Annual Report(April 2005~ March 2006)

Financial Highlights of Mizuho Financial Group, Inc. (Consolidated)
Millions of yen
2006

For the Fiscal Years ended March 31,

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

¥

2005

3,732,166
2,752,024
980,142649,903
81,421¥Thousands of U.S. dollars
2006

3,455,653
2,512,594
943,059
627,383
79,929$31,771,232
23,427,462
8,343,770
5,532,510
693,122*Non-consolidated basis.

Millions of yen
2006

At March 31,

Total Assets
Securities
Loans and Bills Discounted
Deposits
Total Shareholders' Equity¥ 149,612,794
37,702,957
65,408,672
82,367,125
4,804,993

2005

Thousands of U.S. dollars
2006¥ 143,076,236
36,047,035
62,917,336
80,368,058¥ 3,905,726$ 1,273,625,558
320,958,179
556,811,715
701,175,838$
40,904,007

2005

U.S. dollars
2006

Yen
For the Fiscal Years ended March 31,

2006

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

55,157.14¥

54,625.61$

469.54

4,000

3,500

34.05

/
/
47,60042,000—///20,000/30,0008,200
14,00047,60042,00011,000
8,000
—
5,380
20,000—30,000//405.21357.54—///170.26/255.382006

2005

11.59%

11.91%*Non-consolidated basis.

At March 31,

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

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

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

A
A+
A+
A+
A+

a–1
a–1
a–1
a–1
a–1

—
AA–
AA–
A+
AA–

—
—
—
—
J–1+

—
A1
A1
A1
A1*

P–1
P–1
P–1
P–1
P–1*

A–
A
A
A
—

—
A–1
A–1
A–1
—

A
A
A
A
—

F1
F1
F1
F1
—

*Credit ratings for EMTN programme (Joint Medium-term Note Programme with Mizuho International, based on keepwell agreement with Mizuho Corporate Bank).
(As of August 25, 2006)

2006 Mizuho Financial Group Annual Report2
4

A Message from the President & CEO of Mizuho Financial Group, Inc.
Summary of Financial Results for Fiscal 2005
Mizuho Corporate Bank, Ltd.

6

Aiming to Become “One World-Class Company”
Mizuho Bank, Ltd.

8
10

Our Goal is to Have Our Customers Say “I Want to Deal with Mizuho”
Securities, Trust and Asset Management Business Strategies

12

Pursuing the “Channel to Discovery” Plan

16
18
20

Business Outline of Mizuho
Office Network of Mizuho
Business Approaches Adopted by Each Global Group44

Brand Strategy

46
50

Management Structure of Mizuho
Internal Control Systems of Mizuho

67
99
147

Financial Analysis of Mizuho [Under Japanese GAAP]
Financial Data of Mizuho Financial Group, Inc. [Under Japanese GAAP]
Non-Consolidated Financial Statements of Mizuho Financial Group, Inc.
and Four Subsidiaries [Under Japanese GAAP]

159
160
163

Senior Executives of Mizuho
Office Network of Mizuho
Investor Information on Mizuho Financial Group, Inc.

All figures contained in this report are calculated using accounting principles generally accepted in Japan (“Japanese GAAP”).

Forward-Looking Statements
This document contains statements that constitute forward-looking statements within the meaning of the United States Private
Securities Litigation Reform Act of 1995. Such forward-looking statements do not represent any guarantee by management of future
performance.
In many cases, but not all, we use such words as “aim,” “anticipate,” “believe,” “endeavor,” “estimate,” “expect,” “intend,” “may,”“plan,” “probability,” “project,” “risk,” “seek,” “should,” “strive,” “target” and similar expressions in relation to us or our management
to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions. These statements reflect our current views with respect to future events and are subject to risks, uncertainties and assumptions.
We may not be successful in implementing our business strategies, and management may fail to achieve its targets, for a wide rangeof possible reasons, including, without limitation: incurrence of significant credit-related costs; declines in the value of our securities portfolio; changes in interest rates; foreign currency fluctuations; revised assumptions or other changes related to our pension plans; failure
to maintain required capital adequacy ratio levels; downgrades in our credit ratings; the effectiveness of our operational, legal and otherrisk management policies; our ability to avoid reputational harm; and the effect of changes in general economic conditions in Japan.
We do not intend to update our forward-looking statements. We are under no obligation, and disclaim any obligation, to update oralter our forward-looking statements, whether as a result of new information, future events or otherwise.

1

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

We began to implement our business strategy, the“Channel to Discovery” Plan, in April 2005, with theobjectives of winning the even-stronger support of ourcustomers and creating a world-leading financial group.
Under this plan, we are steadily implementing two key
strategic initiatives—the Business Portfolio Strategy andthe Corporate Management Strategy.
As a result of these initiatives, we recorded
consolidated net income of ¥649.9 billion for fiscal
2005 representing a further gain over the previous fiscal
year. We also achieved additional improvement infinancial soundness.
Along with sustained profitability and increased

Three Global Groups Offer Services to Meet theSpecific Needs of Each Customer Segment

our membership service platform called the Mizuho

As part of our Business Portfolio Strategy, we

and middle market corporations, it supplies significant

realigned our businesses into three global groups tofunds for meeting sound loan demands, and proac-provide services customized to suit the needs of

tively promotes solutions businesses.

Mileage Club. For small and medium-sized enterprises

particular customer segments. The Global Corporate

In the Global Asset & Wealth Management Group,Group, the Global Retail Group, and the Global Asset

Mizuho Trust & Banking works to further strengthen& Wealth Management Group leverage their

the capabilities of its trust and asset management

strengths and capabilities and take initiatives to offer

businesses and cooperates even more closely withthe best financial products, services and solutions toother group companies. In addition, in October

our customers.

2005, we established Mizuho Private WealthThe principal companies in the Global Corporate
Group are Mizuho Corporate Bank and Mizuho

Management, a subsidiary that offers full-fledged
private banking services.

Securities. This group works to meet the requirements
strengthening our syndicated loan business, where

Improving Management Transparency andPromoting CSR Activities

Mizuho maintains a strong presence as a market

The other strategic initiative supporting the “Channel toleader, and implementing other strategies to further

Discovery” Plan is the Corporate Management Strategy.

increase our global presence by expanding and

One of the key elements of this strategy is to increaseenhancing the capabilities of our overseas network. In

transparency in corporate governance to further

addition to these initiatives, the Global Corporate

enhance the confidence that investors have in ourGroup continues to enhance such businesses asgroup. In line with this strategy, we are moving ahead

corporate banking, securities and investment banking.

steadily with the preparations, including enhancement

In the Global Retail Group, its core company Mizuho

of our management controls, for our listing on the Newof major corporations and multinationals by further

Bank works to further strengthen our capabilities for2

York Stock Exchange as soon as feasible.

meeting the needs of individual customers, especially in

In our corporate social responsibility (CSR) activities,

the fields of consulting and lending services, while also

we implemented environmental initiatives, provided

working to improve the attractiveness to customers of

support for financial education, and engaged in otheradequacy ratio was maintained at a sufficient level offinancial soundness, I am pleased to report that in
July 2006 we completed the repayment of all
public funds totaling ¥2,949.0 billion, that had
been provided to us in March 1998 and March
1999. Supported by these public funds for a periodof more than eight years, we were able to focus
on making our business revitalization a success.
We sincerely appreciate your understanding andcontinued support over this period.
In the following sections, I would like toexplain our group’s management strategies andaccomplishments in more detail.

11.59% as of the end of March 2006.
Along with our success in securing stable profits andimproving our financial soundness, during fiscal 2005,
we repurchased preferred stock of public funds of¥866.4 billion. In July 2006, we repurchased preferredstock of public funds of ¥600.0 billion and completed
the repayment of all public funds.
In November 2005, we conducted an offering of
763,000 shares of common stock (¥531.6 billion) of
Mizuho Financial Group, Inc. (MHFG), held by its
subsidiary Mizuho Financial Strategy Co., Ltd. (MHFS),
formerly known as Mizuho Holdings, Inc. In July 2006,
we repurchased and cancelled 131,800 shares ofcommon stock (¥129.9 billion) of MHFG held by MHFS.
With respect to the remaining common stock of MHFG

activities. Our CSR Report provides details on these

held by MHFS after the above offering as well as theactivities. We also moved forward with initiatives torepurchase and cancellation, we intend to repurchasestrengthen our corporate brand strategy.

and cancel them after fiscal 2006, taking into
consideration our financial condition.

Solid Progress in Increasing Profitability and
Further Improvements in Financial Strength
As a consequence of our efforts mentioned above, inFulfilling Our Social Responsibilities while
Recognizing the Public Role of Our Businessfiscal 2005, we recorded a steady increase in income in

We will move ahead proactively with the steadysuch areas as retail banking, which was our growth

implementation of our “Channel to Discovery” Plan.

business area, solutions businesses, and overseas

Backed by the support of our customers, we will workbusinesses. Regarding general and administrative

to enhance our corporate value by strengthening our

expenses, we allocated our management resourcescompetitiveness and profitability.

aggressively in growth areas, while further reducing
existing costs.

At the same time, recognizing the public nature ofour business as a financial institution, we plan toMoreover, we made additional progress in improving

continue contributing to society through various

our financial soundness and established top-levelmeasures, such as offering products and services that

financial strength among the Japanese mega banks.

meet the needs of our customers and engaging in CSR

The non-performing loan ratio as of the end of March

activities that aim for harmonious coexistence with

2006 was 1.41%, representing a further decline fromsociety, while endeavoring to increase our corporate

the previous fiscal year-end. Consolidated net deferredvalue. We look forward to your continuing support as

tax assets also significantly decreased.

we make further progress toward our objectives.

As mentioned earlier, consolidated net income of

July 2006

the group increased to ¥649.9 billion, and net income
per share of common stock also showed a steady rise.
In view of these financial results, we decided to increase

Terunobu Maeda

the year-end cash dividend per share for fiscal 2005 to

President & CEO
Mizuho Financial Group, Inc.

¥4,000 and made dividend payments on preferredstock as prescribed. The consolidated BIS capital3

Summary of Financial Results for Fiscal 2005

Based on our business strategy called the “Channel to Discovery” Plan, we advanced into a new phase in ourmanagement strategies and focused on increasing our top-line profits as well as implementing disciplined capitalmanagement. As a consequence, we recorded consolidated net income of ¥649.9 billion.

Summary of Income Analysis

Increase in Net Fee and Commission Income

Our consolidated gross profits increased by ¥9.3 billion(Billions of yen)
600

compared with the previous fiscal year. If we exclude

Consolidated
The Three Banks

the effect of the disposition of unrealized losses on+ 83.3+ 46.0400

bond portfolios in March 2006 (¥138.5 billion for+ 63.3+ 46.5“Three Banks”: Mizuho Corporate Bank (MHCB),
200

Mizuho Bank (MHBK) and Mizuho Trust & Banking(MHTB)), which we carried out in light of such factors

0

as interest rate trends, consolidated gross profits

Fiscal 2003

Fiscal 2004

Fiscal 2005

¥426.6 bn.

¥472.6 bn.

¥555.9 bn.

The Three Banks ¥268.5 bn.

¥315.1 bn.

¥378.4 bn.

increased by 7.4% compared with the previous fiscal

Consolidated

year. The factors accounting for the increase in consolidated gross profits were the increase in income from4

Customer Groups and the steady growth in profits ofin interest margins caused by tougher competition in

our group companies.

lending businesses and the decrease in the average

In addition, due to the recording of reversal ofbalance of our domestic loans. However, in addition

reserves for possible losses on loans and net gains

to the steady increase in overseas loans, there was a

related to stock, consolidated net income amounted toturnaround in our domestic loans to both small and¥649.9 billion. If we exclude a special factor in the pre-medium-sized enterprises (SMEs) and individual

vious fiscal year (i.e., the effect of the ¥308.4 billion

customers, and they continued to increase. The main

Supreme Court judgment regarding Japan Housing

factors contributing to the turnaround and growthLoan, Inc.), consolidated net income virtually increased

in domestic loans were the steady increases in loans

by approximately ¥330.0 billion.

to middle credit risk corporations, our housing loans

 Steady Enhancement of Top-Line Growth
As for non-interest income, net fee and commission
income on a Three Banks basis increased by ¥63.3 billion, or 20.0%, compared with the previous fiscal year.
This increase was attributed to the considerable
increase in fee income related to investment trusts andindividual annuities in our business with individual
customers as a result of our efforts to enhance ourconsulting functions. In our business with corporate
customers, our solutions, foreign exchange, andoverseas businesses showed solid growth. So did thetrust and asset management businesses of MHTB. On a
consolidated basis, net fee and commission income
increased by ¥83.3 billion compared with the previous
fiscal year, due to enhancement of group synergies.
Net interest income decreased compared with theprevious fiscal year, due to the effects of the decrease

and loans to individuals in alliance with Orient
Corporation, all of which are areas where we haveplaced significant focus.
Increase in Loan Balance (The Three Banks)(Trillions of yen)
65

Overseas &offshore
Domestic

60

55

0

September
2004

March
2005

September
2005

March
2006

Loan balance*1 ¥64.1 tn.

¥62.6 tn.

¥63.5 tn.

¥65.0 tn.

Loans to SMEs
and individual
customers*2¥37.3 tn.

¥36.6 tn.

¥38.5 tn.

¥37.2 tn.

*1 Excluding trust account and loans to MHFG
*2 Including trust accountAs for general and administrative expenses (G&A

Combined with the aforementioned good profit

expenses), “strategic expenses” were incurred toperformance, our fully diluted earnings per share (EPS)

implement measures for enhancing future top-line

was ¥46,234 and return on equity (ROE) was 14.9%,

growth. “base expenses,” on the other hand, further

both of which were sustained at high levels.

decreased due primarily to the decrease in IT-related
expenses, including the effects of the completion ofSuperior Financial Soundness

MHBK's IT systems integration. As a result, total G&A

At MHFG, the ratio of consolidated net deferred tax

expenses on a Three Banks basis decreased by ¥18.1

assets to Tier 1 capital decreased significantly to 6.4%,

billion compared with the previous fiscal year.

and the non-performing loan ratio on a Three Banks
basis decreased to 1.41%, showing that our financial

Decrease in G&A Expenses (The Three Banks)

soundness remains at a top level among Japanese(Billions of yen)mega banks.

900- 28.2

MHFG's consolidated BIS capital adequacy ratio was- 18.1800

Strategic
expenses¥33.9 bn.

- 52.0Base
expenses¥777.0 bn.

700

0maintained at a sufficient level of 11.59%.

Fiscal 2003

Fiscal 2004

Fiscal 2005

G&A Expenses ¥857.4 bn.

¥829.1 bn.

¥810.9 bn.

Disciplined Capital Management
 Repayment of Public Funds
We repurchased and cancelled preferred stock ofpublic funds of ¥616.4 billion (on an issued-pricebasis) in August 2005, ¥250.0 billion (ditto) in
October 2005, and ¥600.0 billion (ditto) in July
2006. We completed the repayment of all publicfunds, the original amount of which was ¥2,949.0
billion, including the subordinated bonds of publicfunds which we redeemed in full during fiscal 2004.
 Secondary Offering of Common Stock ofMizuho Financial Group, Inc. (MHFG)

With respect to the remaining common stock(approximately 261,000 shares) of MHFG held by
MHFS after the above offering as well as repurchaseand cancellation, we intend to repurchase and cancel
them after fiscal 2006, taking into consideration our
financial condition.

 Issuance of Preferred Securities
In March 2006, through our overseas special purpose
subsidiaries, we issued approximately ¥140.0 billion
of preferred securities, which increased our group's
Tier 1 capital and contributed to enhancing ourcapital base to support our future growth.

To enhance our capital base, in November 2005, by
way of a global offering, we conducted an offeringof 763,000 shares of common stock (¥531.6 billion)
of MHFG, held by its subsidiary Mizuho Financial
Strategy (MHFS), formerly known as Mizuho
Holdings. In July 2006, we repurchased and cancelled 131,800 shares of common stock (¥129.9 billion) of MHFG held by MHFS.

5

Mizuho Corporate Bank, Ltd.

Aiming to Become “One World-Class Company”
services have become more sophisticated and diverse.
This means that the roles we as financial institutions
must play are also undergoing major change.
In view of these various developments, we believethat one of the most important roles that banks must
play is to serve the function of powerful risk intermediaries. In other words, banks must in effectperform the role of risk processing plants. They musttake the credit risk inherent in the businesses andprojects that clients undertake, break this risk down
and process or transform it using sophisticatedfinancial technologies, then allocate this risk across a
broad range of investors. By strengthening ourcapabilities for performing these functions, it will bepossible to offer fund-raising services for businesses

Combining Commercial andInvestment Banking, and Expanding it
Globallythat would have been difficult for traditional banking
institutions to undertake previously, and, ultimately,
these enhanced risk-processing capabilities may
contribute to new economic growth.
Moreover, there is a strong need for banks to evolve

6

Since commencing operations over four years ago, wetoward a business model that is based on their ability

have worked successfully to materially resolve our non-to offer various financial and business solutions to theirperforming loan (NPL) issues and strengthen ourclients. We believe that for us to be a bank that clientsfinancial position. We have also worked consistently tocome to proactively for services, or in other words, fordevelop our business model, promoting our “originate

us to be the bank that clients call first to draw on ourto distribute” business model based on asset turnovercapabilities in finance, we must have an in-depth

and strengthening our capabilities in investment

understanding of economic and industry trends, as wellbanking. During the current fiscal year as well, we aim

as cutting-edge financial technology, plus the ability

to be the bank that is “constantly evolving,” responding

to offer sophisticated solutions that respond to theswiftly and nimbly to changes in the business environ-broad range of management needs and financial

ment, and to implement our business model globally.

requirements of our clients.

A New Kind of Bank Needed in Wholesale
Finance
In wholesale finance, Japanese banks have traditionally

Our Investment Bank Declaration: We Will
Combine Commercial and Investment
Banking

operated under a business model involving raising

Building on this understanding of the businessfunds from deposits and lending to corporations.

environment, our fundamental strategy is to establish a

However, after experiencing the collapse of the bubble“Global Corporate Banking Group” whose businesseconomy and the onset of deflationary conditions, themodel is constantly evolving. The core element of thisJapanese economy and its industries have undergone

strategy lies in the significance of the two words,

major structural transformation. Today, Japanese“Corporate Banking,” which requires the combinationindustries have embraced the IT revolution, becomeof commercial banking and investment banking.

global, and learned lessons from being burdened with

Leveraging our relationships with clients developed

NPLs. Also, the requirements of clients for financial

through our strong commercial banking base, we offer

our clients advanced solutions and products thatnational boundaries, we eliminated the distinction

contribute to enhancing their corporate value. These

between “domestic” and “overseas.” Under the newinclude syndicated loans, M&A deals, leveraged

organization, divisions performing specialized functions

finance, project finance, cash management, and many

conduct both domestic and international operations inother services. Moreover, as the “Group” in “Global

a seamless framework. Further, to continue to bolster

Corporate Banking Group” suggests, Mizuho has aour global network, we opened branches in New Delhi

full range of services, including securities and trustin May 2006 and in Wuxi, China, in June 2006.

services, that enable us to offer a seamless package offinancial services.

We plan to significantly accelerate these initiatives,with the goal of establishing our next business model,

In parallel with our drive to strengthen ourwhich can be summarized via our intention tocapabilities in investment banking, we are also working“structure a true investment bank on our strong

proactively to enhance the sophistication of ourcommercial banking foundations, then expand it

portfolio management. By working to maximize theglobally.” Our Global Declaration means we are aiming

value of our portfolio through the dispersal of risk andto become “one world-class company.”proactive control of credit risk, we are improving ourI would like to report that in July 2006 we have fully

capabilities for strategic risk-taking. Through these

repaid the public funds provided to us. We sincerely

initiatives, we are committed to substantiallyappreciate your understanding and continued support

strengthening the risk intermediary functions thatover the years.

banks should have as the shift to market-oriented
indirect financing becomes more pronounced.

We have positioned the current year as a time forbeginning and accelerating full-scale programs that will

We announced our “Investment Bank Declaration” as

put us on course toward becoming a top global

our motto in fall 2005 to express our commitment tobanking institution. We are working to ensure that all

establishing the business model I have just described.

the senior executives and staff share this objective,
promote our evolving business model, and commit

Our Global Declaration: We Will
Substantially Enhance Our Global Presence

themselves to realizing the high levels of competitive-

We are also aiming to apply this business model at the

cation of management expertise that will enable us toglobal level. Markets in virtually all industries aretake our place among the top global banks. As we

expanding, propelled by the growth in worldwide

move toward these objectives, we look forward to yourdemand. Moreover, industrial realignments are undercontinued support.

way at the global level in many industries, andness and profitability as well as enhanced sophisti-

July 2006

companies are making major capital investments
outside their home markets. We are working tosubstantially improve our capabilities for offeringsolutions worldwide for our clients who are expanding
their activities around the world.

Hiroshi Saito
President & CEO
Mizuho Corporate Bank, Ltd.

To promote the globalization of our activities, we
implemented major reforms in our organization andstructure on March 31, 2006. Previously, Japanesebanks conducted operations within the generalframework of “domestic business promotion” and“overseas business promotion.” Now, with theobjective of creating an organization appropriate for us,
as a bank conducting business activities transcending7

Mizuho Bank, Ltd.

Our Goal is to Have Our Customers Say “I Want to Deal with Mizuho”
profitability in the mass-retail sector and rebuilding ourchannel network.
To strengthen our core businesses, in individual
customer transactions, we are focusing on developing
a consulting structure that will allow us to provide
appropriate advice for customers who purchaseinvestment products. We are also responding broadly
to customers' loan needs by expanding our Housing
Loan Business Promotion Centers and entering a tie-up
with consumer loan company Orient Corporation.
In corporate banking, we are stepping up ouractivities to respond broadly to the financing needs of
SMEs and middle-market corporations, including thepromotion of new transactions to meet the broad rangeof financing needs in these segments. We are also

A Year for Taking the Next Steps in
Cementing Long-Term Relationships
with Our Customers

actively offering business solutions, including planningand assistance for passing family businesses to the next
generation, M&A advisory services, and helping ourcorporate customers to find new opportunities throughour “business matching” services.

The Year in Perspective: Shifting Fully to
the Offensive

to enhance the attractiveness of our Mizuho Mileage

As the core bank of the Global Retail Group, underClub membership services, including offering reduced

Mizuho's “Channel to Discovery” Plan, which was

fees on certain services, and to expand Club-relatedannounced in April 2005, Mizuho Bank positioned

services that are even more closely in tune with thefiscal 2005 as a year for making major leaps forward indaily lives of our customers. As a result of thesegrowth to reach the medium-term goal of becoming

activities, the number of members has exceeded 1.9

the best bank in Japan's middle and retail markets inmillion. Also, in March 2006, we entered tie-ups in theterms of both customer satisfaction and profitability.

mobile phone credit card settlement business with NTT

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

About 26 million individual customers have accounts

DoCoMo and UC Card. We also began to offer services

with us, and approximately 100,000 small and medium-for the Mizuho Suica Card, which we issue under a tie-

sized enterprises (SMEs) and middle-market corporations

up with East Japan Railway Company, and whichhave borrowings from us. The financial needs of both

combines the features of an IC ATM card, a credit card,

individuals and companies are becoming increasingly

railway tickets, and e-money.

diverse and sophisticated. We intend to respond to these

Moreover, to provide security for our customers, weneeds with carefully tailored, speedy services based on

are strongly encouraging customers to upgrade to IC

improved cooperation among Mizuho group companies

ATM cards, which offer enhanced security inand, therefore, have shifted from a strategy of preparing

transactions. In this connection, in February 2006, thethe foundations for growth to a proactive offensive to

Depositor Protection Law went into effect in Japan,

promote our business and management reforms.

but, prior to this, in November 2005, we began tocompensate customers for their losses due to the Business Reforms
The three principal pillars of our business reforms arestrengthening our core businesses, enhancing
8

falsification or theft of their ATM cards.
To rebuild our channel network, we are creating a
new channel and branch structure that will allow us toaddition, we opened a new type of office in March 2006

Working to Build Long-Term Relationshipsof Trust with Our Customers

in the Roppongi Hills business, commercial, and residen-

We regret that in January 2006, one of our former

tial district of Tokyo dedicated to offering services to

employees was arrested for alleged improper conductindividual customers, and our plans call for opening

in misappropriating deposits of our customers. In

about 100 such offices throughout Japan going forward.

February 2006, another employee, who held theAmong other activities, together with Orient

position of section chief in one of our branches, wasCorporation, in December 2005 we created a financealso arrested on suspicion of leaking personal

scheme for supporting SMEs and middle-market

information of customers outside the Bank. We regard

corporations that proactively promote environmental

these incidents with greatest seriousness and wish toinitiatives. Under this system, as part of our corporate

express our deepest apologies again, first to oursocial responsibility (CSR) activities, working together

customers and more broadly to the general public.

provide tailor-made services to meet customer needs. In

with Orient Corporation, we provide financing at

Since these incidents were discovered, we havesubstantially reduced interest rates for corporate

worked to substantially expand and strengthen ourcustomers who are working to make their activities andinternal control systems and implement bank-wide

products more environment-friendly.

initiatives to prevent the recurrence of such unethicalconduct, including efforts to nurture a corporate culture Management Reform
The three main pillars of our management reforms are
realigning our cost structure, reviewing the allocationof our management resources, and making reforms in
our human resources management structure.
In cost reform, the positive effects of our computer
system integration, which was completed in fiscal
2004, are becoming apparent, and we are continuing
to conduct thorough reviews of all our operations,while steadily moving forward with cost reductions.
Going forward, while making further efforts to reduce
costs, in line with our strategy of improving customer
services, we are allocating management resources
aggressively to develop services for our customers andmake improvements in our cost ratios.
Our reforms in human resources include strengthening our training regime and assigning personnel topositions that are best suited to their abilities. In addition, we are actively recruiting experienced professionals. For example, we are training an increasing numberof financial consultants (FCs) who can give advice in
response to all kinds of customer consulting needs. As
a result, the number of our FCs reached 2,000 in fiscal
2005. In corporate activities, we have increased the staffof the Mizuho Business Finance Center, which specializes in lending to small-scale businesses, to approximately 600 to offer supportive and responsive services.

that reinforces compliance and internal controls.
During the current fiscal year, we are working toachieve maximum results from the business reforms weare implementing and setting our management course
to focus on thinking first and foremost on building
long-term relationships of trust with our customers. In
addition, we are endeavoring to make further major
improvements in services, ensure full compliance withlaws and regulations, and implement a more-proactive
program of CSR activities.
I would like to report that in July 2006 we have fully
repaid the public funds provided to us. We sincerely
appreciate your understanding and continued support
for many years.
The senior executives and staff of the Mizuho Bankare committed to working together as one to devotetheir fullest efforts to offer services that are convenientand provide security to our customers. Our goal is tohear our customers say, and really mean, “I want todeal with Mizuho.”
As we work toward our strategic objectives, we lookforward to your continuing support.
July 2006

Seiji Sugiyama
President & CEO
Mizuho Bank, Ltd.
9

Securities, Trust and Asset Management Business Strategies

Basic Strategy for the Securities BusinessIn addition to pursuing integrated banking and securi-area of M&A and other financial advisory services forties operations based on customer segmentation, theJapanese customers, and has a track record in structured

group's three securities companies—Mizuho Securities

finance that puts it among the market leaders in Japan.

