Annual Report(April 2002~March 2003)

Corporate Structure
Mizuho Financial Group, Inc. (MHFG: financial holding company)

Corporate Revitalization

Banking and Securities Business Sector

Mizuho Holdings, Inc.

The Mizuho Financial Group precisely and swiftly meets its customers’ diverse financial
needs through the expertise possessed by and the close collaboration of its groupcompanies, including Mizuho Corporate Bank, which primarily serves large
corporations and overseas corporations, and Mizuho Bank, which deals primarily withindividuals, small, medium-sized, and middle market enterprises as well as securities,
trust banking and asset management companies.

Mizuho Corporate,
Ltd.
Mizuho Corporate
Bank, Ltd. (MHCB)

Mizuho Securities
Co., Ltd. (MHSC)
Mizuho Global, Ltd.
ShinkoSecurities
Co., Ltd.

Mizuho Bank, Ltd.
(MHBK)

History

Financial subsidiaries forcorporate revitalization(MHHD: intermediate holding company for banks
and securities subsidiaries)

Mizuho Investors
Securities Co., Ltd.
(MHIS)

Mizuho Project, Ltd.

Trust and Asset Management Sector

2003 June
May

March

Mizuho Advisory established as the group’s advisory company
for corporate revitalization.

Implementation of the group’s business reorganization.

Trust & Custody Services Bank, Ltd. (TCSB)
Advisory company forcorporate revitalization
Asset management companies
Dai-Ichi Kangyo Asset Management Co., Ltd. (DKA)
Fuji Investment Management Co., Ltd. (FIMCO)DLIBJ Asset Management Co., Ltd. (DIAM)

Mizuho Advisory, Inc.

Mizuho Financial Group, Inc. established.

2002 April

Mizuho Corporate Bank and Mizuho Bank start operations.

2000 October

Mizuho Securities and Mizuho Trust & Banking start operations.

September

Mizuho Asset, Ltd.

Mizuho Corporate, Mizuho Global, Mizuho Project, andMizuho Asset established as the group’s financial subsidiaries
for corporate revitalization.
• Mizuho Holdings was reformed as an intermediate holding company to manage the banking andsecurities business sector.
• Mizuho Securities became a subsidiary of Mizuho Corporate Bank.
• Mizuho Investors Securities became a subsidiary of Mizuho Bank.
• Mizuho Trust & Banking and Mizuho Asset Trust & Banking were merged to create Mizuho Trust & Banking.
• Strategic subsidiaries such as the group's credit card company, asset management company,
and IT-related companies that are the backbone of the entire group's management infrastructure,
were made direct subsidiaries or affiliates of Mizuho Financial Group.

January

Mizuho Trust & Banking Co., Ltd. (MHTB)

Mizuho Holdings established.

Credit card company
UC Card Co., Ltd.
Research institution
Mizuho Research Institute
Information & technology
DKB Information Systems Inc. (DKIS)
Fuji Research Institute Corporation (FRIC)IBJ Systems, Limited (KSD)
Venture capitalMizuho Capital Co., Ltd.

1

Financial Highlights (Consolidated)

Financial Highlights (Consolidated)
The consolidated results for the fiscal year ended March 31, 2003 are for MHFG. The results for the fiscal year ended March 31,
2002 are for MHHD.
2003
For the Fiscal Years ended March 31,

Millions of yen

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

MHHD 2002
Millions of yen

Thousands of U.S. dollars

3,441,810
5,703,982(2,262,172)(2,377,172)
22,147$28,634,030
47,454,101(18,820,071)(19,776,805)
184,256¥

5,315,591
6,740,762(1,425,170)(976,044)
54,985*Non-consolidated basis.

Millions of yen

2003
Thousands of U.S. dollars

MHHD 2002
Millions of yen¥ 134,032,747
23,816,574
69,210,035
72,222,642¥ 2,861,066$ 1,115,081,090
198,141,219
575,790,644
600,853,928$
23,802,554¥ 151,312,427
24,108,931
84,593,656
85,606,236¥ 4,731,420

U.S. dollars

MHHD 2002
yen(2,117.51)¥ (108,003.27)

—

—

3,500

22,5008,200
14,00047,600/42,00011,0008,000
17,500
5,380
165
21
247

187.1968.22
116.47396.01/
349.4291.51
66.56
145.59
44.76
1.37
0.17
2.05

22,5008,200
14,00047,600—42,00011,0008,000
17,500
5,380
/
/
/

2003

MHHD 2002

9.53%

10.56%At March 31,

Total Assets
Securities
Loans and Bills Discounted
Deposits
Total Shareholders' Equity

2003
For the Fiscal Years ended March 31,

yen

Per Share of Common Stock
Net Loss (Common Stock)
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
Fifth Series Class V 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¥ (254,524.65)$*Non-consolidated basis.

At March 31,

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

Ratings
At March 31, 2003

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

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

—
A–
A–
A–
A–
A–

a–1
a–1
a–1
a–1
a–1
a–1

—
—
—
—
—
A–

—
—
—
—
J–1
—

—
—
A3
A3
—
Baa1

—
—
P–1
P–1
—
P–2

—
—
BBB
BBB
—
BBB

—
—
A–3
A–3
—
—

—
—
BBB+
BBB+
—
BBB+

—
—
F2
F2
—
F2

(as of July 31, 2003)

2

2003 Mizuo Financial Group
Annual Report

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

6 Management Reform of Mizuho
Resolving Financial Issues and Reinforcing Capital Base
Evolution of the Mizuho Financial Group's Business Model
Business Strategies of the Mizuho Financial GroupThorough Cost Structure Reforms
Strengthen Corporate Governance and Reinforce the Merit-BasedRemuneration System
The Mizuho Financial Group's “Corporate Revitalization Project”
Financial Highlights of Mizuho Financial Group for Fiscal 2002

18 Business Strategy of Mizuho
Business Outline of Mizuho
Business Strategy of Mizuho Corporate Bank
Business Strategy of Mizuho Bank
Securities Business Strategy
Trust and Asset Management Business Strategy
Business Results Highlights of Mizuho

45 Community Activities andEnvironmental Awareness of Mizuho

47 Management Structure of Mizuho
50 Internal Control Systems of Mizuho
63 Financial Analysis of Mizuho
99 Financial Data of Mizuho Financial Group, Inc.
139 Consolidated Financial Statements of Mizuho
Holdings for Fiscal 2001 and 2000

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

174 Senior Executive Officers of Mizuho
Office Network of Mizuho
Investor Information on Mizuho Financial Group, Inc.
Disclosure Policy of Mizuho

3

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

On behalf of the Mizuho Financial Group, I would like to take thisopportunity to extend my sincere gratitude to our shareholders and customers for your continued support.
Last fiscal year, we took speedy and decisive actions for our management reform, including the recent reorganization of our new corporate
structure and execution of measures to resolve all major financial issues.
In the current fiscal year, we are making every effort in further improving our customer services and enhancing competitiveness and profitability. I would like to assure you that we aim to make this year a year ofachievement for Mizuho in response to your support and expectations.

Completion of Our New Corporate Structure
On April 1, 2002, the Mizuho Financial Group launched two banks,
namely, Mizuho Corporate Bank, which primarily serves large corporations and overseas corporations, andMizuho Bank, which deals primarily with individuals and domestic small, medium-sized and middle market
enterprises, hence creating a corporate structure under a holding company with four core subsidiaries consisting of these two banks and Mizuho Securities and Mizuho Trust & Banking.
I would also like to take this opportunity to express my deepest apologies for the computer systems problems
that occurred at the launching of the two banks mentioned above and affected our domestic services such as delays
in automatic debit transactions and problems in ATM services. We immediately established a preventive structure
in order not to repeat similar problems and we are undertaking further improvement of our customer services.
Since the group's inauguration, we have aggressively adopted and implemented various measures to carryout management reform. In March of this year, we further reviewed our corporate strategies and instituted thereorganization of our corporate structure in order to further reinforce our comprehensive financial services
capabilities and secure stable profitability. Specifically, we strengthened the collaboration between the banking
and securities subsidiaries based on customer segmentation. Moreover, Mizuho Trust & Banking and Mizuho
Asset Trust & Banking were merged to unify the group's trust banking business. We also set up a new financial
holding company, Mizuho Financial Group, Inc., to directly manage strategically important group subsidiaries,
including a credit card company, asset management companies and IT-related companies. Furthermore, in order
to concurrently promote an early achievement of our corporate customers' revitalization and a further reinforcement of our credit creation function, we initiated the “Corporate Revitalization Project” in the current fiscal
year. In this project, we newly established four financial subsidiaries specializing in corporate revitalization andan advisory company with cutting-edge expertise from both domestic and overseas advisors outside the group.

Resolving Financial Issues Decisively and Reinforcing Capital BaseDuring the last fiscal year, to set a course for a breakthrough on financial issues we faced, we executed drastic
financial actions resulting in significant improvement of our asset quality.
First, to promptly resolve the non-performing loan (NPL) issue, we worked to revitalize and support companies through specialized divisions while proactively accelerating final disposals of NPLs. We also significantly
increased the level of loan-loss reserves against the risk of future deterioration of assets. As a result, the aggregated Credit-related Costs for Mizuho Corporate Bank, Mizuho Bank and Mizuho Trust & Banking (the Two
Banks and MHTB) amounted to ¥2,095.2 billion for fiscal 2002.
Second, to reduce the impact of stockholding risks on bank management, we promoted sales of stocks inthe market and made use of the Stock Purchasing Operations by the Bank of Japan together with our conservative accounting of stock devaluation, resulting in reducing the aggregated carrying value of stockholdings of4

the Two Banks and MHTB by approximately ¥3 trillion. In addition, we also disposed unrealized losses on stocks
in subsidiaries and affiliates.
Third, in light of the recent severe economic environment, we made a conservative estimation of future taxable income. By increasing the valuation allowance against deferred tax assets (DTA) by ¥966.7 billion in thesecond half of last fiscal year, we decided not to book DTA in the same amount additionally on an aggregatedbasis of Mizuho Corporate Bank and Mizuho Bank.
To deal with the decrease of our capital base that resulted from the aforementioned efforts, we successfullyraised new capital of ¥1,081.93 billion by issuing preferred stocks to our domestic customers and institutional
investors in March of this year. As a result, the group's consolidated BIS Capital Adequacy Ratio was maintained
at 9.53% at the end of the last fiscal year.

Reinforcement of Our Financial Services and Profitability
We are working to maximize profitability by realizing synergy benefits within our group to the fullest and offering quickly more convenient and specialized products and services that meet customers' financial needs.
More specifically, Mizuho Corporate Bank is accelerating transformation from its conventional businessmodel, which heavily depends on volume of assets, to a market-oriented indirect financing model. Mizuho
Bank is increasing its profitable assets by developing financial products and services according to customer segmentation, while other group companies are further strengthening their own expertise and strategic focuses aswell as actively pursuing group synergies through stronger collaboration within the group.
Additionally, in order to accelerate cost structure reform through thoroughgoing corporate restructuring, weare implementing drastic management rationalization measures that include a significant decrease in the number of employees and redundant offices ahead of schedule, as well as a reduction in the annual compensationof all senior executives and employees. On another front, we achieved a dynamic rejuvenation of the organization by launching a job application system for branch general manager positions to encourage the development
and advancement of young employees especially in their thirties, and by introducing an early retirement plan.
Although we made active progress in maximizing our profitability and restructuring, due to our efforts to resolve
our financial issues, Mizuho Financial Group's Total Income was ¥3,441.8 billion, Loss before Income Taxes andMinority Interests was ¥2,262.1 billion and Net Loss was ¥2,377.1 billion last fiscal year on a consolidated basis.
We also regret that we had to forego the payment of dividends on common stocks for last fiscal year in light of theneed to strengthen our financial base. The dividend payments on preferred stocks were made as originally planned.

Enhancing Corporate Value
After completion of the new corporate structure and reinforcement of our financial base, we are now concentrating our full efforts on improving financial services and ensuring the profitability and the competitivenessthat befits a financial group with the largest customer base in Japan.
In addition, by our proactive efforts to revitalize companies through our “Corporate Revitalization Project,”
we will surely make a major contribution to resolve issues that the Japanese economy faces, such as the revitalization of the industrial and financial sectors. We commit to direct the group's overall strength to this project.
In order to enhance the group's corporate value, we are determined to deliver results by quickly and surely
implementing the measures we have announced to date. As President & CEO, I sincerely look forward to yourcontinuing support.
July 2003

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

Management Reform of Mizuho

Aiming to Become an Innovative Financial Services Group that Will Lead the New Era through CuttingEdge Comprehensive Financial Services
During fiscal 2002 (ended March 31, 2003), we successfully shifted to a new corporate structure and reinforced our financial base. We have positioned fiscal 2003 as a year of achievement for Mizuho, and the entire
group will collaborate in both further improving services to customers and enhancing our competitivenessand profitability.
 The group launched two new banks in April 2002, namely, MHCB, to serve large corporations and overseas

 We also announced the “Business Reorganization Program” to further evolve our business model and reinforce thecorporations, and MHBK, to serve individuals and domestic small and medium-sized enterprises (SMEs), and middle

comprehensive financial services capabilities of the group. In this program, we reorganized our corporate structure tomarket enterprises. Under a corporate structure with legally separated subsidiaries according to customer segmentation

strengthen the synergistic collaboration between MHCB and MHBK as well as between the two banks and securities

and business function, our group companies, including MHCB and MHBK, strengthened their respective expertise while

subsidiaries, and unify our trust banking business. At the same time, we launched the “Corporate Revitalization

working closely together.

Project.” Under the new corporate structure, the group companies are accelerating implementation of their business In fiscal 2002, we adopted a drastic management reform based on our “Change & Speed-Up Program” and otherstrategies by making maximum use of the group's overwhelming customer base and each company's core strengths.

measures, and accelerated their implementation. To realize a dramatic improvement in the soundness of our assets, we In addition, we reduced the number of senior executives and employees, cut their annual compensation, and broughtsignificantly accelerated the resolution of the non-performing loan (NPL) issue, greatly reduced stockholding risks andforward closures and consolidation of domestic and overseas branches, most of which are overlapped, to accelerate

adopted a conservative evaluation of deferred tax assets. We also reinforced our capital base with new capital raising of

cost structure reforms through thoroughgoing corporate restructuring.

approximately ¥1.1 trillion by the third party allotment of preferred stocks.

 We are also striving to encourage group cohesiveness and create an energetic organization by strengthening
corporate governance and reinforcing the merit-based remuneration system.

Fiscal 2002
April

May

Fiscal 2003
June

July

AugustSeptember October November

DecemberJanuary

February

March

April

May

June

July

AugustSeptember

Resolved three financial issues
Build a robust financial structure

Raised ¥1.1 trillion in capitalin preferred stocks

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

Realize open management and establish a new corporate culture

Addressed corporate revitalization

6“Change & Speed-Up
Program”

Raised capital in preferred securities
Changed and accelerated thedeployment of business strategies

Implemented the “Business Reorganization” (Reorganization of corporate structure)

Accelerated cost structure reforms

Strengthened corporate governanceand reinforced a merit-based remuneration system
Launched the “Corporate
Revitalization Project”

To be completed in a timeframe of three years.

7Management Reform of Mizuho

Resolving Financial Issues and Reinforcing Capital Base
We resolved the following three financial issues: promptly resolving the NPL issue, further reducing stockholding
risks, and adopting a conservative evaluation of deferred tax assets. In addition, we also strengthened our capitalbase.
Disclosed Claims under the Financial Reconstruction Law (FRL) (Aggregated Figures of Two Banks and MHTB)(trillion yen)
6.0

5.0

4.0

Claims forSpecialAttention

50%Reduction
Compared toMarch 2002

+ 34%
+ ¥ 738Bn
Increase in Reserve Ratios
by Introducing DCF Method

3.0
Claims with
Collection Risk

2.0

1.0

0.0

“Corporate Revitalization Project”
Support Corporate Restructuring &Further Acceleration of NPL Disposal– 44%– ¥ 1,470Bn
Claims against
Bankrupt &Substantially
Bankrupt Obligors

Corporate Restructuring &Acceleration of NPLs Disposal

March 2002
NPL Amount¥ 5,517Bn– ¥ 731Bn

March 2003

March 2004

March 2005

¥ 4,785Bn

Approx. ¥4Tn

¥ mid-2Tn

Increase in Reserves

Prompt Resolution of NPL Issue
Acceleration of Final Disposal of NPLs

— Highest level of loan-loss reserves among major— 44% decrease in Claims with Collection Risk or

financial groups.
We strengthened the measures against the risk of future

worse compared to the end of fiscal 2001.
In addition to working to revitalize and support companies

deterioration in asset quality by applying the discounted cash

through specialized divisions, we prepared financial provisions

flow (DCF) method to 60% of Special Attention Obligors withto support restructuring of large problem borrowers andlarge exposure, while increasing our loan-loss reserves foraccelerated the final disposal of Claims with Collection Risk

claims not subject to the DCF method by applying the revised(Intensive Control Obligors) or worse. As a result, the non-expected loss ratios to reflect the difficult economic situation

consolidated aggregated outstanding balance of Claims withand acceleration of the final disposal of NPLs.

Collection Risk or worse of MHCB, MHBK and MHTB (theAs a result of accelerating the final disposal of NPLs andTwo Banks and MHTB) at the end of fiscal 2002 decreased byincreasing the level of loan-loss reserves, the aggregated

44% (¥1,470.1 billion) compared to the end of fiscal 2001,

Credit-related Costs of the Two Banks and MHTB amounted

and overall outstanding disclosed claims under the FRL

to ¥2,095.2 billion.

including Claims for Special Attention declined by ¥731.8*Please refer to page 80 for further information on our efforts to improveasset quality.

billion.

NPL Ratios and Reserve Ratios
Mizuho[March 2003](Aggregated Figures of the
Two Banks and MHTB)

MTFG

SMFG

UFJ

NPL Ratios

6.2%

5.3%

8.4%

8.6%

74.5%

68.5%

79.2%

73.7%

38.3%

35.6%

33.7%

29.8%

7.5%

3.3%

6.0%

4.5%

Reserve
Ratios*Intensive Control Obligors(for uncovered portion)
Special Attention Obligors(for uncovered portion)
Other Watch Obligors(reserve ratio against total claims)

Note: Based on fiscal 2002 financial results of each group.
*Reserve ratios for obligor classification based on self-assessment of assets.

8

Further Reduction of Stockholding Risks
Aggressive Reduction through Sale andConservative Devaluation— The carrying value of stockholdings was
reduced by ¥3 trillion.

Aggressive Reduction of Stockholding Risks(Cross Stockholdings)
Stock Portfolio (Aggregated figures of the Two Banks and MHTB)(trillion yen)

· Sale· Devaluation· Write-off of Unrealized Losses throughAccounting Profits of Corporate Split& Merger Process on April 1, 2002

10

In order to reduce stockholding risks quickly, we reduced
the carrying value of stockholdings of the Two Banks and
MHTB by ¥3 trillion through measures including sales of8

Unrealized
Lossapproximately ¥1.8 trillion and conservative devaluation.
We will meet the restrictions on stockholdings by the end

6Carrying
Valueof September 2004 and will further reduce stockholdings.

Disposal of Unrealized Losses on Stocks in– ¥ 3Tn

4

Fair Value

Subsidiaries and Affiliates
MHHD established Reserves for Possible Losses on

2

Investments against Shares in MHCB and MHBK. MHCB
and MHBK disposed of the unrealized losses on stocks of0

March 1998

March 2002

March 2003

Sept 2004(Plan)

their listed subsidiaries.

Conservative Valuation of Deferred Tax Assets(DTA)
Conservative Estimation of Future Taxable Income

basis of MHCB and MHBK as future taxable income was re-— Not to book DTA in the amount of ¥966.7 billion.

estimated conservatively to reflect the current severe

By increasing the valuation allowance against DTA by ¥966.7

economic conditions. As a result, the amount of DTA as ofbillion in the second half of last fiscal year, we decided not tothe end of fiscal 2002 decreased by ¥318.3 billion tobook DTA in the same amount additionally on an aggregated¥1,978.3 billion compared to the end of fiscal 2001.

Reinforcement of Capital Base
Maintaining Sufficient BIS Capital Adequacy Ratios
and Securing a Stable Source of Dividends

Consolidated BIS Capital Adequacy Ratiosof the Group Companies

In order to secure a solid financial base, we raised new

March
2003

September
2002

March
2002

MHFG (International Standard)

9.53%

10.42%

10.56%MHCB (International Standard)

10.42%

9.74%/

International Standard

9.47%

10.36%/

Moreover, MHFG, the group's holding company, started

Domestic Standard

9.25%

9.85%

/

its operations with sufficient retained earnings amounting

MHTB (International Standard)

11.23%*10.10%*10.96%

capital of ¥1,081.93 billion in preferred stocks from a broad
range of domestic customers and institutional investors,
totaling about 3,400. At the end of March 2003, our groupcompanies secured sufficient BIS capital adequacy ratios.

to ¥252.0 billion at the end of March 2003, thus securing asource for stable dividend payments going forward.

MHBK*Figures for the end of March 2002 are for the former Yasuda Trust & Banking, andthose for the end of September 2002 are for the former Mizuho Asset Trust &Banking (both domestic standard).

9

Management Reform of Mizuho

Evolution of the Mizuho Financial Group's Business Model
In order to dramatically improve the comprehensive financial services capabilities of the group and secure stableprofitability, we implemented the “Business Reorganization” to reform our corporate structure in March 2003.
Furthermore, in order to promote an early achievement of our corporate customers' revitalization, we also
initiated the “Corporate Revitalization Project,” which involved establishment of financial subsidiaries specializingin corporate revitalization and an advisory company that provides advice to the financial subsidiaries.

The Group's Corporate Structure after the Business Reorganization
Mizuho Financial Group, Inc. (MHFG: financial holding company)
Mizuho Holdings, Inc. (MHHD: intermediate holding company for banks and securities subsidiaries
Mizuho Corporate Bank, Ltd.
(MHCB)
Change &Speed-Up Program

Mizuho Bank, Ltd. (MHBK)Strengthening
collaboration
between banks
and securities
subsidiaries«Advisory company for corporate revitalization»

Mizuho Advisory, Inc.

Mizuho Securities Co., Ltd.
(MHSC)

ShinkoSecurities
Co., Ltd.

Mizuho Investors
Securities Co., Ltd. (MHIS)«Financial subsidiaries for corporate revitalization»

Mizuho Corporate, Ltd.
Mizuho Global, Ltd.

Mizuho Trust & Banking Co., Ltd. (MHTB)

Mizuho Project, Ltd.
Mizuho Asset, Ltd.

Reorganizationof trust andasset
management
sectorTrust & Custody Services Bank, Ltd. (TCSB)

BankingandSecurities
Business
SectorCorporate
Revitalization

Corporate
Revitalization
Project
Trust and
Asset
Management
Sector«Asset management companies» Dai-Ichi Kangyo Asset Management Co., Ltd. (DKA)
Fuji Investment Management Co., Ltd. (FIMCO) DLIBJ Asset Management Co., Ltd. (DIAM)«Credit card company» UC Card Co., Ltd.

«Research institution»

Mizuho Research Institute«Information & technology» DKB Information Systems Inc. (DKIS)
Fuji Research Institute Corporation (FRIC) IBJ Systems, Limited (KSD)«Venture capital» Mizuho Capital Co., Ltd.

Reorganization of the Corporate StructureEstablishment of Mizuho Financial Group, Inc. as a
New Financial Holding Company

Placing
strategic
subsidiaries
directly under
MHFG'smanagement

Change & Speed-Up Program• Change and accelerate the deployment of business strategies
Accelerating the business strategies by making
maximum use of the group's overwhelming customer base and each company's core strengths.
• Accelerate cost structure reforms
Cutting operating costs by carrying out
drastic restructuring plans.
• Strengthen corporate governance and reinforce a merit-based remuneration system
Streamlining management structure andachieving dynamic rejuvenation in organization to create an energetic organization.

Strengthen Collaboration between MHCB and MHBK as
well as between the Two Banks and Securities Subsidiaries
To strengthen the synergistic cooperation between MHCB

We set up a new financial holding company, Mizuho Financial

and MHBK as well as between the two banks and securities

Group, Inc. (MHFG), to directly manage core group companies.

subsidiaries according to customer segmentation, we placed
MHSC and MHIS under MHCB and MHBK, respectively. We
also reformed MHHD as a banking and securities holding
company.

10Strategic Reorganization of Trust and AssetManagement Sector

companies that are the backbone of the entire group's
management infrastructure.

The trust banking business within the group was unified by

The “Corporate Revitalization Project”

merging Mizuho Trust & Banking and Mizuho Asset Trust &We are in the process of implementing the “Corporate

Banking under the name of Mizuho Trust & Banking (MHTB),

Revitalization Project” for promoting the early achievement ofwhile at the same time placing trust and asset management

corporate revitalization, having established four financial

subsidiaries under direct management of MHFG.

subsidiaries specializing in corporate revitalization and an

Direct Management of Strategic Subsidiaries

advisory company that combines the cutting-edge expertise

MHFG also directly manages other strategic subsidiaries suchof domestic and overseas advisors.

as the group's credit card company and the IT-related

Business Strategies of the Mizuho Financial Group
Under the new corporate structure, we are thoroughly strengthening the business strategies according tocustomer segmentation and business function that we have adopted since April 2002.

MHCB

MHBK

Accelerating transformation to a market-oriented
indirect financing model.

Accelerating strategic deployment according tocustomer segmentation using its customer base andnetwork.

Other Group Companies
Strengthening their own expertise and strategic focuses while actively pursuing group synergies.

MHSC

MHTB

Paving path to become a leading investment bank.

Evolving into a full-line trust banking company withunique strengths.

Thoroughly Strengthening Business Strategies According
to Customer Segmentation and Business Function

Taking advantage of its convenient nationwide network andMHCB

the leading bank in housing loans and high-quality loans to

overwhelming customer base, MHBK is working to become— Accelerating transformation to a market-oriented

SMEs by developing financial products and services andindirect financing model.

building a business promotion structure according to

MHCB carried out a significant reallocation of management
resources as well as drastic organizational reforms so as tocustomer segmentation.
At the same time, it is working to increase fee income byaccelerate the transformation from its conventional businesspromoting the solution business.

model, which was dependent on volume of assets, and toImproving Asset Efficiency

swiftly realize a market-oriented indirect financing model.

In addition to their ordinary credit providing functions, MHCB

More specifically, this involved the creation/reorganization ofand MHBK are aggressively enhancing new types of credit

three strategic business units (Syndicated Finance Businessprovision by promoting syndicated loans and the securitization

Unit, Asset Management & Transaction Banking Unit andof receivables. They are also reviewing their entire asset

Financial Products Unit) with 1,000 staff members.

portfolio in order to improve asset efficiency and accelerate

MHBK

the shift away from structural dependence on volume of— Accelerating strategic deployment according toassets. They continue working on increasing loan spreads socustomer segmentation using its customer base andas to reflect the appropriate credit risk of their borrowers.

network.
11

Management Reform of Mizuho

Strategies of Other Group CompaniesMHTB

MHSC, MHTB and other group companies are further— Evolving into a full-line trust banking company

strengthening their respective expertise and strategic focuses,with unique strengths.

while actively pursuing group synergies through stronger

Through the merger of the former Mizuho Trust & Banking

collaboration within the group.

and Mizuho Asset Trust & Banking, MHTB evolved into a full-MHSC

line trust banking company with unique strengths in trust— Paving path to become a leading investment bank.

banking services for both retail and corporate customers. In

MHSC established a global network with overseas subsidiaries

addition to aiming to be Japan's leading trust bank, it isin major international financial markets, and is establishing aseeking expanded collaboration and synergy benefits withinfirst-class track record in the bond and investment banking

the group through an increase in the number of branches

sectors. In the equities business, its performance in securities

and business promotion offices licensed under a franchiseanalyst rankings and other areas places it among the top

system with MHCB and MHBK, and joint branch operations

Japanese and foreign securities houses.

with MHBK.

Tackling Corporate Revitalization

Lending to SMEs

MHCB established its Corporate Restructuring Business

Recognizing that increasing and expanding loans to

Unit in October 2002 while MHBK set up the Business

SMEs is one of the group's most important management

Advisory Office within its Credit Division in July of thetargets, we have worked to make our approach moresame year. Both banks aimed to bring together theeffective by developing our organizational structure,expertise and skills existing within their respective

strengthening our target-setting and evaluation systems,

organizations into specialized units and channel themand formulating various measures for enhancing lending

into providing customers with more proactive support in

activities.

reorganizing their businesses. MHSC continues toDeveloping organizational structure

contribute to its customers' business revival efforts

We established project teams within MHFG, MHCB andthrough its expertise in M&A.

MHBK to deal with lending to SMEs, while the Executive

The group also launched its “Corporate Revitalization

Management Committee controls outstanding balances

Project” as a comprehensive approach to revitalizing its

and progress in implementing key programs.

customers, establishing financial subsidiaries forFormulating various measures for augmenting

corporate revitalization in May 2003 and an advisory
company in June 2003.
*Please refer to page 15 for further information on the“Corporate Revitalization Project.”lending
Since SMEs are extremely important customers for
MHBK, it took steps to strengthen its organization witha view to reinforcing its head office support structureand seeking new customers. It is also taking a proactive
approach to develop new financial products for SMEs,
including “Mizuho Advanced Partner,” an unsecured
loan product that uses a rapid automatic credit-scoringmodel. The Two Banks enhanced the credit providing
function to SMEs through stronger efforts in securitizationof receivables and arranging syndicated loans for them.

12Results from Market-Oriented Indirect Financing(MHCB)

Fixed Income and Investment Banking Performance(MHSC)• US$36.9 billion in arrangement of syndicated loans in the• ¥800 billion in lead management of domestic straight bond issues

Asian Pacific region including Japan(No.1 among financial institutions worldwide)*• ¥900 billion in real estate finance arrangements (No.1 inindustry sector)• ¥2 trillion and 35% share in administration of domestic
public corporate bonds (No.1 in industry sector)*• US$2,367 million in arrangement of global project finance(No.1 among Japanese banks)*Aggregated figures of MHCB and MHBKKey Results in the Individual Customer Sector (MHBK)• 7.06 million customers utilizing membership-style banking
services “Mizuho Value Program” (No.1 among Japanesebanks)• ¥9 trillion in residential housing loan portfolio (No.1 among
Japanese banks)• 3.4 million customers of “Mizuho Direct” and other remotebanking services• 32% share of debit card sales by affiliated merchants (No.1
in industry sector)• Joint branches in Japan for banking, securities and trust
banking services(No.3 in industry sector)• ¥505.5 billion in lead management of FILP agency bond issues(No.1 in industry sector)• No.1 position in the Nikkei Bond Information rankings in fixedincome analyst, economist, credit analyst and overall evaluation bycompany (two consecutive years)• M&A advisory banking transactions involving Japanese companies—36% share in the amount of completed deals (No.1 inindustry sector)—14% share in the amount of announced deals (No.3 inindustry sector) and 87 announced deals (No.2 in industry
sector)• 20% share in the amount of issues in general ABS bookrunner
league table (No.1 in industry sector for two consecutive years)
and received the Thomson Deal Watch “ABS House of the Year”
award for the third year in succession

Performance in Trust Services for Corporate and RetailCustomers (MHTB)• 9,653 testamentary trusts entrusted (No.1 in industry
sector)• ¥6.1 trillion in securitized assets (receivables and real estate)With MHTB: 15 branches

under administration as trustee (No.1 in industry sector)

With MHIS: 10 branches• “Asset Management Company to be Newly Adopted for

Joint banking/securities/trust banking services: 2 branches

Pension Assets” (Pension Information Survey, November 18,2002) (No. 1 for two consecutive years)

Key Products and Services for SMEs and Middle
Market Enterprises (MHBK)• An unsecured loan product that uses a rapid automatic
credit-scoring model, “Mizuho Advanced Partner”• 397 MHCB and MHBK branches and business promotion
offices licensed under the franchise system in trust services(115 added in the second half of fiscal 2002.)• ”Mizuho Business Finance Centers” using multiple channels
to provide consultation on customers' funding needs• Strategic Products: loans with stock purchase warrants,
special purpose loans related to diesel-powered vehicles,
unsecured loans to new customers, etc.

*Please refer to page 18 for details of business strategies of the group.

13

Management Reform of Mizuho

Thorough Cost Structure Reforms
Promoting drastic reduction of expenses through accelerating restructuring ahead of the schedule set forth in theBusiness Revitalization Plan, and pursuing rationalization of consolidation.
Personnel Reductions andCompensation Reviews

Progress of Restructuring Plan
March 2003
Compared
to planAchievement ofplanned targets

33

0

Achieved

30,262

27,900(1,150)March 2005
24,000

645

578

562

0

March 2004
458

113

71

49

(4)

March 2004
43

March 1999
(pre-consolidation)

March 2002

111

50

34,818Domestic branches

employees was also reduced by 2,300

Overseas branches
and subsidiaries

to 27,900 compared to the end of*Business Revitalization Plan basis (aggregated figures of MHFG, MHCB and MHBK)MHFG, MHCB and MHBK reduced theaggregated number of Directors andExecutive Officers by 30 to 81, andBoard members(Directors and Auditors)

cut annual compensation for senior

Employees

executives by 30% compared to April
1, 2002. The aggregated number ofMarch 2002. In addition to bonuses,
the base salary of employees was cut by 10% on average,

most of which are overlapping, by bringing forward theand by 20% for general managers.

implementation of the Business Revitalization Plan.

Closures and Consolidations of Domestic andExpense Reductions

Overseas Branches

Through accelerated personnel reductions, compensation

The Two Banks reduced the number of domestic branches byreviews, accelerated consolidations and closures of domestic

16 compared to the end of March 2002, bringing the total toand overseas offices, and other measures that went beyond

562. The number of overseas branches was decreased by 18

the Business Revitalization Plan, we were able to reduceto 24, and the number of overseas subsidiaries was decreased

expenses for fiscal 2002 by ¥14.4 billion compared with theby 4 to 25. We will continue to close or consolidate branches,original forecast.

Strengthen Corporate Governance and Reinforce the Merit-Based Remuneration System
In addition to speedier managerial decision-making and a reinforced merit-based remuneration system, we areworking to encourage group cohesiveness and create a more energetic organization.
Strengthening of Corporate Governancetheir thirties, and plan to appoint more younger employees to

We achieved a streamlined management structure withsimilar positions at around 10% of our branches.

speedier managerial decision-making through reductions in

We also introduced a group-wide job application system

the number of Directors and Executive Officers. We also

to encourage employees to acquire greater specialization as

invited outside Directors to the Board and established anthey pursue their careers, and intend to strengthen theAdvisory Board to ensure greater transparency andscheme further by expanding the number of positions

accountability in management.

eligible.

Establishment of a New Corporate Culture

14Thoroughgoing Efforts to Rejuvenate the Organi-We formulated the “Mizuho evaluation standard,” a uniform

zation and Put the Right Person in the Right Job

personnel evaluation system throughout the group

In January 2003, we launched a job application system forcompanies to fulfill our policy for renewing our seniorbranch general manager positions to encourage theexecutives' and employees' awareness and establishing a new

development and advancement of young employees. To date,

corporate culture as soon as possible. We expect all senior

we have achieved a dynamic rejuvenation of the organization

executives and employees to keep this in mind at all times as

by appointing 14 branch general managers who were still inthey go about their daily duties.

From fiscal 2002, we extended the 360-degree evaluation*Mizuho's new personnel evaluation scheme whereby personal evaluations

measures* to all managers, approximately 5,000 in all, soof managers involve not only superiors but also subordinates and persons

that they are evaluated by a total of 50,000 people. This isfrom other divisions with whom they have close working relationships, and inwhich the results are fed back to the manager being evaluated.

the largest scheme of its kind in Japan, and its implementation
is designed to ensure that performance evaluations are fairand impartial.

The Mizuho Financial Group's “Corporate Revitalization Project”
We launched the “Corporate Revitalization Project, ” which simultaneously works toward the early achievementof corporate revitalization through full use of the “Project Bank” function and further reinforcement of credit
creation through enhancement of the “Prime Bank” function.
Overview of Structure
MHFG

MHHD

Loans and stocks tofinancial subsidiaries
Number of customers:
Approx. 1,000 companies
Outstanding amountof loans and stocks:
Approx. ¥4.6 trillion

MHBK

MHCB

MHTB

Business regarding customers in need of revitalization / restructuring

Business regarding customers in need of revitalization / restructuring

Business regarding customers in need of revitalization / restructuring

Mizuho Project

Mizuho Corporate

Mizuho Global

Mizuho AssetExpertise in corporate revitalization

Mizuho financial groupcompanies

Development
Bank of Japan(DBJ)

Cerberus Group,
Deutsche Securities,
Merrill Lynch Japan Securities,
Morgan Stanley Japan,
UBS Consortium (UBS Securities
Japan / Lone Star Fund)

Stockholdings: 30%

Centralized advisory function

Stockholdings: 10%

Stockholdings: 60%

Mizuho Advisory

Aims of the “Corporate Revitalization Project”

and stocks of customers in need of revitalization/restructuring

Recognizing the “Corporate Revitalization Project” as a com-held by the Two Banks and MHTB were transferred to theprehensive program for revitalizing companies by simultane-financial subsidiaries specializing in corporate revitalization in

ously working for an early achievement of our corporate

July 2003, while the advisory company provides professionalcustomers' revitalization and a further reinforcement of theadvice to the financial subsidiaries swiftly and accurately.

credit creation function, we intend to expedite all our efforts

The Two Banks and MHTB are thus able to focus on banking

to complete revitalization of customers in a time frame ofbusiness centered on the fund intermediation function to

three years.

support customers with a stable supply of high-quality funds.

For an early achievement of corporate revitalization, loans
15

Management Reform of Mizuho

Establishment of Financial Subsidiaries
Specializing in Corporate Revitalization

Establishment of an Advisory Company for
Corporate Revitalization Combining Cutting-Edge
Expertise from Inside and Outside the GroupFinancial Subsidiaries According to theWe established Mizuho Advisory to provide our financial

Characteristics of Each Bank's Customers
We established Mizuho Corporate, Mizuho Global, Mizuho

subsidiaries for corporate revitalization with pertinent advice.

Project and Mizuho Asset as financial subsidiaries to specialize in

It brought together human resources and expertise that were

corporate revitalization according to the characteristics of each

formerly dispersed throughout the group, along with thebank and its customers, then brought together the necessary

expertise of Development Bank of Japan, which is apersonnel resources by transferring the organizations of thegovernmental comprehensive financial institution, andbanks engaged in corporate revitalization to the new financial

foreign financial institutions.

subsidiaries.

Japan's First Comprehensive Corporate
Revitalization Scheme in Scale and Degree
Loans and stocks of the approximately 1,000 customers weretransferred to the financial subsidiaries for corporate revitalization. Two thirds of loans to the customers in need of revitalization/restructuring were segregated.

Financial Highlights of Mizuho Financial Group for Fiscal 2002
The consolidated results for the fiscal year ended March 31,
2003 (“Fiscal 2002”) are for MHFG. The results for the fiscal
year ended March 31, 2002 (“Fiscal 2001”) are for MHHD.

Industrial Bank of Japan (IBJ).
The aggregated figures for the “Two Banks and MHTB” arethe sum of the non-consolidated results of MHCB, MHBK and

The aggregated figures of the “Two Banks” are the sum of

MHTB for Fiscal 2002. Comparative figures for Fiscal 2001 are

the non-consolidated results of MHCB and MHBK for Fiscal

the sum of the non-consolidated results of the former DKB, the2002. Comparative figures for Fiscal 2001 are the sum of theformer Fuji Bank, the former IBJ and the former Yasuda Trust

non-consolidated results of the former Dai-Ichi Kangyo Bank

and Banking.

(DKB), the former Fuji Bank (Fuji Bank) and the former

Profits and Losses
MHFG (Consolidated)billions of yen

Fiscal 2002

Consolidated Gross Profits
Consolidated Net Loss¥

2,233.6(2,377.1)

Fiscal 2001¥

2,462.0(976.0)Change¥(228.3)(1,401.1)

Aggregated Figures of the Two Banks and MHTB
billions of yen

Fiscal 2002
MHCB

Gross Profits
General and Administrative Expenses
Credit-related Costs
Net Loss

16¥

1,815.9941.1
2,095.2(2,367.0)

¥

701.2
280.9
1,148.7(1,633.4)

MHBK¥

1,005.4
610.9
906.2(628.5)

MHTB

¥

109.3
49.2
40.2
(105.0)Consolidated BIS Capital Adequacy Ratios
MHFG (International Standard)billions of yen

Fiscal 2002

Fiscal 2001

Change¥ 6,847.4
3,495.4
71,823.5
9.53%¥ 9,959.5
5,028.9
94,288.7
10.56%¥ (3,112.1)(1,533.5)(22,465.1)(1.03%)

Fiscal 2002

Fiscal 2001

ChangeDisclosed Claims under the FRL¥ 4,785.9
Claims against Bankrupt and Substantially Bankrupt Obligors, and equivalent
615.1
Claims with Collection Risk
1,265.0
Claims for Special Attention
2,905.7¥ 5,517.8
1,125.5
2,224.8
2,167.4¥ (731.8)(510.4)(959.7)738.2

Fiscal 2002

Fiscal 2001

Change

74.5%
37.9%
7.5%

64.9%
20.9%
4.6%

9.6%
17.0%
2.9%

CapitalTier 1
Risk-weighted Assets
Capital Adequacy Ratio (%)

Status of NPLs

Disclosed Claims under the FRL
Aggregated Figures of the Two Banks and MHTB
billions of yen

Reserve Ratios
Aggregated Figures of the Two Banks and MHTB (Banking Account)%

Claims with Collection Risk (for uncovered portion)
Claims for Special Attention (for uncovered portion)
Other Watch Obligors* (against total claims)* Reserve ratio for obligor classification based on self-assessment.

Outstanding Balance of Claims with Collection Risk (Intensive Control Obligors) or Worse, and theResults of Removal of NPLs
Aggregated Figures of the Two Banks
billions of yen

Balance at endof Fiscal 2002

AmountAccumulated
Removal Amount Removal Ratio (%)*Modified Accumulated
Removal Ratio (%)

As of September 30, 2000
Second Half of Fiscal 2000
First Half of Fiscal 2001
Second Half of Fiscal 2001
First Half of Fiscal 2002
Second Half of Fiscal 2002

¥ 2,465.4
673.9
1,187.3
1,195.6
581.5
795.6

¥

142.2
101.1
298.1
231.2
224.0
795.6

¥ (2,323.1)(572.7)(889.1)(964.3)(357.4)
/

94.2%
84.9%
74.8%
80.6%
61.4%
/

98.0%
88.4%
85.8%
87.8%
68.8%
/

Total

¥ 6,899.4¥ 1,792.5///*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.

Unrealized Gains and Losses on Other Securities
Aggregated Figures of the Two Banks and MHTB
billions of yen

Book Value

Other Securities*
Stocks
Bonds
Other¥ 21,314.1
3,753.2
12,218.1
5,342.7

Fiscal 2002
Unrealized Gains(Losses)(a)¥(28.0)(194.8)
87.4
79.3

Gains

¥ 348.9
160.4
88.5
99.9

Fiscal 2001
Unrealized Gains
Losses(Losses)(b)¥ 376.9
355.2
1.0
20.6

¥ (901.4)(754.6)(15.7)(130.9)Change(a) – (b)¥ 873.3
559.8
103.1
210.3

* In addition to the balances shown in the above table, Other Securities included securities without fair values.

17

Business Strategy of Mizuho

Business Outline of Mizuho
Consumer and Private
Banking GroupInternational Banking Unit

Financial Institutions &Public Sector Banking Unit

Customers
Large corporations (listed on the firstsections of domestic stock exchanges, etc.)

Customers
Overseas corporations including subsidiaries
of Japanese companies.

Customers
Financial institutions and their groupcompanies, and public sector entities.

Main Businesses• Provide a full range of financial services
and products that make the most of thegroup's comprehensive capabilities.
• Provide optimized solutions for customers'
needs in the areas of management andbusiness strategy.

Main Businesses• Provide highly specialized services that takeregional and industrial circumstances into
consideration and make use of the group's
global network.

Main Businesses• Provide optimized solutions for funding
and asset management needs,
improvements in operational efficiency, andestablishment of risk management systems.

Corporate Banking Unit

Syndicated FinanceBusiness Unit
Main Businesses• Provide syndicated loan-related services
both in Japan and overseas in order tobetter respond accurately to the funds
procurement needs of customers.

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

ALM & Trading Unit
Main Businesses• Develop and provide interest rate,exchange rate, securities and other marketrelated products and their derivatives.
• Asset and liability management for MHCB.

Financial Products Unit
Main Businesses• Provide value-added financial services suchas securitization and MBOs to meetcustomers' needs in their business andfinancial strategies by making full use of
cutting-edge financial technologies.
• Bond administration of domestic corporate
bonds and ABSs, etc.

Asset Management &Transaction Banking Unit
Main Businesses• Provide advanced financial services tailoredto e-business and the IT era, yen clearing
and yen custody services, and currencyrelated services.
• Provide asset management and trustrelated services utilizing group companies
to offer comprehensive solutions
concerning retirement benefits centered on
defined contribution pension plans.

Corporate Restructuring
Business Unit
Main Businesses• Provide comprehensive advice to corporate
customers to support and realize theirbusiness restructuring efforts.

Private Banking
Asset Management
Products for Individuals

Securities Business

Real Estate

Stock Trading
Bond Trading

Structured Finance

MizuhoSecurities(MHSC)

Main Businesses• Provide high-quality finance, andsophisticated products and services.
• Provide solutions that match customers'
business strategies in such areas asinvestment banking services, IPOs as well as
starting overseas operations.
• Support new businesses, venture companies
and other growth companies.

Main Businesses• Through a highly convenient distribution
channel network, provide a broad range of
products and optimum services to ourcustomers responding to their individual
needs at specific occasions of life byoffering savings, augmenting, borrowing
and insurance services.
• Provide private banking services making themost of the group's comprehensive
capabilities.

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

MizuhoInvestors
Securities(MHIS)

ShinkoSecurities

A securities company
that focuses onserving the group’s
customers.

Main Businesses• Support for relationship marketing throughplanning, developing and providing foreignexchange, foreign currency deposits, tradefinance and similar products and services.
• Planning and promotion of correspondentbanking-related business, support for SWIFTbased transactions.

MHBK serves individuals,
domestic companies and local
governments.

e-Business Services Group

Trust and
Asset Management Group

Customers
Local governments and their affiliatedorganizations and national public sector
entities.
Main Businesses• Propose efficient financing and asset
management methods.
• Provide reliable and high-quality collecting
services of public charges.
• Propose methods, such as PFIs, to improvethe efficiency of public services.

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

UC Card
A leader among
credit cardcompanies
in Japan.

Main Businesses• Develop and provide interest rate,exchange rate, securities and other marketrelated products and their derivatives.
• Asset and liability management for MHBK.

Securities and Investment
Banking Group

Main Businesses• Support for relationship marketing throughproviding advanced financial services
tailored to the e-business and the IT era.

Main Businesses• Primarily develop and provide investment trust
services, and support relationship marketing.
• Provide high value-added products and services
related to defined contribution pension plans.
• Provide highly specialized trust products
through the close cooperation with Mizuho
Trust & Banking.

Main Businesses• Provide solutions centered on corporatebond finance, trustee and administration
business of corporate bonds.
• Provide high value-added solutions
through offering multi-faceted financial
methods that respond to customers'
various needs made possible by making useof the close cooperation with groupsecurities and venture capital companies.
(M&A, asset and property securitization,and MBO business, etc.)

Trust Banking andAsset Management Business
MizuhoTrust & Banking(MHTB)
A full-line trust bankthat possesses strengths
in both the corporate
and individual
markets.

Stock Transfer Agent
Securitization

A comprehensive
securities company
that focuses on the
middle and retailmarket.

Mizuho Bank(MHBK)

Trade Services Group

Custody

Overseas subsidiaries

18

Pension Trust andAsset Management

M&A and Financial
Advisory Services

IPOs

Debt Financing

Customers
Domestic small and medium-sized, andmiddle market enterprises.

Customers
Individuals

Public Sector
Banking Group

Trading and ALM Group
MizuhoCorporate Bank(MHCB)

Equity Financing

Corporate Banking Group

Trust &
CustodyServices Bank(TCSB)

Corporate Revitalization
BusinessDefinedContribution
Plan Services(DCPS)A highly specialized
trust bank focusing on
the custody business.

An entity that specializes
in managing defined
contribution pension plans.

Dai-IchiKangyo AssetManagement
(DKA)

Fuji
Investment
Management(FIMCO)DLIBJ AssetManagement(DIAM)

MizuhoCorporate

MizuhoGlobalMizuhoProject

MizuhoAsset

The group's asset management companies.
Financial subsidiaries specializing in
corporate revitalization.

MizuhoCapitalMizuhoFactors

The group’s principal
venture capitalcompany.

The group’s
factoringcompany.

MizuhoResearch
InstituteThe group’s
think tank.

DKB
Information
Systems(DKIS)

Fuji
Research
Institute
Corporation(FRIC)IBJ Systems(KSD)

MizuhoAdvisory

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

The group's IT-related companies.
As of June 25, 2003.

19

Business Strategy of Mizuho

Business Strategy of Mizuho Corporate Bank

I would like to start by expressing my appreciation to our shareholders andcustomers for your continued support.
Mizuho Corporate Bank was launched on April 1, 2002 to serve large
corporations, financial institutions and their group companies, public sector
entities and overseas corporations including subsidiaries of Japanese
corporations, and I am delighted to report that we have now completed our
first full year of operations. Once again, I wish to thank our customers andother stakeholders who have given us so much support. I would also like totake this opportunity to express my deepest apologies for the computer
systems problems that affected our domestic services such as delays inautomatic debit transactions and problems in ATM services when Mizuho
Corporate Bank and Mizuho Bank started operations inconveniencing manyof our customers. We have established a preventative structure in order not to repeat similar problems.
Since the establishment of the Mizuho Financial Group, various drastic steps have been taken toreform our management. For our part, we at MHCB are accelerating our transformation from a
conventional business model dependent on the volume of assets in order to swiftly realize a marketoriented indirect financing model. We continue our efforts to become the “Best Solutions Provider”
by offering optimized solutions to satisfy the increasingly varied and sophisticated financial needs ofour customers. We look forward to your continued support.
July 2003

Hiroshi Saito
President & CEO, Mizuho Corporate Bank, Ltd.

What sort of business strategy has Mizuho Corporate Bank adopted for the switchover
to a market-oriented indirect financing model?
With the structure of the economy and the framework of the financial sector in Japan going throughsignificant changes, we recognized the need for drastic reforms of our asset and profit structures.
This provided us with the impetus to abandon our asset-oriented financing in favor of marketoriented indirect financing. In other words, we have made a major switch to a business model basedon asset turnover centered on the syndication business.
In December 2002, we established a new and greatly expanded Syndicated Finance Business Unit
to respond to customers' funding requirements while creating an organization that will make more
effective use of our capital and expand fee income. The group now accounts for close to 50% of thedeals made in Japan's rapidly growing syndicated loan market on an arrangement value basis, giving
it by far the largest share of any Japanese bank. We will continue our efforts to expand our businessin the domestic syndicated loan market. During the last fiscal year, with the aim of strengthening our
product marketing capabilities, we reorganized our Financial Products Unit and Asset Management& Transaction Banking Unit and increased their staff substantially in order to accurately meet theincreasing needs of our customers and thus expand our earning opportunities.
20

As we work on transforming our banking business model, we aim to quickly establish our position
as the “Best Solutions Provider” and respond to our customers' needs pertaining to their businessand financial strategies by reallocating our business resources to growth-based, profit-based businessareas and, ultimately, increase the ratio of fee income to 50% of total gross profit.
What are you doing in the areas of corporate revitalization and NPL disposals?
We established the Corporate Restructuring Business Unit in October 2002, bringing together some
150 staff members with the high levels of specialist knowledge and skills demanded for carrying out
corporate revitalization. Corporate revitalization is an extremely difficult task, requiring theformulation of many diverse reconstruction measures and complicated adjustments between
numerous concerned parties. Yet by March 2003, just six months or so after its establishment, we
believe the new unit had almost achieved the targets for supporting corporate reconstruction andthe disposal of NPLs.
Under Mizuho's “Corporate Revitalization Project” initiated this year, the group's organizations
tackling corporate revitalization at our Corporate Restructuring Business Unit, MHBK and MHTB will
be brought together to financial subsidiaries specializing in corporate revitalization. Mizuho
Corporate Bank will accelerate our efforts in the area of support for corporate rehabilitation aiming
to revitalize corporate customers with real needs in this area. We also believe that industrial andcorporate revitalization contributes to revitalization of the Japanese economy.
Tell us about your policies for the strategic restructuring of your international business.
In the area of international operations, we are in the process of strategically reconstructing ourbusiness model to accommodate changes in the management environment. Our strategy is veryclear. It calls for a review of cost structures on the one hand, and for concentration of management
resources on promising geographical areas in the future.
In other words, we have decided to focus our efforts on our home market of Asia, particularly
China, where significant inroads by our customers have encouraged us to establish a full-scale
support system for companies ranging from those engaged in business expansion there to those stillin the initial stages of feasibility studies. In the Americas and Europe, we have conducted a sweeping
review of our exposure to non-Japanese companies from the viewpoint of profitability and credit risk
management. With regard to those customers with good long-standing relationships at the global
level, we have reinforced our product marketing capabilities and started switching to a businessmodel that focuses on fee income as the key source of profits.
Finally, could you tell us about your policies for this year?
We spent last fiscal year setting our direction as a new bank and believe that, after having madeadjustments to our organizational structure and personnel deployment, we have now laid thefoundations for fulfilling our goal of becoming the “Best Solutions Provider.” We are determined tobuild on these foundations and make this year a year of achievement.
Although we face an extremely tough management environment compounded by deepening
deflation pressures on the Japanese economy, the management and employees are united in our
determination to enhance the Mizuho brand.

