other Securities (Consolidated)
Billions of yen

At March 31, 2005

Cost

Fair value

Other Securities*1
Stocks*2
Bonds
Other

¥ 30,554.5
3,087.9
22,170.2
5,296.3¥ 31,551.2
4,197.5
22,094.0
5,259.6

Gross unrealized
Gains

¥

1,232.6
1,174.3
15.8
42.3

¥

Losses

235.9
64.7
92.0
79.0

Net unrealized*3
gains (losses)

¥

996.7
1,109.6(76.2)(36.6)
Billions of yen

At March 31, 2004

Cost

Fair value

Other Securities*1
Stocks*2
Bonds
Other

¥ 27,895.2
3,477.1
20,185.9
4,232.1¥ 28,615.6
4,361.7
19,994.7
4,259.2

Gross unrealized
Gains

¥

1,018.8
967.2
9.3
42.2

¥

Losses

298.4
82.6
200.5
15.1

Net unrealized
gains (losses)

¥

720.4
884.5
(191.1)
27.0
Billions of yen

ChangeOther Securities*1
Stocks*2
Bonds
Other

Cost

¥

2,659.2(389.2)
1,984.3
1,064.1

Fair value¥

2,935.5(164.1)2,099.3
1,000.3¥

Gross unrealized
Gains

Losses

213.7
207.1
6.5
0.1

(62.5)(17.8)(108.4)63.8¥

Net unrealized
gains (losses)

¥

276.2
225.0
114.9
(63.7)*1 In addition to the balances shown in the above table, Other Securities include securities without fair values such as unlisted stock (excluding OTC stock) of ¥814.7 billion and non-publicly offered bondsof ¥1,617.3 billion as of March 31, 2005.
*2 Fair value of Stocks is determined based on the average market price over the month preceding the balance sheet date.
*3 Unrealized Gains (Losses) include ¥54.0 billion which was recognized in the Statement of Operations by applying the fair-value hedge method and other.

78

Consolidated Capital Adequacy Ratio (BIS Capital Ratio)%, Billions of yen

At March 31,

2005

2004

Capital Adequacy Ratio
Tier I Ratio

11.91%
6.19%

11.35%
5.75%

Tier I
Common Stock and Preferred StockNew Stock Subscription
Capital Surplus
Retained Earnings
Minority Interest in Consolidated Subsidiaries
Preferred Stock issued by Overseas SPC
Unrealized Losses on Other Securities
Treasury Stock Subscription
Treasury Stock
Foreign Currency Translation Adjustments
Goodwill Equivalent
Consolidation Differences Equivalent(A)¥

Tier II(B)
45% of Unrealized Gains on Other Securities
45% of Revaluation Reserve for Land
General Reserve for Possible Losses on Loans
Debt Capital
Perpetual Subordinated Debt and Other Debt Capital
Subordinated Debt and Redeemable Preferred Stock
Deductions from Capital(C)

Capital(A)+(B)-(C)Risk-adjusted Assets
Assets Exposed to Credit Risk
On-balance-sheet Items
Off-balance-sheet Items
Market Risk Equivalent Divided by 8%(Reference) Market Risk Equivalent

4,172.0
1,540.9—
1,022.5
972.5
1,079.2
927.9——(394.5)(48.6)(0.0)—¥

3,956.4
426.0
150.7
637.3
2,742.3
854.3
1,888.0
8,020.2¥ 67,324.9
66,391.5
60,702.4
5,689.1
933.4
74.6

0.56%
0.44%
¥

3,941.1
325.4
175.5
1,175.8
2,803.9948.7
1,855.1

108.2¥

3,941.1
1,540.9—
1,262.5
386.6
995.7
923.3
—
—
(134.1)(110.5)(0.0)—

Change15.3
100.5(24.8)(538.5)(61.5)(94.4)
32.9

112.2
¥

7,770.0¥ 68,424.1
67,368.7
63,093.7
4,275.0
1,055.4
84.4

230.9
—
—
(239.9)
585.8
83.4
4.5
—
—
(260.4)
61.8
0.0
—

(3.9)
¥

250.1

¥ (1,099.1)(977.1)(2,391.3)
1,414.1(122.0)(9.7)

79Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2005

Aggregated Figures of the Three Banks
For an early achievement of corporate revitalization, loans and stocks of customers in need of revitalization/restructuring held by
MHCB, MHBK and MHTB were transferred to their financial subsidiaries specializing in corporate revitalization in July 2003.
Aggregated figures of the Three Banks are the aggregated non-consolidated figures of MHCB, MHBK, MHTB and their financial
subsidiaries specializing in corporate revitalization.

1. Differences between Consolidated Figures and Aggregated Figures of the Three Banks

Billions of yen, %For the Fiscal Years ended March 31,

Gross Profits
Net Interest Income
Fiduciary Income
Net Fee and Commission Income
Net Trading Income
Net Other Operating Income

MHFG(Consolidated)(a)(a) – (b) (b) / (a)¥1,993.0 ¥1,106.4
63.2
472.6
165.0
185.7
93.9

61.2

32.6

65.2

¥

627.3 ¥

582.5 ¥

44.7

92.8%

Credit-related Costs
Net Income

2005
AggregatedFigures of theThree Banks (b)1,626.4 ¥ 366.6
1,028.1
78.3
62.8
0.4
315.1
157.5
43.8
121.1
176.5
9.1

81.6%
92.9
99.2
66.6
26.5
95.0

MHFG
(Consolidated)
(a)

¥

¥

2004
AggregatedFigures of theThree Banks (b)2,112.3 ¥1,185.0
62.0
426.6
231.8
206.8

(a) – (b) (b) / (a)1,805.5 ¥ 306.8 85.4%
1,130.7
54.2 95.4
62.0
0.0 99.9
268.5
158.0 62.9
111.9
119.8 48.2
232.3
(25.4) 112.3

298.8

237.9

60.8

406.9 ¥

447.9 ¥

(40.9) 110.0%

79.6

Note: Credit-related Costs = Expenses related to Portfolio Problems + Provision for General Reserve for Possible Losses on Loans + Reversal of Reserves for Possible Losses on Loans, etc. + Credit Costs for
Trust Accounts.

Billions of yen, %

80

2005
AggregatedFigures of theThree Banks (b)At March 31,

MHFG(Consolidated)(a)Total Assets
Securities
Loans and Bills Discounted¥ 143,076.2 ¥ 135,561.5 ¥7,514.6
94.7%
36,047.0
39,192.0 (3,144.9) 108.7
62,917.3
62,647.1
270.1
99.5

(a) – (b) (b) / (a)MHFG(Consolidated)
(a)

2004
AggregatedFigures of theThree Banks (b)(a) – (b) (b) / (a)¥ 137,750.0 ¥ 137,897.7 ¥ (147.6) 100.1%
32,071.6
35,359.9 (3,288.3) 110.2
66,205.8
66,132.4
73.4 99.8

2. Profits and Losses
Profits and Losses (the Three Banks)
Billions of yen

For the Fiscal Years ended March 31,

Domestic Gross Profits
International Gross Profits

2005

¥

Gross Profits
Net Interest Income
Fiduciary Income
Net Fee and Commission Income
Net Trading Income
Net Other Operating Income
Net Gains related to Bonds

1,214.7
411.6

2004

¥

1,327.7
477.7

Change¥(112.9)(66.0)

1,626.4
1,028.1
62.8
315.1
43.8
176.5
9.6

1,805.5
1,130.7
62.0
268.5
111.9
232.3
115.0

(179.0)(102.6)0.7
46.5(68.0)(55.7)(105.3)General and Administrative Expenses (Excluding Non-recurring Losses)

829.1

857.4

(28.2)Net Business Profits (before Provision for General Reserve
for Possible Losses on Loans)Excluding Net Gains related to Bonds

800.0
790.3

954.0
838.9

(154.0)(48.6)

Provision for (Reversal of) General Reserve for Possible Losses on Loans(155.2)

10.7(165.9)Net Business Profits

952.4

937.3

15.1

Net Non-recurring Losses
Net Gains related to Stocks
Expenses related to Portfolio Problems
Other(154.1)193.8(456.6)108.6(78.9)
188.6(285.8)18.1(75.2)
5.1(170.8)
90.4

Income before Income Taxes

798.2

858.3

(60.0)

0.6

0.6

0.0

Income Taxes–Current
Income Taxes–Refund

21.2

—

21.2

Income Taxes–Deferred

236.2

409.7

(173.4)Net Income

¥

582.5

¥

447.9

¥

134.6

Credit-related Costs

¥

61.2

¥

237.9

¥

176.7

Notes: 1. Net Business Profits (before Provision for General Reserve for Possible Losses on Loans) of MHTB denotes amounts before Provision for General Reserve for Possible Losses on Loans and Credit
Costs for Trust Accounts.
2. Credit-related Costs = Expenses related to Portfolio Problems + Provision for General Reserve for Possible Losses on Loans + Reversal of Reserves for Possible Losses on Loans, etc. + Credit Costs
for Trust Accounts.
3. Note that unlike in previous terms, there is no reclassification for Reversal of Reserves for Possible Losses on Loans, etc.

Breakdown of Gross Profits (the Three Banks)
Billions of yen

For the Fiscal Years ended March 31,

Net Interest Income
Domestic Operations
International Operations

2005

¥

1,028.1
866.2
161.8

2004

¥

1,130.7
918.3
212.3

Change¥(102.6)(52.1)(50.4)

Fiduciary Income
Domestic Operations
International Operations

62.8
62.8
/

62.0
62.0
/

0.7
0.7
/

Net Fee and Commission Income
Domestic Operations
International Operations

315.1
257.0
58.0

268.5
210.9
57.5

46.5
46.0
0.4

Net Trading Income
Domestic Operations
International Operations

43.8
16.7
27.1

111.9
42.9
68.9

(68.0)(26.2)(41.7)Net Other Operating Income
Domestic Operations
International Operations

176.5
11.9
164.5

232.3
93.3
138.9

(55.7)(81.4)
25.6

Gross Profits¥

1,626.4¥

1,805.5¥(179.0)81

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2005

Breakdown of Net Interest Income (MHCB and MHBK excluding Financial Subsidiaries for Corporate Revitalization)
Billions of yen, %Change

2005

Yield
2004

(1,445.1)(3,754.1)
5,913.6

1.30%
1.58
0.90

1.36%
1.67
1.19

(0.06)%(0.09)(0.28)

111,464.2
83,013.4(2,247.8)
1,145.0

0.38
0.23

0.36
0.22

0.02
0.00

/

/

/

0.91

1.00

(0.08)

/

/

/

1.34

1.44

(0.09)

Domestic Operations
Use of Funds
Loans and Bills Discounted
Securities

89,710.5
52,379.0
28,917.6

90,985.6
55,626.9
23,018.3(1,275.0)(3,247.8)
5,899.2

1.01
1.43
0.45

1.10
1.56
0.52

(0.08)(0.13)(0.07)

Source of Funds
Deposits and Debentures

93,485.4
75,117.9

95,696.1
74,100.0(2,210.6)
1,017.8

0.12
0.10

0.16
0.14

(0.03)(0.03)

Interest Margins

/

/

/

0.88

0.94

(0.05)

Loan and Deposit Margin

/

/

/

1.32

1.41

(0.09)

International Operations
Use of Funds
Loans and Bills Discounted
Securities

16,904.3
5,289.6
5,118.6

16,516.1
5,795.8
5,104.2

388.1(506.2)
14.4

2.74
3.04
3.47

2.78
2.72
4.23

(0.04)
0.32(0.75)

Source of Funds
Deposits and Debentures

16,754.2
9,040.5

16,233.1
8,913.3

521.0
127.1

1.83
1.28

1.55
0.90

0.28
0.38

Interest Margins

/

/

/

0.90

1.22

(0.32)

Loan and Deposit Margin

/

/

/

1.75

1.81

(0.06)For the Fiscal Years ended March 31,

2005

Average balance
2004

Total
Use of Funds
Loans and Bills Discounted
Securities¥ 105,591.5
57,668.6
34,036.2¥ 107,036.7
61,422.8
28,122.6

Source of Funds
Deposits and Debentures

109,216.4
84,158.4

Interest Margins
Loan and Deposit Margin¥

ChangeBreakdown of Net Fee and Commission Income (the Three Banks)
Billions of yen

For the Fiscal Years ended March 31,

Net Fee and Commission Income

82

2005

2004

Change¥ 315.1¥ 268.5¥ 46.5

Fee and Commission Income
Deposits, Debentures and Lending Business
Remittance Business
Securities-related BusinessAgency Business
Safe Custody and Safety Deposit Box Business
Guarantee Business¥ 422.2
118.8
113.9
43.7
29.9
6.6
20.9

¥ 380.3
100.9
116.1
36.0
26.3
6.9
18.0

¥ 41.8
17.8
(2.2)
7.7
3.5
(0.2)
2.8

Fee and Commission Expenses
Remittance Business¥ 107.1
29.1¥ 111.7
28.8¥ (4.6)0.2

Breakdown of Net Other Operating Income (the Three Banks)
Billions of yen

For the Fiscal Years ended March 31,

2005

2004

Net Other Operating Income¥ 176.5¥ 232.3¥(55.7)¥ 176.5
156.0
9.6¥ 232.3
93.2
115.0

¥

(55.7)
62.7(105.3)

Domestic Operations
Net Gains (Losses) related to Bonds

11.9
(4.5)

93.3
61.5

(81.4)(66.0)

International Operations
Profits on Foreign Exchange Transactions
Net Gains related to Bonds

164.5
156.0
14.2

138.9
93.2
53.5

25.6
62.7
(39.3)

Total
Profits on Foreign Exchange Transactions
Net Gains related to Bonds

ChangeBreakdown of General and Administrative Expenses (Excluding Non-recurring Losses) (the Three Banks)
Billions of yen

For the Fiscal Years ended March 31,

2005

2004

¥ 245.7¥ 277.6

Non-personnel Expenses

531.3

533.7

Miscellaneous Taxes

52.1

45.9

¥ 829.1¥ 857.4

2005

2004

193.8
257.2
(13.1)(47.6)(2.9)
0.3¥ 188.6
247.9(21.8)(20.2)(2.5)(14.5)

Expenses related to Portfolio Problems(456.6)(285.8)

Other

108.6

18.1

Personnel Expenses

Total

Change¥(31.9)
(2.4)
6.1

¥

(28.2)Breakdown of Net Non-Recurring Losses (the Three Banks)
Billions of yen

For the Fiscal Years ended March 31,

Net Gains related to Stocks
Gains on Sales
Losses on Sales
Losses on Devaluation
Provision for Reserves for Possible Losses on Investments
Gains (Losses) on Derivatives other than for Trading

Net Non-recurring Losses¥¥(154.1)¥(78.9)

Change

¥

5.1
9.3
8.7
(27.3)(0.4)
14.9(170.8)90.4¥(75.2)(Reference) Breakdown of Credit-Related Costs (the Three Banks)
Billions of yen

For the Fiscal Years ended March 31,

Credit-related Costs
Credit Costs for Trust Accounts
Provision for (Reversal of) General Reserve for Possible Losses on Loans
Losses on Write-offs of Loans
Provision for Specific Reserve for Possible Losses on Loans
Losses on Sales of Loans to CCPC
Reversal of Reserve for Possible Losses on Loans Sold
Reversal of Reserve for Possible Losses on Support of Specific Borrowers
Reversal of Reserve for Possible Losses on Loans to Restructuring Countries
Provision for (Reversal of) Reserve for Contingencies
Other Losses on Sales of Loans

¥

2005

2004

Change61.2
2.7(332.6)
163.6
160.3
—
—
—
(3.0)
8.5
61.7

¥ 237.9
5.9(131.5)
173.1
184.3
0.7
(5.0)
(3.2)
(7.2)
(4.7)
25.6

¥ (176.7)(3.2)(201.0)(9.5)(23.9)
(0.7)
5.0
3.2
4.1
13.2
36.0

Note: CCPC is the abbreviation for the Cooperative Credit Purchasing Company, Ltd.

83

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2005

3. Aggregated Assets and Liabilities
Assets and Liabilities (the Three Banks) (Banking Accounts)
Billions of yen

At March 31,

Total Assets
Cash and Due from Banks
Call Loans
Securities
Loans and Bills Discounted
Total Liabilities
Deposits
Debentures
Call Money
Bills Sold
Total Shareholders' Equity
Net Unrealized Gains on Other Securities, net of Taxes

2005

2004

Change¥ 135,561.5
9,818.5
2,296.1
39,192.0
62,647.1¥ 137,897.7
9,240.5
3,883.4
35,359.9
66,132.4¥ (2,336.1)
578.0(1,587.2)
3,832.0(3,485.3)

127,996.5
83,336.2
7,894.5
6,603.6
3,342.4

131,021.5
79,895.8
9,554.7
9,746.6
2,369.4(3,025.0)
3,440.4(1,660.1)(3,142.9)
973.0

7,565.0
523.7

6,876.1
387.0

688.8
136.6

Balance of Housing and Consumer Loans (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

At March 31,

Housing and Consumer Loans
Housing Loans for Owner's Residential Housing

2005

2004

¥ 11,833.0
9,140.4¥ 12,335.6
9,398.0

Change¥(502.5)(257.5)

Note: Above figures are aggregated banking and trust account amounts. (Trust Accounts denotes trust accounts with contracts indemnifying the principal amount.)

Loans to Both Small and Medium-Size Enterprises and Individual Customers (the Three Banks)(Banking Accounts and Trust Accounts)
Billions of yen, %At March 31,

Loans to Both Small and Medium-size Enterprises and Individual Customers
Percentage of Loans to Both Small and Medium-size Enterprises
and Individual Customers, of Total Domestic Loans

84

2005

2004

Change¥ 37,307.8¥ 39,456.4¥ (2,148.5)

62.4%

62.0%

0.4%

Fair Value of Other Securities (the Three Banks) (Banking Accounts)
Billions of yen

At March 31, 2005

Cost

Fair value

Other Securities*1
Stocks*2
Bonds
Other

¥ 30,042.9
3,077.1
22,029.6
4,936.2¥ 30,979.4
4,127.9
21,953.6
4,897.8

Gross unrealized
Gains

¥

1,171.2
1,115.4
16.0
39.7

¥

Losses

234.7
64.5
92.0
78.1

Net unrealized*3
gains (losses)

¥

936.5
1,050.8(75.9)(38.3)
Billions of yen

At March 31, 2004

Cost

Fair value

Other Securities*1
Stocks*2
Bonds
Other

¥ 27,458.8
3,460.7
20,056.9
3,941.1¥ 28,133.6
4,302.3
19,866.0
3,965.2¥

Gross unrealized
Gains

Losses

973.0
924.9
9.3
38.7

298.2
83.3
200.2
14.6

¥

Net unrealized
gains (losses)

¥

674.8
841.6
(190.9)24.1
Billions of yen

ChangeOther Securities*1
Stocks*2
Bonds
Other

Cost

¥

2,584.1(383.5)
1,972.6
995.0

Gross unrealized
Gains

Fair value¥

2,845.7(174.3)2,087.5
932.5

¥

198.1
190.4
6.6
0.9

¥

Losses(63.5)(18.7)(108.2)63.5

Net unrealized
gains (losses)

¥

261.6
209.2
114.9
(62.5)*1 In addition to the balances shown in the above table, Other Securities includes securities without fair values.
*2 Fair value of Stocks is determined based on the average market price over the month preceding the balance sheet date.
*3 Unrealized Gains (Losses) include ¥54.0 billion which was recognized in the Statement of Operations by applying the fair-value hedge method and other.

85

Financial Analysis of Mizuho

Improvement of Asset Quality

For an early achievement of corporate revitalization, loans and stocks of customers in need of revitalization/restructuring held by
MHCB, MHBK and MHTB were transferred to their financial subsidiaries specializing in corporate revitalization in July 2003.
Consolidated figures are those for MHFG.
Aggregated figures of the Three Banks are the aggregated non-consolidated figures of MHCB, MHBK, MHTB and their financial
subsidiaries specializing in corporate revitalization.
Figures on the tables of “Trust Account” denote trust accounts with contracts indemnifying the principal amount, except for the
figures on the tables of Status of Loans by Industry and Status of Loans by Nationality of Borrowers.

 Disposal of Non-Performing Loans in the Fiscal Year ended March 31, 2005
Credit-related Costs in the consolidated figures decreased by ¥204.9 billion to ¥93.9 billion in comparison with the previous fiscal
year as a result of the steady progress in revitalization and continued removal of problem loans from the balance sheet.
Credit-related Costs in the aggregated figures of the Three Banks decreased by ¥176.7 billion to ¥61.2 billion.

 Credit-Related Costs
Credit-Related Costs (Consolidated)
Billions of yen

For the Fiscal Years ended March 31,

Credit-related Costs
Expenses related to Portfolio Problems + Provision
for General Reserve for Possible Losses on Loans

2005

¥

Losses on Write-offs of Loans
Provision for Reserve for Possible Losses on Loans
Reversal of Reserves for Possible Losses on Loans, etc.
Credit Costs for Trust Accounts

2004

Change298.8¥ (204.9)

231.9

302.7

(70.7)

161.4—(140.7)
2.7

209.5
65.4
(9.8)
5.9

(48.0)(65.4)(130.9)
(3.2)

93.9

¥

Note: Credit-related Costs = Expenses related to Portfolio Problems + Provision for General Reserve for Possible Losses on Loans + Reversal of Reserves for Possible Losses on Loans, etc. + Credit Costs for
Trust Accounts

Credit-Related Costs (the Three Banks)
Billions of yen

For the Fiscal Years ended March 31,

Credit-related Costs
Credit Costs for Trust Accounts
Provision for (Reversal of) General Reserve for Possible Losses on Loans
Losses on Write-offs of Loans
Provision for Specific Reserve for Possible Losses on Loans
Losses on Sales of Loans to CCPC
Reversal of Reserve for Possible Losses on Loans Sold
Reversal of Reserve for Possible Losses on Support of Specific Borrowers
Reversal of Reserve for Possible Losses on Loans to Restructuring Countries
Provision for (Reversal of) Reserve for Contingencies
Other Losses on Sales of Loans
Note: CCPC is the abbreviation for the Cooperative Credit Purchasing Company, Ltd.

86

2005

¥

61.2
2.7
(332.6)
163.6
160.3
—
—
—
(3.0)
8.5
61.7

¥

2004

Change237.9
5.9(131.5)
173.1
184.3
0.7
(5.0)
(3.2)
(7.2)
(4.7)
25.6

¥ (176.7)(3.2)(201.0)(9.5)(23.9)
(0.7)
5.0
3.2
4.1
13.2
36.0

 Overview of Disclosure of NPLs at March 31, 2005 (the Three Banks) (Banking Accounts)
Billions of yen

1. Self-Assessment
ObligorCategorization

Category I(Non-Categorization)

Category II

Category IV
Category III (Non-Collateralized)

206.7
Bankrupt and Substantially
Bankrupt Obligors
206.7

Watch Obligors

Intensive Control
Obligors
804.2

Claims for Special
Attention
474.9

Collateral, Guarantees, etc.:
185.4
Reserve for Possible Losses:
21.2

Reserve
Ratio
100%

683.4

120.8

Collateral, Guarantees, etc.:
313.0
Reserve for Possible Losses:
370.4

Reserve
Ratio
75.4%

Reserve Ratio for
Uncovered Portion
29.7%
Collateral, Guarantees, etc.:
152.6
Reserve for Possible Losses:
95.9

DirectWrite-offs

2. Disclosed Claims
under the FRL

3. Non-Accrual, Past
Due & Restructured
Loans

Claims against Bankrupt
and Substantially Bankrupt
Obligors
206.7

Loans to Bankrupt Obligors
84.0

Coverage Ratio 100%

Claims against Special
Attention Obligors (Note 1)·Coverage Ratio: 54.0%·Reserve Ratiofor Uncovered Portion: 31.9%·Reserve Ratio
against Entire Claim: 21.5%

Claims with Collection Risk
804.2

Non-Accrual
Delinquent Loans
892.1

Coverage Ratio 84.9%
34.9 (Note 2)

Claims for Special Attention
474.9
Coverage Ratio 52.3%

Loans Past Duefor 3 Months or More
27.7
Restructured Loans
446.9(Special Attention Obligors)
Other Watch Obligors
Normal Obligors

Total
68,662.2

Reserve Ratio
against Total Claims·Other Watch Obligors 8.28%·Normal Obligors 0.11%

Total Coverage
Ratio 76.6%

Total
1,485.9

Total
1,450.9

Notes: 1. Claims against Special Attention Obligors includes all claims, not limited to claims for Special Attention.
2. The difference between total Non-Accrual, Past Due and Restructuring Loans and total Disclosed Claims under the FRL represents claims other than loans included in Disclosed Claims under the FRL.

87

Financial Analysis of Mizuho

Improvement of Asset Quality

 Outstanding Balance of NPLs
Status of Disclosed Claims
The Three Banks' aggregated figures of Disclosed Claims under the Financial Reconstruction Law (FRL) decreased by ¥1,695.3 billion (an approximately 53% decrease) from the end of the previous fiscal year to ¥1,495.6 billion. The classifications of thoseloans are shown in the table on page 92.
Of the total, Claims with Collection Risk or worse claims decreased by ¥453.4 billion to ¥1,015.3 billion as a result of measuresfor corporate revitalization and removal of NPLs from the balance sheet.
At the same time, Claims for Special Attention decreased by ¥1,241.9 billion (an approximately 72% decrease) to ¥480.2 billion, as a result of the steady progress in revitalization and the improved classification of some portion of Claims with Collection
Risk due to a general improvement in the performance of corporate clients.
NPL Ratio
The aggregated NPL ratio for the Three Banks at the end of March 2005 decreased to 2.16%, less than half of the level at theend of the previous fiscal year.
As set forth in the Financial Revitalization Program announced in October 2002, major Japanese banks must reduce their NPL
ratios by half by the end of March 2005. By September 2004, our group had already surpassed our target for reducing NPLs
through the strict implementation of the Corporate Revitalization Project and removal of NPLs from the balance sheet. Further, by
the end of March 2005, our NPL ratio stood at 2.16%, clearly proving that we have come very near to putting the NPL issue
behind us.

 Management of Loans
Credit Ratings
A 16-grade unified credit rating system is one of the most important elements of the Three Banks' risk management infrastructure.
In principle, credit ratings apply to all borrowers and are subject to regular reviews at least once a year to reflect promptly theirterm-end corporate results, as well as to special reviews required whenever a borrower's credit standing changes. This enables thegroup to monitor both individual borrowers and the status of the overall portfolio in a timely fashion. Since credit ratings are a
primary phase of the self-assessment process described below, they are linked to the obligor classifications used in the self
-assessment of assets.
Self-Assessment of Assets
Self-assessment of assets is one of the credit risk management measures that enables the group to ascertain actual asset status, inorder to prepare for appropriate write-offs and provisions based on accounting principles.
Specifically, borrowers are categorized into five obligor classifications according to creditworthiness, then assets are classified
into four categories according to asset recovery risk and risk of impairment (please refer to the Definition of Obligor Classifications
and Definition of Categories of Self-assessment on the next page for details).
Write-Offs and Reserves
Write-offs and reserves are made according to obligor classifications and asset categories on the basis of the results of the self
-assessment.
The results of write-offs and reserves at the end of March 2005 are described on page 87.

88Definition of Obligor Classifications and Definition of Categories of Self-Assessment
Definition of Obligor Classifications

NormalObligors

Obligors whose business conditions are favorable and who are deemed not to have any particular problems in terms of their financial
position.

Watch
Obligors

Obligors who require close watching going forward
because there are problems with their borrowings,
such as reduced or suspended interest payments,
problems with fulfillment such as de facto postponements of principal or interest payments, or problems
with their financial positions as a result of their pooror unstable business conditions.

Intensive
Control
Obligors

Obligors who are not yet bankrupt but are in
financial difficulties and are deemed to be very
likely to go bankrupt in the future because they
are finding it difficult to make progress in implementing their management improvement plans(including obligors who are receiving ongoingsupport from financial institutions).

Substantially
Bankrupt
Obligors

Obligors who have not yet gone legally or formally bankrupt but who are substantially bankrupt because they are in serious financial
difficulties and are not deemed to be capable ofrestructuring.

Bankrupt
Obligors

Obligors who have already gone bankrupt, fromboth a legal and/or formal perspective.

Category I

Category II

Category III(Non-Categorized)

Category IV(Non-Collateralized)

All credit given toNormal Obligors.

Credit given to
Watch Obligors
other than thoseincluded in
Category I.

Credit to obligors
which has pledged
collateral oris covered byguarantees,considered of highquality, such as
deposit collateral.

Credit to obligors
which is coveredby general collateral, such as realestate and guarantees.

Credit given to
Intensive Control
Obligors otherthan thoseincluded in
Category I and
Category II.
The difference
between the assessedvalue and market
value of collateral on
credit to Bankrupt andSubstantially Bankrupt
Obligors (i.e., the portion of loans for which
final collection problems or losses are
anticipated).

Credit to Bankrupt
and Substantially
Bankrupt Obligors,other than those in
Category I,
Category II and
Category III (credit
that is judged to be
unrecoverable orwithout value).

Method for Write-Offs and Reserves

Normal Obligors

Calculate the value of estimated loss based on the probability of failure over the coming year for loans by credit rating andappropriate it for the General Reserve for Possible Losses on Loans.

Watch Obligors

Calculate the estimated loss on loans based on the probability of failure over the next three years and appropriate it for
the General Reserve for Possible Losses on Loans. Further, in regard to Special Attention Obligors, for obligors with large
claims more than a certain amount, if the cash flow from the return of principal and interest payments can reasonably be
estimated, set up a reserve under the DCF method.

Intensive Control Obligors

Provide an amount for Specific Reserve for Possible Losses on Loans as calculated by one of the following methods after
deducting amounts anticipated to be recoverable from the sale of collateral held against the claims and from guarantorsof the claims: a) an amount calculated based on the overall ability of the borrower to pay, or b) the estimated loss calculated on the basis of the balance and the probability of failure over the next three years.
Further, for obligors with large claims more than a certain amount, if the cash flow from the return of principal andinterest payments can reasonably be estimated, set up a reserve under the DCF method.

Substantially Bankrupt
Obligors
Bankrupt Obligors

Provide the entire balance after deducting amounts anticipated to be recoverable from the sale of collateral held against
the claims and from guarantors of the claims for Specific Reserve for Possible Losses on Loans, or write-off the entire balance.

89

Financial Analysis of Mizuho

Improvement of Asset Quality

 Credit Management
Credit Operations Standard
The Credit Operations Standard stipulates the basic stance for all senior executive officers and employees of the group engaged in
credit operations. Fundamental credit operations policies are determined therein in light of the appropriate public and social rolesof the bank, including social principles, safety principles, growth principles and earnings principles.
Credit Examination
In order to improve the quality of assets, it is extremely important to manage credit on a daily basis so as to prevent the occurrence of NPLs.
Basically each business promotion division and branch responsible is to conduct an impartial analysis and examination of eachcredit application separately, and matters that exceed the authority of the division or branch general manager are to be examinedby head office credit divisions. Industry-specific, customer size-specific and region-specific credit divisions have been established,
and they are able promptly to conduct specialized examinations depending on the characteristics of the customer and market,
and provide business promotion divisions and branches with appropriate advice.
From the point of view of preventing the occurrence of new NPLs, particularly where there is a low credit rating indicating highdownside risk, the business promotion division and branch work jointly with the credit divisions to clarify credit policy, and at thesame time, work to provide support for the early revitalization of the customer.