(MHSC), Mizuho Investors Securities (MHIS) and Shinko

MHSC also aims to satisfy the diversified needs ofSecurities—make the most of their capabilities andcustomers who are active at home and abroad by offer-advantages in order to ensure that the group can maxi-

ing seamless domestic and overseas business services

mize its comprehensive strengths.

through its network of overseas securities subsidiaries.

Integrated Banking and Securities Operations
With the aim of pursuing greater synergies by strengthening cooperation between group banks and securities
companies, MHSC, which plays a part in the Global
Corporate Group, was positioned under the umbrellaof MHCB, and MHIS was positioned under the umbrellaof MHBK in the Global Retail Group, in accordancewith 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, MHCB utilizes the investmentbanking function as well as the bond and equityrelated capabilities of MHSC to provide a broad rangeof new and more specialized products and services forcustomers. MHBK offers its customers MHIS's bondand equity-related functions and, by jointly developing
branches with MHIS, gives customers the convenienceof “one-stop shopping.”

Mizuho Investors Securities
MHIS is working to proactively strengthen cooperation among group companies through establishing a
network of 100 joint branches with MHBK and promoting a securities sales agency business with MHBK,
starting a trust business with MHTB as an agent, as
well as an IPO business with group companies. With
this as its operational base, MHIS responds to customers' asset investment needs by offering various
securities-related solutions, and to their funding needs
by offering stock and bond underwriting services andconsulting business in connection with their capital
structure planning. In this way, it aims to become thecustomer's first choice as the most trusted securities
company by providing carefully-tailored, high-quality
products and securities services in a speedy manner.

Strengths and Characteristics of the Group's
Three Securities Companies
Mizuho Securities
MHSC is a wholesale securities company that offers
high-quality, specialized solutions in response to thewide-ranging needs of domestic and international institutional investors, corporations, financial institutions
and public sector entities.
It occupies a top position among the major securities companies in the area of bond underwriting, andboasts a strong presence in bond sales as well. In theequity-related business, it offers a full range of services
and has raised its market standing to a position close
to that of the major securities companies.

10

It has already established a top-level presence in the

Shinko Securities
Shinko Securities is a comprehensive securities company
with a nationwide network that offers a full range ofservices from underwriting to brokerage. Throughdynamic and efficient cooperation with group companies, it uses its full-line functions to provide middle
market/retail customers with a wide selection of financial products and services. In May 2006, Shinko
Securities, in conjunction with MHBK, started to handle wrap accounts through its securities sales agent, afirst in Japan.

The three group securities companies aim to make themost of their strengths and characteristics, and maximize synergies to develop a group presence thatmatches that of other major securities companies.

Basic Strategy for the Trust Businessissues arising from changes in accounting systems andWe recognize that the trust business is a growth sector

revisions to the Company Law.

and are working to deliver the best solutions to cus-

MHTB will continue to identify customers' needs

tomers through MHTB, which offers a full range ofand to satisfy them by proactively developing newtrust services, and Trust & Custody Services Bank

products and services, and creating new trust business.

(TCSB), which offers high-level custody services in its
role within the Global Asset & Wealth Management
Group. MHTB quickly and accurately responds to theincreasingly diversified and sophisticated needs oftoday's customers by offering various products and services together with group companies through theagent system and with external entities through business tie-ups, and also by holding joint seminars.

Mizuho Trust & Banking
MHTB aims to become the most trusted trust bank by
accurately meeting the diversified needs of customers
through original products and services that draw on
the high level of expertise and rich know-how it has
built up over many years.
MHTB responds to the asset management andinvestment needs of a wide range of individual customers by offering consulting services in connection
with assets in general, including financial assets andreal estate. It also offers asset investment products
such as “Always” and “Chochiku no Tatsujin,” which
are money trusts based on securitized automobile loan
assets, and asset management products such as “AssetManagement Trusts” for centralized management offinancial assets.
In the area of testamentary trusts, MHTB's experienced professionals have earned an excellent reputation for their carefully-tailored services. MHTB is
offering services to an even larger number of customers through its network of agents at MHBK, andhas one of the highest balances of such trusts in the
sector. For corporate customers, MHTB cooperates
with group companies in offering optimal solutions insuch areas as real estate, securitization, pensions, thestock transfer agency business and asset management.
In particular, through its sophisticated consulting services, MHTB supports customers in formulating effective business strategies to deal with management

Trust & Custody Services Bank
Based on its advanced systems infrastructure andhighly transparent internal control systems, TCSB provides financial institutions, institutional investors andother customers with high-quality, high value-added
trust and custody services, and outsourcing for comprehensive asset administration services. TCSB also
responds to customers' high-level custody requirements
through participation in the “account-management
institution business” developed in response to securities
settlement systems and infrastructure reform in Japan,
and through the provision of securities lending services.

Basic Strategy for the Asset Management
Business
In the investment trust and pensions markets, we aim tobecome one of the world's leading players in terms ofboth quality of services and assets under management.
Our asset management companies, Dai-Ichi Kangyo
Asset Management, Fuji Investment Management
and DLIBJ Asset Management, all make the most of
their individual specialties in offering high-quality
products and services to both group and non-group
customers. In the distribution of investment trusts,
they offer a widely varied line-up of products designed
to meet the increasingly complex and sophisticatedneeds of customers.
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 individuals to
enjoy in their retirement.

11

Pursuing the “Channel to Discovery” Plan

Outline of the “Channel to Discovery” Plan
Business Portfolio Strategy
We have realigned our business into three global groups according to our customers' needs. These groups are the Global
Corporate Group, the Global Retail Group and the Global Asset & Wealth Management Group. We provide the most suitableproducts, services and solutions to our customers by maximizing the advantages of each group.
Management Structure of Mizuho

The Global Corporate Group

Mizuho Financial Group, Inc. (MHFG)Group
Strategy
Affiliates

Mizuho Information & Research Institute, Inc. (MHIR)

Mizuho Research Institute Ltd. (MHRI)

Mizuho Financial Strategy Co., Ltd. (MHFS)

Mizuho Investors Securities Co., Ltd. (MHIS)

Asset management companies (DKA, FIMCO, DIAM)

Mizuho Bank, Ltd. (MHBK)

Mizuho Securities Co., Ltd. (MHSC)

Mizuho Capital Co., Ltd.

UC Card Co., Ltd.

12

Mizuho Private Wealth Management Co., Ltd.(MHPW)

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

GlobalAsset & WealthManagement
Group

Trust & Custody Services Bank, Ltd. (TCSB)

GlobalRetailGroup

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

GlobalCorporateGroup

The Global Corporate Group provides highly
specialized and cutting-edge products andservices by leveraging our comprehensive
financial capability, with close cooperation
between the global corporate banking sector
and the wholesale securities sector in responseto the needs of large, global corporations.

The Global Retail GroupThe Global Retail Group provides top-levelproducts and services on a global scale, withclose cooperation with leading domestic andinternational companies in response to thediversified and globalized needs of individuals
as well as small and medium-sized enterprises
and middle-market corporations in Japan.

The Global Asset & WealthManagement GroupThe Global Asset & Wealth Management
Group provides top-level products and services on a global scale in response to thediversified and advanced customers' needs inthe business areas of trust and custody, andprivate banking.

Group Strategy Affiliates
MHFS: An advisory company pertaining tomanagement control and corporate
revitalization for financial institutions.
MHRI: A think tank.
MHIR: An IT-related company.

Management focus has moved into a phase that will seek to gain the support of customers. Hence, in April 2005,
Mizuho launched its business strategy, the “Channel to Discovery” Plan. As action plans under this strategy, wedeveloped the “Business Portfolio Strategy” as well as the “Corporate Management Strategy.”

Corporate Management Strategy
We developed the following strategies to realize corporate management befitting a world-leading financial group.
• MHFG is preparing for listing on the New York Stock Exchange (NYSE) as early as is feasible in order to further improve
the transparency of its corporate governance and increase its investors' trust.
• We promote corporate social responsibility (CSR) activities by positioning CSR as one of the main pillars of our groupbusiness strategy for the creation of new corporate value and the achievement of sustainable growth.
• We are enhancing our branding strategy to establish the Mizuho brand in order to win solid social trust.

Promoting a New Medium-Term Business Plan
drastically devoting management resources to new

Fiscal 2007 (Plan)

Fiscal 2005

Consolidated Net Business
Net Income
Profits

Consolidated Net Business
Net Income
Profits

strategic measures in response to customers'
needs. We will also continue with intensive
rationalization of existing businesses.
The above description of our mid-term business plan contains
statements that constitute forward-looking statements within themeaning of the United States Private Securities Litigation ReformAct of 1995. Such forward-looking statements do not represent
any guarantee by management of future performance and are
subject to risks, uncertainties and assumptions, including thoseenumerated under “Forward-Looking Statements” on page 1.
Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, our actual results
may vary materially from those we currently anticipate. We do notintend to update our forward-looking statements, whether as aresult of new information, future events or otherwise.

Establish a stableearning basesupported by customers

Overview of the Medium-Term Business Plan
Resolution of financial issues

We will improve the level of gross profits by

MHFG

650.0

2

(Billions of yen)

1,180.0

649.9

2

889.2
435.1

Global Corporate Group

1

290.0

2

460.0

1

572.7

2

Global Retail Group

1

290.0

2

630.0

1

157.5

2

365.7

Global Asset & WealthManagement Group

1

40.0

2

90.0

1

41.2

2

88.3

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

 Progress of “Channel to Discovery” Plan
July 2005

April 2005
 MHBK entered into separate business MHTB entered into a business MHBK started to sell the investment

collaborations with two of the bestcollaboration with The Bank of New

funds “Mizuho Wachovia U.S.

U.S. super-regional banks, Wachovia

York, a global leader in the trust

Investment Grade Corporate Bondand Wells Fargo respectively.

banking business. MHBK also enteredFund,” and “Mizuho Wells Fargo

into a business collaboration with The

Emerging Markets Equity Open.”

Bank of New York in the area of
distribution of investment trust
products in Japan.

>>>
13

CSR Activities of Mizuho
Mizuho sees CSR as an indispensable part of its activities to achieve sustainable growth along with society.
It has adopted a proactive approach to CSR centered on the following priorities. Please refer to Mizuho's CSR REPORT2005 for details of the Mizuho's approach to CSR.

Involvement in Environmental AwarenessPromotion of Group-Wide Approach to CSR

By recognizing the immediate importance of curbing and

The group's holding company, MHFG, promotes analleviating environmental impact as a globally shared

integrated group-wide approach to CSR with a view tochallenge, we are seeking to provide financial services thatfurther developing the existing CSR activities of theare in line with environmental preservation policies, such asgroup companies.

measures to prevent global warming, while at the same time
reducing our own consumption of resources.

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

CSR REPORT 2005 Published
In February 2006, we published the CSR REPORT2005 with a view to promoting broader stakeholder
understanding of the group's CSR policy andactivities. The next edition, CSR REPORT 2006, is due
to be published in the fall of 2006.

Enhancement of Corporate Governance
We are further enhancing corporate governance in order tosustain maximum fairness and integrity in our corporate
activities and thus win high levels of acceptance in the global

The report is available at
MHFG's website, but a printed
copy is also available at yourrequest.

financial and capital markets.

Highly Responsive Communications

http://www.mizuho-fg.co.jp/activity/report/index.html

We are realizing responsive communications between
stakeholders such as customers, shareholders, local
communities and employees.

September 2005

October 2005

 MHBK and MHTB started to In pursuit of further

 We reorganized Mizuho

synergies in the retail market

Holdings (MHHD) into MHFS,

specializing in corporate

Bank Loan Fund.”business, the two strategic

a new advisory company that

revitalization terminatedretail subsidiaries, UC Card

provides advice to financial

operations, and MHCB,

and Mizuho Capital, were

institutions. MHFS integrated

MHBK and MHTB merged

reorganized as subsidiaries

MHHD's expertise in group

their own subsidiaries.

of MHBK.

management as a bankholding company, with
Mizuho Advisory's expertisein the area of corporate
revitalization.

14

 Four financial subsidiaries

sell the “Mizuho BNY US

Mizuho Exhibit at Eco-Products 2005

Lectures Held at Universities

In December 2005, we set up an exhibit at the Eco-

In fiscal 2006, lectures will be held at Hitotsubashi

Products 2005 held at Tokyo Big Sight, Japan's

University, Waseda University, and Keio University. Seniorlargest environment-related exhibition.

executives and employees of Mizuho's group companies

Out of the many visitors to our booth, some 800

working at the cutting edge of the finance business arepeople cooperated in completing a questionnaire.

to lecture on comprehensive financial knowledge based

We will make use of the opinions received fromon actual experience.

these visitors in promoting our work with the

Joint Research on Financial Education Inaugurated

environment.

In April 2006, Mizuho and Tokyo Gakugei University
initiated joint research into
specific methods for promoting
financial education in forms
that are suitable for school
education and society.

Brand Strategy
We are developing various kinds of communication activities under the group's unified Brand Slogan, “Channel toDiscovery.”

Brand Slogan

The slogan expresses the role Mizuho will play, not only to realize today's dreams,
but also to discover new possibilities that lie ahead and to create a better future.
“Discovery” stands for Mizuho's customers discovering their dreams and new possibilities, and“Channel” stands for the role Mizuho will play in providing the ways and means to its customers
so that they can realize their dreams and new possibilities.

November 2005

January 2006

February 2006

July 2006

 MHPW, private banking

 As part of strengthening We issued CSR Report 2005

 We completed theservices company, started

our branding strategy, wein order to introduce our

repayment of all public

its operation.

developed communication

CSR policies and activities.

funds.

activities includingcommercials on television.

15

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

MizuhoSecurities (MHSC)

Securities
Business

MizuhoInvestors
Securities(MHIS)

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

A securities company
that focuses on serving
the group's customers.

MizuhoTrust & Banking(MHTB)

Trust & Custody
Services Bank(TCSB)

A trust bank that possesses strengths in boththe corporate and individual markets.

A highly specialized
trust bank focusing on
the custody business.

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

Mizuho Corporate Bank(MHCB)MHCB focuses its business on corporate finance, primarily serving
large corporations (such as thoselisted on the first sections of domestic stock exchanges), financial
institutions and their group companies, public sector entities, andoverseas corporations including
subsidiaries of Japanese companies.

Mizuho Bank(MHBK)

Trust and
Asset
Management
Business

Other
Businesses

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

Overseas
Subsidiaries

16

DefinedContribution
Plan Services(DCPS)

Dai-IchiKangyo AssetManagement
(DKA)

Fuji
Investment
Management(FIMCO)DLIBJ AssetManagement(DIAM)

An entity that specializes in managing defined contribution pension plans.

An assetmanagement company.

An assetmanagement company.

An assetmanagement company.

MizuhoTrust Realty
Company

MizuhoCreditGuarantee

MizuhoCapitalMizuhoFactors

A principal
venture capitalcompany.

A factoring company.

UC CardMizuhoPrivate WealthManagement(MHPW)

A leader among
credit cardcompanies in Japan.

A private banking
services company.

A real estate agency.

A credit guarantee
and real estate
research company.

MizuhoResearch
Institute(MHRI)

MizuhoInformation &Research Institute(MHIR)

Mizuho-DL
Financial
Technology

MizuhoFinancial
Strategy(MHFS)

A think tank.

An IT-relatedcompany.

A research anddevelopment companyof financial technology.

An advisory company
for financial institutions.

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

17Office Network of Mizuho
We utilize our office network, which covers every prefecture in Japan as well as major overseas cities,
to respond to our customers' diversified and globalizing financial needs while supporting the smooth
progress of economic activities.

International Network (As of July 31, 2006)

Brussels

MHCB
 Overseas Branches and Relevant Offices
 Overseas Representative Offices
 Major Overseas Subsidiaries and Relevant Offices

LondonBeijing
AmsterdamMHSC Overseas Subsidiaries
 Overseas Representative Offices
MHTB Overseas Subsidiaries
 Overseas Representative Offices

TianjinDüsseldorf
Frankfurt

Toronto
Wuxi

DalianNanjing
Luxembourg

Seoul
Vienna

Paris

Wuhan

ChicagoNew York

XiamenZurichShenzhen

TehranLos Angeles

Atlanta
HoustonNew Delhi
Bahrain

Shanghai

Guangzhou
Hong Kong
Mumbai
Hanoi

TaipeiCaymanKaohsiung

MexicoManilaDomestic Network (As of July 31, 2006)

Bangkok

MHCB
Ho Chi Minh

Head Office and Branches: 18

MHBK
Head Office and Branches: 375
Sub-branches: 72
Agencies: 47

Kuala Lumpur

MHSC

Singapore

Head Office and Department: 2

SydneySão PauloMHTBHead Office and Branches: 37
Sub-branch: 1

LabuanJakarta18

19

Business Approaches Adopted by Each Global Group

Global Corporate Group— Approaches to Large and Global Corporations, and Other Entities —Business Environment and Overview of the Global Corporate GroupThe self-sustaining recovery trend in the Japanese economy is becoming more apparent as theturnaround spreads from the manufacturing sector to the non-manufacturing sector and hence toconsumer spending. Moreover, as the global economy takes a turn for the better, and markets forvarious industries expand as a result of surging worldwide demand, there are signs of a global
industrial realignment that transcends national boundaries. Under these conditions, customers
among large and global corporations and other entities expect financial institutions to do more than

GLOBALCORPORATE
GROUP

simply resolve their financial issues in areas such as funding and financial efficiency. Indeed, theirneeds have expanded to include restructuring existing businesses, advancing into new businesssectors, overseas strategies, risk management and numerous other management issues.

For a financial group to enhance its competitiveness in satisfying these needs, it is essential tooffer sophisticated, cutting-edge solutions that combine financial functions such as securities andtrusts, as well as banking.

To respond to the needs of large and global corporations and other entities, the Global Corporate

Group provides highly specialized, cutting-edge solutions by leveraging its comprehensive financial
capabilities and promoting close cooperation between the global corporate banking sector and thewholesale securities sector.

20

GLOBAL CORPORATE GROUPKey Group Companies

Performance and Highlights

 Mizuho Corporate Bank

Performance

MHCB provides optimal solutions to the increasingly

Income from business with customers rose sharply

diverse and sophisticated needs of customers in the areasof both finance and business strategies, focusing its
efforts on serving major corporations (such as those listed

due to higher profits from the solutions businessand transactions with Japanese companies in theinternational business sector, as well as substantial
increases in income from non-Japanese customers

on the first section of domestic stock exchanges),through MBOs and other transactions in Europe.

financial institutions and their group companies, public

MHSC also set a new record for income as it took

sector entities, and overseas corporations including

advantage of the favorable market environment.

subsidiaries of Japanese corporations.

(Billions of yen)More specifically, it is revamping its organization todramatically strengthen its ability to provide financial
solutions through competitive services at the global level.
In addition to taking full advantage of the functions of

Global Corporate Group

Fiscal 2005
Net Income
Net Business Profits
572.7*1
435.1*2*1: Aggregated figures of core banking subsidiary and securities subsidiary (non-consolidated).
*2: Aggregated figures of core banking subsidiary (non-consolidated).

the group companies of Mizuho such as MHBK, MHSC
and MHTB, it is working in broadly-based cooperation

Highlights

with foreign investment banks and various types ofMHCB

investment funds as it pursues a “deal after deal”
marketing strategy that offers customers cutting-edge
financial solutions on a continuous, multi-faceted basis.

 Mizuho Securities• Implemented thoroughgoing cross-divisional
realignments of all internal and external operating
structures to improve its ability to provide worldclass services.
• Established the Houston Representative Office and

MHSC is a wholesale securities company that offers high-the Atlanta Representative Office of the New York

quality, specialized solutions in response to the wide-

Branch, the New Delhi Branch, the Wuxi Branch,ranging needs of domestic and overseas institutional

and the Brussels Branch of Mizuho Corporate Bank

investors, corporations, financial institutions and public
sector entities.
It already occupies a top position in the domestic
investment banking business in such areas as debt,
equity, M&A and structured finance, but is working hardto offer more enhanced services that maximize its
comprehensive strengths through inter-operational tieups and a more customer-oriented operating structure.
It is also proactively strengthening its global operations
by promoting greater integration with the operations ofoverseas offices, establishing representative offices in
China, and entering tie-ups with a U.S. investment bankin M&A operations.

Nederland.
• Claimed the number five spot in Thomson Financial's
world ranking of project finance arrangers.
• Acted as lead arranger in numerous large leveraged finance and MBO deals in Japan and overseas.
• Maintained top domestic share in the syndicatedloan sector in fiscal 2005.

MHSC• Posted record ordinary profits on both a consolidated and a non-consolidated basis.
• Established the International Business Promotion
Group and opened representative offices in
Beijing and Shanghai.
• Formed a strategic alliance with U.S. investmentbank Evercore Partners to offer cross-border M&A
advisory services.

21

Global Corporate Group— Approaches to Large and Global Corporations, and Other Entities —“Investment Bank Declaration” and “Global Declaration”
In the fall of 2005, MHCB unveiled its new slogan, the “Investment Bank Declaration,” following the progress it madeas a financial institution with its base in corporate finance in achieving a business model that promotes and combines
its commercial and investment banking operations. From fiscal 2006, it has launched a new slogan, the “Global
Declaration.” This new slogan indicates the direction MHCB intends to take in the future, which is to build on thestrong foundations of commercial banking and establish “true” investment banking, and to expand it globally.

Strategic Reorganization
In order to reinforce its business model and further promote the globalization of the bank overall, MHCB instituted
major changes in its organization and structure at the end of March 2006. Traditionally, Japanese banks tend to beorganized so that domestic and overseas divisions operate separately. In an attempt to transform its organization into
something that better suits a financial institution that is expanding its business activities on a global scale, however,
MHCB decided to completely change its approach so that all business promotion and development will be carried out
on a bank-wide scale at the global level by divisions with specific functional expertise.
These globalization measures cover not only profit-generating divisions such as business promotion, investmentbanking and transaction banking divisions, but also corporate divisions such as IT, systems and operations divisions. In
other words, all domestic and international banking operations will be integrated on a cross-divisional basis. These
efforts to promote globalization will enable MHCB to provide customers with advanced financial solutions of a higher
level of sophistication than ever before.

Solutions for Management and Financial Needs
Solutions Business Helps Raise Corporate Value
As a bank that is “constantly evolving,” MHCB is putting a great deal of effort into offering solutions that help raise
its customers' corporate value.
Employing a “strategic advisory service-based solutions business approach” as their code of behavior, MHCB's
relationship managers offer global financial solutions that bring together the group's financial functions in the formof group-wide relationship managers. These cover M&A, various forms of securitization, syndicated loans, pensions
and CMS, as well as the full line of services available through the combination of banking, securities, trust and otherspecialist functions of Mizuho.
In other words, they engage in a “deal after deal” marketing approach whereby they offer timely strategic advice
on maximizing customers' corporate value with solutions provided on an ongoing, multi-faceted basis created by
Combining CB (Commercial Banking) and IB (Investment Banking) Functions
Strategic advisory functions from the perspective of enhancing customers' corporate value

Build long-term relationships
through the CB business
Lending, settlement (domestic/foreignexchange, deposits), corporate retail,trusts, etc.

Use synergy to
expand scopeof business

Enhance customers' corporate value
through the IB business
M&A, financial solutions, etc.

Create and supplement the CB business using the IB business

22

GLOBAL CORPORATE GROUP

taking into consideration the viewpoints of managers of corporate customers.
This business style is unique in that it combines the features of strategic consulting companies and foreign
investment banks, and is designed to enable MHCB to become a strategic building partner to its customers throughsolutions business promotion.

Solutions for Financial Institutions and Public Sector Entities Financial Institutions
As customers from the financial sector turn to more aggressive management stances, MHCB has been proposing
appropriate solutions that offer a more robust approach than ever from the viewpoint of financial strategies and risk
management. In order to respond to customers' increasingly sophisticated investment needs, MHCB investment
proposals have come to embrace new products and investment instruments, including cross-border syndicated loans,and investment products incorporating tailor-made investment trusts and derivatives. By offering advanced financial
technologies, products and other forms of know-how, it is strengthening its efforts to open up new business frontiers
as a partner that can be relied on.
MHCB also seeks to channel the financial functions of Mizuho's group companies into proposing high-quality
advisory services and solutions to management issues associated with strengthening customers' financial structures,such as capital management, the removal of assets from the balance sheet and alliance strategies.

 Public Sector Entities
In recent years, special public corporation reforms, government FILP (Fiscal Investment and Loan Program) reforms andother reforms affecting the public sector have gotten underway in earnest. As a result, the needs of public sector
entities have become more diverse and sophisticated than ever. In response, MHCB endeavors to propose optimal
solutions that bring together the sophisticated expertise and know-how of Mizuho's group companies. In the area ofdiversifying financial needs, examples include the arrangement of syndicated loans and asset securitization, as well asadvisory entrustment and the proposal of derivative products to meet increasingly complex risk management needs.
The public and corporate bond business has gone through a number of institutional reforms, including the
introduction of the Book-entry Transfer System for “Corporate Bonds” of JASDEC (Japan Securities DepositaryCenter) and the new Company Law of Japan. Against this background, MHCB has drawn on its powerfulperformance and rich experience as a leading bank to support issuers in procuring stable supplies of funds.

New Global Expansion
 Strategic Reinforcement of Office Network
In light of the increasing global expansion of its customers' business, MHCB is proactively extending its global
network in order to provide high-quality support.
With the opening of the Houston Representative Office in August 2005 and the Atlanta Representative Office inFebruary 2006, it rapidly expanded its coverage of the U.S. from three offices to five, in the process establishing aframework that can offer much closer service support than before. In rapidly growing India, one of the pillars of the“BRICs economies”—Brazil, Russia, India and China—MHCB opened a branch in New Delhi in May 2006, adding to
its Mumbai Branch to strengthen its support for Japanese companies that are increasingly active on the subcontinent. It subsequently opened a branch in Wuxi, China, in June, and another in Brussels*, Belgium, in July.
In September 2006, it is scheduled to open a branch in Ho Chi Minh City, its second in Vietnam. The bank willcontinue to carefully analyze medium-term trends in economic conditions and customers' activities, with a view tomaintaining its flexible, proactive branch network development strategy.
*The Brussels Branch belongs to Mizuho Corporate Bank Nederland, a wholly owned subsidiary of MHCB.