21

Business Strategy of Mizuho

Business Strategy of Mizuho Corporate Bank

Corporate Banking Unit
Drawing on the Capabilities of the Group to Become the “Best Solutions Provider”
The Corporate Banking Unit serves around 70% of all listed companies in Japan, primarily large
Japanese corporations and their group companies. The unit interacts closely with customers of
the Mizuho Financial Group to provide them with the best solutions.

One to One Marketing
The unit deploys corporate finance professionals with wide-ranging knowledge of the field toengage in “one to one marketing” activities carefully tailored to the needs of individual
corporate customers through 43 business promotion divisions in 18 offices throughout Japan.
By coordinating the specialist functions in cooperation with the Financial Products Unit and otherunits, as well as group companies such as MHSC, this “one to one marketing” approach enables
the unit to consistently offer optimal solutions that are customized to the sophisticated andvaried needs of large corporations.

Providing Advanced Financial Functions
Where funding is concerned, financial institutions are now expected not only to provide
companies with loans on a bilateral basis, but also to fulfill a new financial intermediation
function in bringing together investors and companies in the market. Making use of ourcustomer base, which is the largest of any Japanese financial group, and our extensive networkof institutional investors, including financial institutions, we are working to expand out asset
turnover-type business and have already secured a powerful position as a market leader in thearea of syndicated loans. We also have an excellent reputation in areas like asset/liability
securitization, structured finance and project finance, where high levels of expertise are required.
We utilize these functions to satisfy the funding needs of customers through a wide range ofadvanced financing schemes that go beyond conventional corporate finance.

Development of Financial Services Centered on Advisory-Type Solutions
The Industry Research Division was set up within the unit to survey trends by industry in Japanand overseas. Taking into consideration industry trends and the business environment, businesspromotion divisions in charge of dealing with customers use the division's specialist functions tooffer business strategies and solutions for resolving management issues.

 Provide Advice and Solutions for Business and Financial Strategies
We offer M&A and MBO advisory services and provide structured finance and other solutions forbusiness strategies such as restructuring existing businesses and expanding business into newareas. We also offer solutions for dealing with changes in accounting standards and financial
strategies such as financial restructuring, applying balance sheet controls that use asset
securitization and other off-balance-sheet schemes, as well as improving cash management andthe efficiency of fund operations at group level.

 Enhanced Support for Overseas Subsidiaries of Japanese Companies
Using our powerful international network, we dynamically support the overseas businessactivities of our customers by providing an extensive range of financial advisory services that are
integrated seamlessly with their transactions in Japan. In particular, we have seen a major upsurge
in our customers' need for assistance in developing their businesses in China in recent years.
Using our solid branch network and in coordination with our China Business Promotion Division,
which has a strong record and ample experience in advisory services, we are able to respond to awide range of customer needs, starting from the initial stages of business development in China.
22

International Banking Unit

combine the unit's rich experience in overseas markets with its powerful overseas network andits advanced financial products.

Strategy for Asian Markets(Amounts arranged, January 1 – December 31, 2002)

No.of deals

and foreign customers engaged in global business activities the best solutions that dynamically

Global Project Finance Arrangers
Rank

As part of Japan's leading financial institution, our International Banking Unit offers domestic

Amount(US$
million)

1 Citigroup
2 Societe Generale
3 Royal Bank of Scotland

6,248 433,589 213,257 23

4 Westdeutsche Landesbank 2,894 29
5 Barclays Capital
2,556 13

Japanese companies are very active in developing their business there. We offer the same high6 Mizuho Financial Group
7 BNP Paribas SA
8 HypoVereinsbank AG

levels of financial service as in Japan in essential segments like lending, deposits and foreign

1,608 12
9 Deutsche Bank AG
10 Mitsubishi Tokyo Financial Group 1,493 21

exchange transactions. We also offer high value-added services that use advanced FT, including

Source: PFI, January 22, 2003.

We are focusing considerable effort on Asia because we see it as our home ground and2,367 17
1,666 15
1,639 19settlement-related products based on CMS (Cash Management Services), syndicated loanarrangement, and derivatives-related products designed for hedging against interest rate andforeign exchange risk.

Mizuho's Strong Presence in China
Our customers have made significant inroads into China, where we have built the largest
network of any Japanese bank, with four mainland branches (three of which are licensed tohandle renminbi (RMB) transactions) and five representative offices. We have also set up
comprehensive business alliances with China's four major commercial banks, concluded businesscooperation agreements with the Shanghai Waigaogiao Free Trade Zone and the cities of Dalianand Wuxi, creating a framework that makes the most of our deep ties with the China side tosupport our customers' business efforts.
In Japan, we established the China Business Promotion Division, which brings together thegroup's China-related human resources and expertise to specialize in supporting customers
expanding into the Chinese market. Starting from the initial feasibility studies phase, we draw on
many years of experience and the latest information to offer high value-added advisory services
to many customers ranging from small and medium-sized enterprises to large enterprises, earninghigh praise from customers.

Strategy for the Americas and European Markets
In the Americas and European markets, we have worked to improve our returns in proportion torisks in our loan portfolios by conducting drastic reviews of our exposures to non-Japanese
corporate customers from the viewpoint of profitability and credit risk control. We are switching
to a business model that focuses on profits in the form of fee income derived from asset turnover,becoming more proactive in offering syndicated loan arrangements and similar products to thosecustomers with whom we have good long-standing relationships at the global level.

 Involved in PFI for London
Underground
Acting as a lead manager together
with three other banks, one each fromthe U.K., France and Germany, we succeeded in arranging project financeamounting to 1.8 billion pounds sterling for the London Underground PFI,
signing the deal in December 2002.
Although the London Underground is
the oldest subway system in the world,
its facilities are clearly becoming too
old. The object of the deal is, therefore,
to enlist private sector vitality in aneffort to improve the equipment andinfrastructure. One of the largest PFIs
ever undertaken, the project is of enormous social significance, involving an
innovative scheme to separate theoperating divisions from the equipment
divisions. The Project Finance magazine
selected it as “Deal of the Year” in theEuropean Railway PFI sector.

As the group which knows Asia best, we provide full-scale support for multinational
companies entering the Japanese and Asian markets.
In response to the increasingly varied and sophisticated needs of Japanese customers, we areworking actively to assist them in developing their businesses, offering them products based on
the latest FT in the U.S. and European markets.

Products BusinessWe are striving to strengthen our global products business in order to respond to customers'
complex financial needs while boosting our own profitability. In the area of project financeespecially, we have earned an excellent reputation in the markets for our role as a financial
23

Business Strategy of Mizuho

Business Strategy of Mizuho Corporate Bank

advisor and/or arranger in numerous projects. We are also proud of our capabilities in arranging
MBOs and PFIs, which have earned us a top-class reputation among banks at the global level,
not just among Japanese banks.

Financial Institutions & Public Sector Banking Unit
 Financial Institutions
Making use of our customer base of financial institutions and our distribution network—both
the largest of any Japanese bank—we are actively involved in market-oriented indirect financing
and the solutions business.

Expansion of the Syndication BusinessWe are working to become an asset turnover-type solution bank through active promotion of
the domestic loan syndication business and the securitization business.
In order to satisfy customers' needs in the syndication business in particular, we are building abroadly-based support system to assist with customized after-care in such areas as organizationbuilding, portfolio analysis advisory services, and credit and corporate research know-how.

Offer a Wide Range of Investment Products
As we work to become the “best partner” for our financial institution customers, we are

Glossary Reform of the FILP and FILP
Agency Bonds
Under legislation relating to the reformof the FILP, the system whereby all
postal savings and pension reserves
were deposited with the Trust Fund
Bureau of the Ministry of Finance has
been abolished. Since April 2001, a
new framework has been put in place
whereby these funds and reserves areto be invested autonomously throughfinancial markets, while special public
corporations and other organizations
are to raise necessary funds in the market.
FILP agency bonds are issued without
government guarantees by individual
special public corporations and othergovernment institutions in private sector financial markets.

channeling our efforts into proposing sophisticated and highly varied investment products thatcan meet their increasingly diverse financing needs, particularly in the area of bank debenturesand privately placed investment trusts.

Development of the Solutions BusinessWe are working to provide high value-added solutions in connection with the increasingly
complex and diverse managerial and financial strategies of financial institutions by drawing on
the comprehensive financial service capabilities of the group.
More specifically, we provide various types of in-sourcing operations and advisory services
pertaining to mergers and consolidations of financial institutions, and are actively offering
proposals that contribute to the establishment and reinforcement of internal management
systems necessary for upgrading credit and market risk management.

 Public Sector Entities
Drawing on our strengths in securities-related services and FT, we aim to become a “solution

Mizuho's Participation in FILP
Agency Bond Issues
Number of Issues Entrusted(Fiscal 2002)

Mizuho's Share
62.3%(No. 1 in the sector)

Number of Lead-Manager
Transactions

bank” by making even greater use of the group's comprehensive capabilities in offering optimized
solutions to the requirements of customers among public sector entities.

Responding to a Variety of Customers' Needs Arising from Special Public
Corporation Reforms
As the needs of customers in the public sector diversify in the wake of privatization,transformation into independent administrative institutions and other aspects of special public
corporation reforms, we proactively provide solutions that make use of group FT and expertise.
More specifically, we offer a tailored support regime that embraces consulting in connection

Mizuho's Share*
47.5%(No. 1 in the sector)*Number of transactions of MHSC

24

with the organizational changes affecting customers, advisory services in connection with entry
into new business sectors and business risk analysis arising from business expansion, andsecuritization, project finance and other aspects of financial diversification.

Expansion of the Public Bond Business

Glossary

Since we offer a number of advantages and strengths in the area of securities-related services

 Issues of Major Joint Local
Government Bonds

associated with issues of public bonds, our experience and record in connection with activities as
a commissional bank and underwriting of government-guaranteed bonds, publicly issued local
government bonds and FILP agency bonds surpasses that of other Japanese financial groups.
The group has also proactively channeled maximum resources into issues of major joint local
government bonds, which started from fiscal 2003, and is determined to carve out a position asa market leader in the public bond market, which appears set for robust expansion in the future.

Starting from fiscal 2003, 27 local governments issuing publicly offeredbonds (excluding Tokyo) have been
permitted to float joint issues of publicly offered local government bonds(joint and several obligation/joint signatures method) in order to promote stable
and advantageous fund procurement.

Syndicated Finance Business Unit

Syndicated lending helps borrowers rationalize their finances and expand the range of funding
sources available, while helping fund providers to adopt more diversified, more efficient asset

Global Syndicated Loan Arrangers(Amounts arranged, January 1 – December 31, 2002)

Rank

Expansion of the Syndication Market

Amount(US$ million)

management methods. It also benefits arrangers because they are able to respond to customers'

1 JP Morgan
424,016
2 Citigroup/Salomon Smith Barney 230,410

requirements without depending on their own capital while at the same time securing fee

3 Bank of America
4 Deutsche Bank

220,955
92,058income.

5 Barclays Capital
6 Banc One
7 BNP Paribas

71,781
58,81646,0828 Mizuho Financial Group
9 ABN AMRO

41,61737,314

10 HSBC(Hongkong Shanghai Banking Corp.)

36,744In recent years, awareness of its value has spread quickly, leading to rapid expansion in the
syndication market in Japan, which now ranks third in size behind the U.S. and the U.K.
Drawing on our broad customer base and the network of financial institutions we have built up
to date, the group now ranks eighth globally in terms of amounts arranged (first in the Asia
Pacific region), making us by far the largest Japanese banking group in this respect.

Source: IFR, February 8, 2003.

Syndicated Loan Arrangers

Organization and Approach Policy
In December 2002, we moved to create a more powerful organizational structure by establishing

Rank(Asia Pacific Region Including Japan)(Amounts arranged, January 1 – December 31, 2002)

Amount(US$ million)

1 Mizuho Financial Group

36,870the new Syndicated Finance Business Unit. This move verifies our determination to break away

2 SMBC
3 Bank of Tokyo-Mitsubishi

26,621
18,029from the traditional asset-dependent business model and switch to a business model based on

4 Citigroup/Salomon Smith Barney
5 UFJ Bank
6 Standard Chartered

14,176
7,016
5,611

7 ABN AMRO
8 JP Morgan
9 HSBC(Hongkong Shanghai Banking Corp.)

5,545
4,763
4,682

10 Bank of China

3,735

asset turnover (“originate to distribute” model) that simultaneously promotes more effective useof capital centered on syndicated lending and an increase in fee income.
We thus created a powerful framework for spearheading the Japanese syndication market toits creative and dynamic expansion. Looking ahead, we will respond to the needs of both

Source: IFR, February 8, 2003.

borrowers and fund providers by making proactive use of our syndication functions in new
finance arenas that go beyond conventional corporate finance, such as M&A and corporate
revitalization.

Financial Products Unit
Asset-Backed Securities Business for Customers
Our excellent record in handling issuance of ABCP and a wide range of other structured
finance products puts us in the ideal position to support customers in realizing financial
strategies centered on securitization of monetary claims, thus satisfying their funding needs
while using asset securitization to improve their management indices.

Real Estate Finance BusinessWe support customers in optimizing financial strategies in the area of real estate assets with realestate non-recourse loans, support and advice on real estate development projects and thehandling of accounting for impairment of fixed assets.

 Roppongi Hills Project
Completed in April 2003, this was thelargest urban redevelopment project in
the country, and we arranged Japan's
largest ever non-recourse syndication
for it.

 Kinshicho ProjectThis multipurpose business/commerce/residential project for the redevelopment of a former factory site in
Kinshicho in Tokyo got underway inDecember 2002 and is due for completion in May 2006. We arranged adevelopment finance syndicated loan
to fund the construction of the business and commercial portion.

25

Business Strategy of Mizuho

Business Strategy of Mizuho Corporate Bank Japan's First IPO for an MBO
Company
Japan Pure Chemical arose interest in
December 2002 when it became thefirst MBO company to go publicthrough an IPO on JASDAQ only three
years after a full-scale managementbuyout in which Mizuho's MBO fund
was deeply involved.

Acquisition Finance BusinessCentered on MBOs, we support customers in building the most appropriate business portfolio
for their needs through a full-range service structure embracing advisory, finance and investment
services provided by our team of acquisition finance professionals.

Corporate Revitalization Business
We use DIP (debtor-in-possession) financing and other methods to assist companies in theprocess of corporate revitalization.

Bond Administration

Others 7%¥425.5 billion

We make full use of the best operational set-up

UFJ Group 11%¥665.0 billion

in the business to offer bond administration
services relating to corporate bonds and ABSs.
Glossary B2B (Business to Business)
Business
According to the Electronic Commerce
Promotion Council of Japan (ECOM),the market is expected to expand from¥44 trillion in 2002 to ¥125 trillion in2006. We developed our own original
Mizuho e-Market Financial service asan e-procurement scheme providing
everything from logistics to settlement
functions.

 Securities Settlement System
ReformEfforts are moving ahead to create theconditions necessary for further risk
reductions, including the introductionof DVP (Delivery versus Payment) settlements and T+1 settlements (settlements on the first business day after
the transaction date).

Mitsubishi Tokyo
Financial Group 14%¥856.0 billion

Mizuho 35%¥2,096.0 billion

Sumitomo Mitsui Banking
Corporation 33%¥1,993.5 billion

Source: MHCB (excluding banks' subordinated bonds, banks'
straight bonds, ABSs and structured bonds).

 Trade Finance EDI (Electronic
Data Interchange)
To improve the efficiency of tradeoperations through the use of electronic documentation, we participate
enthusiastically in global projects such as
Bolero, TradeCard and TEDI as a meansof strengthening our cross-border settlement capabilities.

Administration of Domestic Public Corporate Bonds(Fiscal 2002)

Asset Management & Transaction Banking Unit
Defined Contribution Pensions
Drawing on the strengths of the entire group, we propose comprehensive solutions pertaining
to retirement benefits centered on defined contribution pensions, providing pension consulting
services and investment products and follow-up services for participants. We are proud of a topclass market share in this area among management and administration institutions.

Asset Management BusinessWe arrange and sell privately placed investment trusts to meet customers' asset management
needs.

Franchise System in Trust Services
As a franchisee for MHTB, we offer trust products associated with pensions, stock transfer
agency services and securitization through all our branches in Japan.

Foreign Exchange
We provide various solutions to customers who wish to hedge foreign exchange risk andimprove the efficiency of their foreign exchange settlements. We also proactively support steps
to improve the efficiency of customers' trade operations using Internet-based services such as
Bolero, TradeCard and TEDI.

Custody and Foreign Exchange
Yen Clearing Business(As of March 31, 2003)

Yen Custody Assets ofForeign Investors

e-Business
To meet customers' needs for more efficient cash management, we offer comprehensive solutions
centered on domestic and overseas CMS (Cash Management Services) utilizing Internet technology.

MHCB's share:
45%(No.1 among
Japanese banks)

We also draw extensively on our ties with leading software vendors to provide advanced
services such as electronic certification, B2B portals, and Mizuho e-Market Financial, the first eprocurement scheme set up by a Japanese bank in order to reduce purchase costs.

Number of Foreign Exchange(Yen Clearing) Agency Settlement
Transactions
MHCB's share:
34%(No.1 among
Japanese banks)

Clearing & Settlements
We maintain an overwhelming market share in the yen custody business for non-resident
foreign investors. And as the top Japanese bank in this area, we respond proactively to shorter
settlement cycles and other aspects of securities settlement system reform.

26

We continue to strengthen our operations and respond to outsourcing needs in the area of
foreign exchange yen clearing and foreign trade operations, where we have the top share in Japan.

Corporate Restructuring Business Unit
Involvement in Corporate Revitalization~ Establish a Specialist Team and Utilize Accumulated Expertise ~As a partner in corporate revitalization and restructuring to accommodate the increasingly
diverse and sophisticated management and business strategy needs of customers facing businessconsolidation and restructuring, we are committed to accurate and timely responses in areas like
M&As and transfers of operations.
The formation of the Corporate Restructuring Business Unit in October 2002 established ascheme that can provide speedy, multifaceted advice to satisfy customer requirements, andbrings together some 150 staff members boasting high levels of specialist knowledge and skills
into six divisions.
Furthermore, we make maximum use of the specialist functions of group companies such as
MHSC and Mizuho Corporate Advisory in devising proposals to satisfy customers' businessstrategies in light of industry trends and the business environment.
We will also cooperate with the group's four financial subsidiaries and its advisory company
specializing in corporate revitalization in further accelerating our support for companies planningor going through revitalization.

ALM & Trading Unit
Sales and Trading Operations
Our sales and trading team ranks among the largest of any Japanese bank and boasts an
excellent record. It underpins our business strategy as a “solution bank,” putting forward
proposals to customers concerning fund raising/investment schemes and risk management, andoffering effective products.
More specifically, the team seeks to satisfy both customers' financial and business risk control

 International Foreign Exchange
Division Featured on TV
TV Tokyo's network featured the workings of our International Foreign
Exchange Division in the international
foreign exchange markets during thetense Iraq situation in its documentary
program Gaia no Yo-ake (Gaia's Dawn)
broadcast on April 8, 2003.

requirements by offering risk hedging schemes and other optimized solutions. In addition toforeign exchange and interest rate derivatives, the team uses cutting-edge FT to devise a broad
lineup of derivative products whose underlying assets include crude oil and other commodities,
credit, the weather and equities.
In order to be able to provide customers with consistently high-quality services in the areas offoreign exchange and currency options, we have established a global network linking five key
markets – Tokyo, New York, London, Singapore and Hong Kong. In addition to market-making,we engage in proactive trading based on a careful and detailed grasp of inter-market pricemovements governed by precise risk management procedures.

Banking Operations: ALM
We carefully manage the interest rate risk and liquidity risk associated with our portfolios, which
comprise the assets we hold, including loans, yen and foreign currency-denominated securities,
as well as liabilities like deposits and bank debentures. These effective risk controls make flexible
use of derivatives and other transactions, and enable us to ensure a stronger, more stableearnings structure.
27

Business Strategy of Mizuho

Business Strategy of Mizuho Bank

I would like to thank our shareholders and customers for your continued support. Mizuho Bank waslaunched on April 1, 2002 to provide banking services to customers consisting primarily of
individuals, domestic small and medium-sized enterprises (SMEs), middle market enterprises, andlocal governments. Once again, I wish to thank our customers and other stakeholders who havegiven us so much support during our first year in operation. I would also like to take this opportunity
to express my deepest apologies for the computer systems problems that affected our domestic
services such as delays in automatic debit transactions and problems in ATM services when Mizuho
Bank and Mizuho Corporate Bank started operations inconveniencing many of our customers. We
have established a preventative structure in order not to repeat similar problems.
Our aim at Mizuho Bank is to become the customer's bank of choice and best business partner by
providing comprehensive, high value-added financial services and achieving the highest level ofcustomer satisfaction. We look forward to your continued support.
July 2003

Tadashi Kudo
President & CEO, Mizuho Bank, ltd.

A year has passed since Mizuho Bank started operations. What sort of year has it been
for the bank?
It was a difficult start because we were faced with a severe financial environment, that is, deepening
deflation, falling stock prices, and weak corporate demand for funds. Moreover, we had to recover ourcredibility following the systems problems that occurred in April 2002. To cope with the situation, we
announced and implemented the “Change & Speed-Up Program” and the “Business Reorganization”
last fiscal year, and moved to raise over ¥1 trillion in new capital. Unmistakably, it was a year for laying
the foundations for the group's future. We, therefore, see this coming year as a year of achievement,
which we aim to accomplish by taking an aggressive approach to establishing a base for stable, highearnings.
Which measures have you prioritized in order to make this a year of achievement?
We face three key issues: the strategic rebuilding of our earnings structure, thoroughgoing efforts toimprove our asset portfolios and speedy execution of cost structure reforms.
In addressing the first of these issues—strategic rebuilding of our earnings structure—for theindividual customer market, in order to reinforce our high-earning assets under management andhousing loans businesses, we will strengthen our relationship with customers and respond precisely
to their financial needs during their various life stages by building a customer segmented businesspromotion structure. For the corporate market, we will carefully analyze the market to obtain an
accurate grasp of customers' funding needs, as well as aggressively offer them solutions in areas like
M&A, real estate finance, and syndicated loans.
In facing the second issue—thoroughgoing efforts to improve our asset portfolios—we haveincreased substantial loan-loss reserves at the last fiscal year-end in March and we are now on
course towards resolving our non-performing loan (NPL) problems. But that is not all. We will28

further strengthen our efforts to prevent new NPLs from emerging andsupport corporate revitalization.
And the third issue—speedy execution of cost structure reforms—calls
for the early establishment of robust, efficient systems that aim toaccelerate thorough expense cutbacks in non-personnel expenses, branchamalgamations, and reductions in the number of personnel to the
maximum extent possible with the aim of reducing the ratio of expenses togross profits to the 40% level. Especially, with regard to branch amalgamations,
we will reduce the number of our branches by 104 by the end of March
2004, to achieve our plan to bring the total down to 440 branches.
Tell us about your program for financing SMEs.
SMEs rank alongside individuals as extremely important customers. Satisfying the funding needs of
SMEs and helping them resolve management problems is one of our missions, and withouttransactions with these vitally important customers, any recovery in our performance would be
impossible. We have, therefore, recognized anew the fact that increasing and expanding our loans
to these customers is one of our most important management issues, and we are working toenhance our business promotion structure and strengthen our product line-up. Specifically, we will
provide cutting-edge solutions that match their specific business strategies in areas such as highquality funding and investment banking, syndication, derivatives, assistance with public offerings andoverseas business expansion. We will also focus more on supporting businesses with high growthpotential such as new businesses and venture businesses.
Tell us about your efforts towards increasing customer satisfaction and invigorating theorganization.
We have been placing even more emphasis on actively promoting customer satisfaction (CS), and inorder to further strengthen our efforts in this area, we have also placed our focus on invigorating theorganization this fiscal year.
CS is an essential aspect of our business performance, and in order for our customers to be satisfied even further, an organization that is full of vigor is absolutely necessary. In other words, because
our profits are derived from our customers in return for services we provide to them, maximizing
customer satisfaction is an essential prerequisite for improving the bank's performance. At the sametime, customer satisfaction is the greatest source of gratification for employees, and the accumulation of such gratification acts as the driving force that sustains a dynamic organization that can provide even better services. Each and every employee's desire to be helpful to customers is reflected intheir actions, which in turn enhances even further the customer's trust and satisfaction in us.
In order to increase customer satisfaction on a wider scale, we are currently promoting a bankwide “CS Campaign.” We believe it is essential to deal and speak with customers in a manner thatconveys both a sense of gratitude to them and a feeling that we want to be helpful to them.
As for invigorating the organization, we have already implemented the job application system andthe 360-degree evaluation for all managers, and introduced a job application system for branch general manager positions. We are also improving operational efficiency and fostering human resources.
Everyone at Mizuho Bank, from top management to each and every employee, is committed torecovering customer trust and improving our performance.
29

Business Strategy of Mizuho

Business Strategy of Mizuho Bank

Consumer and Private Banking Group
Number of Customers Utilizing
Membership-Style Banking
Services

Our goal is to become the customers' bank of choice~ Fully satisfying customers throughout their lives ~(customers in millions)8•

Promotion of Relationship Marketing
We will make a thoroughgoing effort to satisfy customers by creating a business7•

promotion structure that can provide the best products and services.

6• Membership-Style Banking Services — “The Mizuho Value Program”

5•

In March 2003, we upgraded our Mizuho Value Program.
4•

The program offers two service plans. The “basic plan” offers, for example, free use of ATMs

3•

after banking hours, as well as three levels of benefits depending on the nature of transactions.

Sept. 2001 Mar. 2002 Sept. 2002 Mar. 2003

The “members plan” offers wide-ranging advantages for a fee. Currently, we have over sevenmillion members, making it the largest such service in Japan.

 Databases
We will continue to build up databases that allow the access and accumulation of additional
data concerning customers through various channels, and will make use of the information
extrapolated from these databases to ensure that our business structure provides individual
customers with the best possible responses and services.

 Asset Management Advisory Services
In order to satisfy our customers' increasingly diverse asset management needs, we offer a wide
range of products, including yen deposits, bank debentures, Japanese government bonds forprivate individuals, foreign currency deposits and the Mizuho Fund Collection of investment
trusts. We have also expanded our force of highly trained specialized staff to provide asset
management advisory services, extending from portfolio proposals to after-care, that fit perfectlywith individual customers' life plans.

 Private Banking
We aim to become partners to our customers not just for their lifetimes, but into the next
generation as well. Our teams of highly experienced private bankers and financial planners takeadvantage of the group's capabilities in areas like securities and trust banking, and incooperation with tax accountants and accountants, provide individually tailored asset investment
Mizuho UC Cards

and management services, and inheritance plans.

 Credit Cards (Mizuho UC Cards)
UC Card serves as the group's comprehensive credit card company. Customers can use its wide
range of card services through its exclusive Mizuho UC Card with a sense of security.
Outstanding Balance ofResidential Housing Loans(¥ billions)
10,000 •Stronger Approach to Strategic Markets and New Businesses Housing Loans
We offer an extensive range of housing loan services to match the home ownership plans of

8,000 •

customers. All of our services feature a high degree of flexibility, allowing customers to select6,000 •

from various interest methods (variable-rate interest, fixed interest rates, etc.) or specify
repayment amounts. We will establish a framework that will allow us to provide customers with4,000 •

speedier, more appropriate advice by strengthening cooperation between our nationwide full-

2,000 •

service branches and housing loan business promotion centers, which have strong ties with real0•

Sept. 2001 Mar. 2002 Sept. 2002 Mar. 2003

*Aggregated figures of the former
three banks up to and including
March 2002.

30

estate companies.

 Retail Business Aimed at Corporate Employees
Making the most of our group's customer base and office network, we offer a wide range ofasset-formation products and services including housing loans and company sponsored
employee savings programs to meet corporate management needs associated with in-houseadministrative rationalization and employee benefits, as well as corporate employees' needs formore convenient services.

 Insurance
We provide life planning consultation services tailored to customer needs and offer individual
variable annuities (“IVAs”), annuity installment indemnity insurance for their comfortable postretirement years, long-term housing loan-related fire insurance, loan repayment support
insurance and overseas travelers' personal accident insurance.

 Takarakuji LotteriesMizuho Direct Starts Operations

We have been entrusted with the operation of Takarakuji lotteries by all prefectures and 12
designated cities in Japan.
As the “Takarakuji Bank,” we respond to customers' needs by making the most of our
network of full-service branches, increasing the number of dedicated sales outlets anddeveloping new sales channels.

Realize Greater Efficiency
We will expand our ATM and remote channel networks to increase convenience andpromote cost cutting.
 Multi-Channel Networks
With our nationwide network of full-service branches, we continue to offer customers greater
convenience by expanding the number of close-to-customer, easy-to-use transaction counters at
our in-store branches – branches established within the premises of supermarkets and the like.
As of the end of March 2003, we had ATMs in approximately 9,200 locations, including jointuse ATMs established through tie-up agreements with convenience stores, and are actively
working to expand this network.

Corporate Banking Group
Offering Optimal Solutions
 Funding Support for Small-Scale Companies
To specialize in supporting the funding activities of SMEs, we have established Mizuho Business

In March 2003, we launched “Mizuho
Direct,” a service that allows customers
to execute banking transactions by personal computer, telephone, mobile
phone and other methods under a single contract. Customers can accesstheir account at any Mizuho branch inJapan to check their balances, maketransfers between their accounts freeof charge or transfers to otheraccounts, and conduct transactions
including time deposit, foreign currency deposit and purchase of investment trust and even lottery tickets.

 Mizuho Business Finance Centers
Our Business Finance Centers offer
smaller corporate customers tailormade funding information and advice.
• Customized information and advice
on funding, loans and various institutional lending schemes.
• Access tools include telephone, facsimile, direct mail, Internet and electronic mail.
• Currently there are seven centers
located in the Tokyo area and Osaka,
to which approximately 100 veteranstaff are deployed. In the future, weplan to increase the number of centers to 20 to 30, and staff them with
500 employees.
• Results: 26,000 companies, ¥230 billion in outstanding loans.
(As of March 31, 2003)

Finance Centers staffed by an experienced team of some 100 who offer consultations and otherpersonalized support on lending by telephone and other means.
We also offer “Mizuho Advanced Partner,” an unsecured loan product that uses a rapid‘automatic credit-scoring model’ for responding speedily to the funding needs of smaller
corporate customers.

 Management and Start-Up Support for Newly-Launched Businesses and New
Businesses Mizuho Business Mall
Aimed at company owners and management level customers in charge offinance and business promotion,
Mizuho Business Mall offers the latest
management and business information
on a weekly basis through e-mail andan exclusive home page, and answers
questions and accepts requests.

We provide proactive support for companies involved in the development of new technologies
and products, developing funding methods that go beyond traditional methods, such as the
copyright investment scheme, which utilizes beneficial interests in trust, or making use of theCharitable Trust for Mizuho New Business Fund for venture funding.
We also respond to IPO needs through multi-faceted collaboration with Mizuho Capital,
Japan's leading bank-affiliated venture capital company, MHIS and MHTB.
31

Business Strategy of Mizuho

Business Strategy of Mizuho Bank

 Charitable Trust for Mizuho
New Business FundThis fund was set up in 1996 by MHBK's
contribution and has been managed by
MHTB. The fund aims at contributing to
the promotion and support of SMEs
through a subsidy program for R&Dand knowledge-intensive venture companies. Applications for financing areaccepted once a year, and through fiscal
2002, an aggregate total of 85 companies had been granted subsidies.

 Support for Business Expansion and Reorganization
We use the bank's broadly based business research capabilities to provide powerful support forcustomers in realizing and executing business plans to deal with their management issues.
Specialists provide speedy responses for resolving business issues by offering investment banking
services such as M&As and MBOs.
We are the top Japanese banking group in arranging syndicated loans, which contribute to
the diversification of funding sources.

 Support for Business Activities in Asia
In order to satisfy the needs of Japanese corporate customers actively entering into Asian New Schemes and Products
Copyright investment scheme
In addition to lending that uses copyrights as collateral and securitizing the
profit distribution rights inherent in
copyrights, securitization of the subsidiary revenues from sales of character
goods derived from popular animation
video movies offers useful support for
funding. In November 2002, we madeour first offering in this field when we
issued trust certificates in trust basedon secondary income from several
dozen popular animation works andsold them to corporate customers.

Loans with stock purchasewarrants
In a tie-up with Mizuho Capital, we
became the first major bank to provide
low-interest finance using stock subscription rights for customers planning
IPOs.

Vendor financeassistance in customers' local projects through our group's overseas network, which is the mostextensive of any Japanese bank.

 Hospital Management Support
We offer comprehensive consulting services to deal with the environmental changes affecting
hospital management. We have already conducted hospital management support projects
assisting some 300 hospitals in rationalizing and boosting managerial efficiency, fromhealthcare-related systems, medical equipment and hospital meals to medical administration andpharmaceutical prescriptions, as well as financial issues and management.

Provide a Rapid Response though IT
Centered on the Internet-based Mizuho Business Mall, we periodically offer some 30,000
companies and 70,000 individual members the latest information on management and businessissues such as financial strategy, business strategy, international information, financial
management, management consultation, human resources and labor.
Furthermore, inquiries that customers submit via the Internet are responded to quickly by theThis financing scheme uses machine
tools and other equipment as collateraland is offered in conjunction withgroup leasing companies that are wellacquainted with the management anddisposal of equipment.

dedicated staff at head office and in branches.

Special purpose loans related todiesel-powered vehicles

We are developing new products to satisfy sound demand for funds from the SMEs and middle

This scheme was introduced to provide
finance to meet replacement demandfor diesel-powered vehicles amongsmaller enterprises required to satisfy
new exhaust emission controls(Automotive NOx and PM Law, theEnvironmental Security Ordinance of
the Tokyo Metropolitan Government,etc.).

Mizuho Frontier Partner 03
We established this scheme to provide
new customers who meet certain conditions in respect of operational sizeand other factors with up to ¥100 million in necessary business funding percompany without requiring collateral or
third party joint and several guarantors.

32

markets, particularly China, specialist staff who are well-versed in overseas conditions provide

Funding Support for SMEs and Middle Market Enterprises
 Product Development, etc.
market enterprises that underpin the Japanese economy, including loans with stock purchasewarrants, vendor finance (with leasing company guarantees) and special purpose loans related
to diesel-powered vehicles in connection with the Tokyo Metropolitan Government's exhaustemission controls. We are also responding proactively to the diversification of funding methods
by arranging CLOs and CBOs as part of the Tokyo Metropolitan Government's bond market
program.

 Develop New Markets and Increasing Our Customer BaseA staff of 500 works exclusively to attract new customers among successful SMEs and middle
market enterprises. We have also developed the “Mizuho Frontier Partner 03,” a new unsecured
loan product designed to open up new markets.

Public Sector Banking Group
Effective Response to the Diversifying Administrative Needs of Local
Governments
The shift of authority from the national to the local level has increased the importance of theroles played by local governments and the fiscal measures they implement. Efforts now focus ondeveloping and establishing simple, efficient administrative structures capable of dealing withnew administrative issues and responding to the diverse needs of residents, and on reforms
designed to improve the health of local government finances. Moreover, to ensure that public
services are provided efficiently and effectively, numerous deregulatory measures have been
introduced, including the contracting out of services to the private sector. We are actively
involved in providing financial services to contribute to efficiency improvements in local
government, arranging PFIs and introducing the Pay-easy and other electronic payment systems
for public charges.
In fiscal 2002, Mizuho Research Institute was commissioned to undertake 29 PFI research andadvisory projects, which is among the most taken on by any think tank in Japan. With regard to
the computerization of payment systems for collecting public charges for local governments,from January 2003, we started practical tests of the Pay-easy payment service for electroniccollection of charges for the use of municipal welfare facilities and parking facilities formotorcycles and bicycles in Tokyo's Mitaka City, which became the first local government to try
such a system.
As a designated financial institution for 35 local governments mainly in the Tokyo
Metropolitan area, we are making every effort to fulfill the expectations of local governments
and residents. We also make use of our nationwide network of full-service branches in providing
tailored financial services to local governments and related bodies throughout Japan.
During fiscal 2002, we arranged CBOs and CLOs for the Tokyo Metropolitan Government's“Financial Market Plan,” which is a scheme designed to provide support for direct fund raising.
Also, the new financing scheme we proposed for replacement of diesel powered vehicles in
response to the new regulation beginning in October 2003 has been accepted and introducedby the Tokyo Metropolitan Government as an urgent and enhancing support measure in themetropolitan area.

Proactive Response to Needs Arising out of FILP and Special Public
Corporation Reforms
As progress is made in reforming the FILP, reorganizing national government ministries andagencies, and reforming special public corporations, the needs of public sector entities are
rapidly diversifying. In addition to devising responses for dealing with the various new methods
now emerging for procuring and investing funds, we closely follow developments as more public
entities are transformed into independent administrative corporations, privatized or closed andconsolidated. We stand ready at all times to offer them high-level services that bring together
our group research and advisory capabilities, FT and expertise.

33

Business Strategy of Mizuho

Business Strategy of Mizuho Bank

Trading and ALM Group
Sales and Trading Operations
The group offers not only traditional financial services and instruments like foreign exchange andCP, but also a broad line-up of derivative products such as interest rate and currency derivatives,
commodity derivatives (crude oil, metals and other commodities) and weather derivatives byusing cutting-edge financial technologies in order to provide solutions to customers' risk
MHBK's dealing room

management requirements for hedging against financial and business risks. Moreover, we
respond to a wide range of customer needs quickly by deploying a highly specialized sales
support team to cover our nationwide branch network, by offering timely market information
through the Internet, and holding various seminars for customers.
We conduct trading activities in a flexible manner by managing market risk and other types ofrisk appropriately.

Banking Operations
We carefully manage the interest rate risk and liquidity risk associated with our portfolios, which
comprise the assets and liabilities we hold, including deposits, loans and securities. These
effective risk controls make flexible use of derivatives and other transactions, and enable us toensure a stronger, more stable earnings structure.

Securities and Investment Banking Group Tokyo Metropolitan Government's
CBO Program
We arranged CBOs for the Tokyo
Metropolitan Government's Financial
Market Plan.
After the bank subscribed for private bonds (uncollateralized, unguaranteed and with a maturity of
approximately two years) issued by 189
SMEs mainly in the Tokyo Metropolitanarea, a special purpose company used
these bonds as collateral for public
issues of CBOs, which were then soldon to institutional investors by MHSC.

 Promoting One-Stop Shopping
In October 2002, we opened the firstjoint branch to offer banking and securities services in the same lobby in
Shakujii, Tokyo following the relaxationof regulations that required clear separation between the branches of banks
and securities companies. In November
2002, we opened the first joint branch
in Japan to feature banking, securities
and trust bank services in Omori,Tokyo. In January 2003, we opened ajoint branch to offer banking, securities
and trust bank services in Hamamatsu,
and set up the first securities company
sales booth in the banking lobby. As ofthe end of June 2003, we were operating 15 joint bank/trust bank branches,
10 joint bank/securities branches andtwo joint bank/securities/trust bankbranches.

34

Securities and Investment Banking Operations
In addition to our own services, we employ the underwriting capabilities of group securities
companies such as MHIS and the overseas subsidiaries of our group to provide SMEs and middle
market enterprises with support in procuring funds through issues of private and public bonds,
foreign bonds, equities and collateralized bond obligations.
We also draw on our group's comprehensive capabilities to provide services to companies
that plan to go public. These capabilities include advice from MHBK and group securities
companies, investments through Mizuho Capital, a leading venture capital company, andunderwriting and sales of equities by MHIS.

Cooperation with Group Securities Companies
Group securities companies such as MHIS offer a wide variety of financial services for MHBK's
corporate and individual customers with securities investment needs.
MHIS is in a position to provide speedier advice on financing after it resumed underwriting
operations for corporations through its 61 branches in Japan from fiscal 2003.
MHBK and MHIS have already established 12 jointly operated branches, and will step up ourefforts to establish new-type joint branches using booths set up in space leased within thebanking floor area, thereby offering more convenient comprehensive financial services in theform of one-stop shopping for banking and securities services.

Trust and Asset Management Group
Investment Trusts
The extensive Mizuho Fund Collection is designed to offer appropriate solutions for customers' asset
management requirements. To help customers with their long-term investment plans, we also
provide advice on asset allocation according to investment targets and risk tolerance, and a carefully
devised after-care program concerning investment performance and the profit and loss situation.

Defined Contribution Pensions

Screen shot of MHBK's M-PAS Portfolio
Advisory System.

We act as a management and administration institution for corporate customers, providing
integrated services from feasibility studies and scheme design through to the introduction andadministration of defined contribution pension schemes. We provide support for individual
customers through a pension asset formation scheme called the Mizuho Personal Pension Plan.
By offering services and products that satisfy corporate customers, participants and individual
customers, we are channeling our total resources and capabilities into becoming a frontrunner in
the Japanese defined contribution pension market.

Franchise System in Trust Services
As a franchisee of MHTB, we are able to respond faster and more precisely to customers' financial
needs and offer more in-depth solutions in the form of highly specialized trust products in areas likepensions, stock transfer agency services, securities management and securitization. As of March 31, 2003,
379 branches handled these services, concluding over 300 contracts in the year beginning April 2002.

e-Business Services GroupB2B (Business to Business) BusinessWe are using our customer base, the largest of any domestic bank, as the foundation forstrengthening our firm banking services in Japan.
We respond to customers' needs by offering cash management services between affiliated Debit Cards
This service enables customers to makepurchases and pay bills using their cash
cards.
Customers simply insert their cash
cards into the terminals installed at participating stores displaying the sign
shown below. After the terminal reads
the information recorded on the cashcard, the customer simply inputs his or
her personal identification number.
Participating stores contracted with
Mizuho account around 32% of sales
revenues of debit cards in Japan.
Source: Japan Debit Card Promotion
Association survey.

companies, Internet banking services for corporations and products that customers can use infacilitating all aspects of settlement, such as invoicing, payments and reconciliation of accounts
receivable.
The J-Debit mark.

B2C (Business to Consumer) Business
The group has played a key role in popularizing the use of debit cards, and both the number ofparticipating stores and the amounts involved have been increasing. We are also working actively
to expand convenient services such as our Internet shopping payment settlement scheme.
In the area of IC cards, which are also in the spotlight because of their multi-functionality andstrong security features, we continue our quest to develop more sophisticated cash cards thatincorporate IC chips, such as employee ID cards combined with cash cards.

Multi-Payment Network Services
The group is playing a central role in the building and operation of a multi-payment networkthat will constitute the core of a government-private sector settlement infrastructure. The Pay-

 Pay-easy
Customers use this service to pay theirbills, taxes and treasury fund remittances using PCs, mobile phones andATMs.
We were the first financial group in
Japan to offer these services for thepayment of mobile phone bills andairfares. We are also making a major
contribution to the promotion of “egovernment” through practical testingof systems for electronic collection of
charges for the use of municipal welfare facilities and motorcycle and bicycle parking facilities.

easy service for payments of bills is already in operation, and we are pursuing convenience forcustomers through the development of new services, such as the automatic debit transactions
reception service that is to be introduced soon.

The Pay-easy mark.

35

Business Strategy of Mizuho

Business Strategy of Mizuho Bank

Trade Services Group
Glossary

Foreign Exchange Silent Confirmation

While working to improve the quality of our various foreign exchange transaction services, weRefers to the practice of confirming the
L/C in question (confirmation) without
notifying the bank issuing the LC(silent), at the request of the exporterin export L/C transactions.

 Forfaiting
Refers to purchases on the condition of
acceptance of time bills without theright of recourse for repurchase by theexporter in export L/C transactions.

 Invoice DiscountRefers to a scheme whereby MHBK
provides finance while our group's factoring company, Mizuho Factors, provides a final collection guarantee fordeferred remittance export transactions.

saw the expansionary trend in business with Asia as an encouragement to put more effort into
increasing our turnover in the area of import-export transactions by enhancing our services in
Asian currencies such as the Chinese renminbi, the Taiwanese dollar and the Korean won.

Foreign Currency Deposits
In addition to ordinary and time deposits denominated in six currencies – the U.S. dollar, British
pound sterling, Swiss franc, Australian dollar and New Zealand dollar – we extended our productrange by offering special foreign currency time deposit contracts denominated in the U.S. dollar
and the euro for hedging against exchange risk within certain parameters, taking the number
one position among Japanese banks in terms of outstanding deposits. We also offer a foreign
currency transfer service that allows two-way transfers between yen deposits and foreign savings
deposits (U.S. dollar) through ATMs using a single cash card.

Trade FinanceAs the need for hedging against risk connected with recovery of export claims increases, we areadding new schemes such as silent confirmation and forfaiting to the confirmation of L/Ctransactions. For non-L/C transactions, we have moved to meet an even wider range of needs byproviding invoice discount in a tie-up with our group factoring company, Mizuho Factors.

Trade Finance EDI
To improve the efficiency of trade operations through the use of electronic documentation, we
participate enthusiastically in global projects such as Bolero as a means of strengthening ourcross-border settlement capabilities.

36

Business Strategy of Mizuho

Securities Business Strategy

Basic Strategy for Securities BusinessIn the securities business sector, the group's three securities companies—MHSC, MHIS and Shinko Securities—are making
the most of their strengths and advantages in order to make a contribution to consolidated group profits and competewith other major securities companies.
MHSC is a top-class investment bank in Japan that operates at a global level and follows business models that enable it
to deliver high profitability. MHIS cooperates with MHBK in responding to the securities investment needs of MHBK's
customers, while Shinko Securities makes its comprehensive securities services available for proactive use by the group.
In the “Business Reorganization” implemented by the group in March 2003, MHSC was made a subsidiary of MHCB
and MHIS a subsidiary of MHBK in order to pursue greater synergies by strengthening the ties between group banks andsecurities companies on the basis of customer segmentation. This resulted in the creation of a framework for providing
comprehensive solutions that make the most of the respective functions of the banks and securities companies.
More specifically, cooperation between MHCB and MHSC has enabled them to establish a broad product line-up thatsatisfies customers' increasingly complex and sophisticated needs and offer more specialist products and services through
MHSC's bond-, stock- and investment banking-related functions. MHBK and MHIS are working to improve customer
convenience further by offering “one-stop” financial services through their active and ongoing program of opening new
joint branches.
In addition to this, MHSC is also strengthening its cooperative relationship with MHIS and Shinko Securities, setting up abusiness alliance with Shinko Securities in December 2002 to create a joint marketing relationship for securing underwriting
business, and will continue to form new business alliances in a wide range of fields.
Characteristics of the Three Group Securities Companies
MHSC

A securities company specializing in wholesale services for a wide range of customers covering domestic institutional investors, corporations, financial institutions and public institutions.

MHIS

A securities company catering to group customers through a tie-up with MHBK.

Shinko Securities

A comprehensive securities company specializing in the middle market and retail securities businesses.

Mizuho Securities and Its Overseas Securities Subsidiaries
Basic Strategy

Domestic SB League Table (LeadManaged Issues)
Total issues: ¥4,824.0 billion
Lead man- Market
aged issues share(billion yen)(%)

offer optimized solutions in the areas of securities and investment banking in response to the

Rank

MHSC and its overseas securities subsidiaries operate as wholesale securities companies thatneeds of domestic and overseas institutional investors, corporations, financial institutions and1 Nomura Securities

1,096.7

22.73

public institutions. Its core businesses are debt, equities, M&A and structured finance and it

Daiwa Securities
2 SMBC

856.4

17.75

competes with the big firms of Europe and the U.S. as a professional house that draws on high-3 Mizuho Securities

800.0

16.58

quality human resources and advanced FT to offer consistently excellent products and services at

4 Nikko Citigroup

771.7

16.00

the global level through its bases in New York, London, Zurich and Hong Kong.
In fiscal 2002, MHSC posted consolidated Ordinary Profits of ¥43.2 billion, and aims to
exceed ¥50 billion by fiscal 2004.

Joining the Ranks of the Big Three Securities Companies in Bond Trading
As a leading player in the bond market, MHSC follows the basic principle of being a bond housethat customers can trust, providing products that suit their investment strategies, engaging
proactively in market making, and offering high-quality information. In the primary bondmarket, it ranked third in the domestic straight bonds (SB) league table behind Nomura

Securities
company

Mitsubishi
426.0
8.83
5 Securities
Goldman Sachs &
220.9
4.58
6 Co.
UFJ Tsubasa
156.0
3.23
7 Securities
Merrill Lynch
113.3
2.35
8 Japan Securities
Norinchukin
97.0
2.01
9 Securities
UBS Warburg
62.5
1.30
10 Securities* April 1, 2002 – March 31, 2003
* Contract date basis.
* Excluding city bank issues, self-financing
issues, and retail investor target issues.
* Source: IN Information Center

37

Business Strategy of Mizuho

Securities Business Strategy

Securities and Daiwa Securities SMBC, and first in the area of electric power bonds and FILP
Agency Bonds in fiscal 2002, and has a powerful presence in the secondary bond market.
In the area of research, it maintains its steady efforts to provide macroeconomic, credit andother market analyses and portfolio diagnostic services to satisfy customers' individual needs. As
a result, MHSC captured the number one position in four divisions in the Eighth Nikkei Bond
Information rankings published by the leading Japanese financial daily, Nihon Keizai Shimbun—
bond analyst, economist, credit analyst, and overall evaluation by company—the latter for thesecond successive year.

Equities Trading Gets Underway in Earnest
In equities trading, MHSC provides a full line-up of services for a wide range of customers, fromdomestic and overseas institutional investors to corporations, financial institutions and public
corporations. To build on the excellent reputation in the area of macroeconomic analysis, itsought to strengthen its research capabilities in the area of individual corporate analyses by
Announced M&A; Japanese
Target, Any Acquirer

reinforcing its team of sector analysts. As a result, its overall ranking in all sectors in the 15th

Rank

(excluding equity carveouts, withdrawn
deals & open market repurchases credit totarget & acquirer advisors)
Rank value
No.of
(US$
Advisordeals
million)expanding its block trading and other transactional capabilities both in the domestic market andwith institutional investors overseas, cooperating with the sales teams of its securities

1 Nomura

16,414.0 117

subsidiaries in London, New York, Zurich and Hong Kong to create a framework that will allow

2 Daiwa Securities SMBC

7,768.3

86

rapid and accurate global dissemination of research reports. MHSC aims to strive harder to

6,895.1

87

develop its global business through overseas placements and IR briefings for institutional

6,884.6

21

investors.

5 Goldman Sachs & Co

4,205.8

10

6 JP Morgan

4,126.1

10

Top-Level Investment Banking

7 Morgan Stanley

4,120.4

23

MHSC's investment banking activities are built on two pillars: M&A and other financial advisory

8 Global Corporate Advisory 3,888.9

14business pertaining to corporate mergers and buyouts, and structured finance business

9 Arthur Andersen

3,732.6

7

pertaining to ABS and real estate securitization. Both these areas are closely intertwined with the

10 UFJ Holdings

3,066.637

structural reform of the Japanese economy in areas such as industrial reorganization and balance

Mizuho Financial
3 Group
Citigroup/Salomon
4 Smith Barney* January 1, 2002 – December 31, 2002
* Source: Thomson Financial

Securities company

No. of issues

Rank

General ABS Bookrunner League
Table

1 Mizuho Securities 17

Amount Market(yen in sharebillions) (%)

sheet restructuring.

 Advisory Business
MHSC is among the world's best in the M&A advisory business, coming in third in terms oftransaction value and second in terms of number of transactions in the M&A advisory rankings
for January-December 2002. As the pace of change in the business environment accelerates, it

620.3

20.31

will continue to provide advisory services in connection with corporate mergers, stock-for-stock

UFJ Tsubasa
2 Securities
Daiwa Securities
3 SMBC
Merrill Lynch
4 Japan Securities

7

360.3

11.80

exchanges, corporate splits, sales and purchases, business tie-ups and capital strategies, as well

11

354.0

11.59

as corporate revitalization and sell-offs of NPLs.

4

314.0

10.28

 Structured Finance

5 Nomura Securities

7

303.1

9.92

Another vital element of the investment banking business is the structured finance business,

6 Nikko Citigroup

9

257.5

8.43

which covers the securitization of real estate and monetary claims such as lease receivables and7 Shinsei Securities

6

204.4

6.69

housing loan claims, and lease finance. MHSC has drawn on its human resources and know-

Morgan Stanley
8 Securities

4

135.8

4.44

how to compile a solid record in this area, in the process becoming a market leader. It was also

CSFB

4

134.1

4.39

successful in maintaining its number one position as a general ABS bookrunner for two

J.P. Morgan
10 Securities

4

115.2

3.77

successive years in fiscal 2001 and fiscal 2002. It will continue its proactive approach to all* April 1, 2002 – March 31, 2003
* ASBs backed by assets in Japan: Domestic
public and private bonds and Eurobonds
estimated by MHSC.
* Source: Thomson Deal Watch

aspects of the asset securitization business starting with the highly promising REIT related

938

annual Nikkei analyst survey rose to seventh. On the business promotion side, MHSC is steadilybusiness, while responding to customers' needs through the development of various kinds offinancial technologies.

Strategic Overseas Network
MHSC runs its domestic business seamlessly with four overseas securities subsidiaries—Mizuho

 MHSC's New Approach to Business

International in London, Mizuho Securities USA, Mizuho Bank (Switzerland) and Mizuho

MHSC has established the following
new strategic companies:

Securities Asia in Hong Kong—and The Bridgeford Group in the U.S. In addition to trading• Japan Investor Relations andInvestor Support (J-IRIS)

Japanese securities, the overseas subsidiaries engage in various aspects of business overseas.

Engages in research on investor relations for corporations, investor support for institutional investors andcorporate governance.

Their operations include bond trading in the euro market, debt-equity finance and arrangementof securitization products in London, underwriting and trading of Japanese equities and privatebanking in Zurich, underwriting and trading of U.S. treasuries and other instruments, andagency transactions in financial futures in the U.S., and investment advisory services that exploit
its access to the markets of Asia and China in Hong Kong. The Bridgeford Group covers M&A
advisory services in connection with cross-border investments in Japan and the U.S. Based on
MHSC's powerful overseas network, therefore, it is able to respond to the developing anddiversifying needs of its customers at home and overseas.