 Treatment of NPLs
Centralized management of recovery and final disposal of NPLs by a specialized division facilitate continued efforts to revitalize
corporations and collect debts through a disposal of collateral.
The division works to strengthen management and collection systems and realize efficient and expeditious disposals by utilizing
schemes for corporate revitalization including transfer of business and M&A, bulk sales of NPLs and working with the RCC(Resolution and Collection Corporation).
Mizuho Saiken Kaishu Co., Ltd., a servicer of the group, mainly collects NPLs for the group banks and affiliated companies.

 Activities in Corporate Revitalization
The group considers support for corporate revitalization to be an important mission for a financial institution, and it is doing its
utmost as a group to provide such support.
After announcing its Corporate Revitalization Project in May 2003, the group has made steady progress in the corporate reconstruction of its customers through corporate splits and transfer of operations, and improving customers’ financial position by
underwriting their preferred shares or using DES (Debt Equity Swaps).
As a result, necessary measures were taken for each of the approximately 1,000 companies that were transferred to MHFG'sfinancial subsidiaries specializing in corporate revitalization, allowing the group to bring the project to an end one year ahead ofschedule.

90 Status of Disclosed Claims under the Financial Reconstruction Law (FRL)
Disclosed Claims under the FRL (Consolidated)(Consolidated)
Billions of yen

At March 31,

Claims against Bankrupt and Substantially Bankrupt Obligors
Claims with Collection Risk
Claims for Special Attention
Total

2005

¥

251.6
859.0
476.5

2004

¥

Change466.1
1,084.1
1,719.4¥(214.5)(225.1)(1,242.9)¥ 1,587.1¥ 3,269.7¥(1,682.5)

2005

2004

¥ 1,042.5¥ 1,379.0

2005

2004

Note: Above figures are presented net of partial direct write-offs, the amounts of which are indicated in the table below.
Billions of yen

Amount of Partial Direct Write-offs

Change¥(336.5)(Trust Accounts)
Billions of yen

At March 31,

Claims against Bankrupt and Substantially Bankrupt Obligors
Claims with Collection Risk
Claims for Special Attention
Total

Change

¥

2.8
1.5
5.3

¥

4.2
3.8
15.5

¥

(1.4)
(2.3)
(10.2)

¥

9.6

¥

23.6

¥

(13.9)(Consolidated and Trust Accounts)
Billions of yen

At March 31,

Claims against Bankrupt and Substantially Bankrupt Obligors
Claims with Collection Risk
Claims for Special Attention
Total

2005

¥

254.4
860.5
481.8

¥ 1,596.8

2004¥

Change470.3
1,087.9
1,735.0¥(215.9)(227.4)(1,253.1)¥ 3,293.3¥(1,696.5)

91

Financial Analysis of Mizuho

Improvement of Asset Quality

Disclosed Claims under the FRL (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

At March 31,

Claims against Bankrupt and Substantially Bankrupt Obligors
Claims with Collection Risk
Claims for Special Attention

2005

¥

Subtotal¥

1,495.6

Normal Claims
Total

209.5
805.8
480.2

2004

435.9
1,032.8
1,722.2

Change¥3,191.0

67,600.3

69,313.7¥ 69,095.9¥ 72,504.7

2005

2004

(226.4)(227.0)(1,241.9)(1,695.3)(1,713.4)¥(3,408.8)

Note: Above figures are presented net of partial direct write-offs, the amounts of which are indicated in the table below.
Billions of yen

Amount of Partial Direct Write-offs

¥

865.4

¥

1,176.1

Change¥(310.7)

Ratio of Disclosed Claims under the FRL (the Three Banks) (Banking Accounts and Trust Accounts)%

At March 31,

2005

2004

ChangeClaims against Bankrupt and Substantially Bankrupt Obligors
Claims with Collection Risk
Claims for Special Attention

0.30%
1.16
0.69

0.60%
1.42
2.37

(0.29)%(0.25)(1.68)

Subtotal

2.16

4.40

(2.23)

Normal Claims

97.83

95.59

2.23

100.00%100.00%/Total
Note: Above figures are presented net of partial direct write-offs.

Disclosed Claims under the FRL and Coverage Amount (the Three Banks) (Banking Accounts)
Billions of yen

At March 31,

Claims against Bankrupt and Substantially Bankrupt Obligors
Collateral, Guarantees, and equivalent
Reserve for Possible Losses
Claims with Collection Risk
Collateral, Guarantees, and equivalent
Reserve for Possible Losses
Claims for Special Attention
Collateral, Guarantees, and equivalent
Reserve for Possible Losses
Total
Collateral, Guarantees, and equivalent
Reserve for Possible Losses
Note: Above figures are presented net of partial direct write-offs.

92

2005

2004

Change

¥

206.7
185.4
21.2
804.2
313.0
370.4
474.9
152.6
95.9

¥

431.7
389.6
42.0
1,028.9409.9
488.8
1,706.6
726.5
406.8

¥

(225.0)(204.2)(20.7)(224.7)(96.9)(118.4)(1,231.7)(573.9)(310.9)¥1,485.9
651.0
487.6

¥

3,167.3
1,526.2
937.8¥(1,681.4)(875.1)(450.1)

Coverage on Disclosed Claims under the FRL (the Three Banks) (Banking Accounts)
Billions of yen

At March 31,

Coverage AmountReserve for Possible Losses on Loans
Collateral, Guarantees, and equivalent

2005

¥

1,138.7
487.6
651.0

¥

2004

Change2,464.0
937.8
1,526.2¥ (1,325.3)(450.1)(875.1)

Coverage Ratio
Claims against Bankrupt and Substantially Bankrupt Obligors
Claims with Collection Risk
Claims for Special Attention(Claims against Special Attention Obligors)

76.6%
100.0
84.9
52.3
54.0

77.7%
100.0
87.3
66.4
66.3

(1.1)%—(2.3)(14.0)(12.3)

Reserve Ratio against Non-collateralized Claims
Claims against Bankrupt and Substantially Bankrupt Obligors
Claims with Collection Risk
Claims for Special Attention(Claims against Special Attention Obligors)

100.0%
75.4
29.7
31.9

100.0%
78.9
41.5
41.2

—%
(3.5)
(11.7)(9.3)(Reference) Reserve Ratio
Claims against Special Attention Obligors
Claims against Watch Obligors excluding Claims against Special Attention Obligors
Claims against Normal Obligors

21.56%
8.28
0.11

23.64%
10.38
0.13(2.08)%(2.09)(0.02)

Note: Above figures are presented net of partial direct write-offs.

93

Financial Analysis of Mizuho

Improvement of Asset Quality

 Status of Non-Accrual, Past Due & Restructured Loans (Consolidated)(Consolidated)
Non-Accrual, Past Due & Restructured Loans
Billions of yen

At March 31,

Loans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for 3 Months or More
Restructured Loans
Total

2005

¥

89.7
971.8
27.7
448.5

2004

¥

177.8
1,284.0
24.9
1,694.2

Change¥(88.1)(312.1)2.8(1,245.7)¥ 1,537.9¥ 3,181.1¥ (1,643.1)

2005

2004

¥ 1,015.4¥ 1,353.2

At March 31,

2005

2004

ChangeLoans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for 3 Months or More
Restructured Loans

0.14%
1.54
0.04
0.71

0.26%
1.93
0.03
2.55

(0.12)%(0.39)
0.00)(1.84)

2.44%

4.80%

(2.36)%

2005

2004

Reserves for Possible Losses on Loans
General Reserve for Possible Losses on Loans
Specific Reserve for Possible Losses on Loans
Reserve for Possible Losses on Loans to Restructuring Countries¥ 1,146.7
637.3
503.9
5.5

¥ 1,850.5
1,175.8666.2
8.4

Reserve for Possible Losses on Support of Specific Borrowers

—

—

2005

2004

¥ 1,042.7¥ 1,379.6

Note: Above figures are presented net of partial direct write-offs, the amounts of which are indicated in the table below.
Billions of yen

Amount of Partial Direct Write-offs

Change¥(337.7)

Ratio to Total Loans%

Non-Accrual, Past Due & Restructured Loans / Total Loans
Note: Above figures are presented net of partial direct write-offs.

Reserves for Possible Losses on Loans
Billions of yen

At March 31,

Change¥(703.7)(538.5)(162.3)(2.9)—

Note: Above figures are presented net of partial direct write-offs, the amounts of which are indicated in the table below.
Billions of yen

Amount of Partial Direct Write-offs

Change¥(336.9)Reserve Ratios for Non-Accrual, Past Due & Restructured Loans%

At March 31,

2005

2004

ChangeAfter Partial Direct Write-offs

74.56%

58.17%

16.39%

Note: Reserve Ratio = (Reserves for Possible Losses on Loans + Reserve for Possible Losses on Support of Specific Borrowers) / Total Non-Accrual, Past Due & Restructured Loans.

94

(Trust Accounts)
Non-Accrual, Past Due & Restructured Loans
Billions of yen

At March 31,

Loans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for 3 Months or More
Restructured Loans
Total

2005

2004

Change

¥

1.2
3.2
0.0
5.1

¥

2.0
6.1
0.2
15.2

¥

(0.7)
(2.8)
(0.1)
(10.1)

¥

9.6

¥

23.6

¥ (13.9)

Ratio to Total Loans%

At March 31,

2005

2004

ChangeLoans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for 3 Months or More
Restructured Loans

0.29%
0.73
0.02
1.18

0.34%
1.04
0.04
2.62

(0.05)%(0.31)(0.02)(1.44)

2.23%

4.06%

(1.83)%

2005

2004

Non-Accrual, Past Due & Restructured Loans / Total Loans(Consolidated and Trust Accounts)
Non-Accrual, Past Due & Restructured Loans
Billions of yen

At March 31,

Loans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for 3 Months or More
Restructured Loans
Total

¥

91.0
975.1
27.8
453.6

¥ 1,547.6¥

179.9
1,290.1
25.1
1,709.5¥ 3,204.7

Change¥(88.8)(315.0)2.6(1,255.8)¥ (1,657.1)

Note: Above figures are presented net of partial direct write-offs.

Ratio to Total Loans%

At March 31,

2005

2004

ChangeLoans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for 3 Months or More
Restructured Loans

0.14%
1.53
0.04
0.71

0.26%
1.93
0.03
2.55

(0.12)%(0.39)
0.00)(1.84)

2.44%

4.79%

(2.35)%

Non-Accrual, Past Due & Restructured Loans / Total Loans
Note: Above figures are presented net of partial direct write-offs.

95

Financial Analysis of Mizuho

Improvement of Asset Quality

 Status of Non-Accrual, Past Due & Restructured Loans (the Three Banks)(Banking Accounts and Trust Accounts)
Non-Accrual, Past Due & Restructured Loans
Billions of yen

At March 31,

Loans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for 3 Months or More
Restructured Loans
Total

2005

¥

85.3
895.3
27.8
452.1

2004

¥

173.3
1,221.8
25.1
1,696.7

Change¥(87.9)(326.4)
2.6(1,244.6)¥ 1,460.6¥ 3,117.0¥ (1,656.3)

2005

2004

840.1

¥ 1,152.5

At March 31,

2005

2004

ChangeLoans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for 3 Months or More
Restructured Loans

0.13%
1.41
0.04
0.71

0.25%
1.83
0.03
2.54

(0.12)%(0.41)
0.00)(1.82)

2.31%

4.67%

(2.35)%

2005

2004

980.6
579.4
395.6
5.5

¥ 1,653.5
1,109.3
535.7
8.4

—

—

2005

2004

865.6

¥ 1,176.6

At March 31,

2005

2004

ChangeAfter Partial Direct Write-offs

67.58%

53.45%

14.12%

Note: Above figures are presented net of partial direct write-offs, the amounts of which are indicated in the table below.
Billions of yen

Amount of Partial Direct Write-offs¥

Change¥(312.3)

Ratio to Total Loans%

Non-Accrual, Past Due & Restructured Loans / Total Loans
Note: Above figures are presented net of partial direct write-offs.

Reserves for Possible Losses on Loans
Billions of yen

At March 31,

Reserves for Possible Losses on Loans
General Reserve for Possible Losses on Loans
Specific Reserve for Possible Losses on Loans
Reserve for Possible Losses on Loans to Restructuring Countries¥

Reserve for Possible Losses on Support of Specific Borrowers

Change¥(672.9)(529.8)(140.1)(2.9)—

Note: Above figures are presented net of partial direct write-offs, the amounts of which are indicated in the table below.
Billions of yen

Amount of Partial Direct Write-offs¥

Change¥(310.9)Reserve Ratios for Non-Accrual, Past Due & Restructured Loans%

Note: Reserve Ratio = (Reserves for Possible Losses on Loans + Reserve for Possible Losses on Support of Specific Borrowers) / Total Non-Accrual, Past Due & Restructured Loans.

96 Status of Loans by Industry
Outstanding Balances by Industry (Consolidated)
Billions of yen, %At March 31,

2005
Outstanding
Balance Composition

2004
Outstanding
Balance Composition

ChangeOutstanding
Balance Composition

Domestic Total (excluding Loans Booked Offshore)
Manufacturing
Agriculture
Forestry
Fishery
MiningConstruction
Utilities
Communication
Transportation
Wholesale & Retail
Finance & Insurance
Real Estate
Service Industries
Local Government
Other¥ 58,265.6
7,511.0
44.2
1.3
6.0
136.8
1,621.7
988.3
884.0
2,966.1
6,909.0
6,457.3
6,585.8
9,889.1
430.2
13,834.3¥ 62,071.4
8,759.8
55.1
1.9
8.3
123.7
1,939.6
943.9
1,101.3
3,066.8
7,824.2
6,885.8
6,862.0
10,299.9
365.0
13,833.7¥ (3,805.7)(1,248.7)(10.8)
(0.5)
(2.3)
13.1
(317.8)44.3(217.2)(100.6)(915.1)(428.5)(276.1)(410.8)65.2
0.5

Overseas Total (including Loans Booked Offshore)
Governments
Financial Institutions
Other

4,651.6
157.7
642.8
3,851.0

100.00
3.39
13.82
82.79

4,134.4
148.0
367.3
3,618.9

100.00
3.58
8.89
87.53

517.2
9.6
275.5
232.0

/
(0.19)
4.93(4.74)¥ 62,917.3/¥ 66,205.8/¥ (3,288.5)

/

Total

100.00%
12.89
0.08
0.00
0.01
0.24
2.78
1.70
1.52
5.09
11.86
11.08
11.30
16.97
0.74
23.74

100.00%
14.11
0.09
0.00
0.01
0.20
3.12
1.52
1.78
4.94
12.61
11.09
11.06
16.59
0.59
22.29

/
(1.22)%(0.01)
0.00
0.00
0.04
(0.34)
0.18(0.26)
0.15(0.75)(0.01)
0.24
0.38
0.15
1.45

Note: Domestic Total = MHFG and its domestic consolidated subsidiaries (excluding their overseas offices).
Overseas Total = Overseas offices of MHFG's domestic consolidated subsidiaries and MHFG's overseas consolidated subsidiaries.

Outstanding Balances by Industry (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen, %At March 31,

2005
Outstanding
Balance Composition

2004
Outstanding
Balance Composition

ChangeOutstanding
Balance Composition

Domestic Total (excluding Loans Booked Offshore)
Manufacturing
Agriculture
Forestry
Fishery
MiningConstruction
Utilities
Communication
Transportation
Wholesale & Retail
Finance & Insurance
Real Estate
Service Industries
Local Government
Other¥ 59,700.4
7,550.7
44.2
1.3
6.0
138.1
1,646.9
1,057.2
892.2
3,027.1
6,929.1
6,982.9
6,598.2
9,945.3
478.5
14,401.9¥ 63,570.9
8,860.3
55.1
1.9
8.8
125.8
1,963.0
1,031.4
1,111.3
3,151.1
7,834.7
7,445.7
6,931.2
10,368.7
413.3
14,267.8¥ (3,870.5)(1,309.5)(10.8)
(0.5)
(2.8)
12.3
(316.0)25.7(219.1)(124.0)(905.5)(462.7)(333.0)(423.3)65.1
134.0

Overseas Total (including Loans Booked Offshore)
Governments
Financial Institutions
Other

4,192.9
154.8
632.2
3,405.8

100.00
3.69
15.08
81.23

3,815.2
143.9
401.2
3,270.0

100.00
3.77
10.52
85.71

377.7
10.8
230.9
135.8

/
(0.08)
4.56(4.48)¥ 63,893.4/¥ 67,386.2/¥ (3,492.8)

/

Total

100.00%
12.65
0.07
0.00
0.01
0.23
2.76
1.77
1.50
5.07
11.61
11.70
11.05
16.66
0.80
24.12

100.00%
13.94
0.09
0.00
0.01
0.20
3.09
1.62
1.75
4.96
12.33
11.71
10.90
16.31
0.65
22.44

/
(1.29)%(0.02)
0.00
0.00
0.03
(0.33)
0.15(0.25)
0.11(0.72)(0.01)
0.15
0.35
0.15
1.68

97

Financial Analysis of Mizuho

Improvement of Asset Quality

Disclosed Claims under the FRL by Industry and Coverage Ratio (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen, %At March 31,

2005
Disclosed Claims
under the FRL Coverage Ratio

2004
Disclosed Claims
under the FRL Coverage Ratio

ChangeDisclosed Claims
under the FRL Coverage Ratio

Domestic Total(excluding Loans Booked Offshore)
Manufacturing
Agriculture
Forestry
Fishery
MiningConstruction
Utilities
Communication
Transportation
Wholesale & Retail
Finance & Insurance
Real Estate
Service Industries
Local Government
Other¥ 1,425.8
116.2
0.7
—
0.0
—
97.5
1.0
11.8
76.8
335.1
8.3
294.7
275.9
—
207.5

¥ 3,057.8
517.8
2.6
0.2
2.2
0.8
194.2
1.2
34.9
56.0
846.2
55.9
502.3
480.5
—
362.4

¥ (1,631.9)(401.6)
(1.8)
(0.2)
(2.2)
(0.8)
(96.7)(0.2)(23.1)
20.7(511.0)(47.5)(207.5)(204.6)—(154.9)Overseas Total(including Loans Booked Offshore)
Governments
Financial Institutions
Other

69.7
10.5
0.6
58.5

Total

¥ 1,495.6

77.3%
78.7
93.0
—
100.0
—
82.2
100.0
68.4
68.5
69.1
76.1
85.7
68.9
—
90.5
61.8
24.4
100.0
68.0
76.6%

133.1
10.7
1.0
121.3
¥ 3,191.0

78.0%
85.3
97.2
50.7
92.0
99.3
68.4
93.7
76.3
72.7
77.9
54.0
82.4
67.8
—
84.4
74.1
25.4
83.3
78.4
77.7%

(63.4)(0.2)(0.3)(62.7)(0.6)%(6.5)(4.2)(50.7)
7.9(99.3)
13.7
6.2
(7.9)
(4.2)
(8.8)
22.0
3.2
1.0
—
6.1
(12.3)(1.0)
16.6(10.3)¥ (1,695.3)(1.1)%

Non-Accrual, Past Due and Restructured Loans by Industry (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

At March 31,

2005

2004

ChangeDomestic Total(excluding Loans Booked Offshore)
Manufacturing
Agriculture
Forestry
Fishery
MiningConstruction
Utilities
Communication
Transportation
Wholesale & Retail
Finance & Insurance
Real Estate
Service Industries
Local Government
Other¥ 1,396.0
113.4
0.7
—
—
—
92.0
0.3
11.7
76.0
331.9
8.3
291.8
274.8
—
194.6

¥ 2,988.8
515.7
2.6
0.2
2.2
0.3
174.5
0.4
32.2
55.8
829.3
55.8
500.4
474.9
—
343.9

¥ (1,592.8)(402.2)
(1.8)
(0.2)
(2.2)
(0.3)
(82.5)(0.1)(20.5)
20.2(497.3)(47.5)(208.6)(200.0)—(149.2)

Overseas Total(including Loans Booked Offshore)
Governments
Financial Institutions
Other

64.6
10.5
—
54.1

128.1
10.7
0.3
117.0

(63.5)(0.2)(0.3)(62.8)¥ 1,460.6¥ 3,117.0¥ (1,656.3)

Total

98

 Status of Loans by Nationality of Borrowers
Loans to Foreign Governments, and equivalent, by Country (Consolidated)
Billions of yen, %At March 31,

2005

Billions of yen, %At March 31,

2004

Indonesia
Others (5 Countries)¥ 41.1
0.3

Indonesia
Others (5 Countries)¥ 51.00.3

Total
Ratio to Total Assets¥ 41.40.02%

Total
Ratio to Total Assets¥ 51.40.03%

Note: Listed are loans to the government and related agents in restructuring countries for which Reserves for Possible Losses on Loans to Restructuring Countries are accounted as stipulated under JICPA
Banking Audit Committee Report No. 4.

Balance of Loans to Restructuring Countries (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen, Number of countries

At March 31,

2005

Loan Amount
Number of Restructuring Countries

¥

2004

51.4
6

¥

Change

54.9
6

¥

(3.5)
—

Notes: 1. Loans are subject to Reserve for Possible Losses on Loans to Restructuring Countries under JICPA Banking Audit Commitee Report No. 4.
Notes: 2.“Number of Restructuring Countries” indicates the number of countries whose loans are subject to the above Reserves and are accounted for on the balance sheets of the Three Banks.

Outstanding Balances and Non-Accrual, Past Due and Restructured Loans by Nationality of Borrowers (the Three Banks)(Banking Accounts and Trust Accounts)
Billions of yen

At March 31,

2005
Non-Accrual,
Outstanding
Past Due &Balance
Restructured Loans

Outstanding
Balance

Non-Accrual,
Past Due &Restructured Loans

Asia
China
ThailandHong Kong¥ 1,335.8
268.9
211.6
204.0

¥ 1,159.3
199.3
195.5
198.2

¥ 40.5
2.4
10.1
2.5

¥ 176.5
69.6
16.1
5.8

Central and South America
North America¥ 26.0
0.4
4.8
2.3

2004

ChangeNon-Accrual,
Outstanding
Past Due &Balance
Restructured Loans¥(14.4)
(1.9)
(5.3)
(0.2)

903.8

2.9

775.9

5.7

127.8

(2.8)

1,544.7

38.6

1,641.3

150.8(96.6)(112.1)

Eastern Europe

39.4

—

29.4

0.9

9.9

(0.9)

Western Europe

933.0

7.5

815.9

20.5

117.0

(13.0)

Other

401.9

26.5

379.5

7.4

22.4

19.1

Total

¥ 5,158.9¥ 101.7¥ 4,801.6¥ 226.0¥ 357.2¥ (124.3)

99

Financial Analysis of Mizuho

Improvement of Asset Quality

 Results of Removal of NPLs from the Balance Sheet
Outstanding Balances of Claims against Bankrupt and Substantially Bankrupt Obligors and Claims with Collection Risk
(under the FRL) (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

At September 30, At March 31, At September 30, At March 31, At September 30, At March 31, At September 30, At March 31,
2001
2002
2002
2003
2003
2004
2004 (a)2005 (b)Amount Categorized as Problem Assets
before September 30, 2001
¥ 4,804.5 ¥ 2,113.6 ¥ 1,605.9 ¥

607.7 ¥

455.6 ¥

261.3 ¥

170.1 ¥

84.5 ¥ (85.6)

of which the amount in the processof being removed from the balance sheet

514.5

266.1

216.7

132.9

96.8

56.1

(40.6)

812.2
1,301.4

640.2
965.7

330.9
276.7

261.4
194.2

148.6
112.6

113.1
57.0

57.4
27.1

(55.7)(29.9)

1,236.6

664.4

236.4

168.7

89.4

87.9

18.4

(69.5)

165.4

88.8

61.1

33.8

17.4

5.8

(11.5)

172.8
491.6

124.7
111.7

90.1
78.5

56.8
32.5

35.9
51.9

9.0
9.4

(26.9)(42.5)

589.1

226.5

149.2

78.9

44.5

19.2

(25.2)

71.8

44.8

45.9

27.3

23.0

3.7

(19.2)

85.0
504.0

70.2
156.2

69.0
80.2

31.4
47.5

23.7
20.7

4.9
14.3

(18.8)
(6.4)

809.5

603.5

321.0

187.8

49.0

(138.8)

57.0

74.0

45.2

32.6

15.9

(16.6)

89.1
720.3

82.1
521.4

83.4
237.6

62.9
124.9

30.8
18.1

(32.0)(106.7)

390.3

192.0

95.3

37.0

(58.3)

40.9

23.4

20.8

11.3

(9.5)

45.7
344.5

28.1
163.9

23.5
71.8

9.5
27.4

(13.9)(44.4)

525.9

161.1

60.4

(100.6)

83.7

62.7

25.8

(36.8)

87.3
438.5

75.1
86.0

31.2
29.1

(43.8)(56.8)

515.7

72.3

(443.4)

39.9

25.6

(14.3)

65.8
449.9

26.3
46.0

(39.5)(403.9)

674.1

674.1

24.1

24.1

Claims against Bankrupt andSubstantially Bankrupt Obligors
1,595.9
Claims with Collection Risk
3,208.6
Amount Newly Categorized as Problem Assets
during the Second Half of Fiscal 2001of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Amount Newly Categorized as Problem Assets
during the First Half of Fiscal 2002

313.3
923.3

of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Amount Newly Categorized as Problem Assets
during the Second Half of Fiscal 2002of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Amount Newly Categorized as Problem Assets
during the First Half of Fiscal 2003
of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Amount Newly Categorized as Problem Assets
during the Second Half of Fiscal 2003
of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Amount Newly Categorized as Problem Assets
during the First Half of Fiscal 2004
of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Amount Newly Categorized as Problem Assets
during the Second Half of Fiscal 2004
of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Total

40.1
40.1
634.0
634.0
¥ 4,804.5 ¥ 3,350.3 ¥ 2,859.6 ¥ 1,880.2 ¥ 1,767.6 ¥ 1,468.7 ¥ 1,262.8 ¥ 1,015.3 ¥(247.4)

of which the amount in the processof being removed from the balance sheet

100

Change(b)-(a)Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk

1,595.9
3,208.6

1,125.5
2,224.8

751.8

456.9

438.8

346.6

293.4

168.7

(124.7)898.1
1,961.4

615.1
1,265.0

548.6
1,218.9435.9
1,032.8

400.2
862.5

209.5
805.8

(190.6)(56.7)

Progress in Removal of Problem Assets from the Balance Sheet (Accumulated Removal Amount and Removal Ratio)(the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

Balance
at March 31,
2005

Accumulated
RemovalAmount¥ 4,804.5
1,236.6
589.1
809.5
390.3
525.9
515.7
674.1

¥

84.5
18.4
19.2
49.0
37.0
60.4
72.3
674.1

¥

¥ 9,546.1¥ 1,015.3¥

AmountAs of September 30, 2001
Second Half of Fiscal 2001
First Half of Fiscal 2002
Second Half of Fiscal 2002
First Half of Fiscal 2003
Second Half of Fiscal 2003
First Half of Fiscal 2004
Second Half of Fiscal 2004
Total

%

Accumulated
Removal
Ratio

ModifiedAccumulated
Removal Ratio

Progress measured against
target of the Emergency
Economic Policy Package

4,720.0
1,218.2
569.8
760.4
353.2
465.4
443.4
/

98.2%
98.5
96.7
93.9
90.5
88.5
85.9
/

99.4%
98.9
97.3
95.9
93.4
93.4
90.9
/

almost completed
almost completed
more than 80%
more than 80%
more than 50%
more than 50%—/

8,530.8///

Note: Modified accumulated removal ratios are based on the accumulated removal amount including the amount which was in the process of being removed from the balance sheet.

Under the government's Emergency Economic Policy Package announced in April 2001, major banks are required to remove
Claims against Intensive Control Obligors or worse (under the FRL, Claims with Collection Risk or worse claims) from their balance
sheets by the end of March 2003 for claims originated before the first half of 2000. For new claims, half are required to be
removed within one year, 80% within two years and complete removal is required within three years.
Therefore, the group has proceeded with thorough collection and final disposal of NPLs as well as improvement in the classification of claims through corporate revitalization.
These measures removed approximately ¥1.6 trillion in NPLs in fiscal 2004. As a result, based on the Emergency Economic
Policy Package, the removal ratio for loans due for disposal by the end of March 2005 has reached 98%, including the amountwhich was in the process of being removed from the balance sheet, so removal from the balance sheet is almost complete.
The group substantially surpassed its targets for the first two consecutive fiscal years, achieving at least 90%.
The group will steadily proceed with removal of NPLs.

101

Financial Analysis of Mizuho

Improvement of Asset Quality

Breakdown of Reasons for Removal of Problem Assets from the Balance Sheet(the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

Problem Assets Newly Categorized as Problem Assets
Accumulated as of Second Half ofFirst Half of Second Half ofFirst Half of Second Half ofSeptember 30, 2001
Fiscal 2001
Fiscal 2002
Fiscal 2002
Fiscal 2003
Fiscal 2003

Liquidation¥(101.4) ¥(8.9) ¥

(2.7) ¥

(18.4) ¥(7.2)(21.2) ¥(0.1) ¥

(160.3)

(3.9)

(5.9)

(3.5)

(0.0)

(0.2)

(1.6)

(83.2)(98.6)

Improvement in Business Performancedue to Restructuring
Securitization(2.3)(135.5)—(28.4)—(37.6)—(84.9)(0.0)(49.9)(0.0)(64.4)(0.5)(101.5)(2.9)(502.5)

Direct Write-off

198.0

38.1

27.5

25.2

30.9

44.7

(1.6)

363.0

Other
Debt Recovery
Improvement in Business Performance(40.2)(34.1)(6.1)(64.2)(24.8)(39.4)

(8.8)
(6.2)
(2.5)

(60.5)(44.6)(15.8)(31.8)(16.5)(15.3)(57.9)(47.9)(10.0)(256.3)(117.1)(139.1)(520.0)(291.4)(228.6)(85.6) ¥(69.5) ¥(25.2) ¥ (138.8) ¥Restructuring

Total

¥

¥

Amount Removed
First Half of from BS in the Second
Fiscal 2004 Half of Fiscal 2004

(58.3) ¥ (100.6) ¥ (443.4) ¥(921.6)(Reference) Breakdown of Accumulated Amount Removed from the Balance Sheet(the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

Up to Second Half of
Fiscal 2001*

Liquidation

Accumulated
from Second Halfof Fiscal 2000

First Half of Second Half of
Fiscal 2004
Fiscal 2004

(557.5) ¥ (190.2) ¥ (214.5) ¥(20.6) ¥ (129.5)

Restructuring(442.7)(235.2)(316.5)(46.4)(320.8)(139.5)(98.6)(1,600.0)

Improvement in Business Performancedue to Restructuring
Securitization(14.6)(741.5)(47.8)(237.9)(58.7)(1,658.1)(6.4)(116.0)(43.9)(411.9)(0.5)(254.1)(2.9)(502.5)(175.2)(3,922.4)

426.4

324.6

1,010.7

19.3

519.6

128.6

363.0

2,792.5(1,360.9)//(693.2)(387.5)(305.7)(551.5)(390.8)(160.7)(332.6)(224.2)(108.3)(438.1)(313.7)(124.4)(428.7)(160.7)(267.9)(520.0)(291.4)(228.6)(4,325.4)//

Direct Write-off
Other
Debt Recovery
Improvement in Business Performance
Total

¥

Breakdown of Amount Removed
First Half of Second Half ofFirst Half of Second Half of
Fiscal 2002
Fiscal 2002
Fiscal 2003
Fiscal 2003¥

(27.3) ¥ (160.3) ¥ (1,300.1)¥ (2,690.9) ¥(1,079.8) ¥(1,788.8) ¥ (502.9) ¥ (824.7) ¥ (721.7) ¥ (921.6) ¥ (8,530.8)* From the Second Half of Fiscal 2000 to the Second Half of Fiscal 2001.