23

Global Corporate Group— Approaches to Large and Global Corporations, and Other Entities — Solutions for Global Companies
MHCB helps enhance customers' corporate value by proactively providing global-based solutions, not only to
Japanese companies but also to customers centered in the North American and European markets who are engaged
in global business activities. In doing so, it makes strategic use of relationships with external financial institutions tooffer solutions that include syndicated loans, project finance, leveraged finance, structured trade finance and various
other advanced products.
It holds a top-tier position in the European MBO market, for example. It has also established a strong track recordin North America and Europe in proactively putting together securitization products such as CDOs (Collateralized
Debt Obligations) that use advanced financial technology. MHCB is also introducing technologies nurtured inadvanced markets into Japan and using them in developing solutions that can satisfy its customers' needs
more precisely.

From Corporate Revitalization to Credit Engineering
As it steadily resolved its non-performing loan (NPL) issues, MHCB established the Credit Engineering Division in April
2005 to bring together the highly specialized know-how it accumulated during the corporate revitalization process,and is moving rapidly to promote its credit engineering business.
The new division is actively engaged in promoting and backing up businesses that focus more on enhancing
customers' corporate value and improving their market confidence. It offers high value-added investment bank-likeskills in setting up business revitalization schemes, calculating corporate value and supporting feasibility studies onrefinancing and capital management measures. It has also arranged Japan's first high-yield CLOs (Collateral Loan
Obligations) and provided support for an exit strategy of preferred stock.
In keeping with its aim of becoming a partner to its customers in creating new corporate value, MHCB makes useof MHSC and other Mizuho resources while at the same time working in broad-based cooperation with foreign
investment banks and various types of equity funds.

Aiming for Greater Strength in Top-Level Products on a Global Scale
Promoting Investment Bank-Type Finance Leveraged Finance and MBOs
Amidst rapid growth in Japan's M&A business in recent years, MHCB has endeavored to help customers raise theircorporate value through business restructuring by promoting leveraged finance, primarily non-recourse finance basedon the cashflows of the target companies. In the LBO/MBO sectors in particular, it provides advisory services andarrange finance in connection with large-scale business restructuring involving sell-offs of business divisions andsubsidiaries, and similar deals. It has also adopted a proactive approach to crossborder deals, and has the best trackrecord in the sector for global leveraged finance transactions.
Group companies Mizuho Corporate Advisory and Mizuho Capital Partners provide advisory services in connection
with MBOs and financial strategies, as well as investments through an MBO fund. In December 2005, it set up
Japan's first mezzanine fund in order to satisfy the increasingly sophisticated financial requirements of customers.

 Real Estate Finance
As a leading player in the real estate finance business, MHCB has accumulated advanced expertise in arranging total
financial packages using everything from senior debt to mezzanine finance and equity investment, and in putting

24

GLOBAL CORPORATE GROUP

together large-scale development finance projects associated with urban renewal, such as the Tokyo Midtown Projectfor redeveloping the site once occupied by the Defense Agency.
Amidst the rapid changes affecting the Japanese real estate market and market globalization, it is endeavoring toprovide customers with optimal solutions by drawing on its strong record and rich experience in real estate finance,
its real estate-related advisory functions and its links with overseas branches.

 Structured Finance
MHCB supports its customers' financial strategies by arranging securitization programs to satisfy their funding needs
and remove assets from the balance sheet in order to improve their management indices.
It offers several securitization solutions for customers with a variety of assets including future receivables, accounts
and notes receivables, and intellectual property rights. It uses syndication methods to satisfy investors' needs forsophisticated, specialist products and solutions.
To provide a wide range of finance solutions, it offers inventory finance and other forms of asset-based lending,and comprehensive balance sheet management covering both the asset and the liability sides.

 Project Finance
By its nature, project finance has to be tailored to reflect thevery diverse business structures of individual projects, andrequires sophisticated skills and a rich store of knowledge.
With its team of highly experienced staff members operating
at the global level, MHCB occupies an important position inthis sector, claiming the number five spot in the world rankingof arrangers compiled by Thomson Financial.
It offers business risk-mitigating solutions to customers who
invest in projects by providing limited recourse-based finance

Performance as an Arranger of Project Finance(January 2005-December 2005)
AmountNo. of(millions of transactions
U.S. dollars)
Royal Bank of Scotland
8,891.0
54
BNP Paribas
7,647.6
48
Societe Generale
7,214.3
37
Calyon6,902.3
59
Mizuho Financial Group
5,530.1
38
Caja Madrid
3,838.5
16
Mitsubishi Tokyo UFJ Financial Group 3,633.3
44West LB
3,620.336
Dexia
3,545.9
31
RBC Capital Markets
3,512.9
11

Ranking Company name
1
2
3
4
5
6
7
8
9
10

Source: Thomson Financial

for resource development, power generation and otherinfrastructure improvement projects in Japan and overseas,
and for PFI projects in Japan in line with the shift from thepublic to the private sector.

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

30

Taking the Syndication Business to the Next Phase
Japan's syndicated loan markets have grown rapidly in recent

25

years, and MHCB plays a leading role in driving market growthand providing high value-added services by making active useof the syndication function to meet a variety of corporate
financial needs in all sectors. Examples include cross-border
syndicated loans (“Ninja loans”) for foreign companies and20

Arrangement of Syndicated
Loans in Japan (Fiscal 2005)
Mizuho's
Share:
37%

15

10

sovereign entities raising funds in the Japanese market, large
LBO deals using M&A finance, and financial solutions for total

5

debt restructuring aimed at increasing corporate value. The
loan trading market is essential for MHCB's “originate to
distribute” business model based on asset turnover, and
MHCB is contributing to its development by compiling an

0

Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
1998 1999 2000 2001 2002 2003 2004 2005
Sources: Fiscal 1998 – Fiscal 2002: IFR database
Fiscal 2003 – Fiscal 2005: Bank of Japan statistics(Market share calculated by MHCB)

impressive record in arranging numerous “high-liquidity loans”

25

Global Corporate Group— Approaches to Large and Global Corporations, and Other Entities —and other deals. Through its commitment to a proactive involvement in the syndication business as a means ofsatisfying the needs of both corporate customers and financial institutions, MHCB is seeking new modes of corporate
finance that go beyond traditional methodologies.
In order to provide appropriate solutions for customers developing their global businesses in a wide range ofsectors, it has strengthened the cooperation between its offices in North America, Europe and Asia, and has worked
on strengthening its global syndication system still further. It has also encouraged organic linkage within its Global
Investment Banking Group, providing comprehensive solutions that focus both on corporate assets and liabilities,
thereby contributing to the creation of a true market with a deeper multi-layered structure in its ongoing role as amarket leader in market-oriented indirect financing.

Acceleration of Sophisticating Portfolio Management
MHCB is making progress in enhancing the sophistication of its portfolio management, recognizing it as one of theimportant pillars of its “originate to distribute” business model alongside its syndication business. Specifically, its
Global Portfolio Management Unit plays a key role in streamlining and improving risk-returns of the bank's overall
credit portfolio and makes use of the secondary loan trading market to strategically buy or sell loans in response tochanges in the status of the entire portfolio and the macro economic situation. In other words, it makes investments
to diversify credit risk and eliminates excess concentration of credit risk inherent in loans.
As an investment bank capable of providing loans, it will endeavor to strengthen its strategic risk-taking
capabilities and to maximize portfolio value by controlling credit risk in a dynamic and proactive fashion without
curtailing its ability to originate loans.

Promoting the Transaction Business at the Global Level
 e-Business
The Mizuho Advanced CMS cash management system, as a core solution product, offers pooling, agency payment
services and other solutions for managing funds. In addition to Mizuho Global CMS, MHCB has been offeringsophisticated fund management services at the global level to customers with overseas offices through its crossborder pooling service since fiscal 2005.
Mizuho's CMS Network
Improving the efficiency of overseas fund operations

Mizuho e-Business Site
Mizuho Advanced CMS
Fund Management Services
Best Receiver
Firm Banking

Overseassubsidiaries

Check balances andmove funds in overseas
accounts fromdomestic head office

Overseas affiliates
Overseas affiliates

Overseas regional
headquarters
Branches

Centralizing fundmanagement athead office

Customer's
head office

Overseassubsidiaries

Subsidiaries

Branches

Various products toimprove efficiency offund operations
Subsidiaries

Improving the efficiency of domestic fund operations

26

Mizuho Global CMS

Overseas affiliates

GLOBAL CORPORATE GROUP

 Exchange and Trade FinanceSpecialist divisions, domestic branches and overseas offices cooperate in business promotion by proposing globalbased solutions. MHCB is also developing a new trade finance business through currency options, NDF and otherforms of exchange hedges, responses to large bond deals using syndication, trade receivable finance, structured tradefinance, commodity finance and ECA finance.

 External “Yen” Settlement
MHCB continues to invest in systems with a view to enhancing service levels and making its operations divisions morereliable and efficient. In line with progress in fund and securities settlement reform, it is pushing forward proactively
with foreign exchange settlement, CLS, custody operations, securities settlement and other proxy services with a view
to supporting customers' external “yen” settlement and establishing its stable earnings base.

 Pensions and Trust Business
MHCB offers comprehensive solutions to its customers who are considering restructuring their pension scheme, centered on defined contribution pension products, cooperating with MHTB, TCSB, DCPS and asset management companies within Mizuho.
MHCB also acts as an agent for MHTB to deliver trust products to its customers.

Boosting Sales and Trading Capabilities
In the sales and trading business, MHCB is working to consolidate its market reputation as a top-level “solutions
provider” by offering risk hedging schemes employing derivatives and optimal solutions that use cutting-edge
financial technologies to satisfy customers' diversified financial and business risk control needs.
MHCB has established a position as a top global player alongside the leading Western investment banks in theinterest rate and exchange-related derivative segments, earning top five placings in Risk magazine's “Corporate
End-User Survey 2006” in four areas—yen interest rates, yen FRA, dollar/yen currency swaps, and dollar/yen
exchange forwards.
MHCB has expanded its product line-up from basic items like interest rates and foreign exchange to oil, metals,
weather and other commodity derivatives, and ultra-long-term, low-liquidity currency derivatives. It is also
strengthening its tie-up with Mizuho-DL Financial Technology, a group company specializing in the development offinancial technology, and is introducing sophisticated risk control methodologies that incorporate dynamic foreignexchange hedging—a statistical/probabilistic exchange risk hedging method that eliminates market views andarbitrariness—and loans that incorporate commodity derivatives to take care of areas that are not covered by existingrisk management methods.
For local currency transactions in countries around the world, it continues to expand its product range, strengthen
its trading capabilities and offer high-quality solutions to increasingly globalized customers, thus maintaining its
efforts to become the most relied on “first call bank.”

Foreign Exchange Division Featured on TV
The activities of MHCB's Foreign Exchange Division werefeatured in a program entitled NHK Special: SimultaneousThree-point Documentary—the Clash of Money
Speculators, which was broadcast by NHK (the publicbroadcaster) on January 8, 2006.

(Courtesy of NHK)27

Global Corporate Group— Approaches to Large and Global Corporations, and Other Entities —Debt-Related Business
Debt Financing
MHSC has sustained its sector-leading performance as a result of its
powerful bond-selling capabilities, and its ability to set prices toreflect customer demand with precision and respond rapidly tochanges in the market. Through its proposals for dealing with rating
enhancement strategy, disclosure and related issues, it will continue

Domestic SB League Table (Including yendenominated foreign bond, and excluding
municipal bond bank debenture, self-led
issues and retail targeted)* Lead managing amount basis. Total Amount ofIssues: ¥8,588.3 billion (April 2005-March 2006)
Underwriting Market
Ranking Company name(billions of yen) share (%)
1
Mizuho Securities
1,688.2
19.66
2
Nomura Securities
1,654.6
19.27
3
Daiwa Securities SMBC
1,508.4
17.56
Source: Calculated by MHSC based on data of I-N Information Systems

to use accurate analyses of market trends and cutting-edge financial
technologies in formulating proposals for optimized funding plans according to customers' needs.

Sales and Trading
As a leading player in the bond market, MHSC provides products that suit its customers' investment strategies,
engaging proactively in market-making and offering high-quality information.
In the area of research, it continues to offer individual market analyses and maintain steady efforts to satisfy
customers' individual needs through portfolio diagnostic services and consulting services that can offer efficientinvestment approaches based on a birds-eye view of the balance sheet. As the securities company with the numberone research division in Japan, it has also earned an extremely good reputation among institutional investors.
It will continue to enhance its market presence by arranging and proposing a variety of high value-added products.

Equity-Related Business
Equity Financing
Backed by superior financial technology and enormous equity-selling
power at home and overseas, MHSC is steadily improving its performance by dealing with customers' funding needs through public andother stock offerings and sales, and convertible bond-type corporate

Domestic Public Offering League Table* Underwriting basis, including REITs. Total Amountof Issues: ¥4,698.9 billion (April 2005-March 2006)
Underwriting Market
Ranking Company name(billions of yen) share (%)
1
Nomura Securities
1,092.9
23.26
2
Daiwa Securities SMBC
1,048.9
22.32
3
Nikko Citigroup
712.4
15.16
4
Mizuho Securities
370.3
7.88
5
Mitsubishi UFJ Securities
302.6
6.44
Source: Calculated by MHSC based on data of I-N Information Systems

bonds with stock purchase warrants. It has also been quick to propose new finance schemes that take changes in Japanese legislation and taxation systems into account, draws up proposals pertaining to capital management for maximizing customers' corporate value, and supports IR activities.
It has put together a team with rich experience in the area of IPOs to establish a system for providing advice on themost appropriate capital management and other aspects of preparing for IPOs, as well as full-scale support for disclosure and the compilation of due diligence materials. It also provides customers with high-level solutions to issues arising
after the IPO, including IR, growth strategies and capital management measures.

Sales and Trading
MHSC is extending the range of stocks the research division covers, offering high value-added IR services, andworking through its global network to secure trading orders for sales of Japanese stocks, thereby steadily increasing
its presence in terms of broker rankings.
Looking ahead, it will devote more effort to further developing its global business by strengthening its sales efforts
towards overseas institutional investors and by trading in foreign stocks. It also responds appropriately to customers'
increasingly sophisticated requirements by drawing on its broadly based domestic and overseas strengths in sales,
research, trading and execution, and its abilities to develop products that utilize derivatives.
28

GLOBAL CORPORATE GROUP

Investment Banking
M&A Advisory Services
MHSC has established a top-level presence in the area of M&A and is regularly placed among the upper echelons of
the M&A advisory rankings in terms of the number of advisory deals handled. Drawing on its advanced sectoral
knowledge and know-how to satisfy customers' business and financial management strategies, it provides advice onmergers, stock-for-stock exchanges, corporate splits, acquisitions and sales, business tie-ups, capital strategies, corporate revitalization and sell-offs of NPLs.
In February 2006, it formed a strategic alliance with U.S. investment bank Evercore Partners in the area of M&A, in order tostrengthen its overseas presence and improve its position for handling cross-border deals.
Looking ahead, it will reinforce its ability to put forward andexecute proposals in line with customers' business strategies, and

M&A Advisory Ranking (Japanese target,
any acquirer nation, deals completed)* League table based on number of deals (January
2005-December 2005)
No. of Amount (millions
Ranking Advisor
transactions of U.S. dollars)
1
Nomura131
77,862
2
Mitsubishi UFJ Financial Group
130
52,771
3
Mizuho Financial Group
96
7,122
Source: Thomson Financial

create new business opportunities while striving to further expand
its M&A business.

Structured Finance
MHSC has used its personnel resources and know-how to compile
an impressive record that puts it among the market leaders inJapan in real estate (J-REITs, private funds, etc.), monetary claims(lease claims, credit claims, housing loans, etc.) and other areas of
securitization, as well as lease finance and other aspects of struc-

Overall ABS Bookrunner League Table(ABSs backed by assets in Japan: Domestic
public and private bonds and Eurobonds)* Settlement date basis (April 2005 - March 2006)
No. ofAmount Market
Ranking Company nameissues (billions of yen) share (%)
1
Mizuho Financial Group 19
752.5
22.5
2
Daiwa Securities SMBC
12
722.6
21.7
3
Nomura Securities
8
473.1
14.2
Source: Thomson Financial*Figures for Mizuho Financial Group are the aggregate figures for
MHSC and its overseas securities subsidiaries

tured finance.
Looking ahead, it will continue to meet customers' various needs by proactively tackling all aspects of the asset
securitization business while developing new financial technologies and utilizing principal investment.

Global Operations
As the core company responsible for the securities operations of the Global Corporate Group, MHSC has set up securities subsidiaries in key overseas markets in the U.K., the U.S., Hong Kong and Switzerland. To satisfy the diverse
needs of globally expanding customers, it is working to realign its global investment banking business organization bypromoting stronger integration among its domestic and overseas offices.
To strengthen its securities operations in Asia, it opened its first Chinese representative offices in Beijing andShanghai in September 2005, and established the International Business Promotion Group.

To Prevent Recurrence of Placement of Erroneous Orders
With respect to the erroneous stock order placed by MHSC in December 2005, MHSC reiterates its deepest apology to
all related parties for any inconvenience this incident had caused. In its efforts to restore market credibility, MHSC is
working to prevent any recurrence of such an incident by making systems improvements and conducting a thoroughreview of its operating procedures, as well as substantially strengthening its management controls.

29

Business Approaches Adopted by Each Global Group

Global Retail Group— Targeting Individuals, SMEs and Middle-Market Corporations —Business Environment and Overview of the Global Retail Group The Environment Facing Individual Customers
Against the background of progressive deregulation, prolonged low interest rates, an aging society
with falling birthrates and other changes in the Japanese social structure, personal asset investment
needs have diversified and their focus has shifted dramatically from savings to investments. In light ofthese changes, banks are increasingly expected to offer one-stop services to satisfy customers'
diverse requirements, from consulting functions to products ranging from banking, trusts, securities

GLOBALRETAIL
GROUP

and insurance through multiple channels. Meanwhile, it would be no exaggeration to say that one of
the banks' social missions is to ensure the greater convenience and safety of settlement functions,which are key elements of the social infrastructure.

 The Environment Facing SMEs and Middle-Market Corporations
Although improvements in corporate earnings and other factors show that business conditions haveentered a recovery trend, the Japanese economy must promote the creation and development of
SMEs and middle-market corporations with growth potential and venture businesses with a revolutionary, challenging spirit to instill a new sense of vitality into the Japanese economy. Banks arestrongly required to respond to these corporate customers' needs for stable lending services andmanagement issue resolution.

With the close cooperation of the group companies of Mizuho and leading domestic and interna-

tional companies, the Global Retail Group provides top-level products and services on a global scale
in response to the increasingly diversified and globalized needs of individuals, SMEs and middlemarket companies.

30

GLOBAL RETAIL GROUPKey Group Companies

 Mizuho CapitalMizuho Capital ranks among the top domestic venture Mizuho Bank

capital companies in performance, making full use of its

MHBK's primary customers are individuals, SMEs andrich pool of know-how and Mizuho's domestic and over-middle-market corporations.

seas network in its proactive approach to investment and

MHBK sees asset management consulting and per-consulting.

sonal loans as the key business areas for individual customers, and is working to strengthen its businesspromotion organization and ability to offer products by

Performance and Highlights

cooperating with securities companies and trust banks, as

Performancewell as training financial consultants and developing

In the business with customers, there was a steadycompetitive new products.
It is also encouraging customers to deepen, expand
and consolidate their banking transactions with MHBK byincrease in fee income from investment trust sales
and solutions-related business. A strong performance by MHIS also contributed to higher income.
(Billions of yen)offering highly convenient products and services such as
the “Mizuho Mileage Club,” which allows them to accu-

Fiscal 2005
Net Income
Net Business Profits
157.5*1
365.7*2

mulate points according to their usage of MHBK services,

Global Retail Groupand an expanded channel network. MHBK has also

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

adopted a more proactive approach to reinforcing security by introducing biometric identification (finger vein

Highlights

recognition) for ATM transactions and other measures.

MHBK

As for the needs of SMEs and middle-market corporations for funding and resolution of management issues, it
makes use of the financial functions and networks ofMizuho and business tie-ups to offer optimal products,
services and solutions to customers ranging from those
who are just starting up in business to those who seek
to expand.

 Mizuho Investors Securities

Approaches to Individual Customers• Membership of the “Mizuho Mileage Club” topped
the 1.9 million mark in June 2006.
• A new-type office was opened in Roppongi Hills.
• The consulting system was further strengthened
with the deployment of 2,000 financial consultants.
• “Mizuho Orico Card Loans” were launched.
• The number of IC cash cards exceeded 3.0 million.

In line with its aspirations to become “the securities com-

Approaches to SMEs and Middle-Market
Corporations

pany that customers know and trust most,” MHIS is• Lending increased by ¥620 billion (including private

working with MHBK to establish joint branches and promote securities sales agency business while cooperatingwith Mizuho's group companies to satisfy wide-ranging
securities transaction needs in areas like IPOs.

 UC Cardbond issues).
• The number of offices of Mizuho Business Financial
Center reached 100, with a staff of 600.
• Reorganization of the Corporate Banking Group
strengthened the solution support framework.

Through its strategic tie-up with Credit Saison, UC Card
has built the strongest business structure in the credit
card sector by becoming the first company in Japan to
specialize in both the management business of affiliatedmerchants and the processing business, offering highly
convenient and innovative services.

31

Global Retail Group— Targeting Individuals, SMEs and Middle-Market Corporations —Approaches to Individual Customers
Working to Improve the Convenience of Customer Transactions
Mizuho Mileage Club
Membership of the “Mizuho Mileage Club” broke through the 1.9 million mark in June 2006.
In the area of Mizuho Mileage Club cards with credit card functions, we started offering Saison American
Express(R) Card in January 2006. As a result, customers are now able to choose from among the four majorinternational brands, including MasterCard (UC) and VISA/JCB (Saison) according to their requirements.
In the area of the “Partners Service,” which is built on affiliations with well-known companies, new tie-ups wereconcluded with the Lotte Group of Korea in June 2006, which owns department stores, hotels, theme parks, andduty free stores, and Prince Hotels, which owns the largest network of hotels and leisure facilities in Japan.

“Mizuho Suica Card” Launched
In March 2006, MHBK started offering “Mizuho Suica Cards” in a tie-up with the East Japan Railway Company (JR East).
These cards combine MHBK's IC ATM cards with JR East's View Card credit cards and Suica, which incorporates
train ticket and electronic money functions. Not only can the View Thanks Points that accumulate according to credit
card usage be converted into Mizuho Mileage Club points, but Mileage points can also then be used to charge theSuica with new cash. MHBK is thus the first financial institution to offer a point service with such advanced featuresand convenience.

Comprehensive Business Alliance with DoCoMo and UC Card
MHBK has reached agreement on a comprehensive business alliance with NTT DoCoMo (DoCoMo) and UC Card. In
cooperation with DoCoMo, MHBK is planning to offer customers holding Mizuho Mileage Club cards a service
whereby credit card settlements can be made by mobile phones using “iD”*.
It will work to improve user convenience further by developing services that link mobile phones that are already an
integral part of its daily life infrastructure and financial products that are closely linked to daily lifestyles.
*iD is a service that enables DoCoMo mobile phones to settle credit card payments.

New-Style Office Opened in Roppongi Hills
In March 2006, MHBK opened a new-style office specializing in services for individual customers in Roppongi Hills, Tokyo.
Customers who urgently need asset management or lending services can use this office on weekday evenings andSaturdays. It features a spacious lounge where customers can relax in a calm and comfortable atmosphere, andprivate rooms where they can receive sufficient advice from specialized consultants.
This Roppongi Hills office is the first of a planned total of 100 new-style outlets that MHBK intends to tailor tomarket characteristics and customer requirements.
* This office is a part of the Roppongi Branch, not a business office (branch, representative office) under the Banking Law of Japan.

Targeting the Senior Executives and Employees of Corporate Customers
MHBK offers various products and services that senior executives and employees of its own customer corporations
and those of MHCB can use at various stages of their lives, from opening salary deposit accounts and asset-building

32

GLOBAL RETAIL GROUP

savings (Zaikei) to housing, education and other types of loans and retirement allowance management.
In particular, as a result of increasing the number of centers handling sales to senior executives and employees ofcorporate customers to six, as well as other efforts to improve services, it has posted steady growth in the number ofhousing loans handled for this market.

Personal Loans
Housing LoansMHBK is working to strengthen its products and services in response to its customers' constantly diversifying housing
loan needs.
To respond to customers' interest requirements, it continues its special interest rate housing loan campaign andoffers the “Flat 35” securitization-type housing loan product to cater to customers' longer term fixed-interest needs.
In fact, “Flat 35” continued the trend set in fiscal 2004 by retaining the number-one spot among financial institutions
on a results basis in fiscal 2005 as well.
In July 2006, MHBK started handling housing loans with a sickness security rider as it continued to expand its
product line-up.
During fiscal 2005, MHBK also held weekend consultations on housing loans at an aggregate total of around
1,000 branches throughout Japan, assisting large numbers of customers who cannot visit its offices on regularbusiness days. From April 2006, some branches have started holding evening sessions on weekdays to assist
customers on their way home from work with their consultation needs.
It is also enhancing its services to customers by expanding its Housing Loan Business Promotion Centers—a
specialist channel via which customers apply for housing loans through housing sales companies.

Unsecured Loans
Through its comprehensive business alliance with Orient Corporation (Orico), MHBK has successfully increased thebalance of captive loans (exclusive sales tie-up loans extended through Orico's affiliated merchants). In January 2006,
it also started selling “Mizuho Orico Card Loans,” which it developed jointly with Orico. This product comes in two
types to meet customers' diversifying loan needs. The “Casual Plan” features simplified application procedures, whilethe “Platinum Plan” offers the lowest interest rates in the industry.

Aiming for the No.1 Spot in Consulting Services
Strengthening Consulting Functions
MHBK is striving to become the leader in consulting services to ensure that it is the customer's bank of choice as alifetime advisor at various stages of their lives. To this end, it is working to train and deploy more expert personnel,build a new in-branch organization and improve its information infrastructure.
It will respond to customers' increasingly sophisticated needs by training and deploying 2,000 financial consultants
who specialize in business promotion for individual customers and can respond to all kinds of consulting needs.
As of the end of March 2006, it had established “Premium Salons” at 150 branches to provide customers withspace for thorough consultations on asset management using life plan simulations and other tools, and plans to
expand this to approximately 250 branches.

33

Global Retail Group— Targeting Individuals, SMEs and Middle-Market Corporations —It is also establishing “Comprehensive Reception and Information Desks” and deploying “Lobby Concierges” toassist customers in completing their business at branches more smoothly.