• Japan Industrial Partners
This fund management company is a
joint venture with Bain & Company,
a U.S. consulting company, and NTT
Data.

• Basic Capital Management
A fund management company set up
jointly with Orix and Merrill Lynch to
manage business revitalization funds.

• Industrial Decisions (IDI)

Overseas Network

Mizuho International(London)Mizuho Bank (Switzerland)(Zurich)Mizuho Securities(Tokyo)Mizuho Securities USA,The Bridgeford Group(New York)A management strategy advisory
company specializing in electric
power, gas and other aspects of theenergy industry set up jointly with
Strategic Decisions Group, a strategic
U.S. consulting company.

Mizuho Securities Asia
(Hong Kong)

The Joint Branch Strategy of MHBK and MHIS
MHIS offers various securities-related solutions in response to the asset management andfunding needs of group customers, particularly individuals and SMEs. It makes active use of its
ties with group companies, building a strong relationship with MHBK branches through joint
branch operations and holding joint seminars for customers with MHBK and MHTB.
Considerable progress has been made in the area of joint branches and MHIS is now aleading domestic securities company in this respect, with joint operations in 12 out of its 61

The joint branch in Shakujii, Tokyo.

branches nationwide as of the end of June 2003. It was very quick to react to the deregulatory
measures contained in the Program for Promoting Securities Markets Reform announced by the
Financial Services Agency in August 2002, opening the first truly joint branch in Japan to givecustomers access to banking and securities services on the same floor at its Shakujii Branch inTokyo in October 2002. Since then, it has set up various types of joint branches, including the
Omori Branch in Tokyo which offers banking, trust banking and securities services provided by
MHBK, MHTB and MHIS, respectively, and setting up an MHIS securities consultation booth in
the banking lobby of the Hamamatsu Branch, the first of its kind in Japan. It plans to work evenharder to improve customer convenience by accelerating the opening of new joint branches thatcan offer even more finely tuned services.

39

Business Strategy of Mizuho

Securities Business Strategy

The Cooperative Strategy of MHSC and Shinko Securities
Shinko Securities offers its vast middle-market/retail customer base a full range of securities
services through its nationwide network.
MHSC and Shinko Securities signed a memorandum on business collaboration and concluded
a tie-up agreement in December 2002. Both companies plan to build a new relationship using
strategies designed to make the most of their respective strengths and advantages to create apresence similar to that of the big three securities firms.
Their goal is to enhance the group's presence in the securities markets by improving theirservices to customers, with particular emphasis on strengthening cooperation in stock
underwriting.

 Cooperation between MHSC and Shinko Securities• Collaboration in securing lead manager roles through joint sales in the area of underwriting.
• Channel JASDAQ market-making business to Shinko Securities (implemented May 2003).
• Build a cooperative management structure for IR consulting.
• Product development.
• Utilize the functions of the overseas network.
• Hold group sponsored courses at universities.
• Human resources exchanges, etc.

Business Strategy of Mizuho

Trust and Asset Management Business Strategy
Basic Strategy for Trust BusinessWe see the trust business as a growing sector and have restructured the group's trust banks in order to strengthen ourability to offer solutions that will satisfy customers' complex and sophisticated needs with precision and enhance our
product lineup.
More specifically, the former Mizuho Trust & Banking merged with Mizuho Asset Trust & Banking (MHAT), under thename of Mizuho Trust & Banking (MHTB). The former specialized in corporate transactions in such business areas aspensions and asset management, stock transfer agency business and securitization, and the latter was strong in the privatebanking, real estate business and testamentary trust business. TCSB, originally set up jointly with four closely related life
insurance companies, became a directly owned subsidiary of MHFG. The objective of this change was to position TCSB atthe core of our infrastructure for overall group securities custody and administration business and provide customers not
only inside but also outside of the group with high-quality services in this area.
MHTB aims to become one of Japan's leading trust banks, offering a full range of trust services complying withworldwide standards, earning an excellent reputation among customers, shareholders and market players, and winningsociety's confidence.
Utilizing the franchise system for trust services, MHTB has tied-up with group companies to realize greater synergies byoffering unique MHTB trust products to corporate customers of MHCB and MHBK. MHTB also holds joint seminars to
introduce testamentary trust and other functions to individual customers of MHBK and MHIS, and has opened joint
branches with them.
Based on its cooperation with MHTB and other group companies, TCSB responds to customers promptly and precisely asa trust company specializing in securities custody and administration services with competitive strengths in terms of both
quality and pricing.

40Business Strategy of Mizuho

Trust and Asset Management Business Strategy

MHTB's Business Strategy
Private Banking Business
Each customer's investment and inheritance needs are various, depending upon the type of
asset, that is, whether they comprise real estate, funds or securities. In the belief that grasping MHTB Starts Operations
On March 12, 2003, MHTB got off to a
new start following the merger of theformer Mizuho Trust & Banking andMHAT.

and analyzing a customer's current situation is the first step to answer that customer's needs,
MHTB communicates with customers to identify the essence of the issues facing the customer,
and provides individual solutions for those issues of that customer.
MHTB's staff, highly experienced financial advisors, financial planners and registered realestate transaction managers, offer services on managing portfolios in the form of “AssetManagement Trusts,” real estate investments, apartment management, and testamentary trusts.

Asset Management Products for Individuals
MHTB offers individual customers a wide range of attractive products, using its trust functions.

 Securitization Products
MHTB offers original products created by fusing the credit enhancement (subordination
structure) with trust functions. These products have proven very popular among customers.

 Order-Made Asset Investment Products
MHTB offers an order-made money trust product for customers who are not satisfied withready-made products. It is an individually managed product that pays performance dividends
and is managed by fund managers in accordance with investment policies decided in advance bycustomers in consultations with private bankers or financial consultants. It is possible for various
combinations of risk and return to be made depending on the customer portfolio.

Real Estate Business
MHTB assists customers in maximizing the value of their real estate by making available a wide
range of such functions as consulting on finance and inheritance, subdivision sales, appraisal,land trusts and securitization.
MHTB not only provides consultation services concerning purchases and sales of real estate,
but also offers advice and makes comprehensive proposals to meet customers' needs inconnection with acquisition, closing or consolidation of head offices, stores, branches, andfactories, and the utilization of unused real estate. These proposals often refer to the use ofpreferential tax treatment and financial strategies. In the area of real estate securitization, MHTB
handles various deals on the background of rising demand for more effective use of assets andfunding diversification.

Pension and Asset Management 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 the Defined Contribution Pension Law and approval for the returnof the substituted portion of the Employees' Pension Insurance within Employees' Pension Fundto the government. There is definitely a growing need to review pension fund plans andinvestments, and the role that MHTB should fulfill as a trustee for corporate pensions is now
more important than ever.
In this time of change, MHTB acts as a comprehensive pension trustee institution providing afull range of services which are actuarial and administrative services, asset management andadministration services, and various consulting services, thus offering high-quality, appropriate

 Tie-Up with Mizuho Asset Realty
Company
Mizuho Asset Realty Company, thehousing agency of MHTB's subsidiary,
assists individuals with their real estateneeds, from sales and purchases offamily homes to consulting services on
the use of unused land.
It has also established a membershipclub to provide members with the latest
information on real estate investments
in condominiums and commercial
buildings.

 Second Consecutive Year as No.1
“Asset Management Company to
be Newly Adopted for Pension
Assets”
MHTB was ranked No. 1 for the second
consecutive year as “an asset management company to be newly adopted
for pension assets” in a survey* of
Employees' Pension Funds and corporations throughout Japan.
*Customer survey report carried in “Nenkin
Joho,” November 18, 2002.

 Cooperation with Mizuho
Pension Research InstituteAs the oldest research institution in
Japan to specialize in pension and asset
management, Mizuho Pension ResearchInstitute carries out research and generates information concerning pension
schemes and offers pension consulting
services. The Mizuho Pensions Report,
which carries the reports of advanced
research by Japanese and international
researchers, has been very wellreceived for its high levels of expertiseand specialist knowledge.

 Develop Discretionary Investment
TrustsIn September 2002, MHTB developedand started selling the industry's first
discretionary investment trusts. Insteadof following the usual practice of
entrusting management of theseinvestment trusts to investment trust
management companies, MHTB manages them and aims to expand sales byfurther diversifying its product range.

41

Business Strategy of Mizuho

Trust and Asset Management Business Strategy

services and products in response to our customers' individual needs as a “best solutions
partner.”
In order to satisfy a wide range of needs in the area of asset management mainly forcorporate and public institutions pension funds, MHTB offers quality-oriented multi-strategyfunctions covering active investment strategies, alternative investment strategies and passive
investment strategies. In addition, by making the most of investment advisory functions for
dealing with the requirements and issues presented to MHTB by its customers, it has also won
the trust of customers who are looking into restructuring their pension programs.

Asset Administration Business
MHTB sees asset administration services such as those for specified money trusts (tokkin funds),
investment trusts and pension funds as one of its most important core businesses, andcustomers value its services because they are manifestly based on a high degree of expertise.
As progress is made in reforming securities settlement systems, demand is growing for faster,
more sophisticated asset administration services. MHTB associates with TCSB in order to be able
to offer even higher levels of services by utilizing scale merit acquired through consolidating its
assets to TCSB and taking full advantage of the two companies' combined know-how andmanagement resources in asset administration services.

Stock Transfer Agency BusinessAs a stock transfer agent for companies, MHTB offers various new services in response to thechanges affecting legal systems and customers' needs. These services include management ofshareholders' registers and requests for transfers, the development of systems for the use of IT
at shareholders' meetings, services to encourage individual shareholders in Japan to exercise
their voting rights, and services to provide information on foreign shareholders.
In order to respond to the recent increasing demand for high-level know-how for corporate
restructurings in areas such as stock-for-stock exchanges and mergers, MHTB has strengthened
its legal support functions by setting up a special division to deal with those matters. MHTB also
responds to requests from both companies and shareholders, routinely providing advice tocustomers on running shareholders' meetings and information on stocks, as well as using its richexperience and know-how concerning mergers, capital increases, corporate naming changes
and various other matters relating to stock administration.

Securitization BusinessFor corporate customers who are interested in diversifying their funding sources or in offbalancing assets, MHTB offers funding methods using assets such as monetary claims likereceivables and real estate which are normally thought not to be easily negotiable. MHTB alsooffers both individual and corporate customers new investment products.
In particular, MHTB uses its trust functions to fashion securitized assets such as money trusts
into original fund products, and has developed the revolutionary “Noteless 2,” a product thatsimultaneously satisfies the need for large and middle market enterprises to reduce the numberof promissory notes issued and rationalize clerical operations while helping the fund-raisingefforts of their suppliers. MHTB leads the market in structuring capabilities and total solution
services.

42

TCSB's Business Strategy
TCSB focuses its efforts on the areas listed below as a trust company dedicated to securities
custody and administration services, managing securities held by MHCB, MHBK, MHTB, andother financial and non-financial institutions.
TCSB has developed and streamlined its state-of-the-art asset administration infrastructure tocope with securities settlement system reform, by constant and effective IT investment that TCSB
began at its foundation, and by establishment of business management frameworks complying
with worldwide standards that include utilizing external audits.
TCSB will continue to adhere to its customer-oriented policies as a trust company specializing
in securities custody and administration services, offering highly competitive quality and price in
response to its customers' needs and demands.

 Securities Custody Services
 Offer Models for the Outsourcing of Securities Custody Services
TCSB launched its first comprehensive securities outsourcing model in January 2003 when it
started full subcontracting services in connection with the management of some ¥25 trillion insecurities held by life insurance companies, including accounting services.

 Master Trust Services
 Trustee Service in Connection with Defined Contribution Pension Plans
 Foreign Exchange and Securities Lending Services
TCSB provides comprehensive custodian services that involve handling value-added services

 Strengthen System Infrastructure
to Cope with Securities Settlement
System Reform
In August 2002, TCSB launched the New
Joint Settlement Infrastructure System,
which incorporated STP (Straight
Through Processing). As a result, TCSB
became the first domestic trust bank to
be ready for the T+1 settlement cycle.

 Moody's Upgrades MQR Rating
In March 2003, the ratings agency
Moody's granted TCSB an MQR of
Aa3. This is equivalent to the former
MQ1 (top) rating, and represents an
upgrade from its former MQ2 rating.
The ratings upgrade reflects Moody's
high evaluation of TCSB's efforts toimprove its IT systems and its businessand risk management systems.

 Off-Site Back-Up System Goes
into Operation
In order to strengthen its plans and systems for dealing with contingencies,
TCSB re-launched operations at its
off-site back-up center in Saitama
Prefecture, boasting robust, state-ofthe-art facilities to cope with emergencies and disasters, in March 2003.

such as securities lending and foreign exchange services associated with its conventionalcustody services.

Basic Strategy for Asset Management
MHFG has adopted a proactive approach to the expanding investment trust and pensions markets, and aims to become
one of the world's leading asset management groups in terms of both quality and assets under management.
Recently, we made direct investments in our asset management companies (DKA, FIMCO and DIAM) to clarify theirpositions as core members of the group. Each of these companies makes the most of its own investment philosophy, styleand processes in providing a wide range of high-quality products and services to companies both in and out of the group.
In distribution of investment trusts, we offer a widely varied line-up of products designed to meet the increasing
complex and sophisticated needs of customers, as well as arranging and selling privately placed investment trusts forcorporate customers.
As a front-runner in the Japanese defined contribution pension business, we are channeling our total resources into
providing solutions for corporate management issues by supporting the formation of assets for employees to enjoy in theirretirement. Our services cover every aspect of the business, from management and administration functions such as
product selection and the education of participants to offering products such as investment trusts and deposits,
consultation on the design of corporate schemes, and the management of contributed pension assets.

43

Business Strategy of Mizuho

Business Results Highlights of Mizuho

The Mizuho Financial Group is highly ranked in a wide range of financial services in Japan.

Supporting the Financial Needs of Households ¥33 trillion in personal assets under management (No.1 among Japanese banks) ¥9 trillion in residential housing loan portfolio (No.1 among Japanese banks)
 7.06 million customers utilizing membership-style banking services (No.1 among Japanese banks)
 9,653 testamentary trusts entrusted (No.1 in industry sector) Mizuho Bank's 648 full-service branches; 8,500 automated outlets (locations of ATMs including joint-use

ATMs at convenience stores) in Japan(All figures are as of March 31, 2003.)

Supporting the Financial Needs of Corporations
 US$36.9 billion in arrangement of syndicated loans in the Asian Pacific region (including Japan) in 2002

(No.1 among financial institutions worldwide) ¥800 billion in lead management of domestic straight bond issues excluding city bank issues, self-

financing issues and retail investors targeted issues (No.3 in industry sector) for fiscal 2002
 ¥505.5 billion in lead management of FILP agency bond issues (No.1 in industry sector) for fiscal 2002
 87 arrangements (No.2 in industry sector) and US$6.9 billion (No.3 in industry sector) in M&A advisory

banking transactions in which Japanese companies operating in Japan were merged or acquired(announcement basis) in 2002
 ¥4.7 trillion in domestic pension funds under investment management (No.1 in industry sector) as ofDecember 31, 2002
 ¥6.1 trillion in securitized assets (receivables and real estate) under administration as trustee (No.1 inindustry sector) as of March 31, 2003
 ¥1.2 trillion in retirement benefit funds under administration as trustee (No.1 in industry sector) as ofMarch 31, 2003

Supporting Global Business US$2,367 million in arrangement of global project finance (No.1 among Japanese banks) in 2002
 45% share in yen securities custody service for foreign investors (No.1 among Japanese banks) as ofMarch 31, 2003
 34% share in foreign exchange (yen clearing) services (No.1 among Japanese banks) as of March 31, 2003

*All figures are for the group, and are rounded off.
44

Community Activities and Environmental Awareness of Mizuho

Community Activities~We have established a basic approach to and guidelines for community activities, and are engaged in numerous
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 tosociety in five areas laid down by our guidelines: (1) nurturing young people; (2) social welfare; (3) promotion of the arts, culture
and academic studies; (4) international exchange; and (5) global environmental preservation.

 Traffic Safety Campaign
As part of the group's annual “Yellow Badge Traffic Safety Campaign,” we provide firstgraders throughout Japan with yellow badges that, when worn, signify they are automaticallycovered by traffic accident insurance. 2003 marks the 39th year of this campaign, whichstarted in 1965 and was carried out under MHFG, Sompo Japan Insurance, The Yasuda
Mutual Life Insurance Company and The Dai-ichi Mutual Life Insurance Company. The
campaign has now provided insurance coverage for a total of 48.26 million children in Japan.

 Encyclopedias about Japan for Children Presented to Primary Schools Nationwide
In September 2002, we published a mini encyclopedia about Japan for children andpresented copies to some 24,000 primary schools throughout Japan. The books give aneasy-to-understand overall introduction to Japan's natural environment, history, culture andindustry with ample use of visuals, and are placed in school libraries.

 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 monthly salaries and donated to group philanthropic foundations,used as relief funds during large-scale disasters and contributed to volunteer organizations
selected from groups recommended by employees. In May 2003, we made a contribution of¥1.5 million (approximately 100,000 renminbi) to the Ministry of Health of the People's
Republic of China for patients suffering from SARS (Severe Acute Respiratory Syndrome) andfor medical personnel.

 Support for the "All-Japan Elementary and Junior High School Students'
Environmental Art Contest"
Since 1996, we have supported the “All-Japan Elementary and Junior High School Students'
Environmental Art Contest,“ which promotes environmental education among elementary andjunior high school students. Winners are presented with books containing the winning entries.

 Activities of Philanthropic Foundations
The Mizuho Financial Group supports welfare assistance for senior citizens and physicallychallenged persons, education and scholarships, international exchange and academic
research through the following philanthropic foundations.
Mizuho Education Welfare
Foundation
Assistance for education in rural areas,
education of physically challenged
children, and welfare for senior citizens (grants, donations of sports
equipment and welfare vehicles).

Mizuho Welfare Foundation
Assistance in connection with the welfare of the disabled. (Grants, donationsof electrically powered wheelchairs andwelfare vehicles. Funds for translatingbooks into Braille for visually impaired
university students.)

Mizuho International Foundation
Scholarships for students from overseas studying in Japan. Training for
personnel to undertake work in thearea of international exchange.

Mizuho Foundation for the
Promotion of Sciences
Research grants in the areas of engineering and law. Public essay contests
in the areas of law and economics.
Scholarships for students from overseas studying in Japan.

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

45

Community Activities and Environmental Awareness of Mizuho

Overseas Activities
 Activities of the Mizuho USA Foundation, Inc., etc.
In the U.S., group employees and their families are very active in volunteer activities,
participating in such events as walk-a-thons sponsored by the March of Dimes. The Mizuho USA
Foundation, Inc. was launched on January 1, 2003 to assist non-profit organizations working tosupport and revitalize urban communities. The Mizuho Financial Group also provided assistancewith scholarships in Southeast Asia and engaged in philanthropic activities in Taiwan throughthe Mizuho Asian Fund and the Mizuho Aishin Charity Fund.

Support for Art and Culture Coming-of-Age Day Concert
This year's “Coming-of-Age Day Concert” took place at the Suntory Hallin Tokyo on the Coming-of-Age Day national holiday on January 13,
2003. The concerts have been held annually since 1990 with a view to supporting young artists and popularizing classicalmusic among the next generation of young people. One hundred young people who became 20 years old this year, thelegal age of adulthood in Japan, were selected through a drawing to attend the event.

 MIZUHO STREET GALLERY
In order to discover and support young artists, we make available the MIZUHOSTREET GALLERY in the form of space in the window display areas of Mizuho
Bank's Ginza Chuo and Sukiyabashi branches.

Environmental Activities~We are aware that it is our social responsibility to take into account environmental issues as we try to maintain abalance between economic development and environmental preservation~
In compliance with laws and ordinances relating to the environment, we are working to contribute to the protection of theenvironment 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
Services related to
global warming
Project finance

Description
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.
Advisory services for CDM/JI investments, arranging finance for wind power generation andgarbage 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.

Support for
implementing LCA

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

 CDM/JI: The mechanism for the greenhouse gas emission reduction project adopted under the Kyoto Protocol.

Horonobe Wind Power Generation's Otonrui
Wind Power Plant.

 Environmental Risk Assessment in Financial Operations
The Mizuho Financial Group factors environmental risks into a growing number of credit decisions concerning companies andprojects, and evaluations of corporate value in M&A transactions. Moreover, following the enforcement of the Law for thePrevention of Soil Pollution in February 2003, cases of soil pollution uncovered in connection with evaluations of real estatecollateral are depreciated in light of real estate appraisal criteria.
46

Management Structure of Mizuho

companies, and supervises the manner in which Directors andManagement Framework of the Mizuho
Financial Group

Executive Officers fulfill their duties. Outside Directors participate
in board meetings from a position that is independent of actualStrengthening Corporate Governanceexecution of duties to strengthen the management andWe have been working to achieve a streamlined and speedy

monitoring functions of the Board of Directors. MHFG has

management structure while strengthening corporate

adopted the Executive Officer System in order to separate thegovernance by inviting outside Directors to join our Board ofmanagerial auditing function from the execution of duties,

Directors and establishing an advisory board. Together withand clarify lines of authority and responsibility.

devoting our effort to make corporate management

To ensure transparency and objectivity in personnel

transparent and efficient, we will carry out our businessmatters relating to the Board of Directors and Directors'

activities with integrity and fairness in conformity with social

remuneration, we have established two advisory bodies: thestandards, positioning compliance as one of the fundamental

Nominating Committee and the Compensation Committee,

principles of sound business management and complying

both of which include outside Directors.

strictly with all laws, ordinances, rules and regulations.

In respect of the execution of duties, the President & CEO

We manage the group through legally separate

manages MHFG according to the fundamental management

subsidiaries according to customer segmentation andpolicies determined by the Board of Directors. The Executive

business functions under the holding company structure weManagement Committee has been established to serve as an

selected as the most suitable business model for dealing

advisory body for the President & CEO and discusses important

flexibly and dynamically with changes in the businessmatters concerning the execution of business operations.

environment. We are striving to maximize group corporate

MHFG's Corporate Auditors monitor whether operational

value by further enhancing the group companies' expertise

execution by Directors is legal by attending Board meetingsand strengthening our ability to respond to customers' needs.

and expressing their views. MHFG's Internal Audit &Moreover, MHFG, the group holding company, fulfills

Compliance Committee, on the other hand, has been

optimum administrative functions by implementing various

established to fulfill an internal audit function under themeasures designed to enhance the group's overall capabilities

chairmanship of the President & CEO by checking whether

such as formulating group business portfolio strategies,

operational execution is appropriate from the viewpoint ofrealizing synergies among group companies and strengthening

compliance and audit. Outside specialists (one lawyer and one

risk management, compliance management and internal

accountant) participate in the Internal Audit & Compliance

auditing functions within the group. On the other hand, theCommittee to reinforce its expertise and objectivity.

group companies carry out their business in their respective
sectors in line with the basic policies set by MHFG.

MHFG has also established an advisory board of outside
experts that will offer objective evaluations and advice froman independent standpoint, aiming for a more open style

Management Structure of Mizuho

management. The advisory board meets about every three

MHFG's Board of Directors sets management policies andmonths.

determines important matters for itself and its group
Management Structure of Mizuho

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 &Compliance Committee*1. Two of the eight Directors are outside Directors.
*2. Three of the five Corporate Auditors are outside Auditors.

(As of June 25, 2003)

47

Management Structure of Mizuho

Profit Management System of Mizuho

frameworks of the group. Each unit and group engages inbusiness activities within the limits of that risk capital andProfit Management System Based on Legally
Separate Subsidiaries According to Customer
Segments and Business Lines

RAROC is then used as a performance index to evaluate theWe have adopted a basic policy that aims to reinforce ourmanagement system and framework, but in actual operations

financial strength through vigorous measures to increase

take a flexible and swift approach that matches theirprofitability and cut costs. Centered on MHFG, we conductindividual business models.

return on allocated risk capital.
Basically, both banks have adopted a common profit

profit management for the group, primarily for the coregroup companies, which have been legally separated

Consolidated Profit Management

according to customer segmentation and business function.

While each core group company works to enhance its own

More specifically, we have clarified the strategic positions

profitability, we manage their profits on a consolidated basisof the core group companies within the group on the basis of

as a means of building an optimal business portfolio that is

our group business portfolio strategy and, having ensuredbalanced for the entire group.

their autonomy and independence while bringing them closer

Specifically, in addition to the core group companies, wetogether through the unifying force of MHFG, we are seeking

formulate profit plans and manage performance for theto maximize group corporate value.

strategically important subsidiaries and include their profits

Regarding the core group companies, we are making

with those of the core group companies.

efforts to optimize our business portfolio, managing profits
through the following:

Allocation of Risk Capital• Formulating plans for net business profits and net

In an environment where the financial sector faces

income, and carrying out performance management.

progressive deregulation and globalization and financial• Allocating management resources such as personnel,

technology grows in sophistication, financial institutions must

investment and risk assets.

strengthen their profitability while managing various types of• Risk controls and profitability assessments based onallocation of risk capital.

risk.
Based on MHFG's business portfolio strategy, we have

Further, each branch and division of the core groupbuilt a management structure under which optimized

companies establishes its own profit plan according to thebusiness activities are conducted within the limits ofmanagement policy, overall profit plans and resource

allocations of risk capital drawn from equity capital and otherallocations drawn up by MHFG and manages its performance.

sources.

MHCB has built its profit management system based on

Under this framework, RAROC is used as an index tothe business operations section including the units, while

evaluate performance in terms of return on allocated risk

MHBK has built a profit management system centered on

capital at the level of the holding company and the core

two axes—the group and the business promotion planninggroup companies. Our aim as a group is to improve capital

section. Each section of the two banks has been given

efficiency by allocating resources more efficiently based on

authorities and responsibilities concerning profits, allowing

the results of these evaluations.

rapid decision-making and more efficient allocation of
Glossary

management resources.

 RAROC (Risk-Adjusted Return on Capital)

Both banks have also introduced the allocation of risk
capital, which is one of the most important management

Risk Capital Allocation

48

RAROC is a measure of the profitability of allocated capital and is used as an index forassessing capital efficiency. RAROC is calculated by dividing risk-adjusted profits (profits adjusted to reflect statistically expected risk) by capital.

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
Optimize uniqueness of group companies and synergies
Essenceof HumanResources
System

A compensation system linked to job and performance
Aggressive promotion of the “Professional Career Path”

Vision for Human Resources: ROE on Human
Resources Investment

A Compensation System Linked to Job andPerformance

Employees of the group set a shared vision for humanWe have introduced a compensation system linked to job andresources as follows:

performance.

“We promote the “ROE” principle for human resources
with a view to lasting value creation and create an attractive

We pay salaries according to job grade that is determinedby job responsibilities and other factors.

and fulfilling working environment for employees.”

As for retirement benefits, we have introduced a

In this vision, “ROE” stands for the following:

combination of “basic retirement benefits” (based on job

Responsibility: Observe the principles of independent

grades) and “performance-based retirement benefits.”

judgement and self-accountability.
Employability: Develop expertise to enhance

Aggressive Promotion of the “Professional CareerPath”

competitiveness.

We have put in place multi-featured compensation systems

Opportunity:

Provide equal opportunity.

that meet the needs of employees and an increasingly fluid

Optimize Uniqueness of Group Companies andSynergies

labor market.

Employees are employed by one of the group companies“Professional Career Path,” with a salary system that is in line

(MHFG, MHHD, MHCB, MHBK, MHSC, MHTB), in order thatwith market standards.

One example is the aggressive promotion of thewe can create a group of specialists that can deliver
maximum innovativeness and speed for actions and decisions.
At the same time, we are maximizing synergies between
personnel and promote optimal human resources allocation
across group companies, which is facilitated by the common
basic compensation system (Common Platform for Human
Resources).
Common Platform for Human Resources

MHFG

MHHD

MHCB

MHBK

MHSC

MHTB

Management-class platform (stock options, etc.)
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.)

49

Internal Control Systems of Mizuho

Compliance Structure

Compliance at subsidiaries of the core group companies ismonitored and managed through the core group companies

Basic Compliance Policy
We are acutely conscious at all times of our social
responsibilities and public mission as Japan's leadingthemselves.
MHHD cooperates with MHFG in managing compliance at
MHCB, MHBK, MHSC, MHIS and their group companies.

comprehensive financial services group. We, therefore, work
to ensure that we observe all laws and regulations, andCompliance Activities

pursue corporate activities in a fair and honest manner that

Furthermore, we have drawn up the Mizuho Code ofconforms to the norms accepted by society. Adhering to the

Conduct, which establishes clear and concrete standards ofthree basic principles for compliance listed below as the basis

ethical behavior, distributing it to all senior executives andfor our corporate activities throughout the group, each group

employees of the group and ensuring that they are wellcompany establishes its own compliance structure in line withaware of its contents and act in accordance with them.

the basic policies indicated by MHFG.

Each group company has also prepared a compliance1) We shall place thoroughgoing compliance as one of themanual, which serves as a practical guidebook for rigorously

fundamental principles of sound business management.

enforcing compliance, clarifying the laws and regulations that

2) We shall promote a compliance system which will begroup companies must observe in pursuing their businessaccepted in the global financial and capital markets.

activities and the compliance activities they should follow.

3) We shall gain the favorable regard of our shareholders

Again, we are doing all we can to ensure that senior

and the market, and build on the trust of society

executives and employees are fully acquainted with its

through rigorous compliance activities.

contents through compliance training.
To check compliance levels, we have established measures

Compliance Structure

for ensuring that compliance is thoroughly enforced throughIn order to check that our business activities are appropriate

primary self-checks by individual units and secondary checks

in terms of compliance and audits, MHFG, MHCB and MHBK

by the internal audit section.

have each established the Internal Audit & Compliance

Each fiscal year, group companies also draw up compliance

Committee, which is headed by the CEO and includes Deputy

programs containing concrete measures for ensuring thatPresidents, the Chief Compliance Officer (CCO) and external

compliance is thoroughly enforced, including various measures

specialists in legal and accounting matters among its

associated with establishing a compliance framework,

members. Moreover, the above companies establishedtraining and checks. Progress in implementing the programs

individual Compliance Divisions under the CCOs. Theseis monitored every half-year.

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 inconnection with compliance, while the compliance officer /compliance administrator is deployed to check the status ofcompliance.
MHCB and MHBK have set up Securities and Trading
Compliance Offices within their Compliance Divisions to takeresponsibility for matters pertaining to compliance in trading
operations and securities business such as registration.
Other core group companies such as MHSC and MHTB
have also established compliance structures that suit thecharacteristics of their respective business sectors.
MHFG monitors the status of compliance throughout thegroup from reports submitted by the core group companies,
and adopts appropriate responses whenever necessary.
50

our corporate value while ensuring that the business of both
MHFG's Compliance Structure

the group as a whole and the affiliated companies remain

MHFG

healthy and stable, we are well aware that adopting risk

Board of Directors

management and control measures that match ourInternal Audit & Compliance Committee(Chairman: President & CEO)

operations and their inherent risks is an issue of key
importance to management. For this reason we are taking

Head of Audit & Compliance Group(Compliance Division)

steps to strengthen our risk management structure.
Based on this awareness, MHFG's Board of Directors has

Every organizational unit
Compliance Officer /Head of each unit
Compliance Administrator

laid down basic policies for risk management that are
applicable to the entire group for managing specific types ofrisk. These policies clearly define the kinds of risks to be

MHHD

managed, establish the organizational structure and provide

Joint management by
MHFG and MHHD

for training the human resources necessary for appropriate

MHCB
MHBK
MHSC
MHIS

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

Subsidiaries ofcore group companies

Subsidiaries ofcore group companies

levels of risk management. They also provide for audits to

MHTB and othermeasure the effectiveness and suitability of the risk
management structure. In line with these basic policies, wehave clarified the framework for managing each type of risk
and are working to strengthen risk management by adopting
various measures and striving to enhance the sophistication*Core group companies:
MHCB, MHBK, MHSC, MHTB, MHIS, TCSB, DKA, FIMCO, DIAM, UC Card,
Mizuho Research Institute, DKIS, FRIC, KSD, Mizuho Capitalof risk management.

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

Risk Management Structure

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

Commitment to Risk Management

management for the group as a whole.

Basic Approach

More specifically, MHFG regularly and as required receives

Further progress in financial deregulation and international-

reports from the core group companies on their risk

ization has led to rapid growth in the diversity and complexity

management situation and it approves certain risk limitsof banking operations, exposing financial institutions more

based on the basic risk management policies adopted by its

than ever to various kinds of risk, including credit, market

Board of Directors. MHFG also monitors the risk profile of theoperations, IT, legal and settlement risks. In order to raise

entire group, and gives appropriate instructions concerning

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 of core group companies

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

MHTB
TCSB, etc.
MHCB
MHBK
MHSC
MHIS

Give instructions
concerning
risk management

Subsidiaries
managed by thecore groupcompanies

Report on risk profile*Core group companies:
MHCB, MHBK, MHSC, MHTB, MHIS, TCSB, DKA, FIMCO, DIAM, UC Card,
Mizuho Research Institute, DKIS, FRIC, KSD, Mizuho Capital

51

Internal Control Systems of Mizuho

risk management to core group companies. MHHD

market risk, equity risk and operational risk in line with Basiccooperates with MHFG in managing the risk of MHCB,

Policy for Integrated Risk Management laid down by MHFG.

MHBK, MHSC, MHIS and their group companies.

We also take a proactive approach to enhancing the

Each core group company also has its own system for
managing different types of risk, regularly and as required

sophistication of our risk management methods by tailoringthem to the characteristics of different type of risks.

receiving reports on the status of risk at their own groupsubsidiaries. In this way, each core group company monitors

Risk Capital Allocation

the risk profile for itself and its own group subsidiaries, andWe use our integrated risk management framework as thegives the latter appropriate instructions on risk management.

basis for obtaining the clearest possible grasp of the group's

MHFG and its core group companies, therefore, manage

overall risk exposure, and have implemented measures tooverall risk for the entire group, including subsidiaries of the

keep such risks within the group's financial base.
More specifically, MHFG allocates risk capital to the core

core group companies.

group companies, including their own group companies, tocontrol risk within the limits set for each company. MHFG

Integrated Risk Management

also controls risk within managerially tolerable limits byworking to ensure that the overall risk held by the group on a

Basic Approachconsolidated basis does not exceed the capital account andWe define integrated risk management as controlling riskother measures of financial strength. To ensure the ongoing

within managerially tolerable limits through consolidated

financial health of MHFG and the core group companies, wemanagement of risks belonging to different categories byregularly monitor the manner in which this risk capital isgrasping the existence and scale of risk in a timely andbeing used in order to obtain a proper grasp of the risk

accurate manner. We then take appropriate measures to deal

profile within this framework. Reports are also submitted towith it as necessary before or after the fact, while establishing

the Board of Directors and other committees of eachmanagement frameworks centered on risk capital allocations.

company. To prevent uneven distribution of overall risk within

There are two broad areas of risk management. First,

the group, risk capital is allocated to MHCB and MHBK by risk

management of credit risk and market risk aims to control

category, covering credit risk, market risk, equity risk andrisks appropriately in order to secure profits. Second,

operational risk. This risk capital is further allocated to the

management of operations risk, IT risk and legal risk seeks tobusiness units within the individual banks to create aavert risk in order to avoid losses.

framework for managing it within the limits of the allocated

We use quantitative methods to control total credit risk,

amounts.

Allocation of Risk Capital(Example)
MHFG
The group’s risk
exposureMHCB
MHBK

Capital account, etc.

Core groupcompanies'
risk exposure*

MHSC

Allocated risk capital

The group’s financial
strength

MHCB
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.

MHTB
MHBK

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

52

MHSC
MHTB

Credit Risk Management Structure

Credit Risk Management

The Board of Directors of MHFG determines the most

Basic Approach

important matters pertaining to credit risk in accordance withWe define credit risk as the group's exposure to the risk thatthe Basic Policy for Credit Risk Management. In addition, theit might incur losses because of a decline in, or total loss of,Portfolio Management Committee was established as one ofthe value of assets (including off-balance sheet assets) as a

our business policy committees to discuss and coordinate

result of deterioration in a counterparty's financial position.

overall credit portfolio management for MHFG. The Chief

The group has already established the methods and structures

Risk Officer (CRO) is responsible for the Risk Management

necessary for grasping and managing credit risk, which has

Division and the Credit Risk Management Division, whichbecome increasingly complex because of financial deregulation,

jointly formulate and execute plans in connection with basic

internationalization and the growing sophistication of transactions.

matters relating to credit risk management.

We have adopted two different but mutually complementary

MHFG's uniform Basic Policy for Credit Risk Management

approaches toward credit risk management. The first of thesesets the guidelines for core group companies to manage theiris to curb losses arising from the emergence of credit risk bycredit risk in accordance with the scale and nature of theircontrolling the entire process for each individual transaction,

exposures, and for each company's Board of Directors tofrom granting the credit through to recovery, on the basis ofdetermine key matters pertaining to credit risk.

assessments of the credit standings of the counterparties

MHCB and MHBK (the Two Banks) have each establishedinvolved. This first approach is primarily the responsibility of

the Portfolio Management Committee and the Credit Review

the core group companies. The second is to manage theCommittee as business policy committees for managing

entire portfolio using statistical methods to measure thecredit risk, and members of these committees discuss andpotential for credit risk in order to grasp the existence andcoordinate overall management of individual credit portfolios

scale of credit risk in a timely and accurate manner. Thisand transaction policies towards borrowers. To jointly

second approach is the responsibility of the core group

formulate and execute plans in connection with basic matterscompanies as well as MHFG, which has group-wide

relating to credit risk management, the Credit Risk

accountability.

Management Divisions and the Risk Management Divisions
have been established under the senior executives responsible
for the Risk Management Groups at each of the Two Banks,with the functions of managing credit exposures and

MHFG's Credit Risk Management Structure

measuring and monitoring credit risk. Individual credit
MHFG

Board of Directors

lines of authority that conform to the above-mentioned basic
Executive Management
Committee

CEO

Portfolio Management
Committee

Head of Risk Management
Group (CRO)
Risk Management
Division

examination divisions approve individual transactions throughalso established Credit Review Divisions to function as internal
auditors that are independent of the business divisions.
One of the most important elements of the Two Banks'Credit Risk Management
Division•Set risk management policies•Give instructions concerning
risk management

policies. To provide checks and balances, the two banks have

•Report on the risk
management situation

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
results, as well as special reviews as required whenever a

Core group companies
MHCB
MHBK
MHSC
MHTB
MHIS
TCSB, etc.

borrower's credit standing changes. This enables us tomonitor both individual borrowers and the status of theoverall portfolio in a timely fashion. Since we consider credit
ratings to be a primary phase of the self-assessment processdescribed on the next page, they are linked to the obligor
classifications used in self-assessment of assets.

53

Internal Control Systems of Mizuho

Connection between Credit Ratings, Definition of Obligor Classifications of Self-Assessments,
Claims Disclosed under the FRL and Non-Accrual, Past Due & Restructured Loans
Definition ofCreditObligorRatings
Classifications of (Major
Self-Assessment Category)A

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

B

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

C

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

D

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

E

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.

NormalObligors

Watch
Obligors

Claims Disclosed
under the FRL

Definition of Ratings

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
ObligorsF

Substantially
Bankrupt
Obligors

G

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

H

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

Non-Accrual, Past
Due & Restructured
Loans

Normal Claims

Restructured Loans
Claims for Special
Attention

Claims with
Collection Risk

Claims against Bankrupt
and Substantially
Bankrupt Obligors,
and equivalent

Loans Past Due for
3 Months or More

Non-Accrual
Delinquent Loans

Loans to Bankrupt
Obligors

the group to identify and control the actual quality of assets.
Aims and Application of Credit Ratings
Apply credit rating

The two banks thus use the unified credit rating systemand credit risk measurement tools to ascertain and monitor
the status of their portfolios. They are also improving their

Appropriate credit
risk management

credit decisions and post-transaction management functions(1) Reflect credit policies in daily credit management(2) Quantify credit risk
(3) Appropriate pricing(4) Administer and manage the credit portfolio(5) Preparation for self-assessments, write-offs and provisions

providing internal audits and risk management guidance toSelf-assessment of assets is used to ascertain the status of54

by examining individual transactions from these viewpoints,
individual business promotion offices. MHTB and MHSC
follow credit risk management procedures that suit thecharacteristics of their respective business sectors.

Portfolio Management Structure

assets for both credit risk management and preparations forPortfolio-based credit risk management uses statisticalmaking the appropriate write-offs and provisions based on

methods to calculate the possibility that our credit portfolio

corporate accounting principles. Specifically, the Credit Risk

may generate bad debt losses. There are two key figures:Management Division under the oversight of the senior“expected loss” is the average amount of loss forecast for the

executive officer responsible for risk management is in charge

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

of overall control of self-assessment of assets, cooperating withamount in the case where losses exceed the expected loss.

the administration divisions specified for each type of asset,“Expected loss” should be covered out of profits on credit

including loan portfolios and securities in executing andtransactions, and is used as a reference value when setting

managing self-assessments. This results in a structure that allows

transaction guidelines. “Unexpected loss” should be covered

out of total capital when it actually materializes. The credit

accounts centered on individuals, small and medium-sized,

portfolio, therefore, is monitored from various angles toand middle market enterprises, public sector entities andensure that unexpected losses are kept within the level of theother customers in Japan. In addition to its efforts to reduce

allocated risk capital, and limits are applied to the portfolio

expected losses, it aims to exploit these features of its

where necessary.

portfolios to realize portfolio management that raises its
overall capital efficiency and ultimately leads to higher

Expected Loss and Unexpected Loss Amounts

profitability and shareholder value while keeping a sharp eyeon the potential for unexpected losses.

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.

Both banks are making strenuous efforts to enhance their
credit risk management structures, which underpin these
efforts.
MHSC's credit risk management regime consists of setting
credit limits for each product according to each customer's
creditworthiness and ensuring that these limits are complied

Loss amountMaximum loss amounts
Expectedloss amounts

Unexpected loss amounts

with. Claims (replacement cost) are also monitored toascertain the impact of price fluctuations, etc., on the valueof transacted assets. Internal ratings for judging thecreditworthiness of customers are established on the basis ofquantitative and qualitative analyses and reviewed

The Two Banks recognize two types of risk arising fromperiodically. To ensure appropriate management of its

allowing too large a proportion of overall credit risk to be

portfolios, MHTB bases its operations on the “individual

allocated in certain areas. One type is “credit concentrationcompany ratings-based credit guidelines” it has established torisk,” which stems from granting too much to certain

control credit concentration in certain companies while

individual counterparties; the other type is the “chain reaction

simultaneously endeavoring to reduce expected losses.

default risk,” which stems from granting too much credit toInternal ratings for judging the creditworthiness of customers

certain corporate groupings, industrial sectors, etc. For theseare derived from quantitative and qualitative analyses ofreasons, they have established “individual company ratings-

actual results and subjected to periodic reviews.

based credit guidelines” to control credit concentration risk,
and “corporate group-based credit guidelines,” “geographicalarea/country-based credit guidelines” (MHCB only) and“industrial sector-based credit guidelines” to deal with chain

MHCB's Credit Portfolio
Asia Other
Europereaction default risk. Adherence to these guidelines creates a
structure for managing overall credit portfolio risk arising

North America

Japanfrom credit concentration in individual companies on the one
hand, and from simultaneous chain reaction defaults arisingfrom credit concentration in certain corporate groupings or
geographical areas/countries on the other, making it possible
to control total credit risk more effectively within the level ofallocated risk capital. Business Policy Committees monitor the
implementation of these various guidelines.
MHCB is also working to reduce expected losses while

MHBK's Credit Portfolio
Other
Public sector
entities

Individuals

simultaneously striving to improve its overall capital efficiency,
profitability and shareholder value by utilizing financial

Domestic small and medium-sized,
and middle market enterprises

technology, and engaging in active portfolio management
involving strategic acquisitions and sales of assets.
MHBK's portfolios are diversified among relatively small

55

Internal Control Systems of Mizuho

Market and Liquidity Risk Management

Market Risk Management Structure
MHFG's Board of Directors determines key matters pertaining

Basic Approachto market risk management policies. The CEO has overall

We define market risk as the risk that the group could incur

control of market risk management. The ALM & Market Risk

losses because of changes in the value of assets and liabilities

Committee is responsible for overall discussion and(including off-balance sheet assets and liabilities) caused bycoordination of market risk management. Specifically, thefluctuations in market risk factors such as interest rates,

committee discusses and coordinates matters relating to basic

foreign exchange rates and bond and stock prices. Our

ALM policies, risk planning, fund procurement and asset

definition includes the risk of losses incurred when it becomesmanagement, and market risk management, proposing

impossible to execute transactions in the market because of

responses to emergencies such as sudden market changes.

market confusion, or loss arising from transactions at prices

The CRO is responsible for matters relating to market riskthat are significantly less favorable than usual (market

management planning and operations. The Risk Management

liquidity risk). We define liquidity risk as the risk of losses

Division is responsible for monitoring market risk, reports andarising when the group faces funding difficulties because

analyses, proposals, and setting limits and guidelines, and for

deterioration in its financial position makes it difficult to raise

formulating and implementing plans relating to market risk

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

much higher interest rates than usual.

MHFG's Risk Management Division receives necessary data

MHFG manages market and liquidity risk for the group as

and reports on the status of market risk, including compliancea whole. More specifically, MHFG formulates the Basic

with risk limits, from core group companies. This information

Policies for Market and Liquidity Risk Management for the

enables it to obtain a solid grasp of the market risk

entire group, and the core group companies follow thesemanagement situation. Depending on the status andpolicies in managing risk for themselves. This system alsocharacteristics of the risk exposures of core group companies,

allows MHFG to monitor and manage the overall market andthe division submits reports to the CEO on a daily basis andliquidity risk management profile for the group.

to the Board of Directors and the Executive Management
Committee on a regular basis.

MHFG's Market and Liquidity Risk Management
Structure
MHFG
Board of Directors

We manage market risk using Value at Risk (VAR) as ourprincipal measuring tool, supplementing it with stress testing.
In fiscal 2002, VAR on trading activities averaged ¥2.9 billion(confidence interval: one-tailed 99.0%; holding period: one

Executive Management
Committeeday), ranging from a minimum of ¥1.7 billion to a maximum

ALM & Market Risk Committeeof ¥4.1 billion. VAR on banking activities (excluding crossCEOshareholdings) averaged ¥209.0 billion (confidence interval:

Chief Risk Officer (CRO)

one-tailed 99.0%; holding period: one month), ranging from
Risk Management Divisiona minimum of ¥177.6 billion to a maximum of ¥238.9 billion.
With regard to interest rate risk, which constitutes the•Set risk management policies•Approve limits•Give instructions concerning
risk management•Report on the risk
management situation•Apply for limits

main form of market risk in the group's market activities, we
conduct interest rate sensitivity analyses as well as VAR
measurements. The table on the next page depicts theCore group companies
MHCB
MHBK
MHSC
MHTB
MHIS
TCSB, etc.

interest rate sensitivity of yen currency banking operations, by
maturity, as of the end of fiscal 2002. Interest rate sensitivity(10BPV) shows how much net present value varies wheninterest rates rise by 10 basis points (0.1%). We can,therefore, judge the impact of interest rate movements on
net present value more accurately even when short- andlong-term interest rates behave differently.

56and MHTB) have formulated their basic policies in line with
VAR for MHFG in the Fiscal Year ended March 31, 2003.
Trading activities

MHFG's Basic Policy for Market Risk Management. Their
Boards of Directors determine important matters relating to(VAR, ¥ billion)
5.0

market risk management while their CEOs take charge of

4.0

controlling market risk management. The ALM & Market Risk
3.0Management Committee is the business policy committee
2.0

coordinates matters relating to basic ALM policies, risk plan-

03.3.2003.2.2803.2.1003.1.2102.12.31

02.12.11

02.11.1

02.11.21

02.10.14

02.9.4risk management. Specifically, the committee discusses and02.9.2402.8.15

02.7.802.7.26

02.6.18

02.5.902.5.2902.4.102.4.19

1.0
0.0

responsible for overall discussion and coordination of market

Maximum: ¥4.1 billion
Minimum: ¥1.7 billion
Average: ¥2.9 billion

ning, fund procurement and asset management, and market

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

risk management, proposing responses to emergencies suchas sudden market changes. The CRO is responsible for matterspertaining to planning and running market risk management.

Banking activities(VAR, ¥ billion)
300.0

Based on a common group risk capital allocation frame-

250.0

work, the above-mentioned companies manage market risk

200.0

by setting limits according to the risk capital allocated to mar-150.0

ket risk.
Maximum: ¥238.9 billion
Minimum: ¥177.6 billion
Average: ¥209.0 billion

100.0
50.0

03.3.2003.2.2803.2.1003.1.2102.12.31

02.12.11

02.11.21

02.11.1

02.10.14

02.9.2402.9.402.8.15

02.7.26

02.7.802.6.18

02.5.902.5.2902.4.1

management divisions to provide integrated, company-wide
02.4.19

0.0

These companies have established specialist market risk
monitoring of market risk according to its scale and nature,
submit reports, analyses and proposals, set limits, and formu-

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

late and implement plans relating to market risk management. The risk management division of each company
submits reports on the status of market risk management,

MHFG's Fiscal 2002 Interest Rate Sensitivity by
Maturity
At March 31, 2003 (Billions of yen)Over 1 year,
up to and1 year or lessincluding Over 5 years
5 years
Interest rate sensitivity(10BPV)

(2)

(52)

(40)

Total

including VAR, positions, profit and loss, to the CEO and top
management on a daily basis, and to the Board of Directors
and Executive Management Committee on a regular basis.
They also provide regular reports to MHFG. With regard to(94)

market operations, they have established middle offices—
specialized risk management sections—that are independent

To manage market risk, limits that correspond to riskof their front offices, which engage in market transactions,capital allocations are set as necessary according to the risk

and their back offices, which are responsible for book entries

profiles of the core group companies. For trading activities,

and settlements. When VAR is not enough to manage andlimits are set for VAR and for losses. For non-trading activities

control risk on its own, specialist market risk management

such as banking operations, limits are set for VAR and fordivisions manage it with additional market risk information

losses where necessary. Position limits based on interest rate

and tools. For example, we set limits on risk sensitivities suchsensitivity are also set as needed.

as Basis Point Value (BPV), carry out stress tests, and set stop

These limits are discussed and coordinated by the ALM &loss limits according to the scale and characteristics of market

Market Risk Management Committee, discussed further bybusiness and activities of each division. In this way, the core

the Executive Management Committee, then determined bygroup companies accounting for most of the group's expo-

the CEO. At each stage, various factors are taken into

sure to market risk have established effective organizational

account, including business strategies, historical limit usage

structures for segregation of duties of related sections andratios, risk-bearing capacity (profits, total capital and risk

allowing effective checks and balances to come into play.

management systems), profit targets and the market liquidityof the products involved.
Of the core group companies, those that account for mostof the group's exposure to market risk (MHCB, MHBK, MHSC

Of the various kinds of market risk, we monitor ourmarket liquidity risk positions (see Basic Approach above for
explanation) for individual financial products in the market
while taking turnover and other factors into consideration.
57

Internal Control Systems of Mizuho

Back Testing

above. However, the head of the Financial Control &In order to confirm the effectiveness of market risk

Accounting Group of MHFG is additionally responsible formeasurements using VAR, MHFG carries out regular backmatters relating to planning and running cash flow

tests to compare VAR and profits/losses.

management operations, while the ALM and Trading

The graph below depicts daily VAR on trading activities inPlanning Division is responsible for monitoring and adjusting

fiscal 2002, and the corresponding paired distribution of

the cash flow management situation and for planning andprofits and losses. The points in the area above the diagonal

implementing cash flow management. Reports on the cash

line on the graph (the upper left hand section) indicate where

flow situation are submitted to the ALM & Market Risk

profits/losses exceed VAR.

Committee, the Executive Management Committee and theThere was one case where profits/losses exceeded VAR

CEO, both regularly and as required.

during the period, yielding an excess rate of 0.4%. We

MHFG measures liquidity risk using indices pertaining tobelieve this confirms that our internal models are sufficiently

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

accurate in measuring our group's market risk exposure.

on liquidity risk are discussed and coordinated by the ALM &Market Risk Committee, discussed further by the Executive

Fiscal 2002 Back TestingManagement Committee, then determined by the CEO.

Profits / losses (absolute value) (¥ billions)
5.0

MHFG’s basic policy has established classifications for the

4.5

cash flow conditions affecting the group, ranging from

4.0

“normal” to “cause for concern” and “critical,” and has laid

3.5
3.0

down response procedures for dealing with cases where they

2.5

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

2.0

Notes
1. Including major overseas
1.5
subsidiaries managed by
1.0
each company.
0.5
2. Profits / losses is on anassumptive basis.
0.0
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0
VAR (¥ billions)

categories.
Of the core group companies, the liquidity risk management structures of MHCB, MHBK, MHSC and MHTB arebasically the same as the aforementioned market risk
management structures, but the senior executives responsible

Stress Testing

for risk management are responsible for matters pertaining to

As a market risk measurement method, VAR is based onplanning and running liquidity risk management, while thestatistical assumptions. For this reason, we carry out stresssenior executives of the ALM and trading units are in charge

testing to simulate the levels of losses that could be incurredof matters pertaining to planning and running cash flow

in cases where the market moves suddenly to levels thatmanagement.
The methodologies used for ensuring precise control ofexceed these assumptions.
The stress testing methods we use include one method

liquidity risk include the formulation of indices pertaining tothat calculates losses on the basis of the largest fluctuations

cash flow management, such as limits on funds raised in thethat occurred during a period longer than ten years, andmarket. The abovementioned companies, like MHFG, haveanother that calculates losses on the basis of market

established classifications for the cash flow conditions

fluctuations occurring during historical market events.

affecting them, ranging from “normal” to “cause for

The table below shows the results of stress testing ofconcern” and “critical,” and have laid down response
procedures for dealing with cases where they are deemed to

trading activities at the end of fiscal 2002.

fall into the “cause for concern” or “critical” categories.
Each company has adopted stringent controls that callFiscal 2002 Stress Testing
At March 25, 2003 (Billions of yen)
Assumed maximum losses
Worst scenario(the largest fluctuations during a period longer than ten years)

18

for the submission of reports on liquidity risk management
and cash flow management to the ALM & Market Risk
Management Committee and other business policy
committees, the Executive Management Committee and theLiquidity Risk Management Structure

CEO both on a regular basis and as deemed necessary. They

MHFG's liquidity risk management structure is fundamentally

also provide regular reports to MHFG.

the same as the market risk management structure described58

Operational Risk Management

developing a common loss database for the entire group, aremeasuring operational risk by selecting quantification models.