Write-Offs of Loans (the Three Banks) (Banking Accounts)
Billions of yen

At March 31,

Write-offs of Loans

2005

¥

163.6

2004

¥

173.1

Change¥(9.5)

Principal Amounts of NPLs Sold (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

At March 31,

Principal Amounts of NPLs Sold
Sales of Loans to RCC
Other Sales

2005

¥

831.4
42.7
788.7

2004

¥

548.1
54.4
493.7

Change¥283.2(11.7)
295.0

Note: RCC is the abbreviation for the Resolution and Collection Corporation.

Debt Forgiveness (the Three Banks) (Banking Accounts and Trust Accounts)
Number of cases, Billions of yen

At March 31,

2005

2004

Number of Cases of ForgivenessBook Value

15
132.7

22
58.0

Note: The above figures do not include debt forgiveness following legal bankruptcy procedures.

102

¥

¥

Change

¥

(7)
74.7

Financial Data of Mizuho Financial Group, Inc.
Report of Independent Auditors

104

Consolidated Financial Statements

105

Notes to Consolidated Financial Statements

110

103

Financial Data of Mizuho Financial Group, Inc.

Report of Independent Auditors

The Board of Directors
Mizuho Financial Group, Inc.
We have audited the accompanying consolidated balance sheets of Mizuho Financial Group, Inc. and consolidated subsidiaries(the “Company”) as of March 31, 2005 and 2004, and the related consolidated statements of operations, shareholders' equity,and cash flows for the years then ended, all expressed in yen. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial positionof Mizuho Financial Group, Inc. and consolidated subsidiaries at March 31, 2005 and 2004, and the consolidated results of theiroperations and their cash flows for the years then ended in conformity with accounting principles generally accepted in Japan.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2005
are presented solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our
opinion, such translation has been made on the basis described in Note 1.

Ernst & Young ShinNihon.
June 28, 2005

104

Financial Data of Mizuho Financial Group, Inc.

Consolidated Financial Statements

Consolidated Balance Sheets
Millions of yen
2005

At March 31,

AssetsCash and Due from Banks (Notes 12, 32 and 37)
Call Loans and Bills Purchased
Receivables under Resale Agreements
Guarantee Deposits Paid under Securities Borrowing Transactions
Other Debt Purchased (Note 37)
Trading Assets (Notes 4, 12 and 37)
Money Held in Trust (Note 37)
Securities (Notes 5, 12 and 37)
Loans and Bills Discounted (Notes 6 and 12)
Foreign Exchange Assets (Notes 7 and 12)
Other Assets (Notes 8 and 12)
Premises and Equipment (Notes 9, 12 and 23)
Deferred Debenture Charges (Note 10)
Deferred Tax Assets (Note 34)
Customers' Liabilities for Acceptances and Guarantees (Note 22)
Reserves for Possible Losses on Loans (Note 11)
Reserve for Possible Losses on Investments
Total Assets¥

6,808,965
397,5075,004,683
8,680,334
1,007,826
11,047,601
28,67936,047,035
62,917,336
716,907
5,577,985
1,028,082
303
1,036,907
3,928,176(1,146,797)(5,300)¥2004

6,813,510
1,008,716
4,392,105
7,970,608
835,573
8,016,509
27,86332,071,624
66,205,868
608,792
5,496,845
1,143,807
446
1,361,766
3,647,613(1,850,586)(975)

Thousands of
U.S. dollars (Note 1)
2005$

63,392,285
3,700,844
46,594,204
80,814,960
9,382,986
102,854,499
267,009335,602,229
585,767,958
6,674,496
51,931,715
9,571,573
2,829
9,653,733
36,571,794(10,676,823)(49,345)¥ 143,076,236¥ 137,750,091$ 1,332,056,946

Liabilities, Minority Interests and Shareholders' Equity
Liabilities
Deposits (Notes 12 and 13)¥ 80,368,058
Debentures (Note 14)
7,795,073
Call Money and Bills Sold (Notes 12 and 15)
8,359,912
Payables under Repurchase Agreements (Note 12)8,357,544
Guarantee Deposits Received under Securities Lending Transactions (Note 12)
7,635,035
Commercial Paper (Note 16)
1,397,200
Trading Liabilities (Note 4)
7,942,784
Borrowed Money (Notes 12 and 17)
2,634,433
Foreign Exchange Liabilities (Note 7)
292,905
Short-term Bonds
260,300
Bonds and Notes (Note 18)
2,356,972
Due to Trust Accounts
1,367,569
Other Liabilities (Notes 12 and 19)
5,092,621
Reserve for Bonus Payments
34,475Reserve for Employee Retirement Benefits (Note 20)
37,137
Reserve for Contingencies
10,108Reserves under Special Laws (Note 21)
1,834
Deferred Tax Liabilities (Note 34)
34,016
Deferred Tax Liabilities for Revaluation Reserve for Land (Note 23)
135,984
Acceptances and Guarantees (Note 22)
3,928,176¥ 77,487,475
9,459,514
8,680,595
8,031,106
8,161,802
837,800
6,070,833
1,643,343
352,136
180,000
2,359,370
1,360,532
4,406,174
37,917
31,979132,739
1,372
28,792
158,467
3,647,613$

748,236,276
72,573,068
77,831,789
77,809,742
71,083,100
13,008,100
73,948,279
24,526,890
2,726,983
2,423,424
21,943,694
12,732,240
47,412,920
320,975
345,752
94,107
17,077316,702
1,266,035
36,571,794

Total Liabilities

138,042,144

133,069,567

1,285,188,947

Minority Interests

1,128,364

1,036,127

10,505,213

Shareholders' Equity
Common Stock and Preferred Stock (Note 24)
Capital Surplus
Retained Earnings
Revaluation Reserve for Land, net of Taxes (Note 23)
Net Unrealized Gains on Other Securities, net of Taxes (Note 37)
Foreign Currency Translation Adjustments
Treasury Stock (Note 24)

1,540,965
1,022,571
1,048,530
198,945538,027(48,757)(394,555)

1,540,965
1,262,526
462,594
231,739392,772(112,067)(134,134)

14,346,569
9,520,264
9,761,947
1,852,203
5,009,101(453,942)(3,673,356)

Total Shareholders' Equity
Total Liabilities, Minority Interests and Shareholders' Equity

3,905,726

3,644,396

36,362,786¥ 143,076,236¥ 137,750,091$ 1,332,056,946

See accompanying “Notes to Consolidated Financial Statements,” which are an integral part of these statements.

105

Financial Data of Mizuho Financial Group, Inc.

Consolidated Financial Statements

Consolidated Statements of Operations
Millions of yen
2005

For the Fiscal Years ended March 31,

IncomeInterest Income (Note 25)
Fiduciary Income
Fee and Commission Income
Trading Income (Note 26)
Other Operating Income (Note 27)
Other Income (Note 28)¥

Total Income
Expenses
Interest Expenses (Note 25)
Fee and Commission Expenses
Trading Expenses
Other Operating Expenses (Note 29)
General and Administrative Expenses
Other Expenses (Note 30 and 31)
Total Expenses
Income before Income Taxes and Minority Interests
Income Taxes:
Current
RefundDeferred
Minority Interests in Net Income
Net Income¥

1,584,415
63,253566,120
165,059
341,506
735,297¥

2004

1,622,704
62,064515,377
232,455
406,481503,872

Thousands of
U.S. dollars (Note 1)
2005$

14,751,096
588,901
5,270,654
1,536,724
3,179,464
6,845,712

3,455,653

3,342,957

32,172,551

477,983
93,492—
155,781
1,091,348
693,989

437,703
88,762651
199,620
1,125,905
609,073

4,450,080
870,429—
1,450,343
10,160,582
6,461,121

2,512,594

2,461,716

23,392,555

943,059

881,240

8,779,996

41,045
21,228235,227
60,63028,055—
387,855
58,347382,141
197,641
2,190,000
564,478

627,383¥

406,982$

5,841,018

Per Share of Common StockYen
At March 31,

Shareholders' Equity
Net Income:
Basic
DilutedCash Dividends

2005¥ 131,016.15

See accompanying “Notes to Consolidated Financial Statements,” which are an integral part of these statements.

106

54,625.61
37,719.13
3,500.00

2004¥

61,980.34
36,153.27
18,754.94
3,000.00

U.S. dollars (Note 1)
2005$

1,219.78
508.57351.1732.59

Consolidated Statements of Shareholders' Equity
Millions of yen

For the Fiscal Years
ended March 31, 2005 and 2004

Common Stockand Preferred
Stock

CapitalSurplus

Revaluation Net Unrealized
Foreign
Retained
Reserve Gains (Losses) on
Currency
Earnings
for Land, Other Securities,
Translation(Deficit) net of Taxes net of Taxes Adjustments

Balance at April 1, 2003
¥ 1,540,965 ¥ 2,599,552 ¥(1,404,992) ¥ 380,120
Sale of Treasury Stock
—
269
—
—
Effect of the Change
in Foreign Exchange Rate————
Net Change in Unrealized Gains (Losses)
on Other Securities, net of Taxes————
Transfer from Revaluation
Reserve for Land, net of Taxes——
145,456(145,456)
Transfer to Deferred Tax Liabilities
Related to Land Revaluation———(2,924)
Transfer to Retained Earnings— (1,337,295)
1,337,295—
Cash Dividends——(22,147)—
Net Income——
406,982—¥ (24,600)—

Balance at March 31, 2004
Transactions of Treasury Stock(Common Stock)Repurchase of Preferred Stock
Cancellation of Preferred Stock
Effect of the Change
in Foreign Exchange Rate
Net Change in Unrealized Gains
on Other Securities, net of Taxes
Transfer from Revaluation
Reserve for Land, net of Taxes
Transfer from Deferred Tax Liabilities
Related to Land Revaluation
Effect of Exclusion of an Affiliate
from the Scope of the Equity Method
Cash Dividends
Net Income
Balance at March 31, 2005

¥ 1,540,965 ¥ 1,262,526

Treasury
Stock

Total
Shareholders'Equity¥ (95,786) ¥(134,190) ¥ 2,861,066
—
56
325

—

(16,280)—(16,280)

417,373——

417,373

—

—

—

—

—
—
—
—

—
—
—
—

—
—
—
—

(2,924)—(22,147)
406,982¥ 462,594¥ 231,739¥ 392,772¥ (112,067) ¥ (134,134) ¥ 3,644,396

—
—
—

28
—
(239,971)

—
—
—

—
—
—

—
—
—

—
—
—

(460)
(499,931)
239,971(432)(499,931)
—

—

—

—

—

—

63,309—63,309————145,255——

145,255——

32,833(32,833)

—

—

—

—

—

—

—

39

—

—

—

39

—
—
—

(11)
—
—

—
(74,280)
627,383

—
—
—

—
—
—

—
—
—

—
—
—

(11)
(74,280)
627,383¥ 1,540,965 ¥ 1,022,571 ¥ 1,048,530¥ 198,945¥ 538,027¥ (48,757) ¥ (394,555) ¥ 3,905,726

Thousands of U.S. dollars (Note 1)

Common Stockand Preferred
For the Fiscal Year ended March 31, 2005
Stock

Balance at March 31, 2004
Transactions of Treasury Stock(Common Stock)Repurchase of Preferred Stock
Cancellation of Preferred Stock
Effect of the Change
in Foreign Exchange Rate
Net Change in Unrealized Gains
on Other Securities, net of Taxes
Transfer from Revaluation
Reserve for Land, net of Taxes
Transfer from Deferred Tax Liabilities
Related to Land Revaluation
Effect of Exclusion of an Affiliate
from the Scope of the Equity Method
Cash Dividends
Net Income
Balance at March 31, 2005

CapitalSurplus$ 14,346,569 $ 11,754,270

Revaluation Net Unrealized
Foreign
Reserve
Gains onCurrency
Retainedfor Land, Other Securities,
Translation
Earnings net of Taxes net of Taxes Adjustments

Treasury
Stock

Total
Shareholders'Equity$ 4,306,812 $ 2,157,521 $ 3,656,759 $(1,043,360)$(1,248,807)$ 33,929,764

—
—
—

261
—
(2,234,162)

—
—
—

—
—
—

—
—
—

—

—

—

—

—

589,418—

589,418

—

—

—

—

1,352,342——

1,352,342——

305,681(305,681)

—

—

—

—

—

—

—

363

—

—

—

363

—
—
—

(105)
—
—

—
(691,564)
5,841,018

—
—
—

—
—
—

—
—
—

—
—
—

(105)
(691,564)
5,841,018$ 14,346,569 $ 9,520,264—(4,291)— (4,654,420)— 2,234,162(4,030)(4,654,420)—$ 9,761,947 $ 1,852,203 $ 5,009,101 $ (453,942)$(3,673,356)$ 36,362,786

See accompanying “Notes to Consolidated Financial Statements,” which are an integral part of these statements.

107

Financial Data of Mizuho Financial Group, Inc.

Consolidated Financial Statements

Consolidated Statements of Cash Flows
Millions of yen
For the Fiscal Years ended March 31,

2005

I. Cash Flow from Operating Activities
Income before Income Taxes and Minority Interests¥
943,059
Depreciation
129,567
Loss on Impairment of Fixed Assets
67,143
Amortization of Consolidation Differences
426
Equity in Income from Investments in Affiliates(1,429)Decrease in Reserves for Possible Losses on Loans(703,361)
Increase (Decrease) in Reserve for Possible Losses on Investments
4,324
Decrease in Reserve for Possible Losses on Loans Sold—
Decrease in Reserve for Contingencies(122,631)
Increase (Decrease) in Reserve for Bonus Payments(4,157)
Increase in Reserve for Employee Retirement Benefits
5,143Interest Income—accrual basis(1,584,415)
Interest Expenses—accrual basis477,983
Gains on Securities(243,429)
Gains on Money Held in Trust(306)
Foreign Exchange Losses—net
6,646
Losses (Gains) on Disposal of Premises and Equipment(5,334)
Gains on Establishment of Employee Retirement Benefit Trusts—
Net Decrease (Increase) in Trading Assets(2,982,338)
Net Increase (Decrease) in Trading Liabilities
1,848,161
Net Decrease in Loans and Bills Discounted
3,334,370
Net Increase in Deposits
2,873,864
Net Decrease in Debentures(1,664,440)
877,030Net Increase in Borrowed Money (excluding Subordinated Borrowed Money)
Net Decrease (Increase) in Due from Banks (excluding Deposits with Central Banks)
81,198Net Increase in Call Loans etc.
(16,245)Net Increase in Guarantee Deposits Paid under Securities Borrowing Transactions(709,725)
Net Decrease in Call Money, etc.
(164,974)
Net Increase in Commercial Paper
559,400
Net Increase (Decrease) in Guarantee Deposits Received
under Securities Lending Transactions(526,766)
Net Decrease (Increase) in Foreign Exchange Assets(107,737)
Net Increase (Decrease) in Foreign Exchange Liabilities(59,235)Net Increase in Short-term Bonds (Liabilities)
80,300Net Increase in Bonds and Notes
86,320Net Increase (Decrease) in Due to Trust Accounts
7,037Interest and Dividend Income—cash basis
1,622,787
Interest Expenses—cash basis(458,667)
Other—net
905,750
Subtotal
Cash Paid in Income Taxes
Net Cash Provided by Operating Activities

108

2004

¥

881,240
139,863—(239)(1,761)(360,299)(4,180)(25,561)(8,384)
1,105
18,876(1,622,704)
437,703(336,609)(417)
10,190120,592(60,677)
1,991,740(270,856)
2,911,383
5,605,562(2,236,876)
100,974(648,501)(485,485)(1,672,887)(2,816,946)
210,400

Thousands of
U.S. dollars (Note 1)
2005$

8,779,996
1,206,287
625,112
3,967(13,313)(6,548,380)
40,261—(1,141,711)(38,706)
47,883(14,751,096)
4,450,080(2,266,362)(2,855)61,884(49,666)—(27,765,931)
17,206,605
31,043,391
26,756,020(15,496,145)
8,165,258
755,963(151,249)(6,607,633)(1,535,937)
5,208,081

4,021,419
93,566
163,902
180,000
34,078(128,931)
1,664,000(488,800)(1,373,879)(4,904,263)(1,003,049)(551,488)
747,603
803,655
65,521
15,108,347(4,270,246)
8,432,646

4,555,314(137,303)

6,042,599(27,657)

42,410,530(1,278,310)¥ 4,418,011¥ 6,014,942$ 41,132,220

2005

2004

Thousands of
U.S. dollars (Note 1)
2005

II. Cash Flow from Investing Activities
Payments for Purchase of Securities¥ (69,640,865)
Proceeds from Sale of Securities
34,321,694
Proceeds from Redemption of Securities
31,505,073
Payments for Increase in Money Held in Trust(19,605)
Proceeds from Decrease in Money Held in Trust
19,104
Payments for Purchase of Premises and Equipment(71,486)
Proceeds from Sale of Premises and Equipment
98,715
Payments for Purchase of Stocks of Subsidiaries (affecting the scope of consolidation)(734)
Proceeds from Sale of Stocks of Subsidiaries (affecting the scope of consolidation)—¥ (71,932,830)
46,486,466
17,704,694(14,899)
25,784(95,971)374,085(258)
50,716$ (648,364,824)
319,539,096
293,316,016(182,528)
177,862(665,544)
919,050(6,842)—(3,788,105)(7,402,213)(35,267,714)

III. Cash Flow from Financing Activities
Proceeds from Issuance of Subordinated Borrowed Money
140,000
Repayments of Subordinated Borrowed Money(41,914)
Proceeds from Issuance of Subordinated Bonds
462,674
Payments for Redemption of Subordinated Bonds(570,886)
Payments for Redemption of Subordinated Bonds, Notes and Bonds with Stock Options—
Proceeds from Investments in Minority Interests
75,010
Dividends Paid
(74,280)
Dividends Paid to Minority Interests(47,915)
Payments for Purchase of Treasury Stock(500,476)
Proceeds from Sale of Treasury Stock60

90,000(15,000)
601,406—(731,797)—(22,147)(53,497)(166)
208

1,303,417(390,226)
4,307,551(5,315,017)—
698,352(691,564)(446,099)(4,659,501)
563(557,729)(130,994)(5,192,524)

220

(381)

2,052

V. Net Increase (Decrease) in Cash and Cash Equivalents

72,397(1,518,647)

674,034

VI. Cash and Cash Equivalents at the Beginning of the Year5,529,664

7,048,505

51,481,842

Millions of yen

Net Cash Used in Investing Activities

Net Cash Used in Financing Activities
IV. Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents

VII. Net Decrease in Cash and Cash Equivalents Resulted
from Exclusion of Subsidiaries from the Scope of Consolidation
VIII. Cash and Cash Equivalents at the End of the Year (Note 32)—¥

5,602,062(193)¥

5,529,664—$

52,155,876

See accompanying “Notes to Consolidated Financial Statements,” which are an integral part of these statements.

109

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

1. Basis of Presentation
The accompanying consolidated financial statements have been prepared from the accounts maintained by Mizuho Financial
Group, Inc. (“MHFG”) and its consolidated subsidiaries in accordance with the provisions set forth in the Commercial Code ofJapan and the Securities and Exchange Law, and in conformity with accounting principles generally accepted in Japan (“Japanese
GAAP”) which are different in certain respects from the application and disclosure requirements of International Financial
Reporting Standards.
Certain items presented in the consolidated financial statements which were previously filed with the Director of the Kanto
Finance Bureau are reclassified for the convenience of readers outside Japan. In addition, the Consolidated Statements ofShareholders' Equity are presented and included in the consolidated financial statements, though they are not required to be filedwith the Director of the Kanto Finance Bureau. The notes to the consolidated financial statements include information which is
not required under Japanese GAAP but is presented herein as additional information.
The amounts indicated in millions of yen are rounded down by truncating the figures below one million. Totals may not add up
exactly because of such truncation. Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The
rate of ¥107.41=US$1.00, the foreign exchange rate on March 31, 2005, has been used for translation. The inclusion of suchamounts is not intended to imply that Japanese yen has been or could be readily converted, realized or settled into U.S dollars atthat rate or any other rate.

2. Principles of Consolidation(1) Scope of Consolidation
The consolidated financial statements include the accounts of MHFG and its subsidiaries (collectively, the “Group”), including
Mizuho Corporate Bank, Ltd. (“MHCB”), Mizuho Bank, Ltd. (“MHBK”), Mizuho Trust & Banking Co., Ltd. (“MHTB”), Mizuho
Securities Co., Ltd. (“MHSC”) and other subsidiaries. The number of consolidated subsidiaries as of March 31, 2005 and 2004
was 118. In the fiscal year ended March 31, 2005, Polaris Principal Finance Co., Ltd. and 3 other companies were newly
consolidated as a result of establishment and other reasons, and DKB Information Systems Inc. and 3 other companies were
excluded from the scope of consolidation as a result of merger and other reasons. The consolidated financial statements for the
fiscal years ended March 31, 2005 and 2004 do not include the accounts of IBJ Australia Bank Limited and other subsidiaries,
as they are considered immaterial in terms of the respective group ownership of Total Assets, Net Income / Net Loss andRetained Earnings.
The number of affiliates under the equity method as of March 31, 2005 and 2004 was 20 and 28, respectively. Investments
in affiliates include The Chiba Kogyo Bank, Ltd., Shinko Securities Co., Ltd., Japan Mortgage Co., Ltd. and other affiliates. In
the fiscal year ended March 31, 2005, Max Investment Advisory Co., Ltd. and 2 other companies were newly included in thescope of the equity method as a result of establishment, and IBJ Leasing Co., Ltd., Fuyo General Lease Co., Ltd. and 9 othercompanies were excluded from the scope of the equity method as a result of listing and other reasons. Non-consolidated subsidiaries, including IBJ Australia Bank Limited and certain affiliates, are not under the equity method, as they are not significant
to the consolidated financial statements of MHFG.
In consolidation, significant intercompany accounts and transactions have been eliminated. In addition, all significant unrealized profit included in assets resulting from transactions within the Group has been eliminated.
The accounting standards applicable to the consolidated financial statements require a company to consolidate all subsidiaries of which the company controls the operations, irrespective of whether or not the company owns a majority of theirshares. Control is considered to exist where the company has (a) the power to appoint or remove the majority of the Board of
Directors or an equivalent governing body, and/or (b) the power to cast the majority of the votes at a meeting of the Board of
Directors or an equivalent governing body.
(2) Year-End Dates of Consolidated Subsidiaries
The accompanying consolidated financial statements include the accounts of subsidiaries whose fiscal year-ends are other thanMarch 31. Fiscal year-ends of such subsidiaries are principally December 31.
Consolidated subsidiaries with fiscal year-ends of the day before the last business day of June, or October 31, performed tentative closings and prepared financial statements as of and for the period ended December 31.
Other consolidated subsidiaries are consolidated based on their respective fiscal year-ends after making necessary adjustments for significant transactions recorded during the period between these subsidiaries' fiscal year-ends and the date of theconsolidated financial statements.

110(3) Combinations and Reorganizations
On September 29, 2000, The Dai-Ichi Kangyo Bank, Limited (“DKB”), The Fuji Bank, Limited (“Fuji Bank”) and The Industrial
Bank of Japan, Limited (“IBJ”) (collectively, the “Three Banks”) established Mizuho Holdings, Inc. (“MHHD”) by way of stocktransfers (“kabushiki-iten”). As a result of this transaction, each of the Three Banks became a wholly-owned subsidiary of
MHHD.
The formation of MHHD and the stock-for-stock transfers of the Three Banks ( the “Initial Combination”) were accounted forusing the pooling-of-interests method in accordance with “Accounting for the Consolidation of a Holding Company
Established by Stock Exchange or Stock Transfers” (the Japanese Institute of Certified Public Accountants (“JICPA”) Accounting
Committee Research Report No. 6) and, as such, the assets and liabilities of the Three Banks were combined at book value.
On April 1, 2002, the Three Banks were combined and reorganized (the “Combination and Reorganization”) into two banks,
MHCB and MHBK, by means of corporate split and merger.
On January 8, 2003, MHFG was incorporated and a stock-for-stock exchange (“kabushiki-kokan”) was carried out by andbetween MHHD and MHFG on March 12, 2003, as a result of which MHHD became a wholly-owned subsidiary of MHFG (the“Business Reorganization”). In the Business Reorganization, certain subsidiaries of MHHD, MHCB and MHBK such as trust
banking subsidiaries were transferred to MHFG primarily by means of corporate splits. The Business Reorganization was
accounted for using the pooling-of-interests method in accordance with the JICPA Accounting Committee Research Report
No. 6.
(4) Amortization of Difference between Cost and Underlying Interests
In principle, the difference between the fair value of net assets and the cost of the acquired subsidiary is being amortized over a
period within 20 years from the date of acquisition, and the unamortized balance is recorded as “Consolidation Differences”
on the Consolidated Balance Sheets. If these amounts have no material impact on the consolidated financial statements of
MHFG, they are charged or credited to income in the year of acquisition.
3. Summary of Significant Accounting Policies(1) Trading Assets and Trading Liabilities
Trading transactions intended to take advantage of short-term fluctuations and arbitrage opportunities in interest rates,
currency exchange rates, market prices of securities and related indices are recognized on a trade date basis and recordedin Trading Assets or Trading Liabilities on the Consolidated Balance Sheets.
Securities and other short-term credit instruments held for trading purposes are stated at fair value at the consolidated balance sheet date. Derivative financial products, such as swaps, forward contracts and option transactions, are stated at their fairvalues, assuming that such transactions were terminated and settled at the consolidated balance sheet date.
Trading Income and Trading Expenses include the interest received and interest paid during the fiscal year, the gains or losses
resulting from any change in the value of securities and monetary claims between the beginning and the end of the fiscal year
and the gains or losses resulting from any change in the value of financial derivatives between the beginning and the end of
the fiscal year, assuming they were settled at the end of the fiscal year.
(2) Securities
In accordance with “Accounting Standard for Financial Instruments” (Business Accounting Deliberation Council, January 22,1999), MHFG classifies securities into three categories based upon management's intent. These securities are accounted for
as follows:(i) Trading securities are carried at market value and included in Trading Assets.
(ii) Bonds held to maturity are stated at amortized cost, determined by the moving average method.
(iii)Other securities are securities which are not classified as either trading securities or bonds held to maturity. Other securities
which have readily determinable fair value are stated at fair value with changes in net unrealized gains or losses, net of
applicable income taxes after excluding gains and losses as a result of fair-value hedge method and other, included directly
in shareholders' equity. Fair value of domestic equity securities with a quoted market price are determined based on the
average quoted market price over the month preceding the consolidated balance sheet date. Fair value of securities otherthan domestic equity securities with a quoted market price are determined at the quoted market price if available, or otherreasonable value at the consolidated balance sheet date (cost of securities sold is calculated primarily by the moving averagemethod). Other securities which do not have readily determinable fair values are stated at cost or amortized cost as determined by the moving average method.
In addition, investments in non-consolidated subsidiaries and affiliates which are not under the equity method are valued
at cost as determined by the moving average method.
111

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

Securities which are held as trust assets in Money Held in Trust accounts are valued in the same way as Securities above.
Certain Other Securities which have fair value are devalued to the fair value, and the difference between the acquisition
cost and the fair value is treated as the loss for the fiscal year (“devaluation”), if the fair value (primarily the closing market
price on the last day of the fiscal year) has significantly deteriorated compared with the acquisition cost (including amortizedcost) unless it is deemed that there is a possibility of a recovery in the market price, the market price is taken as the amountrecorded. The amount of devaluation was ¥355 million ($3,309 thousand) and ¥1,417 million for the fiscal years ended
March 31, 2005 and 2004, respectively.
The criteria for determining whether a security’s fair value has “significantly deteriorated” are outlined as follows:
Security whose fair value is 50% or less of the acquisition cost
Security whose fair value exceeds 50% but is 70% or less of the acquisition cost and the quoted price maintains acertain level or lower(3) Securities Lending and Borrowing Transactions
Unsecured securities loaned that allow borrowers to sell the borrowed securities, amounted to ¥28,605 million ($266,317
thousand) and ¥20,023 million as of March 31, 2005 and 2004, respectively, and are included in Trading Securities in Trading
Assets. Securities loaned that do not allow borrowers to sell the borrowed securities, amounted to ¥9 million as of March 31,
2004, and are included in Japanese National Government Bonds. A portion of unsecured borrowed securities, securities borrowed with cash collateral and securities purchased under resale agreements have the right to resell or repledge out of which
securities repledged were ¥4,242,038 million ($39,493,889 thousand) and ¥4,519,460 million as of March 31, 2005 and 2004,
respectively, securities re-loaned were ¥2,355 million ($21,933 thousand) and ¥1,947 million as of March 31, 2005 and 2004,
respectively, and securities neither repledged nor re-loaned were ¥5,911,831 million ($55,039,865 thousand) and ¥4,757,422
million as of March 31, 2005 and 2004, respectively.
(4) Bills Discounted
In accordance with “Accounting and Auditing Treatment Relating to Adoption of Accounting Standards for Financial
Instruments for Banks” (JICPA Industry Audit Committee Report No. 24), Bills Discounted are accounted for as financing transactions, although the subsidiary banks have rights to sell or pledge certain commercial bills and foreign exchange bills discounted. The principal amount of these bills amounted to ¥930,853 million ($8,666,359 thousand) and ¥963,147 million as ofMarch 31, 2005 and 2004, respectively.
(5) Derivatives
Derivative transactions are valued at fair value with changes in fair value included in current income. Derivatives qualified ashedges are mainly accounted for using the deferral method of hedge accounting (see the following note).
(6) Hedge Accounting
Domestic consolidated banking subsidiaries and domestic trust banking subsidiaries apply either the fair-value hedge method or
the deferred method of hedge accounting for the interest rate risk accompanying various financial assets and liabilities. Until
the fiscal year ended March 31, 2003, as permitted by the transitional treatment in the JICPA Industry Audit Committee Report
No. 24, hedge accounting was applied to macro hedges in which overall interest rate risks inherent in loans, deposits and other
instruments were managed on a net basis using derivatives.
Effective the fiscal year ended March 31, 2004, the general provisions of the JICPA Industry Audit Committee Report No. 24
are applied.
Under the general provision, the effectiveness of a fair value hedge is assessed by each of identified (i) group of hedged
deposits, loans or similar instruments and (ii) corresponding group of hedging instruments such as interest rate swaps in thesame maturity bucket. Also, under the general provisions, the effectiveness of a cash flow hedge is assessed based on the correlation between a base interest rate index of the hedged cash flow and that of the hedging instrument.
Deferred hedge gains/losses on the macro hedges recognized in the previous periods are amortized as interest
income/expenses or other income/expenses over the remaining maturity of the respective hedging instrument.
Until the fiscal year ended March 31, 2004, the deferred method has been applied to the hedge of interest rate risk associated with various financial assets and liabilities. In response to the price fluctuations in the bond market, effective the fiscal year
ended March 31, 2005, the fair-value hedge method has been applied to derivative transactions which hedge fluctuations inbond prices of Other Securities so that the effect of these hedge transactions will be presented more fairly in the financial statements. As a result of the application of the fair-value hedge method, Interest Income decreased by ¥3,810 million ($35,475
thousand), Other Operating Expenses increased by ¥7,297 million ($67,942 thousand) and Other Expenses increased by¥14,412 million ($134,181 thousand), and, as a consequence, Income before Income Taxes and Minority Interests decreased by¥25,520 million ($237,599 thousand), respectively, as compared with the corresponding amounts under the previously applied
method. In addition, Other Assets decreased by ¥79,471 million ($739,893 thousand), Deferred Tax Assets increased by112¥21,898 million ($203,881 thousand), and Net Unrealized Gains on Other Securities, net of Taxes decreased by ¥32,052 million($298,413 thousand). A certain domestic consolidated banking subsidiary has not yet changed the hedge accounting methodin the fiscal year ended March 31, 2005, but is applying the fair-value hedge method gradually.
Since it was expected that significant losses would be incurred at maturity of hedge accounting due to changes in interest
rate trends during the fiscal year ended March 31, 2005, Deferred Hedge Losses of ¥67,089 million ($624,610 thousand) werecharged to Other Expenses.
The unamortized amounts of Gross Deferred Hedge Losses on the macro-hedges were ¥556,029 million ($5,176,699 thousand) and ¥1,246,462 million as of March 31, 2005 and 2004, respectively. The unamortized amounts of Gross Deferred
Hedge Gains on the macro-hedges were ¥545,978 million ($5,038,126 thousand) and ¥1,177,257 million as of March 31,
2005 and 2004, respectively.
Domestic consolidated banking subsidiaries and domestic trust banking subsidiaries also apply the deferred method of hedge
accounting to hedges of foreign exchange risks associated with various foreign currency denominated monetary assets and liabilities. Until the fiscal year ended March 31, 2003, the transitional treatment in “Accounting and Auditing Treatment Relating
to Adoption of Accounting Standards for Foreign Currency Transactions for Banks” (JICPA Industry Audit Committee Report
No. 25) was applied to these transactions. Effective the fiscal year ended March 31, 2004, in accordance with the general provisions of the JICPA Industry Audit Committee Report No. 25, hedge accounting is applied to currency-swap transactions,exchange swap transactions and similar transactions intended to hedge risks of borrowing and lending in different currencies
by swapping the borrowing currency for the lending currency.
The effectiveness of the above described currency-swap transactions, exchange swap transactions and similar transactions
hedging the foreign exchange risks of monetary assets and liabilities denominated in foreign currencies is assessed based oncomparison of foreign currency position of the hedged monetary assets and liabilities and the hedging instruments.
In addition to the above methods, the domestic consolidated banking subsidiaries apply the deferred method or the fair-value
hedge method to portfolio hedges of the foreign exchange risks associated with foreign securities (except for bonds) identified
as hedged items in advance, as long as the amount of spot and forward foreign exchange contracts payable exceeds theamount of acquisition cost of the hedged foreign securities in foreign currency.
Until the fiscal year ended March 31, 2003, gains and losses relating to foreign exchange swaps of some of the domesticbanking subsidiaries were reported in gross amounts in the statements of operations. However, effective the fiscal year ended
March 31, 2004, the net amount of gains and losses is presented as a result of the application of hedge accounting in accordance with the JICPA Industry Audit Committee Report No. 25. Compared to the corresponding amounts under the previously
applied method, Interest Income and Interest Expenses decreased by ¥13,254 million for the fiscal year ended March 31, 2004.
Intercompany interest rate swaps, currency swaps and similar derivatives among consolidated companies or between trading
accounts and other accounts, which are designated as hedges, are not eliminated and related gains and losses are recognizedin the statements of operations or deferred under hedge accounting because these intercompany derivatives are covered byoutside third-party transactions executed in appropriate hedge operations without subjectivities in accordance with the JICPA
Industry Audit Committee Reports Nos. 24 and 25.
Other subsidiaries also apply the deferred method, the fair-value method or the exceptional accrual method for interest rate
swaps as hedge accounting methods as described above.