Cooperation with Securities Company and Trust BankMHBK is moving ahead with tie-ups with the group companies of Mizuho and the online securities company, Monex
Securities.
There was further progress in setting up MHIS consultation booths (“Planet Booths”) in the lobbies of MHBK
branches, and as of the end of March 2006, the number of branches with these booths had reached 73. MHBK isthus able to respond to a wide range of asset investment needs by introducing MHIS through these joint branches.
MHBK also offers an online securities sales agency service through Internet channels in an alliance with Monex
Securities. From February 2006, this service was further enhanced by allowing mileage points to be accumulated for
the Mizuho Mileage Club through agency sales of securities, etc., via the Internet.
MHBK also handles a variety of MHTB trust products at all of its branches using the agent system for trust
banking businesses.
MHBK has worked to upgrade its services in the testamentary trusts business by preparing a guidebook designed
to answer the needs that customers increasingly face as a result of the aging society, with information on inheritanceprocedures, notifications, etc.

Expanding Asset Management Products
To support customers' asset investment needs, MHBK is endeavoring to expand its product line-up of investment
trusts, individual annuity insurance and foreign currency deposits.
Following the third stage lifting of the ban on over-the-counter sales of insurance by banks in December 2005,
MHBK initiated sales of lump-sum payment whole life insurance and lump-sum payment endowment insurance at all
branches throughout Japan.
In the area of investment trusts, it also started handling the following products for the first time: the Nomura Small
Cap Stock Open, which focuses on diversified investment in small-cap Japanese stocks, and the World 8 Asset Fund(stable course, allocation course, growth course; also known as “World Suite”) which focuses on diversified
investment in Japanese and foreign stocks, bonds and REITs. In the area of individual annuity insurance, it deals in the“Nenkin Kiko” fixed annuity insurance and the “Tanoshimi Life” annuity funding-guaranteed type variable personal
pension insurance. It also offers products that promise good yields on a yen basis through riders, such as “Mizuho
Yen Time Deposits with Rider.” MHBK is striving to satisfy customers' diversifying asset management needs by using
campaigns and other means to expand its business in JGBs for individual investors.

“Special Consulting Program for Retirees” Launched
MHBK has drawn up the “Special Consulting Program for Retirees” for members of the generation who are facing a
new start in life, and since June 2006, has been enhancing its services to enable customers to live more prosperous,
more fruitful lives.
It offers various services, starting with “Money Life Simulations” whereby it provides various estimates of pension
receipts and future cash flow, etc., while consulting with customers. It has also launched the “Retirement Allowance
Investment Plan,” which offers a 1% preferential interest rate on the special rate already available on “Mizuho
Money Plan Set” 3-month yen time deposits, and the “Money Life Information Delivery” service, which offers basic
knowledge on retirement allowances and the latest useful money life information on a regular basis.

34

GLOBAL RETAIL GROUP

Targeting SMEs and Middle-Market Corporations

By strengthening its efforts to create a larger and more stable profit base for the future, as well to further promote its
solutions businesses, MHBK aims to become the top bank in terms of both share of transactions with SMEs andmiddle-market corporations, and of providing solutions for them.

Promoting Lending
MHBK is working proactively to increase lending with a view to creating a stronger, more stable profit base.
Its positive efforts to boost its share of lending in fiscal 2005 resulted in an increase of approximately ¥620 billion,
including private bond issues. As a result of efforts to increase its specialist staff, new transactions with new customers resulted in a one-year increase of approximately ¥1,160 billion, including private bond issues, in fiscal 2005.
MHBK will be positive in taking risks without relying on collateral and adhere to a proactive approach to meetingcustomers' funding demands by expanding the “Partner Series” of unsecured loan products and by offering various
fund procurement schemes as a means of satisfying the varied needs of SMEs and middle-market corporations,
including the ¥1 trillion “Super Wide” strategic loan fund.

Alliance with Orient Corporation
Launching New Loan Products for SMEs
MHBK is making use of the credit enhancement capabili-

Sales Performance of Three Products Developedby Mizuho

ties offered by Orico and the debt servicer know-how(Billions of yen)
400

Amount (execution basis)

offered by Japan Collection Service, a member of the Orico

No. of transactionsgroup, to develop a number of loan products for SME customers. On an execution basis, it has already extended(No. of deals)
6,000

300

4,500

200

3,000

100

1,500

approximately ¥350 billion in loans.
This was realized by the development of several breakthrough products that manage risk for the entire productportfolio, including “Mizuho Long Partner,” which provides unsecured working capital for up to seven years,“Mizuho Rising Partner,” which provides loans to SMEs
with growth potential, and “Mizuho Quick Partner,” anunsecured loan product that uses a rapid automatic creditscoring model for applications. Of these, “Mizuho Long
Partner” responds to the needs of companies planning
IPOs. So long as they meet certain criteria, it is now possible to eliminate the need to obtain guarantees from a cus-

0

0
July
2003

February
2004

DecemberNovember
2005

March
2006

“Mizuho Quick Partner” launched“Mizuho Support 30” launched

tomer's representative director.
MHBK intends to respond speedily to the financing
needs of corporate customers by developing more unse-“Mizuho Rising Partner” launched“Mizuho Long Partner” launched

cured loan products in cooperation with Orico.

35

Global Retail Group— Targeting Individuals, SMEs and Middle-Market Corporations —Approach to Small-Scale Companies
MHBK is proactively engaged in the lending business, and has concentrated its overall lending operations for smallscale companies in Mizuho Business Financial Center, a subsidiary specializing in lending.
The number of offices of Mizuho Business Financial Center reached 100 during fiscal 2005, and its staff reached
600, most of them veterans who are well-versed in the lending business. Making the most of these resources, MHBK
works proactively to satisfy the funding needs of small-scale customers through loans with guarantees from theCredit Guarantee Corporation and the “Mizuho Quick Partner” unsecured loan product.

Becoming the Top Bank in Providing Solutions for SMEs and Middle-Market Corporations
Further Promoting the Solutions BusinessA team of approximately 350 MHBK professionals specializing in corporate banking is working together with its
branches to provide solutions that make the most of the bank's expertise as a specialist in transactions with SMEs andmiddle-market corporations.
The solutions offered are very diverse, ranging from financing deals in areas like structured finance and syndicatedloans to solutions associated with business strategies such as business inheritance, M&As and business matching, andadvisory services on overseas expansion.
In March 2006, MHBK reorganized its Corporate Banking Group to enable it to offer solutions to customers' varied
management issues and needs more rapidly. Specifically, this involved establishing the Corporate Finance Division,
which centralizes various solutions functions, and the ALC Advisory Division, which supports management strategies
in order to bring together group know-how and offer more precise solutions than ever. The Comprehensive Solutions
Strategy Team has also been established in the ALC Advisory Division to offer strategic, comprehensive proposals in
response to the management issues of upper-middle corporations with advanced solutions needs.

Business Matching
MHBK is proactively engaged in business matching services for introducing customers of Mizuho who best satisfy thebusiness needs of other customers. These include introducing new sales and purchasing partners, and partnercompanies for developing new products or business diversification.
“Business Matching Forums” are designed to bring corporate customers together to engage in individual businessnegotiations, and have been extremely well received.

Defined Contribution Pensions
Environmental changes that are occurring with the scheduled abolition of the preferential tax treatment connectedwith the Tax Qualified Pension System and Reserve for Employee Retirement Benefits have presented customers with
the need to restructure their corporate pension schemes. In response, the Corporate Planning Division's DefinedContribution Pension Office offers integrated services extending from feasibility studies to actual introduction,
management and administration. These services cover pension consulting centered on defined contribution pension
schemes, support for introducing these schemes, investment products and aftercare for policyholders.
MHBK also provides support for various defined contribution pension schemes to suit a variety of requirements,
including the Mizuho “SogoGata (comprehensive package)” DC Plan for SMEs and the “Mizuho Personal DC Plan”
for individuals.

36

GLOBAL RETAIL GROUP

Mobilizing Group Strengths
 Support for New Businesses
In the new business market, MHBK's know-how is far superior to that of other banks, and it proactively offers financeto corporate customers possessing core technologies with promising business potential, even if they are recently
established venture firms.

 IPO Support
MHBK responds to the needs of customers planning IPOs through dynamic collaboration with other group companiesof Mizuho: Mizuho Capital serves as a venture capital investor and provides advice on going public; MHIS provides
broadly based support as a securities company; and MHTB provides advisory and stock transfer agency services.

 Responding to Business Inheritance Needs
In October 2005, MHBK set up the Corporate Consulting Office within the Corporate Banking Group to strengthen
its ability to deal with important customer management issues, such as the inheritance of management rights andbusiness restructuring. In cooperation with MHTB and Mizuho Management Advisory, it offers the best possible
solutions to customers' needs in such areas as business inheritance.

 Support for Overseas Expansion
In order to satisfy the needs of Japanese companies that are increasingly active in China and other Asian markets,
specialist staff who are well-versed in overseas business provide assistance in customers' local projects through thegroup's overseas network, which is the most extensive of any Japanese bank. Its specialist staff cooperate with therelevant divisions to offer wide-ranging solutions pertaining to customers' overseas business operations, including the
CMS, solutions to risk mitigation needs, and operational support for foreign exchange and foreign trade.

Securities Sales Agency Business
Now that MHBK handles securities sales agency business aimed at corporate customers, the bank itself is able torespond proactively to customers' diversifying investment needs by engaging in solicitation and agency businesses inconnection with structured bonds and other instruments that were once the exclusive province of securities companies.
The Asset Management Office for Corporate proposes solutions to corporate customers' investment needs, and its
highly expert staff offers both securities, investment trusts and other products to suit customers' requirements.

37

Business Approaches Adopted by Each Global Group

Global Asset & Wealth Management Group— Dealing with Customers' Demands for Asset Management andAdministration —Business Environment and Overview of the Global Asset & WealthManagement GroupGLOBALASSET & WEALTH
MANAGEMENTGROUP
Against the background of an aging society and reforms to legislative and accounting systems, theneed for asset management and administration is increasing among individuals and corporates alike.

In the world of trusts, moreover, restrictions limiting the assets that could be placed in trust wereabolished by revisions to the Trust Business Law in December 2004. At the same time, entities otherthan financial institutions are now allowed to enter the trust business, and the scope for adopting
the agent system for trust banking businesses has been expanded. This has led to a steady increasein the number of opportunities to offer solutions that make use of trust functions.

The Global Asset & Wealth Management Group provides world-class products and services tomeet diverse and sophisticated customer needs in the areas of trust and custody services as well asprivate banking services.

38

GLOBAL ASSET & WEALTH MANAGEMENT GROUPKey Group Companies

Performance and Highlights

 Mizuho Trust & Banking

Performance

Trust banks may engage in trust business and related

The group achieved steady profit growth as a result

operations as well as banking business. One particularfeature that sets trust banks apart from other banks isof its efforts to strengthen its asset managementbusiness further.

their asset management function, which allows them to(Billions of yen)

Fiscal 2005
Net Income
Net Business Profits

manage and administer customers' assets.
MHTB offers a full range of trust services to individualand corporate customers, and is working on strengthen-

Global Asset & WealthManagement Group

41.2

88.3

*: Figures of core banking subsidiary (non-consolidated).

ing its asset administration divisions, handling pensions,asset management, real estate, securitization and stocktransfer agency business.

 Trust & Custody Services BankTCSB is a highly specialized trust bank focusing on

Highlights
MHTB• The number of testamentary trusts entrusted to
MHTB increased steadily, reaching 11,504 contracts
as of the end of March 2006.

asset management services, offering high-quality, high

• The balance entrusted to the “Noteless” lump-sum

value-added trust and custody services to financial institu-

accounts receivable trust scheme exceeded ¥1 tril-tions and institutional investors.

lion.

 Asset Management Companies
Mizuho's asset management companies Dai-Ichi Kangyo
Asset Management, Fuji Investment Management and
DLIBJ Asset Management constantly pursue optimal
investment results in both the investment trust and theinvestment advisory businesses as they strive to respondaccurately to customers' increasingly diverse and sophisti-• The balance of securitized assets (real estate)under administration increased by ¥1 trillion to¥4.2 trillion.

Asset Management Companies• Received commendations from numerous investment trust evaluation organizations.

MHPW• Started operations in November 2005.

cated asset management needs.

 Mizuho Private Wealth Management
As a full-fledged private banking services company,
MHPW provides optimal, high-quality comprehensive andintegrative products and services tailored to the needs ofindividual customers.

39

Global Asset & Wealth Management Group— Dealing with Customers' Demands for Asset Management and Administration —Expanding the Trust Market
The trust system involves the transfer of assets from one party (the entruster) to someone the entruster trusts (thetrustee), who is then entrusted with the management and administration of said assets on behalf of the entruster inaccordance with certain objectives (the trust objectives).
Today's trust system is said to have been introduced into Japan during the Meiji era (1868-1912), and the Trust
Law and the Trust Business Law were enacted in 1922. In the 80 or so years since, money held in trusts, securities
held in trusts and other forms of trusts have made an enormous contribution to the lives of the Japanese people.
In December 2004, the system underwent the largest change in its history when the revised Trust Business Law
was passed. This abolished restrictions that had originally limited the assets that could be placed in trust to six
categories, including money and land, and made it possible to place intellectual property rights such as copyright intrust. For all practical purposes, only financial institutions were originally allowed to participate in the trust business,but it has now been opened up to ordinary business corporations and the scope for adopting the agent system fortrust banking businesses has been expanded. This means the trust mechanism has come into much more general use
and the trust market is expected to grow further.
MHTB sees expansion of the trust market as a new business opportunity and will provide Mizuho's customers withsophisticated trust solutions.

Sophisticated Solutions
Testamentary Trusts
In contemporary Japan, the advent of an aging society withfalling birthrates and heightened awareness of individual rights

Testamentary Trusts Entrusted

have fueled an increase in the number of inheritance problems.

(No. of deals)
12,000Each year, more and more customers are making use of the trust

11,500banks' testamentary trust business as a means of preventing

11,000these inheritance problems from arising. MHTB's testamentary

10,500trust business covers three services: consent to allow the bank toundertake the execution of wills so that their provisions are ful-

10,000filled; will custody trust services; and entrustment by all heirs toallow the bank to act as their agent in the inheritance and thus
the distribution of the estate. As of the end of March 2006,

0

March
2004

March
2005

March
2006

11,504 customers had entrusted MHTB with their wills, thereby
placing the futures of their families in its hands where asset
inheritance is concerned.

Securitization of Monetary Claims and Other Claims
MHTB makes full use of its trust functions in developing asset financing schemes on an order-made basis, andproposing them to its customers.
Utilizing the high-level structuring capabilities it has built up on the basis of its strong track record, MHTB offers various solutions to customer needs for fund procurement, cutbacks in assets and liabilities, and better financial indices.
As a result, the balance of monetary claims in trust rose by approximately ¥1.2 trillion to ¥6.6 trillion. In particular,

40

GLOBAL ASSET & WEALTH MANAGEMENT GROUP

the balance of funds in the “Noteless” lump-sum accounts
exceeded ¥1 trillion. “Noteless” is a product whereby accounts

Securitized Monetary Claims and Other
Claimsreceivable are accepted in trust from customers in such a way as to(Trillions of yen)7

provide them with a service that allows due-date collections andpre-maturity conversion into funds of the receivables in question.

6

At the same time, it provides investors with new investment
instruments in the form of asset securitization products. Since its

5

launch in July 2002, the “Chochiku no Tatsujin” automobile loan
securitization product for individuals (results-based dividend typemoney held in trust) has been well-received because it focuses on0balancing safety with profitability, and its outstanding sales have

March
2004

March
2005

March
2006

increased steadily, topping the ¥630 billion mark as of the end of
March 2006.

Real Estate Securitization
In recent years, real estate securitization has come into
increasingly active use because of the need to overhaul strategies

Securitized Assets (Real Estate) under
Administration as Trustee

relating to real estate holdings in response to changes in the(Trillions of yen)5business environment. These include the growing need to makemore efficient use of assets, the diversification of fund4

investment and procurement needs, and changes in theaccounting system.

3

Fully utilizing the know-how it has built up over many years,
MHTB is engaged in a wide range of securitization deals involving
office buildings and commercial facilities. At the same time, it isproactively engaged in real estate development methods that

0

March
2004

March
2005

March
2006

utilize securitization mechanisms. MHTB's capabilities andperformance in arranging real estate securitization deals have earned high marks among Japanese and overseas rating
agencies and investors. As of the end of March 2006, it boasted the highest balance of securitized assets underadministration as a trustee with a total in excess of ¥4.2 trillion.
It will put forward sophisticated proposals that will satisfy all real estate needs by making the most of the overall
strengths generated through the combination of its arrangement capabilities and financial functions.

41Global Asset & Wealth Management Group— Dealing with Customers' Demands for Asset Management and Administration —Pensions Business
The move to reform corporate pensions triggered by the introduction of accounting standards for retirement benefits is now
underway in earnest following the passage of the Defined
Benefit Corporate Pension Law and the Defined Contribution
Pension Law. As Japan's structural reforms progress, andRetirement Benefit Funds under
Administration as Trustee (Solely operated
designated money trust + Pension trust +Pension specified money trust)(Trillions of yen)18

responses to globalization become more necessary, corporate
pension schemes are increasingly in need of drastic reform as

16companies reassess their human resource programs, strengthen
their measures against financial risk, and move ahead with cor-

14

porate realignments.
MHTB responds to customers' broad-based needs as a pension
trustee offering full services ranging from pension planning and

0

March
2004

March
2005

March
2006

consultation to pension asset management. In cooperation with
Mizuho Pension Research Institute, MHTB provides ALM consultation and risk management services through highly
experienced professionals equipped with the best know-how in the business.
As a “Best Solutions Partner” in the area of corporate pensions, MHTB will continue to offer appropriate highquality services and products.

TCSB Number One in Terms of Outstanding Assets under Management
In cooperation with the group companies of Mizuho, TCSB has
worked to expand its transactions with financial institutions andinstitutional investors. As a result, the balance of assets under

TCSB's Assets under Administration(Trillions of yen)200

management reached ¥189 trillion as of the end of March 2006,
putting it in the number one position among trust banks

150

specializing in asset management services. It will continue toexploit the economies of scale that result from its strong base of100

assets under management to provide high-quality, high valueadded custody services that match the needs of its customers.
0

42

March
2004

March
2005

March
2006

GLOBAL ASSET & WEALTH MANAGEMENT GROUP

Mizuho's Asset Management Performance Rated Highly
Mizuho's asset management companies have earned an excellent reputation among investment trust evaluation
organizations for their investment expertise and unique product characteristics.
By offering investment products that make the most of the expertise of each company, they will continue to satisfy
customers' asset management needs.
Mizuho's Asset Management Companies and Awards Received
Dai-Ichi Kangyo Asset Management

Morningstar Japan Award “Fund of the Year 2005”• Excellent Funds in Domestic Equity/Hybrid

Fuji Investment Management

Lipper Fund Awards Japan 2006
• Best Fund Management Company (Bond)DLIBJ Asset Management

Morningstar Japan Award “Fund of the Year 2005”• Best Fund in Fixed Income• Excellent Funds in Global Equity/Hybrid
Lipper Fund Awards Japan 2006
• Best Fund Management Company (Overall)

Full-Scale Private Banking Services
Mizuho offers the best solutions to individual customers' diversified asset management and administration needs.
In November 2005, the newly established firm, Mizuho Private Wealth Management, Japan's first full-fledged
private banking services company, started operations providing comprehensive and integrative services similar to
those available in the U.S. and Europe to the extent permitted under Japanese laws and regulations.
Based on the open-architecture concept of “providing customers with the best around the globe,” it will seek tooffer products and services of the highest level.
With regard to non-financial services, it will provide premium services to meet customers' diverse needs in relation
to art, automobiles and similar areas, in collaboration with prestigious companies, as well as high-quality solutions inconnection with areas such as philanthropy and concierge services.

43

Brand Strategy

We are pursuing a strategy to transform the Mizuho name into a brand that befits a leading global financial services
group.
Under this branding strategy, we will make a clear declaration of the kind of value we can provide to customers. This is
our Brand Promise.
Our Promise, however, is mere words and is not enough on its own to win customer approval for our efforts to provide
value. In order to fulfill our Brand Promise, therefore, we will share and put into practice the strengths and challenges
embodied in the expression “enterprising, open, and leading-edge” in our daily work activities.

Brand Promise
To customers ranging from domestic retail, corporate to international,
Mizuho Financial Group is comprised of enterprising, spirited professionals
who use creative and original methods to respond to customer needs today,
while helping them achieve a bright future tomorrow.
Because we want to play a meaningful role in our customers' lives
by always being available to them, we offer a full range of leading-edge products and services
designed to help them achieve their goals and make their lives more enjoyable and gratifying.

Brand Strength
EnterprisingOpen

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

open to new ideas and new ways toforesight to “light the future.”find the right path.

serve our customers.

In other words, each of us should

We think creatively about our busi-

We listen sincerely to our cus-

anticipate how society and customers

ness and each of us is empowered to

tomers and treat them with fairness

change. As a result of this, we intro-

make a difference in our customers'

and kindness any time we have theduce the most advanced and unique

lives. We keep focused on our cus-chance.

products and services to better serve

tomer needs and continuously strive tohelp them achieve their dreams.
We act enterprising all the time.

We want to be open all the time.

our customers. Because of our innovative mindset, we help our customers
achieve a better and brighter future.
We want to be leading-edge all the
time.

44

We believe we will only achieve our aspiration to become “A financial partner that helps customers shape their future andachieve their dreams” when our customers truly feel we are “enterprising, open, and leading-edge” and have fulfilled ourBrand Promise.
We will continue to declare our Brand Promise through various kinds of communications activities under the group's
unified Brand Slogan, “Channel to Discovery.”

Brand Vision“A financial partner that helps customers shape their future and achieve their dreams.”

Brand Slogan

The slogan expresses the role Mizuho will play, not only to realize today's dreams,
but also to discover new possibilities that lie ahead and to create a better future.
“Discovery” stands for Mizuho's customers discovering their dreams and new possibilities, and“Channel” stands for the role Mizuho will play in providing the ways and means to its customers
so that they can realize their dreams and new possibilities.

45

Management Structure of Mizuho

Management Framework

remuneration, MHFG has established two advisory bodies:
the nominating committee and the compensation

Group Management Frameworkcommittee, both of which include outside directors.

MHFG, as the financial holding company, is working to

MHFG has adopted a corporate auditor systemstrengthen the group's comprehensive financial services

whereby corporate auditors monitor whether operational

capabilities by directly managing our principal banking

execution by directors is legal by attending board meetings

subsidiaries and other core group companies* and maxi-

and expressing their views.

mizing the benefits of customer segmentation based on Execution of Duties

legally separate subsidiaries, thereby realizing synergies

In respect to execution of duties, MHFG has adopted thewithin the group and enhancing the specialization of indi-

executive officer system in order to separate the man-vidual group companies.

agerial auditing function from the execution of duties,

Group companies meanwhile carry out their businesses

and clarify lines of authority and responsibility. The

in their respective sectors in line with the basic policies set

chief executive officer controls MHFG's overall busi-

by MHFG.

ness with ultimate responsibility for execution ofduties. In addition to establishing the executive man-

MHFG's Corporate Governance Structure

agement committee as an advisory body to the chief

We devote our efforts to making our corporate manage-

executive officer to serve as a forum for discussing

ment more transparent and efficient and carrying out ourimportant issues concerning the execution of duties ofbusiness activities with integrity and fairness in confor-

MHFG, MHFG has set up business policy committees

mity with social standards. To this end, we position

including the compliance committee, the information

compliance as one of the fundamental principles of

security management committee and the disclosure com-sound business management and comply strictly with all

mittee to facilitate the discussion and coordination oflaws, ordinances, rules and regulations.

company-wide issues of concern to the executive officers.

 Board of Directors and Corporate Auditors

MHFG has also set up the internal audit committee to

MHFG's board of directors sets management policies,

fulfill an internal audit function under the chairmanshipdetermines important matters for MHFG and its groupof the chief executive officer by checking whether

companies, and supervises the manner in which directors

operational execution is appropriate from the viewpoint ofand executive officers fulfill their duties. Outside directors

audit. Outside specialists (one lawyer and one accountant)participate in board meetings from a position that isparticipate in the internal audit committee as special

independent of the actual execution of duties tomembers to reinforce its expertise and objectivity.

strengthen the management and monitoring functions of*Principal banking subsidiaries and other core group companies:

the board of directors.

MHCB, MHBK, MHTB, MHSC, MHIS, TCSB, DKA, FIMCO, DIAM, MHRI, MHIR,
MHFS, MHPWTo ensure transparency and objectivity in personnel
matters relating to the board of directors and directors'
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

Chief Executive Officer

Internal Audit Committee*1. Three of the nine directors are outside directors.
*2. Three of the five corporate auditors are outside auditors.

(As of June 27, 2006)

46

Profit Management System

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

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

We have adopted the basic policy of reinforcing our

Consolidated Profit Management

financial strength by vigorously increasing profitability

While each principal banking subsidiary or core groupand cutting costs. Centered on MHFG, we conduct profit

company works to enhance its own profitability, wemanagement for the group based primarily on our princi-

manage their profits on a consolidated basis as a means

pal banking subsidiaries and other core group companies.

of building an optimal business portfolio that is balanced

More specifically, we have clarified the strategic

approach best suited for its individual business models.

for the entire group.

positions of our principal banking subsidiaries and otherSpecifically, in addition to our principal banking

core group companies within the group on the basis ofsubsidiaries and other core group companies, we

our group business portfolio strategy and, having ensured

formulate profit plans and manage performance for thetheir autonomy and independence while bringing themstrategically important subsidiaries and include theircloser together through the unifying force of MHFG, we

profits with those of our principal banking subsidiaries andare seeking to maximize group corporate value.

other core group companies.

Based on our principal banking subsidiaries and othercore group companies, MHFG is making efforts to

Allocation of Risk Capital

optimize its business portfolio, managing profits throughIn an environment where the financial sector faces

the following:

progressive deregulation and globalization, and financial• formulating plans for net business profits and nettechnology is growing in sophistication, financial

income, and carrying out performance management,

institutions must strengthen their profitability while• allocating management resources such as personnel,
investment and risk capital, and• risk controls and profitability assessments based onallocation of risk capital.
Further, our principal banking subsidiaries and certain
other core group companies establish their own profit

managing various types of risk.
Based on MHFG's business portfolio strategy, we havebuilt a management structure under which optimized
business activities are conducted within the limits ofallocations of risk capital drawn from equity capital andother sources.

plans for and manage the performance of their respective

Under this framework, RAROC is used as an index tocompany's business group/units based on the manage-

evaluate performance in terms of return on allocated risk

ment policy, overall profit plans and resource allocations

capital at the level of the holding company and our prin-drawn up by MHFG.

cipal banking subsidiaries and other core group compa-

The above group companies have also introduced thenies. Our aim as a group is to improve capital efficiency

allocation of risk capital among each company's businessby allocating resources more efficiently based on thegroups/units, which is one of the most importantresults of these evaluations.

management frameworks of the group. Each groupcompany engages in business activities within the limits ofthat risk capital and RAROC is then used as a performanceindex to evaluate the return on allocated risk capital.