Basic Approach

We think operational risk should be covered by capital

We define operational risk as the risk of loss that our groupaccounts when it realizes into losses, and we are regularly

may incur resulting from inadequate or failed internalmonitoring operational risk to ascertain whether it is kept

processes, people and systems, or from external events. This

within the level of the allocated risk capital.

definition includes operations risk, IT risk and legal risk.
The need to manage these risks across the entire group

Management of Other Risks

through quantification methods becomes increasingly urgent
with each passing year as a result of the growing
sophistication and diversity of financial operations andprogress in computerization.
From the same standpoint, the Basel Committee on
Banking Supervision is currently working toward theintroduction in 2006 of new BIS rules, which will include
operational risk as well as market and credit risk within
capital adequacy guidelines.
We are participating in the international forum on new BIS
rules, and are proactively pursuing more sophisticatedoperational risk management across the entire group.

Operations Risk Management
Operations risk is the risk of incurring losses because senior
executives or employees fail to fulfill their tasks properly,
cause accidents or act improperly.
We are well aware that this kind of risk has a direct impact
on services to customers. We are also aware that we bear agreat responsibility towards society because each timesomething like this happens, it can easily cause major losses
for all concerned. For this reason, we are working hard tobuild a management structure that is more attuned to thesituation.

Operational Risk Management Structure

MHFG has drawn up the Basic Policy for Operations Risk

We have developed a risk management structure, whereby

Management for use across the entire group, while the core

MHFG draws up the Basic Policy for Operational Risk

group companies have, where necessary, set out their own

Management for use by the entire group, and the core group

policies for managing operations risk in conformance withcompanies in turn set out their own basic policies for

MHFG's policy. Based on this, the core group companies

operational risk management as required based on MHFG'sreport to MHFG on the status of risk management bothbasic policy to manage their own risk and those of theirregularly and as required under these policies. In this way, topgroup companies.

management is able to obtain a rapid and accurate grasp of

At MHFG, the Risk Management Division is responsible forquantitative risk management while the Operations Planning,

operations risk at group level, and thus devise effective
measures for dealing with it.

the IT Systems & Planning, and the Legal Affairs Divisions are

The Basic Policies for Operations Risk Management

responsible for qualitative management of each specific risk.

adopted by the Two Banks stipulate their basic approach,

They are also working closely together to promotewhich calls for grasping the status of operations risk, primarily

operational risk management for the entire group.

by the Operations Planning Division and the Administrative

At MHCB, MHBK, MHSC, and MHTB, these divisions are

Operations Division, thus establishing a framework foralso working together in the same structure to manage

appropriate reductions in operations risk and promoting

operational risk by data gathering, monitoring risk profiles,

improvements. Specifically, clearly defined operational

and analyzing the causes of each specific risk, and proposing

procedures for handling various types of activities have been

and implementing measures for mitigating risk.

established, while the status of operational processes is

To enhance the sophistication of operational risk

checked periodically. Progress is being made in strengthening

management, it is important to identify the scale ofoperational guidance from head office in order to improve

operational risk in a timely and accurate manner, and adopt

the operational expertise and capabilities of the personnel

appropriate measures to mitigate risk as required.

involved in operations and training managers. We are also

Recognizing the need to build a quantitative operational

reinforcing our computer center's processing functions byrisk management structure, MHFG, MHCB and MHBK haveenhancing the range and capabilities of office equipment andlaid down rules for data gathering, and in addition to

moving ahead with computerization in order to ensure59Internal Control Systems of Mizuho

speedy operational procedures that reduce human error to a

mitigation measures that take into consideration theminimum.

results of risk analyses concerning the development and

MHSC and MHTB follow operations risk management
procedures that suit the characteristics of their respective
business sectors.

operations of the hardware and software configurationsof the systems currently in operation.
 To prevent major malfunctions in newly developed systems, the Two Banks have implemented thoroughgoing

IT Risk Management

project management for process and quality control.

• Dealing with IT Risk

 In preparation for possible large-scale systems

IT risk is the risk of exposure to tangible or intangible losses

malfunctions arising from natural disasters and similararising from system defects such as failures, faults, or

events, the Two Banks have instituted contingency

incompleteness in computer operations.

plans to reduce their impact to the maximum extent

We are keenly aware that we bear a great responsibility

possible, and hold regular drills.

towards society where IT risk is concerned, because such

 The Two Banks have established firewalls and installedfailures may threaten the basic infrastructure of our services

anti-virus software applications to protect their

to customers. We are, therefore, making every effort toinformational assets from the threat of cyber terrorism.

ensure the stability of our IT operations and the protection

MHSC and MHTB follow IT risk management procedures

and safety of informational assets relating to systems.
The IT Systems & Planning Division of MHFG monitors IT

that suit the characteristics of their respective businesssectors.

risk for the entire group in line with the Basic Policy for IT Risk

The group's total strengths are dedicated to making theseManagement drawn up by MHFG as the basis for our IT risk

measures more effective, while at the management level

management framework. The head of the IT, Systems &progress in their implementation and establishment is

Operations Group ascertains the sources, scale and nature ofmonitored on a continuous basis.

IT risk and, after overall assessment and monitoring, submits
reports to the CEO and other members of top management

Legal Risk Management

who then address the management issues involved and work

We see legal risk as the risk of incurring tangible or intangible

to resolve them.

losses as a result of infringements of laws and regulations,

In order to ensure the stability of IT operations, and theWhile deregulation has resulted in considerable progress insystems, as well as minimize possible loss, MHFG and theliberalizing and diversifying the banking business, bankcore group companies have laid down the Basic Policy for IT

managements are also required to be fully accountable for

Risk Management and Security Policy in line with the group's

their actions. In this environment, we recognize that legal risk

unified basic policy, clarifying the basic IT risk management

management is an issue of key importance for managing theitems that all senior executives and individual employees

group, and the Legal Affairs Division of MHFG's Audit andshould observe, and ensuring their thoroughgoing

Compliance Group is responsible for the basic planning andcompliance.

administration of legal risk management.

• Measures to Deal with IT Risk

MHFG has drawn up the Basic Policy for Legal Risk

Following the computer systems problems in our domestic

Management that forms the foundations for the entire

services at the time of the launching of MHCB and MHBK ingroup. Legal risk management takes the form of legal checks

April 2002, the Two Banks have been doing everything inin connection with management decisions, new products andtheir power to minimize IT risk.

new businesses. It also covers centralized management of The Two Banks have instituted wide-ranging measureslegal information concerning the enactment, revision andto prevent the recurrence of the problem by analyzing

abolition of legislation, as well as identifying and responding

the causes of the systems problems that occurred at theto legal risks such as litigation.

time of the consolidation, reviewing development andEach of the core group companies manages legal risk inoperations structures and procedures, and conducting

accordance with MHFG's basic policy and submits

enhancement tests.

applications and reports concerning prescribed matters to The Two Banks have drawn up and implemented risk
60

concluding inappropriate contracts, and other legal factors.

protection and safe use of informational assets relating to

MHFG.

Settlement Risk Management

Internal Audit Structure

Settlement risk is the risk of incurring losses because
settlements are not executed according to schedule for some

Basic Approachreason. It usually encompasses various kinds of risks,Internal audits are an integrated process for evaluating theincluding credit risk, liquidity risk, operations risk and legal

extent to which internal control achieves its objectives in key

risk. In recent years, moreover, finding international solutions

areas—appropriate risk management, efficient and effectivefor Herstatt risk—the risk arising from time zone differencesbusiness operations, reliable financial reporting, andin international currency settlements—has attracted a greatcompliance with laws, regulations and internal rules. They aredeal of attention.

conducted from an objective and comprehensive standpoint,

We have adopted various methods for averting different

independently of operational reporting lines, and extend as far

types of settlement risk. We use netting procedures to reduce

as offering advice, guidance and remedial recommendations

actual settlement amounts, Real-Time Gross Settlements

in connection with any problems that may be uncovered.

(RTGS) to minimize the settlement time lag, and theThrough this integrated process, internal audits assist theContinuous Linked Settlement Bank (CLS) to cut settlement

Boards of Directors of individual group companies inrisk.

efficiently and effectively fulfilling their managerial duties
under the self-responsibility principle.

Reputational Risk Management
Reputational risk is the risk of incurring tangible or intangible

MHFG's Internal Audit Management Structure

losses as a result of damage caused to the group's credibility

In line with the Basic Policy for Internal Audit laid down byor the Mizuho brand when market players learn about or the

MHFG, the core group companies conduct internal audits,

media reports various risk events that actually arise inwhich include the auditing of their own subsidiaries. They

connection with the group's operating activities, or false

also submit reports to MHFG on the results of internal audits

rumors or vicious slander.

and the status of follow-up steps to deal with problems.

MHFG has drawn up rules for managing information

MHFG grasps and manages the status of conducting audits at

associated with reputational risk and manages this kind of

the core group companies through examining above reports.

risk throughout the entire group. Each of the core group

The Internal Audit & Compliance Committee of MHFG

companies draws up its own rules for managing information

discusses and makes decisions on the results of examinations

associated with reputational risk in line with MHFG's rules,

and important matters pertaining to the group's internal

and monitors and manages the sources, scale and status ofaudits. After it reaches decisions thereon, reports are

reputational risk.

submitted to the Board of Directors.

When MHFG and core group companies deem that certain

MHHD cooperates with MHFG in managing matters

information may have a serious impact on group management,

relating to internal audits at MHCB, MHBK, MHSC, MHIS andMHFG requires the core group companies to submit timely

their group companies.

reports as appropriate, managing the information on an

MHCB and MHBK have also established Internal Audit &

integrated basis and devising suitable responses to minimize

Compliance Committees that are independent of business

reputational risk.

promotion divisions to ensure the independence of theinternal audit divisions and provide checks and balances.
Based on reports from the senior executives in charge ofinternal audit, the members of the respective Internal Audit &Compliance Committees discuss and reach decisions on
matters relating to internal audits. After going through theInternal Audit & Compliance Committees, the results ofaudits and the status of follow-up steps to deal withproblems are submitted to the Boards of Directors and to
MHFG.
In addition, MHCB and MHBK have established theInternal Audit Divisions and the Credit Review Divisions as61

Internal Control Systems of Mizuho

internal audit divisions to carry out the audits at domestic andoverseas business offices, head office divisions and groupcompanies. Specifically, the Internal Audit Divisions assess thesuitability and effectiveness of business activities associatedwith compliance and risk management. The Credit Review
Divisions audit credit ratings and the status of credit
management in addition to auditing self-assessment ofassets, in order to verify the correctness and suitability ofmatters deemed necessary from the viewpoint of assuring thesoundness of the assets in question.
MHSC, MHTB and other core group companies have alsoestablished effective and efficient internal audit structuresthat suit the characteristics of their respective businesssectors.

MHFG's Internal Audit Management Structure
MHFG
Board of Directors

President & CEO
Chairman of Internal Audit& Compliance Committee
Internal Audit &Compliance Committee

Report the results ofinternal audit, etc.

Advice, guidance andremedial recommendations

MHHD

Report the results ofinternal audit, etc.

Advice, guidance andremedial recommendations

Head of Audit andCompliance Group
Division in charge:
Internal Audit Division

Joint management by
MHFG and MHHD
MHCB
MHBK
MHSC
MHIS

MHTB and othercore group companies
other than those to
the left (11 companies)

Subsidiaries ofcore group companies

Subsidiaries ofcore group companies*Core group companies:
MHCB, MHBK, MHSC, MHTB, MHIS, TCSB, DKA, FIMCO, DIAM, UC Card,
Mizuho Research Institute, DKIS, FRIC, KSD, Mizuho Capital(as of June 30, 2003)

62

Financial Analysis of Mizuho
Key Indicators of Mizuho Financial Group, Inc.

64

The Financial and Economic Environment

66

Results for the Fiscal Year ended March 31, 2003

68

Improvement of Asset Quality

80

63

Financial Analysis of Mizuho

Key Indicators of Mizuho Financial Group, Inc.

Key Indicators of Performance
The results for the fiscal year ended March 31, 2003 are for Mizuho Financial Group, Inc. The results for the fiscal year ended
March 31, 2002 are for Mizuho Holdings, Inc.

Consolidated
Billions of yen

For the Fiscal Years ended March 31,

2003

2002

¥ 3,441.8(2,377.1)
2,861.0
134,032.7
72,222.6
11,696.3
69,210.0
23,816.5¥ 5,315.5(976.0)4,731.4
151,312.4
85,606.2
15,310.8
84,593.6
24,108.9(20,376.71)(254,524.65)—

295,093.14(108,003.27)
—

9.53%

10.56%Net Return on Equity
PER (Times) (Note 3)(183.7)%—x(28.8)%—xCash Flows from Operating Activities
Cash Flows from Investing Activities
Cash Flows from Financing Activities(2,196.1)(206.3)(394.0)6,776.4
1,530.7(697.4)

Cash and Cash Equivalent at the End of the Year

7,048.5

9,847.3

Total Income
Net Loss
Total Shareholders' Equity
Total Assets
Deposits
Debentures
Loans and Bills Discounted
Securities
Total Shareholders' Equity per Share (Yen) (Note 1)
Net Loss per Share (Yen) (Note 2)
Diluted Net Loss per Share (Yen) (Note 3)
Risk-based Capital Ratio (BIS Capital Ratio)

Notes: 1. Total Shareholders' Equity per Share for the fiscal year ended March 31, 2003: (Total Shareholders' Equity – Shares of Preferred Stock x Issued Value – Cash Dividends Declared (Preferred Stock)) /Shares of Common Stock (excluding Treasury Stock).
Total Shareholders' Equity per Share for the fiscal year ended March 31, 2002: (Total Shareholders' Equity – Shares of Preferred Stock x Issued Value) / Shares of Common Stock (excluding
Treasury Stock).
2. Net Loss per Share: (Net Loss – Cash Dividends Declared (Preferred Stock)) / Average Outstanding Shares of Common Stock (excluding Treasury Stock).
3. “Diluted Net Loss per Share” and “PER” for the fiscal years ended March 31, 2003 and 2002 are not required to be disclosed due to loss positions.

64

Non-Consolidated
Billions of yen

For the Fiscal Years ended March 31

2003

2002

¥ 0.9
0.0

¥ 123.0
98.5

1,540.9
Common Shares 10,582,426.71 sharesFirst Series Class I Preferred Shares
33,000 shares
Second Series Class II Preferred Shares
100,000 shares
Third Series Class III Preferred Shares
100,000 shares
Fourth Series Class IV Preferred Shares
150,000 shares
Sixth Series Class VI Preferred Shares
150,000 shares
Seventh Series Class VII Preferred Shares
125,000 shares
Eighth Series Class VIII Preferred Shares
125,000 shares
Ninth Series Class IX Preferred Shares
140,000 shares
Tenth Series Class X Preferred Shares
140,000 shares
Eleventh Series Class XI Preferred Shares
943,740 shares
Twelfth Series Class XI Preferred Shares
101,500 shares
Thirteenth Series Class XIII Preferred Shares
36,690 shares

2,572.0
Common Shares 9,430,250.71 sharesFirst Series Class I Preferred Shares
33,000 shares
Second Series Class II Preferred Shares
100,000 shares
Third Series Class III Preferred Shares
100,000 shares
Fourth Series Class IV Preferred Shares
150,000 shares
Sixth Series Class VI Preferred Shares
150,000 shares
Seventh Series Class VII Preferred Shares
125,000 shares
Eighth Series Class VIII Preferred Shares
125,000 shares
Ninth Series Class IX Preferred Shares
140,000 shares
Tenth Series Class X Preferred Shares
140,000 shares

3,545.8
3,595.6

6,616.4
7,467.7

Operating Income
Net Income
Common Stock and Preferred Stock
Number of Shares Issued
and Outstanding

Total Shareholders' Equity
Total Assets
Total Shareholders' Equity per Share (Yen) (Note 1)
Dividend per Share of Common Stock
Common SharesFirst Series Class I Preferred Shares(Interim dividends per share) (Yen)
Second Series Class II Preferred Shares
Third Series Class III Preferred Shares
Fourth Series Class IV Preferred Shares

46,568.86—
22,5008,200
14,00047,600Sixth Series Class VI Preferred Shares
Seventh Series Class VII Preferred Shares
Eighth Series Class VIII Preferred Shares
Ninth Series Class IX Preferred Shares
Tenth Series Class X Preferred Shares
Eleventh Series Class XI Preferred Shares
Twelfth Series Class XI Preferred Shares
Thirteenth Series Class XIII Preferred Shares
Common SharesFirst Series Class I Preferred Shares
Second Series Class II Preferred Shares
Third Series Class III Preferred Shares
Fourth Series Class IV Preferred Shares

42,00011,0008,000
17,500
5,380
165
21
247
—
—
—
—
—

Sixth Series Class VI Preferred Shares
Seventh Series Class VII Preferred Shares
Eighth Series Class VIII Preferred Shares
Ninth Series Class IX Preferred Shares
Tenth Series Class X Preferred Shares
Net Income (Loss) per Share of Common Stock (Yen) (Note 2)
Diluted Net Income per Share (Yen) (Note 3)

—
—
—
—
—
(8,663.01)—

PER (Times) (Note 3)
Dividend Propensity (Note 4)——

Common SharesFirst Series Class I Preferred Shares
Second Series Class II Preferred Shares
Third Series Class III Preferred Shares
Fourth Series Class IV Preferred Shares
Fifth Series Class V Preferred Shares
Sixth Series Class VI Preferred Shares
Seventh Series Class VII Preferred Shares
Eighth Series Class VIII Preferred Shares
Ninth Series Class IX Preferred Shares
Tenth Series Class X Preferred Shares

Common SharesFirst Series Class I Preferred Shares
Second Series Class II Preferred Shares
Third Series Class III Preferred Shares
Fourth Series Class IV Preferred Shares
Fifth Series Class V Preferred Shares
Sixth Series Class VI Preferred Shares
Seventh Series Class VII Preferred Shares
Eighth Series Class VIII Preferred Shares
Ninth Series Class IX Preferred Shares
Tenth Series Class X Preferred Shares

494,962.03
3,500
22,5008,200
14,00047,600—42,00011,0008,000
17,500
5,380

—
—
—
—
—
—
—
—
—
—
—
8,286.55
8,161.61
36.44 x43.09%

Notes: 1. Total Shareholders' Equity per Share for the fiscal year ended March 31, 2003: (Total Shareholders' Equity – Shares of Preferred Stock x Issued Value – Cash Dividends Declared (Preferred Stock)) /Shares of Common Stock (excluding Treasury Stock).
Total Shareholders' Equity per Share for the fiscal year ended March 31, 2002: (Total Shareholders' Equity – Shares of Preferred Stock x Issued Value) / Shares of Common Stock (excluding
Treasury Stock).
2. Net Income (Loss) per Share: (Net Income (Loss) – Cash Dividends Declared (Preferred Stock)) / Average Outstanding Shares of Common Stock (excluding Treasury Stock).
3. “Diluted Net Loss per Share” and “PER” for the fiscal year ended March 31, 2003 are not required to be disclosed due to loss positions.
4. Dividend Propensity: Cash Dividends Declared (Common Stock) / (Net Income – Cash Dividends Declared (Preferred Stock)). The Dividend Propensity for the fiscal year ended March 31, 2003 is
not required to be disclosed because dividends for common stocks were not declared.

65Financial Analysis of Mizuho

The Financial and Economic Environment

The Financial and Economic Environment
The Economic Conditions in Japan and Overseas
Looking at global economic conditions in the fiscal year ended March 31, 2003, the U.S. economy experienced a slight downturn
as growing signs of a deceleration in consumer spending and industrial production emerged through the second half of the year.
In Europe, the economy was stagnant in the face of a continuing decline in capital expenditures and a dramatic slowdown ingrowth in consumer spending. In contrast, the Asian economy continued to recover due to the growth in exports. Overall, theglobal economy was on a gentle recovery trend but the rising tension over the situation in Iraq through the fiscal year-end led toa growing sense of stagnation.
In Japan, increase in exports and other factors helped the economy on to an external demand-led recovery path through thefirst half, but domestic demand failed to recover under the pressures of prolonged deflation. As a result, corporate sales declined
and capital expenditures remained at a low level. After the year-end, the outlook for the economy became more uncertain as
consumer spending lost momentum because of the deteriorating incomes and employment environment.
In light of these economic environments, the Bank of Japan (BOJ) loosened monetary policy further in October 2002, and took
steps to facilitate corporate finances in December 2002. Meanwhile, the government decided “Comprehensive Measures to
Accelerate Reforms” in October 2002 in order to accelerate its structural reforms while alleviating their deflationary impact.

The Financial Sector
Looking back at the financial markets in fiscal 2002, long-term rates declined consistently to reach historical lows. Since stock
prices also continued to fall in the first half of fiscal 2002, the BOJ began outright purchases of bank stockholdings in November
2002, and the Financial Services Agency initiated measures to ensure appropriate operation of the stock market in March 2003.
However, since stock markets around the world remained weak, stock prices in Japan remained at their lowest levels since theeconomic bubble burst. As for the foreign exchange market, the yen appreciated rapidly against the dollar in the beginning of the
fiscal year; it moved within the range of ¥115-125 thereafter.
In October 2002, the government decided to postpone the complete abolition of the blanket deposit insurance and launched
the “Program for Financial Revival” to promote an early resolution of the major banks' non-performing loan (NPL) problems.
Because of the growing awareness of the need to promote financial revival and corporate and industrial revitalization as a single
package, the government adopted several new measures, including the establishment of the Industrial Revitalization Corporationof Japan. Under the severe business environment marked by sluggish stock markets and consistently high corporate bankruptcy
levels, expediting final disposals of NPLs and dramatically strengthening management infrastructures are becoming matters of
extreme importance and urgency for financial institutions.

66

Trends in Interest Rates in Japan
(%)
2.5

(%)
0.40
Long-Term Prime Rate (left scale)

0.35

2.0
0.30
0.25

1.5
Short-Term Prime Rate (left scale)

0.20

Newly Issued Government Bond Yield (10-Year) (left scale)

1.0

0.15
Euroyen TIBOR (3-month) (right scale)

0.10

0.5
0.05

Call Rate (Uncollateralized overnight) (right scale)

0.0

0.00

Jan. 2002

Apr. 2002

July 2002

Oct. 2002

Jan. 2003

Apr. 2003

Trends in TOPIX and Yen / Dollar Exchange Rate
(Point)(Yen / Dollar)

135

1,200
TOPIX (left scale)

1,100
130

1,000
125
900
120
800
Yen / Dollar Exchange Rate(right scale)

700

115

Jan. 2002

Apr. 2002

July 2002

Oct. 2002

Jan. 2003

Apr. 2003

67

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2003

Consolidated Accounts
The consolidated results for the fiscal year ended March 31, 2003 are for Mizuho Financial Group, Inc. The consolidated results
for the fiscal year ended March 31, 2002 are for Mizuho Holdings, Inc.

1. Scope of Consolidation and Application of the Equity Method
companies

At March 31,

2003

2002

ChangeNumber of consolidated subsidiaries
Number of affiliates accounted for under the equity method

138
33

171
30

(33)
3

The group's consolidated subsidiaries decreased by 33 to 138, and the number of affiliates accounted for under the equity
method increased by 3 to 33 from the end of the previous fiscal year. The major consolidated subsidiaries are Mizuho Bank, Ltd.,
Mizuho Corporate Bank, Ltd., Mizuho Securities Co., Ltd. and Mizuho Trust & Banking Co., Ltd. The major affiliates accounted forunder the equity 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
Net Fiduciary Income
Net Fee and Commission Income
Net Trading Income
Net Other Operating Income

2003

¥

2,233.6
1,256.3
55.4
410.5
244.5
266.7

2002

¥

Change2,462.0
1,527.6
54.4
501.0
178.8
199.9

¥

(228.3)(271.2)1.0(90.5)
65.6
66.7

General and Administrative Expenses

1,237.6

1,368.2

Credit-related Costs

2,092.3

2,487.6(395.3)

Net Gains (Losses) related to Stocks and Other Securities(924.9)116.7(1,041.6)

(3.4)

(6.7)

3.2

Equity in Losses from Investment in Affiliates
Other
Loss before Income Taxes and Minority Interests(130.5)(237.3)(141.2)(96.1)(2,262.1)(1,425.1)(837.0)

Income Taxes–Current

22.2

110.4

(88.2)

Income Taxes–Deferred

30.5(545.9)576.4

Minority Interests in Net Income (Loss)
Net Loss
Net Loss per Share of Common Stock (Yen)

62.2(13.7)

75.9(2,377.1)(976.0)(1,401.1)¥ (254,524.65)¥ (108,003.27)¥ (146,521.38)

Notes: 1. Consolidated Gross Profits: Net Interest Income + Net 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.

(1) Consolidated Gross Profits
Consolidated Gross Profits decreased by ¥228.3 billion to ¥2,233.6 billion in comparison with the previous fiscal year.
Net Interest Income decreased by ¥271.2 billion to ¥1,256.3 billion, as a result of the continuing low domestic demand for capital, and other factors.
Net Fiduciary Income increased by ¥1.0 billion to ¥55.4 billion.
Net Fee and Commission Income declined by ¥90.5 billion to ¥410.5 billion.
Because of a rise in net gains on trading securities and derivatives, Net Trading Income increased by ¥65.6 billion to ¥244.5 billion.
Net Other Operating Income increased by ¥66.7 billion to ¥266.7 billion.
(2) General and Administrative Expenses
General and Administrative Expenses decreased by ¥130.5 billion from the previous fiscal year to ¥1,237.6 billion.

68(3) Credit-related Costs
The strictest financial provisions continued from the previous fiscal year, including acceleration of final disposal of non-performing
loans (NPLs) and an increase in the reserve ratio. As a result, Credit-related Costs decreased by ¥395.3 billion to ¥2,092.3 billion.
(4) Net Gains (Losses) Related to Stocks and Other Securities
As a result of a significant reduction in exposure to stockholdings through the sale of stocks and conservative devaluation ofshares, Net Gains (Losses) Related to Stocks and Other Securities changed by ¥1,041.6 billion to a loss of ¥924.9 billion.
(5) Net Income (Loss)
As a result of the above, Loss before Income Taxes and Minority Interests amounted to ¥2,262.1 billion.
Net Loss increased by ¥1,401.1 billion to ¥2,377.1 billion after reflecting Income Taxes–Current, Income Taxes–Deferred andMinority Interests in Net Loss in Loss before Income Taxes and Minority Interests.

Use and Source of Funds
Billions of yen

2003

Yield
2002

Use of Funds
Due from Banks
Call Loans and Bills Purchased
Receivables under Resale Agreements
Guarantee Deposit Paid under Securities
Borrowing Transactions
Securities
Loans and Bills Discounted¥ 125,177.1
5,506.9
5,867.1
4,234.6¥ 130,664.1
3,724.3
1,886.3
3,265.7¥ (5,486.9)
1,782.5
3,980.8
968.8

1.59%
0.77
0.19
2.69

2.31%
2.84
0.88
8.01

(0.72)%(2.06)(0.69)(5.32)

2,846.6
25,456.0
77,957.3—
30,046.6
88,835.8

2,846.6(4,590.5)(10,878.5)

0.02
1.36
1.83

—
1.71
2.31

0.02
(0.35)(0.47)

Source of Funds
Deposits
Debentures
Call Money and Bills Sold
Payables under Repurchase Agreements
Guarantee Deposit Received under Securities
Lending Transactions
Commercial Paper
Borrowed Money¥ 126,911.2
79,247.3
13,767.2
15,027.0
8,365.4¥ 126,610.8
81,877.5
16,878.0
8,280.1
7,095.4¥ 300.3(2,630.1)(3,110.7)
6,746.9
1,270.0

0.57%
0.24
0.87
0.04
2.27

1.17%
0.61
1.01
0.39
4.91

(0.59)%(0.36)(0.13)(0.34)(2.64)

3,500.2
418.6
2,245.3—
1,545.1
3,695.3

3,500.2(1,126.5)(1,450.0)

0.24
0.20
1.97

—
1.26
2.54

0.24
(1.06)(0.57)

2003

2002

ChangeFee and Commission Income
Deposits, Debentures and Lending Business
Remittance Business
Securities-related BusinessAgency Business
Safe Custody and Safety Deposit Box Business
Guarantee Business
Trust-related Business¥ 490.1
81.1
113.4
64.0
15.6
2.4
30.7
23.1

¥ 544.2
123.7
115.8
85.1
41.1
8.3
39.4
23.8

¥ (54.0)(42.6)(2.4)(21.1)(25.5)
(5.9)
(8.6)
(0.7)

Fee and Commission Expenses
Remittance Business¥ 79.627.9¥ 43.127.5¥ 36.4
0.3

For the Fiscal Years ended March 31,

Average balance
2003
2002

ChangeChangeNet Fee and Commission Income
Billions of yen

For the Fiscal Years ended March 31,

69

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2003

3. Consolidated Assets and Liabilities(1) Assets
Securities decreased by ¥292.3 billion from the end of the previous fiscal year to ¥23,816.5 billion. Unrealized Gains (Losses) on
Other Securities (available for sale) at year-end were unrealized losses of ¥19.5 billion.
Loans and Bills Discounted at year-end fell by ¥15,383.6 billion to ¥69,210.0 billion. Non-Accrual, Past Due & Restructured
Loans amounted to ¥4,769.9 billion, or 6.89% of total Loans and Bills Discounted.
Total Assets was ¥134,032.7 billion.
Consolidated Assets and Liabilites
Billions of yen

At March 31,

Total Assets
Cash and Due from Banks
Trading Assets
Securities
Loans and Bills Discounted
Other Assets
Customers' Liabilities for Acceptances and Guarantees

2003

2002

Change¥ 134,032.7
7,849.7
9,919.0
23,816.5
69,210.0
4,904.6
4,145.4¥ 151,312.4
11,720.1
7,951.4
24,108.9
84,593.6
11,067.7
4,923.2¥ (17,279.6)(3,870.4)
1,967.6(292.3)(15,383.6)(6,163.1)(777.8)130,133.6
72,222.6
11,696.3
11,185.8
5,526.5

145,629.9
85,606.2
15,310.8
9,453.6
11,278.1(15,496.2)(13,383.5)(3,614.4)
1,732.1(5,751.6)

Total Liabilities
Deposits
Debentures
Call Money and Bills Sold
Other Liabilities
Minority Interests

1,038.0

Shareholders' Equity

¥

951.0

86.9

4,731.4¥ (1,870.3)

Gross unrealized
Gains

LossesNet unrealized
gains (losses)

359.3
166.0
88.5
104.7

378.9
356.6
1.0
21.2

2,861.0¥

Fair Value of Securities
Billions of yen

At March 31, 2003 (a)Fair value

Other Securities*1
Stocks*2
Bonds
Other

¥ 21,784.9
3,755.8
12,376.5
5,652.5¥¥¥(19.5)(190.5)
87.4
83.5
Billions of yen

At March 31, 2002 (b)Other Securities*1
Stocks*2
Bonds
Other

Gross unrealized
Gains

Fair value¥ 22,343.5
6,345.6
11,090.5
4,907.2

¥

459.8
409.5
15.4
34.8

¥

Losses

1,347.5
1,156.1
29.0
162.3

Net unrealized
gains (losses)¥(887.6)(746.5)(13.5)(127.4)
Billions of yen

Change (a)-(b)Other Securities*1
Stocks*2
Bonds
Other

Gross unrealized
Gains

Fair value¥(558.5)(2,589.8)
1,285.9745.2¥(100.5)(243.4)
73.0
69.8

¥

Losses(968.5)(799.4)(27.9)(141.1)

Net unrealized
gains (losses)

¥

868.0
556.0
101.0
210.9

*1 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 ¥581.5 billion and non-publicly offeredbonds of ¥1,026.3 billion as of March 31, 2003.
*2 Fair value of Stocks is determined based on the average market prices during one-month periods before the balance sheet date.

70

(2) Liabilities and Minority Interests
Deposits decreased by ¥13,383.5 billion from the end of the previous fiscal year to ¥72,222.6 billion. Debentures decreased by¥3,614.4 billion from the previous fiscal year to ¥11,696.3 billion, and Total Liabilities decreased by ¥15,496.2 billion from theprevious fiscal year to ¥130,133.6 billion.
Minority Interests increased by ¥86.9 billion to ¥1,038.0 billion.
(3) Shareholders' Equity
Shareholders' Equity decreased by ¥1,870.3 billion from the end of the previous fiscal year to ¥2,861.0 billion, primarily becauseof the Net Loss posted.
The consolidated Capital Adequacy Ratio (BIS) stood at 9.53%, continuing at a satisfactory level.

Capital Adequacy Ratio (BIS)
Billions of yen

At March 31,

2003

2002

ChangeCapital Adequacy Ratio
Tier I Ratio

9.53%
4.86%

10.56%
5.33%(1.03)%(0.47)%

Tier I
Capital Stock
Capital Surplus
Retained Earnings (Deficit)
Minority Interest in Consolidated Subsidiaries
Preferred Stock issued by overseas SPC
Unrealized Losses on Other Securities
Treasury Stock
Foreign Currency Translation Adjustments
Goodwill Equivalent
Consolidation Differences Equivalent(A)¥

Tier II(B)
45% of Unrealized Gains on Securities
45% of Revaluation Reserve for Land, net of Taxes
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

3,495.4
1,540.9
2,599.5(1,427.9)
1,036.4
960.2(23.0)(134.1)(96.2)(0.1)—¥

3,495.4—
287.3
1,515.4
2.877.9
1,270.7
1,607.2
143.4¥

6,847.4¥ 71,823.5
71,144.9
66,644.0
4,500.8
678.6
54.2

5,028.9
2,572.0
2,203.7
46.1
952.6
872.5
(559.6)(1.2)(120.1)(0.2)(64.2)¥ (1,533.5)(1,031.0)
395.8(1,474.0)
83.7
87.6
536.6
(132.9)
23.9
0.0
64.2

5,028.9
—
391.3
953.4
3,974.5
1,710.0
2,264.5(1,533.5)—(103.9)562.0(1,096.5)(439.2)(657.2)

98.3

45.0

9,959.5¥ (3,112.1)¥ 94,288.7
93,276.5
85,791.7
7,484.8
1,012.1
80.9¥ (22,465.1)(22,131.6)(19,147.6)(2.983.9)(333.5)(26.6)¥

71

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2003

Aggregated Figures of the Two Banks
The aggregated figures of the “Two Banks” as stated herein are the sum of the non-consolidated results of Mizuho Bank, Ltd.
and Mizuho Corporate Bank, Ltd. for the fiscal year ended March 31, 2003. Comparative figures for the fiscal year ended March
31, 2002 are the sum of the non-consolidated results of the former The Dai-Ichi Kangyo Bank, Limited, the former The Fuji Bank,
Limited and the former The Industrial Bank of Japan, Limited (the former “Three Banks”).

1. MHFG Consolidated Figures and Aggregated Figures of the Two Banks
Differences between Consolidated Figures and Aggregated Figures of the Two Banks or the former Three Banks
Billions of yen

For the Fiscal Years ended March 31,

MHFG(Consolidated)
(A)

2003
AggregatedFigures of the
Two Banks (B)2002
MHHD Aggregated Figures(Consolidated)of the former(A) Three Banks (B)(A) – (B)(B) / (A)Gross Profits
Net Interest Income
Net Fiduciary Income
Net Fee and Commission Income
Net Trading Income
Net Other Operating Income¥ 2,233.6
1,256.3
55.4
410.5
244.5
266.7

¥ 1,706.6
1,126.8
—
228.6
106.2
244.8

¥ 527.0
129.5
55.4
181.9
138.2
21.8

76.4%
89.7
.—
55.7
43.5
91.8

¥ 2,462.0
1,527.6
54.4
501.0
178.8
199.9

¥ 1,829.9
1,335.2
—
231.6
118.5
144.4

37.3

98.2

2,487.6

2,193.9

293.7

88.2

(115.1) 95.2

(976.0)(909.6)(66.4)

93.2(A) – (B)

¥ 632.0
192.3
54.4
269.4
60.3
55.5

Credit-related Costs

2,092.3

2,055.0

Net Loss(2,377.1)(2,261.9)

At March 31,

MHFG(Consolidated)
(A)

2003
AggregatedFigures of the
Two Banks (B)(A) – (B)(B) / (A)2002
MHHD Aggregated Figures(Consolidated)of the former(A) Three Banks (B)Total Assets
Securities
Loans and Bills Discounted¥134,032.7
23,816.5
69,210.0¥128,899.1 ¥5,133.5
23,251.9
564.5
65,517.9
3,692.1

96.2%
97.6
94.7

¥151,312.4 ¥140,985.9 ¥10,326.4
24,108.9
24,049.0
59.8
84,593.6
80,574.3 4,019.3(B) / (A)

74.3%
87.4
.—
46.2
66.3
72.2

Billions of yen(A) – (B)(B) / (A)

93.2%
99.8
95.3

2. Profits and Losses
Aggregated Net Business Profits for the Two Banks (before Provision for General Reserve for Possible Losses on Loans) declined by¥143.5 billion from the previous year to ¥814.6 billion.
As a result of a significant reduction in exposure to stockholdings through the sales and conservative devaluation of stocks, Net
Losses related to Stocks and Other Securities increased by ¥756.7 billion for a loss of ¥830.1 billion.
The strictest financial provisions continued from last fiscal year, including acceleration of final disposal of NPLs and an increasein the reserve ratio, and Credit-related Costs decreased by ¥138.9 billion to ¥2,055.0 billion.
Net Loss thus increased by ¥1,352.3 billion from the previous fiscal year, resulting in Net Loss of ¥2,261.9 billion.

72

Profits and Losses (the Two Banks)
Billions of yen

For the Fiscal Years ended March 31,

2003

Domestic Gross Profits
International Gross Profits¥

Gross Profits
Net Interest Income
Net Fee and Commission Income
Net Trading Income
Net Other Operating Income
Net Gains related to Bonds

1,338.3
368.2

2002

¥

1,303.7
526.1

Change¥34.5(157.8)

1,706.6
1,126.8
228.6
106.2
244.8
193.8

1,829.9
1,335.2
231.6
118.5
144.4
62.7

(123.3)(208.4)(3.0)(12.3)
100.4
131.1

General and Administrative Expenses (Excluding Non-recurring Losses)

891.9

871.7

20.2

Net Business Profits (before Provision for General Reserve
for Possible Losses on Loans)Excluding Net Gains related to Bonds

814.6
620.8

958.2
895.4

(143.5)(274.6)

431.3

214.3

216.9

Provision for General Reserve for Possible Losses on Loans(A)Net Business Profits
Net Non-recurring Losses
Net Losses related to Stocks and Other Securities
Expenses related to Portfolio Problems
Other

(B)

Loss before Income Taxes

383.3

743.8

(360.4)(2,674.0)(830.1)(1,623.7)(220.1)(2,211.4)(73.4)(1,979.5)(158.4)(462.5)(756.7)355.8(61.6)(823.0)(2,290.6)(1,467.6)

Income Taxes–Current

0.9

3.5

(2.5)

Income Taxes–Deferred(29.6)(561.4)531.8

Net Loss
Credit-related Costs(A)+(B)¥ (2,261.9)¥(909.6)¥(1,352.3)¥¥

2,193.9¥(138.9)2,055.0

 Gross Profits
Gross Profits decreased by ¥123.3 billion to ¥1,706.6 billion in comparison with the previous fiscal year.
Breakdown of Gross Profits (the Two Banks)
Billions of yen

For the Fiscal Years ended March 31,

2003

2002

Change¥ 1,126.8
962.1
164.6

¥ 1,335.2
1,108.2
226.9¥ (208.4)(146.0)(62.3)Net Fee and Commission Income
Domestic Operations
International Operations

228.6
174.1
54.4

231.6
156.6
75.0

(3.0)
17.4
(20.5)Net Trading Income
Domestic Operations
International Operations

106.2
66.9
39.2

118.5
34.5
84.0

(12.3)
32.4(44.7)Net Other Operating Income
Domestic Operations
International Operations

244.8
135.0
109.8

144.4
4.2
140.1

100.4
130.7
(30.2)¥ 1,706.6¥ 1,829.9¥ (123.3)

Net Interest Income
Domestic Operations
International Operations

Gross Profits

73

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2003

(1) Net Interest Income
Net Interest Income decreased by ¥208.4 billion from the previous fiscal year to ¥1,126.8 billion. Income from domestic operations decreased by ¥146.0 billion to ¥962.1 billion, and the contribution from international operations decreased by ¥62.3 billion
to ¥164.6 billion.
Breakdown of Net Interest Income (the Two Banks)
Billions of yen

Change

2003

Yield
2002

¥ 118,491.2
82,752.1
26,728.1¥ 2,265.7(8,946.5)(2,527.0)

1.46%
1.77
1.35

2.02%
2.08
1.84

(0.55)%(0.30)(0.48)

122,159.4
90,589.5

115,585.4
95,123.3

6,573.9(4,533.7)

0.53
0.32

0.91
0.65

(0.37)(0.32)

Interest Margins

/

/

/

0.93

1.11

(0.16)

Loan and Deposit Rate Margin

/

/

/

1.44

1.43

0.01

Domestic Operations
Use of Funds
Loans and Bills Discounted
Securities

102,299.9
64,707.5
18,807.5

96,404.9
70,154.7
20,822.1

5,894.9(5,447.1)(2,014.5)

1.17
1.57
0.71

1.47
1.68
0.94

(0.29)(0.10)(0.22)

Source of Funds
Deposits and Debentures

103,913.3
79,994.7

95,315.9
80,773.8

8,597.4(779.1)

0.22
0.19

0.32
0.28

(0.09)(0.08)

Interest Margins

/

/

/

0.94

1.15

(0.20)

Loan and Deposit Rate Margin

/

/

/

1.37

1.40

(0.02)

International Operations
Use of Funds
Loans and Bills Discounted
Securities

20,390.0
9,098.0
5,393.5

24,710.9
12,597.3
5,906.0(4,320.9)(3,499.3)(512.4)

2.97
3.20
3.57

4.10
4.30
5.03

(1.12)(1.09)(1.45)

Source of Funds
Deposits and Debentures

20,179.0
10,594.7

22,894.1
14,349.4(2,715.1)(3,754.6)

2.18
1.32

3.43
2.74

(1.24)(1.41)

Interest Margins

/

/

/

0.78

0.67

0.11

Loan and Deposit Rate Margin

/

/

/

1.88

1.56

0.31

For the Fiscal Years ended March 31,

2003

Total
Use of Funds
Loans and Bills Discounted
Securities¥ 120,756.9
73,805.6
24,201.1

Source of Funds
Deposits and Debentures

Average balance
2002

Change(2) Net Fee and Commission Income
Net Fee and Commission Income decreased by ¥3.0 billion to ¥228.6 billion.
Breakdown of Net Fee and Commission Income (the Two Banks)
Billions of yen

For the Fiscal Years ended March 31,

Fee and Commission Income
Deposits, Debentures and Lending Business
Remittance Business
Securities-related BusinessAgency Business
Safe Custody and Safety Deposit Box Business
Guarantee BusinessFee and Commission Expenses
Remittance Business

74

2003

2002

Change¥ 314.0
94.0
112.0
30.1
23.3
6.4
18.4

¥ 333.3
95.5
114.5
28.6
27.7
6.5
22.8

¥ (19.3)
(1.4)
(2.5)
1.5
(4.3)
(0.1)
(4.3)

85.4
27.6

101.6
28.7

(16.2)(1.1)

(3) Net Trading Income
Net Trading Income decreased by ¥12.3 billion from the previous fiscal year to ¥106.2 billion.
(4) Net Other Operating Income
Net Other Operating Income increased by ¥100.4 billion to ¥244.8 billion due to higher Net Gains related to Bonds.

Breakdown of Net Other Operating Income (the Two Banks)
Billions of yen

For the Fiscal Years ended March 31,

2003

2002

Change¥ 244.8
69.3
193.8¥ 144.4
91.1
62.7¥ 100.4(21.8)
131.1

Domestic Operations
Net Gains related to Bonds

135.0
133.6

4.2
4.7

130.7
128.9

International Operations
Profits on Foreign Exchange Transactions
Net Gains related to Bonds

109.8
69.3
60.1

140.1
91.1
58.0

(30.2)(21.8)
2.1

Total
Profits on Foreign Exchange Transactions
Net Gains related to Bonds

 General and Administrative Expenses
Despite ongoing efforts to promote rationalization and efficiency, General and Administrative Expenses increased by ¥20.2 billion
from the previous year to ¥891.9 billion.
Personnel Expenses decreased by ¥37.1 billion to ¥308.1 billion, because of a reduction in the number of personnel andreviewed compensation levels.
Non-personnel Expenses increased by ¥56.1 billion to ¥535.8 billion, because of cost increases relating to the consolidation.

Breakdown of General and Administrative Expenses (Excluding Non-Recurring Expenses)(the Two Banks)
Billions of yen

For the Fiscal Years ended March 31,

2003

2002

ChangePersonnel Expenses
Salaries and Remuneration¥ 308.1
252.3¥ 345.2
276.1¥ (37.1)(23.8)

Non-personnel Expenses

535.8

479.6

56.1

Miscellaneous Taxes
Total

47.9

46.7

1.2

¥ 891.9¥ 871.7¥ 20.2

 Net Business Profits
Net Business Profits (before Provision for General Reserve for Possible Losses on Loans) decreased by ¥143.5 billion from the previous fiscal year to ¥814.6 billion.

75

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2003

 Net Non-Recurring Losses, Ordinary Loss and Net Loss
(1) Net Losses related to Stocks and Other Securities
The Two Banks reduced stockholdings in order to enhance their financial strength and recorded ¥566.2 billion in Losses on
Devaluation of Stocks and Other Securities, resulting in Net Losses related to Stocks and Other Securities of ¥830.1 billion.
(2) Expenses related to Portfolio Problems
The strictest possible financial provisions were undertaken in order to prepare for the risk of deterioration of assets in the future,including accelerated final disposal of NPLs. As a result of these efforts, Expenses related to Portfolio Problems were ¥1,623.7 billion.
These expenses primarily consisted of Losses on Write-offs of Loans of ¥652.1 billion and Provision for Specific Reserve for
Possible Losses on Loans of ¥389.7 billion.

Breakdown of Net Non-Recurring Losses (the Two Banks)
Billions of yen

For the Fiscal Years ended March 31,

Net Losses Related to Stocks and Other Securities
Gains on Sales of Stocks and Other Securities
Losses on Sales of Stocks and Other Securities
Losses on Devaluation of Stocks and Other Securities
Provision for Reserves for Possible Losses on Investments
Gains on Derivatives other than for Trading
Expenses Related to Portfolio Problems
Losses on Write-offs of Loans
Provision for Specific Reserve for Possible Losses on Loans
Losses on Sales of Loans to CCPC
Provision for Reserve for Possible Losses on Loans Sold
Losses on Support of Specific Borrowers
Provision for Reserve for Possible Losses on Support of Specific Borrowers
Provision for Reserve for Possible Losses on Loans to Restructuring Countries
Provision for Reserve for Contingencies
Other Losses on Sales of Loans
Other
Net Non-recurring Losses

2003

2002

Change¥ (830.1)
67.2(326.8)(566.2)(4.8)
0.4¥ (73.4)
299.7(38.8)(335.4)(0.0)
1.0¥ (756.7)(232.5)(288.0)(230.8)
(4.8)
(0.5)

1,623.7
652.1
389.7
17.8
10.7
0.5
—
(13.8)
6.3
560.2

1,979.5
1,083.2
608.6
54.9
15.9
144.2
17.2
5.2
—
49.9

(355.8)(431.1)(218.8)(37.1)(5.2)(143.6)(17.2)(19.1)
6.3
510.2(220.1)(158.4)(61.6)¥ (2,674.0)¥ (2,211.4)¥ (462.5)(3) Income Taxes
Income Taxes—Current amounted to ¥0.9 billion, and Income Taxes—Deferred amounted to ¥(29.6) billion.
(4) Net Loss
Net Loss thus increased by ¥1,352.3 billion from the previous fiscal year, resulting in a Net Loss of ¥2,261.9 billion.

76

3. Assets and Liabilities
Assets and Liabilities (the Two Banks)
Billions of yen

At March 31,

Total Assets
Cash and Due from Banks
Call Loans
Securities
Loans and Bills Discounted
Customers' Liabilities for Acceptances and Guarantees
Total Liabilities
Deposits
Debentures
Call Money
Acceptances and Guarantees

2003

2002

Change¥ 128,899.1
8,854.1
7,410.5
23,251.9
65,517.9
5,155.3¥ 140,985.9
11,385.9
849.5
24,049.0
80,574.3
6,391.8¥ (12,086.7)(2,531.7)
6,561.0(797.0)(15,056.4)(1,236.4)

125,806.2
70,551.8
11,797.6
12,919.6
5,155.3

135,908.1
82,484.9
15,805.5
7,437.0
6,391.8(10,101.9)(11,933.1)(4,007.9)
5,482.6(1,236.4)

3,092.9(30.3)

5,077.7(530.3)(1,984.7)
500.0

Shareholders' Equity
Net Unrealized Losses on other Securities, net of Taxes

Fair Value of Securities (the Two Banks)
Billions of yen

At March 31, 2003 (a)Fair value

Other Securities*1
Stocks*2
Bonds
Other

¥ 20,115.9
3,511.2
11,576.4
5,028.1

Gross unrealized
Gains¥ 331.0
148.2
85.3
97.5

LossesNet unrealized
gains (losses)

361.3
340.0
0.9
20.3

¥ (30.2)(191.8)84.3
77.2

LossesNet unrealized
gains (losses)¥ 1,273.0
1,091.2
28.7
153.0¥ (861.2)(722.7)(15.9)(122.5)¥

Billions of yen

At March 31, 2002 (b)Other Securities*1
Stocks*2
Bonds
Other

Fair value¥ 20,475.0
5,827.5
10,382.2
4,265.1

Gross unrealized
Gains¥ 411.7
368.5
12.7
30.4

Billions of yen

Change (a)-(b)Other Securities*1
Stocks*2
Bonds
Other

Fair value¥

Gross unrealized
Gains

LossesNet unrealized
gains (losses)(359.1)(2,316.2)¥ (80.6)(220.3)¥ (911.7)(751.2)¥ 831.0
530.9

1,194.1
762.9

72.5
67.0

(27.7)(132.7)

100.3
199.8

*1 In addition to the balances shown in the above table, Other Securities included securities without fair values.
*2 Fair value of Stocks is determined based on the average market prices during one-month periods before the balance sheet date.

77

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2003

(1) Assets
Total Assets decreased by ¥12,086.7 billion from the end of the previous fiscal year to ¥128,899.1 billion.
Securities decreased by ¥797.0 billion to ¥23,251.9 billion, as a result of sales of stocks and other steps taken to reduce stockholding risk. Unrealized Losses on Other Securities was ¥30.3 billion at year-end.
In addition to low domestic demand for funds due to prolonged economic stagnation, progress in disposing of NPLs meantthat overall Loans and Bills Discounted fell by ¥15,056.4 billion from the end of previous fiscal year to ¥65,517.9 billion. NonAccrual, Past Due and Restructured Loans amounted to ¥4,399.2 billion, or 6.71% of total Loans and Bills Discounted.
(2) Liabilities
Total Liabilities decreased by ¥10,101.9 billion from the end of the previous fiscal year to ¥125,806.2 billion.
Total deposits decreased by ¥11,933.1 billion to ¥70,551.8 billion in comparison with the end of the previous fiscal year.
Debentures decreased by ¥4,007.9 billion to ¥11,797.6 billion.
(3) Shareholders' Equity
Shareholders' Equity decreased by ¥1,984.7 billion from the end of the previous fiscal year to ¥3,092.9 billion, primarily because
Retained Earnings declined as a result of the Net Loss for the year.

78

(Reference) Aggregated Figures for the Two Banks & MHTB
The aggregated figures for the Two Banks & MHTB are the sum of the non-consolidated results of Mizuho Corporate Bank, Ltd.,
Mizuho Bank, Ltd. and Mizuho Trust & Banking Co., Ltd.
Profits and Losses (the Two Banks & MHTB)
For the Fiscal Year ended March 31, 2003

Billions of yen

Gross Profits
Net Interest Income
Net Fiduciary Income
Credit Costs for Trust Accounts of MHTBNet Fee and Commission Income
Net Trading Income
Net Other Operating Income¥

General and Administrative Expenses (Excluding Non-recurring Losses)

1,815.9
1,168.3
35.5(19.1)
246.9
109.9
255.1
941.1

Net Business Profits (before Provision for General Reserve
for Possible Losses on Loans)*1

894.0

Provision for General Reserve for Possible Losses on Loans

(A)

431.3

Net Business Profits

443.5

Net Non-recurring Losses
Net Losses related to Stocks and Other Securities
Expenses related to Portfolio Problems
Other(2,821.5)(905.8)(1,656.0)(259.7)(B)

Loss before Income Taxes(2,378.1)

Income Taxes–Current

0.9

Income Taxes–Deferred(12.0)Net Loss¥ (2,367.0)

Credit-related Costs(A)+(B)¥

2,095.2*1 Net Business Profits (before Provision for General Reserve for Possible Losses on Loans) stand for those before Credit Costs for Trust Accounts of MHTB.