(7) Translation of Foreign Currencies
Assets and Liabilities denominated in foreign currencies and accounts of overseas branches of domestic banking subsidiaries
and a domestic trust banking subsidiary are translated into Japanese yen primarily at the exchange rates in effect at the consolidated balance sheet date, with the exception of the investments in non-consolidated subsidiaries and affiliates not under theequity method, which are translated at historical exchange rates.
Until the fiscal year ended March 31, 2003, the transitional treatment permitted by the JICPA Industry Audit Committee
Report No. 25 was applied to foreign currency transactions. However, effective the fiscal year ended March 31, 2004, in
accordance with the general provisions of the JICPA Industry Audit Committee Report No. 25, hedge accounting is applied tocurrency-swap transactions, exchange swap transactions and similar transactions intended to hedge risks of borrowing andlending in different currencies by swapping the borrowing currency for the lending currency. A summary of the hedge accounting applied in these transactions is explained in 3 (6) above.
As a result of the application of hedge accounting, currency-swap transactions and exchange swap transactions, which previously were accounted for on an accrual basis, are valued at fair value and the gross amount of the credit balance and the debt
balance are recorded on the balance sheet in Other Assets and Other Liabilities. Other Assets and Other Liabilities increased by¥1,458 million and ¥1,415 million, respectively, compared with the corresponding amounts under the previous methods as ofMarch 31, 2004. Additionally, as a result of this change, Income before Income Taxes and Minority Interests increased by ¥42
million for the fiscal year ended March 31, 2004.
113

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

Until the fiscal year ended March 31, 2003, the net fair value of forward foreign exchange transactions other than those forthe above hedging purposes was recorded in Other Assets or Other Liabilities on the balance sheets. However, effective the fiscal year ended March 31, 2004, in accordance with the JICPA Industry Audit Committee Report No. 25, the gross fair value
amounts are presented in (i) Trading Assets and Trading Liabilities as Trading-Related Financial Derivatives and (ii) Other Assets
and Other Liabilities as Derivatives other than for Trading on the balance sheets. As a result, Trading Assets, Trading Liabilities,
Other Assets, and Other Liabilities increased by ¥101,928 million, ¥234,226 million, ¥780,758 million and ¥648,460 million,
respectively, compared with the corresponding amounts under the previous method as of March 31, 2004.
The consolidated subsidiaries' assets and liabilities denominated in foreign currencies, except for the above transactions, aretranslated primarily at the exchange rates in effect at each balance sheet date.

(8) Premises and Equipment
Depreciation of buildings is computed mainly by the straight-line method, and that of equipment is computed mainly by the
declining-balance method with the following range of useful lives:
Buildings
3 years to 50 years
Equipment
2 years to 20 years(9) Software
Development costs for internally used software are capitalized and amortized under the straight-line method over their estimated useful lives of mainly five years.
(10) Impairment of Fixed Assets
Until the fiscal year ended March 31, 2004, for fixed assets whose net realizable value was substantially lower than their bookvalue, the difference between the net realizable value and the book value had been written-down. However, as permitted by“Accounting Standard for Impairment of Fixed Assets” (“Opinion Concerning Establishment of Accounting Standard for
Impairment of Fixed Assets” (Business Accounting Deliberation Council, August 9, 2002)) and “Guidelines on Implementationof Accounting Standard for Impairment of Fixed Assets” (the Accounting Standards Board of Japan (“ASBJ”) Guidelines No. 6,
October 31, 2003), effective the fiscal year beginning April 1, 2004, the impairment accounting was adopted early in accordance with these standard and guidelines. As a result, Income before Income Taxes and Minority Interests decreased by¥39,318 million ($366,056 thousand).
As fixed assets are carried on the balance sheet net of accumulated depreciation in accordance with the “Banking Law
Enforcement Regulations” (Ministry of Finance Ordinance No. 10, 1982), the accumulated impairment losses are also directlydeducted from each asset balance.
A certain domestic subsidiary recognizes the estimated unrecoverable amount of its investment in its branch premises as Losson Impairment of Fixed Assets. For the purposes of identifying impaired assets, the assets of an individual branch are grouped
as a unit. The relevant domestic subsidiary calculates the recoverable amount by measuring value of use, applying a discountrate of 8.8%, for the fiscal year ended March 31, 2005.
Domestic banking subsidiaries, a certain domestic trust banking subsidiary and certain domestic subsidiaries recognize Loss on
Impairment of Fixed Assets for branch premises to be closed, assets to be disposed of, and idle assets. For the purposes of identifying impaired assets in such a case, the individual asset is assessed as a unit. The recoverable amount is calculated based on
net realizable value. Net realizable value is calculated based on the valuation by road rating with reasonable adjustments tocompensate for sites with long depth, etc. and on the appraisal value, etc., less estimated cost of disposal.
(11) Deferred Debenture Charges
Deferred Debenture Charges are amortized as follows:
Debenture discounts are amortized over the term of the debenture.
Debenture issuance costs are amortized over the term of the debentures, up to a maximum of three years, which is thelongest period permitted under the Enforcement Regulations of the Commercial Code of Japan.
(12) Bond Issuance Costs
Bond issuance costs are expensed as incurred.
(13) Reserves for Possible Losses on Loans
Reserves for Possible Losses on Loans of major domestic consolidated subsidiaries are maintained in accordance with internallyestablished standards for write-offs and provisions:• For credit extended to obligors that are legally bankrupt under the Bankruptcy Law, Special Liquidation under the Commercial
Code or other similar laws (“Bankrupt Obligors”), and to obligors that are effectively in similar conditions (“Substantially
Bankrupt Obligors”), reserves are maintained at 100% of amounts of claims net of expected amounts recoverable from thedisposal of collateral and/or the amounts recoverable under guarantees.
114• For credit extended to obligors that are not yet legally or formally bankrupt but who are likely to be bankrupt (“Intensive
Control Obligor”), reserves are maintained at the amount deemed necessary based on overall solvency analyses of theamount of claims less expected amounts recoverable from the disposal of collateral and/or the amounts recoverable underguarantees.
• For Intensive Control Obligors and Obligors with Restructured Loans as defined in Note 6 below, if the exposure to an obligor
exceeds a certain specific amount, reserves are provided as follows:(i) if future cashflows of the principal and interest can be reasonably estimated, the discounted cash flow method is applied,
under which method the reserve is determined as the difference between the book value of the loan and its present valueof future cash flows discounted using the contractual interest rate before the loan was classified as a Restructured Loan,and(ii) if future cashflows of the principal and interest cannot be reasonably estimated, losses are estimated for each individualloan.
• For credit extended to other obligors, reserves are maintained at rates derived from historical credit loss experiences, etc.
• Reserves for Possible Losses on Loans to Restructuring Countries (including Reserves for Losses on Overseas Investments prescribed in Article 55-2 of the Exceptions to the Tax Laws Act) are maintained in order to cover possible losses based on analyses of the political and economic climates of the countries.
All credit is assessed by each credit origination department, and the results of the assessments are verified and examined by
the independent examination department. Reserves for Possible Losses on Loans are provided for on the basis of such verified
assessments.
In the case of loans to Bankrupt Obligors or Substantially Bankrupt Obligors, which are collateralized or guaranteed by a third
party, the amounts deemed uncollectible are written off against the respective loan balances. The total write-off amounts were
¥1,042,790 million ($9,708,505 thousand) and ¥1,379,693 million at March 31, 2005 and 2004, respectively.
Other consolidated subsidiaries provide the amount necessary to cover the loan losses based upon past experience for generalclaims and their management's assessment for other claims.

(14) Reserve for Possible Losses on Investments
Reserve for Possible Losses on Investments is maintained to provide against possible losses on investments in securities, after
taking into consideration the financial conditions and other relevant factors concerning the investee company.
(15) Reserve for Bonus Payments
Reserve for Bonus Payments, which is provided for future bonus payments to employees, is maintained at the amount accruedat the end of the fiscal year, based on the estimated future payments and service periods.
(16) Reserve for Employee Retirement Benefits
Reserve for Employee Retirement Benefits, which is provided for future pension payments to employees, is recorded as therequired amount based on the projected benefit obligation and the estimated plan asset amounts at the end of the fiscal year.
Prior service cost and unrecognized actuarial gains (losses) are recognized mainly as follows:
Prior service cost (Gain on plan amendment) is recognized as income in the period of occurrence.
Unrecognized actuarial gains or losses are recognized as income or expenses from the following fiscal year under the straightline method over a certain term within the average remaining service period of the current employees.
Unrecognized net obligation at the date of initial application of the accounting standard for retirement benefits has been recognized equally as an expense primarily over five years.
On September 25, 2003 MHFG and certain of its domestic consolidated subsidiaries received approvals for an exemption
from payments of benefits related to future employee services in respect of the substitutional portion of their pension funds
from the Minister of Health, Labour and Welfare, based on the Law Concerning Defined Benefit Corporate Pension Plans. In
accordance with the transitional treatment permitted by Paragraph 2 of Article 47 of “Practical Guidelines for Accounting for
Retirement Benefits (Interim Report)”(JICPA Accounting Committee Report No. 13), MHFG and certain of its domestic consolidated subsidiaries derecognized the future retirement benefit obligations relating to the substitutional portion of the pension
funds and the pension assets on the date of the approvals. In consequence of the above, ¥45,169 million of Other Income wasrecorded for the fiscal year ended March 31, 2004.
The amount of the substitutional amount of the retirement benefit obligations as of the consolidated balance sheet date was¥210,451 million as of March 31, 2004.
Until the fiscal year ended March 31, 2004, the excess fair value of the plan assets over the benefit obligation of the pension
plan (“unrecognized plan assets”), which resulted from actuarial gains such as an excess of actual return over expected returnon plan assets or a gain on plan amendment due to reduction of plan benefits, had not been recognized as an asset or a gainin accordance with Note 1 (1) to the “Accounting Standards for Retirement Benefits” (Business Accounting Deliberation
115

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

Council, June 16, 1998). Effective March 16, 2005, the Accounting Standards for Retirement Benefits was amended and recognition of the former unrecognized plan assets as an asset or a gain was permitted, effective the fiscal year ended March 31,
2005 as an early adoption. “Guidelines on Interpretation of Amendment of Accounting Standards for Retirement Benefits”(ASBJ Guidelines No.7, March 16, 2005), effective the fiscal year ended March 31, 2005, was adopted, and the former unrecognized plan assets allocated to actuarial gains and gains on plan amendment were recognized as gains or reduction fromexpenses. As a result, Other Assets and Income before Income Taxes and Minority Interests both increased by ¥31,523 million($293,486 thousand).

(17) Lease Transactions
Finance leases of MHFG and domestic consolidated subsidiaries that do not involve the transfer of ownership to the lessee atthe end of the lease term are accounted for as operating leases.
Lease transactions of foreign consolidated subsidiaries are principally accounted for as either finance leases or operatingleases.
(18) Scope of Cash and Cash Equivalents in Consolidated Statements of Cash Flows
In the Consolidated Statements of Cash Flows, Cash and Cash Equivalents consist of cash and due from central banks.
(19) Income Taxes
Deferred income taxes are recorded for corporate tax, inhabitants' taxes and enterprise taxes based on the differences between
the tax bases of assets and liabilities and those as reported in the consolidated financial statements, using enacted tax rates
which will be in effect when the differences are expected to reverse. The assets and liabilities method is used to determinedeferred income taxes.
(20) Consumption Taxes
MHFG and its domestic consolidated subsidiaries are subject to Japanese consumption taxes. Japanese consumption taxes are
excluded from the transaction amounts.
(21) Enterprise Taxes
As a result of lawsuits against the Tokyo Metropolitan Government related to the “Metropolitan Ordinance regarding the
Imposition of Enterprise Taxes through External Standards Taxation on Banks in Tokyo” (Tokyo Metropolitan Ordinance No.
145, April 1, 2000), MHFG's three banking subsidiaries reached a basic agreement with the Tokyo Metropolitan Government
and the Tokyo Governor to make settlement-at-court at the Supreme Court. On October 2, 2004, the banking subsidiaries
received the tax refund and the interest on the refund of ¥58,198 million, in aggregate, which was included in Other Income
for the year ended March 31, 2004.
With the enactment of “Revision of Law regarding Regional Taxation, etc.” (Law No.9 of March 2003) on March 31, 2003,
certain parts of the basis of the enterprise taxes imposed on banks were changed effective the fiscal year beginning April 1,
2004 to “added value” and “amount of capital, etc.” As a result, effective the fiscal year ended March 31, 2005, domesticbanking subsidiaries, domestic trust banking subsidiaries and certain domestic subsidiaries included the enterprise taxes based
on “added value” and “amount of capital, etc.” in “General and Administrative Expenses” on the Consolidated Statement of
Operations, in accordance with “Practical Treatment of Presentation of External Standards Taxation portion of Enterprise Taxeson the Statement of Operations” (ASBJ Report No. 12).
(22) Appropriation of Retained Earnings
Cash dividends are recorded in the fiscal year in which the proposed appropriation of Retained Earnings is approved by the
Board of Directors and/or by the general meeting of shareholders.

116

(23) Net Income per Share
Consolidated Net Income per Share for the fiscal years ended March 31, 2005 and 2004 and related information are as follows:
(Yen)
2005

Consolidated Net Income per Share·····················¥(U.S. dollars)
2005

2004

54,625.61¥

36,153.27$

Consolidated Net Income···································· ¥ 627,383 million¥

406,982 million$ 5,841,018 thousand

Consolidated Net Income
attributable to common shareholders················· ¥ 589,462 million¥

365,012 million$ 5,487,963 thousand

Consolidated Net Income
not attributable to common shareholders···········¥¥

41,969 million$

353,054 thousand$

351.1737,921 million

Average number of shares of common stock(excluding treasury stock)·····································

10,790 thousand

Consolidated Net Income per Share (Diluted)·······¥

37,719.13

508.57

10,096 thousand¥

18,754.94/

Common stock equivalents to be used to calculate diluted per share information are as follows:
Class I, II, III, VII, VIII, IX, X, and XI Preferred Shares

4. Trading Assets and Liabilities
Millions of yen
2005

At March 31,

Trading Assets:
Trading Securities
Derivatives for Trading Transactions
Securities Held to Hedge Trading Transactions
Derivatives for Trading Securities
Derivatives for Securities Held to Hedge Trading Transactions
Other Trading Assets
Total
Trading Liabilities:
Trading Securities Sold Short
Derivatives for Trading Transactions
Securities Oversold to Hedge Trading Transactions
Derivatives for Trading Securities
Derivatives for Securities Held to Hedge Trading Transactions
Total

¥

2004

Thousands of U.S. dollars
2005

7,575,729
2,173,215
114,370
44,757492
1,139,036¥

4,654,300
2,390,452
84,47532,821
1,051
853,408$

70,530,950
20,232,898
1,064,802
416,701
4,583
10,604,565¥ 11,047,601¥

8,016,509$ 102,854,499¥

5,615,615
2,029,879
251,085
44,562
1,641¥

3,659,244
2,277,916
89,473
43,127
1,072$

52,282,055
18,898,420
2,337,640
414,879
15,285¥

7,942,784¥

6,070,833$

73,948,279

Millions of yen
2005

2004

Thousands of U.S. dollars
2005¥ 22,651,836
151,067
2,999
2,075,937
5,084,227
6,080,966¥ 20,431,753
125,820—
1,652,262
5,275,248
4,586,539$ 210,891,322
1,406,453
27,92519,327,227
47,334,771
56,614,531¥ 36,047,035¥ 32,071,624$ 335,602,229

5. Securities
At March 31,

Japanese National Government Bonds
Japanese Local Government Bonds
Japanese Short-term Bonds
Japanese Corporate Bonds
Japanese Stocks*1
Other*2Total*1 Japanese Stocks included investments in non-consolidated subsidiaries and affiliates of ¥71,943 million ($669,800 thousand) and ¥76,289 million at March 31, 2005 and 2004, respectively.
*2 Other included investments in non-consolidated subsidiaries and affiliates of ¥2,155 million ($20,066 thousand) and ¥16,460 million at March 31, 2005 and 2004, respectively.

117

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

6. Loans and Bills Discounted
Millions of yen
2005

2004

Thousands of U.S. dollars
2005¥ 46,568,909
11,441,766
4,118,742
490,153
297,765¥ 47,602,650
12,738,383
4,969,989
610,001
284,843$ 433,562,136
106,524,217
38,345,989
4,563,387
2,772,229¥ 62,917,336¥ 66,205,868$ 585,767,958

At March 31,

Loans on Deeds
Overdrafts
Loans on Notes
Bills Discounted
Financing Receivables, including Factoring, Leasing and Property Financing
Total

Loans and Bills Discounted at March 31, 2005 and 2004 include the following:
Millions of yen
2005

At March 31,

Loans to Bankrupt Obligors*1
Non-Accrual Delinquent Loans*2
Loans Past Due for 3 Months or More*3
Restructured Loans*4
Total*5

2004

Thousands of U.S. dollars
2005¥

89,743
971,895
27,735448,569¥

177,883
1,284,036
24,9101,694,269$

835,524
9,048,466
258,223
4,176,236¥

1,537,944¥

3,181,100$

14,318,449*1 Loans to Bankrupt Obligors represent non-accrual loans to obligors who are legally bankrupt as defined in Article 96-1-3 and 4 of the Japanese Tax Law Enforcement Regulation (Article 97 of 1965
Cabinet Order).
*2 Non-Accrual Delinquent Loans represent non-accrual loans other than (i) Loans to Bankrupt Obligors and (ii) loans of which payments of interest are deferred in order to assist or facilitate therestructuring of obligors in financial difficulties.
*3 Loans to Bankrupt Obligors or Non-Accrual Delinquent Loans, both of which are classified as non-accrual, are not included in this category.
*4 Restructured Loans represent loans on which contracts were amended in favor of obligors (e.g., the reduction of or exemption from stated interest, the deferral of interest payments, the extension of
maturity dates, or renunciation of claims) in order to assist or facilitate the restructuring of obligors in financial difficulties.
*5 ¥1,992 million ($18,553 thousand) and ¥2,246 million of these amounts are placed in an administrative trust established by the Resolution and Collection Corporation for eventual final disposal at
March 31, 2005 and 2004, respectively.

Sales of Loans to Participants

The total amount of loan participations outstanding as of March 31, 2004, which was accounted for as sales of loans to participants in accordance with the JICPA Accounting Standard Committee Report No. 3 issued June 1, 1995, was ¥583,005 million.
Commitment Line for Loans
Overdraft protection on current accounts and contracts for the commitment line for loans are contracts by which consolidated
subsidiaries are bound to extend loans up to the prearranged amount, at the request of customers, unless the customer is inbreach of contract conditions. The unutilized balance of these contracts amounted to ¥46,348,812 million ($431,513,009 thousand) and ¥43,249,003 million as of March 31, 2005 and 2004, respectively. Of these amounts, ¥42,227,207 million($393,140,373 thousand) and ¥39,966,604 million relate to contracts in which the original contractual maturity is one year or
less, or which are unconditionally cancelable at any time as of March 31, 2005 and 2004, respectively.
Since many of these contracts expire without the rights exercised, the unutilized balance itself does not necessarily affect future
cash flows of MHFG and its consolidated subsidiaries. A provision is included in many of these contracts that entitles the consolidated subsidiaries to refuse the execution of loans, or reduce the maximum amount under contracts when there is a change inthe financial situation, necessity to preserve a claim, or other similar reasons. The consolidated subsidiaries obtain, moreover, realestate or securities as collateral at the time the contracts are entered into, if needed, and periodically monitor a customer's business condition, based on and in accordance with established procedures, and take measures to control credit risks such as making
amendments to contracts, if needed.

118

7. Foreign Exchange Assets and Liabilities
Millions of yen
2005

At March 31,

Foreign Exchange Assets:
Foreign Bills Bought
Foreign Bills Receivable
Advance to Foreign Banks
Due from Banks (Foreign)
Total
Foreign Exchange Liabilities:
Advance from Foreign Banks
Due to Banks (Foreign)
Foreign Bills Sold
Foreign Bills Payable
Total

2004

Thousands of U.S. dollars
2005¥

447,131
211,489
52,244
6,041¥

362,446
181,520
61,178
3,647$

4,162,851
1,968,994
486,406
56,245¥

716,907¥608,792$

6,674,496¥

169,763
96,074
16,566
10,500¥265,220
69,534
10,8376,544$

1,580,520
894,464
154,240
97,759¥292,905¥

352,136$

2,726,983

Millions of yen
2005

2004

8. Other Assets
At March 31,

Derivatives
Accrued Income
Deferred Hedge Losses*1
Prepaid Expenses
Other
Total

Thousands of U.S. dollars
2005¥ 1,797,133
267,82480,452
19,561
3,413,013¥ 1,945,646
260,729
209,010
18,646
3,062,812 *2$ 16,731,525
2,493,481
749,023
182,119
31,775,567¥ 5,577,985¥ 5,496,845$ 51,931,715*1 Deferred Hedge Losses is the net realized or unrealized losses from hedging instruments. The gross amounts of deferred hedge gains and losses before netting are ¥810,865 million ($7,549,251
thousand) and ¥891,317 million ($8,298,274 thousand), respectively, at March 31, 2005, and ¥1,516,244 million and ¥1,725,255 million, respectively, at March 31, 2004.
*2 Other included provisional tax payments of ¥222,682 million made by a certain domestic subsidiary. These payments were made upon receipt of the Correction Notice from the Tokyo Regional
Taxation Bureau (“TRTB”) on August 23, 1996 in connection with the write-off of credits due from Japan Housing Loan, Inc., amounting to ¥376,055 million recorded in the fiscal year ended March
1996. The subsidiary disputed the rationale for the proposed correction and filed an application seeking to void the proposed correction to the National Tax Tribunal for administrative review. This was
dismissed on October 28, 1997. On October 30, 1997, the subsidiary filed a lawsuit with the Tokyo District Court seeking to void the TRTB's administrative action against the subsidiary and won thecase entirely on March 2, 2001. However, this was appealed to the Tokyo High Court on March 16, 2001 and the subsidiary lost the case on March 14, 2002. On March 27, 2002, the subsidiary filed
an appeal to the Supreme Court. The subsidiary accrued Reserve for Contingency amounting to ¥131,159 million from the viewpoint of financial soundness and prudent accounting at March 31,
2004. The Supreme Court subsequently ruled in favor of the petition of the subsidiary for rescission of the correction notice from the Tokyo Regional Taxation Bureau.

9. Premises and Equipment
Millions of yen
2005

At March 31,

Land
Buildings
Equipment
Other
Total
Accumulated Depreciation¥

519,131254,541
105,734
148,675

Thousands of U.S. dollars
2005

596,753
266,129
124,848
156,076$

4,833,178
2,369,808
984,405
1,384,182¥ 1,028,082¥ 1,143,807$

9,571,573¥¥

695,663$

6,396,844

Millions of yen
2005

2004

Thousands of U.S. dollars
2005

687,085¥

2004

10. Deferred Debenture Charges
At March 31,

Deferred Discount on Debentures
Deferred Debenture Issuance Costs
Total

¥

181
122

¥

244
202

$ 1,687
1,142

¥

303

¥

446

$ 2,829119

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

11. Reserves for Possible Losses on Loans
Millions of yen
2005

At March 31,

General Reserve for Possible Losses on Loans
Specific Reserve for Possible Losses on Loans
Reserve for Possible Losses on Loans to Restructuring Countries
Total

2004

Thousands of U.S. dollars
2005¥

637,361
503,927
5,508¥

1,175,873
666,255
8,458$

5,933,911
4,691,624
51,288¥1,146,797¥

1,850,586$

10,676,823

Millions of yen
2005

2004

12. Assets Pledged as Collateral
The following assets were pledged as collateral:
At March 31,

Trading Assets
Securities
Loans and Bills Discounted
Premises and Equipment¥

6,263,905
11,651,064
5,630,348
157¥

4,107,695
13,086,449
4,973,990—

Thousands of U.S. dollars
2005$

58,317,715
108,472,811
52,419,220
1,462

The following liabilities were collateralized by the above assets:
Millions of yen
2005

At March 31,

Deposits
Call Money and Bills Sold
Payables under Repurchase Agreements
Guarantee Deposit Received under Securities Lending Transactions
Borrowed Money
Other Liabilities¥

1,221,225
4,960,500
4,435,138
7,413,857
1,330,193
—

¥

2004

613,370
4,763,500
4,552,666
7,561,629
497,696
137

Thousands of U.S. dollars
2005$

11,369,758
46,182,851
41,291,675
69,023,905
12,384,266—

In addition, the settlement accounts of foreign and domestic exchange transactions or margins for futures transactions are collateralized or substituted by Cash and Due from Banks of ¥10,301 million ($95,907 thousand) and ¥6,755 million, Trading Assetsof ¥305,764 million ($2,846,701 thousand) and ¥365,978 million, Securities of ¥2,311,761 million ($21,522,775 thousand) and¥2,297,837 million and Loans and Bills Discounted of ¥290,716 million ($2,706,609 thousand) and ¥330,416 million as of March
31, 2005 and 2004, respectively. None of the assets are pledged as collateral in connection with borrowings by the unconsolidated subsidiaries and affiliates.
Guarantee deposits amounting to ¥142,143 million ($1,323,371 thousand) and ¥153,125 million were included in Premises
and Equipment as of March 31, 2005 and 2004, respectively. Margins for futures transactions amounting to ¥34,207 million($318,478 thousand) and ¥25,596 million, collateral pledged for derivatives transactions amounting to ¥341,458 million($3,179,021 thousand) and ¥321,544 million, were included in Other Assets as of March 31, 2005 and 2004, respectively.
Guarantee money deposits on when-issued transactions amounting to ¥600 million ($5,586 thousand) and guarantee money
deposits on margin transactions amounting to ¥258 million ($2,403 thousand) were included in Other Assets as of March 31,
2005.
Bills re-discounted are treated as financial transactions in accordance with the Industry Audit Committee Report No. 24. The
total face value of commercial bills and foreign bills of exchange bought as a result of rediscounting as of March 31, 2005 and2004 was ¥6,208 million ($57,802 thousand) and ¥12,379 million, respectively.

120

13. Deposits
Millions of yen
2005

At March 31,

Current Deposits
Ordinary Deposits*1
Deposits at NoticeTime Deposits
Certificates of Deposits
Other

¥

Total

6,266,377
31,627,410
802,372
24,868,551
10,868,491
5,934,855¥ 80,368,058

¥

2004

Thousands of U.S. dollars
2005

6,233,189
30,939,628
990,969
24,818,453
9,958,644
4,546,589$¥ 77,487,475

58,340,726
294,454,990
7,470,186
231,529,198
101,186,960
55,254,216$ 748,236,276*1 Ordinary Deposits include savings deposits.