Risk capital allocation

Glossary RAROC (Risk-Adjusted Return on Capital)
RAROC is a measure of the profitability of allocated capital and is used as anindex for assessing capital efficiency. RAROC is calculated by dividing riskadjusted profits (profits adjusted to reflect statistically expected risk) by capital.

Allocation of risk capital to our principal banking subsidiaries and other core group companies

Management resources allocation function

Risk-based profitability assessments

Risk control function

Management to preserve allocated risk capital

47

Management Structure of Mizuho

Human Resources System

Establishing a Corporate Culture Full of Vitality
We have established the following five values as the

Vision for Human Resources: ROE on Human
Resources Investmentgroup's common code of conduct. These values, serving as

The group and its employees have set a shared vision forgeneral managers, along with the 360-degree employee

human resources as follows:

performance evaluation*, are being instilled in all“We promote the ‘ROE’ principle for human resources

the axis of our personnel evaluation system used by

employees of the group.

with a view to lasting value creation and creating an(1) Possessing a “customer-first” corporate objective.

attractive and fulfilling working environment for(2) Facing the challenges of innovation.

employees.”(3) Being rational and fair in making decisions.

In this vision, “ROE” stands for the following:(4) Placing importance on speed.

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

(5) Being accountable for all actions.

Responsibility:

Observe the principles of
independent judgment andself-accountability.

Opportunity:

Provide equal opportunity.

Optimizing the Uniqueness of Group
Companies and Synergies
Employees are employed by one of the group companies(MHFG, MHCB, MHBK, MHTB, MHSC, MHIR) with theaim of creating a group of specialists that can deliver
maximum innovativeness and speed.

Employability:

Develop expertise to enhancecompetitiveness.

At the same time, facilitated by the group's common
compensation system (group-wide common platform forhuman resources), we are able to maximize group synergy
through cross-company personnel transfers to place theright person in the right job.

Common Platform for Human Resources
MHFG

MHCB

MHBK

MHTB

MHSC

MHIR

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

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

Proactive personnel exchanges across group companies.
Welfare benefits platform(Health insurance association, employees' pension funds, cafeteria plan, etc.)
Human resources framework platform(Job groups, job grades, job application system, etc.)

48

CommonPlatform

Promoting the “Professional Career Path”
We have put in place multi-featured compensation systems that meet the needs of employees and the increasingly fluid labor market.
One example is the promotion of the “Professional
Career Path,” with a salary system that is in line withmarket standards.

Rejuvenating the Organization and Pursuing
Specialization
In January 2003, we launched an internal job application
system for branch general manager positions to encourage
the quick development and advancement of younger
employees. As of May 31, 2006, we achieved a dynamic
rejuvenation of the organization by selecting 52 applicantsin their thirties and appointing them as branch generalmanagers.
We also introduced a group-wide “job application system” and a “rookies' job request system“ for young
employees who have not experienced personnel transfers
to encourage employees to acquire greater specializationin which employees can apply for specific positions
throughout the group. We intend to strengthen thisscheme further by expanding the number of positions
available for the “job application system.”Positive Action Initiatives
With the aims of invigorating our organization by proactively recruiting women, and of improving the morale offemale employees, we are taking joint measures in our
approach to positive action*.
*Initiatives that a company adopts proactively and autonomously in order toeliminate gender discrimination in recruitment and to promote the utilizationof womens' capabilities to the fullest extent possible.

Note: Contents appearing in this section describe the group's human resources
system in Japan.
(As of June 27, 2006)49

Internal Control Systems of Mizuho

Compliance Structure

Compliance Activities
We have established the Mizuho Code of Conduct,

Basic Compliance Policy

which sets forth clear and concrete standards of ethical

We are acutely conscious at all times of our social respon-

behavior, and distributed it to all directors, senior man-sibilities and public mission as Japan's leading compre-

agement and employees of the group so that they arehensive financial services group. We, therefore, work to

well aware of its content and act accordingly.

ensure that we observe all laws and regulations, and pur-

Each of our group companies has also prepared asue corporate activities in a fair and honest manner thatcompliance manual, which serves as a practical guide-

conform to the norms accepted by society.

book for the rigorous compliance enforcement and clari-

Placing thoroughgoing compliance as one of the fun-fies the laws and regulations that the group companies

damental principles of sound business management,

must observe in pursuing their business activities and theeach group company pursues compliance and establishes

compliance activities they are required to follow.

its own compliance structure in line with the basic policies indicated by MHFG.

We conduct compliance training for directors, senior
management and employees so that they are fullyacquainted with the contents of the manual. We monitor

Compliance Structure

the status of compliance levels through primary self-

The chief executive officer of MHFG, MHCB and MHBK

assessments by individual organizational units and sec-each generally oversees compliance matters of theondary assessments by the internal audit division of each

respective company, and such chief executive officers

company.

also head their respective compliance committees atEvery fiscal year, each of our group companies estab-

which important matters concerning compliance are dis-lishes a compliance program, which contains concrete

cussed. The three companies also have individual compli-

measures for compliance enforcement such as mea-

ance divisions under the chief compliance officer. Thesesures related to the management of the compliancedivisions are responsible for compliance planning andframework, training and assessments. Progress regarding

implementation and control overall compliance manage-

the implementation of the compliance program is moni-

ment at the respective company. At the level of each

tored every six months.

organizational unit (such as branches and divisions) at thethree companies, the head of the unit is responsible forCompliance Structure

guidance and implementation related to compliance mat-

MHFG

ters within such unit, and the compliance officer or the

Board of Directors

compliance administrator at each unit reviews the status

Chief Executive Officer (CEO),
Compliance Committee(Chairman: Chief Executive Officer (CEO))of compliance.
MHFG has established the Internal Controls and Audit
Hotline, a system designed for obtaining concerns
regarding questionable accounting or auditing mattersfrom in and outside the company.
Other core group companies such as MHTB and

Chief Compliance Officer (CCO)(Compliance and Legal Affairs Division)
Every organizational unit
Compliance Officer/
Head of each unit
Compliance Administrator

MHSC have also established compliance structures adapted to the characteristics of their respective businesses.
MHFG monitors the status of compliance of the group

MHCB, MHBK, and othercore group companies

through reports submitted by our principal banking subsidiaries and other core group companies and adopts
appropriate responses when necessary. Compliance at
subsidiaries of our principal banking subsidiaries andother core group companies is monitored and managed
by their respective parent.

50

Subsidiaries of the above group companies

“Internal Controls and Audit Hotline”—A system designed for obtaining concerns regarding
questionable accounting or auditing matters—
Reporting Items:
MHFG has established a hotline to receive reports fromin and outside the company in connection withproblems concerning internal controls and audits ofaccounts and financial reports.
Contact Point:
This hotline has been established within an external law
office. Please use conventional mail or e-mail forreporting.
Conventional mail:
6F Nikko Ichibancho Bldg., Ichibancho 13-banchi,
Chiyoda-ku, Tokyo 102-0082
Mizuho Accounting Hotline, c/o Ohta Ishii Law OfficeE-mail : mizuho-kaikei@ohta-ishii.com
 When reported matters are within the scope of thereporting items, MHFG will do reasonable efforts toinvestigate the facts behind the information received
and report back on the results.
 Anonymous tips are also acceptable, but there arecases where it will not be possible to fully satisfy theintentions behind such tips owing to constraints on
investigations and the inability to report back.
 Information on persons making such reports is notdisclosed to third parties except in cases where theassent of the person in question has been obtainedor such disclosure is required under laws andordinances, etc.

Information Security Management
SystemBasic Approach
As the advanced information-telecommunication society
evolves and use of information increases exponentially,
appropriate protection of the informational assets held by
a company becomes a social responsibility, while appropriate usage of the same assets becomes the foundationof the company's competitiveness. As a provider of comprehensive financial services in Japan and abroad, we
believe that appropriate protection and use of informational resources are extremely important issues.
We are striving to strengthen our information security
management system, defining information security management as all acts associated with the appropriate protection and use of group informational assets. This
includes adopting information security management
measures to ensure the confidentiality, integrity andavailability of our informational assets, and responding torequests for disclosure from “data subjects” (the people
to whom specific information pertains) concerning personal information.

Overview of the Information Security
Management System
We have clarified the group management system as wellas management methods for information security man-

(As of June 27, 2006)

agement, and each company has drawn up its own regulations concerning information security management. We
are also building an information security management
system, stipulating that the compliance departments of
the individual companies are to act as information security management departments.
The chief executive officer of MHFG appoints a chief
information security officer who supervises planning, proposals and implementation in connection with overall
group information security management, and the information security management committee handles discussions and coordination of cross-divisional issues relating
to overall group information security management. In
addition, the Information Security Management Officehas been established within the Compliance and Legal
Affairs Division to specialize in information security management and provide centralized monitoring and controlof the information security management situation at our
principal banking subsidiaries and other core group51

Internal Control Systems of Mizuho

companies. The information security management situation at subsidiaries of our principal banking subsidiaries
and other core group companies is monitored and managed by our principal banking subsidiaries and othercore group companies themselves. In every organizational unit, the head of each unit is also responsible for
information security management, and an information
security management officer is appointed to check on
how information is handled and ensure that personnel
are fully aware of and well trained in safety management measures.
Based on this information security management system, we have drawn up and published the Privacy Policy
Regarding Customer Information* that complies withJapan's Law Concerning the Protection of Personal
Information. We are also building a system to deal withrequests for disclosure, and strengthening our safety
management measures.
*The Privacy Policy Regarding Customer Information includes the policy andprocedures for management of customer information. Our group companies
have each established privacy policies regarding customer information, which
are published on their individual websites and via other disclosure tools.

Information Security Management System
Board of Directors
Chief Executive Officer
(CEO)

MHFG
Executive
Management Committee
Information Security
Management Committee

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

Head of each unit

MHCB, MHBK, and othercore group companies

Subsidiaries of the above group companies

52

MHFG Acquires Certification for
Information Security Management
In September 2005, MHFG obtained certification ofInformation Security Management Systems for all
divisions of the company under the “Conformity
Assessment Scheme for ISMS (Ver. 2.0)”, thenational standard, and the “BS7799-2”, the British
standard. MHFG is striving to strengthen its information management procedures by promoting
efforts to obtain a broader range of credentials.
This includes encouraging our principal banking
subsidiaries and other core group companies toacquire certification in specific operational sectors.
(As of June 27, 2006)

Strengthening Disclosure Controls andProcedures

their implementation. In addition, evaluation of the effectiveness and appropriateness of Disclosure Controls andProcedures is conducted through internal audits.

Basic Principles

 Others

We aim to win the highest regard of our shareholders

We established a “Code of Ethics for Financial Profes-

and the market and to earn the trust of society as Japan's

sionals” to be observed by all directors and executive offi-

leading comprehensive financial services group. For thiscers, as well as all managers and other employees withinreason, we place one of the highest management

our group who engage in financial reporting, accounting

priorities on continuing to disclose information to ouror disclosure. We have also developed the “Internalcustomers, shareholders, and investors both in andControls and Audit Hotline”, a system designed foroutside Japan in a fair, timely and appropriate manner, inobtaining concerns regarding questionable accounting ororder that they may form proper judgments andauditing matters from both inside and outside the group

appraisals of the group. To achieve this aim, we observe(Please refer to page 51).

applicable domestic and international laws andMoreover, we established “Disclosure Policy” which

regulations as well as stock exchange rules relating toincludes basic principles regarding disclosure and frame-

corporate disclosure, and we establish and implement

work of disclosure controls and procedures, andappropriate Disclosure Controls and Procedures.

announce on our website as well as this annual report.

Outline of Disclosure Controls and Procedures
 Establishment and Implementation of Disclosure
Controls and Procedures
Our Disclosure Controls and Procedures are establishedto observe applicable domestic and international laws
and regulations as well as stock exchange rules and to
implement fair, timely and appropriate corporate
disclosure. The Disclosure Controls and Procedures are
the process carried out by directors, officers andDisclosure Controls and Procedures System
Board of Directors
Chief Executive Officer
(CEO)

MHFG
Disclosure Committee

Chief Financial Officer(in charge of Disclosure Controls and Procedures)and Other Heads of Groups
Every organizational unit
Disclosure Control
Officer

Head of each unit

employees of our group and include internal controls
designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of

MHCB, MHBK, and othercore group companies

financial statements. We have established the basic
principles underlying our Disclosure Controls andProcedures as well as our internal rules related to

Subsidiaries of the above group companies

Disclosure Controls and Procedures that govern the
management framework for the entire group including(As of June 27, 2006)

group companies, and we endeavor to establish,
implement and continuously improve our Disclosure
Controls and Procedures. Our disclosure committee is theprincipal management body that is responsible fordiscussing and exploring matters relating to Disclosure
Controls and Procedures.

 Evaluation of Effectiveness of Disclosure
Controls and Procedures
Our Disclosure Controls and Procedures are documented,
and evaluation of the overall effectiveness of our
Disclosure Controls and Procedures is conducted regularly
by reviewing the contents of such documentation and53

Internal Control Systems of Mizuho

receives reports and applications concerning the risk

Risk Management Structure

management situation from our principal banking sub-Commitment to Risk Management

sidiaries and other core group companies and gives themappropriate instructions concerning risk management.

Basic Approach

Our principal banking subsidiaries and other core group

Progress in financial deregulation and internationalizationcompanies each maintains its own system for managing

has led to rapid growth in the diversity and complexity ofvarious types of risk, regularly receiving reports on thebanking operations, exposing financial institutions to vari-status of risk at their respective subsidiaries, and givesous risks, including credit, market operations, information

them appropriate instructions concerning risk manage-technology, legal, settlement and other risks. We recog-

ment.

nize the conducting of operations tailored to the risks
and managing such risks as a key issue relating to overall

Approach to Basel II

management. In order to implement our business strat-

Current regulations for international standards of

egy while maintaining our financial stability, we maintainthe health of banks, first implemented in 1992, willcomprehensive risk management and control measures.

be revised in light of developments in risk manage-

MHFG maintains basic policies for risk management

ment methods. These amended regulations,established by our board of directors that are applicable

known as “Basel II”, are scheduled to be imple-

to the entire group. These policies clearly define the kinds

mented in Japan beginning March 2007.

of risks to be managed, set forth the organizational struc-

These regulations focus on three main points.

ture and provide for the human resources training neces-

The first is minimum capital requirements relatingsary for appropriate levels of risk management. The

to risk which should be maintained by banks, with

policies also provide for audits to measure the effective-

respect to which the calculation method for credit

ness and suitability of the risk management structure. In

risk will be changed and operational risk will beline with these basic policies, we maintain various mea-

added. The second is a regulatory review processsures to strengthen and enhance the sophistication ofwith respect to assessment of risks that cannot be

our risk management system.

fully addressed through minimum capital requirements alone. The third is market discipline allowing

Risk Management Structure

for assessment by the market through appropriate

Each of our subsidiaries adopts appropriate risk manage-disclosure.

ment measures for its business based on the size andBased on the principles of Basel II, we are mov-nature of its risk exposures, while MHFG controls risk

ing forward with preparations to implement the

management for the group as a whole. MHFG regularlyprescribed procedures by the time of effectiveness.

Risk Management StructureManage overall group risk
Manage risk of core group companies
Set risk management policies.
Give instructions concerning
risk management.

MHFG
Report on therisk management situation.

54

Principal banking
subsidiaries and othercore group companies
MHCB
MHBK
MHTB
, etc.

Give instructions
concerning
risk management.

Report on the risk
management situation.

Subsidiaries
managed by theprincipal banking
subsidiaries andother core groupcompanies

General Concept of Risk Management

risk within managerially acceptable limits by working toensure that the overall risk we hold on a consolidated

Basic Approachbasis does not exceed shareholders' equity and otherWe classify our risk exposures according to the various

measures of financial strength. To ensure the ongoingkinds of risk, including credit risk, market risk, liquidity

financial health of MHFG, our principal banking sub-risk and operational risk, and manage each type of risk

sidiaries and other core group companies, we regularly

according to its characteristics.

monitor the manner in which risk capital is being used in

In addition to managing each type of risk individually,order to obtain a proper grasp of the risk profile within

we have established a risk management structure to

this framework. Reports are also submitted to the board

identify and evaluate overall risk and, where necessary, toof directors and other committees of each company. Risk

devise appropriate responses to keep risk within limits

capital is allocated to MHCB, MHBK, MHSC and MHTB by

that are managerially acceptable in both qualitative andrisk category, and is further allocated within their respec-

quantitative terms.

tive business units based on established frameworks.

In line with the basic policies relating to overall risk
management laid down by MHFG, companies within theCredit Risk Management

group identify risk broadly and take a proactive andsophisticated approach to risk management, including

Basic Approach

methodologies for operations that involve exposures to

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

multiple categories of risk such as settlement and trustof losses that may be incurred due to a decline in, or totalbusinesses.

loss of, the value of assets and off-balance-sheet instruments, as a result of deterioration in a counterparty's

Risk Capital Allocation

financial position. We have established the methods andWe endeavor to obtain a clear grasp of the group's over-structures necessary for grasping and managing credit

all risk exposure and have implemented measures to keep

risk, which has become increasingly complex due tosuch risks within the group's financial base in accordance

financial deregulation, internationalization and the grow-with the risk capital allocation framework.

ing sophistication of transactions.

More specifically, we allocate risk capital to our princi-

MHFG manages credit risk for the group as a whole.

pal banking subsidiaries, including their respective sub-More specifically, we have adopted two different but

sidiaries, and other core group companies to control risk

mutually complementary approaches toward credit risk

within the limits set for each company. We also control

management. The first of these is to curb losses arising

Allocation of Risk Capital(Example)
MHCB

MHFG
The group's risk
exposure
MHCB

Capital account, etc.

Principal
banking
subsidiaries
and othercore groupcompanies'
risk exposure*

MHBK
MHTB

Allocated risk capital

The group's financial
strength

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

Credit risk
Market risk

Allocation toeach business unit

Equity risk
Operational riskGroupcompanies, etc.

MHSC

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

MHBK
MHTB
MHSC

55

Internal Control Systems of Mizuho

from the emergence of credit risk by controlling theentire process for each individual transaction, from granting credit to recovery, on the basis of our assessment of Credit Risk Management at Our Principal
Banking Subsidiaries and Other Core Group
Companies

the credit quality of the counterparties involved. The sec-

Our principal banking subsidiaries and other core group

ond is to manage the portfolio using statistical methods

companies manage their credit risk according to the scale

to measure the potential for credit risk in order to identify

and nature of their exposures in line with basic policies

such risk and devise appropriate responses.

set forth by MHFG. Each company's board of directors
determines key matters pertaining to credit risk.

Credit Risk Management Structure

MHCB, MHBK and MHTB (principal banking sub-

 Credit Risk Management of MHFG

sidiaries) have each established business policy committees

Our board of directors determines the group's basic

to discuss and coordinate overall management of their

credit risk management policies. In addition, the portfolio

individual credit portfolios and transaction policies

management committee of MHFG discusses andtowards obligors. The senior executive officer of eachcoordinates basic credit risk policy and overall credit

principal banking subsidiary responsible for risk manage-

portfolio management and monitoring for the group. The

ment oversees matters relating to credit risk management

chief risk officer of MHFG is responsible for mattersplanning and operations. The credit risk management

relating to credit risk management planning anddivision of each principal banking subsidiary is responsible

operations. The Risk Management Division and the Credit

for credit management and credit risk measuring and

Risk Management Division of MHFG jointly monitor,

monitoring, and such division regularly presents reports

analyze and submit suggestions concerning credit risk

regarding the risk management situation of such banking

and formulate and execute plans in connection with basic

subsidiary to MHFG. Individual credit examination divi-matters pertaining to credit risk management.

sions approve individual transactions in accordance withthe lines of authority set forth in the basic policies for
credit risk management. To provide checks and balances,

Credit Risk Management Structure

MHFG

Board of Directors

Executive Management
Committee

Chief Executive Officer(CEO)
Head of Risk Management
Group (CRO)

Portfolio Management
Committee

each of our principal banking subsidiaries have alsoestablished credit review divisions to function as internal
auditors that are independent of the business divisions.

 Individual Credit Management
Our principal banking subsidiaries use a unified credit
rating system and credit risk measurement tools to

Risk Management Division, Credit Risk Management Divisionascertain and monitor the status of their portfolios. They
are also improving their credit decisions and post-•Set risk management policies•Give instructions concerning
risk management•Report on the risk
management situation

Principal banking subsidiaries andother core group companies
MHCB

MHBK

MHTB

MHSC

Other coregroup
companies

transaction management functions by examining
individual transactions from these viewpoints, providing
internal audits and risk management guidance toindividual business promotion offices. MHSC and othercore group companies follow credit risk management
procedures that suit the characteristics of their respective
business sectors.

Board of Directors

The Three Banks Credit Business Regulations
The basic code of conduct for all of our officers andChief Executive Officer
Senior executives
responsible for risk management

Executive Management
Committee

employees engaged in the credit business is set forth inBusiness Policy Committees

our credit business regulations. Seeking to fulfill theDivisions responsible for credit risk management(Risk Management Division, Credit Risk Management Division)bank's public and social role, our basic policy for credit
business is determined in light of fundamental principles
focusing on public welfare, safety, growth andprofitability.

56

Connection between Credit Ratings, Definition of Obligor Classifications of Self-Assessments,
Claims Disclosed under the FRL and Non-Accrual, Past Due & Restructured Loans
Definition of Credit
Obligor Clas- Ratingssifications of (Major
Self-AssessCategory)ment

Definition of Ratings

Category I(NonCategorized)

Category II

Category III

Claims Non-Accrual,
Category IV
Disclosed Past Due &(Nonunder the RestrucCollateralized)
tured Loans
FRL

Obligors whose certainty of debt fulfillment

A1–A3 is very high, hence their level of credit risk is
excellent.
Obligors whose certainty of debt fulfillment poses

B1–B2 no problems for the foreseeable future, hence
their level of credit risk is sufficient.

NormalObligors
C1–C3

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

All credit given
to Normal
Obligors.

NormalClaimsObligors whose current certainty of debt fulfill-

D1–D3 ment poses no problems, however, their resistance to future environmental changes is low.

E1
Watch
Obligors

E2 R

Intensive
Control
Obligors

F1

Substantially Bankrupt Obligors

G1

Bankrupt
Obligors

H1

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

Credit given to
Watch Obligors
other than thoseincluded in
Category I.

Claims forSpecialAttention

Restructured
Loans
Loans Past Duefor 3 Months
or MoreObligors who are not yet bankrupt but arein financial difficulties and are deemed to bevery likely to go bankrupt in the future
because they are finding it difficult to makeprogress in implementing their management
improvement plans (including obligors who
are receiving ongoing support from financial
institutions).

Credit given to
Credit toIntensive Conobligors which
trol Obligors
Claims withhas pledgedother than thoseCollection
collateral or is
included in CatRisk
covered by
egory
I
and
Catguarantees,
Non-Accrual
egory II.
considered ofDelinquent
Credit to oblighigh quality,
Loans
ors
which
is
covsuch as deposit
The difference
Obligors who have not yet gone legally or
Credit to Bankeredbygeneralbetween theformally bankrupt but who are substantially collateral.
collateral, such assessed value and rupt and Substan- Claims
bankrupt because they are in serious finantially Bankrupt
as real estatemarket value of colcial difficulties and are not deemed to beagainst Bankand guarantees. lateral on credit to Obligors, othercapable of restructuring.
than those in Cat- rupt and SubBankrupt and Subegory I, Category stantiallystantially Bankrupt
II and Category III Bankrupt
Obligors (i.e., the(credit that is
Obligors, and Loans toportion of loans for
Obligors who have already gone bankrupt,
judged to be
Bankrupt
equivalent
which final collection
from both a legal and/or formal perspective.
unrecoverable or
Obligors
problems or losses
without value).
are anticipated).

Method for Write-Offs and Reserves
Normal Obligors

Calculate the value of estimated loss based on the probability of failure over the coming year for loans by credit rating 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 regard to Special Attention Obligors, for obligors with large claims more than a certain amount, if the
cash flow from the return of principal and interest payments can reasonably be estimated, set up a reserve under the DCF method.

Intensive Control
Obligors

Substantially
Bankrupt Obligors
Bankrupt 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 guarantors of the claims: a) an amount calculated
based on the overall ability of the obligor 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 and interest payments canreasonably be estimated, set up a reserve under the DCF method.
Provide the entire balance after deducting amounts anticipated to be recoverable from the sale of collateral held against the claims and fromguarantors of the claims for Specific Reserve for Possible Losses on Loans, or write-off the entire balance.

 Credit Ratinga obligor's credit standing changes. This enables our prin-

One of the most important elements of the risk manage-

cipal banking subsidiaries to monitor both individual

ment infrastructure of our principal banking subsidiaries

obligors and the status of the overall portfolio in a timely

is the use of a 16-grade unified credit rating system. In

fashion. Because we consider credit ratings to be an ini-

principle, credit ratings apply to all obligors and are sub-tial phase of the self-assessment process regarding theject to regular reviews at least once a year to reflect

quality of our claims, such credit ratings are closely linked

promptly the fiscal periodend financial results of theto the obligor classifications and are an integral part ofobligors, as well as special reviews as required whenever

the process for determining the reserves and write-offs
57

Internal Control Systems of Mizuho

in our self-assessment of claims (Please refer torevitalization or collection efforts as appropriate.