Fair Value of Securities (the Two Banks & MHTB)
Billions of yen

At March 31, 2003

Fair value

Other Securities*1
Stocks*2
Bonds
Other

¥ 21,314.1
3,753.2
12,218.1
5,342.7

Gross unrealized
Gains¥ 348.9
160.4
88.5
99.9

LossesNet unrealized
gains (losses)¥ 376.9
355.2
1.0
20.6

¥ (28.0)(194.8)87.4
79.3*1 In addition to the balances shown in the above table, Other Securities included securities without fair values.
*2 Fair value of Stocks is determined based on the average market prices during one-month periods before the balance sheet date.

79

Financial Analysis of Mizuho

Improvement of Asset Quality

Improvement of Asset Quality
The consolidated results for the fiscal year ended March 31, 2003 (“Fiscal 2002”) are for Mizuho Financial Group, Inc. The results forthe fiscal year ended March 31, 2002 (“Fiscal 2001”) are for Mizuho Holdings, Inc.
The aggregated figures of the “Two Banks” are the sum of the non-consolidated results of Mizuho Corporate Bank, Ltd. (MHCB)
and Mizuho Bank, Ltd. (MHBK) for the fiscal year ended March 31, 2003. Comparative figures for the year ended March 31,2002 are
the sum of the non-consolidated results of the former The Dai-Ichi Kangyo Bank, Limited (DKB), the former The Fuji Bank, Limited(Fuji Bank) and the former The Industrial Bank of Japan, Limited (IBJ).
The aggregate figures for the “Two Banks and MHTB” are the sum of the non-consolidated results of MHCB, MHBK and Mizuho
Trust & Banking Co., Ltd. (MHTB) for the fiscal year ended March 31, 2003. Comparative figures for the year ended March 31,2002
are the sum of the non-consolidated results of the former DKB, the former Fuji Bank, the former IBJ and the former Yasuda Trust andBanking.

 Disposal of Non-Performing Loans in the Fiscal Year ended March 31, 2003
Credit-related Costs of the aggregated figures of the Two Banks and MHTB amounted to approximately ¥2.1 trillion for the fiscal
year ended March 31, 2003 (¥1.8 trillion in the second half) in order to resolve the non-performing loan (NPL) issue at an earlystage.
The second half figures included ¥810 billion for acceleration of disposal of NPLs including further disposal of NPLs and preparation of necessary financial provisions for large problem borrowers, and ¥690 billion of increase in the level of loan-loss reserves,
including application of a discounted cash flow method (the “DCF method”).
Acceleration of disposal of NPLs and the increase in the level of loan-loss reserves are the first steps in the future reduction of
the outstanding balance of NPLs.
Discounted Cash Flow Method (the “DCF Method”)

The DCF method is a measurement method of the Reserve for Possible Losses on Loans, where future cash flows to bereceived from repayment of principle of and interest on loans are estimated and discounted to a present value, and thedifference between that the present value and the book value of the loan is recorded in the Reserve for Possible Losses on
Loans.
Our group has adopted this method for the fiscal year ended March 31, 2003, to almost 60% of the claims against
Special Attention Obligors, and to approximately 75% in the case of MHCB alone. The average reserve ratio for the claims
to which the DCF method is applied is about 45% against the uncovered portion, which is considerably higher than the
35% average reserve ratio for claims subject to special examination announced by the Financial Services Agency.
Approximately ¥370 billion out of the ¥2.1 trillion Credit-related Costs for the fiscal year ended March 31, 2003 is
related to adoption of the DCF method.

Credit-related Costs (Consolidated)
Billions of yen

For the Fiscal Year ended March 31,

Credit-related Costs
Losses on Write-offs of Loans
Provision for Reserve for Possible Losses on Loans
Provision for Reserve for Possible Losses on Loans Sold

80

2003

¥ 2,092.3
735.1
914.7
10.7

Credit-related Costs (the Two Banks)
Billions of yen

For the Fiscal Years ended March 31,

Credit-related Costs
Expenses Related to Portfolio Problems
Losses on Write-offs of Loans
Net Provision for Specific Reserve for Possible Losses on Loans
Losses on Sales of Loans to CCPC
Provision for Reserve for Possible Losses on Loans Sold
Losses on Support of Specific Borrowers
Provision for Reserve for Possible Losses on Support of Specific Borrowers
Provision for (Reversal of) Reserve for Possible Losses on Loans to Restructuring Countries
Provision for Reserve for Contingencies
Other Losses on Sales of Loans
Provision for General Reserve for Possible Losses on Loans

2003

2002

Change¥ 2,055.0
1,623.7
652.1
389.7
17.8
10.7
0.5
—
(13.8)
6.3
560.2
431.3

¥ 2,193.9
1,979.5
1,083.2
608.6
54.9
15.9
144.2
17.2
5.2
—
49.9
214.3

¥ (138.9)(355.8)(431.1)(218.8)(37.1)(5.2)(143.6)(17.2)(19.1)
6.3
510.2
216.9

Note: CCPC:Cooperative Credit Purchasing Company, Ltd.

(Reference) Credit-related Costs (the Two Banks and MHTB)
Billions of yen

For the Fiscal Year ended March 31,

2003

Credit-related Costs
Expenses Related to Portfolio Problems
Losses on Write-offs of Loans
Provision for Specific Reserve for Possible Losses on Loans
Provision for Reserve for Possible Losses on Loans Sold
Provision for General Reserve for Possible Losses on Loans¥ 2,095.2
1,656.0
673.1
389.7
10.7
431.3

 Overview of Disclosure of NPLs at March 31, 2003 (the Two Banks)
1. Self-Assessment
ObligorCategorization

Category I(Non-Categorization)

Category II

Category IV
Category III (Non-Collateralized)

559.7
Bankrupt and Substantially
Bankrupt Obligors
559.7

Watch Obligors

Intensive Control
Obligors
1,232.7

Claims for Special
Attention
2,682.1

Collateral, guarantees, etc.:
483.2
Reserve for Possible Losses:
76.5

Reserve
Ratio
100%

1,061.6

171.1

Collateral, guarantees, etc.:
558.7
Reserve for Possible Losses:
502.8

Reserve
Ratio
74.6%

DirectWrite-offs

Billions of yen

2. Disclosed Claims
under the FRL

3. Non-Accrual, Past
Due & Restructured
Loans

Claims against Bankrupt
and Substantially Bankrupt
Obligors, and equivalent
559.7

Loans to Bankrupt Obligors
263.0

Coverage Ratio 100%Reserve Ratio for
Uncoverd Portion
38.0%

Claims with Collection Risk
1,232.7
Coverage Ratio 86.1%

75.4 (Note 2)

Claims for Special Attention(Note 1) 2,682.1

Collateral, guarantees, etc.:
960.4
Reserve for Possible Losses:
654.8

Non-Accrual
Delinquent Loans
1,454.0

Coverage Ratio 60.2%

Loans Past Due for 3 Months
or More 47.9

Restructured Loans
2,634.1(Special Attention Obligors)
Other Watch Obligors
Normal Obligors

Total
71,726.5

Reserved based on
estimated credit losses·Other Watch Obligors 7.63%·Normal Obligors 0.16%

Aggregate Coverage
Ratio 72.3%

Total
4,474.6

Total
4,399.2

Notes: 1. Claims for Special Attention includes loans only and is equal to the total amount of Loans Past Due for 3 Months or More and Restructured Loans.
Claims against Special Attention Obligors includes all claims, not limited to loans, against Special Attention Obligors.
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.
3. FRL: Financial Reconstruction Law

81

Financial Analysis of Mizuho

Improvement of Asset Quality

 Outstanding Balance of NPLs
Status of Disclosed Claims
The Two Banks and MHTB's aggregated figures of Disclosed Claims under the Financial Reconstruction Law (FRL) decreased by¥731.8 billion from the end of the previous year to ¥4,785.9 billion. The classifications of those loans are shown in the table on
page 86.
Of the total, Claims with Collection Risk or worse claims decreased by ¥1,470.1 billion (approximately 44% decrease) from theprevious year to ¥1,880.2 billion as a result of such measures for removal of NPLs including the sales of about ¥600 billion to the
Resolution and Collection Corporation in order to accelerate disposal of NPLs.
On the other hand, Claims for Special Attention increased by ¥738.2 billion compared to the end of March 2002 to ¥2,905.7
billion, as the classification of some portion of Claims with Collection Risk improved due to active efforts to proceed with corporate revitalization, and as strict self-assessments were carried out reflecting the difficult economic situation.
NPL Ratio
The aggregated NPL ratio for the Two Banks and MHTB at the end of March 2003 was about 6.2%.
By continuing to remove NPLs from the balance sheet and strengthen measures to prevent the occurrence of NPLs, we intend
to reduce NPLs to 50% of fiscal year ended March 31, 2003 by the end of the fiscal year ending March 31, 2005.

 Management of Loans
Credit Ratings
A 16-grade unified credit rating system is one of the most important elements of MHCB and MHBK' risk management infrastructure. 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 results, as well as to special reviews required whenever a borrower's credit standing changes. This
enables us to monitor both individual borrowers and the status of the overall portfolio in a timely fashion. Since credit ratings area primary phase of the self-assessment process described below, they are linked to the obligor classifications used in the selfassessment of assets.
Self-Assessment of Assets
Self-assessment of assets is one of the credit risk management measures that enables us to ascertain actual asset status for the
preparation for appropriate write-offs and provisions based on accounting principles.
Specifically, the 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 results of the self-assessment.
The results of write-offs and reserves at the end of March 2003 are described on page 81.

82

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 havepledged collateralor are covered byguarantees,considered of highquality, such as
deposit collateral.

Credit to obligors
which are 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).

Methods 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
and appropriate 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 regards 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.

83

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 responsible business promotion division and branch 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 to promptly 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.
Sohgo Saikenkaisyu Co., Ltd, a servicer of the group, mainly collects NPLs for the group banks and affiliated companies, and we
intend to gradually expand the scope of collection services in the future and to consider accepting requests from non-group entities.

 Activities in Corporate Revitalization
We consider support for corporate revitalization to be an important mission for a financial institution, and we are making our best
efforts as a group to provide that.
MHCB established the Corporate Restructuring Business Unit in October 2002 and MHBK established the Business Advisory
Office within the credit divisions in July 2002. We have concentrated all of our know-how and skills into the sections supporting
corporate revitalization, which have actively supported such initiatives as restructuring of customers' businesses.
Also, in May 2003 we announced our Corporate Revitalization Project, a comprehensive effort of the group to support corporate revitalization. The subsidiary banks transfered loans made to customers requiring restructuring to subsidiaries specializing in
corporate revitalization, and established an advisory company for corporate revitalization with the most advanced expertise. The
objective of the project is realization of early corporate revitalization through the combination of internal and external know-hows(please see page 15 for more information on the Corporate Revitalization Project).

84 Status of Disclosed Claims under the FRL
Disclosed Claims under the FRL (After Partial Direct Write-offs of Category IV Loans) (Consolidated)
Billions of yen

At March 31,

2003

Claims against Bankrupt and Substantially Baunkrupt Obligors, and equivalent
Claims with Collection Risk
Claims for Special Attention

¥

Total

680.1
1,300.7
2,883.6¥ 4,864.6

Note:

Billions of yen

2003

Amount of Partial Direct Write-offs¥ 1,832.8

Disclosed Claims under the FRL and Coverage Amount (After Partial Direct Write-offs of Category IV Loans) (the Two Banks)
Billions of yen

At March 31,

2003

Claims against Bankrupt and Substantially Bankrupt Obligors, and equivalent ¥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

559.7
483.2
76.5
1,232.7558.7
502.8
2,682.1
960.4
654.8

Subtotal
Collateral, guarantees, and equivalent
Reserve for Possible Losses

4,474.6
2,002.4
1,234.2

Normal Claims
Total

2002

¥

1,060.3
930.1
130.2
2,030.1
961.6
682.8
1,933.2
561.0
280.5
5,023.7
2,452.7
1,093.6

Change¥(500.5)(446.9)(53.6)(797.3)(402.8)(180.0)
748.8
399.3
374.2
(549.0)(450.3)140.6

67,251.8

87,497.1(20,245.2)¥ 71,726.5¥ 92,520.9¥ (20,794.3)

2003

2002

Change2,519.3¥ (1,086.9)

Note:

Billions of yen

Amount of Partial Direct Write-offs¥

1,432.4¥

Ratio of NPLs, and Normal Claims (After Partial Direct Write-offs of Category IV Loans) (the Two Banks)
At March 31,

2003

2002

ChangeClaims against Bankrupt and Substantially Bankrupt Obligors, and equivalent (1)Claims with Collection Risk
(2)
Claims for Special Attention
(3)

0.78%
1.71
3.73

1.14%
2.19
2.08

(0.36)(0.47)
1.64((1)+(2)+(3)) / Disclosed Claims under the FRL
Normal Claims((1)+(2)+(3)+(4)) / Disclosed Claims under the FRL

(4)

6.23

5.42

0.80

93.76

94.57

(0.81)

100.00%100.00%/85

Financial Analysis of Mizuho

Improvement of Asset Quality

Status of Coverage on Disclosed Claims under the FRL (the Two Banks)
Billions of yen

At March 31,

Coverage AmountReserve for Possible Losses on Loans
Reserve for Possible Losses on Support of Specific Borrowers
Collateral and Guarantees, and equivalent

2003

¥

3,236.6
1,211.4
22.8
2,002.4¥

2002

Change3,546.4
1,061.2
32.4
2,452.7¥ (309.7)
150.1
(9.5)
(450.3)Coverage Ratio (after Partial Direct Write-offs of Category IV Loans)
Claims against Bankrupt and Substantially Bankrupt Obligors, and equivalent
Claims with Collection Risk
Claims for Special Attention
Coverage Ratio (before Partial Direct Write-offs of Category IV Loans)

72.3%
100.0
86.1
60.2
79.0

70.6%
100.0
81.0
43.5
80.4

1.7%
—
5.1
16.7
(1.3)

Reserve Ratio against Non-collateralized Claims
Claims against Bankrupt and Substantially Bankrupt Obligors, and equivalent
Claims with Collection Risk
Claims for Special Attention(Reserve Ratio regarding Total Claims for Special Attention)

100.0%
74.6
38.0
24.4

100.0%
63.9
20.4
/

—%
10.7
17.6
/

Reserve Ratio regarding Other Claims
Claims against Watch Obligors excluding Claims for Special Attention
Normal Claims

7.63%
0.16

4.56%
0.16

3.07%
0.00

(Reference) Disclosed Claims under the FRL (After Partial Direct Write-offs of Category IV Loans) (the Two Banks and MHTB)
Billions of yen

At March 31,

Claims against Bankrupt and Substantially Bankrupt Obligors, and equivalent
Banking AccountTrust Account
Claims with Collection Risk
Banking AccountTrust Account
Claims for Special Attention
Banking AccountTrust Account

2003

¥

615.1
603.9
11.1
1,265.0
1,259.6
5.4
2,905.7
2,880.8
24.9

2002

¥

1,125.5
1,100.3
25.2
2,224.8
2,211.8
13.0
2,167.4
2,133.1
34.2¥(510.4)(496.3)(14.0)(959.7)(952.1)
(7.5)
738.2
747.6
(9.3)

Subtotal
Banking AccountTrust Account4,785.9
4,744.4
41.5

5,517.8
5,445.2
72.5(731.8)(700.8)(31.0)

Normal Claims
Banking AccountTrust Account71,298.9
70,616.7
682.1

91,632.6
90.787.6
844.9(20,333.6)(20,170.9)(162.7)76,084.8
75,361.1¥
723.7

97,150.4
96,232.9¥
917.4(21,065.5)(20,871.7)¥(193.7)

2003

2002

Change2,762.3¥ (1,176.2)

Total
Banking AccountTrust AccountNote:

Billions of yen

Amount of Partial Direct Write-offs

86

Change¥1,586.0¥

(Reference) Ratio of NPLs, and Normal Claims (After Partial Direct Write-offs of Category IV Loans) (the Two Banks and MHTB)At March 31,

2003

2002

Claims against Bankrupt and Substantially Bankrupt Obligors, and equivalent (1)Claims with Collection Risk
(2)
Claims for Special Attention
(3)

0.8%
1.6
3.8

1.1%
2.2
2.2

((1)+(2)+(3)) / Disclosed Claims under the FRL
Normal Claims(4)((1)+(2)+(3)+(4)) / Disclosed Claims under the FRL

Change

(0.3)
(0.6)
1.5

6.2

5.6

0.6

93.7

94.3

(0.6)

100.0%

100.0%/(Reference) Disclosed Claims under the FRL (Banking Account) (the Two Banks and MHTB)At March 31,

2003

2002

Reserve Ratio against Non-collateralized Claims
Claims against Bankrupt and Substantially Bankrupt Obligors, and equivalent
Claims with Collection Risk
Claims for Special Attention(Claims against Other Watch Obligors)*

100.0%
74.5
37.9
7.5%

100.0%
64.9
20.9
4.6%

Change

—
9.6
17.0
2.9

Note:*Reserve Ratio regarding total claims.

87

Financial Analysis of Mizuho

Improvement of Asset Quality

 Status of Non-Accrual, Past Due & Restructured Loans (Consolidated)[Banking Account]
Non-Accrual, Past Due & Restructured Loans (After Partial Direct Write-offs of Category IV 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

2003

¥

288.6
1,598.5
50.6
2,832.0¥ 4,769.9

2002¥

Change639.2
2,698.5
69.7
2,059.6¥¥ 5,467.2

¥

Note:

(350.5)(1,100.0)(19.0)
772.4(697.2)
Billions of yen

Amount of Partial Direct Write-offs

2003

2002

Change¥ 1,767.7¥ 2,925.4¥ (1,157.6)

ChangeRatio to Total Loans (After Partial Direct Write-offs of Category IV Loans)
At March 31,

2003

2002

Loans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for 3 Months or More
Restructured Loans

0.41%
2.30
0.07
4.09

0.76%
3.19
0.08
2.43

(0.33)%(0.88)
0.00
1.65

6.89%

6.46%

0.42%

2003

2002

¥ 2,211.3
1,515.4
678.5
17.3¥ 1,949.8
953.4
962.4
34.0

25.5

49.6

Non-Accrual, Past Due & Restructured Loans / Total Loans

Status of Reserves for Possible Losses on Loans
Billions of yen

At March 31,

Reserves for Possible Losses on Loans(After Partial Direct Write-offs of Category IV 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 Loans Sold
Note:

Change

¥

261.5
562.0
(283.8)(16.6)(24.0)
Billions of yen

2003

2002

ChangeAmount of Partial Direct Write-offs (Specific Reserve for Possible Losses on Loans) ¥ 1,832.9¥ 3,040.0¥ (1,207.1)

Reserve Ratios for Non-Accrual, Past Due & Restructured Loans
At March 31,

2003

2002

ChangeBefore Partial Direct Write-offs of Category IV Loans
After Partial Direct Write-offs of Category IV Loans

61.86%
46.36

59.46%
35.66

2.40%
10.70

Note: Reserve ratio: (Reserve for Possible Losses on Loans + Reserve for Possible Losses on Support of Specific Borrowers) / Total Non-Accrual, Past Due & Restructured Loans.

88[Trust Account]
Non-Accrual, Past Due & Restructured Loans (After Partial Direct Write-offs of Category IV 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

2003

2002

Change

¥

5.1
12.5
0.7
23.0

¥

11.3
30.0
0.9
30.1

¥

(6.1)
(17.4)
(0.2)
(7.1)

¥

41.5

¥

72.5

¥ (31.0)

ChangeRatio to Total Loans (After Partial Direct Write-offs of Category IV Loans)
At March 31,

2003

2002

Loans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for 3 Months or More
Restructured Loans

0.71%
1.73
0.10
3.18

1.23%
3.27
0.10
3.29

(0.52)%(1.53)
0.00(0.10)

5.74%

7.90%

(2.16)%

Non-Accrual, Past Due & Restructured Loans / Total Loans[Banking & Trust Account]
Non-Accrual, Past Due & Restructured Loans (After Partial Direct Write-offs of Category IV 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

2003

¥

293.8
1,611.1
51.4
2,855.1¥ 4,811.4

2002

Change650.6
2,728.6
70.6
2,089.8¥ (356.7)(1,117.5)(19.2)
765.2¥ 5,539.7¥ (728.2)

Change¥Ratio to Total Loans (After Partial Direct Write-offs of Category IV Loans)
At March 31,

2003

2002

Loans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for 3 Months or More
Restructured Loans

0.42%
2.30
0.07
4.08

0.76%
3.19
0.08
2.44

(0.34)%(0.88)
0.00
1.63

6.88%

6.47%

0.40%

Non-Accrual, Past Due & Restructured Loans / Total Loans

89

Financial Analysis of Mizuho

Improvement of Asset Quality

 Status of Non-Accrual, Past Due & Restructured Loans (the Two Banks)
Non-Accrual, Past Due & Restructured Loans (After Partial Direct Write-offs of Category IV 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

2003

2002

Change583.8
2,390.6
67.7
1,865.5¥ (320.8)(936.6)(19.8)
768.6¥ 4,399.2¥ 4,907.8¥ (508.6)

2003

2002

Change¥ 1,377.9¥ 2,414.9¥ (1,036.9)

¥

263.0
1,454.0
47.9
2,634.1¥

Note:

Billions of yen

Amount of Partial Direct Write-offs

Ratio to Total Loans (After Partial Direct Write-offs of Category IV Loans)
At March 31,

2003

2002

Loans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for 3 Months or More
Restructured Loans

0.40%
2.21
0.07
4.02

0.72%
2.96
0.08
2.31

(0.31)%(0.74)
0.00
1.71

6.71%

6.09%

0.62%

Non-Accrual, Past Due & Restructured Loans / Total Loans

90

ChangeStatus of Loan Loss Reserves
Billions of yen

At March 31,

Reserve for Possible Losses on Loans(After Partial Direct Write-offs of Category IV Loans)

2003

2002

Change¥ 1,904.8¥ 1,689.5¥ 215.3

General Reserve for Possible Losses on Loans
Beginning Balance[Translation Difference of Foreign Exchange]
Increase
Decrease
Used for Original Purpose
OthersEnding Balance

770.9—
1,219.90.0
770.9
1,219.9

560.3[(2.3)]
788.6
—
560.3
788.6

210.6
[2.3]
431.2
0.0
210.6
431.2

Specific Reserve for Possible Losses on Loans
Beginning Balance[Translation Difference of Foreign Exchange]
Increase
Decrease
Used for Original Purpose
OthersEnding Balance

888.1
—
668.4
609.5
278.5
668.4

764.7
[(1.7)]
869.3
497.7
266.9
869.3

123.3
[1.7]
(200.9)111.7
11.5(200.9)Reserve for Possible Losses on Loans to Restructuring Countries
Beginning Balance[Translation Difference of Foreign Exchange]
Increase
Decrease
Used for Original Purpose
OthersEnding Balance

30.3
—
16.5
—
30.3
16.5

26.2
0.3
31.5
—
26.2
31.5

4.1
[(0.3)](15.0)—
4.1(15.0)

1,689.4—
1,904.8
609.5
1,079.9
1,904.8

1,351.3[(3.7)]
1,689.5
497.7
853.5
1,689.5

338.1
[3.7]
215.3
111.7
226.3
215.3

22.8

32.4

(9.5)

24.9

48.2

(23.3)

26.8

82.3

Total
Beginning Balance[Translation Difference of Foreign Exchange]
Increase
Decrease

Used for Original Purpose
OthersEnding Balance
Reserve for Possible Losses on Support of Specific Borrowers
Reserve for Possible Losses on Loans Sold
Loans to CCPC
Notes: 1.

Amount of Partial Direct Write-offs (Specific Reserve for Possible Losses on Loans)(55.4)
Billions of yen

2003

2002

Change¥ 1,432.5¥ 2,519.3¥ (1,086.8)

Change2. CCPC: Cooperative Credit Purchasing Company, Ltd.

Reserve Ratios for Non-Accrual, Past Due & Restructured Loans
At March 31,

2003

2002

Before Partial Direct Write-offs of Category IV Loans
After Partial Direct Write-offs of Category IV Loans

58.16%
43.81

57.92%
35.09

0.24%
8.73

Note: Reserve ratio: (Reserve for Possible Losses on Loans + Reserve for Possible Losses on Support of Specific Borrowers) / Total Non-Accrual, Past Due & Restructured Loans.

91Financial Analysis of Mizuho

Improvement of Asset Quality

 Status of Loans by Industry
Outstanding Loans by Industry (Consolidated)
Billions of yen

2003
At March 31,

Outstanding 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¥ 63,201.9
9,380.0
67.5
3.0
9.8
124.0
2,173.6
931.9
1,125.9
2,977.7
8,171.1
6,911.2
7,206.8
10,167.2
271.8
13,679.7

100.00%
14.84
0.11
0.00
0.02
0.20
3.44
1.47
1.78
4.71
12.93
10.94
11.40
16.09
0.43
21.64

Overseas Total (including Loans Booked Offshore)
Governments
Financial Institutions
Other

6,008.1
200.4
512.0
5,295.5

100.00
3.34
8.52
88.14

¥ 69,210.0

—

Total

Notes: 1.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.
2. Since the “Japanese Standard Industry Categorization” was amended on March 7, 2002 by Bulletin no.139 of the Ministry of Public Management, Home Affairs, Posts and Telecommunications,and was applied from October 1, 2002, the amounts for each industry under “Domestic Total (excluding loans booked offshore)” at March 31, 2003 are given on the basis of the amended
standard.
Billions of yen

2002
At March 31,

Outstanding Balance

Composition

Domestic Total (excluding Loans Booked Offshore)
Manufacturing
Agriculture
Forestry
Fishery
MiningConstruction
Utilities
Transportation & Communication
Wholesale, Retail & Restaurant
Finance & Insurance
Real Estate
Services
Local Government
Other¥ 74,060.6
11,636.5
74.3
3.3
65.0
88.0
2,701.5
1,294.6
3,992.5
10,610.7
8,930.1
8,660.4
11,249.9
242.3
14,511.2

100.00%
15.71
0.10
0.00
0.09
0.12
3.65
1.75
5.39
14.33
12.06
11.69
15.19
0.33
19.59

Overseas Total (including Loans Booked Offshore)
Governments
Financial Institutions
Other

10,532.9
450.9
243.1
9,838.9

100.00
4.28
2.31
93.41

¥ 84,593.6

—

Total
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.

92

Disclosed Claims under the FRL by Industry and Coverage Ratio (the Two Banks)
Billions of yen

At March 31,

2003
Disclosed
Coverage on
Claims Disclosed Claim
under the FRL
under the FRL

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¥ 4,060.8
661.6
2.2
0.4
0.0
3.5
372.0
11.2
32.3
97.5
956.6
180.5
735.8
643.3
0.3
362.9

Overseas Total(including Loans Booked Offshore)
Governments
Financial Institutions
Other

413.8
11.9
2.0
399.8

Total

¥ 4,474.6

72.7%
72.4
90.2
82.6
100.0
112.4
79.3
96.8
79.4
78.5
69.0
54.2
75.1
69.9
66.3
82.8
67.7
32.5
64.3
68.8
72.3 %

Note: Since the “Japanese Standard Industry Categorization” was amended on March 7, 2002 by Bulletin no.139 of the Ministry of Public Management, Home Affairs, Posts and Telecommunications,and was applied from October 1, 2002, “Disclosed Claims under the FRL by industry and Coverage Ratio” under “Domestic Total (excluding loans booked offshore)” at March 31, 2003 are givenon the basis of the amended standard.
Billions of yen

At March 31,

2002
Disclosed
Coverage on
Claims Disclosed Claim
under the FRL
under the FRL

Domestic Total(excluding Loans Booked Offshore)
Manufacturing
Agriculture
Forestry
Fishery
MiningConstruction
Utilities
Transportation & Communication
Wholesale, Retail & Restaurant
Finance & Insurance
Real Estate
Services
Local Government
Other¥ 4,551.0
450.3
2.8
0.4
0.2
0.5
398.2
11.2
76.4
938.2
408.3
1,160.7
771.9
0.3
330.9

Overseas Total(including Loans Booked Offshore)
Governments
Financial Institutions
Other

472.6
24.3
6.9
441.2

Total

¥ 5,023.7

71.4 %
69.6
85.2
75.8
79.1
66.1
61.7
88.6
65.1
74.1
70.6
74.5
68.3
44.5
89.0
63.6
38.3
71.2
65.0
70.6 %

93

Financial Analysis of Mizuho

Improvement of Asset Quality

Non-Accrual, Past Due and Restructured Loans by Industry (the Two Banks)
Billions of yen

At March 31,

2003

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¥ 4,015.8
640.5
2.2
0.4
0.0
2.9
366.9
10.3
31.1
97.2
952.0
180.4
731.8
636.7
0.3
362.4

Overseas Total(including Loans Booked Offshore)
Governments
Financial Institutions
Other

383.3
11.9
1.2
370.1

Total

¥ 4,399.2

Note: Since the “Japanese Standard Industry Categorization” was amended on March 7, 2002
by Bulletin no.139 of the Ministry of Public Management, Home Affairs, Posts andTelecommunications, and was applied from October 1, 2002, “Non-Accrual, Past Due andRestructured Loans by Industry” under “Domestic Total (excluding loans booked
offshore)” at March 31, 2003 are given on the basis of the amended standard.

94

Billions of yen

At March 31,

2002

Domestic Total(excluding Loans Booked Offshore)
Manufacturing
Agriculture
Forestry
Fishery
MiningConstruction
Utilities
Transportation & Communication
Wholesale, Retail & Restaurant
Finance & Insurance
Real Estate
Services
Local Government
Others¥ 4,488.3
429.8
2.8
0.4
0.2
0.5
380.6
10.3
76.1
933.3
408.1
1,159.6
756.3
0.3
329.4

Overseas Total(including Loans Booked Offshore)
Governments
Financial Institutions
Others

419.4
21.3
4.4
393.6

Total

¥ 4,907.8

 Status of Loans by Nationality of Borrowers
Loans to Foreign Governments, and equivalent, by Country (Consolidated)
Billions of yen

Billions of yen

At March 31,

2003

At March 31,

2002

Indonesia
Others (7 Countries)¥ 73.6
4.6

Indonesia
Argentina
Others (8 Countries)¥ 198.7
11.6
2.2

Total
(Ratio to Total Assets)¥ 78.2(0.05%)

Total(Ratio to Total Assets)¥ 212.6(0.14%)

Note: Loans are subject to Reserve for Possible Losses on Loans to Restructuring Countries.

Balance of Loans to Restructuring Countries (the Two Banks)
Billions of yen

At March 31,

2003

Loan Amount
Number of Restructuring Countries

¥

2002

89.4
19

¥

Change165.5
8¥(76.1)
11

Note: Loans are subject to Reserve for Possible Losses on Loans to Restructuring Countries under JICPA Banking Audit Commitee Report No.4.

Status of Loans by Nationality of Borrowers (the Two Banks)
Billions of yen

At March 31,

2003
Non-Accrual,
Outstanding
Past Due &Balance
Restructured Loans

2002
Non-Accrual,
Outstanding
Past Due &Balance
Restructured Loans

ChangeNon-Accrual,
Outstanding
Past Due &Balance
Restructured Loans

Asia
Hong Kong
Thailand
China
SingaporeRepublic of Korea
Indonesia¥ 1,328.6
259.8
223.9
202.5
160.2
112.1
111.7

¥ 77.9
4.1
17.4
5.9
4.1
0.6
39.4

¥ 2,047.6
511.3
340.5
243.2
164.5
213.8
182.0

¥ 139.8
4.9
37.8
7.6
4.6
3.8
59.8

¥ (719.0)(251.5)(116.6)(40.6)(4.3)(101.7)(70.2)¥ (61.9)(0.7)(20.4)
(1.6)
(0.5)
(3.1)
(20.4)

801.5
63.1
44.4
15.0

37.4
—
1.2
6.1

294.7
92.1
41.2
30.4

22.1
0.8
—
19.1

506.8
(29.0)
3.1(15.4)

15.2
(0.8)
1.2
(12.9)

North America

2,647.9

268.0

/

/

/

/

Eastern Europe

64.0

3.3

/

/

/

/

Western Europe

961.1

18.7

/

/

/

/

Central and South America
MexicoBrazilArgentina

Others

521.3

32.5

/

/

/

/

Total

¥ 6,324.6¥ 438.1

/

/

/

/

95

Financial Analysis of Mizuho

Improvement of Asset Quality

 Results of Removal of NPLs from the Balance Sheet (Aggregated Figures of the Two Banks)
Outstanding Balances of Claims against Bankrupt and Substantially Bankrupt Obligors and Claims with Collection Risk
(under the FRL)
Billions of yen

September 30,
2000

Amount Categorized as Problem Assets
before September 30, 2000

¥ 2,465.4

March 31, September 30,
2001
2001

¥ 1,744.8¥ 1,391.7

March 31, September 30,
2002
2002 (a)March 31,2003 (b)¥ 812.6¥ 142.2 ¥ (443.7)

of which the amount which was in the processof being removed from the balance sheet

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

1,039.9
1,425.5

Amount Newly Categorized as Problem Assets
during the Second Half of Fiscal 2000

240.8

93.0

(147.7)663.8
1,080.9

609.3
782.3

398.6
414.0

314.7
271.2

100.3
41.9

(214.4)(229.2)

673.9

481.8

311.6

247.9

101.1

(146.7)

43.7

23.6

(20.0)of which the amount which was in the processof being removed from the balance sheet

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

¥ 585.9

141.9
531.9

Amount Newly Categorized as Problem Assets
during the First Half of Fiscal 2001

77.7
404.0

88.7
222.6

61.8
186.0

32.3
68.8

(29.5)(117.2)

1,187.3

770.3

581.0

298.1

(282.8)

192.7

130.7

(61.9)

267.4
502.7

223.1
357.8

149.6
148.5

(73.5)(209.2)

1,195.6

651.0

231.2

(419.8)

159.4

86.4

(72.9)

166.8
484.2

122.2
108.9

(44.5)(375.2)

581.5

224.0

(357.5)

70.7

42.7

(27.9)

82.1
499.4

68.1
155.8

(13.9)(343.5)

795.6

/

54.9

/

87.0
708.6

/
/

of which the amount which was in the processof being removed from the balance sheet

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

257.1
930.1

Amount Newly Categorized as Problem Assets
during the Second Half of Fiscal 2001of which the amount which was in the processof being removed from the balance sheet

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

305.1
890.3

Amount Newly Categorized as Problem Assets
during the First Half of Fiscal 2002of which the amount which was in the processof being removed from the balance sheet

Claims against Bankrupt and Substantially
Bankrupt Obligors, and equivalent
Claims with Collection Risk
Amount Newly Categorized as Problem Assets
during the Second Half of Fiscal 2002of which the amount which was in the processof being removed from the balance sheet

Claims against Bankrupt and Substantially
Bankrupt Obligors, and equivalent
Claims with Collection Risk
Total

¥ 2,465.4¥ 2,418.7¥ 3,060.8¥ 3,090.1

of which the amount which was in the processof being removed from the balance sheet

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

96

1,039.9
1,425.5

Change(b)-(a)805.7
1,612.8944.1
2,116.4

1,059.8
2,029.6¥ 2,647.6¥ 1,792.5 ¥ (855.0)

707.3

431.6

(275.6)848.8
1,798.7

559.7
1,232.7(289.0)(565.9)Progress in Removal of Problem Assets from the Balance Sheet (Accumulated Removal Amount and Removal Ratio)
Billions of yen

Balanceat end of
Fiscal 2002

Accumulated
RemovalAmountAccumulated
RemovalRatio (%)

*Modified
Accumulated
Removal Ratio (%)

Target of the Emergency
Economic
Policy Package¥ 2,465.4
673.9
1,187.3
1,195.6
581.5
795.6

¥

142.2
101.1
298.1
231.2
224.0
795.6

¥ (2,323.1)(572.7)(889.1)(964.3)(357.4)
/

94.2%
84.9
74.8
80.6
61.4
/

98.0%
88.4
85.8
87.8
68.8
/

Almost Completed> more than 80%> more than 50%> more than 50%//¥ 6,899.4¥ 1,792.5///

AmountAs of September 30, 2000
Second Half of Fiscal 2000
First Half of Fiscal 2001
Second Half of Fiscal 2001
First Half of Fiscal 2002
Second Half of Fiscal 2002
Total

/

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, we have proceeded with thorough collection and final disposal of NPLs as well as improvement of classifications bycorporate revitalization.
The results of removal were approximately ¥1.7 trillion in fiscal 2001 and approximately ¥2.7 trillion in fiscal 2002. As a result,based on the Emergency Economic Policy Package, the removal ratio for loans due for disposal by the end of March 2003 was
98%, including the amount which was in the process of being removed from the balance sheet, and removal from the balance
sheet is almost complete.
In the future we will proceed with removal ahead of the schedule specified by the Emergency Economic Policy Package andreduce the balance of NPLs.

97

Financial Analysis of Mizuho

Improvement of Asset Quality

Breakdown of Reasons for Removal of Problem Assets from the Balance Sheet
Billions of yen

Problem Assets Newly Categorized as Problem Assets
Accumulated as ofIn the Second
In the FirstIn the Second
September 30, 2000
Half of FY2000
Half of FY2001
Half of FY2001

Liquidation¥(89.9)¥(36.0)

¥

(0.7)

¥

In the First
Half of FY2002(33.9)¥(2.2)

Amount Removed
from BS in the Second
Half of FY2002¥(162.9)Restructuring(38.8)(4.4)(40.0)(189.6)(37.3)(310.3)

Improvement in Business Performancedue to Restructuring
Securitization(57.0)(906.3)—(129.2)(0.7)(144.4)—(195.7)—(170.6)(57.8)(1,546.4)

Direct Write-off

780.3

52.8

(23.5)

102.8

12.5

924.9

Other
Debt Recovery
Improvement in Business Performance(131.7)(80.1)(51.6)(29.9)(26.9)(3.0)(73.1)(65.2)(7.9)(103.3)(82.9)(20.4)(159.7)(88.5)(71.2)(498.0)(343.7)(154.3)¥ (443.7)¥ (146.7)¥ (282.8)(357.5)¥ (1,650.7)

Total

¥

(419.8)¥(Reference) Breakdown of Accumulated Amount Removed from the Balance Sheet
Billions of yen

Liquidation

Second Half of
Fiscal 2000

Breakdown of Amount Removed
First Half ofSecond Half of
Fiscal 2001
Fiscal 2001

Second Half of
Fiscal 2002

Accumulated
from Second Halfof Fiscal 2000

(186.8)¥¥¥ (218.3)¥ (146.6)¥ (124.0)

Restructuring(45.8)(308.2)(47.1)(235.0)(310.3)(946.4)

Improvement in Business Performancedue to Restructuring
Securitization/(169.1)(9.9)(221.1)(4.6)(274.8)(28.5)(232.1)(57.8)(1,546.4)(100.8)(2,443.5)

Direct Write-off
Other
Debt Recovery
Improvement in Business Performance
Total

¥

First Half of
Fiscal 2002

(162.9)(838.6)

41.1

448.2

(135.3)

329.0

924.9

1,607.9(328.2)//(306.7)(283.0)(23.5)(579.2)(453.0)(125.9)(670.1)(368.8)(301.1)(498.0)(343.7)(154.3)(2,382.2)(1,448.5)(604.8)¥ (720.7)¥ (545.0)¥ (1,166.0)¥ (1,024.3)¥ (1,650.7)¥ (5,106.7)

Write-offs of Loans (the Two Banks)
Billions of yen

At March 31,

Write-offs of Loans

¥

2003

2002

Change652.1¥ 1,083.2¥ (431.1)

2003

2002

Change

573.8
19.9
553.8

¥ 1,342.6
584.8
757.8

Principal Amounts of NPLs Sold (the Two Banks)
Billions of yen

At March 31,

Principal Amounts of NPLs Sold
Sales of Loans to RCC
Other Sales¥ 1,916.4
604.7
1,311.6¥

Debt Forgiveness (the Two Banks)
Billions of yen

98

At March 31,

2003

2002

Number of Cases of ForgivenessBook Value

19
282.6

11
114.5

¥

¥

Change¥8
168.1

Financial Data of Mizuho Financial Group, Inc.
Independent Auditors' Report

100

Consolidated Balance Sheet

101

Consolidated Statement of Operations

102

Consolidated Statement of Shareholders' Equity

103

Consolidated Statement of Cash Flows104

Notes to Consolidated Financial Statements

106

99

Financial Data of Mizuho Financial Group, Inc.

Independent Auditors' Report

The Board of Directors
Mizuho Financial Group, Inc.
We have audited the accompanying consolidated balance sheet of Mizuho Financial Group, Inc. and consolidated subsidiaries (the“Company”) as of March 31, 2003, and the related consolidated statements of operations, shareholders' equity, and cash flows
for the year then ended, all expressed in yen. These financial statements are the responsibility of the Company's management.
Our responsibility is to independently express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards, procedures and practices generally accepted and applied inJapan. Those standards, procedures and practices require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audit provides 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, 2003, and the consolidated results of their operations
and their cash flows for the year then ended in conformity with accounting principles and practices generally accepted in Japan.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2003
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 to the consolidated financial statements.

Shin Nihon & Co.
June 25, 2003

See Note 1 to the consolidated financial statements which explains the basis of preparation of the consolidated financial statements of Mizuho Financial Group, Inc. and consolidated subsidiaries underJapanese accounting principles and practices.

100

Financial Data of Mizuho Financial Group, Inc.

Consolidated Balance SheetAt March 31, 2003

AssetsCash and Due from Banks (Notes 12 and 37)
Call Loans and Bills Purchased (Note 12)
Receivables under Resale Agreements
Guarantee Deposit 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 24)
Deferred Debenture Charges (Note 10)
Deferred Tax Assets (Note 34)
Customers' Liabilities for Acceptances and Guarantees (Note 23)
Reserve for Possible Losses on Loans (Note 11)
Reserve for Possible Losses on Investments
Total Assets
Liabilities, Minority Interests and Shareholders' Equity
Liabilities
Deposits (Notes 12 and 13)
Debentures (Note 14)
Call Money and Bills Sold (Notes 12 and 15)
Payables under Repurchase Agreements (Note 12)
Guarantee Deposit Received under Securities Lending Transactions (Note 12)
Commercial Paper (Note 16)
Trading Liabilities (Note 4)
Borrowed Money (Notes 12 and 17)
Foreign Exchange Liabilities (Note 7)
Bonds and Notes (Note 18)
Bonds with Stock Options (Note 19)
Due to Trust Accounts
Other Liabilities (Note 20)
Reserve for Bonus Payments
Reserve for Employee Retirement Benefits (Note 21)
Reserve for Possible Losses on Loans Sold
Reserve for Contingencies (Note 22)
Reserve under Special Laws (Note 22)
Deferred Tax Liabilities (Note 34)
Deferred Tax Liabilities for Revaluation Reserve for Land (Note 24)
Acceptances and Guarantees (Note 23)

Millions of yen¥

7,849,717
641,908
3,736,424
6,297,721
1,209,540
9,919,083
33,54023,816,574
69,210,035
720,519
4,904,656
1,632,851
1,041
2,130,243
4,145,411(2,211,366)(5,156)

Thousands of
U.S. dollars (Note 1)$

65,305,469
5,340,340
31,085,061
52,393,693
10,062,730
82,521,489
279,043
198,141,219
575,790,644
5,994,337
40,804,131
13,584,457
8,661
17,722,491
34,487,615(18,397,392)(42,898)¥ 134,032,747$ 1,115,081,090¥ 72,222,642
11,696,391
11,185,809
8,209,283
4,140,383
627,400
6,278,262
1,454,826
190,878
2,468,606
3,858
1,489,463
5,526,554
36,96926,562
25,561
141,124
884
4,276
258,515
4,145,411$

600,853,928
97,307,747
93,059,981
68,296,864
34,445,784
5,219,634
52,231,804
12,103,382
1,588,009
20,537,488
32,104
12,391,543
45,977,992
307,567
220,989
212,661
1,174,078
7,356
35,5762,150,711
34,487,615

Total Liabilities

130,133,666

1,082,642,813

Minority Interests

1,038,013

8,635,723

Shareholders' Equity
Common Stock and Preferred Stock (Note 25)
Capital Surplus
Retained Earnings (Deficit)
Revaluation Reserve for Land, net of Taxes (Note 24)
Net Unrealized Losses on Other Securities, net of Taxes (Note 37)
Foreign Currency Translation Adjustments
Treasury Stock

1,540,965
2,599,552(1,404,992)
380,120(24,600)(95,786)(134,190)

12,820,008
21,626,893(11,688,790)
3,162,402(204,667)(796,896)(1,116,396)

Total Shareholders' Equity
Total Liabilities, Minority Interests and Shareholders' Equity

2,861,066

23,802,554¥ 134,032,747$ 1,115,081,090

See accompanying “Notes to Consolidated Financial Statements,” which are an integral part of these statements.

101

Financial Data of Mizuho Financial Group, Inc.

Consolidated Statement of Operations

For the Fiscal Year ended March 31, 2003

IncomeInterest Income (Note 26)
Fiduciary Income
Fee and Commission Income
Trading Income (Note 27)
Other Operating Income (Note 28)
Other Income (Note 29)
Total Income
Expenses
Interest Expenses (Note 26)
Fee and Commission Expenses
Other Operating Expenses (Note 30)
General and Administrative Expenses
Other Expenses (Note 31)
Total Expenses
Loss before Income Taxes and Minority Interests
Income Taxes:
Current
Deferred
Minority Interests in Net Loss
Net Loss

Millions of yen¥

1,991,236
55,460490,182244,524
416,972
243,434

Thousands of
U.S. dollars (Note 1)$

16,566,030
461,400
4,078,054
2,034,317
3,468,988
2,025,241

3,441,810

28,634,030

734,859
79,647150,217
1,237,641
3,501,617

6,113,641
662,621
1,249,733
10,296,516
29,131,590

5,703,982

47,454,101(2,262,172)(18,820,071)

22,28830,50562,205

185,431
253,791
517,512¥ (2,377,172)$ (19,776,805)

Yen

U.S. dollars (Note 1)

At March 31, 2003

Per Share of Common Stock
Shareholders' Equity
Net Loss:
Basic
DilutedCash Dividends
See accompanying “Notes to Consolidated Financial Statements,” which are an integral part of these statements.

102¥ (20,376.71)(254,524.65)——$(169.52)(2,117.51)——

Financial Data of Mizuho Financial Group, Inc.

Consolidated Statement of Shareholders' Equity

Millions of yen

Common Stockand Preferred
For the Fiscal Year ended March 31, 2003
Stock

Balance at April 1, 2002
¥ 2,572,000
Transfer from Revaluation Reserve for Land—
Effect of the Change
in Foreign Exchange Rate—
Net Change in Unrealized Losses on
Other Securities, net of Taxes—
Transfer to Deferred Tax Liabilities—
Related to Land Revaluation
Cash Dividends—
Bonuses to Directors and—Statutory Auditors
Net Loss—
Treasury Stock Transactions—
Issuance of Preferred Stock
540,965
Effect of the Business Reorganization
on March 12, 2003
(1,572,000)
Balance at March 31, 2003

CapitalSurplus¥ 353,765—

Retained
Earnings(Deficit)

Net Unrealized
Foreign
Currency
Revaluation Losses on Other
Reserve
Securities, Translation
for Landnet of Taxes Adjustments¥ 997,265 ¥ 422,786
29,899(29,899)¥ (558,485) ¥ (69,121)——

Treasury
Stock

Total
Shareholders’Equity¥ (1,255) ¥ 3,716,954
—
—

—

—

—

—

(26,665)—(26,665)———

533,884——

533,884———(54,985)(12,766)
—

—
—

—
—

—
—

(12,766)(54,985)———
540,965(0)(2,377,172)
—
—

—
—
—
—

—
—
—
—

—
—
—
—

—
—
(113)
—

(0)
(2,377,172)(113)
1,081,930

1,704,822

—

—

—

—

(132,822)—¥ 1,540,965 ¥ 2,599,552 ¥(1,404,992)¥ 380,120¥ (24,600) ¥ (95,786) ¥(134,190) ¥ 2,861,066
Thousands of U.S. dollars

Common Stockand Preferred
For the Fiscal Year ended March 31, 2003
Stock

CapitalSurplusNet Unrealized
Foreign
Retained Revaluation Losses on Other
Currency
Earnings
Reserve
Securities, Translation(Deficit)for Landnet of Taxes Adjustments

Treasury
Stock

Total
Shareholders’EquityBalance at April 1, 2002
$ 21,397,670 $ 2,943,140 $ 8,296,719 $ 3,517,361 $ (4,646,303) $ (575,056) $ (10,445) $ 30,923,086
Transfer from Revaluation Reserve for Land——248,749 (248,749)————
Effect of the Change————— (221,840)—(221,840)
in Foreign Exchange Rate
Net Change in Unrealized Losses on————
4,441,636——
4,441,636
Other Securities, net of Taxes
Transfer to Deferred Tax Liabilities
Related to Land Revaluation——— (106,210)———(106,210)
Cash Dividends——(457,451)————(457,451)
Bonuses to Directors andStatutory Auditors
—
—
(2)
—
—
—
—
(2)
Net Loss—— (19,776,805)———— (19,776,805)
Treasury Stock Transactions
—
—
—
—
—
—
(942)
(942)
Issuance of Preferred Stock
4,500,541
4,500,541—————
9,001,082
Effect of the Business Reorganization
on March 12, 2003
(13,078,203) 14,183,212———— (1,105,009)—
Balance at March 31, 2003

$ 12,820,008 $ 21,626,893 $(11,688,790) $ 3,162,402$ (204,667) $ (796,896) $(1,116,396) $ 23,802,554

Notes: A. The balance of Capital Surplus at April 1, 2002 includes a decrease of ¥1,849,982 million ($15,390,870 thousand) arising from the corporate split and merger process of DKB, Fuji Bank and IBJ
which took place on that date (the Combination and Reorganization).
B. The balance of Retained Earnings at April 1, 2002 includes an increase of ¥896,131 million ($7,455,341 thousand) arising from the corporate split and merger process of DKB, Fuji Bank and IBJ
which took place on that date (the Combination and Reorganization).

103

Financial Data of Mizuho Financial Group, Inc.

Consolidated Statement of Cash Flows

For the Fiscal Year ended March 31, 2003

Millions of yen

Thousands of
U.S. dollars (Note 1)

I. Cash Flows from Operating Activities
Loss before Income Taxes and Minority Interests
Depreciation
Amortization of Consolidation Differences
Equity in Losses from Investments in Affiliates
Increase in Reserve for Possible Losses on Loans
Decrease in Reserve for Possible Losses on Investments
Decrease in Reserve for Possible Losses on Loans Sold
Increase in Reserve for Contingencies
Increase in Reserve for Bonus Payments
Decrease in Reserve for Employee Retirement Benefits
Interest Income—accrual basis
Interest Expenses—accrual basis
Losses on Securities
Losses from Money Held in Trust
Foreign Exchange Losses—Net
Losses on Disposal of Premises and Equipment
Gains on Establishment of Retirement Benefit Trusts
Net Increase in Trading Assets
Net Increase in Trading Liabilities
Net Decrease in Loans and Bills Discounted
Net Decrease in Deposits
Net Decrease in Debentures (excluding Subordinated Debentures)
Net Increase in Borrowed Money (excluding Subordinated Borrowed Money)
Net Decrease in Due from Banks (excluding Deposits with Central Banks)
Net Increase in Call Loans
Net Decrease in Cash Placed as Collateral on Securities Borrowed
Net Increase in Guarantee Deposits Paid under Securities Borrowing Transactions
Net Increase in Call Money
Net Decrease in Commercial Paper
Net Decrease in Cash Received as Collateral for Securities Lent
Net Increase in Guarantee Deposits Received under Securities Lending Transactions
Net Decrease in Foreign Exchange Assets
Net Decrease in Foreign Exchange Liabilities
Net Decrease in Issuance, Redemption of Bonds and Notes
Net Decrease in Due to Trust Accounts
Interest Income—cash basis
Interest Expenses—cash basis
Other—net¥ (2,262,172)
144,182
68,597
3,491
263,907(1,682)(24,085)
6,920
15,167(36,501)(1,991,236)
734,859
708,795
988
116,110
100,818(43,847)(2,111,812)
1,508,735
15,264,686(13,346,746)(3,614,499)
23,356
1,027,730(2,509,156)
3,313,727(6,297,721)
5,294,445(77,856)(4,050,050)
4,140,383
463,947(517,285)(50,228)(286,941)
2,085,777(844,916)
671,265$ (18,820,071)
1,199,521
570,694
29,051
2,195,571(13,994)(200,377)
57,574
126,188(303,670)(16,566,030)
6,113,641
5,896,799
8,220
965,975
838,756(364,792)(17,569,158)
12,551,880
126,994,067(111,037,826)(30,070,711)
194,3158,550,168(20,874,849)
27,568,449(52,393,693)
44,046,964(647,727)(33,694,263)
34,445,784
3,859,794(4,303,537)(417,873)(2,387,200)
17,352,562(7,029,254)
5,584,569(2,108,846)(87,315)(17,544,483)(726,421)¥ (2,196,162)$ (18,270,904)

Subtotal
Cash Paid in Income Taxes
Net Cash Used in Operating Activities

104II. Cash Flows from Investing Activities
Payments for Purchase of Securities
Proceeds from Sale of Securities
Proceeds from Redemption of Securities
Payments for Increase in Money Held in Trust
Proceeds from Decrease in Money Held in Trust
Payments for Purchase of Premises and Equipment
Proceeds from Sale of Premises and Equipment

Millions of yen

Thousands of
U.S. dollars (Note 1)¥ (59,435,925)
48,003,018
11,261,664(20,364)
54,340(94,326)
25,257$ (494,475,257)
399,359,558
93,691,050(169,424)
452,086(784,750)
210,129(206,336)(1,716,608)

243,000(1,335,000)
75,000(485,778)
1,081,930
118,500(54,985)(36,424)(263)

2,021,631(11,106,489)
623,960(4,041,416)
9,001,082
985,857(457,451)(303,033)(2,192)(394,021)(3,278,051)

Net Cash Used in Investing Activities
III. Cash Flows from Financing Activities
Proceeds from Issuance of Subordinated Borrowed Money
Repayments for Subordinated Borrowed Money
Proceeds from Issuance of Subordinated Bonds, Notes and Bonds with Stock Options
Redemption of Subordinated Bonds, Notes and Bonds with Stock Options
Proceeds from Issuance of Stocks
Proceeds from Investments in Minority Interests
Dividends Paid
Dividends Paid to Minority Interests
Purchase of Treasury Stock
Net Cash Used in Financing Activities
IV. Effects of Exchange Rate Changes on Cash and Cash Equivalents

72

604

V. Net Decrease in Cash and Cash Equivalents(2,796,448)(23,264,959)

VI. Cash and Cash Equivalents at the Beginning of the Year9,847,366

81,924,845

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)(2,413)¥

7,048,505(20,076)$

58,639,810

See accompanying “Notes to Consolidated Financial Statements,” which are an integral part of these statements.