14. Debentures
MHCB and MHBK issue debentures and offer them to institutional and private investors as a main source of funds for their operations. They provide debentures with a variety of different terms in order to attract investors.
At March 31,
Description of Debentures

One-Year Discount Debentures

Millions of yen
2005¥

593,282[593,282]¥

2004

929,240

Thousands of U.S. dollars
2005$

Interest rates
2005

2004

5,523,528[5,523,528]

0.05%

0.05%

0.02%

0.02%

One-Year Discount Debentures(custody only)

219,161[219,161]

256,8422,040,422[2,040,422]

Five-Year Coupon Debentures(Series A)

5,337,680[1,596,210]

6,351,800

49,694,442[14,860,907]

0.35–1.50% 0.35%–1.50%

Five-Year Coupon Debentures(Series B)

79,645[34,945]

98,316

741,510[325,349]

0.10%–0.90% 0.10%–1.00%

Five-Year Coupon Debentures(with compound interest)

662,642[257,479]

725,067

6,169,278[2,397,165]

0.10%–0.90% 0.10%–1.00%

Five-Year Coupon Debentures(savings-type)709,621[96,804]

715,929

6,606,660[901,259]

0.10%–0.90% 0.10%–1.00%

Five-Year Coupon Debentures(savings-type with compound interest)

82,557[14,945]

85,375

768,624[139,146]

0.10%–0.90% 0.10%–1.00%

Two-year Coupon Debentures—[—]

151,400—[—]

Three-year Coupon Debentures

100,800[—]

115,800

938,460[—]

0.35% 0.35%–0.90%

9,682
29,742[—](US$ 25,000 thousand) (US$97,000 thousand)

90,144[—](US$ 25,000 thousand)

0.46%–4.19% 0.46%–9.37%

Debentures Denominatedin Foreign Currencies
Total

¥

7,795,073¥ 9,459,514

—%

0.65%

$ 72,573,068

Notes: 1. Figures indicated in brackets [ ] represent the amounts to be redeemed within one year.
2. The amount of foreign currency denominated bonds is shown in original currency in parentheses ( ).
3. Repayments for Debentures are scheduled for the next five years as follows:
Fiscal 2005 ¥2,812,828 million ($26,187,776 thousand)2006 ¥1,704,942 million ($15,873,216 thousand)2007 ¥1,211,226 million ($11,276,668 thousand)2008 ¥1,028,369 million ($ 9,574,241 thousand)2009 ¥1,030,705 million ($ 9,595,991 thousand)4. No collateral was provided for the above Debentures.

121

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

15. Call Money and Bills Sold
Millions of yen
2005

At March 31,

2004

Thousands of U.S. dollars
2005

Call Money
Bills Sold¥

5,017,512
3,342,400¥

6,311,195
2,369,400$ 46,713,643
31,118,146

Total

¥

8,359,912¥

8,680,595$ 77,831,789

16. Commercial Paper
Millions of yen
2005

At March 31,

Commercial Paper¥

1,397,200¥

2004

Thousands of U.S. dollars
2005

837,800$ 13,008,100

Average Interest rates*1
2005
2004

0.11%

0.10%

*1 Average interest rates are the weighted-average interest rates of debts calculated from the interest rates and outstanding balances at the end of the year.

17. Borrowed Money
Millions of yen
2005

At March 31,

Bills Rediscounted
Other Borrowings*2,3
Total

2004

Thousands of U.S. dollars
2005

¥

6,208
2,628,224¥

12,3791,630,964$

57,802
24,469,088

4.77%
0.97%

4.10%
1.43%

¥

2,634,433¥

1,643,343$ 24,526,890

0.98%

1.45%

*1 Average interest rates are the weighted-average interest rates of debts calculated from the interest rates and outstanding balances at the end of the year.
*2 Other Borrowings included subordinated debt of ¥820,988 million ($7,643,499 thousand) and ¥722,294 million at March 31, 2005 and 2004, respectively.
*3 Repayments for Other Borrowings are scheduled for the next five years as follows:
Fiscal 2005 ¥1,562,677 million ($14,548,716 thousand)2006 ¥ 25,804 million ($ 240,246 thousand)2007 ¥ 79,090 million ($ 736,343 thousand)2008 ¥ 53,462 million ($ 497,741 thousand)2009 ¥ 61,064 million ($ 568,517 thousand)122

Average Interest rates*1
2005
2004

18. Bonds and Notes
Major components of Bonds and Notes at March 31, 2005 were as follows:
IssuerDescription

Issue

Millions of yen

MHTB

Straight Bonds

Dec. 2000–
Mar. 2005¥

Interest rates

Due

969,184[—]

1.06%–2.76%

Dec. 2010 –MHBKStraight Bonds

Sept. 2004–
Mar. 2005

159,300[—]

1,483,102[—]

0.48%–2.09%

Sept. 2014 –MHCBStraight Bonds

Sept. 1997–
Aug. 2004

123,100[—]

1,146,076[—]

2.10%–3.00%

Nov. 2012 –Aug. 2014*1

Straight Bonds

Jan. 2004–
426,366
Mar. 2004[—](US$3,000,000 thousand)(EUR 750,000 thousand)

3,969,525[—]

4.75%–8.37%

Apr. 2014 –*2

Straight Bonds

Dec. 1995–
Apr. 2001

79,100[—]736,430[—]

0.56%–3.59%

Apr. 2010 –July. 2012*3

Straight Bonds

Feb. 1995–
Sept. 2004

628,915[3,000](US$110,000 thousand)

5,855,275[27,930]

0.00%–5.10%

Dec. 2005 –*4Straight Bonds

Jun. 1995–
598,226
July. 2004[—]
(US$1,049,959 thousand)

5,569,557[—]

0.36%–8.80%

Feb. 2007 –*5

Straight Bonds

Sep. 1998–
Mar. 2005

237,864[26,642](US$43,956 thousand)(EUR25,037 thousand)

2,214,545[248,041]

0.05%–7.50%

Apr. 2005 –Dec. 2034¥ 2,356,972$ 21,943,694

Total

104,100[—]

Thousands of U.S. dollars$

Notes: 1. Figures indicated in brackets [ ] represent the amounts to be redeemed within one year.
2. The amount of foreign currency denominated bonds is shown in the original currencies in parentheses ( ).
3. Repayments for Bonds and Notes are scheduled for the next five years as follows:
Fiscal 2005 ¥29,642 million ($275,971 thousand)2006 ¥39,419 million ($367,004 thousand)2007 ¥53,046 million ($493,870 thousand)2008 ¥16,301 million ($151,772 thousand)2009 ¥55,545 million ($517,132 thousand)4. Bonds and Notes at March 31, 2005 included subordinated bonds and notes of ¥2,118,575 million ($19,724,190 thousand).
*1 Indicates the total amount of straight bonds issued by the overseas consolidated subsidiary, Mizuho Financial Group (Cayman) Limited.
*2 Indicates the total amount of straight bonds issued by the overseas consolidated subsidiary, Mizuho TB (Aruba) A.E.C..
*3 Indicates the total amount of straight bonds issued by the overseas consolidated subsidiary, Mizuho Finance (Aruba) A.E.C..
*4 Indicates the total amount of straight bonds issued by overseas consolidated subsidiaries, Mizuho Finance (Cayman) Limited and Mizuho Finance (Curaço) N.V.
*5 Indicates the total amount of straight bonds issued by MHSC and overseas consolidated subsidiaries, Mizuho Corporate Asia (HK) Limited and Mizuho International plc.

123

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

Major components of Bonds and Notes at March 31, 2004 were as follows:
IssuerDescription

Issue

Millions of yen

Mizuho Holdings

Straight Bonds

Nov. 2000¥

MHTB

Straight Bonds

MHCB

Interest rates

Due

300,000[—]

0.72%–0.82%

Mar. 2010 –Mar. 1998–
Mar. 2004

89,100[—]1.21%–4.01%

Dec. 2010 –Straight Bonds

Sept. 1997–
Feb. 2004

63,100[—]2.10%–3.00%

Nov. 2012 –*1

Straight Bonds

Jan. 2004–
Mar. 2004

413,438[—](US$3,000,000 thousand)(EUR 750,000 thousand)

4.75%–8.37%

Apr. 2014 –*2

Straight Bonds

Dec. 1995–
Apr. 2001

89,100[—]0.57%–3.59%

Apr. 2010 –*3Straight Bonds

Feb. 1995–
Mar. 2004

639,719[—](US$110,000 thousand)

0.00%–5.10%

Dec. 2005 –*4Straight Bonds

Jun. 1995–
Dec. 2003

636,562[2,123](US$1,125,000 thousand)

0.37%–8.80%

Jun. 2004 –*5

Straight Bonds

Nov. 1994–
Mar. 2004

128,350[43,679](US$89,000 thousand)(EUR 9,130 thousand)

0.00%–8.00%

Apr. 2004 –Dec. 2033

Total¥ 2,359,370

Notes: 1. Figures indicated in brackets [ ] represent the amounts to be redeemed within one year.
2. The amount of foreign currency denominated bonds is shown in the original currencies in parentheses ( ).
3. Bonds and Notes at March 31, 2004 included subordinated bonds and notes of ¥2,211,785 million.
*1 Indicates the total amount of straight bonds issued by the overseas consolidated subsidiary, Mizuho Financial Group (Cayman) Limited.
*2 Indicates the total amount of straight bonds issued by the overseas consolidated subsidiary, MHAT Finance (Aruba) A.E.C..
*3 Indicates the total amount of straight bonds issued by the overseas consolidated subsidiary, Mizuho Finance (Aruba) A.E.C..
*4 Indicates the total amount of straight bonds issued by overseas consolidated subsidiaries, Mizuho Finance (Cayman) Limited and Mizuho Finance (Curaço) N.V.
*5 Indicates the total amount of straight bonds issued by MHSC and overseas consolidated subsidiaries, Mizuho Corporate Asia (HK) Limited, Mizuho International plc and Mizuho Corporate
Bank (USA).

19. Other Liabilities
At March 31,

Derivatives
Accrued Expenses
Unearned Income
Income Taxes Payable
Other
Total

124

Millions of yen
2005

2004

Thousands of U.S. dollars
2005¥ 1,742,862
204,793
136,50943,3082,965,147¥ 1,814,635
183,532
138,347
84,9102,184,749$ 16,226,262
1,906,648
1,270,924
403,203
27,605,883¥ 5,092,621¥ 4,406,174$ 47,412,920

20. Reserve for Employee Retirement Benefits(1) MHFG and domestic consolidated subsidiaries adopt the Corporate Pension Fund Plans (“Kigyo Nenkin Kikin Seido”), theEmployees' Pension Fund Plans (“Kousei-Nenkin Kikin Seido”), the Tax-qualified Pension Plans (“Tekikaku-Taishoku-Nenkin
Seido”), and the Termination Allowance Plans (“Taishoku Ichijikin Seido”) as Defined-Benefit Corporate Pension Plans.
On March 31, 2005, MHFG and certain domestic consolidated subsidiaries received approvals for exemption from paymentsof benefits related to past services of employees in respect of the substitutional portion of the Employees' Pension Fund Plans(“Kousei-Nenkin Kikin Seido”) from the Minister of Health, Labour and Welfare. As a result, the Employees' Pension Fund
Plans were replaced with the Corporate Pension Fund Plans (“Kigyo Nenkin Kikin Seido”).
In April 2005, MHFG and certain domestic consolidated subsidiaries established Defined-Contribution Pension Plans.
In addition, certain domestic consolidated subsidiaries have established employee retirement benefit trusts.
(2) Reserve for Employee Retirement Benefits was reconciled as follows:
Millions of yen
2005

2004

Thousands of U.S. dollars
2005¥ (1,117,907)
1,381,356¥ (1,141,686)
1,067,726$ (10,407,856)
12,860,596

At March 31,

Projected Benefit Obligations
Plan Assets
Unfunded Retirement Benefit Obligations
Unrecognized Net Obligation at Date of Initial Applicationof the New Accounting Standard for Employee Retirement Benefits
Unrecognized Actuarial Differences

263,448(73,960)

2,452,740—
287,633

24,550580,419—
2,677,906

Net Amounts
Prepaid Pension Cost

551,082
588,219531,010
562,989

5,130,646
5,476,398

Reserve for Employee Retirement Benefits¥(37,137)¥(31,979)$(345,752)

Notes: 1. The above Projected Benefit Obligations do not include additional retirement benefits paid to employees.
2. The above Projected Benefit Obligations include the amount measured by certain consolidated subsidiaries under the non-actuarial
method.
3. The above Plan Assets at March 31, 2004 do not include ¥281,509 million of unrecognized plan assets.

(3) Breakdown of Retirement Benefit Expenses was as follows:
Millions of yen
2005

For the Fiscal Years ended March 31,

Service Cost*1*2
Interest Cost
Expected Return on Plan Assets
Gain on Plan Amendment (Prior Service Cost)
Amortization of Actuarial Differences
Amortization of Unrecognized Net Obligation at Date of Initial Applicationof the New Accounting Standard for Employee Retirement Benefits
Other (such as Extra Retirement Benefit)¥

Net Retirement Benefit Expenses
Gains on Return of Substitutional Portion of Mizuho Pension FundNet Expenses related to Retirement Benefit¥

23,97028,282(46,672)(3,430)39,939¥2004

Thousands of U.S. dollars
2005

27,98332,778(39,828)(14,426)
69,423$

223,169
263,310(434,526)(31,943)
371,838

24,5505,109

28,081
1,915

228,570
47,56771,748—105,928(45,169)

667,985—

71,748¥60,758$667,985*1 The amount of employee contribution to Mizuho Pension Fund is deducted from Service cost.
*2 Retirement benefit expenses of some consolidated subsidiaries which adopt the non-actuarial method for calculating projected benefit obligations are included in Service Cost in full.

(4) Assumptions used in calculation of the above information were as follows:
Discount Rate
Expected Rate of Return on Plan Assets
Method of Attributing the Projected Benefits to Periods of Service
Prior Service Cost
Amortization of Unrecognized Actuarial Differences
Amortization of Unrecognized Net Obligation at Date of Initial Applicationof the New Accounting Standard for Employee Retirement Benefits

2005
mainly 2.5%
mainly 3.4%
Straight-line basis
Charged to Income(Loss) in the year
Primarily 10-12 years

2004
mainly 2.5%
mainly 3.5%
Straight-line basis
Charged to Income(Loss) in the year
Primarily 10-12 years

Primarily 5 years

Primarily 5 years

125Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

21. Reserves under Special Laws
Millions of yen
2005

2004

¥

1,750
83

¥

1,292
80

$

16,300
777

¥

1,834

¥

1,372

$

17,077At March 31,

Reserve for Contingent Liabilities from Securities Transactions
Reserve for Contingent Liabilities from Futures Transactions
Total

Thousands of U.S. dollars
2005

22. Acceptances and Guarantees(1) All commitments and contingent liabilities of a material nature resulting from guarantees or otherwise are included in the contra-accounts “Acceptances and Guarantees” and “Customers' Liabilities for Acceptances and Guarantees.”
The outstanding balances of the accounts were as follows:
At March 31,

Guarantees
Letters of Credit
Acceptances
Total

Millions of yen
2005

2004

Thousands of U.S. dollars
2005¥ 3,837,617
82,868
7,690¥ 3,570,745
69,844
7,023$ 35,728,676
771,519
71,599¥ 3,928,176¥ 3,647,613$ 36,571,794(2) The principal amounts promised to be indemnified for money trusts and loan trusts, which are entrusted to domestic consolidated trust banking subsidiaries, were ¥812,747 million ($7,566,777 thousand) and ¥708,684 million ($6,597,933 thousand)as of March 31, 2005, respectively, and ¥824,741 million and ¥869,287 million as of March 31, 2004, respectively.

23. Revaluation of Land
In accordance with the Land Revaluation Law, land used for business operations of domestic consolidated banking subsidiaries
was revalued on March 31, 1998. In accordance with Article 2-4 of the Enforcement Ordinance relating to the Land Revaluation
Law (Government Ordinance No.119 promulgated on March 31, 1998), the revaluation was performed by the method of calculating the value along with reasonable adjustments, such as for the condition of the land.
The income tax on the entire excess of revaluation is included in Deferred Tax Liabilities for Revaluation Reserve for Land, andthe remainder, net of tax, is stated as Revaluation Reserve for Land in Shareholders' Equity.
The difference at the consolidated balance sheet date between the total fair value of land for business operation purposes,
which has been revalued in accordance with Article 10 of the above-mentioned law, and the total book value of the land after
such revaluation was ¥222,110 million ($2,067,875 thousand) and ¥253,406 million as of March 31, 2005 and 2004, respectively.

126

24. Common Stock and Preferred Stock
Common Stock and Preferred Stock at March 31, 2005 and 2004 were as follows:
Number of shares
As of March 31, 2005
Class of stock

Common Stock
Second Series Class II Preferred Stock
Third Series Class III Preferred Stock
Fourth Series Class IV Preferred Stock
Sixth Series Class VI Preferred Stock
Seventh Series Class VII Preferred Stock
Eighth Series Class VIII Preferred Stock
Ninth Series Class IX Preferred Stock
Tenth Series Class X Preferred Stock
Eleventh Series Class XI Preferred Stock
Twelfth Series Class XI Preferred StockThirteenth Series Class XIII Preferred Stock

Authorized

Issued andoutstanding

Per share (Yen)InterimYear-end
cash dividend cash dividend

25,000,000 12,003,995.49
100,000
100,000
100,000
100,000
150,000
150,000
150,000
150,000
125,000
125,000
125,000
125,000
33,00033,000140,000
140,000
943,740
1,398,500—
1,500,000
36,690

¥

—
—
—
—
—
—
—
—
—
—
—
—

With
Liquidation Convertible redemption
value
or notor not¥ 3,500 ¥—8,200 2,000,000
14,000 2,000,000
47,600 2,000,000
42,000 2,000,000
11,000 2,000,000
8,000 2,000,000— 1,250,000
5,380 1,250,000
20,000 1,000,000//
30,000 1,000,000

No
Yes
Yes
No
No
Yes
Yes
Yes
Yes
Yes
/
No

No
No
No
Yes
Yes
Yes
Yes
No
No
No
/
Yes

Notes: 1.Treasury Stock and stocks held by subsidiaries and affiliates are not excluded. The numbers are as follows:
Common Stock
1,158 thousand shares
Preferred Stock
137 thousand shares
2.The total number of shares of Class XII Preferred Stock, which are authorized to be issued, is 1,500,000.

Number of shares
As of March 31, 2004
Class of stock

Common StockFirst Series Class I Preferred Stock
Second Series Class II Preferred Stock
Third Series Class III Preferred Stock
Fourth Series Class IV Preferred Stock
Sixth Series Class VI Preferred Stock
Seventh Series Class VII Preferred Stock
Eighth Series Class VIII Preferred Stock
Ninth Series Class IX Preferred Stock
Tenth Series Class X Preferred Stock
Eleventh Series Class XI Preferred Stock
Twelfth Series Class XI Preferred StockThirteenth Series Class XIII Preferred Stock

Authorized

Issued andoutstanding

25,000,000 11,926,964.67
33,00033,000100,000
100,000
100,000
100,000
150,000
150,000
150,000
150,000
125,000
125,000
125,000
125,000
140,000
140,000
140,000
140,000
943,740
1,404,000
5,500
1,500,000
36,690Per share (Yen)InterimYear-end
cash dividend cash dividend

¥

—
—
—
—
—
—
—
—
—
—
—
—
—

With
Liquidation Convertible redemption
value
or notor not¥ 3,000 ¥—22,500 3,000,000
8,200 2,000,000
14,000 2,000,000
47,600 2,000,000
42,000 2,000,000
11,000 2,000,000
8,000 2,000,000
17,500 1,250,000
5,380 1,250,000
20,000 1,000,000
2,500 1,000,000
30,000 1,000,000

No
Yes
Yes
Yes
No
No
Yes
Yes
Yes
Yes
Yes
Yes
No

No
No
No
No
Yes
Yes
Yes
Yes
No
No
No
No
Yes

Notes: 1.Treasury Stock and stocks held by subsidiaries and affiliates are not excluded. The number is as follows:
Common Stock
1,157 thousand shares
2.The total number of shares of Class XII Preferred Stock, which are authorized to be issued, is 1,500,000.

127

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

Holders or registered pledgees of Preferred Stocks are entitled to receive annual dividends, and distribution of residual assets of
MHFG, as set out above in priority to holders of Common Stocks but pari passu among themselves.
MHFG may pay up to one-half of the annual dividend payable on each class of Preferred Stocks as an interim dividend.
Dividends on the Preferred Stocks are not cumulative. Holders of Preferred Stocks are not entitled to vote at a general meetingof shareholders except where the articles of incorporation entitle holders of Preferred Stocks to vote.

All Preferred Stocks except Class IV Preferred Stocks, Class VI Preferred Stocks and Class XIII Preferred Stocks are convertible into
Common Stocks at the option of the holder. Material terms and conditions of conversion are as follows:

128

Conversion period*1

Conversion ratio*2

Second Series Class II
Preferred Stock

August 1, 2004 toJuly 31, 2006

3.060 to be reset on August 1 of 2005 (“Reset Date”) as ¥2,000,000 / (current
market price X 1.025), where the current market price is the higher of (x) the
average price of daily closing prices (including closing bid or offered price) of
Common Stocks as reported by the Tokyo Stock Exchange (the “TSE”) for the 30
consecutive trading days (excluding trading days on which no closing price, closing
bid or offered price is reported) commencing on the 45th trading day prior to the
Reset Date and (y) ¥637,600, provided that the reset conversion ratio shall not beless than the conversion ratio applicable on the date immediately prior to the
Reset Date.

Third Series Class III
Preferred Stock

August 1, 2005 toJuly 31, 2008

¥2,000,000 / (current market price x 1.025), where the current market price is thehigher of (x) the average price of daily closing prices (including closing bid oroffered price) of Common Stocks as reported by the TSE for the 30 consecutive
trading days (excluding trading days on which no closing price, closing bid oroffered price is reported) commencing on the 45th trading day prior to August 1,
2005 and (y) ¥637,600, to be reset on August 1, 2006 and August 1, 2007 using
the same formula mutatis mutandis.

Seventh Series Class
VII Preferred Stock

October 1, 2006 to
January 31, 2011

¥2,000,000 / (conversion price), where the conversion price is the higher of (x) the
average price of daily closing prices (including closing bid or offered price) of
Common Stocks as reported by the TSE for the 30 consecutive trading days
(excluding trading days on which no closing price, closing bid or offered price isreported) commencing on the 45th trading day prior to October 1, 2006 multiplied by 1.025 and (y) ¥420,000; to be reset on October 1 of each year between
2007 and 2010 (each, a “Reset Date”) as ¥2,000,000 / (conversion price), where
the conversion price is the lower of (x) the average price of daily closing prices(including closing bid or offered price) of Common Stocks as reported by the TSE
for the 30 consecutive trading days (excluding trading days on which no closing
price, closing bid or offered price is reported) commencing on the 45th trading
day prior to the Reset Date and (y) the conversion price effective as of the Reset
Date, provided that the conversion price shall not be less than 80% of the initialconversion price.

Eighth Series ClassVIII Preferred Stock

October 1, 2004 to
January 31, 2009

¥2,000,000 / (conversion price), where the current conversion price is ¥540,000,
and thereafter the conversion price is the lower of (x) the average price of daily
closing prices (including closing bid or offered price) of Common Stocks asreported by the TSE for the 30 consecutive trading days (excluding trading days on
which no closing price, closing bid or offered price is reported) commencing on the
45th trading day prior to October 1 of each year between 2005 and 2008 (“ResetDate”) and (y) the conversion price effective as of the Reset Date, provided that theconversion price shall not be less than ¥378,000.

Ninth Series Class IX
Preferred Stock

September 1, 2003 to ¥1,250,000 / (conversion price), where the current conversion price is ¥454,000,
August 31, 2009
and thereafter the conversion price is the higher of (x) the average price of daily
closing prices (including closing bid or offered price) of Common Stocks asreported by the TSE for the 30 consecutive trading days (excluding trading days on
which no closing price, closing bid or offered price is reported) commencing on the
45th trading day prior to September 1 of each year between 2004 and 2008 multiplied by 1.025 and (y) ¥331,000.

Tenth Series Class X
Preferred Stock

July 1, 2003 toAugust 31, 2009

¥1,250,000 / (conversion price), where the current conversion price is ¥454,000,
and thereafter the conversion price is the higher of (x) the average price of daily
closing prices (including closing bid or offered price) of Common Stocks asreported by the TSE for the 30 consecutive trading days (excluding trading days on
which no closing price, closing bid or offered price is reported) commencing on the
45th trading day prior to September 1 of each year between 2003 and 2008 multiplied by 1.025 and (y) ¥331,000.

Eleventh Series ClassXI Preferred Stock

July 1, 2008 toJune 30, 2016

¥1,000,000 / (conversion price), where the conversion price is the higher of (x) the
average price of daily closing prices (including closing bid or offered price) of
Common Stocks as reported by the TSE for the 30 consecutive trading days
(excluding trading days on which no closing price, closing bid or offered price isreported) commencing on the 45th trading day prior to July 1, 2008 and (y)¥50,000; to be reset on July 1 of each year between 2009 and 2015 (each, a“Reset Date”) as ¥1,000,000 / (conversion price), where the conversion price is thelower of (x) the average price of daily closing prices (including closing bid or offeredprice) of Common Stocks as reported by the TSE for the 30 consecutive trading
days (excluding trading days on which no closing price, closing bid or offered priceis reported) commencing on the 45th trading day prior to the Reset Date and (y)the conversion price effective as of the Reset Date, provided that the conversion
price shall not be less than 60% of the initial conversion price or ¥50,000.

Notes: 1. If the date to determine the shareholders entitled to exercise their voting rights at a general meeting of the shareholders of MHFG (the “Record Date”) is prescribed, the period from andincluding the date immediately following such Record Date to and including the date on which such general meeting is concluded shall be excluded.
2. Subject to adjustment, where allotment of new Common Stocks for a subscription price below the “current market price” or “conversion price,” a stock split, allotment of securities convertible
into Common Stocks at a conversion ratio more favorable than the Preferred Stocks, merger or amalgamation, or a capital decrease or consolidation occurs and in certain other circumstances.

129

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

Each Preferred Stock which has not been converted as described above by the end of the relevant conversion period will be
converted into Common Stocks on the day following the end of the conversion period on the following terms:
Second Series Class II
Preferred Stock

August 1, 2006

¥2,000,000 / (current market price), where the current market price is the average
price of daily closing prices (including closing bid or offered price) of Common
Stocks as reported by the TSE for the 30 consecutive trading days (excluding trading days on which no closing price, closing bid or offered price is reported) commencing on the 45th trading day prior to August 1, 2006, provided that theconversion ratio shall not be more than 3.137 (*).

Third Series Class III
Preferred Stock

August 1, 2008

¥2,000,000 / (current market price), where the current market price is the average
price of daily closing prices (including closing bid or offered price) of Common
Stocks as reported by the TSE for the 30 consecutive trading days (excluding trading days on which no closing price, closing bid or offered price is reported) commencing on the 45th trading day prior to August 1, 2008, provided that theconversion ratio shall not be more than 3.137 (*).

Seventh Series Class
VII Preferred StockFebruary 1, 2011

¥2,000,000 / (current market price), where the current market price is the average
price of daily closing prices (including closing bid or offered price) of Common
Stocks as reported by the TSE for the 30 consecutive trading days (excluding trading days on which no closing price, closing bid or offered price is reported) commencing on the 45th trading day prior to February 1, 2011, provided that theconversion ratio shall not be more than the figure obtained by dividing ¥2,000,000
by the amount equal to 60% of the amount obtained by dividing ¥2,000,000 by
the initial conversion ratio.

Eighth Series ClassVIII Preferred StockFebruary 1, 2009

¥2,000,000 / (current market price), where the current market price is the average
price of daily closing prices (including closing bid or offered price) of Common
Stocks as reported by the TSE for the 30 consecutive trading days (excluding trading days on which no closing price, closing bid or offered price is reported) commencing on the 45th trading day prior to February 1, 2009, provided that theconversion ratio shall not be more than the figure obtained by dividing ¥2,000,000
by the amount equal to 60% of the amount obtained by dividing ¥2,000,000 by
the initial conversion ratio.

Ninth Series Class IX
Preferred Stock

September 1, 2009

¥1,250,000 / (current market price), where the current market price is the average
price of daily closing prices (including closing bid or offered price) of Common
Stocks as reported by the TSE for the 30 consecutive trading days (excluding trading days on which no closing price, closing bid or offered price is reported) commencing on the 45th trading day prior to September 1, 2009, provided that theconversion ratio shall not be more than the number obtained by dividing¥1,250,000 by ¥331,000.

* Subject to adjustment, where a stock split or consolidation of share capital occurs.

130Tenth Series Class X
Preferred Stock

September 1, 2009

¥1,250,000 / (current market price), where the current market price is the average
price of daily closing prices (including closing bid or offered price) of Common
Stocks as reported by the TSE for the 30 consecutive trading days (excluding trading days on which no closing price, closing bid or offered price is reported) commencing on the 45th trading day prior to September 1, 2009, provided that theconversion ratio shall not be more than the number obtained by dividing¥1,250,000 by ¥331,000.

Eleventh Series ClassXI Preferred Stock

July 1, 2016

¥1,000,000 / (current market price), where the current market price is the average
price of daily closing prices (including closing bid or offered price) of Common
Stocks as reported by the TSE for the 30 consecutive trading days (excluding trading days on which no closing price, closing bid or offered price is reported) commencing on the 45th trading day prior to July 1, 2016, provided that the current
market price shall not be less than 60% of the initial conversion price or ¥50,000.