Connection between Credit Ratings, Definition of Obligor

Specifically, this typically involves business transfers,

Classifications of Self-Assessments, Claims Disclosed

mergers and acquisitions, obtaining funding from businessunder the FRL and Non-Accrual, Past Due & Restructured

revitalization funds and the bulk sale of non-performing

Loans).

loans. In addition, we concentrate our loan collection needs

 Self-Assessment, Write-Offs and Reserves

into Mizuho Servicing, our subsidiary that specializes in

We conduct self-assessment of assets to ascertain theperforming collection services for our group companies.

status of assets both as an integral part of credit risk
management and in preparation for appropriate account-

Portfolio Management

ing treatment, including reserves and write-offs. During

 Expected Loss and Unexpected Lossthe process of self-assessment, obligors are categorized

We measure portfolio-based credit risk using statistical

into certain groups taking into consideration their finan-

methods to calculate the risks related to losses due tocial condition and their ability to make payments, andproblem loans. We use the following two key measure-credit ratings are assigned to all obligors, in principle, toments to quantify such risk: “expected loss,” or the aver-reflect the extent of their credit risks. The related assets

age amount of loss forecast for the next 12 months, andare then categorized into certain classes based on the risk

“unexpected loss,” or the maximum excess amount inof impairment. This process allows us to identify and con-the case where losses exceed the expected loss.

trol the actual quality of assets and determine the appro-

In establishing transaction guidelines for credit

priate accounting treatment, including reserves andtransactions, we endeavor to match returns with the risk

write-offs. Specifically, the credit risk management divi-

involved. Because actual credit losses must ultimately besion of each of our principal subsidiaries is responsible forabsorbed by shareholders' equity, we monitor credit

the overall control of the self-assessment of assets of theportfolios from various viewpoints and, where necessary,

respective banking subsidiaries, cooperating with theimpose restrictions so that the credit risk amount isadministrative divisions specified for each type of asset,

covered by the corresponding risk capital range.

including loan portfolios and securities, in executing andExpected Loss and Unexpected Loss Amounts

managing self-assessments.

 Credit Screening

Frequency

Prevention of new non-performing loans through routine

Averagecredit management is important in maintaining the quality of our overall loan assets.
Credit decisions involve analysis and screening of eachThis 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.

potential transaction within the relevant business division.
In case the screening exceeds the authority of the diviLoss amountsion, the credit division at headquarters carries out the

Maximum loss amounts

screening. The credit division has specialist departments
for different industries, business sizes and regions, carries

Expectedloss amounts

Unexpected loss amounts

out timely and specialized examinations based on the58

characteristics of the customer and its market, and pro- Risk Control Methods

vides appropriate advice to the business division.

We recognize two types of risk arising from allowing too

In addition, in the case of obligors with low credit rat-

large a proportion of overall credit risk to be allocated inings and high downside risks, the business division andcertain areas. One type is “credit concentration risk,”credit division jointly clarify their credit policy and inwhich stems from granting excessive credit to certain indi-

appropriate cases assist obligors at an early stage invidual counterparties. The other type is “chain-reaction

working towards rehabilitation.

default risk,” which arises from granting excessive credit Collection and Disposal of Non-Performing Loansto certain corporate groups, industrial sectors and other

With respect to collection and disposal of non-perform-

groupings. We manage these risks in line with our spe-

ing loans, a specialist unit is designed to pursue corporatecific guidelines for each. The individual risk management

Allocation of Risk Capital and Control of Credit Risk
Unexpected loss amounts

Allocation of risk capital

Credit concentration risk
 Individual company ratings-based
credit guidelines

MHCB: Sets , , , 
MHBK: Sets , , 
MHTB: Sets , 

Chain reaction default risk

Control

Equivalent to credit concentration risk amounts

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

Equivalent to chain reaction default risk amounts

divisions of our principal banking subsidiaries are respon-

expected losses while simultaneously utilizing sophisti-

sible for monitoring adherence to these guidelines andcated financial tools based on which they make strategic

reporting to their respective business policy committees

acquisitions and sales of assets. While closely monitoring(Please refer to Allocation of Risk Capital and Control ofthe potential for unexpected losses, they also aim to raise

Credit Risk).

overall group capital efficiency, boost profitability and Portfolios of Our Principal Banking Subsidiaries

shareholder value, and enhance the sophistication of

and Certain Other Core Group Companies

their credit risk management.

MHCB's credit portfolio is notable for its international

To control credit concentration in certain companies,

diversification between Japanese public companies and

MHTB and MHSC have set credit limits according to theirother major Japanese enterprises and overseas corpora-customers' creditworthiness and control their portfolios

tions. MHBK's portfolio is diversified among relatively

in an appropriate manner by adhering to these limits.

small accounts centered on individuals, domestic corporations including mainly small and medium-sized enter-

Market and Liquidity Risk Management

prises (SEMs) and middle-market corporations, public
sector entities and other customers in Japan. While

Basic Approachretaining the principal features of each of the two bank-

We define market risk as the risk of losses incurred by theing subsidiaries' respective portfolios, we aim to reducegroup due to fluctuations in interest rates, stock prices
and foreign exchange rates. Our definition includes the

MHCB's Credit Portfolio

risk of losses incurred when it becomes impossible to exe-

Othercute transactions in the market because of market confu-

Asia

sion or losses arising from transactions at prices that are
Europesignificantly less favorable than usual. We define liquidity
Japan

North America

risk as the risk of losses arising from funding difficulties
due to a deterioration in our financial position that makes
it difficult for us to raise the necessary funds or thatforces us to raise funds at significantly higher interest
rates than usual.
MHFG manages market and liquidity risk for the group

MHBK's Credit Portfolio

as a whole.

Other

Individuals
Publicsectorentities

Domestic SMEs
and middle-market
corporations

Market Risk Management Structure Market Risk Management of MHFG
Our board of directors determines key matters pertaining
to market risk management policies. The ALM & market
risk management committee of MHFG broadly discusses
and coordinates matters relating to basic asset and liability
59

Internal Control Systems of Mizuho

management policies, risk planning and market risk man-our principal banking subsidiaries and other core groupagement and proposes responses to emergencies such ascompanies. For trading and banking activities, we set lim-sudden market changes. The chief risk officer of MHFG is

its for VaR and for losses. For banking activities, we set

responsible for matters relating to market risk manage-

position limits based on interest rate sensitivity as

ment planning and operations. The Risk Management

needed.

Division of MHFG is responsible for monitoring market

These limits are discussed and coordinated by the ALM

risk, reports and analyses, proposals, setting limits and& market risk management committee, discussed further

guidelines, and formulating and implementing plansby the executive management committee, then deter-

relating to market risk management.

mined by the chief executive officer. Various factors are

The Risk Management Division assesses and manages

taken into account including business strategies, histori-

overall market risk of the group. It also receives reports

cal limit usage ratios, risk-bearing capacity (profits, total

from our principal banking subsidiaries and other core

capital and risk management systems), profit targets andgroup companies on their market risk management thatthe market liquidity of the products involved.

enable it to obtain a solid grasp of the risk situation, sub-

 Market Risk Management at Our Principal

mitting reports to the chief executive officer on a daily

Banking Subsidiaries and Other Core Groupbasis and to our board of directors and the executive

Companies

management committee of MHFG on a regular basis.

Our principal banking subsidiaries and MHSC which

To manage market risk, we set limits that correspondaccount for most of the group's exposure to market risk

to risk capital allocations according to the risk profiles ofhave formulated their basic policies in line with the basic
policies determined by MHFG. Their boards of directors

Market and Liquidity Risk Management Structure

MHFG

Board of Directors

Chief Executive Officer(CEO)

Executive Management
Committee
ALM & Market Risk
Management Committee

Head of Risk Management
Group (CRO)

determine important matters relating to market risk
management while their chief executive officers are
responsible for controlling market risk. Their respective
business policy committees, including their ALM & market
risk management committees, are responsible for overall
discussion and coordination of market risk management.
Specifically, these committees discuss and coordinate
matters relating to basic asset and liability management

Risk Management Division

policies, risk planning and market risk management andpropose responses to emergencies such as sudden mar-•Set risk management policies•Approve limits•Give instructions concerning
risk management•Report on the risk
management situation•Apply for limits

ket changes. The chief risk officer of each subsidiary is
responsible for matters pertaining to planning and implementing market risk management. Based on a common

Principal banking subsidiaries andother core group companies
MHCB

MHBK

MHTB

MHSC

Other
core groupcompanies

group risk capital allocation framework, the abovementioned subsidiaries manage market risk by setting
limits according to the risk capital allocated to market risk
by MHFG.
These companies have established specialized company-

Board of Directors

Chief Executive Officer (CEO)Senior executives
responsible for risk management

Principal banking
subsidiaries and othercore group companies
Executive Management Committee
ALM & Market Risk
Management Committee

Offices
Risk Management Division

wide market risk management divisions to provide integrated monitoring of market risk, submit reports,
analyses and proposals, set limits and formulate andimplement plans relating to market risk management.
The risk management divisions of each company submit

Middle Offices

reports on the status of market risk management to their

Front Offices

respective chief executive officers and top management
on a daily basis, and to their board of directors and executive management committee on a regular basis. They60

also provide regular reports to MHFG. To provide a sys-management, while the senior executives of the asset

tem of mutual checks and balances in market operations,and liability management and trading units are responsi-

they have established middle offices specializing in riskble for matters pertaining to planning and conducting

management that are independent of their front offices,cash flow management.

which engage in market transactions, and their backThe methodologies used for ensuring precise control ofoffices, which are responsible for book entries and settle-

liquidity risk include the formulation of management

ments. When VaR is not adequate to control risk, theindices pertaining to cash flow, such as limits on funds

middle offices manage risk using additional risk indices,raised in the market. As with MHFG, the above-mentioned

carry out stress tests and set stop loss limits as needed.

companies have established classifications for the cash

They monitor their market liquidity risk for individual

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

financial products in the market while taking turnoverfor concern” and “critical,” and have established proce-and other factors into consideration.

dures for cases which are deemed to fall into the “cause
for concern” or “critical” categories.

Liquidity Risk Management Structure

Each subsidiary has adopted stringent controls that

 Liquidity Risk Management of MHFG

call for the submission of reports on liquidity risk man-

Our liquidity risk management structure is generally theagement and cash flow management to the ALM & mar-same as the market risk management structure describedket risk management committee and other businessabove. However, the head of the Financial Control &policy committees, the executive management committee

Accounting Group of MHFG is additionally responsible

and the chief executive officer of each subsidiary.

for matters relating to planning and running cash flow
management operations, while the Financial Planning

Status of MHFG'S Market Risk

Division is responsible for monitoring and adjusting the Back Testing

cash flow management situation and for planning andIn order to evaluate the effectiveness of market risk mea-

implementing cash flow management. Reports on thesurements calculated using the value-at-risk method, wecash flow situation are submitted to the ALM & market

carry out regular back tests to compare value-at-risk withrisk management committee, the executive management

assumptive profits and losses. The graph below showscommittee and the chief executive officer.

daily value-at-risk of trading activities for the fiscal year

We measure liquidity risk using indices pertaining tocash flow, such as limits on funds raised in the market.
Limits on liquidity risk are discussed and coordinated by
the ALM & market risk management committee, discussed further by the executive management committee
and determined by the chief executive officer. We haveestablished classifications for the cash flow conditions
affecting the group, ranging from “normal” to “cause
for concern” and “critical,” and have established procedures for dealing with cases which are deemed to fall
into the “cause for concern” or “critical” categories.

 Liquidity Risk Management at Our Principal
Banking Subsidiaries and Other Core Group
Companies

ended March 31, 2006, and the corresponding paired
distribution of profits and losses:
MHFG's Fiscal 2005 Back Testing
Assumptive profit or loss (billions of yen)
6.0
4.0
2.0
0
(2.0)
(4.0)
(6.0)

0

1.0

2.0

3.0

4.0

5.0

6.0

VaR (billions of yen)
Note: The data related to the common stock position held between
December 8, 2005 and December 12, 2005 as a result of anerroneous order with the Tokyo Stock Exchange made by Mizuho
Securities on December 8, 2005 is not included in the VaR andassumptive profits and losses in the graph above.

The liquidity risk management structures of MHCB,MHBK, MHTB and MHSC and other group companies are

We had no cases where profits/losses exceeded value-

generally the same as the aforementioned market risk

at-risk during the period, and this confirms that our inter-management structures, but the senior executives

nal value-at-risk models are reasonably accurate in

responsible for risk management are responsible for mat-measuring our group's market risk exposure.

ters pertaining to planning and conducting liquidity risk
61

Internal Control Systems of Mizuho

 Stress Testing

The table below shows the results of estimates ofBecause the value-at-risk method is based on statisticallosses in the banking book as of March 31, 2006 in cases

assumptions, we conduct stress testing to simulate thewhere interest rate fluctuations occur under stress condi-

levels of losses that could be incurred in cases where thetions. The results of estimates of losses in the banking

market moves suddenly to levels that exceed thesebook show that they are 1.8% of broadly-defined capital.

assumptions.

In particular, the table shows a considerable reduction in

The stress testing methods we use include the calcula-the estimate of losses as a percentage of capital comparedtion of losses on the basis of the largest fluctuations

to the previous fiscal year as a result of our reducing theoccurring over a period of more than five years and therisks relating to increasing yen interest rate levels. Since

calculation of losses based on market fluctuations occur-

the amount of risk on the banking book is therefore wellring during historical market events. The table below

within controllable limits, we do not fall under the “out-shows the assumed maximum loss results of stress testinglier” category.

in trading activities using the methods described above: Value-At Risk
We use the value-at-risk (VaR) method, supplemented

MHFG's Fiscal 2005 Stress Testing
At March 31, 2006 (billions of yen)with stress testing, as our principal tool to measure market risk. The value-at-risk method measures the maxi-

Assumed maximum losses

20.7

Maximum loss result calculated by stress testing

mum possible loss that could be incurred due to market
movements within a certain time period (or holding Outlier Framework (Basel II)

period) and degree of probability (or confidence interval).

The Basel Committee on Banking Supervision plans to

Trading Activities

apply new capital adequacy requirements. As part of the

VaR related to our trading activities is based on the fol-

new requirements, the losses arising from a banking

lowing:book in hypothetical interest rate shock scenarios under• variance co-variance model for linear risk and monte-

certain stress conditions are estimated and comparedcarlo simulation for non-linear risk;

with the sum of Tier I and Tier II capital. If the interest• confidence interval: one-tailed 99.0%;

rate risk of the banking book leads to an economic value• holding period of one day; anddecline of more than 20% of the sum of Tier I and Tier II• historical observation period of one year.

capital, we will be deemed an “outlier” and may berequired to reduce the banking book risk or adopt other

The following tables show the VaR related to our trad-

responses. In preparation for the introduction of the new

ing activities by risk category for the fiscal years ended

requirements, we are reviewing our capital adequacy

March 31, 2005 and 2006 and as of March 31, 2005 andrequirements and measuring losses arising from our2006:banking book each month as part of its stress tests.
MHFG's VaR by Risk Category (Trading Activities)(billions of yen)

MHFG's Fiscal 2005 Estimates under the Outlier
Framework
Amountof loss
At March 31, 2005
At March 31, 2006
Effect of yen interest rate
Effect of dollar interest rate
Effect of euro interest rate

429.6
161.3
94.0
52.8
7.8

(billions of yen)
Broadlydefined Loss ratio
capital to capitalInterest rate

8,020.2
8,993.2

Equities

5.4%
1.8%

Notes:1. In the above estimations, a part of demand deposits without
fixed intervals for amending applicable interest rates are deemedcore deposits and are treated accordingly in the calculation.
2. For the interest rate shock scenario used in connection with theabove figures, we generate annual rate fluctuation data for five
years derived from daily raw historical interest rate data of thepast six years and then apply the actual fluctuation data, whichshow a rise in interest rates, at a 99.0% confidence level to theshock scenario.

62

Fiscal 2004

Foreign exchange
Commodities
Total

Average

Maximum

1.9
1.1
0.9
0.1
2.9

3.7
2.8
1.5
0.6
4.3

Average

Maximum

1.7
1.1
1.4
0.2
3.2

2.7
1.8
3.2
1.7
5.5

Minimum At March 31

0.9
0.3
0.6
0.0
2.0

1.2
0.6
0.9
0.1
2.2

Fiscal 2005
Interest rate
Foreign exchange
Equities
Commodities
Total

Minimum At March 31

1.1
0.3
0.5
0.0
2.0

2.4
0.9
3.0
0.1
5.1

The following graph shows VaR figures of our trading
activities for the fiscal year ended March 31, 2006:

The following table shows the VaR figures relating toour banking activities denominated in yen for the fiscal
years indicated:

MHFG's Fiscal 2005 VaR (Trading Activities)(VaR, billions of yen)

MHFG's VaR (Banking Activities)

6.0
5.0

Maximum
4.0

Minimum

3.0

Average(billions of yen)

Fiscal 2003

Fiscal 2004

Fiscal 2005

317.4
78.9
198.5

301.5
186.1
235.8

247.2
152.8
213.9

2.0

We also conduct interest sensitivity analyses of interest

0risk, our main source of market risk. The following table

05.04.01
05.04.15
05.04.29
05.05.13
05.05.27
05.06.10
05.06.24
05.07.08
05.07.22
05.08.05
05.08.19
05.09.02
05.09.16
05.09.30
05.10.14
05.10.28
05.11.11
05.11.25
05.12.09
05.12.23
06.01.06
06.01.20
06.02.03
06.02.17
06.03.03
06.03.17
06.03.31

1.0

shows sensitivity to yen interest risk in our banking activities as of the dates indicated. As shown in the table, we

The following table shows VaR figures of our trading
activities for the fiscal years indicated:
MHFG's VaR (Trading Activities)

increases in interest rates. Interest rate sensitivity (10 BPV)
shows how much net present value varies when interest(billions of yen)

Fiscal 2003

Fiscal 2004

Fiscal 2005

4.7
1.4
3.1

4.3
2.0
2.9

5.5
2.0
3.2

5 casesno casesno cases

Maximum
Minimum
Average
The number of cases where
profits/losses exceeded VaRhave reduced overall sensitivity to the risk of future

Note:The data related to the common stock position held between
December 8, 2005 and December 12, 2005 as a result of anerroneous order with the Tokyo Stock Exchange made by Mizuho
Securities on December 8, 2005 is not included in the VaR andassumptive profits and losses in the graph above.

rates rise by 10 basis (0.1%), and it explains the impact
of interest rate movements on net present value whenshort- and long-term interest rates behave differently.
MHFG's Interest Sensitivity by Maturity
At March 31, (billions of yen)
1 year or lessOver 1 year, up to and including 5 years
Over 5 years
Total

Non-Trading Activities

2005

2006 Change

(5)
(34)
(5)
(44)

(7)
(14)
(6)
(27)

(2)
20
(1)
17

The VaR related to our banking activities is based on thesame conditions as those of trading activities, but theholding period is one month.
The graph below shows the VaR related to our banking activities excluding our strategic equity portfolio forthe year ended March 31, 2006. We attribute the reduction of VaR during the last few months amid rising yen
interest rates to our effective risk management activities.
MHFG's Fiscal 2005 VaR (Banking Activities)(VaR, billions of yen)

(%)
1.4

350
VaR

JGB Yield (5-Year)
1.2

250

1.0

200

0.8

150

0.6

100

0.4

50

0.2

0

0.0

05.04.01
05.04.15
05.04.29
05.05.13
05.05.27
05.06.10
05.06.24
05.07.08
05.07.22
05.08.05
05.08.19
05.09.02
05.09.16
05.09.30
05.10.14
05.10.28
05.11.11
05.11.25
05.12.09
05.12.23
06.01.06
06.01.20
06.02.03
06.02.17
06.03.03
06.03.17
06.03.31

300

63

Internal Control Systems of Mizuho

relating to information technology by utilizing control

Operational Risk Management

self-assessments and improving measurement methods.
We define operational risk as the risk of loss that we may
incur resulting from inadequate or failed internal
processes, people and systems or from external events.
We recognize that operational risk includes information
technology risk, operations risk, legal risk, human

Glossary Control Self-Assessments
An autonomous method of risk management in which risk inherent in operations is identified and, after evaluating and monitoring risks that remains
despite implementing risk control, the necessary measures are implemented toreduce risk.

resources risk, tangible asset risk, regulatory risk and reputational risk. We have determined risk management

Operations Risk Management

policies concerning risk management structures andOperations risk is the risk that customers may suffer ser-methods for each kind of risk. MHCB, MHBK, MHTB,

vice disruptions, as well as the risk that customers or the

MHSC, MHIS and TCSB each manage operational risk ingroup may incur losses because senior executives oran appropriate manner pursuant to risk management

employees fail to fulfill their tasks properly, cause acci-

policies determined by MHFG.

dents or otherwise act improperly.

MHFG, MHCB, MHBK, MHTB and MHSC share com-

In line with our basic policies regarding operations risk

mon rules for data gathering, and we measure opera-

management, we have established a structure fortional risk on a regular basis, taking into account possible

improving operations by identifying and adopting appro-

future loss events and the changes in the business envi-

priate measures for mitigating operations risk. Moreronment and internal management.

specifically, we have established clearly defined proce-

We have established and are strengthening manage-

dures for handling operations and periodically checking

ment methods and systems to appropriately identify,

the status of operational processes. We have strength-

assess, measure, monitor and control the operational

ened central operational guidance and oversight and arerisks which arise from the growing sophistication andworking to improve the operational expertise of staff anddiversification of financial operations and developments

the risk management capabilities of managers. We arealso implementing other policies, including the introduction of information technology, office automation andOperational Risk Management Structure

MHFG

Board of Directors
Chief Executive Officer(CEO)

Executive Management
Committee

human error. Further, we are improving the effectivenessof our emergency responses by holding drills and taking
other steps to minimize the impact of any possible system
failure or disaster on our customers.

Senior executives
responsible for each typeof risk management
Operational risk management(Risk Management Division)

IT risk management
division
Operations risk
management divisioncentralization to ensure efficient operations that reduce

Information Technology Risk Management
Information technology risk is the risk that customers
may suffer service disruptions, or that customers or theDivisions
responsible foreach type of risk
management

group may incur losses arising from system defects suchas failures, faults, or incompleteness in computer operations, or illegal or unauthorized use of computer systems.
In line with our basic policies regarding system risk
management as well as our information security policy,
we continue to make determined efforts to ensure the•Set risk management policies•Give instructions concerning
risk management•Report on the risk
management situation

stability of our information technology operations andthe protection and safety of informational assets relating

Principal banking subsidiaries andother core group companies
MHCB, MHBK, MHTB, MHSC, etc.

to systems. More specifically, we are pushing ahead withvarious efforts, identifying and evaluating information
technology-related risk, implementing risk mitigation
measures based on these evaluations, ensuring ongoing(As of June 27, 2006)

64

project management in such areas as process manage-

Internal Audit Structure

ment in systems development and quality control andstrengthening security to prevent information leaks.

Basic Approach

Further, we are improving the effectiveness of our emer-

Internal audits are designed as an integrated process,gency responses by improving our backup systems andindependent from other business operations, for evaluat-

holding drills and taking other steps to minimize theing the extent to which internal control achieves its

impact of any possible system failures or disasters on cus-

objectives in key areas, including appropriate risk man-tomers.

agement, efficient and effective business operations, reliable financial reporting and compliance with laws,

Reputational Risk Management

regulations and internal rules. We conduct internal audits

Reputational risk is the risk of incurring tangible or intan-

from an objective and comprehensive standpoint, inde-gible losses as a result of damage to our credibility or thependent of operational reporting lines, and offer advice,credibility of the Mizuho brand when market participants

guidance and remedial recommendations in connection

learn about, or the media reports on, various adverse

with any problems that may be identified. Through thisevents, including those that are inaccurate or false.

process, internal audits assist the boards of directors of

MHFG has established a framework under which, inthe event it receives reports from companies within theeach of our group companies to fulfill their managerial
duties efficiently and effectively.

group concerning information that may have a serious

In line with the Basic Policy for Internal Audit estab-

impact on group management, it identifies and manages

lished by MHFG, our principal banking subsidiaries andthe reputational risk for the group as a whole on an inte-other core group companies conduct internal audits,

grated basis and responds to such reputational risk in awhich include the auditing of their respective subsidiaries.

manner appropriate to its scale and nature.

In addition, with respect to the management of risks

Each of our group companies also works to identify

applicable across the group, we coordinate group-wide

rumors swiftly and minimize possible losses by devisinginternal audits to assess the risk management status ofappropriate responses depending on the urgency andthe group as a whole.

possible impact of the situation.
(As of June 27, 2006)

Internal Audit Management Structure MHFGMHFG's internal audit committee determines all important matters concerning internal audits. The committee ischaired by our president and chief executive officer and isindependent of our other business operations.
Our internal audit committee monitors and manages
internal audits at our principal banking subsidiaries andother core group companies through internal audit
reports submitted by such subsidiaries. Our internal audit
committee discusses and makes decisions regarding internal audits at our principal banking subsidiaries and othercore group companies and submits the results, together
with the results of their examination of their internal
audit reports, to our board of directors.

 MHCB and MHBKMHCB and MHBK have also established internal audit
committees that are independent of their other business
operations.
MHCB and MHBK have established internal audit divisions and credit review divisions to conduct internal
65Internal Control Systems of Mizuho

audits at their respective domestic and overseas businessoffices, head office divisions and group companies.
Specifically, the internal audit divisions assess the suitability and effectiveness of business activities associated withcompliance and risk management. The credit review divisions audit credit ratings and the status of credit management in addition to auditing the self-assessment of assets
to verify the accuracy and suitability of matters deemednecessary to assure the soundness of assets.

 Other Core Group Companies
MHTB, MHSC and our other core group companies havealso established effective and efficient internal audit
structures adapted to the characteristics of their respective businesses.
Internal Audit Management Structure
MHFG
Board of Directors
Chief Executive Officer (CEO)Chairman of Internal
Audit Committee
Internal Audit Committee

Everyorganizational
unitManagement
by MHFG

Audit

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

Advice, guidance
and remedialrecommendations

Report theresults of internal
audit, etc.

MHCB, MHBK, and othercore group companies

Subsidiaries of the above group companies

66

Financial Analysis of Mizuho[Under Japanese GAAP]Key Indicators of Mizuho Financial Group, Inc.

68

Financial and Economic Environment

70

Results for the Fiscal Year ended March 31, 2006

72

Status of Asset Quality

84

67

Financial Analysis of Mizuho

Key Indicators of Mizuho Financial Group, Inc.