105

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

1. Basis of Presentation
Mizuho Financial Group, Inc. (“MHFG”) is a holding company and conducts its operations through Mizuho Holdings, Inc.
(“MHHD”) and other subsidiaries and affiliates. MHFG was incorporated on January 8, 2003 and became the parent of MHHD
and other subsidiaries on March 12, 2003, pursuant to the business reorganization (the “Business Reorganization”) described in
Note 2 (3). Reference herein to MHFG, refers to Mizuho Financial Group, Inc. with respect to the period following the Business
Reorganization, and to Mizuho Holdings, Inc. with respect to the period prior to the Business Reorganization.
The accompanying consolidated financial statements have been prepared from the accounts maintained by MHFG and its consolidated subsidiaries in accordance with the provisions set forth in the Commercial Code of Japan and the Securities andExchange Law, and in conformity with accounting principles and practices generally accepted in Japan (“Japanese GAAP”).
Japanese GAAP may differ to some degree from accounting principles and practices generally accepted in countries and jurisdictions other than Japan.
Certain items presented in the consolidated financial statements filed with the Director of the Kanto Finance Bureau are reclassified for the convenience of readers outside Japan. In addition, the Consolidated Statement of Shareholders' Equity is presented
and included in the consolidated financial statements, though it is not required to be filed with the Director of the Kanto Finance
Bureau. The notes to the consolidated financial statements include information which is not required under Japanese GAAP but ispresented 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 ¥120.20=US$1.00, the foreign exchange rate on March 31, 2003, 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 Securities Co., Ltd., Mizuho Trust & Banking Co.,
Ltd. and other subsidiaries. The number of consolidated subsidiaries as of March 31, 2003 was 138. The consolidated financial
statements for the fiscal year ended March 31, 2003 (“Fiscal 2002”) do not include the accounts of ONKD, Inc., and othersubsidiaries, as they are considered immaterial in terms of the respective group ownerships of Total Assets and Net Income /Loss and Retained Earnings.
The number of affiliates accounted for under the equity method as of March 31, 2003 was 33. Investments in affiliates
include The Chiba Kogyo Bank, Ltd., Shinko Securities Co., Ltd, Japan Mortgage Co., Ltd., Fuyo General Lease Co., Ltd. and IBJ
Leasing Co., Ltd. and other affiliates. Non-consolidated subsidiaries, including ONKD, Inc. and certain affiliates, are notaccounted for under the equity method, as they are not significant for the consolidated financial statements of MHFG.
On 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 also been eliminated.
The accounting standard for consolidated financial statements requires a company to consolidate all subsidiaries of which thecompany controls the operations, irrespective of whether or not the company owns a majority of their shares. 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, October 31, or November 30
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.
(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 MHHD by way of stock transfers (“kabushiki-iten”).
As a result of this transaction, each of the Three Banks has become a wholly-owned subsidiary of MHHD.
106

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” (JICPA Accounting Committee Research Report No. 6) and, as such, theassets 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. As a result of the Combination and Reorganization, MHFG's capitalsurplus decreased by ¥1,849,982 million and retained earnings increased by ¥896,131 million. The decrease in capital surplus
and the increase in retained earnings were reflected in the April 1, 2002 balances shown in the statement of shareholders'equity.
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. 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-ofinterests 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 Sheet. 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 Sheet.
Securities and other short-term credit instruments held for trading purposes are stated at fair value at the balance sheet date.
Derivative financial products, such as swaps, forward contracts and option transactions, are stated at their fair values, assumingthat such transactions were terminated and settled at the 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 the Accounting Standard for Financial Instruments (the Business Accounting Deliberation Council, January1998), 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 as determined by the moving average method, although MHFG had nosuch bonds as of March 31, 2003.
(iii)Other securities available for sale are securities which are not classified as either trading securities or bonds held to maturity.
Other securities available for sale which have readily determinable fair value are stated at fair value with changes in net unrealized gains or losses, net of applicable income taxes, included directly in shareholders' equity. Fair value of 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 other than equity securities with a quoted market price are determined at
the quoted market price or other reasonable value at the consolidated balance sheet date (cost of securities sold is calculated primarily by the moving average method). Other securities which do not have readily determinable fair values arestated at cost or amortized cost as determined by the moving average method.
In addition, investments in non-consolidated subsidiaries and affiliates which are not accounted for under the equity
method are valued at cost as determined by the moving average method.
Securities entrusted in Money Held in Trust are accounted for in the same manner as trading assets and securities
described above.

107

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements(3) Securities Lending and Borrowing Transactions
Unsecured securities loaned that allow borrowers to sell borrowed securities, amounted to ¥8,585 million ($71,430 thousand)as of March 31, 2003, and are included in Trading Securities in Trading Assets. Securities loaned that do not allow borrowers tosell the borrowed securities, amounted to ¥1,448 million ($12,051 thousand) as of March 31, 2003, and are included inJapanese National Government Bonds, Japanese Local Government Bonds, or other categories in Securities. Subsidiaries haveborrowed securities that may be sold or pledged, securities borrowed with cash collateral, and securities purchased with resaleagreements. Borrowed securities pledged as collateral, re-loaned, or held without being pledged or sold amounted to¥4,135,372 million ($34,404,099 thousand), ¥2,140 million ($17,808 thousand), and ¥3,499,257 million ($29,111,959 thousand), respectively, as of March 31, 2003. In addition, securities received as collateral for margin transactions in the amount of¥1,911 million ($15,906 thousand) have been re-pledged as collateral for Borrowed Money as of March 31, 2003.
(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 ¥1,162,352 million ($9,670,154 thousand) as of March 31, 2003.
(5) Derivatives
Derivative transactions are valued at fair value with changes in fair value included in current income. Derivatives which qualified
as hedges are mainly accounted for using the deferral method of hedge accounting (see the following note).
(6) Hedge Accounting
Domestic banking subsidiaries and certain domestic trust banking subsidiaries employ the macro-hedge method, using derivatives, as described in the transitional treatment of the JICPA Industry Audit Committee Report No. 24, to manage the overall
interest rate risk associated with various financial assets and liabilities, such as loans and deposits. This risk management
method is referred to as the “Risk Adjusted Approach” in “Temporary Treatment for Accounting and Auditing Application of
Accounting Standards for Financial Instruments in Banking Industry” (JICPA Industry Audit Committee Report No. 15).
Derivative transactions designated as hedges under the approach qualify for hedge accounting under the deferral method.
Hedge effectiveness is assessed by checking (1) whether the total net risk exposure of derivative instruments, used to reducerisk, falls within the risk limit determined in the risk management policy and (2) whether interest rate risk exposures fromhedged items have been reduced.
In order to apply hedge accounting to instruments hedging foreign exchange risks of foreign currency denominated securities, the securities being hedged need to be identified as hedged items and the amount of foreign currency payable of hedging
instruments should be less than the balances of the securities being hedged. The qualified hedges are designated as a portfolio
hedge and accounted for under either the deferral hedge method or the fair value hedge method.
For hedges of certain other assets and liabilities, the exceptional hedge method for interest rate swap, under which interest
rate swaps are accounted for on an accrual basis, is also applied, as well as the deferral hedge method and the fair value hedge
method.
Other subsidiaries also apply the hedge accounting methods as described above.
(7) Translation of Foreign Currencies
Assets and liabilities held by the domestic banking and trust banking subsidiaries that are denominated in foreign currencies aretranslated into yen primarily using the exchange rates prevailing at the balance sheet date, except for investments in non-consolidated subsidiaries and affiliates, which are translated at historical exchange rates. The accounts of overseas branches aretranslated into yen using the exchange rates prevailing at the balance sheet date. Foreign currency assets and liabilities held byother consolidated subsidiaries are translated into yen at the exchange rates prevailing at the end of the fiscal years of therespective subsidiaries.
Foreign currency denominated transactions are accounted for in accordance with “Accounting and Auditing Treatment
Relating to Accounting Standards for Foreign Currency Transactions for Banks” (JICPA Industry Audit Committee Report No.
25). As permitted in the transitional treatment of the JICPA Industry Audit Committee Report No. 25, fund swap transactions,currency swap transactions, and internal contracts are treated in accordance with the previous report, “Tentative Accounting
and Auditing Treatment relating to Adoption of ‘Accounting for Foreign Currency Transaction’ for Banks” (JICPA Industry Audit
Committee Report No. 20).
Fund swap transactions are originated for the purpose of lending and borrowing in different currencies, where (1) thenotional amounts of lending and borrowing are equal to the amounts of foreign exchange purchased or sold as a spot transaction and (2) the amounts of future payment for and proceeds from borrowing and lending, respectively, with the contractual108interest payment or receipt denominated in foreign currency, are equal to the amounts of foreign exchange purchased or soldas a forward transaction.
In accordance with the transitional treatment of the JICPA Industry Audit Committee Report No. 25, fund swap transactions
are accounted for as follows:• Principal amounts of lending/borrowing transactions are translated into yen using the exchange rates in effect at the end of
the fiscal year and the net amount is recorded on the balance sheet.
• Differences arising from different exchange rates applying to the first (spot) and second (forward) legs, are recognized asgains or losses on an accrual basis for the period from the date of the first leg to the second leg.
Currency swap transactions in which the transactions are (1) originated for the purpose of lending and borrowing in different
currencies, (2) amounts payable/receivable at the maturity date are equal to amounts receivable/payable at the contract dateand (3) the swap rates applied to principal and interest are rational were accounted for in accordance with the transitional
treatment of the JICPA Industry Audit Committee Report No. 25 as follows (These currency swap transactions include transactions that renew one currency's equivalent amount of principal on every payment day of interest, using the current exchange
rate of the day):• Principal amounts of lending/borrowing transactions are translated into yen using the exchange rates in effect at the end of
the fiscal year and the net amount is recorded on the balance sheet.
• Interest is recognized as gains or losses on an accrual basis for the period from the date of the first leg to the second leg.
Financial statements of foreign consolidated subsidiaries are translated into yen primarily using the exchange rates in effect at
the end of the period for those subsidiaries.
Revaluation gains and losses of foreign exchange contracts are presented on the balance sheet on a net basis.

(8) Premises and Equipment
Depreciation of buildings has been computed mainly by the straight-line method, and that of equipment has been 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) 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 the maximum of three years, which is thelongest period permitted under the Commercial Code of Japan.
(11) Stock Issuance Costs
Stock issuance costs are recognized as expenses when incurred.
(12) Reserve for Possible Losses on Loans
The Reserve for Possible Losses on Loans of major domestic consolidated subsidiaries is 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 in the Commercial
Law 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.
• 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, on 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 reserve is determined at the difference between the book value of the loan and its present value of
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 individual
loan.
109

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements• 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 theanalyses of 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, who 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
¥1,832,935 million ($15,249,047 thousand) at March 31, 2003.
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.

(13) Reserve for Possible Losses on Investments
The Reserve for Possible Losses on Investments is maintained to provide against possible losses on securities, after taking into
consideration the financial conditions and other relevant factors concerning the subject entity.
(14) 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.
(15) Reserve for Employee Retirement Benefits
The Reserve for Employee Retirement Benefits, which is provided for future pension payments to employees, is recorded as theamount accrued at the end of the fiscal year, based on the projected benefit obligation and the estimated pension plan asset
amounts at the end of the fiscal year.
Gain on plan amendment is recognized as income in the fiscal year 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.
(16) Reserve for Possible Losses on Loans Sold
The Reserve for Possible Losses on Loans Sold is provided to cover possible losses on loans sold to the Cooperative Credit
Purchasing Company, Limited, taking into account the value of collateral pledged.
(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 capital leases or operatingleases.
(18) Scope of Cash and Cash Equivalents in Consolidated Statement of Cash Flows
In the Consolidated Statement of Cash Flows, Cash and Cash Equivalents consist of cash and due from central banks.
(19) Income Taxes
Deferred income taxes are recorded for the corporate tax, the inhabitants' taxes and the enterprize 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 determine deferred 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.

110

(21) Enterprise Taxes
With the implementation of the “Metropolitan Ordinance regarding the Imposition of Enterprise Taxes through ExternalStandards Taxation on Banks in Tokyo” (Tokyo Metropolitan Ordinance No. 145, April 1, 2000) (“the metropolitan ordinance”),
enterprise taxes which were hitherto levied on income are now levied on gyomu ararieki (Gross Profits).
On October 18, 2000, domestic banking subsidiaries and domestic trust banking subsidiaries filed a lawsuit with the Tokyo
District Court against the Tokyo metropolitan government and the Governor of Tokyo seeking to void the metropolitan ordinance. Domestic banking subsidiaries and domestic trust banking subsidiaries won the case eventually entirely on March 26,
2002 with a decision of the Tokyo District Court in domestic banking subsidiaries and domestic trust banking subsidiaries'
favor, on the grounds that the metropolitan ordinance was illegal. The District Court ordered the metropolitan government toreturn to the domestic banking subsidiaries and domestic trust banking subsidiaries advance tax payments of ¥ 20,536 million
and also awarded damages of ¥ 410 million. On March 29, 2002 the metropolitan government lodged an appeal with theTokyo High Court against the decision and on April 9 of the same year all those banks, which were plaintiffs in the first legal
action including domestic banking subsidiaries and domestic trust banking subsidiaries, lodged an appeal with the Tokyo High
Court. The domestic banking subsidiaries and domestic trust banking subsidiaries won the case eventually entirely on January
30, 2003 with a decision of the Tokyo High Court in their favor, on the grounds that the metropolitan ordinance was illegal.
The Tokyo High Court ordered the metropolitan government to return to the domestic banking subsidiaries and domestic trust
banking subsidiaries advance tax payments of ¥ 47,552 million. On February 10, the metropolitan government lodged an
appeal and on February 13 all the banks which were plaintiffs in the first legal action including domestic banking subsidiaries
and domestic trust banking subsidiaries lodged an appeal. It is the opinion of domestic banking subsidiaries and domestic trust
banking subsidiaries that the metropolitan ordinance is both unconstitutional and illegal. Domestic banking subsidiaries anddomestic trust banking subsidiaries have asserted this opinion in the courts and the matter is still in litigation.
During this term domestic banking subsidiaries and domestic trust banking subsidiaries have applied the same treatment as in
the previous term, accounting for enterprise taxes through external standards taxation on banks in Tokyo in accordance withthe metropolitan ordinance, because domestic banking subsidiaries and domestic trust banking subsidiaries have deemed it
appropriate at this stage to continue with the same accounting treatment as before. This accounting treatment does not constitute in any way an admission on the part of domestic banking subsidiaries and domestic trust banking subsidiaries either ofthe constitutionality or of the legality of the metropolitan ordinance.
With the implementation of the metropolitan ordinance, enterprise taxes relating to banks in Tokyo were recorded in Other
Expenses in the amount of ¥ 27,948 million in this consolidated fiscal year. As a result, there was a respective increase in
Ordinary Loss as compared with the previous standards under which enterprise taxes were levied on income. Moreover, there
was no effect in “Income Taxes —Current” in this consolidated fiscal year. Since the enterprise taxes in question are notincluded in the calculations for accounting for tax effects, there was a decrease in Deferred Tax Assets of ¥ 44,514 million ascompared with the amount that it would have been had the enterprise taxes been levied on income instead of gross profits.
There was also a decrease in Deferred Tax Liabilities on Land Revaluation of ¥ 6,293 million, an equivalent increase in the
Revaluation Reserve for Land, net of Taxes of same amount.
On April 4, 2002 domestic banking subsidiaries and domestic trust banking subsidiaries filed a lawsuit with the Osaka District
Court against the Osaka municipal government and the Governor of Osaka seeking to void a similar municipal ordinance. With
the implementation of the “Revision of Municipal Ordinance regarding the Imposition of the Enterprise Taxes through ExternalStandards Taxation on Banks in Osaka” (Osaka Municipal Ordinance No. 77) (“the revised municipal ordinance”) on May 30,
2002 and the implementation of “Revision of Municipal Ordinance regarding the Imposition of the Enterprise Taxes throughExternal Standards Taxation on Banks in Osaka” (Osaka Municipal Ordinance No. 14), enterprise taxes through external standards taxation were applied from the beginning of the consolidated fiscal year starting on April 1, 2003.
The enterprise taxes which the banks are required to pay to the Osaka municipal government this fiscal term are subject tosupplementary provision 2 of the revised Osaka municipal ordinance which stipulates that the banks shall pay the enterprisetaxes based on the lesser of gyomu ararieki (Gross Profits) or income.
Domestic banking subsidiaries and domestic trust banking subsidiaries, therefore, are scheduled to file and pay the enterprisetaxes based on income. The fact that the domestic banking subsidiaries and domestic trust banking subsidiaries filed and paid
the enterprise taxes according to the revised municipal ordinance does not constitute in any way an admission on the part ofthe domestic banking subsidiaries and domestic trust banking subsidiaries either of the constitutionality or of the legality of therevised municipal ordinances as well as the municipal ordinance. Since the enterprise taxes in question are not included in thecalculations for accounting for tax effects, there was a decrease in Deferred Tax Assets of ¥ 5,404 million as compared with theamount that it would have been had the enterprise taxes been levied on income instead of gross profits. There was also adecrease in Deferred Tax Liabilities on Land Revaluation of ¥ 590 million, and an equivalent increase in the Revaluation Reservefor Land, net of Taxes of same amount.

111

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

With the promulgation of “Revision of Law Regarding Regional Taxation etc.” (Law No. 9 of 2003) on March 31, 2003,
enterprise taxes imposed on banks through external standards taxation from the consolidated fiscal year beginning April 1,
2004 will be levied on “added value,” “amount of capital etc.” and “income and liquidation income,” as compared with theprevious legislation (“Law Regarding Regional Taxation” of 2003 before amendment, Article 72-12) under which enterprisetaxes were levied on “income and liquidation income.” It follows that enterprise taxes imposed through external standards taxation levied on added value and amount of capital etc. are not in keeping with a tax which is imposed on income. Moreover, asa result, from the consolidated fiscal year beginning April 1, 2004, enterprise taxes relating to banks in Tokyo and Osaka levied
respectively by the Tokyo metropolitan government on the basis of its metropolitan ordinance and the Osaka municipal government on the basis of its municipal ordinance, will lose their foundation in law and will cease to apply.
As a result, there was a decrease in Deferred Tax Assets of ¥ 9,382 million, and an increase in Income Tax Expenses —Deferredof ¥ 8,531 million. There was also an increase in Deferred Tax Liabilities on Land Revaluation of ¥ 14,027 million, and an equivalent decrease in the Revaluation Reserve for Land, net of Taxes of same amount, in addition to a decrease in the Unrealized
Losses on Other Securities, net of Taxes of ¥ 27 million.

(22) Appropriation of Retained Earnings
Cash dividends and bonuses to directors and statutory auditors 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 the shareholders.
(23) Net Loss per Share
Net Loss per Share is calculated in accordance with Financial Accounting Standard No. 2 “Accounting Standards for Earnings
Per Share” and Financial Accounting Standards Implementation Guidance No. 4 “Implementation Guidance for AccountingStandards for Earnings Per Share.”Consolidated Net Loss per Share for this period and related information are as follows:

Consolidated Net Loss per Share·······················································
Consolidated Net Loss ······································································
Consolidated Net Loss attributable to common shareholders ············
Consolidated Net Loss not attributable to common shareholders ······
Average number of shares of common stock ····································(Yen)¥ (254,524.65)¥ (2,377,172) million¥ (2,399,319) million¥
22,147 million
9,426 thousand

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
Bonds with Stock Options
Diluted net loss per share is not disclosed due to a loss position (anti-dilutive).

112(U.S. dollars)$ (2,117.51)$(19,776,805) thousand$(19,961,062) thousand$
184,256 thousand

4. Trading Assets and Liabilities
At March 31, 2003

Trading Assets:
Trading Securities
Derivatives for Trading Securities
Securities Held to Hedge Trading Transactions
Derivatives for Securities Held to Hedge Trading Transactions
Derivatives for Trading Transactions
Other Trading Assets
Total
Trading Liabilities:
Trading Securities Oversold
Derivatives for Trading Securities
Securities Oversold to Hedge Trading Transactions
Derivatives for Securities Held to Hedge Trading Transactions
Derivatives for Trading Transactions
Total

Millions of yen

Thousands of U.S. dollars¥

5,273,367
6,216
167,479
2,077
3,527,856
942,084$ 43,871,612
51,7181,393,343
17,28629,349,891
7,837,639¥

9,919,083$ 82,521,489¥

2,960,091
2,466
130,057
288
3,185,358$ 24,626,383
20,523
1,082,007
2,402
26,500,489¥

6,278,262$ 52,231,804

5. Securities
At March 31, 2003

Japanese National Government Bonds
Japanese Local Government Bonds
Japanese Corporate Bonds
Japanese Stock and Shares*1
Other*2
Total

Millions of yen

Thousands of U.S. dollars¥ 11,968,696
128,837
1,305,316
4,439,291
5,974,433$ 99,573,183
1,071,858
10,859,535
36,932,540
49,704,103¥ 23,816,574$ 198,141,219*1 Japanese Stock and Shares included investments in non-consolidated subsidiaries and affiliates of ¥101,841 million ($847,265 thousand) .
*2 Other included investments in non-consolidated subsidiaries and affiliates of ¥16,970 million ($141,184 thousand).

113

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

6. Loans and Bills Discounted
At March 31, 2003

Bills Discounted
Loans on Notes
Loans on Deeds
Overdrafts
Financing Receivables, including Factoring, Leasing and Property Financing
Total

Millions of yen¥

797,919
5,823,170
50,304,770
12,052,935
231,239

Thousands of U.S. dollars$

6,638,268
48,445,675
418,508,905
100,274,009
1,923,787¥ 69,210,035$ 575,790,644

Millions of yen

Thousands of U.S. dollars

Loans and Bills Discounted at March 31, 2003 include the following:
At March 31, 2003

Loans to Bankrupt Obligors*1
Non-Accrual Delinquent Loans*2
Loans Past Due for 3 Months or More*3
Restructured Loans*4
Total

¥

288,686
1,598,542
50,6702,832,049$

2,401,719
13,299,023
421,555
23,561,141¥

4,769,949*5$

39,683,438*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 ¥9,988 million ($83,103 thousand) of those amounts are placed in an administrative trust established by the Resolution and Collection Corporation for eventual final disposal.

Sales of Loans to Participants

The total amount of loan participations outstanding as of March 31, 2003, 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, is ¥ 1,431,461 million($11,909,000 thousand).
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 amounts to ¥43,195,571 million ($359,364,159 thousand) as of March 31, 2003. ¥39,548,144 million ($329,019,507 thousand) of these amounts relate to contracts of which originalcontractual terms are of a term of one year or less, or which are unconditionally cancelable at any time as of March 31, 2003.
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 subsequently monitor a customer's business condition periodically, based on and in accordance with established procedures, and take measures to control credit risks
such as amendments to contracts, if needed.

114

7. Foreign Exchange Assets and Liabilities
At March 31, 2003

Foreign Exchange Assets:
Foreign Bills Bought
Foreign Bills Receivable
Advance to Foreign Banks
Due from Banks (Foreign)
Total
Foreign Exchange Liabilities:
Foreign Bills Sold
Foreign Bills Payable
Advance from Foreign Banks
Due to Banks (Foreign)
Total

Millions of yen

Thousands of U.S. dollars¥

368,586
218,676
48,50084,756$

3,066,441
1,819,273
403,495
705,128¥

720,519$

5,994,337

¥

6,780
9,576
25,372
149,148$

56,414
79,671
211,088
1,240,836¥

190,878$

1,588,009

8. Other Assets
At March 31, 2003

Millions of yen

Accrued Income
Prepaid Expenses
Securities in Custody and Other
Deferred Hedge Losses*1
Derivatives
Other*2¥

Total

296,089
14,307—96,5691,350,282
3,147,407¥ 4,904,656

Thousands of U.S. dollars$

2,463,308
119,030—
803,407
11,233,634
26,184,752$ 40,804,131*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 ¥1,827,820 million ($15,206,494
thousand) and ¥1,924,390 million ($16,009,901 thousand), respectively.
*2 Other included provisional tax payments of ¥222,682 million ($1,852,600 thousand) made by a certain domestic subsidiary. These payments were made upon receipt of the Correction Notice from theTokyo 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 ($3,128,577 thousand)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 the case 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 believes that its claim is appropriate. Nevertheless, the subsidiary accrued Reserve for Contingency amounting
to ¥134,806 million ($1,121,515 thausand) from the viewpoint of financial soundness and prudent accounting.

9. Premises and Equipment
At March 31, 2003

Millions of yen

Land
Buildings
Equipment
Other¥ 1,002,080
308,089
159,009
163,672

Total¥ 1,632,851$ 13,584,457¥$

Accumulated Depreciation

735,934

Thousands of U.S. dollars$

8,336,778
2,563,137
1,322,877
1,361,665
6,122,582

10. Deferred Debenture Charges
At March 31, 2003

Deferred Discount on Debentures
Deferred Debenture Issuance Costs
Total

Millions of yen¥

Thousands of U.S. dollars

510
530

$ 4,244
4,417¥ 1,041$ 8,661115

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

11. Reserve for Possible Losses on Loans
At March 31, 2003

General Reserve for Possible Losses on Loans
Specific Reserve for Possible Losses on Loans
Reserve for Possible Losses on Loans to Restructuring Countries
Total

Millions of yen

Thousands of U.S. dollars¥

1,515,414
678,593
17,358$12,607,442
5,645,534
144,416¥

2,211,366$

18,397,392

12. Assets Pledged as Collateral
The following assets were pledged as collateral:
At March 31, 2003

Trading Assets
Securities
Loans and Bills Discounted
Premises and Equipment

Millions of yen¥

3,879,743
13,001,395
4,134,653
63

Thousands of U.S. dollars$

32,277,398
108,164,685
34,398,117
527

The following liabilities were collateralized by the above assets:
At March 31, 2003

Deposits
Call Money and Bills Sold
Payables under Repurchase Agreements
Pledged Money for Securities Lending Transactions
Borrowed Money

Millions of yen¥

706,101
7,672,000
5,554,998
3,940,824
331,760

Thousands of U.S. dollars$

5,874,389
63,826,955
46,214,632
32,785,562
2,760,067

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 ¥7,814 million ($65,008 thousand), Trading Assets of ¥15,205 million($126,499 thousand), Securities of ¥1,792,238 million ($14,910,466 thousand), Loans and Bills Discounted of ¥466,821million($3,883,709 thousand) and Other Assets of ¥8,220 million ($68,391 thousand) as of March 31, 2003. None of the assets arepledged as collateral in connection with borrowings by the unconsolidated subsidiaries and affiliates.
Guarantee deposits amounting to ¥151,387 million ($1,259,465 thousand) were included in Premises and Equipment. Margins
for futures transactions amounting to ¥42,031 million ($349,679 thousand) were included in Other Assets as of March 31, 2003.
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, 2003 is¥14,399 million ($119,794 thousand).

13. Deposits
At March 31, 2003

Current Deposits
Ordinary Deposits
Deposits at NoticeTime Deposits
Certificates of Deposit
Other
Total

116

Millions of yen¥

4,413,253
27,390,970
1,263,237
26,265,714
6,964,740
5,924,724¥ 72,222,642

Thousands of U.S. dollars$

36,715,922
227,878,288
10,509,462
218,516,764
57,942,936
49,290,556$ 600,853,928

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 more investors.
At March 31, 2003
Description of Debentures

Millions of yen

Thousands of U.S. dollars

1,898,586[1,898,586]$ 15,795,227[15,795,227]

0.05%–0.08%

One-Year Discount Debentures(custody only)

302,992[302,992]

2,520,733[2,520,733]

0.02%–0.06%

Five-Year Coupon Debentures(Series A)

7,421,340[1,866,000]

61,741,597[15,524,126]

0.65%–2.00%

Five-Year Coupon Debentures(Series B)

118,067[23,656]

982,258[196,809]

0.14%–1.20%

Five-Year Coupon Debentures(with compound interest)

775,821[98,637]

6,454,424[820,610]

0.14%–1.20%

Five-Year Coupon Debentures(savings-type)734,233[94,664]

6,108,436[787,560]

0.14%–1.10%

Five-Year Coupon Debentures(savings-type with compound interest)

89,003[17,422]740,465[144,942]

0.14%–1.10%

Two-year Coupon Debentures

304,600[153,200]

2,534,110[1,274,542]

0.35%–0.65%

Three-year Coupon Debentures

15,000[—]124,792[—]

0.90%

36,745[—](US$57,000 thousand)

305,705[—](US$57,000 thousand)

1.00%–9.37%¥ 11,696,391$ 97,307,747

One-Year Discount Debentures

Debentures Denominatedin Foreign Currencies
Total

¥

Interest rates

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 2003 ¥4,455,158 million ($37,064,550 thousand)2004 ¥2,164,551 million ($18,007,919 thousand)2005 ¥1,992,860 million ($16,579,535 thousand)2006 ¥1,703,069 million ($14,168,628 thousand)2007 ¥1,367,652 million ($11,378,143 thousand)4. No collateral was provided for the above Debentures.

15. Call Money and Bills Sold
At March 31, 2003

Call Money
Bills Sold

Millions of yen

Thousands of U.S. dollars

6,252,109
4,933,700$ 52,014,224
41,045,757¥ 11,185,809$ 93,059,981

Thousands of U.S. dollars

Average Interest rates*1

¥

Total

16. Commercial Paper
At March 31, 2003

Commercial Paper

Millions of yen¥

627,400$

5,219,634

0.24%*1 The average interest rates are the weighted-average interest rate of debts calculated from the interest rates and outstanding balances at the end of the year.

117Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

17. Borrowed Money
At March 31, 2003

Millions of yen

Bills Rediscounted
Other Borrowings*2,3

¥

Total

14,3991,440,427¥ 1,454,826

Thousands of U.S. dollars$

Average Interest rates*1

119,794
11,983,588

3.65%
2.28

$ 12,103,382

2.29%*1 Average interest rates are weighted-average interest rates of debts calculated from the interest rates and outstanding balances at the end of theyear.
*2 Other Borrowings included subordinated debt of ¥647,431 million ($5,386,286 thousand) at March 31, 2003.
*3 Repayments for Other Borrowings are scheduled for the next five years as follows:
Fiscal 2003 ¥542,159 million ($4,510,475 thousand)2004 ¥203,466 million ($1,692,736 thousand)2005 ¥129,347 million ($1,076,100 thousand)2006 ¥ 33,535 million ($ 278,998 thousand)2007 ¥ 33,211 million ($ 276,305 thousand)

18. Bonds and Notes
Major components of Bonds and Notes at March 31, 2003 were as follows:
IssuerDescription

Issue

Millions of yen

Mizuho Holdings

Straight Bonds

Nov. 2000¥

Interest rates

Due

850,000[—]*1

Straight Bonds*2$ 7,071,547[—]

0.62%–2.67%

Mar. 2008–

Mar. 1998–
Aug. 2001

127,900[—]

1,064,060[—]

1.32%–4.02%

Dec. 2010–

Straight Bonds

Sept. 1997

3,100
[—]

25,790[—]3.00%

Nov. 2012*3

Straight Bonds

Dec. 1995–
Apr. 2001

89,100[—]741,265[—]

0.57%–3.59%

Apr. 2010–*4

Straight Bonds

Mar. 1993–
Sep. 2002

655,794[—](US$110,000 thousand)

5,455,861[—]

0.00%–5.10%

Dec. 2005*5

Straight Bonds

Jun. 1995–
649,490
Mar. 2000[—](US$1,283,374 thousand)

5,403,418[—]

0.00%–8.80%

Apr. 2004*6

Straight Bonds

Aug. 1995–
Mar. 2003

93,220[44,337](US$81,922 thousand)(EUR9,130 thousand)

775,547[368,866]

0.00%–9.00%

Apr. 2003–
Feb. 2021¥ 2,468,606$ 20,537,488

Total

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 2003 ¥ 44,337 million ($368,866 thousand)2004 ¥ 11,544 million ($ 96,041 thousand)2005 ¥ 8,286 million ($ 68,940 thousand)2006 ¥ 24,914 million ($207,279 thousand)2007 ¥102,783 million ($855,108 thousand)4. Bonds and Notes at March 31, 2003 included subordinated bonds and notes of ¥2,355,788 million ($19,598,906 thousand).
*1 indicates the total amount of straight bonds issued by the domestic consolidated subsidiary, Mizuho Trust and Banking Co., Ltd.
*2 indicates the amount of straight bonds issued by MHCB.
*3 indicates the total amount of straight bonds issued by the overseas consolidated subsidiary, MHAT Finance (Aruba) A.E.C..
*4 indicates the total amount of straight bonds issued by the overseas consolidated subsidiary, Mizuho Finance (Aruba) A.E.C..
*5 indicates the total amount of straight bonds issued by overseas consolidated subsidiaries, Mizuho Finance (Cayman) Limited and Mizuho Finance (Curaço) N.V.
*6 indicates the total amount of straight bonds issued by overseas consolidated subsidiaries, Mizuho Corporate Australia Ltd., Mizuho Corporate Asia (HK) Limited,
Mizuho International plc and Mizuho Corporate Bank (USA).

118

19. Bonds with Stock Options
Bonds with Stock Options at March 31, 2003 were as follows:
IssuerDescription of Debentures*

Bonds with Stock Options

Issue

Millions of yen¥

Jul. 1988

3,858[3,858](US$32,103 thousand)Thousands of U.S. dollars$

Interest rates

32,103[32,103]

Due

2.87%
Sep. 2003

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 currency in parentheses ( ).
3. * indicates the total amount of bonds with stock options issued by the domestic consolidated subsidiary Mizuho Trust and Banking Co., Ltd.
4. Details are as follows:
Conversion
Description
Convertible Period
price
Issuing share
Capitalization
US$ denominated Bonds with Stock Options due Sept. 30, 2003 Aug. 15, 1988–Sept. 22, 2003 ¥1,814.90
Common stock¥ 908/share
5. Repayments for Bonds with Stock Options are scheduled for the next five years as follows:
Fiscal 2003 ¥3,858 million ($32,104 thousand)2004 ¥ — million ($— thousand)2005 ¥ — million ($— thousand)2006 ¥ — million ($— thousand)2007 ¥ — million ($— thousand)

20. Other Liabilities
At March 31, 2003

Millions of yen

Accrued Expenses
Unearned Income
Income Taxes Payable
Securities Borrowed
Derivatives
Other

¥

Total

228,144
160,337
97,910136
1,379,903
3,660,121¥ 5,526,554

Thousands of U.S. dollars$

1,898,041
1,333,920
814,565
1,137
11,480,066
30,450,263$ 45,977,992

119Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

21. Reserve for Employee Retirement Benefits(1) Employees of major domestic consolidated subsidiaries are entitled, with some conditions, to receive lump-sum indemnities orannuity payments for life upon their termination of employment. The amount of the benefits is determined by the current rateof pay, length of service and the conditions under which their termination occurs.
The major domestic consolidated subsidiaries have contributory funded defined benefit pension plans under the Japanese
Welfare Pension Insurance Law (the “JWPIL”) which are qualified by the tax authority and severance indemnity plans. The pension plans under the JWPIL cover a portion of the governmental welfare pension program, under which the contributions are
made by such subsidiaries and their employees.
Certain domestic consolidated banking subsidiaries established self-insured pension plans.
In addition, domestic banking and certain trust banking consolidated subsidiaries established employee retirement benefit
trusts.
(2) Reserve for Employee Retirement Benefits was reconciled as follows:
At March 31, 2003

Millions of yen

Thousands of U.S. dollars

Projected Benefit Obligations
Plan Assets¥ (1,491,244)
1,008,021$ (12,406,360)
8,386,198

Unfunded Retirement Benefit Obligations
Unrecognized Net Obligation at Date of Initial Application
Unrecognized Actuarial Differences(483,223)
63,219733,415(4,020,162)
525,949
6,101,623

Net Amounts
Prepaid Pension Cost
Other Liabilities

313,410
339,973—2,607,410
2,828,399—

Reserve for Employee Retirement Benefits¥(26,562)$(220,989)

Note: The above Projected Benefit Obligations includes the governmental welfare program, but does not include additional retirement benefits paid
to employees.
It also includes the amount measured by certain consolidated subsidiaries under the non-actuarial method.

(3) Breakdown of Pension Expenses was as follows:
For the Fiscal Year ended March 31, 2003

Millions of yen

Service Cost*1
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 Application
Other (such as Extra Retirement Benefit)¥

27,20040,817(41,080)(571)
38,27932,967
6,945$

226,289
339,583(341,765)(4,758)318,464
274,273
57,780¥104,557$

869,866

Net Pension Expenses

Thousands of U.S. dollars*1 Retirement expenses of some consolidated subsidiaries which adopt the simplified 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 services
Prior Service Cost
Amortization of unrecognized actuarial differences
Amortization of unrecognized net obligation at date of initial application

120

2003
2.1–2.5%
1.3–6.2%
Straight-line basis
Charged to Income (Loss) in the year
Primarily 10–12 years
Primarily 5 years22. Other Reserves
At March 31, 2003

Millions of yen

Reserve for Contingencies*1
Reserve for Contingent Liabilities from Futures Transactions
Reserve for Contingent Liabilities from Securities Transactions¥

141,12464
819$

1,174,078
537
6,819

¥

142,008$

1,181,434

Total

Thousands of U.S. dollars*1 Reserve for Contingencies is maintained to cover losses arising from matters not covered by other specific reserves that are probable to take place and that are determinable in amounts.

23. 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 balance of the accounts were as follows:
At March 31, 2003

Millions of yen

Acceptances
Letters of Credit
Guarantees

¥

Total

10,11042,004
4,093,296¥ 4,145,411

Thousands of U.S. dollars$

84,112
349,454
34,054,049$ 34,487,615(2) The principal amounts promised to be indemnified for money trusts and loan trusts, which are entrusted to domestic consolidated trust banking subsidiaries, were ¥886,055 million ($7,371,513 thousand) and ¥1,167,331 million ($9,711,579 thousand) as of March 31, 2003, respectively.

24. 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 119 of the 1998 Cabinet Order Article 2-4 of the Enforcement
Ordinance relating to the Land Revaluation Law, the revaluation was performed by the method of calculating the value alongwith 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 the tax, is stated as Revaluation Reserve for Land in Shareholders' Equity.
The difference at the balance sheet date between the total fair value of land for business operation purposes, which has beenrevalued in accordance with Article 10 of the above-mentioned law, and the total book value of the land after such revaluation is¥303,917 million ($2,528,431 thousand). Similar treatment has been adopted for certain consolidated overseas subsidiaries.

25. Common Stock and Preferred Stock
Common Stock and Preferred Stock at March 31, 2003 were as follows:
Number of sharesClass 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
Fifth Series Class V 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 10,582,426.71
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
1,500,000
101,500
1,500,000
36,690

¥

—
—
—
—
—
—
—
—
—
—
—
—
—
—

¥

With
Liquidation Convertible redemption
value
or notor not— ¥—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
165 1,000,000
21 1,000,000
247 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

Note: All the outstanding Fifth Series Class V Preferred Stock was converted into Common Stock on February 1, 2002.

121

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 the 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:

122

Conversion period*1

Conversion ratio*2

First Series Class I
Preferred Stocks

March 12, 2003 toJuly 31, 2005

4.000 to be reset on August 1 every year (each, a “Reset Date”) as¥3,000,000/(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 Tokyo Stock Exchange (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 the Reset
Date, provided that the reset conversion ratio shall be neither less than the conversion ratio applicable on the date immediately prior to the Reset Date nor morethan 4.000.

Second Series Class II
Preferred Stocks

August 1, 2004 toJuly 31, 2006

¥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,
2004 and (y) ¥637,600, to be reset on August 1, 2005 using the same formulamutatis mutandis.

Third Series Class III
Preferred Stocks

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 Stocks

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 Stocks

October 1, 2004 to
January 31, 2009

¥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, 2004 multipliedby 1.025 and (y) ¥540,000; to be reset on October 1 of each year between 2005
and 2008 (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 thatthe conversion price shall not be less than 70% of the initial conversion price.

Ninth Series Class IX
Preferred Stocks

September 1, 2003 to ¥1,250,000/(conversion price), where the conversion price is the higher of (x) the
August 31, 2009average 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 September 1, 2003 multiplied by 1.025 and (y) ¥331,000; to be reset on September 1 of each year between
2004 and 2008 using the same formula mutatis mutandis.

Tenth Series Class X
Preferred Stocks

July 1, 2003 toAugust 31, 2009

¥565,000 to be reset on September 1 of each year between 2003 and 2008 (each,a “Reset Date”) as ¥1,250,000/(conversion price), where the conversion 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 the Reset
Date multiplied by 1.025 and (y) ¥331,000.

Eleventh Series ClassXI Preferred Stocks

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.

Twelfth Series ClassXI Preferred Stocks

July 1, 2003 toJune 30, 2011

¥71,400 to be reset on July 1 of each year between 2004 and 2010 (each, a “ResetDate”) as ¥1,000,000/(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 isreported) 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 priceshall not be less than 60% of the initial conversion price.

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.

123

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:
First Series Class I
Preferred Stocks

August 1, 2005

¥3,000,000/(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, 2005, provided that theconversion ratio shall not be more than 4.000 (*).

Second Series Class II
Preferred Stocks

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 Stocks

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 Stocks

February 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 Stocks

February 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 Stocks

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.

124Tenth Series Class X
Preferred Stocks

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 Stocks

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 initial conversion price or ¥50,000.

Twelfth Series ClassXI Preferred Stocks

July 1, 2011

¥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, 2011, provided that the current
market price shall not be less than 60% of initial conversion price or ¥50,000.

Number of common stocks held by subsidiaries and affiliates is 1,166 thousand.

125Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

26. Interest Income and Interest Expenses
For the Fiscal Year ended March 31, 2003

Millions of yen

Thousands of U.S. dollars

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¥ 1,433,961
347,927
11,12542,801
113,940770
40,710$ 11,929,794
2,894,569
92,555356,086
947,926
6,409
338,691

1,991,236

16,566,030

193,915
117,776
3,146
7,024
189,919
8,724
841
44,22859,883
179
109,219

1,613,273
979,841
26,17758,437
1,580,030
72,587
7,003
367,957
498,195
1,490
908,651

734,859

6,113,641¥ 1,256,377$ 10,452,389

Millions of yen

Thousands of U.S. dollars

TotalInterest Expenses:
Deposits
Debentures
Amortization of Debenture Charges
Call Money and Bills Sold
Payables under Repurchase Agreements
Securities Lending Transactions
Commercial Paper
Borrowed Money
Bonds and Notes
Bonds with Stock Options
Other Interest Expenses
Total
Net

27. Trading Income
For the Fiscal Year ended March 31, 2003

Trading Income:Net Gains on Trading Securities and Derivatives
Net Gains on Securities Held to Hedge Trading Transactions
Net Gains on Derivatives for Trading Transactions
Other Trading Income¥

65,294
5,777
171,487
1,965

$

¥

244,524$ 2,034,317

For the Fiscal Year ended March 31, 2003

Millions of yen

Thousands of U.S. dollars

Gains on Foreign Exchange Transactions
Gains on Sales of Bonds
Other

¥

74,342
276,107
66,523$¥416,972$ 3,468,988

Total

543,21348,066
1,426,685
16,353

28. Other Operating Income

Total

126

618,487
2,297,064
553,437

29. Other Income
For the Fiscal Year ended March 31, 2003

Millions of yen

Gains on Sales of Stock and Other Securities
Gains on Money Held in Trust
Gains on Sales of Premises and Equipment
Recovery on Written-off Claims
Gains on Securities Contributed to Employee Retirement Benefit Trust
Other

¥

75,862
792
1,285
4,210
43,847
117,434$

631,137
6,592
10,69535,033364,791
976,993¥

243,434$

2,025,241

Total

Thousands of U.S. dollars

30. Other Operating Expenses
For the Fiscal Year ended March 31, 2003

Millions of yen

Amortization of Debenture Issuance Costs
Losses on Sales of Bonds
Losses on Devaluation of Bonds
Other

¥

2,326
60,917
2,897
84,075$

19,359506,80224,105
699,467¥

150,217$

1,249,733

Total

Thousands of U.S. dollars

31. Other Expenses
For the Fiscal Year ended March 31, 2003

Millions of yen

Provision of Reserve for Possible Losses on Loans
Write-offs of Claims
Losses on Sales of Stocks and Other Securities
Losses on Devaluation of Stocks and Other Securities
Losses on Money Held in Trust
Provision for Reserve for Possible Losses on Loans Sold
Losses on Dispositions of Premises and Equipment
Equity in Losses from Investment in Affiliates
Amortization of Unrecognized Net Obligation at Date of Initial Applicationof the Accounting Standard for Employee Retirement Benefits
Transfer to Reserve for Contingencies
Other

¥

Total

Thousands of U.S. dollars

932,421735,111
389,498
607,474
1,780
10,763102,104
3,491$

7,757,254
6,115,740
3,240,419
5,053,864
14,81389,549849,451
29,051

32,967
6,920
679,082

274,273
57,574
5,649,602¥ 3,501,617$ 29,131,590

32. Cash Flows
Cash and Cash Equivalents reconciles to Cash and Due from Banks on the Consolidated Balance Sheet as follows:
At March 31, 2003

Millions of yen

Thousands of U.S. dollars

Cash and Due from Banks
Less: Due from Banks except for due from Central Banks¥ 7,849,717(801,212)$ 65,305,469(6,665,659)¥ 7,048,505$ 58,639,810

Cash and Cash Equivalents

127

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

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:
At March 31, 2003

Equipment

Millions of yen
OthersThousands of U.S. dollars
Equipment
OthersAcquisition Cost Equivalents
Accumulated Depreciation Equivalents¥ 70,731
46,566¥ 2,250
1,175¥ 72,982
47,742$ 588,450
387,410$ 18,726 $ 607,176
9,783
397,193

Book Value Equivalents¥ 24,164¥ 1,074¥ 25,239$ 201,040

$

Total

Total

8,943 $ 209,983

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:
At March 31, 2003

Millions of yen

Due in One Year or Less
Due after One Year¥

12,03129,809$ 100,097
248,002¥41,841$ 348,099

Total

Thousands of U.S. dollars

Lease expense, depreciation equivalents and interest expense equivalents relating to finance leases accounted for as operatingleases for the fiscal year ended March 31, 2003 amounted to ¥13,242 million ($110,173 thousand), ¥16,132 million ($134,218
thousand), and ¥1,313 million ($10,927 thousand), respectively.
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 equivalents, which are allocated over the leaseterm by the interest method.

Operating Leases
The future lease payments subsequent to the end of fiscal year for operating lease transactions were summarized as follows:
Lessees:
At March 31, 2003

Millions of yen

Due in One Year or Less
Due after One Year¥

Thousands of U.S. dollars

12,82890,492$ 106,724
752,847¥ 103,320$ 859,571

At March 31, 2003

Millions of yen

Thousands of U.S. dollars

Due in One Year or Less
Due after One Year

¥

79
106

$

662
890

¥

186

$

1,552

Total

Lessors:

Total

128

34. Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities consisted of the following:
At March 31, 2003

Millions of yen

Thousands of U.S. dollars

Deferred Tax Assets:
Tax Losses Carried Forward
Reserve for Possible Losses on Loans
Securities
Securities Contributed to Employee Retirement Benefit Trust
Other¥ 2,257,910
1,026,644
515,460
132,214219,325$ 18,784,610
8,541,137
4,288,355
1,099,951
1,824,669

4,151,554(1,809,550)

34,538,722(15,054,498)¥ 2,342,003$ 19,484,224¥(126,167)(89,869)$ (1,049,643)(747,666)¥(216,036)$ (1,797,309)¥ 2,125,967$ 17,686,915

Deferred Tax Assets Subtotal:
Valuation AllowanceNet
Deferred Tax Liabilities:
Prepaid Pension Cost
Other
Total
Net Deferred Tax Assets

Balances reported on the Consolidated Balance Sheet:
At March 31, 2003

Millions of yen

Thousands of U.S. dollars

Deferred Tax Assets
Deferred Tax Liabilities¥ 2,130,243(4,276)$ 17,722,491(35,576)

Net Deferred Tax Assets¥ 2,125,967$ 17,686,915

MHFG and domestic subsidiaries are subject to a number of different income taxes.

129Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

35. Segment Information(a) Segment Information by Type of Business
MHFG is engaged in securities, trust, leasing and other activities as well as banking business. Such segment information,
however, has not been presented, as the percentages of those activities are insignificant.
(b) Segment Information by Geographic Area
Segment information by geographic area at March 31, 2003 and for the fiscal year ended March 31, 2003 was as follows:
Millions of yen

2003
Geographic Area

Ordinary Income
from Outside
Customers

Inter-segment
Ordinary
IncomeJapan
Americas
EuropeAsia / Oceania excluding Japan¥ 2,716,129
327,148
278,081
114,637¥

Total
Elimination and General Corporate Assets
Consolidated Results

3,435,997—

Ordinary
Income25,23792,80654,865
17,314¥ 2,741,366
419,954
332,947
131,952

190,224(190,224)

3,626,221(190,224)—¥ 3,435,997¥ 3,435,997¥

Ordinary Income
from Outside
Customers

Inter-segment
Ordinary
IncomeOrdinary
Expenses

Ordinary
Profit (Loss)

Total Assets¥ 4,914,101 ¥ (2,172,734) ¥ 126,050,751
349,570
70,384
13,504,905
383,136(50,188)7,543,064
98,83833,114
5,016,293
5,745,645 (2,119,424)(179,101)(11,122)

152,115,014(18,082,267)¥ 5,566,544 ¥ (2,130,547) ¥ 134,032,747
Thousands of U.S. dollars

2003
Geographic Area

Japan
Americas
EuropeAsia / Oceania excluding Japan
Total
Elimination and General Corporate Assets
Consolidated Results$ 22,596,749
2,721,699
2,313,492
953,727
28,585,667—$ 28,585,667$

Ordinary
IncomeOrdinary
Expenses

Ordinary
Profit (Loss)

Total Assets

209,963
772,097
456,456
144,046$ 22,806,712
3,493,796
2,769,948
1,097,773$ 40,882,705 $(18,075,993) $1,048,675,136
2,908,238
585,558
112,353,625
3,187,490(417,542)
62,754,281
822,281
275,492
41,732,887

1,582,562(1,582,562)

30,168,229(1,582,562)

47,800,714 (17,632,485) 1,265,515,929(1,490,028)(92,534)(150,434,839)$ 28,585,667$ 46,310,686 $(17,725,019) $1,115,081,090$—

Notes: 1. Geographic analyses are presented based on geographic contiguity, similarities in economic activities, and relation of business operations.
2. Ordinary Income represents Total Income less certain special income, and Ordinary Expenses represent Total Expenses less certain
special expenses.
3. Ordinary Profit (Loss) represents Ordinary Income less Ordinary Expenses.
4. Americas includes the United States of America and Canada. Europe includes the United Kingdom. Asia / Oceania includes Hong Kongand the Republic of Singapore.

(c) Ordinary Income of Overseas Entities
Ordinary Income from Overseas Entities for the fiscal year ended March 31, 2003 consisted of the following:
For the Fiscal Year ended March 31, 2003

Ordinary Income from Overseas Entities
Total Ordinary Income
Ordinary Income from Overseas Entities’ Ratio¥

Millions of yen

Thousands of U.S. dollars

719,867
3,435,997$ 5,988,917
28,585,667

20.95%/

Notes: 1. Ordinary Income from Overseas Entities represents Ordinary Income recorded by overseas branches of MHCB, MHBK 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.