131

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

25. Interest Income and Interest Expenses
Millions of yen
2005

2004

Thousands of U.S. dollars
2005¥ 1,065,198
290,665
5,082
29,738110,248
3,612
79,869¥ 1,183,736
296,733
5,176
24,84074,2901,718
36,209$ 9,917,126
2,706,135
47,316
276,869
1,026,423
33,632
743,595

1,584,415

1,622,704

14,751,096

125,969
68,6692,922
154,00312,754
1,033
26,59435
65,299—20,702

112,878
92,744
2,858
116,306
12,130
1,006
34,548—45,91447
19,267

1,172,790
639,317
27,205
1,433,795
118,745
9,618
247,594327
607,944—
192,745

For the Fiscal Years ended March 31,

Interest Income:Loans and Bills Discounted
Securities
Call Loans and Bills Purchased
Due from Banks
Receivables under Resale Agreements
Securities Borrowing Transactions
Other Interest Income
Total
Interest Expenses:
Deposits
Debentures
Call Money and Bills Sold
Payables under Repurchase Agreements
Securities Lending Transactions
Commercial Paper
Borrowed Money
Short-term Bonds
Bonds and Notes
Bonds with Stock Options
Other Interest Expenses
Total
Net

477,983

437,7034,450,080¥ 1,106,432¥ 1,185,001$ 10,301,016

26. Trading Income
Millions of yen
2005

For the Fiscal Years ended March 31,

Trading Income:Net Gains on Trading Securities and Derivatives
Net Gains on Derivatives for Trading Transactions
Net Gains on Securities Held to Hedge Trading Transactions
Other Trading Income
Total

2004

Thousands of U.S. dollars
2005¥

98,40063,094
1,880
1,683

¥

138,846
91,753—
1,855$

916,123
587,415
17,50915,677¥

165,059¥

232,455$ 1,536,724

Millions of yen
2005

2004

Thousands of U.S. dollars
2005

27. Other Operating Income
For the Fiscal Years ended March 31,

Gains on Foreign Exchange Transactions
Gains on Sales of Bonds
Other
Total

132

¥

157,858
99,86083,786¥

96,058249,037
61,386$ 1,469,681
929,717780,066¥

341,506¥

406,481$ 3,179,464

28. Other Income
Millions of yen
2005

For the Fiscal Year ended March 31, 2005

Gains on Sales of Stock
Reversal of Reserves for Possible Losses on Loans
Reversal of Reserve for Contingencies (Note)
Interest on the Refund of Provisional Tax Payments (Note)
Gains on Sales of Premises and Equipment
Recovery on Written-off Loans
Other
Total

Thousands of U.S. dollars
2005¥

276,772
143,215
131,159
102,105
29,501
7,054
45,488$2,576,787
1,333,351
1,221,113
950,616
274,666
65,675423,504¥

735,297$

6,845,712

Note: Resulting from a ruling by the Supreme Court in favor of the petition of a certain domestic subsidiary for rescission of a correction notice fromthe Tokyo Regional Taxation Bureau.
Millions of yen
2004

For the Fiscal Year ended March 31, 2004

Gains on Sales of Stock
Gains on Money Held in Trust
Gains on Sales of Premises and Equipment
Recovery on Written-off Loans
Gains on Securities Contributed to Employee Retirement Benefit TrustEnterprise Tax Refund and Interest on the Refund
Gains on Return of Substitutional Portion of Mizuho Pension FundAmortization of Prior Service Costs
Other

¥

251,929
526
8,413
2,555
60,73558,19845,16914,426
61,918¥503,872

Millions of yen
2005

2004

Total

Thousands of U.S. dollars
2005

29. Other Operating Expenses
For the Fiscal Years ended March 31,

Losses on Sales of Bonds
Expenses on Derivatives other than for Trading or Hedging
Losses on Devaluation of Bonds
Amortization of Debenture Issuance Costs
Other
Total

Thousands of U.S. dollars
2005¥

66,462
26,5301,337
242
61,207¥116,146
21,0931,670
777
59,932$618,772
247,006
12,4532,262
569,850¥

155,781¥

199,620$

1,450,343

133

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

30. Other Expenses
Millions of yen
2005

For the Fiscal Year ended March 31, 2005

Write-offs of Loans
Impairment of Fixed Assets
Write-offs of Deferred Hedge Losses
Losses on Sales of Loans
Valuation Losses on Investments in Subsidiaries
Expenses on IT System Integration and Losses on Disposal of Software
Losses on Devaluation of Stock
Amortization of Unrecognized Net Obligation at Date of Initial Applicationof the New Accounting Standard for Employee Retirement Benefits
Losses on Disposal of Premises and Equipment
Effect of Applying the Fair-value Hedge Method
Other

¥

Total

¥

161,461
67,14367,08961,921
59,66655,50948,752

Provision for Reserves for Possible Losses on Loans
Write-offs of Loans
Losses on Sales of Stock
Losses on Devaluation of Stock
Losses on Money Held in Trust
Losses on Disposal of Premises and Equipment
Amortization of Unrecognized Net Obligation at Date of Initial Applicationof the New Accounting Standard for Employee Retirement Benefits
Other

¥

$

1,503,226
625,112624,610576,498
555,505
516,798
453,895

24,550228,570

24,167
14,412
109,313225,000
134,1811,017,726

693,989

Millions of yen
2004

For the Fiscal Year ended March 31, 2004

Thousands of U.S. dollars
2005$

6,461,121

Thousands of U.S. dollars
2005

65,424
209,509
27,63918,900109
129,006$

619,375$

5,766,100

28,081
130,400

Total¥

609,073

31. Losses on Impairment of Fixed Assets
The differences between the recoverable amount and the book value of the following assets were recognized as Losses on
Impairment of Fixed Assets in the fiscal year ended March 31, 2005:
For the Fiscal Year ended March 31, 2005
Area
Principal purpose of use

Tokyo
Metropolitan Area
Other

Branch premises to be closed
Idle assets
Assets to be disposed
Branch premises
Branch premises to be closed
Idle assets

40 branches
108 items
1 branch
5 branches
118 items

Type

Millions of yen

Land and premises, etc.

¥

Land and premises, etc.

Thousands of U.S. dollars

44,096$23,047

410,540

214,572

32. Cash Flows
Cash and Cash Equivalents reconciles to Cash and Due from Banks on the Consolidated Balance Sheets as follows:
At March 31,

Cash and Due from Banks
Less: Due from Banks except for due from Central Banks
Cash and Cash Equivalents

134

Millions of yen
2005

2004

Thousands of U.S. dollars
2005¥ 6,808,965(1,206,902)¥ 6,813,510(1,283,846)$ 63,392,285(11,236,409)¥ 5,602,062¥ 5,529,664$ 52,155,876

33. Lease Transactions
Finance Leases (Lessees)
The Acquisition Cost Equivalents, Accumulated Depreciation Equivalents and Book Value Equivalents relating to finance leasetransactions accounted for as operating leases were summarized as follows:
Millions of yen

At March 31,

Equipment

2005
Others

Total

Equipment

2004
Others

Total

Acquisition Cost Equivalents
Accumulated Depreciation Equivalents¥

52,375(29,826)¥

3,353 ¥ 55,729(2,251)(32,078)¥

83,140(52,233)¥

4,706 ¥ 87,847(2,921)(55,154)

Book Value Equivalents¥

22,548¥

1,101 ¥¥

30,907¥

1,785 ¥

23,65032,692Thousands of U.S. dollars

At March 31,

Equipment

2005
Others

Total

Acquisition Cost Equivalents
Accumulated Depreciation Equivalents$ 487,623(277,692)$ 31,221 $ 518,844(20,965) (298,657)

Book Value Equivalents$ 209,931$ 10,256 $ 220,187

Future lease payments subsequent to the end of the fiscal year for finance leases accounted for as operating leases (including
the interest portion thereon) were summarized as follows:
Millions of yen
2005

At March 31,

Due in One Year or Less
Due after One Year
Total

2004

Thousands of U.S. dollars
2005¥

10,01923,665¥

14,47735,072$

93,279220,328¥

33,684¥49,550$ 313,607

Lease expense, depreciation equivalents and interest expense equivalents relating to finance leases accounted for as operatingleases amounted to ¥15,503 million ($144,336 thousand), ¥15,297 million ($142,426 thousand), and ¥1,209 million ($11,262
thousand), respectively for the fiscal year ended March 31, 2005, and ¥14,433 million, ¥13,754 million, and ¥1,161 million,
respectively for the fiscal year ended March 31, 2004.
Notes: 1. The computing method for the amount of depreciation equivalents is as follows:
Depreciation equivalents are calculated by the declining-balance method, computed by multiplying the amounts by 10/9, which itself iscomputed assuming that the useful life is the lease term and that the residual value at the end of the lease term is 10% of the acquisitioncost.
2. The computing method for the amount of interest expenses equivalents is as follows:
The amounts are defined as the difference between total lease payments and acquisition cost equivalents, which are allocated over thelease term by the interest method.

Operating Leases
The future lease payments subsequent to the end of the fiscal year for operating lease transactions were summarized as follows:
Lessees:Millions of yen
2005

At March 31,

Due in One Year or Less
Due after One Year
Total

¥

25,313
135,669¥ 160,983

2004¥

25,563
159,353¥ 184,917

Thousands of U.S. dollars
2005$

235,670
1,263,103$ 1,498,773

135

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

34. Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities consisted of the following:
Millions of yen
2005

2004

Thousands of U.S. dollars
2005¥ 1,920,951
1,007,619
580,593
218,536
287,145¥ 2,088,231
1,011,479
805,786
210,715
242,353$ 17,884,293
9,381,056
5,405,394
2,034,605
2,673,360

4,014,846(2,354,894)

4,358,566(2,461,786)

37,378,708(21,924,355)¥ 1,659,951¥ 1,896,780$ 15,454,353¥(221,835)(377,963)(57,262)¥(213,062)(308,578)(42,165)$ (2,065,312)(3,518,886)(533,124)¥(657,061)¥(563,807)$ (6,117,322)

At March 31,

Deferred Tax Assets:
Tax Losses Carried Forward
Securities
Reserves for Possible Losses on Loans
Securities Contributed to Employee Retirement Benefit Trust
Other
Deferred Tax Assets Subtotal:
Valuation Allowance
Total
Deferred Tax Liabilities:
Prepaid Pension Cost
Net Unrealized Gains on Other Securities
Other
Total
Net Deferred Tax Assets¥ 1,002,890¥ 1,332,973$

9,337,031

Balances reported on the Consolidated Balance Sheets:
At March 31,

Millions of yen
2005

2004

Thousands of U.S. dollars
2005

Deferred Tax Assets
Deferred Tax Liabilities¥ 1,036,907(34,016)¥ 1,361,766(28,792)$

9,653,733(316,702)

Net Deferred Tax Assets¥ 1,002,890¥ 1,332,973$

9,337,031

MHFG and domestic subsidiaries are subject to a number of different income taxes.

As at March 31, 2005 and 2004 the reconciliation of the statutory tax rate of MHFG to the effective income tax rate was as follows.

136

At March 31, 2005

2005

Statutory tax rate
Adjustments
Effect of a ruling in favor of the petition for rescission of a correction notice from the Tokyo Regional Taxation Bureau
Changes in Valuation Allowance
Permanent differences (e.g. cash dividends received)
Other
Effective income tax rate

40.69)%(6.27)(4.99)(1.59)(0.78)
27.04)%At March 31, 2004

2004

Statutory tax rate
Adjustments
Changes in Valuation Allowance
Effect of tax rates of domestic subsidiaries
Investment in subsidiaries
Other
Effective income tax rate

42.05)%
12.11)(3.83)(1.30)(1.83)
47.19)%

35. Segment Information(1) Segment Information by Type of Business
Segment information by type of business at March 31, 2005 and 2004 and for the fiscal year ended March 31, 2005 and 2004
was as follows:
Millions of yen

2005
Type of Business

Ordinary Income Inter-segmentfrom Outside
Ordinary
Customers
IncomeOrdinary
IncomeOrdinary
Expenses

Ordinary
Profits

Banking Business ¥ 2,509,411 ¥ 13,452 ¥ 2,522,864 ¥ 2,031,898 ¥ 490,965
Securities Business
344,439
27,139371,578
264,333
107,245
Other
185,334
106,538
291,872
228,229
63,643
Total
Elimination

3,039,186—

Consolidated
Results¥ 3,039,186 ¥

147,129(147,129)

3,186,315(147,129)

2,524,461(142,734)

661,854(4,394)— ¥ 3,039,186 ¥ 2,381,726 ¥ 657,459

Losses on
Depreciation Impairment of
Total Assets
Expense Fixed Assets

CapitalExpenditure¥ 126,488,096 ¥ 111,499 ¥ 64,895 ¥ 202,937
18,453,700
8,775
2,135
12,783
1,243,822
9,291
112
10,871
146,185,618(3,109,382)

129,567—

67,143—

226,592—¥ 143,076,236 ¥ 129,567 ¥ 67,143 ¥ 226,592
Millions of yen

2004
Type of Business

Ordinary Income Inter-segmentfrom Outside
Ordinary
Customers
IncomeOrdinary
IncomeOrdinary
Expenses

Ordinary
Profits

Banking Business ¥ 2,752,455 ¥ 26,740 ¥ 2,779,196 ¥ 1,953,785 ¥ 825,411
Securities Business
273,290
28,821
302,111233,057
69,054
Other
174,880
115,341
290,221
270,505
19,716
Total
Elimination

3,200,626—

Consolidated
Results¥ 3,200,626 ¥

170,903(170,903)

3,371,529(170,903)

2,457,348(153,208)

914,181(17,694)— ¥ 3,200,626 ¥ 2,304,139 ¥ 896,486

Losses on
Depreciation Impairment of
Total Assets
Expense Fixed Assets¥ 127,414,246 ¥ 121,592 ¥
13,111,932
8,398
1,152,880
9,872
141,679,059(3,928,967)

139,863—¥ 137,750,091 ¥ 139,863 ¥CapitalExpenditure/ ¥ 161,011
/
6,449
/
5,667
/
/

173,127—/ ¥ 173,127
Thousands of U.S. dollars

2005Type of Business

Ordinary Income Inter-segmentfrom Outside
Ordinary
Customers
IncomeOrdinary
IncomeOrdinary
Expenses

Ordinary
Profits

Losses on
Depreciation Impairment of
Total Assets
Expense Fixed Assets

CapitalExpenditure

Banking Business $23,362,927 $ 125,241 $23,488,168 $18,917,218 $4,570,950
Securities Business 3,206,775
252,669 3,459,444 2,460,973
998,471
Other
1,725,485
991,885 2,717,370 2,124,846
592,524$1,177,619,366 $1,038,077 $ 604,185 $1,889,375
171,806,164
81,702
19,883
119,012
11,580,136
86,5081,044
101,214

Total
Elimination

1,361,005,666 1,206,287(28,948,720)—

28,295,187 1,369,795 29,664,982 23,503,037 6,161,945— (1,369,795) (1,369,795) (1,328,879)(40,916)

Consolidated
Results$28,295,187 $— $28,295,187 $22,174,158 $6,121,029

625,112 2,109,601——$1,332,056,946 $1,206,287 $ 625,112 $2,109,601

Notes: 1. Ordinary Income represents Total Income less certain special income, and Ordinary Expenses represent Total Expenses less certain special
expenses.
2. Ordinary Profits represent Ordinary Income less Ordinary Expenses.
3. Major components of Type of Business are as follows:(1) Banking Business: banking and trust banking business(2) Securities Business: securities business(3) Other: credit card business, investment advisory business and other137

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements(2) Segment Information by Geographic Area
Segment information by geographic area at March 31, 2005 and 2004 and for the fiscal years ended March 31, 2005 and 2004
was as follows:
Millions of yen

2005
Geographic Area

Ordinary Income
from Outside
Customers

Inter-segment
Ordinary
IncomeJapan
Americas
EuropeAsia / Oceania excluding Japan¥ 2,591,325
197,894
177,01272,952¥

Total
Elimination and General Corporate Assets
Consolidated Results

3,039,186—

Ordinary
IncomeOrdinary
Expenses

Ordinary
Profits

Total Assets

46,268
115,641
19,296
11,724¥ 2,637,593
313,536
196,308
84,677¥ 2,048,630 ¥
246,115
181,478
64,577588,963
67,42014,83020,099¥ 132,776,520
12,391,021
6,916,115
4,501,289

192,930(192,930)

3,232,116(192,930)

2,540,802(159,076)

691,313(33,853)

156,584,945(13,508,709)—¥ 3,039,186¥ 2,381,726 ¥

657,459¥ 143,076,236¥ 3,039,186¥

2004
Geographic Area

Ordinary Income
from Outside
Customers

Inter-segment
Ordinary
IncomeOrdinary
IncomeJapan
Americas
EuropeAsia / Oceania excluding Japan¥ 2,760,211
177,703
185,295
77,415¥ 143,450
89,8799,557
1,006¥ 2,903,662
267,582
194,852
78,4223,200,626—

243,893(243,893)—

Millions of yen

Total
Elimination and General Corporate Assets
Consolidated Results¥ 3,200,626¥

Ordinary Income
from Outside
Customers

Inter-segment
Ordinary
IncomeOrdinary
Expenses

Ordinary
Profits

Total Assets¥ 2,063,911 ¥
194,577
181,283
38,997

839,751
73,005
13,56839,424¥ 128,677,634
12,172,914
6,824,656
4,037,664

3,444,519(243,893)

2,478,769(174,630)

965,750(69,263)

151,712,869(13,962,777)¥ 3,200,626¥ 2,304,139 ¥

896,486¥ 137,750,091
Thousands of U.S. dollars

2005
Geographic Area

Japan
Americas
EuropeAsia / Oceania excluding Japan$ 24,125,554
1,842,423
1,648,010
679,200$

430,762
1,076,635
179,649
109,156$ 24,556,316
2,919,058
1,827,659
788,356

Total
Elimination and General Corporate Assets

28,295,187—

1,796,202(1,796,202)

30,091,389(1,796,202)$ 28,295,187$

Consolidated Results

138

Ordinary
Income—$ 28,295,187

Ordinary
Expenses

Ordinary
Profits

Total Assets$ 19,072,996 $ 5,483,320
2,291,364
627,694
1,689,589
138,070
601,228
187,128$1,236,165,349
115,361,896
64,389,863
41,907,544

23,655,177(1,481,019)

6,436,212(315,183)

1,457,824,652(125,767,706)$ 22,174,158 $ 6,121,029$1,332,056,946

Notes: 1. Ordinary Income represents Total Income less certain special income, and Ordinary Expenses represent Total Expenses less certain special
expenses.
2. Ordinary Profits represent Ordinary Income less Ordinary Expenses.
3. Geographic analyses are presented based on geographic contiguity, similarities in economic activities, and relation of business operations.
4. Americas includes the United States of America and Canada. Europe includes the United Kingdom. Asia / Oceania includes Hong Kong andthe Republic of Singapore.
5. Until the fiscal year ended March 31, 2003, gains and losses relating to foreign exchange swaps for some of the domestic banking
subsidiaries were reported in gross amounts on the statements of operations. However, effective the fiscal year ended March 31, 2004, thenet amount of gains and losses is presented on the statements of operations as a result of the application of hedge accounting inaccordance with the JICPA Industry Audit Committee Report No. 25. As a result, for the fiscal year ended March 31, 2004, compared to thecorresponding amounts under the previously applied method, Ordinary Income and Ordinary Expenses decreased by ¥6,798 million, ¥4,666
million, and ¥1,789 million for Japan, Europe, and Asia/Oceania excluding Japan, respectively.
6. Until the fiscal year ended March 31, 2003, the transitional treatment permitted by the JICPA Industry Audit Committee Report No. 25 wasapplied to foreign currency transactions. However, effective the fiscal year ended March 31, 2004, in accordance with the generalprovisions of the JICPA Industry Audit Committee Report No. 25, hedge accounting is applied to currency-swap transactions, exchange
swap transactions and similar transactions for domestic banking and trust banking subsidiaries.
aaAs a result of the application of hedge accounting, as of March 31, 2004, currency-swap transactions and exchange swap transactions,which were accounted for on an accrual basis, are valued at fair value and the gross amount of the credit balance and the debt balance arerecorded on the balance sheet in Other Assets and Other Liabilities, resulting in a decrease of Total Assets of ¥320 million and ¥43 million
for Japan and Americas, respectively, and an increase of Total Assets of ¥126 million and ¥1,695 million for Europe and Asia/Oceania
excluding Japan, respectively, compared with the corresponding amounts under the previous method.
aaUntil the fiscal year ended March 31, 2003, the net fair value of forward foreign exchange transactions other than those for the above
hedging purposes was recorded in Other Assets or Other Liabilities on the balance sheets. However, effective the fiscal year ended March
31, 2004, the gross of fair value amounts are recorded on the balance sheet. As a result, as of March 31, 2004, Total Assets increased by¥782,767 million, ¥25,964 million, ¥44,623 million, and ¥29,331 million for Japan, Americas, Europe, and Asia/Oceania excluding Japan,
respectively, compared with the corresponding amounts under the previous method.

(3) Ordinary Income from Overseas Entities
Ordinary Income from Overseas Entities for the fiscal years ended March 31, 2005 and 2004 consisted of the following:
Millions of yen
2005

For the Fiscal Years ended March 31,

Ordinary Income from Overseas Entities
Total Ordinary Income
Ordinary Income from Overseas Entities' Ratio¥

447,860
3,039,186
14.73%¥

2004

Thousands of U.S. dollars
2005

440,4143,200,626$ 4,169,633
28,295,187

13.76%/

Notes: 1. Ordinary Income from Overseas Entities represents Ordinary Income recorded by overseas branches of MHCB and other overseas
subsidiaries excluding Inter-segment Ordinary Income. Ordinary Income from international operations is presented in lieu of Sales as is thecase for non-financial companies.
2. Segment information on Ordinary Income from Overseas Entities is not presented as no such information is compiled.

36. Subsequent Events
Appropriation of Retained Earnings
The following Appropriation of Retained Earnings was approved at the shareholders' meeting held on June 25, 2005.
Millions of yen

Cash Dividends:
Second Series Class II Preferred Stock
Third Series Class III Preferred Stock
Fourth Series Class IV Preferred Stock
Sixth Series Class VI Preferred Stock
Seventh Series Class VII Preferred Stock
Eighth Series Class VIII Preferred Stock
Tenth Series Class X Preferred Stock
Eleventh Series Class XI Preferred StockThirteenth Series Class XIII Preferred Stock
Common Stock¥ 8,200 per Share¥ 14,000 per Share¥ 47,600 per Share¥ 42,000 per Share¥ 11,000 per Share¥ 8,000 per Share¥ 5,380 per Share¥ 20,000 per Share¥ 30,000 per Share¥ 3,500 per Share

¥

503
1,400
7,140
6,300
1,375
474
753
18,874
1,100
42,007

Thousands of U.S. dollars

$

4,687
13,034
66,47458,654
12,801
4,417
7,012
175,727
10,248391,097139

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

37. Fair Value of Securities and Money Held in Trust
The following tables contain information relating to “Securities,” Trading Securities, Securities Held to Hedge Trading
Transactions, Negotiable Certificates of Deposits, Commercial Paper and other in “Trading Assets,” Negotiable Certificates of
Deposits in “Cash and Due form Banks,” certain “Other Debt Purchased,” and “Money Held in Trust.”
Millions of yen

At March 31, 2005

Bonds Held-to-Maturity:
Japanese National Government Bonds
Japanese Local Government Bonds
Other
Other Securities*2:
Stocks*3
Bonds:
Japanese National Government Bonds
Japanese Local Government Bonds
Japanese Short-term Bonds
Japanese Corporate Bonds
Other
Money Held in Trust
Other Money Held in Trust

Gross unrealized
Gains

Cost

¥

1,459,567
1,117,495
52,911
289,159
30,554,509
3,087,917
22,170,287
21,615,580
89,433
2,999
462,273
5,296,303

¥

169

7,192
6,622
570
—
1,232,628*4
1,174,385
15,873
9,891
2,144
—
3,837
42,369¥—Losses

5,954
—
—
5,954
235,927*4
64,78092,092
91,131354
0606
79,054

Fair value¥—

1,460,805
1,124,118
53,482283,204
31,551,210
4,197,523
22,094,068
21,534,341
91,222
2,999
465,505
5,259,618
169
Millions of yen

At March 31, 2004

Bonds Held-to-Maturity:
Japanese National Government Bonds
Japanese Local Government Bonds
Other Securities*2:
Stocks*3
Bonds:
Japanese National Government Bonds
Japanese Local Government Bonds
Japanese Corporate Bonds
Other

140

Gross unrealized
Gains

Cost

¥

915,604
897,546
18,05827,895,257
3,477,151
20,185,912
19,725,985
97,725362,201
4,232,193

¥

1,147
1,119
28
1,018,867
967,246
9,366
5,699
2,321
1,345
42,254¥Losses482
482—
298,435
82,677200,561
197,477
844
2,239
15,196

Fair value¥

916,270
898,183
18,08728,615,689
4,361,720
19,994,717
19,534,207
99,202
361,3074,259,251

Thousands of U.S. dollars

At March 31, 2005

Bonds Held-to-Maturity:
Japanese National Government Bonds
Japanese Local Government Bonds
Other
Other Securities*2:
Stocks*3
Bonds:
Japanese National Government Bonds
Japanese Local Government Bonds
Japanese Short-term Bonds
Japanese Corporate Bonds
Other
Money Held in Trust
Other Money Held in Trust

Gross unrealized
Gains

Cost

$

13,588,746
10,404,018
492,6142,692,114
284,466,150
28,748,886
206,408,041
201,243,652
832,637
27,9284,303,824
49,309,223
1,581

$

66,96761,655
5,312—
11,475,920*4
10,933,670
147,789
92,095
19,963—35,731
394,461$

Losses55,442——55,442
2,196,515*4
603,111857,396
848,444
3,305
3
5,644
736,008—

Fair value$—

13,600,271
10,465,673
497,926
2,636,672
293,745,555
39,079,445
205,698,434
200,487,303
849,295
27,9254,333,911
48,967,676
1,581*1 A summary of Trading Securities and Money Held in Trust for Investment Purposes and related unrealized gains and losses is as follows:

Fair value

Millions of yen
2005
Unrealized
gains (losses)
Fair value

2004
Unrealized
gains (losses)

Trading Securities¥ 8,829,136
Money Held in Trust for Investment Purposes
28,509¥ 23,528 ¥ 5,592,183—
27,863¥ (2,702)
132

At March 31,

Thousands of U.S. dollars
2005
Unrealized
Fair value
gains (losses)$ 82,200,317
265,428$ 219,050—*2 In addition to the balances shown in the above table, Other Securities included securities without fair values such as unlisted stock (excluding OTC stock) of ¥814,761 million ($7,585,527 thousand)and ¥837,239 million and non-publicly offered bonds of ¥1,617,364 million ($15,057,860 thousand) and ¥1,299,514 million as of March 31, 2005 and 2004, respectively.
*3 Fair value of Stocks is determined based on the average market prices during one-month periods before the balance sheet dates.
*4 Unrealized Gains (Losses) include ¥54,074 million ($503,444 thousand) which was recognized in the Statement of Operations by applying the fair-value hedge method and other.

141

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

Projected Redemption Amounts for Securities
Millions of yen

At March 31, 2005

Bonds:
Japanese National Government Bonds
Japanese Local Government Bonds
Japanese Short-term Bonds
Japanese Corporate Bonds
Other
Total

Within 1 year

1–5 years

5–10 years

Over 10 years¥ 13,547,124
13,283,905
2,258
2,999
257,961
588,578¥

6,479,224
4,984,641
97,401—
1,397,181
2,480,708¥

3,913,699
3,596,479
41,327—
275,893
820,550¥

921,792
786,810
10,079—124,901
1,868,267¥ 14,135,702¥

8,959,933¥

4,734,250¥

2,790,059
Millions of yen

At March 31, 2004

Bonds:
Japanese National Government Bonds
Japanese Local Government Bonds
Japanese Corporate Bonds
Other
Total

Within 1 year

1–5 years

5–10 years

Over 10 years¥ 10,212,773
9,965,129
2,200
245,443873,745¥

7,348,507
6,183,640
39,105
1,125,761
2,032,448¥

3,892,826
3,656,500
73,798
162,527
791,538¥

735,730
626,483
10,716
98,530679,982¥ 11,086,518¥

9,380,955¥

4,684,364¥

1,415,712

Thousands of U.S. dollars

At March 31, 2005

Bonds:
Japanese National Government Bonds
Japanese Local Government Bonds
Japanese Short-term Bonds
Japanese Corporate Bonds
Other
Total

142

Within 1 year

1–5 years

5–10 years$126,125,354
123,674,755
21,02327,9252,401,651
5,479,734$ 60,322,359
46,407,612
906,823—
13,007,924
23,095,694$ 36,437,016
33,483,654
384,762—2,568,600
7,639,427$

Over 10 years$131,605,088$ 83,418,053$ 44,076,443$ 25,975,786

8,581,995
7,325,300
93,845—
1,162,850
17,393,791

Other Securities Sold during the Fiscal Year
Millions of yen

For the Fiscal Years ended March 31,

Other Securities

Proceeds
from sales

2005
Total amountof gains
on sales¥ 34,932,326 ¥Proceeds
from sales

2004
Total amountof gains
on salesTotal amountof losses
on sales¥ 46,704,782¥ 483,208¥ 130,946

Total amountof losses
on sales

354,893 ¥53,044

Thousands of U.S. dollars

For the Fiscal Year ended March 31,

Other Securities

Proceeds
from sales

2005
Total amountof gains
on salesTotal amountof losses
on sales$325,224,160 $ 3,304,099 $ 493,854

Net Unrealized Gains on Other Securities
Net Unrealized Gains on Other Securities as of March 31, 2005 and 2004 are as follows:
2004

Thousands of U.S. dollars
2005¥ 943,023
943,023—¥ 720,256
720,256—$ 8,779,661
8,779,661—

Deferred Tax Assets
Deferred Tax Liabilities
Difference between cost and fair value, net of Taxes

144
377,837
565,329105
305,409414,952

1,343
3,517,714
5,263,290

Amount corresponding to Minority Interests
Amount corresponding to Net Unrealized Gains on Other Securities
owned by affiliated companies, which corresponds to theshareholdings of their investor companies
Net Unrealized Gains on Other Securities, net of Taxes

29,532

23,862274,9542,230¥ 538,027

1,681¥ 392,772

20,765$ 5,009,101

At March 31,

Difference between cost and fair value
Other Securities
Other Money Held in Trust

Millions of yen
2005

143

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

38. Derivatives Information(1) Risk Control for Derivatives(a) Details of Derivative Financial Products
MHFG and its consolidated subsidiaries (the “group”) transact primarily in the following derivative financial products:(i) Interest rate-related products
Swaps, interest rate guarantees (FRA options), futures, futures options, and options(ii) Currency-related products
Futures, futures options, options, swaps, and forward trading(iii) Bond-related products
Futures, futures options, and over-the-counter options(iv) Stock-related products
Index futures, index futures options, and over-the-counter options(v) Other products
Credit derivatives, commodity derivatives, weather derivatives, etc.
(b) Purposes of Using Derivative Financial Products
The group uses derivative financial products in response to the diverse needs of customers, to control the risk related to the assets
and liabilities of the group, as part of its asset and liability management (“ALM”), and for trading purposes.
To control the risk related to assets and liabilities, the group primarily utilizes portfolio-hedges, grouping numerous financial
assets and liabilities, such as loans and deposits with similar interest risk in accordance with risk management policies, using interest rate swaps, etc., as hedging methods for cash-flow hedge or fair value hedge. The group applies hedge accounting to themajority of these products, treating them as deferred hedges. The effectiveness of the hedges is assessed by periodically checking,by regression analysis and other methods, whether the derivative financial products highly reduce the exposure to changes in fairvalue and variable cash flows from hedged items.
(c) Trading Guidelines
In accordance with the purposes for which the group uses derivative financial products, the group deals in derivative financial
products based on the following guidelines:(i) Responding to customer needs
After obtaining an adequate understanding of customer requirements, the group follows a common policy on selling financial
products by recommending the most appropriate financial vehicle for each customer's knowledge, experience and asset position. When actually making a sale, the group endeavors to give full explanations to its customers to ensure that they clearly
understand the nature of each product, the risks involved and other important matters.
(ii) Risk control of assets and liabilities of MHFG (ALM)
MHFG's ALM & Market Risk Committee meets periodically to confirm or revise the trading guidelines for the purposes of
securing stable income while appropriately controlling risk.
(iii) Trading activities
The group engages in trading activities to maximize income under reasonable risk limits and strict management.
(d) Details of Trading-Related Risk
The following are the main risks inherent in derivatives trading.
(i) Credit risk:
The risk of incurring a loss because the counter-parties are unable to fulfill their obligations due to bankruptcy or otherreasons.
(ii) Market risk:
The risk of incurring a loss because the value of the derivative products decreases due to fluctuations in market risk factors
such as interest rates, foreign exchange rates and bond and stock prices.
(iii) Market liquidity risk:
The risk of incurring a loss from the inability to execute transactions in the market and/or execution at unfavorable prices due
to illiquidity of the products.