Key Indicators of Mizuho Financial Group, Inc. (Consolidated)
Billions of yen

As of or for the Fiscal Years ended March 31,

2006

2005

3,455.6
627.3
3,905.7
143,076.2
80,368.0
7,795.0
62,917.3
36,047.0

2004¥

3,342.9406.9
3,644.3
137,750.0
77,487.4
9,459.5
66,205.8
32,071.6

2003

Total Income
Net Income (Loss)
Total Shareholders' Equity
Total Assets
Deposits
Debentures
Loans and Bills Discounted
Securities¥

3,732.1
649.9
4,804.9
149,612.7
82,367.1
6,606.3
65,408.6
37,702.9¥¥

3,441.8(2,377.1)
2,861.0
134,032.7
72,222.6
11,696.3
69,210.0
23,816.5

Total Shareholders' Equity per Share (Yen) (Note 1)
Net Income (Loss) per Share (Yen) (Note 1)
Diluted Net Income per Share (Yen) (Note 1) (Note 2)

274,906.95
55,157.14
46,234.51

131,016.15
54,625.61
37,719.13

61,980.34
36,153.27
18,754.94(20,376.71)(254,524.65)—

Capital Adequacy Ratio (BIS Capital Ratio)

11.59%

11.91%

11.35%

9.53%

Net Return on Equity
PER (Times) (Note 2)

26.3%
17.45 x54.3%
9.28 x135.2%
12.39 x(183.7)%—xCash Flow from Operating Activities
Cash Flow from Investing Activities
Cash Flow from Financing Activities(1,669.1)(99.2)(446.6)

4,418.0(3,788.1)(557.7)

6,014.9(7,402.2)(130.9)(2,196.1)(206.3)(394.0)Cash and Cash Equivalents at the end of the fiscal year

3,387.9

5,602.0

5,529.6

7,048.5

Notes: 1. “Total Shareholders' Equity per Share,” “Net Income (Loss) per Share” and “Diluted Net Income per Share” are calculated in accordance with “Accounting Standard for Earnings per Share”(Financial Accounting Standard No. 2) and “Implementation Guidance for Accounting Standard for Earnings per Share” (Financial Accounting Standards Implementation Guidance No. 4).
2. “Diluted Net Income per Share” and “PER” for the fiscal year ended March 31, 2003 are not required to be disclosed due to loss position.

68

Key Indicators of Mizuho Financial Group, Inc. (Non-Consolidated)
Billions of yen

As of or for the Fiscal Years ended March 31,

2006

2005

2004

2003

Operating Income
Net Income¥ 128.9790.2¥ 26.430.8¥ 25.7
9.9

¥ 0.9
0.0

Common Stock and Preferred Stock
Number of Shares Issued and Outstanding
Common StockFirst Series Class I Preferred Stock
Second Series Class II Preferred Stock
Third Series Class III Preferred Stock
Fourth Series Class IV Preferred Stock
Sixth Series Class VI Preferred Stock
Seventh Series Class VII Preferred Stock
Eighth Series Class VIII Preferred Stock
Ninth Series Class IX Preferred Stock
Tenth Series Class X Preferred Stock
Eleventh Series Class XI Preferred Stock
Twelfth Series Class XI Preferred StockThirteenth Series Class XIII Preferred Stock
Total Shareholders' Equity
Total Assets

1,540.9

1,540.9

1,540.9

1,540.9

12,003,995.49 shares///
150,000 shares
150,000 shares////
943,740 shares/
36,690 shares
2,752.3
4,793.0

12,003,995.49 shares/
100,000 shares
100,000 shares
150,000 shares
150,000 shares
125,000 shares
125,000 shares
33,000 shares
140,000 shares
943,740 shares/
36,690 shares
2,986.2
3,178.6

11,926,964.67 shares
33,000 shares
100,000 shares
100,000 shares
150,000 shares
150,000 shares
125,000 shares
125,000 shares
140,000 shares
140,000 shares
943,740 shares
5,500 shares
36,690 shares
3,533.4
3,600.0

10,582,426.71 shares
33,000 shares
100,000 shares
100,000 shares
150,000 shares
150,000 shares
125,000 shares
125,000 shares
140,000 shares
140,000 shares
943,740 shares
101,500 shares
36,690 shares
3,545.8
3,595.6

Total Shareholders' Equity per Share (Yen) (Note 1)
94,861.81
Dividends per Share (Yen) (Interim Dividends per Share) (Yen)Common Stock
4,000
First Series Class I Preferred Stock/
Second Series Class II Preferred Stock/
Third Series Class III Preferred Stock/
Fourth Series Class IV Preferred Stock47,600Sixth Series Class VI Preferred Stock
42,000Seventh 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
20,000
Twelfth Series Class XI Preferred Stock/Thirteenth Series Class XIII Preferred Stock
30,000Common Stock—First Series Class I Preferred Stock/
Second Series Class II Preferred Stock/
Third Series Class III Preferred Stock/
Fourth Series Class IV Preferred Stock—
Sixth Series Class VI Preferred Stock—
Seventh Series Class VII Preferred Stock—
Eighth Series Class VIII Preferred Stock/
Ninth Series Class IX Preferred Stock/
Tenth Series Class X Preferred Stock/
Eleventh Series Class XI Preferred Stock—
Twelfth Series Class XI Preferred Stock/Thirteenth Series Class XIII Preferred Stock—Net Income (Loss) per Share (Yen) (Note 1)
63,040.65
Diluted Net Income per Share (Yen) (Note 1) (Note 2)
53,235.99

41,782.20

46,670.33

46,568.86

3,500
/
8,200
14,00047,60042,00011,000
8,000
—
5,380
20,000—30,000
—
/
—
—
—
—
—
—
—
—
—
—
—
(588.84)—

3,000
22,5008,200
14,00047,60042,00011,0008,000
17,5005,380
20,0002,500
30,000
—
—
—
—
—
—
—
—
—
—
—
—
—
(2,846.42)——
22,5008,200
14,00047,60042,00011,0008,000
17,500
5,380
165
21
247
/
/
/
/
/
/
/
/
/
/
/
/
/
(8,663.01)
—

—x
—%

—x
—%

—x
—%

PER (Times) (Note 2)
Dividend Propensity (Note 3)

15.27x6.34%

Notes: 1. “Total Shareholders' Equity per Share,” “Net Loss per Share” and “Diluted Net Income per Share” are calculated in accordance with “Accounting Standard for Earnings per Share” (Financial
Accounting Standard No. 2) and “Implementation Guidance for Accounting Standard for Earnings per Share” (Financial Accounting Standards Implementation Guidance No. 4).
2. “Diluted Net Income per Share” and “PER” for the fiscal years ended March 31, 2003, 2004 and 2005 are not required to be disclosed due to loss position.
3. Dividend Propensity: Cash Dividends Declared per Share (Common Stock) / Net Income per Share (Common Stock). Dividend Propensity is not required to be disclosed due to non-payment ofdividends for common stock for the fiscal year ended March 31, 2003, and due to loss position of earnings per share for the fiscal years ended March 31, 2004 and 2005.

69

Financial Analysis of Mizuho

Financial and Economic Environment

Economic Conditions in Japan and Overseas
A look at world economic conditions in fiscal 2005 shows that although there was concern that the U.S. economy would be
affected by rising oil prices and hurricane damage, business conditions remained strong thanks to firm growth in consumer
spending and capital expenditure, while prices were stable as a result of phased increases in interest rates. In Europe, businessconditions gradually recovered as the euro's weakness boosted exports. In China, there was concern that the strong renminbi
might have a negative impact, but the economy was firm as consumer spending grew on the back of improving employment conditions. Other Asian economies also expanded as exports posted high growth.
Relatively high growth in exports also helped Japanese companies to maintain strong performances. Higher domestic and overseas demand contributed to relatively high sustained growth in capital expenditure, too. Against this background, consumer
spending recovered and business conditions remained firm as a result of ongoing improvements in employment conditions.
Domestic corporate goods prices continued to rise as a result of higher global commodity prices, while consumer prices turned
slightly upwards over the fiscal year-end. As a result of these developments, the Bank of Japan abandoned its quantitative easing
policy in March 2006.

Financial Sector
In Japan's financial markets, fiscal 2005 brought sustained increases in stock prices as the global economy expanded, corporate
earnings improved and foreign investors maintained their proactive investment stance. Over the fiscal year-end, expectations ofan end to deflation and moves to abandon the quantitative easing policy resulted in an upward trend in long-term interest rates.
In the foreign exchange markets, the yen remained weak throughout the fiscal year as interest rate differentials expanded on theback of interest rate hikes in the U.S. and Europe.
In the financial sector, NPL disposals and most of the other issues that needed to be resolved have been cleared up and strategic
business tie-ups are accelerating. There was also progress in deregulation including reviewing the bank agent system. In light ofthese environmental changes, ensuring competitive advantage and further strengthening profitability are all matters of considerable importance for financial institutions.

70Trends in Interest Rates in Japan
(%)

(%)

3.0

0.40
0.35

2.5

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

0.30

Long-Term Prime Rate (left scale)

2.0

0.25
0.20

1.5
0.15

Short-Term Prime Rate (left scale)
1.0

0.10

Euroyen TIBOR (3-month) (right scale)
0.05
0.5
0.00

Call Rate (Uncollateralized overnight) (right scale)
0.0

Jan. 2005(0.05)

Apr. 2005

July 2005

Oct. 2005

Jan. 2006

Apr. 2006

Trends in TOPIX and Yen / Dollar Exchange Rate
(Point)(Yen / Dollar)
125

1,900
1,800

TOPIX (left scale)

1,700

120

1,600
1,500
115

1,400
1,300

Yen / Dollar Exchange Rate(right scale)

1,200

110

1,100
1,000
105
900
800
700

Jan. 2005

Apr. 2005

July 2005

Oct. 2005

Jan. 2006

Apr. 2006

100

71

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2006

Consolidated Accounts of Mizuho Financial Group, Inc. (MHFG)
1. Scope of Consolidation and Application of the Equity Method
Companies

At March 31,

2006

2005

ChangeNumber of consolidated subsidiaries
Number of affiliates under the equity method

130
19

118
20

12
(1)

The number of MHFG's consolidated subsidiaries increased by 12 to 130, and the number of affiliates under the equity method
decreased by 1 to 19 from the end of the previous fiscal year.
The major consolidated subsidiaries are Mizuho Corporate Bank, Ltd. (MHCB), Mizuho Bank, Ltd. (MHBK), Mizuho Trust &Banking Co., Ltd. (MHTB) and Mizuho Securities Co., Ltd. (MHSC). The major affiliates under 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
Fiduciary Income
Net Fee and Commission Income
Net Trading Income
Net Other Operating Income

2006

¥

General and Administrative Expenses
Expenses related to Portfolio Problems (including
Provision for General Reserve for Possible Losses on Loans)

2,002.4
1,062.6
78.8
555.9
204.9
100.0

2005

¥

1,993.0
1,106.4
63.2
472.6
165.0
185.7

Change¥9.3(43.7)
15.5
83.3
39.8
(85.6)

1,095.2

1,091.3

3.8

84.7

231.9

(147.2)

231.5

210.3

21.1

9.1

1.4

7.7

Other

(83.0)

61.4(144.4)

Income before Income Taxes and Minority Interests

980.1

943.0

37.0

Income Taxes–Current

64.0

41.0

22.9

Income Taxes–Refund

—

21.2

(21.2)

Income Taxes–Deferred

185.0

235.2

(50.1)Net Gains related to Stocks
Equity in Income from Investments in Affiliates

Minority Interests in Net Income

81.1

60.6

20.5

Net Income

649.9

627.3

22.5

55,157.14

54,625.61

531.53Net Income per Share of Common Stock (Yen)
Credit-related Costs¥(53.2)¥

93.9¥(147.1)(Reference) Consolidated Net Business Profits

¥

922.5

¥

912.5

¥

9.9

Notes: 1. Net Gains related to Stocks for the fiscal year ended March 31, 2006 include gains on disposition of investment in a subsidiary of ¥42.4 billion.
2. Credit-related Costs = Expenses related to Portfolio Problems (including Provision for General Reserve for Possible Losses on Loans) + Reversal of Reserves for Possible Losses on Loans, etc. +Credit Costs for Trust Accounts.
3. Consolidated Net Business Profits = Consolidated Gross Profits - General and Administrative Expenses (Excluding Non-recurring Losses) + Equity in Income from Investments in Affiliates and otherconsolidation adjustments.

72

(1) Consolidated Gross Profits
Consolidated Gross Profits for fiscal 2005 were ¥2,002.4 billion, increasing by ¥9.3 billion from the previous fiscal year. Net
Interest Income was ¥1,062.6 billion, decreasing by ¥43.7 billion from the previous fiscal year resulting from a decrease in loan
margins caused by increasingly fierce competition among domestic lenders and other factors, and a decrease in the average balance of domestic Loans and Bills Discounted. Net Fee and Commission Income was ¥555.9 billion, increasing by ¥83.3 billion
from the previous fiscal year. This was as a result of increases in fee income related to investment trusts and individual annuities,
fees related to our solutions business and fees and commissions from overseas business, etc. Net Trading Income was ¥204.9 billion, increasing by ¥39.8 billion from the previous fiscal year, while Net Other Operating Income was ¥100.0 billion, decreasing by¥85.6 billion from the previous fiscal year. This decrease was as a result of disposition of unrealized losses on our bonds portfolioof ¥138.5 billion in the second half of fiscal 2005, in light of such factors as current trends in domestic and U.S. interest rates.
Excluding this disposition of unrealized losses, Consolidated Gross Profits for fiscal 2005 increased by 7.4% from the previous
fiscal year.
(2) General and Administrative Expenses
General and Administrative Expenses for fiscal 2005 amounted to ¥1,095.2 billion, increasing by ¥3.8 billion from the previous
fiscal year. This includes the effect of the decrease of “Base Expenses” which are mainly IT-related due to the completion ofMizuho Bank’s IT systems integration, while there was an initial outlay relating to “Strategy Expenses” in responding to measures
to increase top-line profits, as well as an increase in expenses associated with an expansion of business operations of securities
subsidiaries.
(3) Credit-Related Costs
Credit-related Costs for fiscal 2005 actually showed a gain of ¥53.2 billion, showing significant improvement of ¥147.1 billion
from the previous fiscal year. This was mainly due to a decrease in costs related to write-offs with the near-completion of theremoval of NPLs from the balance sheet and as a result of reversal of reserves for possible losses on loans, etc., with the strengthening of the Group’s asset quality.
(4) Net Gains related to Stocks and Equity in Income from Investments in Affiliates
With the continuing progress in decreasing our stock holdings to alleviate the risk of stock holdings, as well as the effective credit
and alternative investments (stock-related) which were made as part of an attempt at diversification of profit sources of marketrelated income, Net Gains related to Stocks amounted to ¥231.5 billion (including Gains on Disposition of Investments in
Subsidiary of ¥42.4 billion), increasing by ¥21.1 billion from the previous fiscal year.
Equity in Income from Investments in Affiliates amounted to ¥9.1 billion, increasing by ¥7.7 billion from the previous fiscal year
as a result of a strong business performance by our affiliates under the equity method.
(5) Other
Other decreased by ¥144.4 billion to record a loss of ¥83.0 billion. Major components are as follows:• Reversal of reserve for possible losses on loans of ¥142.2 billion• Gains on disposition of premises and equipment of ¥22.1 billion• Recovery on written-off loans of ¥5.3 billion• Reversal of reserve for contingent liabilities from future transactions of ¥0.0 billion• Losses on sales of bonds related to Japanese Government Bonds, etc., resulting from revision of the bond portfolio strategies,
to mitigate the risk of rising interest rates in the first half of the fiscal 2005, of ¥85.3 billion• Losses on impairment of fixed assets of ¥22.3 billion• Losses on disposition of premises and equipment of ¥18.4 billion• Provision for reserve for contingent liabilities from securities transactions of ¥0.5 billion(6) Income Taxes and Minority Interests in Net Income
Income Taxes - Current amounted to ¥64.0 billion, and Income Taxes - Deferred amounted to ¥185.0 billion.
Minority Interests in Net Income amounted to ¥81.1 billion.
(7) Net Income
After reflecting the above, Net Income amounted to ¥649.9 billion, increasing by ¥22.5 billion from the previous fiscal year.

73

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2006

Use and Source of Funds (Consolidated)
Billions of yen

Average balance
2006
2005

For the Fiscal Years ended March 31,

Use of Funds
Due from Banks
Call Loans and Bills Purchased
Receivables under Resale Agreements
Guarantee Deposits Paid under Securities
Borrowing Transactions
Securities
Loans and Bills Discounted¥ 119,336.2
1,412.1
616.8
6,124.3¥ 112,846.2
1,719.8
1,271.5
4,937.6

7,438.8
37,856.8
62,453.0

7,603.1
33,073.0
63,767.4

Source of Funds¥ 119,713.4
Deposits
78,504.6
Debentures
7,266.9
Call Money and Bills Sold
9,146.1
Payables under Repurchase Agreements
11,174.9
Guarantee Deposits Received under Securities
Lending Transactions
6,900.8
Commercial Paper
444.7
Borrowed Money
2,581.2¥ 115,568.6
76,900.88,590.0
8,764.4
8,902.5
7,156.4
1,066.8
2,135.3¥¥

Change2006

Interest
2005

6,489.9(307.6)(654.7)
1,186.7¥ 1,935.0
50.8
9.9
260.1

¥ 1,584.4
29.7
5.0
110.2

(164.3)
4,783.8(1,314.3)

3.8
456.7
1,071.8

3.6
290.6
1,065.1

4,144.8
1,603.7(1,323.1)
381.6
2,272.4(255.6)(622.0)
445.9

¥

872.3
273.0
48.2
6.4
383.1

¥

477.9
125.9
68.6
2.9
154.0

Change

¥

350.6
21.1
4.8
149.8
0.2
166.0
6.6

¥

394.4
147.1
(20.4)
3.4
229.1

24.2
0.2
23.2

12.7
1.0
26.5

11.5
(0.7)
(3.3)

For the Fiscal Years ended March 31,

2006

Yield
2005

ChangeUse of Funds
Due from Banks
Call Loans and Bills Purchased
Receivables under Resale Agreements
Guarantee Deposits Paid under Securities
Borrowing Transactions
Securities
Loans and Bills Discounted

1.62%
3.60
1.61
4.24

1.40%
1.72
0.39
2.23

0.21%
1.87
1.21
2.01

0.05
1.20
1.71

0.04
0.87
1.67

0.00
0.32
0.04

0.72%
0.34
0.66
0.07
3.42

0.41%
0.16
0.79
0.03
1.72

0.31%
0.18
(0.13)
0.03
1.69

0.35
0.06
0.90

0.17
0.09
1.24

0.17
(0.03)(0.34)%

Source of Funds
Deposits
Debentures
Call Money and Bills Sold
Payables under Repurchase Agreements
Guarantee Deposits Received under Securities
Lending Transactions
Commercial Paper
Borrowed Money

Net Fee and Commission Income (Consolidated)
Billions of yen

For the Fiscal Years ended March 31,

2006

2005

Change¥ 555.9¥ 472.6¥ 83.3

Fee and Commission Income
Deposits, Debentures and Lending Business
Securities-related Business
Remittance Business
Trust-related BusinessAgency Business
Guarantee Business
Safe Custody and Safety Deposit Box Business¥ 650.5
143.4
135.2
116.1
55.2
49.6
28.1
6.5

¥ 566.1
126.0
105.3
113.7
45.4
40.0
25.6
6.6

¥ 84.4
17.3
29.9
2.4
9.8
9.5
2.5
(0.0)

Fee and Commission Expenses
Remittance Business

¥

¥

¥

Net Fee and Commission Income

74

94.6
30.5

93.4
28.9

1.1
1.5

3. Consolidated Assets, Liabilities and Shareholders' Equity
Billions of yen

At March 31,

2006

2005

Total Assets
Cash and Due from Banks
Trading Assets
Securities
Loans and Bills Discounted¥ 149,612.7
5,016.2
10,007.1
37,702.9
65,408.6¥ 143,076.2
6,808.9
11,047.6
36,047.0
62,917.3

Total Liabilities
Deposits
Debentures
Call Money and Bills Sold

143,448.6
82,367.1
6,606.3
9,466.0

138,042.1
80,368.0
7,795.0
8,359.9

Minority Interests
Total Shareholders' Equity
Net Unrealized Gains on Other Securities, net of Taxes

1,359.1¥

4,804.9
1,279.2

Change¥5,406.5
1,999.0(1,188.7)
1,106.1

1,128.3¥

3,905.7
538.0

6,536.5(1,792.7)(1,040.4)
1,655.9
2,491.3

230.7
¥

899.2
741.1

(1) Assets and Liabilities
Consolidated total assets as of March 31, 2006 amounted to ¥149,612.7 billion, increasing by ¥6,536.5 billion from the end of
the previous fiscal year.
Securities were ¥37,702.9 billion, increasing by ¥1,655.9 billion from the end of the previous fiscal year. This reflected mainly
an increase in non-Japanese bonds.
The balance of Loans and Bills Discounted amounted to ¥65,408.6 billion, increasing by ¥2,491.3 billion from the end of theprevious fiscal year. This was due to the facts that since fiscal 2004, the balance of Loans and Bills Discounted overseas has been
increasing after the declining trend bottomed out and that the balance of Loans and Bills Discounted for domestic Small andMedium-sized Enterprises (SMEs) and individual customers has also been increasing.
With respect to NPLs, further efforts to improve MHFG's financial soundness resulted in a consolidated balance of Disclosed
Claims under the Financial Reconstruction Law amounting to ¥1,087.5 billion, decreasing by ¥499.5 billion from the end of theprevious fiscal year.
Net deferred tax assets were ¥295.7 billion, decreasing by ¥707.1 billion from the end of the previous fiscal year as a result ofrecording taxable income and the increased amount of Unrealized Gains on Other Securities, with the continued conservative
strict assessment of asset recoverability.
Deposits (excluding Negotiable Certificates of Deposit (NCDs)) amounted to ¥73,007.9 billion, increasing by ¥3,508.4 billion
from the end of the previous fiscal year. NCDs (included in Deposits) amounted to ¥9,359.1 billion, decreasing by ¥1,509.3 billion
from the end of the previous fiscal year.
(2) Consolidated Capital Adequacy Ratio (BIS Capital Ratio)
While MHFG repurchased and cancelled public funds of preferred shares amounting to ¥692.9 billion (¥616.4 billion on anissued-price basis) in August 2005, and ¥250.7 billion (¥250.0 billion on an issued-price basis) in October 2005, we aimed for astrengthening of the capital base, by steadily accumulating the retained earnings accompanied with the record of Net Income of¥649.9 billion, by a global offering of MHFG shares in the possession of our subsidiary (¥531.6 billion in total amount), and by
issuing preferred securities (approximately ¥140.0 billion).
Furthermore, positively influenced by the increase of unrealized gains on securities and other factors, Capital as of the end of
fiscal 2005 amounted to ¥8,993.2 billion, increasing by ¥973.0 billion from the end of the previous fiscal year.
The Risk-adjusted Assets balance was ¥77,534.5 billion, increasing by ¥10,209.5 billion from the end of the previous fiscal year
due to the increase in assets and further efforts to expand top-line profits after entering into the new phase in our management
strategies.
As a result, the Consolidated Capital Adequacy Ratio (BIS Capital Ratio) decreased by 0.32% from the end of the previous fiscal
year to 11.59%.

75

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2006

Fair Value of Other Securities (Consolidated)
Billions of yen

At March 31, 2006

Acquisition cost

Fair value

Other Securities*1
Stocks
Bonds
Other¥ 30,285.2
2,991.1
20,369.9
6,924.1¥ 32,435.0
5,453.5
20,109.3
6,872.0

Gross unrealized
Gains

¥

2,575.9
2,492.7
1.1
82.0

¥

Losses

426.2
30.3
261.7
134.0

Net unrealized*2
gains (losses)¥

2,149.7
2,462.3(260.6)(52.0)
Billions of yen

At March 31, 2005

Acquisition cost

Fair value

Other Securities*1
Stocks
Bonds
Other¥ 30,554.5
3,087.9
22,170.2
5,296.3¥ 31,551.2
4,197.5
22,094.0
5,259.6

Gross unrealized
Gains

¥

1,232.6
1,174.3
15.8
42.3

¥

Losses

235.9
64.7
92.0
79.0

Net unrealized*2
gains (losses)

¥

996.7
1,109.6(76.2)(36.6)
Billions of yen

ChangeOther Securities
StocksBonds
Other

Acquisition cost¥

(269.2)(96.7)(1,800.3)
1,627.8

Gross unrealized
Gains

Fair value

¥

883.8
1,256.0(1,984.7)
1,612.4¥

1,343.3
1,318.3(14.7)
39.6¥

Losses190.3(34.3)
169.6
55.0

Net unrealized
gains (losses)¥

1,153.0
1,352.7(184.4)(15.3)*1 In addition to the balances shown in the above table, Other Securities include securities which do not have readily determinable fair values such as unlisted stock of ¥807.8 billion and non-publicly
offered bonds of ¥2,018.7 billion as of March 31, 2006.
*2 Net unrealized gains (losses) include ¥(51.6) billion and ¥54.0 billion recognized in the income statements of March 31, 2006 and 2005, respectively, by applying the fair-value hedge method andother. As a result, the base amount to be recorded directly to Shareholders' Equity after tax and consolidation adjustments as of March 31, 2006 and 2005 were ¥2,201.4 billion and ¥942.6 billion,
respectively.

(Reference)
Unrealized Gains (Losses) on Other Securities (the base amount to be recorded directly to Shareholders' Equity after tax
and consolidation adjustments)
For certain Other Securities (which have readily determinable fair values), unrealized gains (losses) were recognized in the income
statement by applying the fair-value hedge method and other. They were excluded from unrealized gains (losses) on Other
Securities. These adjusted unrealized gains (losses) were the base amount, which was to be recorded directly to Shareholders'Equity after tax and consolidation adjustments.
The base amount was as follows:
Billions of yen

At March 31,

Other Securities
Stocks
Bonds
Other

76

2006

¥

2,201.4
2,462.3(234.4)(26.4)

2005

¥

942.6
1,109.6(130.2)(36.6)

Change¥1,258.7
1,352.7(104.1)
10.1

Consolidated Capital Adequacy Ratio (BIS Capital Ratio)%, Billions of yen

At March 31,

2006

2005

ChangeCapital Adequacy Ratio
Tier 1 Capital Ratio

11.59%
5.87%

11.91%
6.19%(0.32)%(0.32)%

Tier 1 Capital
Common Stock and Preferred StockNew Stock Subscription
Capital Surplus
Retained Earnings
Minority Interest in Consolidated Subsidiaries
Preferred Stock issued by Overseas SPC
Unrealized Losses on Other Securities
Treasury Stock Subscription
Treasury Stock
Foreign Currency Translation Adjustments
Goodwill Equivalent
Consolidation Differences Equivalent(A)¥

Tier 2 Capital(B)
45% of Unrealized Gains on Other Securities
45% of Revaluation Reserve for Land
General Reserve for Possible Losses on Loans
Debt Capital
Perpetual Subordinated Debt and Other Debt Capital
Subordinated Debt and Redeemable Preferred Stock
Deductions from Capital(C)

Capital(A)+(B)-(C)Risk-adjusted Assets
Assets Exposed to Credit Risk
On-balance sheet Items
Off-balance sheet Items
Market Risk Equivalent (Divided by 8%)(Reference) Market Risk Equivalent

4,555.9
1,540.9—411.1
1,417.5
1,280.5
1,095.7——(46.8)(47.4)(0.0)—¥

4,554.0
994.6
131.0
615.7
2,812.5
776.3
2,036.2
8,993.2¥ 77,534.5
75,523.4
67,910.0
7,613.3
2,011.0
160.8¥

3,956.4
426.0
150.7
637.3
2,742.3
854.3
1,888.0

116.7¥

4,172.0
1,540.9—
1,022.5
972.5
1,079.2
927.9——(394.5)(48.6)
(0.0)
—

597.5
568.6
(19.6)(21.5)
70.1(77.9)
148.1

108.2
¥

8,020.2¥ 67,324.9
66,391.5
60,702.4
5,689.1
933.4
74.6

383.8
—
—
(611.4)
444.9
201.3
167.7
—
—
347.7
1.2
0.0
—

8.4
¥

973.0

¥ 10,209.5
9,131.8
7,207.6
1,924.1
1,077.6
86.2

77

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2006

Aggregated Figures of the Three Banks
For an early achievement of corporate revitalization, loans and stocks of customers in need of revitalization/restructuring held by
MHCB, MHBK and MHTB were transferred to their financial subsidiaries for corporate revitalization in July 2003.
MHCB, MHBK and MHTB merged with their own financial subsidiaries for corporate revitalization respectively, as of October 1,
2005, in consequence of the termination of the “Corporate Revitalization Project.”
Aggregated figures of the Three Banks are as follows:

Before March
31, 2003

MHCB
MHBK
MHTB

Profits and Losses

Aggregatedfigures of theThree BanksAt March 31, 2006 / For the
Fiscal Year ended March 31,
2006

MHCB
+ Mizuho Corporate, Ltd.
+ Mizuho Global, Ltd.