13036. Subsequent Events
Appropriation of Retained Earnings
The following Appropriation of Retained Earnings was approved at the shareholders' meeting held on June 25, 2003.
Millions of yen

Cash Dividends:
First Series Class I Preferred Shares
Second Series Class II Preferred Shares
Third Series Class III Preferred Shares
Fourth Series Class IV Preferred Shares
Sixth Series Class VI Preferred Shares
Seventh Series Class VII Preferred Shares
Eighth Series Class VIII Preferred Shares
Ninth Series Class IX Preferred Shares
Tenth Series Class X Preferred Shares
Eleventh Series Class XI Preferred Shares
Twelfth Series Class XI Preferred Shares
Thirteenth Series Class XIII Preferred Shares¥ 22,500 per Share¥ 8,200 per Share¥ 14,000 per Share¥ 47,600 per Share¥ 42,000 per Share¥ 11,000 per Share¥ 8,000 per Share¥ 17,500 per Share¥ 5,380 per Share¥
165 per Share¥
21 per Share¥247 per Share¥Thousands of U.S. dollars

742
820
1,400
7,140
6,300
1,375
1,000
2,450
753
155
2
9

$

6,177
6,822
11,64759,401
52,413
11,4398,319
20,383
6,266
1,295
18
75

37. Fair Value of Securities and Money Held in Trust
The following tables contain information relating to Securities, Cash and Due from Banks (negotiable certificates of deposit) and
Other Debt Purchased (commercial paper, etc.) at March 31, 2003.
Millions of yen

At March 31, 2003

Other Securities*2
Stocks*3
Bonds:
Japanese National Government Bonds
Japanese Local Government Bonds
Corporate Bonds
Other
Money Held in Trust
Other Money Held in Trust

Gross unrealized
Gains

Cost

¥

21,804,533
3,946,430
12,289,041
11,889,955
110,364
288,7215,569,061
1,786¥

359,370
166,085
88,571
79,316
6,703
2,550
104,713¥—

Losses378,942356,656
1,073
575
40
457
21,212

Fair value¥

15

21,784,962
3,755,859
12,376,539
11,968,696
117,027
290,815
5,652,563
1,771

Thousands of U.S. dollars

At March 31, 2003

Other Securities*2
Stocks*3
Bonds:
Japanese National Government Bonds
Japanese Local Government Bonds
Corporate Bonds
Other
Money Held in Trust
Other Money Held in Trust

Cost

Gross unrealized
Gains

LossesFair value$ 181,402,110
32,832,201
102,238,282
98,918,096
918,173
2,402,013
46,331,627$ 2,989,774
1,381,744
736,866
659,873
55,772
21,221
871,164$ 3,152,598
2,967,192
8,930
4,786
338
3,806
176,476$ 181,239,286
31,246,753
102,966,218
99,573,183
973,6072,419,428
47,026,315

14,862—

127

14,735*1 A summary of Trading Securities and Money Held in Trust for Investment Purposes and related unrealized gains and losses are as follows:

At March 31, 2003

Trading Securities
Money Held in Trust for Investment Purposes

Millions of yen
Unrealized
Fair value gains (losses)¥ 6,382,931
31,769¥ 4,976(26)

Thousands of U.S. dollars
Unrealized
Fair value
gains (losses)$ 53,102,594
264,308$ 41,404(223)*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 ¥581,590 million ($4,838,522 thousand)and non-publicly offered bonds of ¥1,026,310 million ($8,538,357 thousand) as of March 31, 2003.
*3 Fair value of Stocks is determined based on the average market prices during one-month periods before the balance sheet date as at March 31, 2003.

131

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

Projected Redemption Amounts for Securities Classified as Other Securities
Millions of yen

At March 31, 2003

Bonds:
Japanese National Government Bonds
Japanese Local Government Bonds
Corporate Bonds
Other
Total

Within 1 year

1–5 years

5–10 years

Over 10 years¥

3,677,837
3,567,541
7,691
102,604
745,266¥

5,138,277
4,143,028
36,671
958,576
3,192,613¥

4,420,842
4,148,350
71,943
200,548575,322¥

165,867
109,776
12,53043,561
1,256,281¥

4,423,104¥

8,330,890¥

4,996,165¥

1,422,149

Thousands of U.S. dollars

At March 31, 2003

Bonds:
Japanese National Government Bonds
Japanese Local Government Bonds
Corporate Bonds
Other
Total

Within 1 year

1–5 years

5–10 years$ 30,597,652
29,680,045
63,991
853,616
6,200,219$ 42,747,729
34,467,791
305,0887,974,850
26,560,848$ 36,779,056
34,512,067
598,535
1,668,454
4,786,379$

Over 10 years$ 36,797,871$ 69,308,577$ 41,565,435$ 11,831,528

1,379,931
913,280
104,244362,407
10,451,597

Other Securities Sold during the Fiscal YearFor the Fiscal Year ended March 31, 2003

Other Securities

Millions of yen
Total amount
Proceedsof gains
from sales
on sales¥ 48,709,089¥ 352,189

Thousands of U.S. dollars
Total amount Total amount
Proceedsof gainsof losses
from sales
on saleson salesTotal amountof losses
on sales¥ 435,822 $ 405,233,686 $ 2,930,029 $ 3,625,808

Net Unrealized Losses on Other Securities
Net Unrealized Losses on Other Securities as of March 31, 2003 are as follows:
At March 31, 2003

Millions of yen

Difference between cost and fair value
Other Securities
Other Money Held in Trust¥

Deferred Tax Assets
Deferred Tax Liabilities
Difference between cost and fair value, net of Taxes
Amount corresponding to Minority Interests
Amount corresponding to Net Unrealized Losses on Other Securities owned by affiliatedcompanies, which corresponds to the holding shares by their investor companies
Net Unrealized Losses on Other Securities, net of Taxes

132¥(19,752)(19,737)(15)

Thousands of U.S. dollars$(164,334)(164,207)
(127)

560
3,891
(23,084)

4,665
32,378(192,047)

1,592

13,24675(24,600)$

627(204,666)

38. Derivatives Information(A) Risk Control for Derivatives(1) Details of Derivative Financial Products
MHFG transacts 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.
(2) Purposes for Using Derivative Financial Products
MHFG uses derivative financial products in response to the diverse needs of customers, for risk controls related to the assets andliabilities of MHFG as a part of asset and liability management (“ALM”), and for trading purposes.
As risk controls related to assets and liabilities, MHFG primarily utilizes macro-hedges for the total management of interest raterisk related to numerous financial assets and liabilities, such as loans and deposits, by using interest rate swaps, etc., as hedging
methods. MHFG applies hedge accounting to the majority of these products, treating them as deferred hedges. The effectivenessof the hedges are assessed by periodically checking whether the total net risk amount of derivative financial products falls
within the risk limit as set out in the risk management policy, and whether interest rate risk exposures from hedged items havebeen reduced.
(3) Trading Guidelines
In accordance with the purposes of using derivative financial products, MHFG deals in derivative financial products based on thefollowing guidelines:(i) Responding to Customer Needs
After obtaining an adequate understanding of customer requirements, we follow the group's common policy toward selling
financial products by recommending the most appropriate financial vehicle according to each customer's knowledge, experience and asset position. When actually making a sale, we endeavor to give full explanations to our customers to ensure thatthey 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
MHFG engages in trading activities to maximize income under reasonable risk limits and strict management.
(4) 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 decrease caused by 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 on unfavorable prices due to illiquidity ofthe products.

133

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements(5) 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 MHFG's credit portfolio management procedures. Under thejurisdiction 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 BIS capital adequacy ratio (international capital adequacy standards) is ¥3,159,626 million.
(ii) Market risk management structure
The Basic Policies for Market and Liquidity Risk Management are determined by the Board of Directors, and MHFG has established the Risk Management Department. This 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.
MHFG and its consolidated subsidiaries have established a solid management structure for market risk including comprehensive management (ALM) of interest 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’smonthly 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 regards 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 CEO 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: ¥4.1 billion for the fiscal year ended March 31, 2003
• Average: ¥2.9 billion for the fiscal year ended March 31, 2003
The period covered is from April 1, 2002 to March 31, 2003 (MHHD's VAR results were used during the period from April 1,
2002 to January 7, 2003).
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 our 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, 2003 consisted of the following:
At March 31, 2003

Interest rate Swaps
Currency Swaps
Foreign Exchange Forward Transactions
Interest rate Options (Buy)Currency Options (Buy)
Other Financial Derivative Products
Effect of Reduction in the Credit Risk Equivalent Amount due toLump-sum Settlement Netting Contracts
Total

Millions of yen

Thousands of U.S. dollars¥ 10,206,400
869,011550,671
137,792
277,023
136,174$ 84,911,816
7,229,716
4,581,293
1,146,361
2,304,691
1,132,896(9,017,447)(75,020,360)

3,159,626$ 26,286,413¥

Note: The above is the credit risk equivalent amount based on the consolidated capital adequacy ratio (a uniform international standard).

134

(B) Market Value of Derivatives
The market value of derivatives at March 31, 2003 was as follows:
In the following tables:(i) Contract value represents notional amounts for swap transactions and contract amounts for other transactions.
(ii) Market values of listed contracts are based on the closing prices of the Tokyo Stock Exchange and the Tokyo International
Financial Futures Exchange and others. Market values of over-the-counter contracts are based on the discounted value of
future cash flows or option pricing models.
(1) Interest Rate-Related Transactions
Millions of yen

Contract value
Total
Over one year

At March 31, 2003

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

30,372,072
31,180,316¥

Unrealized
gains (losses)

Market value

2,736,609
2,709,882¥(218,281)
222,582¥(218,281)
222,582

7,036,119
7,959,168

666,435
429,337

4,877
6,931

1,118
3,352

32,797,851
29,982,492

7,228,548
5,090,079

32,768(33,979)

32,768(33,979)

264,936,816
263,164,417
40,855,230
149,593

178,494,093
178,174,511
31,519,466
137,750

8,028,427(7,601,998)(13,189)
4,349

8,028,427(7,601,998)(13,189)
4,349

9,144,409
9,476,903

5,836,780
5,875,857(64,593)
68,092(64,593)
68,092///¥428,650

Thousands of U.S. dollars

Contract value
Total
Over one year

At March 31, 2003

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
BoughtTotal$

252,679,475
259,403,636$

22,767,135
22,544,781$

Market value

Unrealized
gains (losses)(1,815,982)
1,851,768$ (1,815,982)
1,851,768

58,536,770
66,216,041

5,544,390
3,571,861

40,57557,667

9,306
27,892272,860,665
249,438,370

60,137,677
42,346,749

272,618(282,689)

272,618(282,689)

2,204,133,246
2,189,387,835
339,893,763
1,244,541

1,484,975,820
1,482,317,071
262,225,180
1,146,009

66,792,245(63,244,580)(109,730)
36,183

66,792,245(63,244,580)(109,730)
36,18376,076,615
78,842,789

48,558,909
48,884,006(537,380)
566,497(537,380)
566,497

/

/

/

$

3,566,148

Notes: 1. The above transactions are marked to market and charges in unrealized gains (losses) are included in the Consolidated Statement of
Operations.
2. Derivative transactions qualifying for hedge accounting are excluded from the above table.

135

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements(2) Currency-Related Transactions
Millions of yen

Contract value
Total
Over one year

At March 31, 2003

Over-the-Counter:
Currency Swaps¥

19,455,734¥

Unrealized
gains (losses)

Market value

12,610,653¥(134,626)¥(163,955)

Thousands of U.S. dollars

At March 31, 2003

Over-the-Counter:
Currency Swaps

Contract value
Total
Over one year

$ 161,861,349$ 104,913,926

Market value

Unrealized
gains (losses)$ (1,120,019)$ (1,364,020)

Notes: 1. The above transactions are marked to market and charges in unrealized gains (losses) are included in the Consolidated Statement of
Operations.
2. Derivative transactions qualifying for hedge accounting and the following transactions described in note 4 are excluded from the abovetable.
3. Currency Swap Transactions which are accounted for on an accrual basis in accordance with “Tentative Accounting and Auditing
Treatment relating to the Adoption of ‘Accounting for Foreign Currency Transaction’ for Banks” (JICPA Industry Audit Committee Report
No. 20) or “Accounting and Auditing Concerning Accounting for Foreign Currency Transactions in Banking Industry” (JICPA Industry
Audit Committee Report No. 25), are excluded from the above table.
Currency swap transactions accounted for under the accrual method are as follows:

At March 31, 2003

Contract
value

Currency Swaps¥ 370,040

Millions of yen
MarketUnrealizedvalue
gains (losses)¥ 1,893¥ (1,622)

Thousands of U.S. dollars
Contract
MarketUnrealized
value
value
gains (losses)$ 3,078,540$ 15,754$ (13,495)

4. The following currency forwards, currency options and other transactions are excluded from the above table:* Transactions which are marked to market and of which charges in unrealized gains (losses) are included in the Consolidated Statementof Operations.
* Transactions which are for financial assets and liabilities denominated in foreign currencies and recognized on the Consolidated Balance
Sheets.
* Transactions denominated in foreign currencies which are eliminated in the consolidation process.
Currency-related derivatives which are marked to market are as follows:
At March 31, 2003

Listed:Futures:
Sold
BoughtOver-the-Counter:
Forwards:
Sold
BoughtOptions:
Sold
Bought136

Millions of yen
Contract value

¥

2,644
3,173

Thousands of U.S. dollars
Contract value$

22,001
26,405

13,474,009
17,495,358

112,096,582
145,552,068

4,065,115
4,124,246

33,819,597
34,311,538

(3) Stock-Related Transactions

At March 31, 2003

Listed:Index Futures:
Sold
BoughtIndex Futures Options:
Sold
BoughtOver-the-Counter:
Options:
Sold
BoughtForwards:
Sold
BoughtTotal

Millions of yen
Contract value
Over
MarketUnrealized
Total
one yearvalue gains (losses)¥ 61,583
3,170¥

Thousands of U.S. dollars
Contract value
Over
MarketUnrealized
Total
one yearvalue gains (losses)——¥ 1,641(105)¥ 1,641(105)$ 512,343
26,376

17,67150,796

—
—

256
390

(0)
33

40,09574,223

2,081
6,893

1,664
3,527

—
2,233

—
—

—
(142)

/

/

/

¥

$

—
—

$ 13,657(879)$ 13,657(879)

147,013422,600

—
—

2,134
3,248

(6)
281

116
(938)

333,571617,501

17,31857,35013,84429,349968(7,804)—(142)—
18,580———(1,189)—(1,189)

604

/

/

/

$ 5,028

Notes: 1. The above transactions are marked to market and charges in unrealized gains (losses) are included in the Consolidated Statement of
Operations.
2. Derivative transactions qualifying for hedge accounting are excluded from the above table.

(4) Bond-Related Transactions

At March 31, 2003

Listed:Index Futures:
Sold
BoughtIndex Futures Options:
Sold
BoughtOver-the-Counter:
Options:
Sold
BoughtTotal

Millions of yen
Contract value
Over
MarketUnrealized
Total
one yearvalue gains (losses)¥ 624,250
852,153¥——¥ (503)
3,293

173,073
133,577

—
—

409
465

164
(129)

31,51368,548

—
707

114
563

/

/

/

Thousands of U.S. dollars
Contract value
Over
MarketUnrealized
Total
one yearvalue gains (losses)¥ (503) $ 5,193,432
3,293 7,089,461$——$ (4,192)
27,401$ (4,192)
27,401

1,439,883
1,111,295

—
—

3,406
3,876

1,372
(1,078)41
144

262,172
570,289

—
5,882

956
4,685

348
1,200

¥ 3,011///$ 25,051

Notes: 1. The above transactions are marked to market and charges in unrealized gains (losses) are included in the Consolidated Statement of
Operations.
2. Derivative transactions qualifying for hedge accounting are excluded from the above table.

137

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements(5) Commodity-Related Transactions
Millions of yen
Contract value
Total

Over
one year¥ 131,197
131,197¥ 77,335
77,335¥ 6,174
3,607

/

/

/

At March 31, 2003

Over-the-Counter:
Options:
Sold
BoughtTotal

MarketUnrealized
value gains (losses)

Thousands of U.S. dollars
Contract value
Over
MarketUnrealized
Total
one yearvalue gains (losses)¥ 1,779 $ 1,091,497 $ 643,388
1,004 1,091,497
643,388¥ 2,784//$ 51,370 $ 14,802
30,0168,361/ $ 23,163

Notes: 1. The above transactions are marked to market and charges in unrealized gains (losses) are included in the Consolidated Statement of
Operations.
2. Derivative transactions qualifying for hedge accounting are excluded from the above table.
3. Commodities are oil, copper, aluminium and others.

(6) Credit Derivative Transactions
Millions of yen
Contract value
At March 31, 2003

Total

Over
one year

Over-the-Counter:
Credit Derivatives:
Sold
Bought¥ 19,669 ¥ 16,278
502,951498,680

Total/

MarketUnrealized
value gains (losses)¥
17
84,555//¥

Thousands of U.S. dollars
Contract value
Over
MarketUnrealized
Total
one yearvalue gains (losses)

17 $ 163,642 $ 135,425
84,555 4,184,293 4,148,759¥ 84,572

/

/

$
142 $
142
703,453
703,453/ $ 703,595

Notes: 1. The above transactions are marked to market and charges in unrealized gains (losses) are included in the Consolidated Statement of
Operations.
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.

(7) Weather Derivative Transactions
Millions of yen
Contract value
At March 31, 2003

Over-the-Counter:
Weather Derivatives:
Sold
BoughtTotal

MarketUnrealized
value gains (losses)

Thousands of U.S. dollars
Contract value
Over
MarketUnrealized
Total
one yearvalue gains (losses)

Total

Over
one year

¥ 166
166

¥—
—

¥8
7

¥ (2)
5

$ 1,385
1,385

$—
—

$ 73
62

$ (25)
42

/

/

/

¥ 2

/

/

/

$ 17

Notes: 1. The above transactions are marked to market and charges in unrealized gains (losses) are included in the Consolidated Statement of
Operations.
2. Transactions are related to temperature, etc.

138Consolidated Financial Statements ofMizuho Holdings for Fiscal 2001 and 2000
Consolidated Balance Sheets

140

Consolidated Statements of Operations

141

Consolidated Statements of Shareholders' Equity

142

Consolidated Statements of Cash Flows

144

Selected Information from
Consolidated Financial Statements

146

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

165

Non-Consolidated Statement of Operations

165

Mizuho Corporate Bank
Non-Consolidated Balance Sheet

166

Non-Consolidated Statement of Operations

167

Mizuho Bank
Non-Consolidated Balance Sheet

168

Non-Consolidated Statement of Operations

169

Mizuho Securities
Non-Consolidated Balance Sheet

170

Non-Consolidated Statement of Operations

171

Mizuho Trust & Banking
Non-Consolidated Balance Sheet

172

Non-Consolidated Statement of Operations

173

139

Consolidated Financial Statements of Mizuho Holdings for Fiscal 2001 and 2000

Consolidated Balance Sheets

Millions of yen
2002

At March 31,

AssetsCash and Due from Banks
Call Loans and Bills Purchased
Receivables under Resale Agreements
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
Consolidation Differences
Customers' Liabilities for Acceptances and Guarantees
Reserve for Possible Losses on Loans
Reserve for Possible Losses on Investments

2001¥ 11,720,134
942,285
1,768,766
604,395
7,951,419
69,762
24,108,931
84,593,656
1,186,977
11,067,767
1,753,497
4,843
2,509,110
64,296
4,923,244(1,949,819)(6,841)¥¥ 151,312,427¥ 163,455,480$ 1,258,838,835¥ 85,606,235
15,310,890
9,453,692
4,855,073
711,382
4,883,842
2,553,382
708,2312,966,847
8,432
1,776,404
11,278,184
21,801
36,61949,647—135,154
15,741
335,108
4,923,244¥ 80,176,482
17,848,257
13,208,076—
2,369,254
4,687,700
3,871,945
273,849
3,998,017
8,088
1,826,412
21,186,842—
126,050
199,093
159,628
24,74011,462
343,728
6,129,641$

Total Liabilities

145,629,916

156,449,275

1,211,563,366

Minority Interests

951,091

751,933

7,912,573

Shareholders' Equity
Common Stock and Preferred Stock
Capital Surplus
Revaluation Reserve for Land, net of Taxes
Retained Earnings
Net Unrealized Losses on Other Securities, net of Taxes
Foreign Currency Translation Adjustments

2,572,000
2,203,747
534,447
101,133(558,485)(120,167)

2,572,000
2,203,747
548,533
1,107,231—(175,430)

21,397,670
18,334,010
4,446,316
841,378(4,646,303)(999,730)

Subtotal
Treasury Stock

4,732,675(1,255)

6,256,083(1,812)39,373,341(10,445)

Total Assets
Liabilities, Minority Interests and Shareholders' Equity
Liabilities
Deposits
Debentures
Call Money and Bills Sold
Payables under Repurchase Agreements
Commercial Paper
Trading Liabilities
Borrowed Money
Foreign Exchange Liabilities
Bonds and Notes
Convertible Bonds
Due to Trust Accounts
Other Liabilities
Reserve for Bonus Payments
Reserve for Employee Retirement Benefits
Reserve for Possible Losses on Loans Sold
Reserve for Possible Losses on Support of Specific Borrowers
Other Reserves
Deferred Tax Liabilities
Deferred Tax Liabilities for Revaluation Reserve for Land
Acceptances and Guarantees

Total Shareholders' Equity
Total Liabilities, Minority Interests and Shareholders' Equity

5,011,232
2,343,046—
703,619
10,877,475
392,367
28,062,563
92,286,772
845,277
14,940,725
1,713,356
9,531
1,663,971
107,764
6,129,641(1,627,632)(4,233)$97,505,280
7,839,314
14,715,195
5,028,251
66,151,576
580,391
200,573,471
703,774,183
9,875,020
92,077,931
14,588,165
40,293
20,874,463
534,91440,958,771(16,221,462)(56,921)712,198,300
127,378,459
78,649,684
40,391,629
5,918,320
40,630,971
21,242,781
5,892,113
24,682,587
70,15014,778,743
93,828,491
181,379
304,655
413,038—
1,124,413
130,959
2,787,923
40,958,771

4,731,420

6,254,270

39,362,896¥ 151,312,427¥ 163,455,480$ 1,258,838,835

The rate of ¥120.20 = US $1.00, the foreign exchange rate on March 31, 2003, has been used for translation.

140

Thousands of
U.S. dollars
2002Consolidated Financial Statements of Mizuho Holdings for Fiscal 2001 and 2000

Consolidated Statements of Operations

2001

Thousands of
U.S. dollars
2002¥ 3,020,489
54,443544,238
178,884
651,035
866,499¥ 3,512,272
65,111
513,194
156,508
577,125
1,089,530$ 25,128,863
452,943
4,527,772
1,488,225
5,416,269
7,208,817

5,315,591

5,913,742

44,222,889

1,492,876
43,156451,041
1,368,206
3,385,481

2,158,303
85,262
431,320
1,228,618
1,530,161

12,419,936
359,0423,752,429
11,382,747
28,165,399

6,740,762

5,433,665

56,079,553(1,425,170)

480,077(11,856,664)

110,498(545,923)(13,701)

51,621
146,376
70,819919,290(4,541,791)(113,989)

211,260$ (8,120,174)

2002

2001

U.S. dollars
2002¥ (108,003.27)—
3,500¥ 20,524.13
20,109.99
7,000*

Millions of yen
2002

For the Fiscal Years ended March 31,

IncomeInterest Income
Fiduciary Income
Fee and Commission Income
Trading Income
Other Operating Income
Other Income
Total Income
Expenses
Interest Expenses
Fee and Commission Expenses
Other Operating Expenses
General and Administrative Expenses
Other Expenses
Total Expenses
Income (Loss) before Income Taxes and Minority Interests
Income Taxes:
Current
Deferred
Minority Interests in Net Income (Loss)Net Income (Loss)¥(976,044)¥

Yen

Per Share of Common StockNet Income (Loss):
Basic
DilutedCash Dividends$(898.53)—
29.12*Stock transfer payments of ¥3,500 per share of common stock paid instead of interim cash dividends to shareholders of DKB, Fuji Bank and IBJ as of September 27, 2000, are included.
The rate of ¥120.20 = US $1.00, the foreign exchange rate on March 31, 2003, has been used for translation.

141

Consolidated Financial Statements of Mizuho Holdings for Fiscal 2001 and 2000

Consolidated Statements of Shareholders' Equity

Millions of yen

Common Stockand Preferred
Stock

CapitalSurplus

Revaluation
Reservefor LandRetained
Earnings

Foreign
Currency
Translation
Adjustments

Balance at April 1, 2000
Stock Transfer Payments
Effect of the Change in Scopeof Consolidated Subsidiaries
Transfer from Revaluation
Reserve for Land
Transfer from Deferred Tax Liabilities
Related to Land Revaluation
Effect of the Change in Scopeof Consolidated Subsidiaries
Exclusion from Consolidationof Affiliates
Effect of the Change
in Foreign Exchange Rate
Cash Dividends
Bonuses to Directors andStatutory Auditors
Net Income
Treasury Stock Transactions¥2,572,000—¥2,247,155(43,407)¥565,652—¥ 917,065—¥(194,129)—¥(7,597)—¥6,100,145(43,407)

—

—

—

730

—

—

730

—

—

(21,748)

21,748

—

—

—

—

—

4,629

—

—

—

4,629

—

—

—

(147)

—

—

(147)

—

—

—

(17)

—

—

(17)

—
—

—
—

—
—

—
(43,407)

18,699———18,699(43,407)

—
—
—

—
—
—

—
—
—

(0)
211,260
—

—
—
—

—
—
5,785

(0)
211,260
5,785

Balance at March 31, 2001

¥2,572,000¥2,203,747¥548,533¥1,107,231¥(175,430)¥(1,812)¥6,254,270

For the Fiscal Year ended March 31, 2001

Treasury
Stock

Total
Shareholders'EquityMillions of yen

For the Fiscal Year ended March 31, 2002

142

Common Stockand Preferred
Stock

CapitalSurplus

Revaluation
Reservefor LandNet Unrealized
Losses on Other
Retained
Securities,
Earnings net of Taxes

Foreign
Currency
Translation
Adjustments

Total
Treasury Shareholders'
Stock
EquityBalance at April 1, 2001
¥2,572,000 ¥2,203,747
Net Unrealized Losses on Other
Securities, net of Taxes, at theInitial Application of New
Accounting Standard——
Effect of the Change
in Foreign Exchange Rate——
Transfer from Revaluation Reserve for Land——
Transfer to Deferred Tax Liabilities
Related to Land Revaluation——
Effect of the Change in Scopeof Consolidated Subsidiaries——
Exclusion from Consolidation of Affiliates——
Cash Dividends——
Bonuses to Directors andStatutory Auditors——
Net Loss——
Treasury Stock Transactions——¥548,533 ¥1,107,231

Balance at March 31, 2002

¥534,447 ¥ 101,133 ¥(558,485) ¥(120,167) ¥(1,255) ¥4,731,420¥2,572,000 ¥2,203,747— ¥(175,430) ¥(1,812) ¥6,254,270——(558,485)——(558,485)—(13,560)—
13,560——55,262———55,262
—

(525)

—

—

—

—

(525)

—
—
—

(30)
(175)
(43,407)

—
—
—

—
—
—

—
—
—

(30)
(175)
(43,407)

—
—
—

(0)
(976,044)
—

—
—
—

—
—
—

—
—
556

(0)
(976,044)
556

Thousands of U.S. dollars

For the Fiscal Year ended March 31, 2002

Common Stockand Preferred
Stock

CapitalSurplus

Revaluation
Reservefor LandNet Unrealized
Losses on Other
Retained
Securities,
Earnings net of Taxes

Foreign
Currency
Translation
Adjustments

Total
Treasury Shareholders'
Stock
EquityBalance at April 1, 2001
$21,397,670 $18,334,010 $4,563,504 $9,211,580— $(1,459,485) $(15,077) $52,032,202
Net Unrealized Losses on Other
Securities, net of Taxes, at theInitial Application of New
Accounting Standard———— (4,646,303)—— (4,646,303)
Effect of the Change
in Foreign Exchange Rate
—
—
—
—
—
459,755—
459,755
Transfer from Revaluation Reserve for Land—— (112,818)
112,818————
Transfer to Deferred Tax Liabilities
Related to Land Revaluation——(4,370)————(4,370)Effect of the Change in Scopeof Consolidated Subsidiary
—
—
—
(254)
—
—
—
(254)
Exclusion from Consolidation of Affiliates———(1,459)———(1,459)Cash Dividends——— (361,125)——— (361,125)
Bonuses to Directors andStatutory Auditors
—
—
—
(8)
—
—
—
(8)
Net Loss——— (8,120,174)——— (8,120,174)
Treasury Stock Transactions
—
—
—
—
—
—
4,632
4,632
Balance at March 31, 2002

$21,397,670 $18,334,010 $4,446,316$841,378 $(4,646,303)$(999,730) $(10,445) $39,362,896

The rate of ¥120.20 = US $1.00, the foreign exchange rate on March 31, 2003, has been used for translation.

143

Consolidated Financial Statements of Mizuho Holdings for Fiscal 2001 and 2000

Consolidated Statements of Cash Flows2001

Thousands of
U.S. dollars
2002

480,077
75,28323,002(18,036)(421,915)(7,631)(110,663)(64,023)
10,094—(145,991)
125,957(3,512,272)
2,158,303(700,515)
9,000(578,274)
38,337(11,789)(582,053)(79,145)442,2312,203,779(1,531,894)(182,296)
253,674(46,169)
716,387
192,795
2,053,226
981,573
907,528
54,677(77,391)(104,109)
246,308
3,526,703(2,210,161)(1,154,274)$ (11,856,664)
788,269
176,061
56,337
3,007,847
23,061(1,243,310)(1,328,023)
916,566
181,285—(294,268)(25,128,863)
12,419,936(1,679,396)
145,611(3,440,355)
275,536(740,738)
26,208,041(384,587)
53,195,096
40,610,404(21,109,542)
3,421,280
8,077,897
701,226
10,979,762(4,397,267)(3,248,199)(9,503,593)(4,619,055)(2,621,698)
3,534,399(856,155)(416,039)
25,756,154(13,344,367)(26,790,679)

6,908,130(131,692)

2,960,333(41,535)

57,471,970(1,095,612)¥ 6,776,438¥ 2,918,798$ 56,376,358

Millions of yen
For the Fiscal Years ended March 31,

I. Cash Flows from Operating Activities
Income (Loss) before Income Taxes and Minority Interests
Depreciation
Amortization of Consolidation Differences
Equity in Losses (Income) from Investments in Affiliates
Increase (Decrease) in Reserve for Possible Losses on Loans
Increase (Decrease) in Reserve for Possible Losses on Investments
Decrease in Reserve for Possible Losses on Loans Sold
Decrease in Reserve for Possible Losses on Support of Specific Borrowers
Increase in Reserve for Contingencies
Increase in Reserve for Bonus Payments
Decrease in Reserve for Retirement Allowance
Increase (Decrease) in Reserve for Employee Retirement Benefits
Interest Income—accrual basis
Interest Expenses—accrual basis
Gains on Securities
Losses from Money Held in Trust
Foreign Exchange Gains—Net
Losses on Disposal of Premises and Equipment
Gains on Establishment of Retirement Benefit Trusts
Net Decrease (Increase) in Trading Assets
Net Decrease in Trading Liabilities
Net Decrease in Loans and Bills Discounted
Net Increase in Deposits
Net Decrease in Debentures (excluding Subordinated Debentures)
Net Increase (Decrease) in Borrowed Money (excluding Subordinated Borrowed Money)
Net Decrease in Due from Banks (excluding Deposits with Central Banks)
Net Decrease (Increase) in Negotiable Certificates of Deposit
Net Decrease in Call Loans
Net Decrease (Increase) in Cash Placed as Collateral on Securities Borrowed
Net Increase (Decrease) in Call Money
Net Increase (Decrease) in Commercial Paper
Net Increase (Decrease) in Cash Received as Collateral for Securities Lent
Net Decrease (Increase) in Foreign Exchange Assets
Net Increase (Decrease) in Foreign Exchange Liabilities
Net Decrease in Issuance, Redemption of Bonds and Notes
Net Increase (Decrease) in Due to Trust Accounts
Interest Income—cash basis
Interest Expenses—cash basis
Other—net
Subtotal
Cash Paid in Income Taxes
Net Cash Provided by Operating Activities

144

2002

¥ (1,425,170)
94,74921,162
6,771
361,543
2,771(149,445)(159,628)
110,171
21,790—(35,370)(3,020,489)
1,492,876(201,863)
17,502(413,530)
33,119(89,036)
3,150,206(46,227)
6,394,050
4,881,370(2,537,366)
411,237
970,963
84,287
1,319,767(528,551)(390,433)(1,142,331)(555,210)(315,128)
424,834(102,909)(50,007)3,095,889(1,603,992)(3,220,239)

¥

2002

2001

Thousands of
U.S. dollars
2002¥ (58,967,968)
40,450,103
19,571,083(109,999)
429,371(193,154)
35,109¥ (80,782,961)
58,620,081
18,957,642(756,913)
655,289(117,718)
63,299$ (490,582,103)
336,523,320
162,820,993(915,140)
3,572,146(1,606,945)
292,094(1,064)—(8,855)318,553—

2,650,197(1,282)(961)(10,666)

Millions of yen

II. Cash Flows from Investing Activities
Payments for Purchase of Securities
Proceeds from Sale of Securities
Proceeds from Redemption of Securities
Payments for Increase in Money Held in Trust
Proceeds from Decrease in Money Held in Trust
Payments for Purchase of Premises and Equipment
Proceeds from Sale of Premises and Equipment
Payments for Purchase of Stocks of Subsidiaries(affecting the scope of consolidation)
Proceeds from Sale of Stocks of Subsidiaries(affecting the scope of consolidation)
Payments for Purchase of Stock of Subsidiaries(not affecting the scope of consolidation)
Proceeds from Sale of Stock of Subsidiaries(not affecting the scope of consolidation)

—

47

—

1,530,751(3,362,193)

12,735,041

116,000(644,800)
274,033(719,117)
379,874(16,487)(43,393)—(43,421)(323)
233

166,000(306,778)
316,134(381,781)
800—(43,407)(43,351)(42,259)(2,814)
2,693

965,058(5,364,393)
2,279,809(5,982,674)
3,160,354(137,167)(361,007)—(361,240)(2,693)
1,943(697,401)(334,763)(5,802,010)

17,731

15,074

147,516

V. Net Increase (Decrease) in Cash and Cash Equivalents

7,627,520(763,083)

63,456,905

VI. Cash and Cash Equivalents at the Beginning of the Year
VII. Net Increase in Cash and Cash Equivalents Resulted
from Inclusion of Subsidiaries in the scope of Consolidation

2,219,805

2,982,889

18,467,600

46

—

387

Net Cash Provided by (Used in) Investing Activities
III. Cash Flows from Financing Activities
Proceeds from Issuance of Subordinated Borrowed Money
Repayments for Subordinated Borrowed Money
Proceeds from Issuance of Subordinated Bonds, Notes and Convertible Bonds
Redemption of Subordinated Bonds, Notes and Convertible Bonds
Proceeds from Investments in Minority Interests
Payments for Minority Interests
Dividends Paid
Stock Transfer Payments
Dividends Paid for Minority Interests
Purchase of Treasury Stock
Proceeds from Sales of Treasury Stock
Net Cash Used in Financing Activities
IV. Effects of Exchange Rate Changes on Cash and Cash Equivalents

VIII. Net Decrease in Cash and Cash Equivalents Resulted
from Exclusion of Subsidiaries from the Scope of Consolidation
IX. Cash and Cash Equivalents at the End of the Year

(5)¥

9,847,366(0)¥2,219,805(47)$

81,924,845

The rate of ¥120.20 = US $1.00, the foreign exchange rate on March 31, 2003, has been used for translation.

145

Consolidated Financial Statements of Mizuho Holdings for Fiscal 2001 and 2000

Selected Information from Consolidated Financial Statements

1. Trading Assets and Liabilities
Millions of yen

At March 31,

Trading Assets:
Trading Securities
Derivatives for Trading Securities
Securities Held to Hedge Trading Transactions
Derivatives for Securities Held to Hedge Trading Transactions
Derivatives for Trading Transactions
Other Trading Assets
Total
Trading Liabilities:
Trading Securities Oversold
Derivatives for Trading Securities
Securities Oversold to Hedge Trading Transactions
Derivatives for Securities Held to Hedge Trading Transactions
Derivatives for Trading Transactions
Total

2002

2001

¥ 3,437,246
2,638
—
34
2,892,170
1,619,329¥ 6,116,519
2,449
47,602382
2,952,840
1,757,680¥ 7,951,419¥ 10,877,475¥ 2,138,021
617—
82,745,195¥ 1,425,289
1,402
45,691491
3,214,825¥ 4,883,842¥ 4,687,700

2. Securities
Millions of yen

At March 31,

Japanese National Government Bonds
Japanese Local Government Bonds
Japanese Corporate Bonds
Japanese Stock and Shares*1
Other*2
Total

2002

2001

¥ 10,554,751
372,164
1,109,982
6,708,121
5,363,910¥ 11,641,796
476,375
1,126,151
8,391,951
6,426,288¥ 24,108,931¥ 28,062,563*1 Japanese Stock and Shares included investments in non-consolidated subsidiaries and affiliates which are not accounted for under the equity method of ¥112,468 million and ¥141,211 million atMarch 31, 2002 and 2001, respectively.
*2 Other included investments in non-consolidated subsidiaries and affiliates which are not accounted for under the equity method of ¥2,640 million and ¥234,687 million at March 31, 2002 and 2001,
respectively.

3. Loans and Bills Discounted
Millions of yen

At March 31,

Bills Discounted
Loans on Notes
Loans on Deeds
Overdrafts
Financing Receivables, including Factoring, Leasing and Property Financing
Total

146

2002

¥

1,192,472
10,583,475
55,177,085
17,061,042
579,580¥ 84,593,656

2001

¥

1,278,023
13,167,367
58,106,258
18,593,064
1,142,058¥ 92,286,772

Loans and Bills Discounted at March 31, 2002 and 2001 include the following:
Millions of yen

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

2002

¥

639,2692,698,586
69,7552,059,609¥ 5,467,220*5

2001

¥

470,0312,169,692
124,800
1,791,770¥ 4,556,295*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) Bankruptcy Loans and (ii) loans of which payments of interest are deferred in order to assist or facilitate the restructuring 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 borrowers in financial difficulties.
*5 ¥2,459 million of those amounts are placed in an administrative trust established by the Resolution and Collection Corporation for eventual final disposal.

4. Foreign Exchange Assets and Liabilities
Millions of yen

At March 31,

Foreign Exchange Assets:
Foreign Bills Bought
Foreign Bills Receivable
Advance to Foreign Banks
Due from Banks (Foreign)
Total
Foreign Exchange Liabilities:
Foreign Bills Sold
Foreign Bills Payable
Advance from Foreign Banks
Due to Banks (Foreign)
Total

2002

¥

2001

397,398
222,284
25,204542,089¥

486,300
269,833
7,165
81,978¥ 1,186,977¥

845,277¥

3,786
24,508131,883
548,053¥

33,081
27,65475,929137,183¥

708,231¥

273,849

5. Other Assets
Millions of yen

At March 31,

Accrued Income
Prepaid Expenses
Cash Placed as Collateral on Securities Borrowed
Securities in Custody and Other
Deferred Hedge Losses*1
Derivatives
Other*2
Total

2002

¥

358,260
11,706
3,313,727
2,922,552
414,695
1,076,9782,969,846¥ 11,067,767

2001

¥

442,344
97,462
2,785,176
4,787,890
516,356
2,190,966
4,120,529¥ 14,940,725*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 ¥1,357,005 million and ¥1,771,700
million, respectively.
*2 Other included provisional tax payments of ¥222,682 million made by IBJ. 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 the case 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 believes that its claim is appropriate. Nevertheless, the subsidiary accrued Reserve for Contingency amounting to ¥134,203 million from the viewpoint of financial soundness andprudent accounting.

147

Consolidated Financial Statements of Mizuho Holdings for Fiscal 2001 and 2000

Selected Information from Consolidated Financial Statements

6. Premises and Equipment
Millions of yen

At March 31,

2002

2001

Land
Buildings
Equipment
Other¥ 1,072,602
304,707
97,093
279,094¥ 1,093,175
288,300
79,333
252,547

Total¥ 1,753,497¥ 1,713,356¥¥

Accumulated Depreciation

801,712793,130

7. Deferred Debenture Charges
Millions of yen

At March 31,

Deferred Discount on Debentures
Deferred Debenture Issuance Costs
Total

2002

2001

¥

2,555
2,288

¥

7,617
1,913

¥

4,843

¥

9,531

8. Reserve for Possible Losses on Loans
Millions of yen

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

2002

¥

953,410
962,407
34,001¥ 1,949,819

2001

¥

780,774
817,943
28,914¥ 1,627,632

9. Assets Pledged as Collateral
The following assets were pledged as collateral:
Millions of yen

At March 31,

Cash and Due from Banks
Call Loans and Bills Purchased
Trading Assets
Securities
Loans and Bills Discounted
Foreign Exchange Assets
Other Assets
Premises and Equipment

2002

¥

1,932
—
2,344,170
7,881,007
3,684,370
5,189
582,926
92

2001

¥

1,761
50,0001,002,499
7,473,073
3,273,799—
344,964
136

The following liabilities were collateralized by the above assets:
Millions of yen

At March 31,

Deposits
Call Money and Bills Sold
Payables under Repurchase Agreements
Trading Liabilities
Borrowed Money
Foreign Exchange Liabilities
Other Liabilities

148

2002

¥

474,581
4,482,500
2,522,239
194,273
524,963
14,19744,223

2001¥

452,9445,870,347—
235,254
77,274—64,898

10. Deposits
Millions of yen

At March 31,

Current Deposits
Ordinary Deposits
Deposits at NoticeTime Deposits
Certificates of Deposit
Other
Total

2002

2001

¥ 5,828,661
29,170,849
2,059,880
31,222,513
11,476,779
5,847,551¥ 4,902,910
17,662,700
1,935,274
37,020,164
12,851,673
5,803,760¥ 85,606,235¥ 80,176,482

11. Debentures
At March 31,
Description of Debentures

Millions of yen

Interest rates
2002

2002

2001

One-Year Discount Debentures¥ 3,962,829[3,962,829]¥ 5,388,567[5,388,567]

One-Year Discount Debentures(custody only)

266,959[266,959]

400
[400]

Five-Year Coupon Debentures(Series A)

8,693,170[2,010,420]

9,478,533[2,169,188]

0.65%–2.20% 1.00%–2.70%

Five-Year Coupon Debentures(Series B)

154,229[37,093]

198,578[52,441]

0.16%–1.70% 0.20%–2.30%

Five-Year Coupon Debentures(with compound interest)

852,093[160,433]

940,695[209,228]

0.16%–1.70% 0.20%–2.30%

Five-Year Coupon Debentures(savings-type)774,408[100,519]

802,892[109,821]

0.16%–1.70% 0.20%–2.30%

Five-Year Coupon Debentures(savings-type with compound interest)

91,193[15,445]

93,158[16,380]

0.16%–1.70% 0.20%–2.30%

Two-year Coupon Debentures

473,000[319,800]

917,900[598,100]

0.35%–0.75% 0.30%–0.75%

Three-year Coupon Debentures

15,000[—]—[—]28,006[—](US$75,000)

27,531[—](US$85,000)¥15,310,890¥ 17,848,257

Debentures Denominatedin Foreign Currencies
Total

2001

0.08%–0.14% 0.11%–0.34%
0.06%–0.11%

0.09%

0.06%

—%

2.54%–9.37% 3.60%–9.37%

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 were scheduled for the following five years as follows:
Fiscal 2002 ¥6,873,500 million
2003 ¥2,294,077 million
2004 ¥2,068,350 million
2005 ¥2,169,575 million
2006 ¥1,899,387 million
4. No collateral was provided for the above Debentures.

12. Call Money and Bills Sold
Millions of yen

At March 31,

2002

Call Money
Bills Sold

¥ 7,329,547
2,124,144¥ 11,810,988
1,397,087

2001

Total

¥ 9,453,692¥ 13,208,076

149

Consolidated Financial Statements of Mizuho Holdings for Fiscal 2001 and 2000

Selected Information from Consolidated Financial Statements

13. Commercial Paper
Millions of yen
2002

At March 31,

Commercial Paper¥

711,382

Average interest rates*1
2002
2001

2001

¥ 2,369,254

0.30%

1.72%

*1 The average interest rates are the weighted-average interest rate of debts calculated from the interest rates and outstanding balances at the end of the year.

14. Borrowed Money
Millions of yen
2002

At March 31,

Bills Rediscounted
Other Borrowings*2,3

¥

Total

8,975
2,544,406¥ 2,553,382¥

Average interest rates*1
2002
2001

2001

10,6803,861,264

4.45%
2.65

5.21%
3.56

¥ 3,871,945

2.66%

3.57%

*1 Average interest rates are weighted-average interest rates of debts calculated from the interest rates and outstanding balances at the end of theyear.
*2 Other Borrowings included subordinated debt of ¥1,728,891 million and ¥2,261,707 million at March 31, 2002 and 2001, respectively.
*3 Repayments for Other Borrowings were scheduled for the following five years as follows:
Fiscal 2002 ¥1,226,619 million
2003 ¥ 23,223 million
2004 ¥ 201,885 million
2005 ¥ 274,485 million
2006 ¥ 77,522 million

15. Bonds and Notes
Major components of Bonds and Notes at March 31, 2002 were as follows:
IssuerDescription

Issue

Millions of yen

Interest rates

Due

Mizuho Holdings

Straight Bonds

Nov. 2000¥ 850,000[—]

0.64%–1.19%

Mar. 2008–*1

Straight Bonds

Mar. 1998–
Aug. 2001

177,900[—]

1.33%–2.54%

Dec. 2010–*2

Straight Bonds

Sept. 1997

3,100
[—]

3.00%

Nov. 2012*3

Straight Bonds

Dec. 1991–
Nov. 2001

672,314[1,319](US$208,000)(GBP 7,000)

0.00%–5.19%

Feb. 2002–*4

Straight Bonds

Nov. 1994–
Sep. 2001

693,011[1,294](US$1,741,500)

0.36%–8.62%

Jan. 2002–*5

Straight Bonds

Jun. 1989–
Dec. 2001

570,522[75,775](US$357,591)(EUR 9,130)

0.10%–8.80%

Apr. 2002–

Total¥ 2,966,847

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 were scheduled for the following five years as follows:
Fiscal 2002 ¥77,069 million
2003 ¥14,952 million
2004 ¥35,295 million
2005 ¥ 8,312 million
2006 ¥25,392 million
4. Bonds and Notes at March 31, 2002 included subordinated bonds and notes of ¥2,790,850 million.
*1 indicates the total amount of straight bonds issued by the domestic consolidated subsidiary, The Yasuda Trust and Banking Company, Ltd.
*2 indicates the amount of straight bonds issued by IBJ.
*3 indicates the total amount of straight bonds issued by overseas consolidated subsidiaries such as DKB Finance (Aruba) A.E.C., Dai-Ichi Kangyo Australia Ltd., DKB Asia Ltd. and others.
*4 indicates the total amount of straight bonds issued by overseas consolidated subsidiaries such as The Fuji Bank and Trust Company, Fuji International Finance (Australia) Ltd.,YTB Finance (Aruba) A.E.C., and Fuji Finance (Cayman) Ltd.
*5 indicates the total amount of straight bonds issued by overseas consolidated subsidiaries such as Mizuho Finance (Curaço) N.V. (former The Industrial Bank of Japan Finance
Company N.V.), Mizuho International plc, Ltd.

150

16. Convertible Bonds
Convertible Bonds at March 31, 2002 were as follows:
IssuerDescription of Debentures

Issue

Millions of yen

Interest rates*

Convertible Bonds

Sep. 1987–
Jul. 1988¥8,432[4,519](US$63,280)

1.75%–2.87%

Due

Sep. 2002–
Sep. 2003

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 currency in parentheses ( ).
3. * indicates the total amount of convertible bonds issued by the domestic consolidated subsidiary The Yasuda Trust and Banking Company, Ltd.
4. Details are as follows:
Conversion
Description
Convertible Period
price
Issuing share
Capitalization
US$ denominated convertible bonds due Sept. 30, 2002
Oct. 1, 1987–Sept. 20, 2002
¥2,163.90
Common stock¥1,082/share
US$ denominated convertible bonds due Sept. 30, 2003
Aug. 15, 1988–Sept. 22, 2003
¥1,814.90
Common stock¥ 908/share
5. Repayments for Convertible Bonds were scheduled for the following five years as follows:
Fiscal 2002 ¥4,519 million
2003 ¥3,912 million
2004 ¥ — million
2005 ¥ — million
2006 ¥ — million

17. Other Liabilities
Millions of yen

At March 31,

Accrued Expenses
Unearned Income
Income Taxes Payable
Cash Received as Collateral on Securities Lent
Securities Borrowed
Derivatives
Other
Total

2002

¥

338,930
180,927
76,3494,050,050
2,814,054
1,203,042
2,614,829¥ 11,278,184

2001

¥

477,474
206,898
91,973
4,605,260
4,474,393
2,143,396
9,187,445¥ 21,186,842

18. Reserve for Employee Retirement Benefits(1) Reserve for Employee Retirement Benefits was reconciled as follows:
Millions of yen

At March 31,

2002

2001

¥ (1,370,677)
1,087,697¥ (1,331,938)
989,281

Unfunded Retirement Benefit Obligations
Unrecognized Net Obligation at Date of Initial Application
Unrecognized Actuarial Differences(282,980)
123,516
386,566(342,656)
165,714141,722

Net Amounts
Prepaid Pension Cost
Other Liabilities

227,102
263,721—(35,220)
91,027(196)

Projected Benefit Obligations
Plan Assets

Reserve for Employee Retirement Benefits¥(36,619)¥(126,050)

Note: The above Projected Benefit Obligations includes the governmental welfare program, but does not include additional retirement benefits paid
to employees.
It also includes the amount measured by certain consolidated subsidiaries under the non-actuarial method.

151

Consolidated Financial Statements of Mizuho Holdings for Fiscal 2001 and 2000

Selected Information from Consolidated Financial Statements(2) Breakdown of Pension Expenses was as follows:
Millions of yen

For the Fiscal Years ended March 31,

Service Cost*1
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 Application*2
Other (such as Extra Retirement Benefit)
Net Pension Expenses

2002

2001

¥

40,01946,193(41,188)(104,493)
13,78941,9283,796¥

37,66645,411(36,610)—316
185,816
2,017

¥

46

¥

234,618*1 Retirement expenses of some consolidated subsidiaries which adopt the simplified method for calculating projected benefit obligations are included in Service Cost in full.
*2 Amortized projected benefit obligations at the date of initial application arising from the establishment of the retirement benefit trust amounting to ¥144,166 million is included in the amount for theyear ended March 31, 2001.

(3) Assumptions used in calculation of the above information were as follows:
2002
2.1–3.0%
1.0–7.8%
Straight-line basis
Charged to Income(Loss) in the year
1–15 years
Primarily 5 years

Discount rate
Expected rate of return on plan assets
Method of attributing the projected benefits to periods of services
Prior Service Cost
Amortization of unrecognized actuarial differences
Amortization of unrecognized net obligation at date of initial application

2001
2.5–7.7%
1.0–9.0%
Straight-line basis—
1–15 years
Primarily 5 years

19. Other Reserves
Millions of yen

At March 31,

Reserve for Contingencies*1
Reserve for Contingent Liabilities from Futures Transactions
Reserve for Contingent Liabilities from Securities Transactions
Total

2002

2001

¥

134,203
126
824¥

24,032
104603¥

135,154¥

24,740*1 Reserve for Contingencies is maintained to cover losses arising from matters not covered by other specific reserves that are probable to take place and that are determinable in amounts.

20. Acceptances and Guarantees
Millions of yen

At March 31,

Acceptances
Letters of Credit
Guarantees
Total

152

2002

¥

40,779628,228
4,254,235¥ 4,923,244

2001

¥

33,281
683,543
5,412,816¥ 6,129,641

21. Interest Income and Interest Expenses
Millions of yen

For the Fiscal Years ended March 31,

2002

2001

¥ 2,059,125
516,308
16,648105,905
261,61660,884¥ 2,472,492
451,472
342,679
137,942—
107,685

3,020,489

3,512,272

498,640
160,011
10,38832,535
348,619
19,51994,078
169,702233
159,147

817,917
207,599
14,047
478,666—
35,390116,958
173,959218
313,544

Total

1,492,876

2,158,303

Net¥ 1,527,613¥ 1,353,969

Interest Income:Loans and Bills Discounted
Securities
Call Loans and Bills Purchased
Due from Banks
Receivables under Resale Agreements
Other Interest Income
Total
Interest Expenses:
Deposits
Debentures
Amortization of Debenture Charges
Call Money and Bills Sold
Payables under Repurchase Agreements
Commercial Paper
Borrowed Money
Bonds and Notes
Convertible Bonds
Other Interest Expenses

22. Trading Income
Millions of yen

For the Fiscal Years ended March 31,

Trading Income:Net Gains on Trading Securities and Derivatives
Net Gains on Securities Held to Hedge Trading Transactions
Net Gains on Derivatives for Trading Transactions
Other Trading Income
Total

2002

2001

¥

28,935
6,868
139,915
3,165¥

22,35010,029119,467
4,662¥

178,884¥

156,508

23. Other Operating Income
Millions of yen

For the Fiscal Years ended March 31,

Gains on Foreign Exchange Transactions
Gains on Sales of Bonds
Other
Total

2002

2001

¥

90,930192,731367,372¥

22,754
198,171356,199¥

651,035¥

577,125

153

Consolidated Financial Statements of Mizuho Holdings for Fiscal 2001 and 2000

Selected Information from Consolidated Financial Statements

24. Other Income
Millions of yen

For the Fiscal Years ended March 31,

Gains on Sales of Stock and Other Securities
Gains on Money Held in Trust
Gains on Sales of Premises and Equipment
Equity in Income from Investment in Affiliates
Recovery on Written-off Claims
Gains on Securities Contributed to Employee Retirement Benefit Trust
Gains on Amendment of Employee Retirement Benefit Plan
Other
Total

2002

2001

¥

552,834
2,253
3,003
—
25,91090,614
104,493
87,390¥706,968
6,175
3,386
18,036
16,471
85,681—
252,809¥866,499¥ 1,089,530

25 Other Operating Expenses
Millions of yen

For the Fiscal Years ended March 31,

Amortization of Debenture Issuance Costs
Losses on Sales of Bonds
Losses on Redemption of Bonds
Losses on Devaluation of Bonds
Other
Total

2002

2001

¥

4,096
113,028
1,142
7,043
325,731¥

4,646
64,48967781
361,335¥

451,041¥

431,320

26. Other Expenses
Millions of yen

For the Fiscal Years ended March 31,

Provision of Reserve for Possible Losses on Loans
Write-offs of Claims
Losses on Sales of Stocks and Other Securities
Losses on Devaluation of Stocks and Other Securities
Losses on Money Held in Trust
Losses on Dispositions of Premises and Equipment
Equity in Losses from Investment in Affiliates
Amortization of Unrecognized Net Obligation at Date of Initial Applicationof the Accounting Standard for Employee Retirement Benefits
Transfer to Reserve for Contingencies
Other
Total

2002

¥

914,226
1,287,267
56,555380,288
19,75035,400
6,771

2001

¥

289,823
376,615
46,724
140,672
15,31940,150—41,928131,216
512,076

185,816—
435,039¥ 3,385,481¥ 1,530,161

Others included the following losses:
Millions of yen

For the Fiscal Years ended March 31,

Provision for Reserve for Possible Losses on Loans Sold
Provision for Reserve for Possible Losses on Support of Specific Borrowers

2002

¥

15,986—

2001¥

52,472
43,421

27. Cash Flows
Cash and Cash Equivalents reconciles to Cash and Due from Banks on the Consolidated Balance Sheets as follows:
Millions of yen

At March 31,

Cash and Due from Banks
Less: Due from Banks except for due from Central Banks
Cash and Cash Equivalents

154

2002

2001

¥ 11,720,134(1,872,768)¥ 5,011,232(2,791,427)¥ 9,847,366¥ 2,219,805

28. 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

2002
Others

Total

Equipment

2001
OthersAcquisition Cost Equivalents
Accumulated Depreciation Equivalents¥ 75,395
39,677¥ 1,964
1,163¥ 77,360
40,840¥ 66,254
36,334¥ 1,905
1,119¥ 68,159
37,454

Book Value Equivalents¥ 35,718¥¥ 36,519¥ 29,919¥¥ 30,705

801

785

Total

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

At March 31,

Due in One Year or Less
Due after One Year
Total

2002

2001

¥ 12,866
38,221¥ 9,755
35,755¥ 51,088¥ 45,511

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 expense equivalents is as follows:
The amounts are defined as the difference between total lease payments and acquisition equivalents, which are allocated over the leaseterm by the interest method.