144

(e) Derivative Trading Risk Control Structure(i) Credit risk management structure
The Board of Directors determines important items concerning credit risk in accordance with the Basic Policy for Credit Risk
Management. MHFG has established the Portfolio Management Committee as one of its business policy committees. This
committee conducts overall deliberation on and adjustment of the group's credit portfolio management procedures. Under
the authority of the Chief Risk Officer, the Risk Management Department and the Credit Risk Management Department
jointly formulate and implement plans for basic matters related to credit risk management.
The amount of credit risk on derivatives trading (credit risk equivalent) calculated into the capital adequacy ratio (BIS Capital
Ratio) was ¥3,757,438 million ($34,982,206 thousand) and ¥3,291,479 million on March 31, 2005 and 2004, respectively.
(ii) Market risk management structure
The Basic Policies for Market and Liquidity Risk Management are determined by the Board of Directors. MHFG's Risk Management Department is responsible for monitoring market risk, reports and analyses, proposals, setting limits, and for formulating
and implementing plans relating to market risk management as a specialized risk management section.
The group has established a solid management structure for market risk including comprehensive management (ALM) ofinterest rate risk and other types of risk. Through this structure, they comprehensively ascertain and manage risk, while managing assets to secure stable income and appropriately controlling risk.
MHFG has established the ALM & Market Risk Committee as one of the business policy committees charged with conducting overall deliberation on and adjustment of market risk management procedures. The committee decides the entire group's
monthly funding and investment policies, discusses and coordinates matters relating to ALM policies, risk planning and market
risk management, and responds to emergencies such as sudden market changes.
In regard to reporting, the Risk Management Department receives the relevant data from the five core subsidiaries, as well
as reports on risk profile and compliance with risk limits, both on a regular basis and as considered necessary. Based on thesereports, MHFG obtains a solid grasp of the market risk management situation. Reports on the status of market risk and compliance with risk limits are submitted to the President on a daily basis, and to the Board of Directors and the Executive
Management Committee on a regular basis and as considered necessary.
Value at Risk

Value at Risk (VAR) related to MHFG’s trading activities is as follows:(a) The standards used for calculating VAR• Confidence interval: one-tailed 99.0% (two-tailed 98%)
• Holding period: 1 day• Historical observation period: 1 year (265 business days, 264 return)(b) VAR results during the period covered• Maximum: ¥4.3 billion and ¥4.7 billion for the fiscal years ended March 31, 2005 and 2004, respectively• Average: ¥2.9 billion and ¥3.1 billion for the fiscal years ended March 31, 2005 and 2004, respectively
The period covered is from April 1, 2004 to March 31, 2005 and April 1, 2003 to March 31, 2004, respectively.
Note: Value at Risk (VAR) is a method of measuring market risk. It is defined as the maximum possible loss that could be incurred on the portfolio as a result of market movements within a certain
period (holding period) and degree of probability (confidence interval). The actual amount of the VAR may vary according to the length of the holding periods and the confidence interval, as
well as the models used for measuring the volatility of market risk factors.

Credit Risk Equivalent Amounts

Credit risk equivalent amounts at March 31, 2005 and 2004 consisted of the following:
Millions of yen
2005

At March 31,

Interest Rate Swaps
Currency Swaps
Foreign Exchange Forward Transactions
Interest Rate Options (Bought)
Currency Options (Bought)
Other Financial Derivative Products
Effect of Reduction in the Credit Risk Equivalent Amount due toLump-sum Settlement Netting Contracts
Total

¥

7,898,568
941,238
875,448
186,594
699,510324,214¥(7,168,135)¥

3,757,438¥

2004

Thousands of U.S. dollars
2005

8,081,842
859,968
810,997
190,952
457,033
154,693$ 73,536,617
8,763,043
8,150,529
1,737,219
6,512,531
3,018,474(7,264,008)(66,736,207)

3,291,479$ 34,982,206

Note: The above credit risk equivalent amounts are based on the consolidated capital adequacy ratio (BIS Capital Ratio).

145

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements(2) Fair Value of Derivatives
The fair value of derivatives at March 31, 2005 and 2004 was as follows:
In the following tables:(i) Contract value represents notional amounts for swap transactions and contract amounts for other transactions.
(ii) Fair values of listed contracts are based on the closing prices of the Tokyo Stock Exchange and the Tokyo International
Financial Futures Exchange and others. Fair values of over-the-counter contracts are based on the discounted value of future
cash flows or option pricing models.
(a) Interest Rate-Related Transactions
Millions of yen

Contract value
Total
Over one year

At March 31, 2005

Listed:Futures:
Sold
BoughtOptions:
Sold
Bought¥Over-the-Counter:
FRAs:
Sold
BoughtSwaps:
Receive Fixed / Pay Float
Receive Float / Pay Fixed
Receive Float / Pay Float
Receive Fixed / Pay Fixed
Options:
Sold
BoughtTotal

41,771,933
41,457,046¥

9,950,327
9,938,328

Unrealized
gains (losses)

Fair value¥

116,646(116,918)¥

116,646(116,918)

23,351,884
25,241,977

2,292,004
2,169,003(19,778)
18,344

7,273(2,393)

13,261,163
11,505,768

1,252,295
704,297

3,015(3,644)

3,015(3,644)

345,084,379
339,974,536
41,733,275
326,995

238,537,832
238,674,825
26,273,538
254,456

4,543,335(4,577,275)
4,420
1,325

4,543,335(4,577,275)
4,420
1,325

9,487,745
10,292,782

4,725,832
5,224,610(71,809)
79,022(71,795)
78,995///¥(17,015)
Millions of yen

Contract value
Total
Over one year

At March 31, 2004

Listed:Futures:
Sold
BoughtOptions:
Sold
BoughtOver-the-Counter:
FRAs:
Sold
BoughtSwaps:
Receive Fixed / Pay Float
Receive Float / Pay Fixed
Receive Float / Pay Float
Receive Fixed / Pay Fixed
Options:
Sold
Bought
Total

146

¥

30,704,796
25,770,710¥

7,241,477
6,728,393

Unrealized
gains (losses)

Fair value¥(180,409)
178,386¥(180,409)
178,386

18,791,169
19,322,815

2,598,498
2,527,514(28,215)
41,067

11,994
23,832

26,462,539
22,583,896

2,509,421
1,784,556

11,306(9,149)11,306(9,149)306,639,056
302,833,897
50,957,741
185,056

222,428,023
215,681,821
35,837,250
164,027

5,411,524(5,223,310)
(875)
3,900

5,411,524(5,223,310)
(875)
3,900

10,045,468
10,184,210

4,260,798
4,170,538(78,495)
83,418(78,425)
83,199///¥231,973

Thousands of U.S. dollars

Contract value
Total
Over one year

At March 31, 2005

Listed:Futures:
Sold
BoughtOptions:
Sold
BoughtOver-the-Counter:
FRAs:
Sold
BoughtSwaps:
Receive Fixed / Pay Float
Receive Float / Pay Fixed
Receive Float / Pay Float
Receive Fixed / Pay Fixed
Options:
Sold
Bought$388,901,722
385,970,086$

92,638,743
92,527,030

Unrealized
gains (losses)

Fair value$

1,085,996(1,088,524)$

1,085,996(1,088,524)

236,029,087
235,005,838

21,338,840
20,193,684(184,139)
170,789

67,719(22,281)

123,463,025
107,120,089

11,659,025
6,557,094

28,072(33,931)

28,072(33,931)3,212,777,015
3,165,203,765
388,541,811
3,044,366

2,220,815,871
2,222,091,291
244,609,797
2,369,020

42,298,997(42,614,986)
41,153
12,34042,298,997(42,614,986)
41,153
12,34088,332,048
95,827,045

43,998,064
48,641,750(668,556)
735,713(668,429)
735,457

/

/

/

Total

$

(158,417)

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the Consolidated Statements ofOperations.
2. Derivative transactions qualifying for hedge accounting under “Accounting and Auditing Treatment Relating to Adoption of AccountingStandards for Financial Instruments for Banks” (JICPA Industry Audit Committee Report No.24) and others are excluded from the abovetable.

(b) Currency-Related Transactions
Millions of yen

Contract value
Total
Over one year

At March 31, 2005

Listed:Futures:
Sold
BoughtOver-the-Counter:
Currency Swaps
Forwards:
Sold
BoughtOptions:
Sold
BoughtTotal¥

12,562
11,026¥——

Unrealized
gains (losses)

Fair value

¥

(27)
21

¥

(27)
21

18,563,080

13,328,073(70,042)

133,032

21,006,320
18,547,388

520,543
829,521(250,992)
310,997(250,992)
310,997

6,799,743
6,834,863

3,576,553
3,956,656(250,946)
311,792

70,731
83,219///¥346,982147

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

Millions of yen

Contract value
Total
Over one year

At March 31, 2004

Listed:Futures:
Sold
Bought¥Over-the-Counter:
Currency Swaps
Forwards:
Sold
BoughtOptions:
Sold
BoughtTotal

26,554
20,122¥——

Unrealized
gains (losses)

Fair value

¥

(39)
7

¥

(39)
7

18,494,511

12,943,329(218,039)(48,329)

16,819,197
13,440,495

426,491
736,990

325,585(324,841)

325,585(324,841)

5,651,246
5,445,823

2,001,092
1,986,604(186,009)
237,12118,70084,568///¥55,652Thousands of U.S. dollars

Contract value
Total
Over one year

At March 31, 2005

Listed:Futures:
Sold
BoughtOver-the-Counter:
Currency Swaps
Forwards:
Sold
BoughtOptions:
Sold
BoughtTotal$

116,957
102,657$——

Unrealized
gains (losses)

Fair value

$

(260)
197

$

(260)
197

172,824,512

124,085,960(652,109)

1,238,550

195,571,368
172,678,418

4,846,326
7,722,942(2,336,766)
2,895,428(2,336,766)
2,895,428

63,306,429
63,633,396

33,298,144
36,836,949(2,336,345)
2,902,830

658,516
774,786///$ 3,230,451

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the Consolidated Statements ofOperations.
2. The following transactions are excluded from the above table.
•Transactions qualifying for hedge accounting under “Accounting and Auditing Treatment Relating to Adoption of Accounting Standards
for Foreign Currency Transactions for Banks“ (JICPA Industry Audit Committee Report No. 25) and others.
•Transactions which are specified for certain financial assets and liabilities denominated in foreign currencies and reflected on the
consolidated balance sheets.
•Transactions denominated in foreign currencies which are eliminated in consolidation.

148

(c) Stock-Related Transactions
Millions of yen

2005

At March 31,

Listed:Index Futures:
Sold
BoughtIndex Futures Options:
Sold
BoughtOver-the-Counter:
Options:
Sold
BoughtOther:
Sold
BoughtTotal

Contract value
Over
Total
one year¥ 300,579
24,329¥Fair Unrealized
value gains (losses)

2004
Contract value
Over
Total
one year— ¥—1,551 ¥
171

1,551 ¥ 331,922
171
48,14931,77063,548

—
—

(791)
602

(53)
(221)

54,18664,703——(1,355)
1,899

3
430

839,516
809,493

251,126
239,666(36,457)
34,671(2,973)
2,648

363,284
418,229

107,326
112,618(16,774)
25,613

367
5,295

3,314
49,927—47,453

541
648

541
648

5,998
3,925

—
2,600

91
233

91
233

/

/

2,311

/

/

/ ¥

¥

Fair Unrealized
value gains (losses)— ¥ (16,288) ¥ (16,288)
—
2,874
2,874

/ ¥

(6,992)Thousands of U.S. dollars

2005

At March 31,

Listed:Index Futures:
Sold
BoughtIndex Futures Options:
Sold
BoughtOver-the-Counter:
Options:
Sold
BoughtOther:
Sold
BoughtTotal

Contract value
Over
Total
one year$2,798,433
226,513295,786
591,647$

Fair Unrealized
value gains (losses)— $ 14,440 $ 14,440
—
1,597
1,597
—
—

(7,369)
5,610

(502)
(2,065)

7,816,002 2,338,021
7,536,477 2,231,327(339,422)
322,798(27,681)
24,658

5,040
6,035

5,040
6,035

30,857464,832—
441,800/// $ 21,522

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the Consolidated Statements ofOperations.
2. Derivative transactions qualifying for hedge accounting are excluded from the above table.

149

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements(d) Bond-Related Transactions
Millions of yen

2005

At March 31,

Listed:Index Futures:
Sold
BoughtIndex Futures Options:
Sold
BoughtOver-the-Counter:
Options:
Sold
BoughtTotal

Contract value
Over
Total
one year¥1,190,833
1,393,019¥

2004
Fair Unrealized
value gains (losses)——¥ (4,009)
173

235,639
278,628

—
—

(577)
534

55
(339)

758,955
505,173

12,00012,000(2,799)
3,789

/

/

/

Contract value
Over
Total
one year¥ (4,009) ¥ 407,599
173 1,001,632¥

Fair Unrealized
value gains (losses)——¥ (1,661)
1,151¥ (1,661)
1,151

192,651
175,447——(1,805)
1,610

(728)
79

(421)
2,207

833,058
800,9455,455—(6,562)
2,069(2,762)(1,016)¥ (2,332)///¥ (4,937)

Thousands of U.S. dollars

2005

At March 31,

Listed:Index Futures:
Sold
BoughtIndex Futures Options:
Sold
BoughtOver-the-Counter:
Options:
Sold
BoughtTotal

Contract value
Over
Total
one year$11,086,802
12,969,178$

Fair Unrealized
value gains (losses)——$(37,327)
1,617$(37,327)
1,617

2,193,831
2,594,065——(5,379)4,976

516(3,157)

7,065,971
4,703,228

111,721111,721(26,068)
35,281(3,922)
20,553///$(21,720)

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the Consolidated Statements ofOperations.
2. Derivative transactions qualifying for hedge accounting are excluded from the above table.

150

(e) Commodity-Related Transactions
Millions of yen

2005

2004

Contract value
At March 31,

Over-the-Counter:
Options:
Sold
BoughtTotal¥ 368,593 ¥
370,334

Total

Contract valueOver
one yearOver
one year

Fair Unrealized
value gains (losses)

229,663 ¥ (119,674) ¥ (119,674) ¥ 190,382 ¥ 134,895
231,501
127,955
127,955
190,382
134,895¥ (8,777) ¥ (8,777)
14,713
14,713

/

/

Fair
value

/ ¥

Unrealized
gains (losses)

8,280

Total

/

/

/ ¥

5,935

Thousands of U.S. dollars

2005
Contract value
At March 31,

Over-the-Counter:
Options:
Sold
BoughtTotal

Over
one year

Fair
value

Unrealized
gains (losses)$3,431,646 $ 2,138,197 $(1,114,181) $(1,114,181)
3,447,858 2,155,306 1,191,277 1,191,277

Total

/

/

/ $

77,096

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the Consolidated Statements ofOperations.
2. Derivative transactions qualifying for hedge accounting are excluded from the above table.
3. Commodities include oil, copper, aluminium and others.

(f) Credit Derivative Transactions
Millions of yen

2005

2004

Contract value
At March 31,

Over-the-Counter:
Credit Derivatives:
Sold
Bought
Total

Total

Contract valueOver
one year¥1,057,028 ¥ 825,424 ¥
1,153,468 1,112,025
/

/

Fair
value

2,296 ¥
30,571/ ¥Unrealized
gains (losses)

Total

Over
one year

2,296 ¥ 272,177 ¥ 161,783
30,571
784,247
705,377
32,868//Fair Unrealized
value gains (losses)¥

1,434 ¥ 1,434
32,30532,305/ ¥ 33,740

Thousands of U.S. dollars

2005
Contract value
At March 31,

Over-the-Counter:
Credit Derivatives:
Sold
Bought
Total

Total

Over
one year$9,841,059 $ 7,684,801 $
10,738,929 10,353,094
/

/

Fair
value

Unrealized
gains (losses)

21,381 $284,625

21,382
284,625/ $306,007

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the Consolidated Statements ofOperations.
2. Derivative transactions qualifying for hedge accounting are excluded from the above table.
3. “Sold” and “Bought” indicate assumption and cession of credit risk, respectively.

151

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements(g) Weather Derivative Transactions
Millions of yen

2005

2004

Contract value
At March 31,

Over-the-Counter:
Weather Derivatives:
Sold
Bought
Total

Total

¥

502
290

Contract valueOver
one year

¥

/

—
—

Fair Unrealized
value gains (losses)

¥

/

(52)
66

¥

(52)
66

/

¥

14

Total

¥

934
674
/

Over
one year¥——/

Fair Unrealized
value gains (losses)

¥

(106)
102

¥

(106)
102

/

¥

(3)

Thousands of U.S. dollars

2005

At March 31,

Over-the-Counter:
Weather Derivatives:
Sold
BoughtTotal

Contract value
Over
Total
one year$ 4,676
2,700
/

$

—
—
/

Fair Unrealized
value gains (losses)

$

(493)
623

$

(493)
623

/

$

130

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the Consolidated Statements ofOperations.
2. Transactions are related to temperature and others.

152

Non-Consolidated Financial Statements ofMizuho Financial Group, Inc. and Four
Subsidiaries
Mizuho Financial Group, Inc.
Non-Consolidated Balance Sheets154

Non-Consolidated Statements of Operations

154

Mizuho Corporate Bank, Ltd.
Non-Consolidated Balance Sheets

155

Non-Consolidated Statements of Operations

156

Mizuho Bank, Ltd.
Non-Consolidated Balance Sheets

157

Non-Consolidated Statements of Operations

158

Mizuho Trust & Banking Co., Ltd.
Non-Consolidated Balance Sheets

159

Non-Consolidated Statements of Operations

160

Mizuho Securities Co., Ltd.
Non-Consolidated Balance Sheets

161

Non-Consolidated Statements of Operations

162

153

Non-Consolidated Financial Statements of Mizuho Financial Group, Inc. and Four Subsidiaries

Mizuho Financial Group, Inc.

Non-Consolidated Balance Sheets
Millions of yen
2005

At March 31,

AssetsCurrent Assets
Cash and Due from Banks
Other Current Assets
Non-Current Assets
Tangible Assets
Intangible Assets
Investments in Subsidiaries and Affiliates (Stocks)
Other Investments
Deferred Assets
Total Assets
Liabilities and Shareholders' Equity
Liabilities
Current Liabilities
Commercial Paper
Other Current Liabilities
Non-Current Liabilities¥

79,7822,601
77,181
3,098,215
925
4,477
3,089,775
3,037
609

Total Shareholders' Equity
Total Liabilities and Shareholders' Equity

2004

3,940
1,231
2,709
3,595,229
1,014
3,903
3,588,866
1,446
914

$

742,785
24,216
718,569
28,844,763
8,616
41,69028,766,179
28,278
5,675¥ 3,178,608¥ 3,600,085$ 29,593,223

¥

¥

$

191,247
152,000
39,247
1,130

Total Liabilities
Shareholders' Equity
Common Stock and Preferred Stock
Capital Surplus
Retained Earnings
Appropriated Reserves
Unappropriated Retained Earnings
Net Unrealized Losses on Other Securities, net of Taxes
Treasury Stock¥

Thousands of
U.S. dollars
2005

66,01865,0001,018
568

1,780,541
1,415,138
365,403
10,522

192,378

66,587

1,791,063

1,540,965
1,512,942
192,970
4,350
188,620(24)(260,622)

1,540,965
1,752,885
239,832
4,350
235,482(10)(174)

14,346,569
14,085,674
1,796,578
40,4991,756,079(232)(2,426,429)

2,986,230

3,533,497

27,802,160¥ 3,178,608¥ 3,600,085$ 29,593,223

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥107.41=US$1.00, the foreign exchange rate on March 31, 2005, has been used for translation.

Non-Consolidated Statements of Operations
Millions of yen
2005

For the Fiscal Years ended March 31,

Operating Income
Cash Dividends Received from Subsidiaries and Affiliates (Stocks)
Fees and Commissions Received from Subsidiaries and Affiliates

¥

¥

2004

25,748
14,836
10,911$ 246,660
127,889
118,771

Operating Expenses
General and Administrative Expenses

11,799
11,79911,761
11,761

109,852
109,852

Operating Profits
Non-operating Income
Non-operating Expenses

14,69473,69356,94013,986432
3,588

136,808
686,095
530,121

Income before Income Taxes
Income Taxes:
Current
Deferred

31,447

10,831

292,782

4
556

559
334

45
5,181

9,936

$ 287,556

Net Income¥

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥107.41=US$1.00, the foreign exchange rate on March 31, 2005, has been used for translation.

154

26,493
13,736
12,757

Thousands of
U.S. dollars
2005

30,886¥

Non-Consolidated Financial Statements of Mizuho Financial Group, Inc. and Four Subsidiaries

Mizuho Corporate Bank, Ltd.

Non-Consolidated Balance Sheets
2004

Thousands of
U.S. dollars
2005¥ 2,705,567
366,161
560,095
1,905,791
102,848
3,139,093
2,002
16,150,759
24,059,414
580,630
3,371,405
142,4232
357,427
2,893,287(377,911)(6,299)¥ 3,468,597
283,436
1,273,316
2,725,918
120,726
2,973,185
4,754
18,482,622
23,703,886
457,593
3,387,387
166,61418
534,4772,773,479(434,250)(67)$ 25,189,158
3,409,003
5,214,552
17,743,151
957,532
29,225,337
18,640150,365,512
223,996,037
5,405,739
31,388,193
1,325,976
27
3,327,690
26,936,852(3,518,401)(58,649)¥ 55,952,699¥ 59,921,696$ 520,926,349¥ 23,589,172
5,547,662
7,223,622
3,936,149
2,332,412
210,000
2,108,692
2,356,414
291,520
260,300
123,100
2,557,876
2,271
10,10829,912
2,893,287¥ 22,157,982
6,743,929
9,743,569
3,567,653
4,781,320
215,000
2,131,091
2,302,632
355,264
180,000
263,100
2,405,055
2,418
131,749
35,3002,773,479$ 219,618,026
51,649,403
67,252,790
36,646,027
21,715,045
1,955,125
19,632,182
21,938,500
2,714,092
2,423,424
1,146,076
23,814,133
21,147
94,107
278,490
26,936,852

53,472,502

57,789,545

497,835,419

1,070,965
258,247
680,757
2,500
678,257
43,691
426,535

1,070,965
258,247
388,783—
388,783
51,539362,6149,970,813
2,404,315
6,337,931
23,275
6,314,656
406,770
3,971,101

Millions of yen
2005

At March 31,

AssetsCash and Due from Banks
Call Loans
Receivables under Resale Agreements
Guarantee Deposits Paid under Securities Borrowing Transactions
Other Debt Purchased
Trading Assets
Money Held in Trust
Securities
Loans and Bills Discounted
Foreign Exchange Assets
Other Assets
Premises and Equipment
Deferred Debenture Charges
Deferred Tax Assets
Customers' Liabilities for Acceptances and Guarantees
Reserves for Possible Losses on Loans
Reserve for Possible Losses on Investments
Total Assets
Liabilities and Shareholders' Equity
Liabilities
Deposits
Debentures
Call Money and Bills Sold
Payables under Repurchase Agreements
Guarantee Deposits Received under Securities Lending Transactions
Commercial Paper
Trading Liabilities
Borrowed Money
Foreign Exchange Liabilities
Short-term Bonds
Bonds and Notes
Other Liabilities
Reserve for Bonus Payments
Reserve for Contingencies
Deferred Tax Liabilities for Revaluation Reserve for Land
Acceptances and Guarantees
Total Liabilities
Shareholders' Equity
Common Stock and Preferred Stock
Capital Surplus
Retained Earnings
Appropriated Reserves
Unappropriated Retained Earnings
Revaluation Reserve for Land, net of Taxes
Net Unrealized Gains on Other Securities, net of Taxes
Total Shareholders' Equity
Total Liabilities and Shareholders' Equity

2,480,196

2,132,150

23,090,930¥ 55,952,699¥ 59,921,696$ 520,926,349

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥107.41=US$1.00, the foreign exchange rate on March 31, 2005, has been used for translation.

155

Non-Consolidated Financial Statements of Mizuho Financial Group, Inc. and Four Subsidiaries

Mizuho Corporate Bank, Ltd.

Non-Consolidated Statements of Operations
Millions of yen
2005

For the Fiscal Years ended March 31,

Thousands of
U.S. dollars
2005

2004

IncomeInterest Income
Loans and Bills Discounted
Securities
Fee and Commission Income
Trading Income
Other Operating Income
Other Income¥

Total Income

705,631359,228
243,088
136,631
15,765131,015
389,709$6,569,517
3,344,464
2,263,185
1,272,056
146,779
1,219,772
3,628,238

1,422,867

12,836,362

349,145
106,485
62,44437,355—51,766
216,879
320,396

329,575
72,712
84,94240,514465
91,626226,254
145,808

3,250,588
991,390581,368
347,785—
481,955
2,019,177
2,982,929

Total Expenses
Income before Income Taxes
Income Taxes:
Current
RefundDeferred¥

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥107.41=US$1.00, the foreign exchange rate on March 31, 2005, has been used for translation.

156

742,275
408,942
260,485
129,877
55,192
197,586
297,935

1,378,753

Expenses
Interest Expenses
Deposits
Debentures
Fee and Commission Expenses
Trading Expenses
Other Operating Expenses
General and Administrative Expenses
Other Expenses

Net Income¥

975,544834,244

9,082,434

403,209588,623

3,753,928

35
21,228128,01171—
248,363326
197,641
1,191,799

296,391¥

340,188$2,759,444

Non-Consolidated Financial Statements of Mizuho Financial Group, Inc. and Four Subsidiaries

Mizuho Bank, Ltd.

Non-Consolidated Balance Sheets
2004

Thousands of
U.S. dollars
2005¥ 4,871,986
1,908,200
401,2022,497,765
335,946
783,816169
21,121,490
34,063,135
126,180
1,619,133
780,566300
589,021
1,838,888(347,514)(88,665)¥ 4,695,419
4,269,900—
3,175,215
182,827
720,641—
15,238,948
37,001,430
146,193
1,551,238
867,535
428
707,488
1,912,132(460,530)(179,384)$ 45,358,783
17,765,571
3,735,244
23,254,499
3,127,698
7,297,424
1,581
196,643,618
317,131,880
1,174,759
15,074,330
7,267,172
2,802
5,483,861
17,120,271(3,235,405)(825,490)¥ 70,501,625¥ 69,829,484$ 656,378,598¥ 56,382,325
2,346,925
2,042,100
202,328
1,997,832
517,939
1,406,757
19,433
159,300
1,653,684
7,008
—
51
106,072
1,838,888¥ 54,647,737
2,810,806
2,135,200
7,119
2,932,870
600,955
1,538,115
14,989—1,344,260
7,298
2—
123,166
1,912,132$ 524,926,219
21,850,162
19,012,196
1,883,705
18,600,064
4,822,077
13,097,082
180,928
1,483,102
15,396,001
65,246—479
987,546
17,120,271

68,680,647

68,074,656

639,425,078

650,000
762,345
232,471
232,471
155,253
20,906650,000
762,345
195,070
195,070
180,199(32,787)

6,051,578
7,097,531
2,164,337
2,164,337
1,445,432
194,642

1,820,977

1,754,828

16,953,520¥ 70,501,625¥ 69,829,484$ 656,378,598

Millions of yen
2005

At March 31,

AssetsCash and Due from Banks
Call Loans and Bills Purchased
Receivables under Resale Agreements
Guarantee Deposits Paid under Securities Borrowing Transactions
Other Debt Purchased
Trading Assets
Money Held in Trust
Securities
Loans and Bills Discounted
Foreign Exchange Assets
Other Assets
Premises and Equipment
Deferred Debenture Charges
Deferred Tax Assets
Customers' Liabilities for Acceptances and Guarantees
Reserves for Possible Losses on Loans
Reserve for Possible Losses on Investments
Total Assets
Liabilities and Shareholders' Equity
Liabilities
Deposits
Debentures
Call Money and Bills Sold
Payables under Repurchase Agreements
Guarantee Deposits Received under Securities Lending Transactions
Trading Liabilities
Borrowed Money
Foreign Exchange Liabilities
Bonds and Notes
Other Liabilities
Reserve for Bonus Payments
Reserve under Special Law
Reserve for Frequent Users Services
Deferred Tax Liabilities for Revaluation Reserve for Land
Acceptances and Guarantees
Total Liabilities
Shareholders' Equity
Common Stock and Preferred Stock
Capital Surplus
Retained Earnings
Unappropriated Retained Earnings
Revaluation Reserve for Land, net of Taxes
Net Unrealized Gains (Losses) on Other Securities, net of Taxes
Total Shareholders' Equity
Total Liabilities and Shareholders' Equity

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥107.41=US$1.00, the foreign exchange rate on March 31, 2005, has been used for translation.

157

Non-Consolidated Financial Statements of Mizuho Financial Group, Inc. and Four Subsidiaries

Mizuho Bank, Ltd.

Non-Consolidated Statements of Operations
Millions of yen
2005

For the Fiscal Years ended March 31,

Thousands of
U.S. dollars
2005

2004

IncomeInterest Income
Loans and Bills Discounted
Securities
Fee and Commission Income
Trading Income
Other Operating Income
Other Income¥

Total Income

668,085
552,498
65,245234,227
28,267138,135
85,014

6,219,958
5,143,826
607,443
2,180,685
263,173
1,286,055
791,496
10,741,367

75,42423,493
6,224
53,115568
46,158578,549
290,146

79,71023,9298,759
55,3091,491
47,189617,252
307,440

702,208
218,726
57,949494,5135,293
429,742
5,386,362
2,701,297

1,043,962

1,108,393

9,719,415

109,767

238,829

1,021,952

518
87,119476
140,143

4,830
811,091¥

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥107.41=US$1.00, the foreign exchange rate on March 31, 2005, has been used for translation.

158$

1,347,222

Income before Income Taxes
Income Taxes:
Current
Deferred
Net Income

722,349
619,248
75,511
208,774
57,982
165,625
192,491

1,153,730

Expenses
Interest Expenses
Deposits
Debentures
Fee and Commission Expenses
Trading Expenses
Other Operating Expenses
General and Administrative Expenses
Other Expenses
Total Expenses¥

22,129¥98,208$206,031Non-Consolidated Financial Statements of Mizuho Financial Group, Inc. and Four Subsidiaries

Mizuho Trust & Banking Co., Ltd.