Lessors:

The Acquisition Cost, Accumulated Depreciation and Book Value relating to finance lease transactions accounted for as operatingleases were summarized as follows:
Millions of yen

At March 31,

2001
OthersEquipment

Total

Acquisition Cost
Accumulated Depreciation¥ 1,014,188
511,183¥ 2,008 ¥ 1,016,196
1,289
512,473

Book Value¥¥

503,004

718 ¥

503,723

Note: Since the subsidiaries which had been leasing property to customers were excluded from the scope of consolidation during the year ended
March 31, 2002, no disclosure information relevant to lessors existed as of March 31, 2002.

Future lease payments to be received subsequent to March 31, 2001 for finance leases accounted for as operating leases(including the interest portion thereon) were summarized as follows:
Millions of yen

At March 31,

Due in One Year or Less
Due after One Year
Total

2001

¥ 179,302
348,991¥ 528,293

Note: The computing method for the amount of interest income equivalents is defined as the difference between total lease payments and acquisition cost, which is allocated over the lease term by theinterest method.

155

Consolidated Financial Statements of Mizuho Holdings for Fiscal 2001 and 2000

Selected Information from Consolidated Financial Statements

Operating Leases
The future lease payments subsequent to the end of fiscal year for operating lease transactions were summarized as follows:
Lessees:Millions of yen

At March 31,

Due in One Year or Less
Due after One Year
Total

2002

2001

¥

11,02468,539¥14,28088,793¥79,563¥103,074

Lessors:
Millions of yen

At March 31,

2002

Due in One Year or Less
Due after One Year
Total

2001

—
—

¥

3,451
3,797

—

¥

7,248

29. Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities consisted of the following:
Millions of yen

At March 31,

Deferred Tax Assets:
Reserve for Possible Losses on Loans
Tax Losses Carried Forward
Net Unrealized Losses on Other Securities
Securities
Reserve for Possible Losses on Loans Sold
Other

2002

2001

¥ 1,301,166
804,999345,789
225,999
18,612285,610¥ 1,035,529
372,919—
223,276
75,454326,2392,982,177(333,720)

2,033,420(311,511)¥ 2,648,456¥ 1,721,909¥(98,013)(57,074)¥(35,434)(33,967)¥(155,087)¥(69,401)

Deferred Tax Assets Subtotal:
Valuation AllowanceNet
Deferred Tax Liabilities:
Prepaid Pension Cost
Other
Total
Net Deferred Tax Assets¥ 2,493,369¥ 1,652,508

Balances reported on the Consolidated Balance Sheets:
Millions of yen

At March 31,

156

2002

2001

Deferred Tax Assets
Deferred Tax Liabilities¥ 2,509,110(15,741)¥ 1,663,971(11,462)

Net Deferred Tax Assets¥ 2,493,369¥ 1,652,508

30. Segment Information(a) Segment Information by Geographic Area
Segment information by geographic area at March 31, 2002 and 2001 and for the fiscal years ended March 31, 2002 and2001 was as follows:
Millions of yen

2002
Geographic Area

Japan
Americas
EuropeAsia / Oceania excluding Japan
Total
Elimination and General Corporate Assets
Consolidated Results

Ordinary Income
from Outside
Customers

Inter-segment
Ordinary
IncomeOrdinary
Income¥ 3,570,407
1,021,454
354,392
235,929¥ 150,725
164,690
43,54059,817¥ 3,721,132
1,186,144
397,932
295,747

5,182,183—

418,773(418,773)

5,600,956(418,773)¥ 5,182,183¥—¥ 5,182,183

Ordinary
Expenses

Ordinary
ProfitTotal Assets¥ 5,156,794 ¥ (1,435,661) ¥ 137,325,053
1,012,734
173,409
13,682,037
381,442
16,4907,404,657
313,293(17,545)
7,711,025
6,864,264 (1,263,307)(332,230)(86,542)

166,122,774(14,810,346)¥ 6,532,033 ¥ (1,349,850) ¥ 151,312,427
Millions of yen

Ordinary Income
from Outside
Customers

Inter-segment
Ordinary
IncomeOrdinary
IncomeOrdinary
Expenses

Ordinary
ProfitTotal Assets

Japan
Americas
EuropeAsia / Oceania excluding Japan

¥4,014,636
1,136,941
335,629
269,768¥162,040
76,45535,201
69,281¥4,176,676
1,213,396
370,831
339,049¥3,735,873
1,112,686
353,817
286,742¥440,803
100,710
17,01352,307¥145,299,161
16,435,655
7,205,854
7,902,182

Total
Elimination and General Corporate Assets

5,756,975—

342,978(342,978)6,099,954(342,978)5,489,120(307,002)

610,833(35,976)

176,842,853(13,387,373)¥5,756,975¥¥5,756,975¥5,182,118¥574,857¥163,455,480

2001
Geographic Area

Consolidated Results—

Notes: 1. Geographic analyses are presented based on geographic contiguity, similarities in economic activities, and relation of business operations.
2. Ordinary Income represents Total Income less certain special income, and Ordinary Expenses represent Total Expenses less certain
special expenses.
3. Ordinary Profit represents Ordinary Income less Ordinary Expenses.
4. Americas includes the United States of America and Canada. Europe includes the United Kingdom. Asia / Oceania includes Hong Kongand the Republic of Singapore.
5. In prior years, dividend from stocks that have market prices was recognized when it was declared. Effective fiscal year ended March
31, 2002, accrued dividend is recognized based on projected dividend rates amounted by issuers. Criteria for recognition /derecognition of securities other than trading purpose also changed to a contract day basis. As a result, Ordinary Income for“Japan” increased by ¥36,081 million and Ordinary Loss decreased by the same amount.

(b) Ordinary Income of Overseas Entities
Ordinary Income from Overseas Entities for the fiscal years ended March 31, 2002 and 2001 consisted of the following:
Millions of yen

For the Fiscal Years ended March 31,

Ordinary Income from Overseas Entities
Total Ordinary Income
Ordinary Income from Overseas Entities’ Ratio

2002

2001

¥ 1,611,776
5,182,183¥1,742,339
5,756,975

31.10%

30.26%

Notes: 1. Ordinary Income from Overseas Entities represents Ordinary Income recorded by overseas branches of DKB, Fuji Bank, IBJ and otheroverseas subsidiaries excluding Inter-segment Ordinary Income. Ordinary Income from international operations is presented in lieu of Sales
as is the case for non-financial companies.
2. Segment information on Ordinary Income from Overseas Entities is not presented as no such information is compiled.

157

Consolidated Financial Statements of Mizuho Holdings for Fiscal 2001 and 2000

Selected Information from Consolidated Financial Statements

31. Fair Value of Securities and Money Held in Trust
The following tables contain information relating to Securities, Cash and Due from Banks (negotiable certificates of deposit) and
Other Debt Purchased (commercial paper, etc.) at March 31, 2002 and 2001.
Millions of yen

At March 31, 2002

Other Securities*2, 3
Stocks*4
Bonds:
Japanese National Government Bonds
Japanese Local Government Bonds
Corporate Bonds
Other
Money Held in Trust*3
Other Money Held in Trust

Cost

Gross unrealized
Gains

LossesFair value¥ 23,231,117
7,092,274
11,104,080
10,570,896
258,259
274,924
5,034,762¥ 459,892
409,547
15,484
7,762
5,194
2,527
34,860¥ 1,347,502
1,156,139
29,00923,907
1,099
4,003
162,353¥ 22,343,508
6,345,683
11,090,554
10,554,751
262,354
273,448
4,907,269

10,275376—

10,652Millions of yen

At March 31, 2001

Other Securities*2, 3
Stocks*4
Bonds:
Japanese National Government Bonds
Japanese Local Government Bonds
Corporate Bonds
Other
Money Held in Trust*3
Other Money Held in Trust

Cost

Gross unrealized
Gains

LossesFair value¥ 25,932,871
7,912,749
12,363,591
11,641,796
261,816
459,979
5,656,530¥ 864,467
765,889
45,01225,457
8,107
11,44653,565¥ 1,140,119
1,073,119
12,688
11,843
119725
54,310¥ 25,657,219
7,605,519
12,395,915
11,655,409
269,804
470,700
5,655,785

5,449

196

—

5,645

*1 A summary of Trading Securities and Money Held in Trust for Investment Purposes and related unrealized gains and losses are as follows:
Millions of yen

2002
At March 31,

Trading Securities
Money Held in Trust for Investment Purposes

2001

Fair value

Unrealized
gains (losses)

Fair value

Unrealized
gains (losses)¥ 5,056,575
59,110¥ (2,276)(1,261)¥ 7,921,803
386,918¥ 6,489(13,645)*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 ¥249,969 million and ¥337,990 million andnon-publicly offered bonds of ¥946,344 million and ¥880,731 million as of March 31, 2002 and 2001, respectively.
*3 Unrealized gains and losses on Other Securities have not been reflected in the financial statements as of March 31, 2001.
*4 Fair value of Stocks is determined based on the average market prices during one-month periods before the balance sheet date as at March 31, 2002, and on the market prices prevailing on the balance sheet date as at March 31, 2001.

158

Projected Redemption Amounts for Securities Classified as Other Securities
Millions of yen

At March 31, 2002

Within 1 year

1–5 years

5–10 years

Bonds:
Japanese National Government Bonds
Japanese Local Government Bonds
Corporate Bonds
Other¥ 3,948,107
3,854,025
8,000
86,081
1,054,129¥ 5,252,103
4,435,047
83,539733,516
2,092,251¥ 2,794,599
2,265,678
269,984
258,936969,283¥¥ 5,002,237¥ 7,344,354¥ 3,763,882¥ 1,025,398

At March 31, 2001

Within 1 year

1–5 years

5–10 years

Over 10 years

Bonds:
Japanese National Government Bonds
Japanese Local Government Bonds
Corporate Bonds
Other¥ 7,213,291
7,085,545
24,539103,206
756,858¥ 3,371,463
2,581,204
97,345692,913
3,167,870¥ 2,623,373
1,975,045
343,394
304,934
1,208,409¥

15,698—
11,096
4,602
781,854¥ 7,970,150¥ 6,539,334¥ 3,831,782¥

797,552

Total

Over 10 years

22,088—
10,64011,447
1,003,310

Millions of yen

Total

Other Securities Sold during the Fiscal Year
Millions of yen

Proceeds
from sales

2002
Total amountof gains
on salesTotal amountof losses
on sales¥ 40,132,379¥ 415,387¥ 120,291

For the Fiscal Years ended March 31,

Other Securities

Proceeds
from sales

2001
Total amountof gains
on salesTotal amountof losses
on sales¥ 58,047,079¥ 955,377¥ 62,658

Net Unrealized Losses on Other Securities
Net Unrealized Losses on Other Securities as of March 31, 2002 and 2001 are as follows:
At March 31, 2002

Millions of yen

Difference between cost and fair value
Other Securities
Other Money Held in Trust¥ (888,132)(888,509)
376

Deferred Tax Assets
Deferred Tax Liabilities
Difference between cost and fair value, net of Taxes

331,2814,209(561,061)

Amount corresponding to Minority Interests
Amount corresponding to Net Unrealized Losses on Other Securities owned by affiliatedcompanies, which corresponds to the holding shares by their investor companies
Net Unrealized Losses on Other Securities, net of Taxes989¥ (558,485)

At March 31, 2001

Millions of yen

Difference between book value and fair value
Other Securities
Other Money Held in Trust¥ (275,455)(275,651)
196

Amount corresponding to Deferred Tax Assets
Difference between book value and fair value, net of Taxes
Amount corresponding to Minority Interests
Amount corresponding to Net Unrealized Losses on Other Securities owned by affiliatedcompanies,which corresponds to the holding shares by their investor companies
Amount corresponding to Net Unrealized Losses on Other Securities, net of Taxes

1,586

105,613(169,842)
3,675
3,811
¥ (162,354)

Note: Unrealized losses on Other Securities have not been reflected in the financial statements as of March 31, 2001.

159

Consolidated Financial Statements of Mizuho Holdings for Fiscal 2001 and 2000

Selected Information from Consolidated Financial Statements

32. Derivatives Information
Market Value of Derivatives
The market value of derivatives at March 31, 2002 and 2001 was as follows:
In the following tables:(i) Contract value represents notional amounts for swap transactions and contract amounts for other transactions.
(ii) Market values of listed contracts are based on the closing prices of the Tokyo Stock Exchange and the Tokyo International
Financial Futures Exchange and others. Market values of over-the-counter contracts are based on the discounted value of
future cash flows or option pricing models.
(1) Interest Rate-Related Transactions
Millions of yen

At March 31, 2002

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
BoughtTotal

160

Contract value
Total
Over one year

¥ 7,021,558
3,746,983¥

2,385,852
2,313,561

Market value

Unrealized
gains (losses)

¥

¥

3,762
1,522

3,762
1,522

2,069,407
1,929,895

171,114229,219

7,415
5,784

(2,803)
1,633

30,280,783
29,398,902

7,624,841
7,682,984

31,856(29,168)

31,856(29,168)

259,228,559
256,258,811
15,335,921
3,070,125

161,909,892
156,719,785
10,765,936
2,764,976

7,685,119(7,261,247)
(884)
1,274

7,685,119(7,261,247)
(884)
1,274

11,340,608
10,252,957

7,866,548
7,524,157(43,415)
84,616(67,579)
72,765///¥ 436,250

Millions of yen

At March 31, 2001

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
BoughtTotal

Contract value
Total
Over one year

Market value

Unrealized
gains (losses)¥ 31,653,308
35,499,788¥ 10,386,242
12,938,286¥ (385,162)
387,515¥ (385,162)
387,5158,224,799
6,486,581

421,994578,949

7,307
10,165(3,255)
5,682

27,079,298
22,619,539

6,220,724
5,657,425

29,800(28,396)

29,800(28,396)259,626,266
262,599,202
10,375,720
2,626,411

145,525,033
145,215,353
5,251,600
1,995,516

6,021,782(6,164,663)
1,633
3,125

6,021,782(6,164,663)
1,633
3,125

8,824,099
7,087,622

5,742,276
4,739,979

11,40363,914(9,753)45,046///¥(96,645)

Notes: 1. The above transactions are marked to market and charges in unrealized gains (losses) are included in the Consolidated Statements ofOperations.
2. Derivative transactions qualifying for hedge accounting are excluded from the above table.

161

Consolidated Financial Statements of Mizuho Holdings for Fiscal 2001 and 2000

Selected Information from Consolidated Financial Statements(2) Currency-Related Transactions
Millions of yen

At March 31, 2002

Over-the-Counter:
Currency Swaps
Other:
Sold
BoughtContract value
Total
Over one year

Market value

Unrealized
gains (losses)¥ 21,213,205¥ 13,650,730¥ 162,296¥ 49,786

13,956
4,331

13,956
659

(42)
522

(42)
522

/

/

/

¥ 50,266

Market value

Unrealized
gains (losses)

Total

Millions of yen

At March 31, 2001

Over-the-Counter:
Currency Swaps
Other:
Sold
BoughtContract value
Total
Over one year

¥ 17,372,314¥ 12,285,917¥ 225,082¥ 101,465

—
—

—
—

—
—

—
—

/

/

/

¥ 101,465

Total

Notes: 1. The above transactions are marked to market and charges in unrealized gains (losses) are included in the Consolidated Statements ofOperations.
2. Derivative transactions qualifying for hedge accounting and the following transactions described in note 4 are excluded from the abovetable.
3. “Others” denotes swaption transactions.
4. Currency swap transactions which are accrued in accordance with “Tentative Auditing Treatment for the Continuing Adoption of ’New
Foreign Exchange Accouting Standards’ in banking industries” issued by JICPA dated April 10, 2000, at March 31, 2001, and “Tentative
Accounting and Auditing Treatment Relating to Adoption of ‘Accounting for Foreign Currency Transaction’ for Banks” (JICPA Industry
Audit Committee Report No. 20), at March 31, 2002, are excluded from the above tables.
Currency swap transactions accounted for under the accrual method are as follows:
Millions of yen

At March 31,

Currency Swaps

Contract
value

2002
Marketvalue

Unrealized
gains (losses)¥ 825,902¥ 14,901¥ (9,790)

Contract
value

2001
Marketvalue

Unrealized
gains (losses)¥ 1,576,084¥ 10,348¥ (5,114)

5. The following currency forwards, currency options and other transactions are excluded from the above table:* Transactions which are marked to market and of which charges in unrealized gains (losses) are included in the Consolidated Statementsof Operations.
* Transactions which are for financial assets and liabilities denominated in foreign currencies and recognized on the Consolidated Balance
Sheets.
* Transactions denominated in foreign currencies which are eliminated in the consolidation process.
Currency-related derivatives which are marked to market are as follows:
Millions of yen

2002
Contract value

At March 31,

Listed:Futures:
Sold
BoughtOver-the-Counter:
Forwards:
Sold
BoughtOptions:
Sold
Bought

162

¥

—
—

2001
Contract value

¥

1,469
209

14,927,469
19,822,319

24,321,306
28,970,975

4,987,169
4,830,134

4,608,183
4,571,896

(3) Stock-Related Transactions
Millions of yen

2002

2001

Contract value
At March 31,

Listed:Index Futures:
Sold
BoughtIndex Futures Options:
Sold
BoughtOver-the-Counter:
Options:
Sold
BoughtTotal

Contract valueOver
one yearMarketUnrealized
value gains (losses)

¥

—
—

¥ 651
(0)

19,534
10,225——

12,50518,031/

Total¥ 40,892
44

¥

Total

651
(0)

¥ 69,338
15,981

46
195

98
72

1,924
5,311

375
1,394

/

/

Over
one year¥MarketUnrealized
value gains (losses)——¥ 1,002(224)¥ 1,002(224)

35,494
12,046

—
—

128
293

(12)
35

(54)
576

6,182
15,555

1,300
4,673

372
986

(102)
717

¥ 1,343///¥ 1,415

Notes: 1. The above transactions are marked to market and charges in unrealized gains (losses) are included in the Consolidated Statements ofOperations.
2. Derivative transactions qualifying for hedge accounting are excluded from the above table.

(4) Bond-Related Transactions
Millions of yen

2002

2001

Contract value
At March 31,

Listed:Index Futures:
Sold
BoughtIndex Futures Options:
Sold
BoughtOver-the-Counter:
Options:
Sold
Bought
Total

Total

¥ 513,612
363,057

Contract valueOver
one year¥MarketUnrealized
value gains (losses)

Total

Over
one yearMarketUnrealized
value gains (losses)¥——¥ (876)944¥ (876)
944

—
7,851

¥ 1,993(763)¥ 1,993(763)¥621,019
441,976

989,844931,01252,760105,520

967
1,435

(855)
1,012

503,069
440,881

—
—

204
898

402
415

246,429
246,715

502
—

25
100

(98)
22

86,07989,530

—
3,315

217
702

(18)
590

/

/

/

¥ 1,312///¥1,457

Notes: 1. The above transactions are marked to market and charges in unrealized gains (losses) are included in the Consolidated Statements ofOperations.
2. Derivative transactions qualifying for hedge accounting are excluded from the above table.

163

Consolidated Financial Statements of Mizuho Holdings for Fiscal 2001 and 2000

Selected Information from Consolidated Financial Statements(5) Commodity-Related Transactions
Millions of yen

2002

2001

Contract value
Total¥ 39,159
39,159¥ 22,088
22,088¥ 3,754
3,764

/

/

/

At March 31,

Over-the-Counter:
Options:
Sold
BoughtContract valueOver
one year

Total

MarketUnrealized
value gains (losses)¥ (930)
1,259
¥

329

Total

Over
one yearMarketUnrealized
value gains (losses)¥ 5,031
5,031

¥ 496
496

¥ 330
330

/

/

/

¥ 101
(82)
¥

18

Notes: 1. The above transactions are marked to market and charges 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 are oil, copper and aluminium at March 31, 2002, and oil and copper at March 31,2001.

(6) Credit Derivative Transactions
Millions of yen

2002

2001

Contract value
At March 31,

Total

Contract valueOver
one year

Over-the-Counter:
Credit Derivatives:
Sold
Bought¥ 68,987 ¥ 43,999
429,140
412,493

Total/

MarketUnrealized
value gains (losses)

¥

/

(577)
25,230
/

Total

Over
one year(577)
25,230¥ 64,101
124,363¥ 60,021
113,189¥ (504)
1,016¥ (528)1,019¥ 24,652

/

/

/

¥ 490

¥

MarketUnrealized
value gains (losses)

Notes: 1. The above transactions are marked to market and charges 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.

(7) Weather Derivative Transactions
Millions of yen

2002

2001

Contract value
At March 31,

Over-the-Counter:
Weather Derivatives:
Sold
BoughtTotal

Contract value

Total

Over
one yearMarketUnrealized
value gains (losses)

¥ 230
230

¥—
—

¥0
0

/

/

/

Total

Over
one yearMarketUnrealized
value gains (losses)

¥ (0)
0

¥ 595
595

¥—
—

¥ 38
31

¥ 33
(7)

¥—

/

/

/

¥ 26

Notes: 1. The above transactions are marked to market and charges in unrealized gains (losses) are included in the Consolidated Statements ofOperations.
2. Transactions are related to temperature and precipitation.

164

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

Mizuho Financial Group, Inc.

Non-Consolidated Balance SheetAt March 31, 2003

AssetsCurrent Assets
Cash and Due from Banks
Other Current Assets
Non-current Assets
Intangible Assets
Investments in Subsidiaries and Affiliates (Stocks)
Other Investments
Deferred Charges
Total Assets
Liabilities and Shareholders' Equity
Liabilities
Current Liabilities
Commercial Paper
Accrued Expenses
Accrued Taxes
Other Current Liabilities
Total Liabilities
Shareholders' Equity
Common Stock and Preferred Stock
Capital Surplus
Retained Earnings
Appropriated Reserves
Unappropriated Retained Earnings
Treasury Stock
Total Shareholders' Equity
Total Liabilities and Shareholders' Equity

Millions of yen

¥

5,766
3,538
2,228
3,588,658
187
3,588,471
0
1,219

Thousands of U.S. dollars$

47,97229,436
18,53629,855,726
1,556
29,854,170
0
10,143¥ 3,595,643$ 29,913,841¥$

49,75849,000652
98
6413,962
407,654
5,429
823
56

49,758413,962

1,540,965
1,752,885
252,043
4,350
247,693(8)12,820,008
14,583,074
2,096,866
36,1902,060,676(69)

3,545,885

29,499,879¥ 3,595,643$ 29,913,841

Millions of yen

Thousands of U.S. dollars

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥120.20=US$1.00, the foreign exchange rate on March 31, 2003, has been used for translation.

Non-Consolidated Statement of Operations
For the Fiscal Year ended March 31, 2003

Operating Income
Fees and Commissions Received from Subsidiaries and Affiliates¥

Operating Expenses
General and Administrative Expenses
Operating Profits
Non-operating Income
Non-operating Expenses
Income before Income Taxes
Income Taxes:
Current
Deferred
Net Income

¥

957
957

$ 7,968
7,968

604
604

5,026
5,026

353
1,137
1,435

2,942
9,463
11,943

55

462

27
(2)

227
(21)

30

$

256

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥120.20=US$1.00, the foreign exchange rate on March 31, 2003, has been used for translation.

165

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

Mizuho Corporate Bank

Non-Consolidated Balance SheetAt March 31, 2003

Millions of yen

Thousands of U.S. dollars

AssetsCash and Due from Banks
Call Loans
Receivables under Resale Agreements
Pledged Money for Securities Borrowing Transactions
Other Debts 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
Reserve for Possible Losses on Loans
Reserve for Possible Losses on Investmens¥ 3,086,437
410,575
833,285
2,241,428
73,6203,877,428
19,754
14,716,782
27,632,516
540,1312,839,321
264,63438
1,064,486
3,073,167(1,075,211)(4,995)$ 25,677,514
3,415,768
6,932,490
18,647,488
612,484
32,258,139
164,350
122,435,796
229,887,826
4,493,604
23,621,646
2,201,617
318
8,855,962
25,567,121(8,945,183)(41,559)¥ 59,593,402$ 495,785,381¥ 18,386,659
7,878,927
11,701,775
4,568,114
2,191,613
2,265,300
62,0002,789,451
2,036,031
183,016
653,100
2,190,013
3,192
1,435
141,124
63,9783,073,167$ 152,967,220
65,548,484
97,352,541
38,004,276
18,233,058
18,846,090
515,807
23,206,750
16,938,697
1,522,604
5,433,444
18,219,750
26,564
11,943
1,174,078
532,265
25,567,121

58,188,903

484,100,692

1,070,965
1,271,230(1,012,982)
537,115(1,550,098)
104,740(29,453)

8,909,859
10,575,958(8,427,477)
4,468,516(12,895,993)
871,388(245,039)

Total Assets
Liabilities and Shareholders' Equity
Liabilities
Deposits
Debentures
Call Money
Payables under Repurchase Agreements
Pledged Money for Securities Lending Transactions
Bills Sold
Commercial Paper
Trading Liabilities
Borrowed Money
Foreign Exchange Liabilities
Bonds and Notes
Other Liabilities
Reserve for Bonus Payments
Reserve for Employee Retirement Benefits
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 (Deficit):
Appropriated Reserves
Unappropriated Retained Earnings (Deficit)
Revaluation Reserve for Land, net of Taxes
Net Unrealized 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 ¥120.20=US$1.00, the foreign exchange rate on March 31, 2003, has been used for translation.

166

1,404,499

11,684,689¥ 59,593,402$ 495,785,381

Non-Consolidated Statement of Operations
For the Fiscal Year ended March 31, 2003

Millions of yen

Thousands of U.S. dollars

IncomeInterest Income
Loans and Bills Discounted
Securities
Other
Fee and Commission Income
Trading Income
Other Operating Income
Other Income
Total Income
Expenses
Interest Expenses
Deposits
Debentures
Other
Fee and Commission Expenses
Other Operating Expenses
General and Administrative Expenses
Other Expenses
Total Expenses
Loss before Income Taxes
Income Taxes:
Current
Deferred
Net Loss¥

980,833
621,727
256,108
102,997
129,065
65,031
180,666
131,839$

8,160,014
5,172,442
2,130,686
856,886
1,073,754
541,025
1,503,049
1,096,838

1,487,436

12,374,680

549,642
132,470
112,226
304,944
32,26572,884
290,539
2,118,475

4,572,729
1,102,086
933,669
2,536,974
268,433
606,358
2,417,130
17,624,590

3,063,806

25,489,240(1,576,370)(13,114,560)

39
57,032

325
474,478¥ (1,633,441)$ (13,589,363)

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥120.20=US$1.00, the foreign exchange rate on March 31, 2003, has been used for translation.

167

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

Mizuho Bank

Non-Consolidated Balance SheetAt March 31, 2003

Millions of yen

Thousands of U.S. dollars

AssetsCash and Due from Banks
Call Loans and Bills Purchased
Pledged Money for Securities Borrowing Transactions
Other Debts Purchased
Trading Assets
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
Reserve for Possible Losses on Loans
Reserve for Possible Losses on Investments¥ 5,767,724
7,000,000
3,434,253
631,480
1,261,417
8,535,213
37,885,417
156,348
1,448,203
1,200,354
1,002
913,837
2,082,156(829,621)(182,013)$ 47,984,397
58,236,273
28,571,164
5,253,583
10,494,326
71,008,433
315,186,501
1,300,740
12,048,286
9,986,312
8,343
7,602,639
17,322,434(6,902,012)(1,514,255)¥ 69,305,777$ 576,587,164¥ 52,165,166
3,918,740
1,217,900
42,967
953,358
2,523,800
1,101,390
1,495,032
10,712
1,860,847
8,072
24,936
22,8402
189,371
2,082,156$ 433,986,408
32,601,834
10,132,279
357,471
7,931,437
20,996,672
9,162,983
12,437,876
89,124
15,481,261
67,161
207,462
190,01720
1,575,474
17,322,434

67,617,297

562,539,913

650,000
981,668(219,322)
340,864(560,187)
277,061(927)

5,407,654
8,166,959(1,824,647)
2,835,811(4,660,458)
2,305,003(7,718)

Total Assets
Liabilities and Shareholders' Equity
Liabilities
Deposits
Debentures
Call Money
Payables under Repurchase Agreements
Pledged Money for Securities Lending Transactions
Bills Sold
Trading Liabilities
Borrowed Money
Foreign Exchange Liabilities
Other Liabilities
Reserve for Bonus Payments
Reserve for Possible Losses on Loans Sold
Reserve for Possible Losses on Support of Specific Borrowers
Reserve under Special Laws
Deferred Tax Liabilities for Revaluation Reserve for Land
Acceptances and Guarantees
Total Liabilities
Shareholders' Equity
Common Stock and Preferred Stock
Capital Surplus
Retained Earnings (Deficit):
Appropriated Reserves
Unappropriated Retained Earnings (Deficit)
Revaluation Reserve for Land, net of Taxes
Net Unrealized 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 ¥120.20=US$1.00, the foreign exchange rate on March 31, 2003, has been used for translation.

168

1,688,479

14,047,251¥ 69,305,777$ 576,587,164

Non-Consolidated Statement of Operations
For the Fiscal Year ended March 31, 2003

Millions of yen

Thousands of U.S. dollars

IncomeInterest Income
Loans and Bills Discounted
Securities
Other
Fee and Commission Income
Trading Income
Other Operating Income
Other Income
Total Income
Expenses
Interest Expenses
Debentures
Deposits
Other
Fee and Commission Expenses
Trading Expenses
Other Operating Expenses
General and Administrative Expenses
Other Expenses
Total Expenses
Loss before Income Taxes
Income Taxes:
Current
Deferred
Net Loss¥

793,797
686,10271,35536,339184,973
41,291
166,381
63,390$6,603,973
5,708,005
593,643
302,325
1,538,880
343,525
1,384,202
527,377

1,249,834

10,397,957

98,556
11,532
39,04647,97753,14460
29,268635,314
1,147,765

819,934
95,945324,842
399,147
442,131504
243,496
5,285,476
9,548,794

1,964,108

16,340,335(714,273)(5,942,378)

938(86,656)

7,809(720,935)¥ (628,556)$ (5,229,252)

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥120.20=US$1.00, the foreign exchange rate on March 31, 2003, has been used for translation.

169

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

Mizuho Securities

Non-Consolidated Balance SheetAt March 31, 2003

AssetsCash and Cash Equivalents
Cash and Cash Equivalents Segregated as Deposits
Receivables:
Short-term Loans
Accrued Income
Other
Trading Assets
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
Statutory Reserves
Total Liabilities
Shareholders' Equity
Common Stock
Capital Surplus
Retained Earnings (Deficit)
Net Unrealized 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 ¥120.20=US$1.00, the foreign exchange rate on March 31, 2003, has been used for translation.

170

Millions of yen¥

36,562
1,304

Thousands of U.S. dollars$

304,182
10,852

70
8,890
3,480
3,373,694
2,438,639
8,826(3,715)71,861
3,668
12,679582
73,96828,952
28,067,341
20,288,180
73,430(30,908)
597,848
30,520105,484¥ 5,955,961$ 49,550,431¥

391,255
91,400$ 3,255,036
760,399

426,960129
1,704
1,894,275
419,584
2,475,373

3,552,088
1,080
14,181
15,759,364
3,490,720
20,593,788

4,326
7,652
439

35,991
63,664
3,660

5,713,102

47,529,971

150,200
95,324(419)(2,245)

1,249,584
793,049(3,492)(18,681)242,859

2,020,460¥ 5,955,961$ 49,550,431

Non-Consolidated Statement of Operations
For the Fiscal Year ended March 31, 2003

Millions of yen

Thousands of U.S. dollars¥ 32,747
16,4069,553
96$ 272,443
136,491
79,483802

Subtotal
Less: Interest Expenses

58,804(2,461)

489,219(20,481)

Total Income

56,342

468,738

33,58913,685

279,447
113,853

47,274393,300

9,067

75,438

5,767
(742)

47,978(6,179)

IncomeCommission Income
Trading Income
Interest and Dividend Income
Other Income

Expenses
Selling, General and Administrative Expenses
Other Expenses
Total Expenses
Income before Income Taxes
Income Taxes:
Current
Deferred
Net Income

¥

4,043

$

33,639Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥120.20=US$1.00, the foreign exchange rate on March 31, 2003, has been used for translation.

171

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

Mizuho Trust & Banking

Non-Consolidated Balance SheetAt March 31, 2003

AssetsCash and Due from Banks
Monetary Receivables Bought
Trading Assets
Money Held in Trust
Investment Securities
Loans and Bills Discounted
Foreign Exchange Assets
Other Assets
Premises and Equipment
Deferred Tax Assets
Customers' Liabilities for Acceptances and Guarantees
Reserve for Possible Losses on Loans
Total Assets

Millions of yen¥

536,469
84,111
124,720441
1,298,410
3,414,209
1,565
269,148
55,722141,092
216,089(64,183)

Thousands of U.S. dollars$

4,463,137
699,764
1,037,609
3,670
10,802,082
28,404,409
13,0272,239,173
463,580
1,173,816
1,797,745(533,976)¥ 6,077,797$ 50,564,036¥ 3,177,171
440,600
325,055
114,751
142,835
10
127,900
4,731
1,094,630
159,402
1,475
7,589
624
4,200
216,089$ 26,432,372
3,665,557
2,704,286
954,672
1,188,318
90
1,064,060
39,3609,106,739
1,326,148
12,276
63,143
5,199
34,942
1,797,745

5,817,067

48,394,907

Common Stock and Preferred Stock247,2312,056,838

Capital Surplus
Retained Earnings (Deficit)
Net Unrealized Gains on Other Securities, net of Taxes
Treasury Stock117,203(104,990)
1,299
(15)

975,069(873,466)
10,814(126)

Liabilities and Shareholders' Equity
Liabilities
Deposits
Call Money and Bills Sold
Guarantee Deposit Received under Securities Lending Transactions
Trading Liabilities
Borrowed Money
Foreign Exchange Liabilities
Subordinated Bonds
Bonds with Stock Options
Due to Trust Account
Other Liabilities
Reserve for Bonus Payments
Reserve for Employee Retirement Benefits
Reserve for Possible Losses on Loans Sold
Reserve for Possible Losses on Support of Specific Borrowers
Acceptances and Guarantees
Total Liabilities
Shareholders' Equity

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 ¥120.20=US$1.00, the foreign exchange rate on March 31, 2003, has been used for translation.

172

260,7292,169,129¥ 6,077,797$ 50,564,036

Non-Consolidated Statement of Operations
For the Fiscal Year ended March 31, 2003

Millions of yen

Thousands of U.S. dollars

IncomeTrust Fees
Interest Income
Loans and Discounts
Securities
Other
Fee and Commission Income
Trading Income
Other Operating Income
Other Income
Total Income
Expenses
Interest Expenses
Deposits
Borrowings and Rediscounts
Other
Fee and Commission Expenses
Other Operating Expenses
General and Administrative Expenses
Other Expenses
Total Expenses
Loss before Income Taxes
Income Taxes:
Current
Deferred
Net Loss¥

35,55180,011
61,50916,5401,961
22,215
3,656
11,28927,240$295,768
665,650
511,722
137,606
16,322
184,82130,41993,920226,626

179,963

1,497,204

38,538
11,5582,102
24,876
3,847
995
54,380169,703

320,619
96,162
17,496
206,961
32,0108,281
452,414
1,411,839

267,464

2,225,163(87,500)(727,959)

21
17,558181
146,074¥ (105,080)$ (874,214)

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥120.20=US$1.00, the foreign exchange rate on March 31, 2003, has been used for translation.

173

Senior Executive Officers of Mizuho

Mizuho Financial Group, Inc.

Mizuho Corporate Bank

Mizuho Bank

Board of Directors

Board of Directors

Board of Directors

Terunobu Maeda*

Hiroshi Saito*

Tadashi Kudo*

President & CEO

President & CEO

President & CEO

Seiji Sugiyama*

Nobuhiro Mori*

Yukio Obara*

Deputy President

Deputy President

Deputy President

Head of IT, Systems & Operations Group /Chief Information Officer (CIO)

Chief Compliance Officer /Head of Audit & Compliance Group

Tsutomu Abe*

Mitsuru Machida*Toshiaki Ouchi*

Managing Director

Deputy President

Head of Financial Control and Accounting
Group and General Manager of ALM and
Trading Planning / Chief Financial Officer (CFO)

Teruhiko Ikeda*

Jun Kawada*

Michio Ueno*

Managing Director

Senior Managing Director

Kazumi Yanagihara*

Head of Strategic Planning Group and Headof Audit and Compliance Group / Chief
Strategy Officer (CSO) / Chief Compliance
Officer (CCO)

Head of International Banking Unit

Senior Managing Director

Takashi Goto*

Shinichi Watanabe*

Deputy President

Deputy President

Yoshiro Aoki*
Senior Managing Director

Yasuo Tsunemi*
Senior Managing Director

Managing Director

Managing Director

Director

Chief Strategy Officer / Head of Strategic
Planning Group
Chief Credit Officer / Head of Credit

Corporate Auditors

Tadashi Kudo

Toshikazu Kitano*

Corporate Auditor

Director

Managing Director

Hiroshi Saito

Yoshiharu Fukuhara
Director

Head of Corporate Banking Unit

Masayoshi Ejiri
Kiyotaka Noborihayashi
Corporate Auditor

Corporate Auditors

Toshiaki Hasegawa
Corporate Auditor

Director

Kohei Yamashiro
Corporate Auditor

Hidemi Ueda

Corporate Auditors

Junichi Miyazaki

Corporate Auditor

Glen S. Fukushima

Akio Takeuchi
Corporate Auditor

Hidemi Ueda
Corporate Auditor

Setsuo Umezawa
Corporate Auditor

Yukio Nozaki

Corporate Auditor

Yukio Nozaki
Akio Takeuchi
Corporate Auditor

Seiichiro Sato

Toshiaki Hasegawa

Head of Europe, Africa and the Middle East

Executive Officers
Takashi Tsukamoto
Managing Executive Officer
Head of Risk Management Group and Headof Human Resources Group and General
Manager of Post-retirement Counseling /Chief Risk Officer (CRO) / Chief Human
Resources Officer (CHRO)

Yoshiaki Sugita
Executive Officer

Board of Directors
Yoshio Osawa
President

Executive Officers

Corporate Auditor
Corporate Auditor

Mizuho Securities

Corporate Auditor

Managing Executive Officer

Masatsugu Nagato
Managing Executive Officer
Head of the Americas

Yasufumi Miyazaki
Managing Executive Officer

Hideo Arai
Deputy President

Takayasu Tanaka
Deputy President

Shinji Ichishima
Deputy President

Mizuho Trust & Banking

Head of Asia and Oceania

Board of Directors
Hiroaki Etoh
President and CEO

Takeo Sekihara
Deputy President

Hirokazu Ishikawa
Deputy President

Hidehiko Naito
Deputy President
Notes: 1. The Directors concurrently serving as Executive Officers.
*
2. The Executive Officers, excluding the Directors concurrently serving as the Executive Officers and Executive Officers responsible for global regional operations of Mizuho Corporate Bank, havenot been listed.
3. The Executive Officers, excluding the Directors concurrently serving as the 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 well as 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, havenot been listed.

(As of July 31, 2003)

174

Office Network of Mizuho

Domestic Network of Mizuho(as of March 31, 2003)

Mizuho Financial Group, Inc.

Mizuho Corporate Bank

Mizuho Securities

Head Office

Head Office and Branches: 18

Head OfficeMizuho Holdings

Mizuho Bank

Mizuho Trust & Banking

Head Office

Head Office and Branches: 544
Sub-branches: 97
Agencies: 4

Head Office and Branches: 38

International Network of Mizuho(as of July 31, 2003)

Xiamen Representative Office

Labuan Branch

Branches and Representative
OfficesRoom 915, East Ocean Building Hotel, No.1
Building, Zhongshan Road, Xiamen, Fujian
361001, The People's Republic of China
TEL 86-592-202-1111 (ex 2915)

Level 9 (B) & (C), Main Office Tower,
Financial Park Labuan, Jalan Merdeka,
87000 Federal Territory of Labuan, Malaysia
TEL 60-87-417766

Seoul Branch

Guangzhou Representative Office

Labuan Branch,Kuala Lumpur
Marketing Office

Asia and Oceania

14th Floor, Nae Wei Building, 6, 2-ka, Eulji-ro,
Chung-ku, Seoul, Republic of Korea
TEL 822-3782-8500

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

Dalian Branch
6th Floor, Senmao Building, Zhongshan
Road 147, Xigang District, Dalian 116011,
The People's Republic of China
TEL 86-411-3602543

Beijing Branch

12th Floor, Garden Tower, 368 Huanshi
Dong Lu, Guangzhou 510064,
The People's Republic of China
TEL 86-20-8385-8000

Hong Kong Branch

Kuala Lumpur Representative Office

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

Taipei Branch
2nd Floor, Hung Kuo Building, 167 Tun Hua
North Road, Taipei 105, Taiwan
TEL 886-2-2715-3911

Kaohsiung Branch

8th Floor, Chang-Fu-Gong Office Building, Jia 26,
Jianguomenwai Street, Chaoyang District,
Beijing 100022, The People's Republic of China
TEL 86-10-6513-9026

12th Floor, No.2, Chung Cheng 3rd Road,
Kaohsiung 800, Taiwan
TEL 886-7-236-8768

Shenzhen Branch

26th Floor, Citibank Tower, Valero Street corner
Villar Street, Salcedo Village, Makati City,
Metro Manila, Philippines
TEL 63-2-848-0001

21st Floor, Shenzhen International Financial
Building, Jian She Lu, Shenzhen, Guangdong
Province, The People's Republic of China
TEL 86-755-8222-1918

Tianjin Representative Office
Room 2202, Tianjin International Building 75,
Nanjing Road, Tianjin,
The People's Republic of China
TEL 86-22-2330-5448

Level 34, Menara Maxis, Kuala Lumpur City
Centre, 50088 Kuala Lumpur, Malaysia
TEL 60-3-2070-6880

Manila Branch

Hanoi Branch
Suite 403~407, 63 LTT Building,
63 Ly Thai To Street, Hanoi,
Socialist Republic of Vietnam
TEL 84-4-826-6553

Singapore Branch
168 Robinson Road, #13-00 Capital Tower,
Singapore 068912, Republic of Singapore
TEL 65-6423-0330

Mumbai Branch
Maker Chamber III, 1st Floor, Jamnalal Bajaj Road,
Nariman Point, Mumbai, 400021 India
TEL 91-22-2288-6638

New Delhi Representative Office
DBS Business Centre, 1st Floor, World Trade
Tower, Barakhamba Lane, New Delhi 110 001
India
TEL 91-11-341-2190

Sydney Branch
Level 33, 60 Margaret Street, Sydney, N.S.W. 2000,
Australia
TEL 61-2-8273-3888

Subsidiaries

Nanjing Representative Office

Ho Chi Minh City Representative
OfficeRoom 801, Nanjing Grand Hotel, 208 Guangzhou
Road. Nanjing, Jiangsu Province,
The People's Republic of China
TEL 86-25-332-9379

7th Floor, The Landmark, 5B Ton Duc Thang
Street, District 1, Ho Chi Minh City,
Socialist Republic of Vietnam
TEL 84-8-8228-638

Plaza Bll Menara 2, 24th Floor, JL., M.H. Thamrin
No. 51, Jakarta 10350, Indonesia
TEL 62-21-392-5222

Wuhan Representative Office

Bangkok Branch

Room 305, Holiday Inn Tian-an Wuhan,
868 Jiefang Dadao, Wuhan 430022,
The People's Republic of China
TEL 86-27-8582-1155

18th Floor, TISCO Tower,
48 North Sathorn Road, Silom,
Bangrak, Bangkok 10500, Thailand
TEL 66-2-638-0200

17th Floor, Two Pacific Place, 88 Queensway,
Hong Kong, S.A.R., The People's Republic of China
TEL 852-2103-3040

PT. Bank Mizuho Indonesia

Mizuho Corporate Asia (HK) Limited

Mizuho Corporate Leasing (Thailand)Co., Ltd.
19th Floor, TISCO Tower 48/44 North Sathorn
Road, Silom, Bangrak, Bangkok 10500, Thailand
TEL 662-638-0900

Note: All overseas offices are those of Mizuho Corporate Bank except for offices as indicated as follows:* Subsidiary of Mizuho Securities** Subsidiary of Mizuho Trust & Banking*** Subsidiary of DLIBJ Asset Management

175Office Network of Mizuho

Mizuho Capital Markets (HK) Limited

Mizuho Securities USA Inc.*

Mizuho Capital Markets (UK) Limited

16th Floor, Two Pacific Place, 88 Queensway,
Hong Kong, S.A.R.,
The People's Republic of China
TEL 852-2537-3815

Waterfront Corporate Center, 111 River Street,
11th Floor, Hoboken,
NJ 07030, U.S.A.
TEL 1-201-626-1000

River Plate House, 7-11 Finsbury Circus,
London EC2M 7DH, UK
TEL 44-20-7972-9900

Mizuho Securities Asia Limited*

The Bridgeford Group, Inc.*

Mizuho Corporate Bank-BA
Investment Consulting GmbH

Suites 901-907, Level 9, CITIC Tower,
1 Tim Mei Avenue, Central, Hong Kong, S.A.R.,
The People's Republic of China
TEL 852-2685-2000

445 Park Avenue, 20th Floor, New York,NY 10022, U.S.A.
TEL 1-212-705-0880

Landhausgasse 4/7, 1010 Vienna, Austria
TEL 43-1-5355868

Mizuho Futures (Singapore) Pte.
Limited*666 Fifth Avenue, Suite 802, New York,NY 10103, U.S.A.
TEL 1-212-373-5900

Six Battery Road, #18-05 Singapore 049909,
Republic of Singapore
TEL 65-6221-3633

The Americas
Branches, Agency and
Representative Offices
New York Branch
1251 Avenue of the Americas,
New York, NY 10020, U.S.A.
TEL 1-212-282-3000

Chicago Branch
AT&T Corporate Center, Suite 2600,
227 West Monroe Street, Chicago,
IL 60606, U.S.A.
TEL 1-312-855-1111

Los Angeles Agency
350 South Grand Avenue, Suite 1500,
Los Angeles, CA 90071, U.S.A.
TEL 1-213-243-4500

Panama Branch
Plaza Internacional, Vía España,
P.O.Box 2637, Panama 9A,
Republic of Panama
TEL 507-269-6111

Mexico Representative Office
Edificio Omega, Campos Eliseos No.345-11,
Col. Chapultepec Polanco, Deleg. Miguel Hidalgo,
11560 Mexico, D.F., Mexico
TEL 52-55-5281-5037

São Paulo Representative Office
Avenida Paulista,1274-11˚ andar, CEP.01310-926,
São Paulo, SP, Brazil
TEL 55-11-251-4199

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

Europe and the Middle East
Branches and Representative
Offices
London BranchRiver Plate House, 7-11 Finsbury Circus,
London EC2M 7DH, UK
TEL 44-20-7012-4000

Paris Branch
Washington Plaza 40, rue Washington,
75408 Paris Cedex 08, France
TEL 33-1-5383-4100

Düsseldorf Branch
Königsallee 60 D, 40212 Düsseldorf,
F.R. Germany
TEL 49-211-13020

Milan Branch
Via Senato 14/16, 20121 Milan, Italy
TEL 39-02-760-861

Madrid Branch
Torre Picasso Planta 9,
Plaza Pablo Ruiz Picasso, 1 AZCA,
28020 Madrid, SpainTEL 34-91-597-2612

Bahrain Representative OfficeSubsidiaries

Suite 201-202, Entrance 4,
2nd Floor Manama Center,
Manama, Bahrain(P.O. BOX 5759, Manama, Bahrain)
TEL 973-224522

Mizuho Corporate Bank (Canada)

Tehran Representative Office

Suite 1102, 100 Yonge Street, Toronto, Ontario,
Canada M5C 2W1
TEL 1-416-874-0222

3rd Floor, No.1, 14th Street,
Khaled Eslamboli Avenue, Tehran 15117, IranTEL 98-21-872-6593

Mizuho Corporate Bank of California
555 West Fifth Street, Los Angeles,
CA 90013, U.S.A.
TEL 1-213-612-2700

Mizuho Coporate Bank (USA)1251 Avenue of the Americas, New York,NY 10020, U.S.A.
TEL 1-212-282-3030

Mizuho Capital Markets Corporation
1440 Broadway, 25th Floor, New York,NY 10018, U.S.A.
TEL 1-212-547-1500

176

Mizuho Trust & Banking Co.(USA) **Subsidiaries
Mizuho Corporate Bank Nederland
N.V.
Apollolaan 171, 1077 AS Amsterdam,
The Netherlands
TEL 31-20-5734343

Mizuho Corporate Bank (Germany)
Aktiengesellschaft
Taunustor 2,60311 Frankfurt am Main,
F.R. Germany
TEL 49-69-27282-0

Mizuho International plc*
Bracken House, One Friday Street,
London EC4M 9JA, UK
TEL 44-20-7236-1090

Mizuho Bank (Switzerland) Ltd.*
Loewenstrasse 32, CH-8023 Zurich, Switzerland
TEL 41-1-216-9111

Mizuho Trust & Banking(Luxembourg) S.A.**
1B, Parc d'Activité Syrdall, L-5365 Munsbach,Luxembourg
TEL 352-4216171

DLIBJ Asset Management
International Ltd.***Bracken House, One Friday Street, London,
EC4M 9JA, UK
TEL 44-20-7329-3777

Investor Information on Mizuho Financial Group, Inc.

Date of Establishment

Accounting Auditors

January 8, 2003

Shin Nihon & Co.

Paid-in Capital

Transfer Agent¥1,540,965 million

Mizuho Trust & Banking Co., Ltd.

Outstanding SharesFiscal Year12,727,356.71 shares
Common Shares: 10,582,426.71 shares
Preferred Shares:
2,144,930 shares

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 three months from the last
day of each business year, and an extraordinary general
meeting of shareholders shall be convened whenevernecessary.

Number of Shareholders
Common Shares:
Preferred Shares:

253,1033,429

Principal Shareholders (Common Stock)
Percentageof shares
outstanding
Shares held(%)

Mizuho Holdings, Inc.

1,155,839.83

10.92

Japan Trustee Services Bank, Ltd.
(Trust account)

368,390.00

3.48

The Dai-ichi Mutual Life Insurance
Company

349,158.00

3.29

The Master Trust Bank of Japan, Ltd.
(Trust account)
225,860.00

2.13

Nippon Life Insurance Company

189,476.76

1.79

Asahi Mutual Life Insurance
Company

175,608.00

1.65

Sompo Japan Insurance Inc.

150,882.00

1.42

UFJ Trust Bank Limited(Trust account A)

102,272.00

0.96

The Yasuda Mutual Life
Insurance Company

87,809.00

0.82

Shinsei Bank, Limited

77,476.12

0.73(as of March 31, 2003)

Stock Listings
Tokyo Stock Exchange
Osaka Securities Exchange

Record Date
The Company shall deem shareholders having voting rights
appearing in writing or digitally on the last register of shareholders (including the register of beneficial shareholders; thesame shall apply hereinafter) as of March 31 of each 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 upon giving aprior 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 tothe holders of fractional shares appearing in writing or digitally on the last register of holders of fractional shares as ofMarch 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 to as “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 register of holders of fractional shares as of September 30 of each year.

177Disclosure Policy of Mizuho

MHFG aims to provide customers and shareholders
with information on the group’s various “values.” 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 attach the highest management priority to disclose to our customers, shareholders and investors in Japan and overseas the information they need to form accurate judgments and appraisals of the group's
status at any given time.
Since we aim to become an innovative financial services group that leads the new era in the global financial marketplace, weare committed to provide ongoing disclosure on a timely, appropriate and impartial basis as a means of achieving levels of management transparency that surpass global standards.
Specifically, we intend to use the following tools to promote further understanding of group activities:*IR meetings and other briefings by top executives, and disclosure of the content of such meetings on our Web site.
*Highly detailed annual reports and other publications.
*Diversification and effective use of disclosure channels such as our Web site, conference calls and Internet conferencing.

Mizuho's IR Home Page

 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.

178

Contact Information

Mizuho Financial Group, Inc.
Marunouchi Center Building,
1-6-1, Marunouchi,
Chiyoda-ku, Tokyo 100-0005,
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 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/

Mizuho Trust & Banking Co., Ltd.
1-2-1, Yaesu,
Chuo-ku, Tokyo 100-8670,
Japan
Tel. +81-(0)3-3278-8111
URL: http://www.mizuho-tb.co.jp/

179

P rinte d in Ja pa n