Non-Consolidated Balance Sheets
Millions of yen
2005

At March 31,

AssetsCash and Due from Banks
Call Loans
Other Debt Purchased
Trading Assets
Securities
Loans and Bills Discounted
Foreign Exchange Assets
Other Assets
Premises and Equipment
Deferred Tax Assets
Customers' Liabilities for Acceptances and Guarantees
Reserves for Possible Losses on Loans
Reserve for Possible Losses on Investments
Total Assets¥

633,355
100,000
109,363
34,0491,690,770
3,265,381
1,366
157,035
43,874
58,133140,085(36,673)—¥

Thousands of
U.S. dollars
2005

2004

290,394
100,000
102,704
58,7201,382,692
3,093,331
1,808
165,070
42,91989,259161,981(23,551)(676)$

5,896,620
931,0121,018,190
317,00915,741,272
30,401,093
12,7201,462,023
408,478
541,229
1,304,216(341,438)—¥ 6,196,743¥ 5,464,653$ 57,692,424¥ 3,364,789
680,370
214,706
40,381
83,210
6
104,100
1,149,320
37,161
1,278
8,555
140,085¥ 3,090,103
237,244
181,831
64,250101,2739
89,1001,158,712
34,707
1,249
8,747
161,981$ 31,326,597
6,334,331
1,998,939
375,961
774,69864
969,184
10,700,316
345,974
11,90379,6491,304,216

5,823,966

5,129,211

54,221,832

Common Stock and Preferred Stock247,231247,2312,301,759

Capital Surplus
Retained Earnings
Appropriated Reserves
Unappropriated Retained Earnings
Net Unrealized Gains on Other Securities, net of Taxes
Treasury Stock

12,21552,785
1,634
51,15060,601(57)

12,21330,018—30,01846,008(30)

113,726
491,438
15,221
476,217564,204(535)

Liabilities and Shareholders' Equity
Liabilities
Deposits
Call Money and Bills Sold
Guarantee Deposits Received under Securities Lending Transactions
Trading Liabilities
Borrowed Money
Foreign Exchange Liabilities
Bonds and Notes
Due to Trust Accounts
Other Liabilities
Reserve for Bonus Payments
Reserve for Employee Retirement Benefits
Acceptances and Guarantees
Total Liabilities
Shareholders' Equity

Total Shareholders' Equity
Total Liabilities and Shareholders' Equity

372,776

335,4423,470,592¥ 6,196,743¥ 5,464,653$ 57,692,424

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥107.41=US$1.00, the foreign exchange rate on March 31, 2005, has been used for translation.

159

Non-Consolidated Financial Statements of Mizuho Financial Group, Inc. and Four Subsidiaries

Mizuho Trust & Banking Co., Ltd.

Non-Consolidated Statements of Operations
Millions of yen
2005

For the Fiscal Years ended March 31,

2004

Thousands of
U.S. dollars
2005

IncomeFiduciary Income
Interest Income
Loans and Bills Discounted
Securities
Fee and Commission Income
Trading Income
Other Operating Income
Other Income¥

Total Income
Expenses
Interest Expenses
Deposits
Borrowings and Rediscounts
Fee and Commission Expenses
Trading Expenses
Other Operating Expenses
General and Administrative Expenses
Other Expenses
Total Expenses
Income before Income Taxes
Income Taxes:
Current
Deferred
Net Income¥

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥107.41=US$1.00, the foreign exchange rate on March 31, 2005, has been used for translation.

160

62,807
66,61951,227
14,54450,222
424
7,915
16,800¥62,04570,602
51,92816,471
40,566707
11,97041,364$

584,743
620,232
476,937
135,411467,575
3,952
73,695
156,414204,789

227,256

1,906,611

28,163
8,198
1,486
16,450—1,044
77,147
29,83633,441
9,981
2,034
15,9292
2,794
79,25544,498262,206
76,33013,835
153,158—
9,726
718,249
277,777

152,642

175,922

1,421,116

52,14751,334

485,495

54
21,151

47
21,268508
196,92130,941¥30,018$288,066

Non-Consolidated Financial Statements of Mizuho Financial Group, Inc. and Four Subsidiaries

Mizuho Securities Co., Ltd.

Non-Consolidated Balance Sheets
Millions of yen
2005

At March 31,

AssetsCash and Cash Equivalents
Cash and Cash Equivalents Segregated as Deposits
Receivables:
Unsettled Trades
Accrued Income
Other
Trading Assets
Securities Purchased under Resale Agreements
Securities Borrowed
Property, Equipment and Leasehold Improvements, at Cost
Less: Accumulated Depreciation
Investments in Securities
Deferred Tax Assets
Other Assets
Total Assets
Liabilities and Shareholders' Equity
Liabilities
Short-term Borrowings
Commercial Paper
Payables:Unsettled Trades
Other Payables to Customers
Other
Trading Liabilities
Securities Sold under Repurchase Agreements
Securities Loaned
Accrued Liabilities and Other:
Income Taxes Payable
Other
Long-term Borrowings
Bonds Issued
Deferred Tax Liabilities
Statutory Reserves
Total Liabilities¥

43,205
8,137

2004

35,211
6,086$

402,248
75,763—
13,17035,151
6,090,476
126,448
5,099,941
10,865(5,724)
188,754
6,392
17,963

121,534
8,876
20,0912,889,826—
3,011,229
10,167(4,762)
199,128
3,815
30,089—122,615
327,263
56,703,066
1,177,255
47,481,070
101,157(53,299)
1,757,324
59,514
167,247¥ 11,634,782¥ 6,331,295$ 108,321,223¥ 1,680,152
297,200¥

767,056
237,800$ 15,642,422
2,766,968

210,8446,616
3,044
4,360,335
426,323
3,939,084

—
3,100
3,435
2,644,249
206,7712,024,617

1,962,989
61,603
28,34540,595,245
3,969,126
36,673,354

11,00330,017
144,634
148,400
7,046
1,268

15,862
17,00535,50075,40012,700804

102,446
279,463
1,346,563
1,381,622
65,604
11,813

11,265,973

6,044,304

104,887,563

195,146
125,288
34,064
14,310150,200
95,324
20,38721,0781,816,833
1,166,451
317,145
133,231

Shareholders' Equity
Common Stock
Capital Surplus
Retained Earnings
Net Unrealized Gains on Other Securities, net of Taxes
Total Shareholders' Equity
Total Liabilities and Shareholders' Equity¥

Thousands of
U.S. dollars
2005

368,809

286,990

3,433,660¥ 11,634,782¥ 6,331,295$ 108,321,223

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥107.41=US$1.00, the foreign exchange rate on March 31, 2005, has been used for translation.

161

Non-Consolidated Financial Statements of Mizuho Financial Group, Inc. and Four Subsidiaries

Mizuho Securities Co., Ltd.

Non-Consolidated Statements of Operations
Millions of yen
2005

For the Fiscal Years ended March 31,

2004

Thousands of
U.S. dollars
2005

IncomeCommission Income
Trading Income
Interest and Dividend Income
Other Income¥ 49,108
47,891
6,604
2,861¥ 34,162
40,2658,460
903$ 457,204
445,874
61,487
26,637

Subtotal
Less: Interest Expenses

106,465(10,983)

83,792(4,618)991,202(102,253)

Total Income

95,481

79,174

888,949

52,884
2,909

42,117822

492,360
27,08655,79342,939519,446

39,68836,234

369,503

19,084(3,587)

18,877(3,449)177,678(33,399)¥ 24,191¥ 20,807$ 225,224

Expenses
Selling, General and Administrative Expenses
Other Expenses
Total Expenses
Income before Income Taxes
Income Taxes:
Current
Deferred
Net Income

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥107.41=US$1.00, the foreign exchange rate on March 31, 2005, has been used for translation.

162

Senior Executives of Mizuho

Mizuho Financial Group

Mizuho Corporate Bank

Mizuho Bank

Board of Directors

Board of Directors

Board of Directors

Terunobu Maeda*

Hiroshi Saito*

Seiji Sugiyama*

President & CEO

President & CEO

President & CEO

Shunichi Asada*

Tsunehiro Nakayama*

Tsutomu Abe*

Deputy President

Deputy President

Deputy President

Head of Internal Audit Group /Chief Auditor (CA)Head of Internal Audit Group

Satoru Nishibori*

Deputy PresidentManaging Director

Masayoshi Kanaji*

Head of Financial Control and Accounting
Group / Chief Financial Officer (CFO)

Takashi Okimoto*Tetsuji Kosaki*

Norimasa Kuroda*

Managing Director

Managing Director

Head of Strategic Planning Group and Headof IT, Systems & Operations Group / Chief
Strategy Officer (CSO) / Chief Information
Officer (CIO)

Head of International Banking Unit

Deputy President

Toshikazu Kitano*

Saburo Nishiura*
Deputy President

Mitsuru Machida*
Managing Director

Tetsuo Narukawa*
Managing Director

Kiyotaka Noborihayashi*Managing Director

Managing Director

Haruhisa Shiraishi*
Managing Director

Director

Head of Corporate Banking Unit
Chief Information Officer / Head of IT &Systems Group

Seiji Sugiyama

Mareto Sako*

Director

Managing Director

Nobuyoshi Naka

Hiroshi Saito

Yoshiharu Fukuhara
Director

Mitsuo Ohashi
Director

Glen S. Fukushima
Director

Corporate Auditors
Yoshiaki Sugita
Corporate Auditor

Junichi Iwabuchi
Corporate Auditor

Yukio Nozaki
Corporate Auditor

Masahiko Kadotani
Corporate Auditor

Chief Strategy Officer / Head of Strategic
Planning Group
Chief Financial Officer / Head of Financial
Control & Accounting Group

Shigeru Matsuura
Corporate Auditor

Toshiaki Hasegawa
Corporate Auditor

Tsuyoshi Kusumoto

Junichi Iwabuchi

Corporate Auditor

Hajime Tsuji
Corporate Auditor

Yukio Nozaki
Corporate Auditor

Yoshiaki Sugita
Corporate Auditor

Corporate Auditor

Mizuho Securities
Board of Directors
Makoto Fukuda
President

Yoneo Sakai

Executive Officers

Deputy President

Masatsugu Nagato

Keisuke Yokoo

Managing Executive Officer

Deputy President

Head of the Americas

Corporate Auditor

Takashi Tsukamoto

Shigeyoshi Nishiyama
Deputy PresidentManaging Executive Officer
Head of Europe, Africa and the Middle East

Masayuki Saito

Yasufumi Miyazaki

Managing Executive Officer

Managing Executive Officer

Head of Risk Management Group, Head of Human
Resources Group and Head of Compliance Group /Chief Risk Officer (CRO) / Chief Human Resources
Officer (CHRO) / Chief Compliance Officer (CCO)

Head of Asia and Oceania

Hiroshi Kiyama

Corporate Auditor

Corporate Auditors

Toshiaki Hasegawa

Executive Officers

Corporate Auditors

Mizuho Trust & Banking
Board of Directors
Teruhiko Ikeda
President and CEO

Hidehiko Naito

Executive Officer

Deputy President

General Manager of Corporate Planning

Chiharu Baba

Yoshiaki Ohashi

Deputy President

Executive Officer
General Manager of Corporate Communications

Tetsuro Sugiura
Executive Officer
Managing Executive Officer
Mizuho Research Institute, Ltd.

Notes: 1. * Indicates Directors concurrently serving as Executive Officers.
2. Executive Officers, excluding the Directors concurrently serving as Executive Officers and Executive Officers responsible for
global regional operations and the head of the International Banking Unit of Mizuho Corporate Bank, have not been listed.
3. Executive Officers, excluding Directors concurrently serving as Executive Officers of Mizuho Bank, have not been listed.
4. Members of the Board of Directors other than the President and the Deputy Presidents, and the Corporate Auditors as wellas the Executive Officers of Mizuho Securities, have not been listed.
5. Members of the Board of Directors other than the President and CEO and the Deputy Presidents, and the Corporate
Auditors as well as the Executive Officers of Mizuho Trust & Banking, have not been listed.

(As of June 28, 2005)

163

Office Network of Mizuho

Domestic Network of Mizuho(As of March 31, 2005)

Mizuho Financial Group

Mizuho Corporate Bank

Mizuho Securities

Head Office

Head Office and Branches: 18

Head OfficeMizuho Bank

Mizuho Trust & Banking

Head Office and Branches: 491
Sub-branches: 99
Agencies: 23

Head Office and Branches: 37
Sub-branch: 1

International Network of Mizuho
Asia and Oceania(Country/Region)
China(As of August 1, 2005)
Hong Kong

Hong Kong Branch
17th Floor, Two Pacific Place, 88 Queensway,
Hong Kong, S.A.R., The People's Republic of China
TEL 852-2103-3000

Level 34, Menara Maxis, Kuala Lumpur City
Centre, 50088 Kuala Lumpur, Malaysia
TEL 60-3-2070-6595

Philippines

Mizuho Capital Markets (HK) Limited

Manila Branch

8th Floor, Chang-Fu-Gong Office Building, Jia 26,
Jianguomenwai Street, Chaoyang District,
Beijing 100022, The People's Republic of China
TEL 86-10-6525-1888

16th Floor, Two Pacific Place, 88 Queensway,
Hong Kong, S.A.R., The People's Republic of China
TEL 852-2537-3815

26th Floor, Citibank Tower, Valero Street corner
Villar Street, Salcedo Village, Makati City,
Metro Manila, Philippines
TEL 63-2-848-0001

Dalian Branch901-907, Level 9, CITIC Tower,
1 Tim Mei Avenue, Central, Hong Kong, S.A.R.,
The People's Republic of China
TEL 852-2685-2000

Beijing Branch

6th Floor, Senmao Building, Zhongshan
Road 147, Xigang District, Dalian 116011,
The People's Republic of China
TEL 86-411-8360-2543

Shanghai Branch
25th Floor, HSBC TOWER, 101 Yin Cheng
East Road, Pudong New Area, Shanghai
200120, The People's Republic of China
TEL 86-21-6841-0001

Mizuho Securities Asia Limited*India

Mumbai Branch
Maker Chamber III , 1st Floor, Jamnalal Bajaj Road,
Nariman Point, Mumbai, 400021 India
TEL 91-22-2288-6638

Shenzhen Branch

New Delhi Representative Office

21st Floor, Shenzhen International Financial
Building, Jian She Lu, Shenzhen, Guangdong
Province 518001, The People's Republic of China
TEL 86-755-8222-1918

DBS Business Centre, 1st Floor, World Trade Tower,
Barakhamba Lane, New Delhi 110 001 India
TEL 91-11-2341-2190

Guangzhou Representative Office
12th Floor, Garden Tower, 368 Huanshi
Dong Lu, Guangzhou 510064,
The People's Republic of China
TEL 86-20-8385-8000

Nanjing Representative Office
Room 801, Nanjing Grand Hotel, 208 Guangzhou
Road, Nanjing, Jiangsu Province 210024,
The People's Republic of China
TEL 86-25-8332-9379

Tianjin Representative Office
Room 2202, Tianjin International Building 75,
Nanjing Road, Tianjin 300050,
The People's Republic of China
TEL 86-22-2330-5448

Wuhan Representative Office
Room 411, Shangri-la Hotel, 700 Jian She Dadao,
Wuhan 430015, The People's Republic of China
TEL 86-27-8578-1155

Xiamen Representative Office
Room 2102, The Bank Center,
No.189 Xiahe Road, Xiamen, Fujian 361003,
The People's Republic of China
TEL 86-592-239-5571

Indonesia

PT. Bank Mizuho Indonesia
Plaza Bll Menara 2, 24th Floor, JL., M.H. Thamrin
No. 51, Jakarta 10350, Indonesia
TEL 62-21-392-5222

Singapore

Singapore Branch
168 Robinson Road, #13-00 Capital Tower,
Singapore 068912, Republic of Singapore
TEL 65-6423-0330

Mizuho Futures (Singapore) Pte.
Limited*Six Battery Road, #18-05 Singapore 049909,
Republic of Singapore
TEL 65-6221-3633

TaiwanKaohsiung Branch
12th Floor, No.2, Chung Cheng 3rd Road,
Kaohsiung 800, Taiwan
TEL 886-7-236-8768

Taipei Branch
2nd Floor, Hung Kuo Building, 167 Tun Hua
North Road, Taipei 105, Taiwan
TEL 886-2-2715-3911

Korea

Seoul Branch
8th Floor, Seoul City Tower, 581, Namdaemunro,
5-ka, Chung-ku, Seoul, Republic of Korea
TEL 822-3782-8500

Malaysia

Labuan Branch
Level 9 (B) & (C), Main Office Tower, Financial
Park Labuan, Jalan Merdeka, 87000
Federal Territory of Labuan, Malaysia
TEL 60-87-417766

Labuan Branch, Kuala Lumpur
Marketing Office
Level 34, Menara Maxis, Kuala Lumpur City
Centre, 50088 Kuala Lumpur, Malaysia
TEL 60-3-2070-6880

Note: All overseas offices are those of Mizuho Corporate Bank except for offices indicated as follows:* Subsidiary of Mizuho Securities** Subsidiary of Mizuho Trust & Banking*** Subsidiary of DLIBJ Asset Management

164

Kuala Lumpur Representative Office

Thailand

Bangkok Branch
18th Floor, TISCO Tower, 48 North Sathorn Road,
Silom, Bangrak, Bangkok 10500, Thailand
TEL 66-2-638-0200

Mizuho Corporate Leasing (Thailand)Co., Ltd.
19th Floor, TISCO Tower 48/44 North Sathorn
Road, Silom, Bangrak, Bangkok 10500, Thailand
TEL 66-2-638-0900

Vietnam

United Kingdom

U.S.A.

Hanoi Branch

London Branch

Chicago Branch

Suite 403~407, 63 LTT Building,
63 Ly Thai To Street, Hanoi,
Socialist Republic of Vietnam
TEL 84-4-9363-123

River Plate House, 7-11 Finsbury Circus,
London EC2M 7DH, UK
TEL 44-20-7012-4000

311 South Wacker Drive, Suite 2020,
Chicago, IL 60606, U.S.A.
TEL 1-312-855-1111

DLIBJ Asset Management
International Ltd.***New York Branch

Ho Chi Minh City Representative
Office7th Floor, The Landmark, 5B Ton Duc Thang
Street, District 1, Ho Chi Minh City,
Socialist Republic of Vietnam
TEL 84-8-8228-638

Australia

Sydney Branch
Level 33, 60 Margaret Street, Sydney, N.S.W. 2000,
Australia
TEL 61-2-8273-3888

Europe and the Middle East(Country/Region)
AustriaMizuho Corporate Bank-BA
Investment Consulting GmbH
Landhausgasse 4/7, 1010 Vienna, Austria
TEL 43-1-5355868

FranceBracken House, One Friday Street,
London, EC4M 9JA, UK
TEL 44-20-7329-3777

Mizuho Capital Markets (UK) LimitedRiver Plate House, 7-11 Finsbury Circus,
London EC2M 7DH, UK
TEL 44-20-7972-9900

Mizuho International plc*
Bracken House, One Friday Street,
London EC4M 9JA, UK
TEL 44-20-7236-1090

Bahrain

Bahrain Representative Office
Suite 201-202, Entrance 4,
2nd Floor, Manama Center, Manama, Bahrain(P.O. BOX 5759, Manama, Bahrain)
TEL 973-17-224522

Iran

Germany

Düsseldorf Branch
Königsallee 60 D, 40212 Düsseldorf,
F.R. Germany
TEL 49-211-13020

Mizuho Corporate Bank (Germany)
Aktiengesellschaft
Taunustor 2, 60311 Frankfurt am Main,
F.R. Germany
TEL 49-69-27282-0

Luxembourg

Mizuho Trust & Banking(Luxembourg) S.A.**
1B, Parc d'Activité Syrdall, L-5365 Munsbach,Grand Duchy of Luxembourg
TEL 352-4216171

Switzerland

Mizuho Bank (Switzerland) Ltd.*
Loewenstrasse 32, 8023 Zurich, Switzerland
TEL 41-1-216-9111

The Netherlands

Mizuho Corporate Bank Nederland N.V.
Apollolaan 171, 1077 AS, Amsterdam,
The Netherlands
TEL 31-20-5734343

Los Angeles Agency
350 South Grand Avenue, Suite 1500,
Los Angeles, CA 90071, U.S.A.
TEL 1-213-243-4500

Houston Representative Office5051 Westheimer Road, Galleria Tower II,
Suite 710, Houston, Texas 77056, U.S.A.
TEL 1-713-499-4800

DLIBJ Asset Management U.S.A.
Inc.***
1133 Avenue of the Americas, 28th Floor,
New York, NY 10036, U.S.A.
TEL 1-212-350-7650

Mizuho Capital Markets Corporation
1440 Broadway, 25th Floor,
New York, NY 10018, U.S.A.
TEL 1-212-547-1500

Tehran Representative OfficeMizuho Corporate Bank of California

3rd Floor, No.1, 14th Street,
Khaled Eslamboli Avenue, Tehran 15117, IranTEL 98-21-8872-6593

350 South Grand Avenue, Suite 1500,
Los Angeles, CA 90071, U.S.A.
TEL 1-213-612-2700

Paris Branch
Washington Plaza 40, rue Washington,
75408 Paris Cedex 08, France
TEL 33-1-5383-4100

1251 Avenue of the Americas,
New York, NY 10020, U.S.A.
TEL 1-212-282-3000

Mizuho Corporate Bank (USA)The Americas(Country/Region)

1251 Avenue of the Americas,
New York, NY 10020, U.S.A.
TEL 1-212-282-3030

Mizuho Securities USA Inc.*
BrazilSão Paulo Representative Office
Avenida Paulista, 1274-11° andar,
Bela Vista, São Paulo, SP,
CEP. 01310-925, Brazil
TEL 55-11-3251-4199

CanadaMizuho Corporate Bank (Canada)
100 Yonge Street, Suite1102, Toronto, Ontario,
Canada M5C 2W1
TEL 1-416-874-0222

Waterfront Corporate Center, 111 River Street,
11th Floor, Hoboken, NJ 07030, U.S.A.
TEL 1-201-626-1000

Mizuho Trust & Banking Co. (USA) **666 Fifth Avenue, Suite 802,
New York, NY 10103 , U.S.A.
TEL 1-212-373-5900

The Bridgeford Group, Inc.*
445 Park Avenue, 20th Floor,
New York, NY 10022, U.S.A.
TEL 1-212-705-0880

Cayman Islands

Cayman Branch
Coutts House, 1446 West Bay Road,
P.O. Box 707GT, Grand Cayman, Cayman Islands,
British West Indies

MexicoMexico Representative Office
Edificio Omega, Campos Eliseos No.345-11,
Col. Chapultepec Polanco, Deleg. MiguelHidalgo, 11560 Mexico, D.F., Mexico
TEL 52-55-5281-5037

165

Investor Information on Mizuho Financial Group, Inc.

of shares effectively held by Resona Trust & Banking Co., Ltd. and
Deposit Insurance Corporation of Japan as of the end of the fiscal
period in question, and as such, their holdings are not included in
the above table. It should be noted that, while the Resolution andCollection Corporation and Kanebo, Ltd. are named as joint shareholders in the aforementioned Notification of Change inShareholdings, the details of the shares listed as being held by The
Resolution and Collection Corporation in the Report on Large
Shareholdings match the information in the Mizuho Financial Group's
shareholder registry for preferred shares as at the end of the subject
fiscal period, and the details of the shares listed as being held byKanebo, Ltd. match the information in Mizuho Financial Group's
shareholder registry for common shares as at the end of the subject
fiscal period. Accordingly, they are not included in the table below.

Date of Establishment
January 8, 2003

Paid-in Capital¥1,540,965 million

Outstanding Shares
13,907,425.49 shares
Common Shares: 12,003,995.49 shares
Preferred Shares:
1,903,430 shares

Number of Shareholders
Common Shares:
Preferred Shares:

Content of the Notification of Change in Shareholdings:
Number of shares held
Name
Addressor effectively held
Resona Trust & Banking
1-1-2, Otemachi,Co., Ltd.
Chiyoda-ku, Tokyo
105,050
Deposit Insurance
1-12-1,Yurakucho,
Corporation of Japan
Chiyoda-ku, Tokyo
120,319

253,876
3,414

Principal Shareholders(Common Shares)

Name of Shareholders

Mizuho Holdings, Inc.

Percentageof shares
outstanding
Shares held(%)

1,155,840.83

9.62

The Master Trust Bank of Japan, Ltd.
(Trustee account)

609,088.00

5.07

Japan Trustee Services Bank, Ltd.
(Trustee account)

565,950.00

4.71

409,136.00

3.40

The Dai-ichi Mutual Life Insurance
Company

279,158.00

2.32

STATE STREET BANK AND TRUSTCOMPANY 505103(Standing proxy agent:Mizuho Corporate Bank, Ltd.)

151,448.00

137,072.00

1.26

1.14

Trust & Custody Services Bank, Ltd.
(Meiji Yasuda Life Insurance Company
Retirement Benefit Trust Accountre-entrusted by Mizuho Trust &Banking Co., Ltd.)
137,000.00

1.14

Nippon Life Insurance Company

1.10

THE CHASE MANHATTAN BANK,
N. A. LONDON(Standing proxy agent:Mizuho Corporate Bank, Ltd.)

0.76
0.87

Note: The figures for “Number of Shares Held” and “%” in the table
above were copied from the Notification of Change inShareholdings.

(Preferred Shares)

ROYAL TRUST CORPORATIONOF CANADA, LONDON-CLIENTSACCOUNT(Standing proxy agent:Standard Chartered Bank)STATE STREET BANK AND TRUSTCOMPANY(Standing proxy agent:Mizuho Corporate Bank, Ltd.)%132,630.76

115,357.00

Percentageof shares
outstanding
Shares held(%)

The Resolution and Collection
Corporation

785,700

41.27

The Dai-ichi Mutual Life Insurance
Company

27,0001.41

Meiji Yasuda Life Insurance Company

25,0001.31

Sompo Japan Insurance Inc.

19,0000.99

FUKOKU MUTUAL LIFE INSURANCECOMPANY

15,0000.78

ITOCHU Corporation

10,0000.52

THE KANSAI ELECTRIC POWER CO., INC.

10,0000.52

Shiseido Company, Limited

10,0000.52

SHIMIZU CORPORATION

10,0000.52

Seiko Epson Corporation

10,000

0.52

TAISEI CORPORATION

10,0000.52

Electric Power Development Co., Ltd.

10,0000.52

The Tokyo Electric Power Company,
Incorporated

10,0000.52

Nippon Express Co., Ltd.

10,0000.52

Marubeni Corporation

10,0000.52

0.96

Notes: 1. The voting rights of the shares held by Mizuho Holdings, Inc. are
restricted, pursuant to Article 241, Paragraph 3 of the JapaneseCommercial Code.
2. A Notification of Change in Shareholdings concerning the Report on
Large Shareholdings in which Resona Trust & Banking Co., Ltd.
Deposit Insurance Corporation of Japan, The Resolution andCollection Corporation, and Kanebo, Ltd. are named as joint shareholders was submitted pursuant to a February 28, 2005 deadline,
and the number of shares held by these entities as of the aforementioned date was reported to be as shown in the table below.
However, Mizuho Financial Group, Inc. could not confirm the number

Notes: 1. In the table above, the figure for the number of preferred shares
held by The Resolution and Collection Corporation is the total for theSecond Series to the Fourth Series of Preferred Shares; the Sixth
Series to the Eighth Series of Preferred Shares: and the Tenth Seriesof Preferred Shares. For other companies, the figures represent the
totals for the Eleventh Series and the Thirteenth Series of Preferred
Shares.
2. Mizuho Financial Group, Inc. holds the following shares as treasury
shares: Second Series Class II Preferred Shares: 38,600 shares; Eighth
Series Class VIII Preferred Shares: 65,700 shares; Ninth Series ClassIX Preferred Shares: 33,000 shares. These shares are not included in
the above table.
(As of March 31, 2005)

166

Stock Listings
Tokyo Stock Exchange
Osaka Securities Exchange

Accounting Auditors
Ernst & Young ShinNihon

Transfer Agent
Mizuho Trust & Banking Co., Ltd.

Fiscal Year
April 1 to March 31

Convocation of General Meetings of Shareholders
A regular general meeting of shareholders of the Company
shall be convened no later than 3 months from the last dayof each business year and an extraordinary general meetingof shareholders shall be convened whenever necessary.

Record Date
The Company shall deem shareholders having voting rights
appearing in writing or digitally on the last register ofshareholders (including the register of beneficial shareholders; the same shall apply hereinafter) as of March 31 ofeach year as the shareholders who shall be entitled to exercise their rights at the regular general meeting of shareholders for the relevant fiscal term.
In addition to the preceding paragraph, the Company
may temporarily set the record date whenever necessary,
pursuant to a resolution of the Board of Directors and upongiving a prior public notice thereof.

Dividends
Dividends on shares shall be paid to the shareholders or
registered pledgees appearing in writing or digitally on thelast register of shareholders as of March 31 of each year or
to the holders of fractional shares appearing in writing or
digitally on the last register of holders of fractional shares
as of March 31 of each year.

Interim Dividends
The Company may, by a resolution of the Board of
Directors, make cash distributions pursuant to the provisions of Article 293-5 of the Commercial Code (referred toas “Interim Dividends” in these Articles of Incorporation) to
the shareholders or registered pledgees appearing in writing or digitally on the last register of shareholders as of
September 30 of each year or to the holders of fractional
shares appearing in writing or digitally on the last registerof holders of fractional shares as of September 30 of each
year.

167

Disclosure Policy of Mizuho

 Voluntary, Proactive Disclosure
By winning the highest regard of our shareholders and the market, we aim to earn the trust of society as Japan's leading comprehensive financial services group. For this reason, we place one of the highest management priorities on continuing to disclose
information to our customers, shareholders, and investors both in and outside Japan in a timely, fair and appropriate manner, inorder that they may form accurate judgments and appraisals of the group.
Specifically, we use the following tools to promote further understanding of the group:*Proactive investor relations (IR) activities conducted both in and outside Japan including IR meetings and other presentations
by top executives, disclosure of these contents on our Web site, and individual meetings with domestic and foreign investors.
*Improvement of the contents of such publications as annual reports and IR presentation materials in Japanese and English aswell as our Web site.
*Effective use of diversified disclosure channels such as conferences in both Japanese and English via the Internet.

 Disclosure in Compliance with Relevant Laws
In accordance with the provisions of the Japanese Banking Law, the Securities and Exchange Law and the relevant regulations laid
down by stock exchanges in Japan and around the world, we will endeavor to disclose pertinent information in a timely andappropriate manner.

Mizuho's IR Home Page

 Strengthening Disclosure Controls
We have established the Disclosure Committee to strengthen our internal control with regard to disclosure.

168

Contact Information

Mizuho Financial Group, Inc.
1-5-5, Otemachi,
Chiyoda-ku, Tokyo 100-0004,
Japan
Tel. +81-(0)3-5224-1111
URL: http://www.mizuho-fg.co.jp/

Mizuho Corporate Bank, Ltd.
1-3-3, Marunouchi,
Chiyoda-ku, Tokyo 100-8210,
Japan
Tel. +81-(0)3-3214-1111
URL: http://www.mizuhocbk.co.jp/

Mizuho Bank, Ltd.
1-1-5, Uchisaiwaicho,
Chiyoda-ku, Tokyo 100-0011,
Japan
Tel. +81-(0)3-3596-1111
URL: http://www.mizuhobank.co.jp/

Mizuho Trust & Banking Co., Ltd.
1-2-1, Yaesu,
Chuo-ku, Tokyo 103-8670,
Japan
Tel. +81-(0)3-3278-8111
URL: http://www.mizuho-tb.co.jp/

Mizuho Securities Co., Ltd.
Otemachi First Square,
1-5-1, Otemachi,
Chiyoda-ku, Tokyo 100-0004,
Japan
Tel. +81-(0)3-5208-3210
URL: http://www.mizuho-sc.com/

This report contains statements concerning the group's future performance.
These statements, however, do not guarantee the ultimate outcome of the group's
performance in the future, and take into consideration the risks and uncertainties that
may be caused by such factors as changes in the business environment.

169