MHCB
+ Mizuho Corporate, Ltd.
+ Mizuho Global, Ltd.

MHBK
+ Mizuho Project, Ltd.

MHBK
+ Mizuho Project, Ltd.

MHTB
+ Mizuho Asset, Ltd.

MHTB
+ Mizuho Asset, Ltd.

MHCB
+ Mizuho Corporate, Ltd.
+ Mizuho Global, Ltd.

MHCB
MHBK
MHTB

Assets, Liabilities
and Shareholders'EquityAt March 31, 2004 and 2005 /For the Fiscal Years ended
March 31, 2004 and 2005

MHCB
MHBK
MHTB

MHBK
+ Mizuho Project, Ltd.
MHTB
+ Mizuho Asset, Ltd.

1. Differences between Consolidated Figures and Aggregated Figures of the Three Banks
Billions of yen, %For the Fiscal Years ended March 31,

Gross Profits
Net Interest Income
Fiduciary Income
Net Fee and Commission Income
Net Trading Income
Net Other Operating Income

MHFG(Consolidated)(a)¥2,002.4
1,062.6
78.8
555.9
204.9
100.0

¥

649.9

Credit-related Costs
Net Income

2006
AggregatedFigures of theThree Banks (b)(a) – (b) (b) / (a)¥ 1,698.8
1,112.0
77.9
378.4
33.4
96.9

¥ 303.5
84.8%(49.4) 104.6
0.8
98.8
177.5
68.0
171.4
16.3
3.0
96.9

(53.2)(63.9)
¥

732.9

10.7

MHFG
(Consolidated)(a)(a) – (b) (b) / (a)¥1,993.0 ¥1,106.4
63.2
472.6
165.0
185.7
93.9

61.2

32.6

65.2

¥

627.3 ¥

582.5 ¥

44.7

92.8%

120.1

¥ (83.0) 112.7%

2005
AggregatedFigures of theThree Banks (b)1,626.4 ¥ 366.6
1,028.1
78.3
62.8
0.4
315.1
157.5
43.8
121.1
176.5
9.1

81.6%
92.9
99.2
66.6
26.5
95.0

Note: Credit-related Costs = Expenses related to Portfolio Problems + Provision for General Reserve for Possible Losses on Loans + Reversal of Reserves for Possible Losses on Loans, etc. + Credit Costs for
Trust Accounts.

Billions of yen, %78

At March 31,

MHFG(Consolidated)
(a)

2006
AggregatedFigures of theThree Banks (b)Total Assets
Securities
Loans and Bills Discounted¥ 149,612.7
37,702.9
65,408.6¥138,454.1 ¥11,158.6
92.5%
38,148.8(445.8) 101.1
65,984.7(576.0) 100.8(a) – (b) (b) / (a)MHFG(Consolidated)
(a)

2005
AggregatedFigures of theThree Banks (b)(a) – (b) (b) / (a)¥ 143,076.2 ¥ 135,561.5 ¥7,514.6 94.7%
36,047.0
39,192.0 (3,144.9) 108.7
62,917.3
62,647.1
270.1 99.5

2. Aggregated Profits and Losses(the Three Banks)
Billions of yen

For the Fiscal Years ended March 31,

Domestic Gross Profits
International Gross Profits

2006

¥

1,358.0
340.7

2005

¥

Change1,214.7
411.6

¥

143.3
(70.9)

Gross Profits
Net Interest Income
Fiduciary Income
Net Fee and Commission Income
Net Trading Income
Net Other Operating Income
Net Gains (Losses) related to Bonds

1,698.8
1,112.0
77.9
378.4
33.4
96.9
(104.1)

1,626.4
1,028.1
62.8
315.1
43.8
176.5
9.6

72.4
83.9
15.1
63.3
(10.4)(79.5)(113.8)General and Administrative Expenses (excluding Non-recurring Losses)
Expense Ratio

810.9
47.69%

829.1
50.89%(18.1)(3.19)%

889.2
993.4

800.0
790.3

89.2
203.1

Net Business Profits (before Reversal of General Reserve
for Possible Losses on Loans)Excluding Net Gains (Losses) related to Bonds
Reversal of General Reserve for Possible Losses on Loans

0.2

155.2

(154.9)Net Business Profits

888.1

952.4

(64.3)Net Non-recurring Gains (Losses)
Net Gains related to Stocks
Expenses related to Portfolio Problems
Other

47.4
199.7
(115.4)(36.8)(154.1)193.8(456.6)
108.6

201.6
5.8
341.2
(145.4)

Income before Income Taxes

137.3

935.6

798.2

Income Taxes–Current

0.6

0.6

(0.0)

Income Taxes–Refund

—

21.2

(21.2)

Income Taxes–Deferred

202.0

236.2

(34.2)Net Income

¥

732.9

¥

582.5

¥

150.3

Credit-related Costs¥(63.9)¥

61.2¥(125.2)

Notes: 1. Dividends from the financial subsidiaries for corporate revitalization of ¥120.0 billion for the fiscal year ended March 31, 2006 are included due to the simple aggregation of the three banks(non-consolidated) and their financial subsidiaries for corporate revitalization.
2. Net Business Profits (before Reversal of General Reserve for Possible Losses on Loans) of MHTB exclude the amounts of Credit Costs for Trust Accounts.
3. Credit-related Costs = Expenses related to Portfolio Problems + Reversal of General Reserve for Possible Losses on Loans + Reversal of Reserves for Possible Losses on Loans, etc. + Credit Costs for
Trust Accounts.

Breakdown of Gross Profits (the Three Banks)
Billions of yen

For the Fiscal Years ended March 31,

Net Interest Income
Domestic Operations
International Operations

2006

¥

1,112.0
957.1
154.8

2005

¥

1,028.1
866.2
161.8

Change

¥

83.9
90.9
(6.9)

Fiduciary Income
Domestic Operations
International Operations

77.9
77.9
/

62.8
62.8
/

15.1
15.1
/

Net Fee and Commission Income
Domestic Operations
International Operations

378.4
308.8
69.5

315.1
257.0
58.0

63.3
51.7
11.5

Net Trading Income
Domestic Operations
International Operations

33.4
70.8
(37.3)

43.8
16.7
27.1

(10.4)
54.1(64.5)Net Other Operating Income
Domestic Operations
International Operations

96.9(56.7)
153.7

176.5
11.9
164.5

(79.5)(68.6)(10.8)

Gross Profits¥

1,698.8¥

1,626.4

¥

72.4

79

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2006

Breakdown of Net Interest Income (MHCB and MHBK excluding Financial Subsidiaries for Corporate Revitalization)
Billions of yen, %Change

2006

Yield
2005

2,239.1
752.2
4,003.0

1.60%
1.61
1.54

1.30%
1.58
0.90

0.30)%
0.03
0.63

109,216.4
84,158.4

1,462.0
1,438.3

0.61
0.38

0.38
0.23

0.22
0.14

/

/

/

0.99

0.91

0.07

/

/

/

1.23

1.34

(0.11)

Domestic Operations
Use of Funds
Loans and Bills Discounted
Securities

88,004.3
51,663.5
30,109.8

89,710.5
52,379.0
28,917.6(1,706.1)(715.4)
1,192.2

1.12
1.29
0.94

1.01
1.43
0.45

0.11
(0.13)
0.49

Source of Funds
Deposits and Debentures

91,611.2
74,694.4

93,485.4
75,117.9(1,874.1)(423.5)

0.10
0.08

0.12
0.10

(0.02)(0.02)

Interest Margins

/

/

/

1.02

0.88

0.13

Loan and Deposit Margin

/

/

/

1.20

1.32

(0.11)

International Operations
Use of Funds
Loans and Bills Discounted
Securities

20,771.1
6,757.3
7,929.4

16,904.3
5,289.6
5,118.6

3,866.8
1,467.7
2,810.7

3.57
4.09
3.79

2.74
3.04
3.47

0.82
1.05
0.32

Source of Funds
Deposits and Debentures

20,012.0
10,902.4

16,754.2
9,040.5

3,257.7
1,861.8

2.93
2.43

1.83
1.28

1.09
1.14

Interest Margins

/

/

/

0.63

0.90

(0.26)

Loan and Deposit Margin

/

/

/

1.66

1.75

(0.09)For the Fiscal Years ended March 31,

2006

Average balance
2005

Total
Use of Funds
Loans and Bills Discounted
Securities¥ 107,830.7
58,420.9
38,039.3¥ 105,591.5
57,668.6
34,036.2

Source of Funds
Deposits and Debentures

110,678.4
85,596.8

Interest Margins
Loan and Deposit Margin¥

ChangeBreakdown of Net Fee and Commission Income (the Three Banks)
Billions of yen

For the Fiscal Years ended March 31,

2006

2005

Change¥ 378.4¥ 315.1¥ 63.3

Fee and Commission Income
Deposits, Debentures and Lending Business
Remittance Business
Securities-related BusinessAgency Business
Guarantee Business
Safe Custody and Safety Deposit Box Business¥ 480.0
138.8
116.3
61.5
29.3
25.8
6.5

¥ 422.2
118.8
113.9
43.7
29.9
20.9
6.6

¥ 57.8
20.0
2.4
17.8
(0.5)
4.9
(0.1)

Fee and Commission Expenses
Remittance Business¥ 101.6
30.5¥ 107.1
29.1¥ (5.4)
1.4

Net Fee and Commission Income80Breakdown of Net Other Operating Income (the Three Banks)
Billions of yen

For the Fiscal Years ended March 31,

2006

2005

¥

96.9

¥ 176.5¥(79.5)

¥

96.9
219.4
(104.1)¥ 176.5
156.0
9.6

¥

(79.5)
63.4(113.8)Domestic Operations
Net Losses related to Bonds(56.7)(57.7)

11.9(4.5)(68.6)(53.2)

International Operations
Profits on Foreign Exchange Transactions
Net Gains (Losses) related to Bonds

153.7
219.4
(46.3)

164.5
156.0
14.2

(10.8)
63.4(60.6)Net Other Operating Income
Total
Profits on Foreign Exchange Transactions
Net Gains (Losses) related to Bonds

ChangeBreakdown of General and Administrative Expenses (excluding Non-recurring Losses) (the Three Banks)
Billions of yen

For the Fiscal Years ended March 31,

2006

2005

¥ 243.7¥ 245.7

Non-personnel Expenses

518.9

531.3

Miscellaneous Taxes

48.2

52.1

¥ 810.9¥ 829.1

2006

2005

¥ 199.7
238.2(6.3)(28.5)—(3.6)¥ 193.8
257.2(13.1)(47.6)(2.9)
0.3

Expenses related to Portfolio Problems(115.4)(456.6)

341.2

Other

(36.8)

108.6(145.4)47.4¥ (154.1)¥ 201.6

2006

2005

Change61.2
2.7(332.6)
163.6
160.3
(3.0)
8.5
61.7

¥ (125.2)
(1.3)
321.8
(126.6)(295.7)0.6
26.9(50.9)

Personnel Expenses

Total

Change¥(1.9)(12.3)(3.8)¥(18.1)Breakdown of Net Non-Recurring Losses (the Three Banks)
Billions of yen

For the Fiscal Years ended March 31,

Net Gains related to Stocks
Gains on Sales
Losses on Sales
Losses on Devaluation
Provision for Reserve for Possible Losses on Investments
Gains (Losses) on Derivatives other than for Trading

Net Non-recurring Gains (Losses)¥

Change¥5.8(18.9)
6.8
19.1
2.9
(4.0)

(Reference) Breakdown of Credit-Related Costs (the Three Banks)
Billions of yen

For the Fiscal Years ended March 31,

Credit-related Costs
Credit Costs for Trust Accounts
Reversal of General Reserve for Possible Losses on Loans
Losses on Write-offs of Loans
Provision for (Reversal of) Specific Reserve for Possible Losses on Loans
Reversal of Reserve for Possible Losses on Loans to Restructuring Countries
Provision for Reserve for Contingencies
Other Losses on Sales of Loans¥(63.9)
1.4(10.7)
36.9(135.3)
(2.4)
35.4
10.7

¥

81

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2006

3. Aggregated Assets, Liabilities and Shareholders' Equity
Assets and Liabilities (the Three Banks) (Banking Accounts)
Billions of yen

At March 31,

Total Assets
Cash and Due from Banks
Call Loans
Securities
Loans and Bills Discounted
Total Liabilities
Deposits
Debentures
Call Money
Bills Sold
Total Shareholders' Equity
Net Unrealized Gains on Other Securities, net of Taxes

2006

2005

Change¥ 138,454.1
6,085.4
2,641.5
38,148.8
65,984.7¥ 135,561.5
9,818.5
2,296.1
39,192.0
62,647.1¥ 2,892.5(3,733.0)
345.3(1,043.1)
3,337.5

132,815.9
84,253.0
6,674.1
7,676.8
3,246.9

127,996.5
83,336.2
7,894.5
6,603.6
3,342.4

4,819.3
916.7(1,220.4)
1,073.1(95.5)

5,638.2
1,252.4

7,565.0
523.7(1,926.8)
728.6

Balance of Housing and Consumer Loans (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

At March 31,

Housing and Consumer Loans
Housing Loans for Owner's Residential Housing

2006

2005

¥ 11,774.1
9,225.6¥ 11,833.0
9,140.4

Change¥(58.8)
85.1

Loans to Both Small and Medium-Sized Enterprises (SMEs) and Individual Customers (the Three Banks)(Banking Accounts and Trust Accounts)
Billions of yen, %At March 31,

Loans to Both SMEs and Individual Customers
Percentage of Loans to Both SMEs
and Individual Customers, of Total Domestic Loans

2006

2005

Change¥ 39,531.7¥ 37,307.8¥ 2,223.8

65.1%

62.4%

2.6%

Notes: 1. Loans as of March 31, 2006 include loans to MHFG of ¥965.0 billion from MHCB (¥342.0 billion) and MHBK (¥623.0 billion).
2. Above figures do not include loans booked at overseas offices and offshore loans.
3. The definition of SMEs is as follows:Enterprises of which the capital is ¥300 million or below (¥100 million or below for the wholesale industry, and ¥50 million or below for the retail and service industries), or enterprises withfull-time employees of 300 or below. (100 or below for the wholesale industry, 50 or below for the retail industry, and 100 or below for the service industry)82

Fair Value of Other Securities (the Three Banks) (Banking Accounts)
Billions of yen

At March 31, 2006

Acquisition cost

Fair value

Other Securities*1
StocksBonds
Other¥ 29,824.5
3,017.2
20,216.0
6,591.2¥ 31,882.6
5,383.6
19,956.0
6,542.9

Gross unrealized
Gains

¥

2,484.8
2,398.7
1.1
84.8

¥

LossesNet unrealized*2
gains (losses)

426.6
32.3
261.1
133.2

¥ 2,058.1
2,366.4(259.9)(48.3)

LossesNet unrealized*2
gains (losses)

Billions of yen

At March 31, 2005

Acquisition cost

Fair value

Other Securities*1
Stocks
Bonds
Other¥ 30,042.9
3,077.1
22,029.6
4,936.2¥ 30,979.4
4,127.9
21,953.6
4,897.8

Gross unrealized
Gains

¥

1,171.2
1,115.4
16.0
39.7

¥

234.7
64.5
92.0
78.1

¥

936.5
1,050.8(75.9)(38.3)
Billions of yen

ChangeOther Securities
StocksBonds
Other

Acquisition cost¥

(218.4)(59.9)(1,813.5)
1,655.0

Gross unrealized
Gains

Fair value

¥

903.2
1,255.6(1,997.5)
1,645.1¥

1,313.5
1,283.3(14.8)
45.1¥

LossesNet unrealized
gains (losses)

191.9(32.2)
169.1
55.0¥ 1,121.6
1,315.6(184.0)(9.9)*1 In addition to the balances shown in the above table, Other Securities includes securities which do not have readily determinable fair values.
*2 Net unrealized gains (losses) include ¥(51.6) billion and ¥54.0 billion recognized in the income statements of March 31, 2006 and 2005, respectively, by applying the fair-value hedge method andother. As a result, the base amount to be recorded directly to Shareholders' Equity after tax adjustments as of March 31, 2006 and 2005 were ¥2,109.8 billion and ¥882.4 billion, respectively.

(Reference)
Unrealized Gains (Losses) on Other Securities (the base amount to be recorded directly to Shareholders' Equity after tax
adjustments)
For certain Other Securities (which have readily determinable fair values), unrealized gains (losses) were recognized in the income
statement by applying the fair-value hedge method and other. They were excluded from unrealized gains (losses) on Other
Securities. These adjusted unrealized gains (losses) were the base amount, which was to be recorded directly to Shareholders'Equity after tax adjustments.
The base amount was as follows:
Billions of yen

At March 31,

Other Securities
Stocks
Bonds
Other

2006

¥

2,109.8
2,366.4(233.8)(22.7)

2005

¥

882.4
1,050.8(130.0)(38.3)

Change¥1,227.3
1,315.6(103.8)15.6

83

Financial Analysis of Mizuho

Status of Asset Quality

Loans and stocks of customers in need of revitalization/restructuring held by MHCB, MHBK and MHTB were transferred to theirfinancial subsidiaries for corporate revitalization in July 2003.
MHCB, MHBK and MHTB merged with their own financial subsidiaries for corporate revitalization respectively, as of October 1,
2005, in consequence of the termination of the Corporate Revitalization Project.

 Disposal of Non-performing Loans (NPLs) in the Fiscal Year ended March 31, 2006
Credit-related Costs resulted in reversal of reserves for possible losses of ¥53.2 billion due to the steady improvement of asset
quality as a result of corporate business recovery and other factors.
Credit-related Costs in the aggregated figures of the Three Bank resulted in reversal of reserves for possible losses of ¥63.9 billion.

 Outstanding Balance of NPLs
Status of Disclosed Claims
The Three Banks' aggregated figures of Disclosed Claims under the Financial Reconstruction Law (FRL) decreased by ¥442.8 billion
from the end of the previous fiscal year to ¥1,052.8 billion. The classifications of those loans are shown in the table on page 88.
Of the total, Claims with Collection Risk or worse claims decreased by ¥529.2 billion to ¥486.1 billion as a result of measuresfor corporate revitalization and removal of NPLs from the balance sheet.
At the same time, Claims for Special Attention increased by ¥86.4 billion to ¥566.7 billion, mainly due to the improved classification of some portion of Claims with Collection Risk as a result of the steady progress in revitalization.
NPL Ratio
The aggregated NPL ratio for the Three Banks at the end of March 2006 decreased to 1.41%, coming under the 2% mark.
 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 and bulk sales of NPLs.
Mizuho Saiken Kaishu Co., Ltd., a servicer of the group, mainly collects NPLs for the group banks and affiliated companies.

 Activities in Corporate Revitalization
The group considers support for corporate revitalization to be an important mission for a financial institution. The group is doing
its utmost to provide such support including verification of business plans of corporations tackling revitalization and provision ofadvice pertaining to reconstruction measures.
Since launching its Corporate Revitalization Project in July 2003, the group has made steady progress in the corporate reconstruction of its customers through corporate splits and transfer of operations, and improving customers' financial position by
underwriting their preferred shares or using DES (Debt Equity Swaps). As a result, necessary measures were taken for each of theapproximately 1,000 companies that were transferred to MHFG's financial subsidiaries for corporate revitalization, allowing thegroup to bring the project to an end one year ahead of the initial target period of within three years.

 Results of Removal of NPLs from the Balance Sheet
The group has proceeded with through collection and final disposal of NPLs as well as improvement in the classification of claims
through corporate revitalization.
The group has taken these measures actively to improve asset quality and removed ¥828.9 billion in NPLs in fiscal 2005. As aresult, the removal ratio for NPLs amount categorized as problem assets before fiscal 2004 has exceeded approximately 90% asof the end of March in 2006, including the amount which was in the process of being removed from the balance sheet, so
removal from the balance sheet is almost complete.
The group will steadily proceed with removal of NPLs.

84 Credit-Related Costs
Credit-Related Costs (Consolidated)
Billions of yen

For the Fiscal Years ended March 31,

Credit-related Costs
Expenses related to Portfolio Problems (including Provision
for General Reserve for Possible Losses on Loans)

2006

¥

Losses on Write-offs of Loans
Reversal of Reserves for Possible Losses on Loans, etc.
Credit Costs for Trust Accounts(53.2)¥

2005

Change93.9¥ (147.1)

84.7

231.9

(147.2)37.1(139.3)1.4

161.4(140.7)2.7(124.2)
1.3
(1.3)

2006

2005

Change61.2
2.7(332.6)
163.6
160.3
(3.0)
8.5
61.7

¥ (125.2)
(1.3)
321.8
(126.6)(295.7)0.6
26.9(50.9)

Credit-Related Costs (the Three Banks)
Billions of yen

For the Fiscal Years ended March 31,

Credit-related Costs
Credit Costs for Trust Accounts
Reversal of General Reserve for Possible Losses on Loans
Losses on Write-offs of Loans
Provision for (Reversal of) Specific Reserve for Possible Losses on Loans
Reversal of Reserve for Possible Losses on Loans to Restructuring Countries
Provision for Reserve for Contingencies
Other Losses on Sales of Loans¥(63.9)
1.4(10.7)
36.9(135.3)
(2.4)
35.4
10.7

¥

85

Financial Analysis of Mizuho

Status of Asset Quality

 Overview of Disclosure of NPLs at March 31, 2006 (the Three Banks) (Banking Accounts)
Billions of yen

1. Self-Assessment
Category IV
Category III (Non-Collateralized)

Categorization

NonCategorization Category II

Bankrupt and Substantially
Bankrupt Obligors
130.8

Collateral, Guarantees, etc.:
117.0
Reserve for Possible Losses:
13.8

Reserve
Ratio
100%

311.8

43.4

Collateral, Guarantees, etc.:
194.6
Reserve for Possible Losses:
117.2

Reserve
Ratio
72.9%

Obligor

130.8

Watch Obligors

Intensive Control
Obligors
355.2

Claims for Special
Attention
566.6

Reserve Ratio against
Uncovered Portion
33.9%
Collateral, Guarantees, etc.:
200.1
Reserve for Possible Losses:
124.5

DirectWrite-offs

2. Disclosed Claims
under the FRL

3. Non-Accrual, Past
Due & Restructured
Loans

Claims against Bankrupt
and Substantially Bankrupt
Obligors
130.8

Loans to Bankrupt Obligors
28.7

Coverage Ratio 100%

Claims against Special
Attention Obligors (Note 1)·Coverage Ratio: 59.5%·Reserve Ratiofor Uncovered Portion: 34.3%·Reserve Ratio
against Entire Claim: 21.1%

Claims with Collection Risk
355.2

Non-Accrual
Delinquent Loans
432.5

Coverage Ratio 87.7%
25.1 (Note 2)

Claims for Special Attention
566.6
Coverage Ratio 57.2%

Loans Past Duefor 3 Months or More
13.9
Restructured Loans
552.3(Special Attention Obligors)
Other Watch Obligors
Normal Obligors

Total
74,190.4

Reserve Ratio
against Total Claims·Other Watch Obligors: 11.35%·Normal Obligors: 0.11%

Total Coverage
Ratio 72.8%

Total
1,052.8

Total
1,027.6

Notes: 1. Claims for Special Attention is denoted on an individual loans basis. Claims against Special Attention Obligors includes all claims, not limited to claims for Special Attention.
2. The difference between total Non-Accrual, Past Due and Restructured Loans and total Disclosed Claims under the FRL represents claims other than loans included in Disclosed Claims under the FRL.

86

 Status of Disclosed Claims under the Financial Reconstruction Law (FRL)
Disclosed Claims under the FRL (Consolidated)(Consolidated)
Billions of yen

At March 31,

Claims against Bankrupt and Substantially Bankrupt Obligors
Claims with Collection Risk
Claims for Special Attention
Total

2006

¥

156.9
362.9
567.7

2005

¥

Change

251.6
859.0
476.5

¥

(94.6)(496.1)91.1¥ 1,087.5¥ 1,587.1¥(499.5)

2006

2005

805.2

¥ 1,042.5

2006

2005

Note: Above figures are presented net of partial direct write-offs, the amounts of which are indicated in the table below.
Billions of yen

Amount of Partial Direct Write-offs¥

Change¥(237.2)(Trust Accounts)
Billions of yen

At March 31,

Claims against Bankrupt and Substantially Bankrupt Obligors
Claims with Collection Risk
Claims for Special Attention
Total

Change

¥

—
—
0.0

¥

2.8
1.5
5.3

¥

(2.8)
(1.5)
(5.3)

¥

0.0

¥

9.6

¥

(9.6)

(Consolidated and Trust Accounts)
Billions of yen

At March 31,

Claims against Bankrupt and Substantially Bankrupt Obligors
Claims with Collection Risk
Claims for Special Attention
Total

2006

¥

156.9
362.9
567.7

¥ 1,087.6

2005¥

Change

254.4
860.5
481.8

¥

(97.4)(497.6)85.8¥ 1,596.8¥(509.2)87

Financial Analysis of Mizuho

Status of Asset Quality

Disclosed Claims under the FRL (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

At March 31,

Claims against Bankrupt and Substantially Bankrupt Obligors
Claims with Collection Risk
Claims for Special Attention

2006

¥

130.8
355.2
566.7

2005

¥

209.5
805.8
480.2

Change¥(78.6)(450.5)
86.4

Subtotal

1,052.8

1,495.6(442.8)

Normal Claims

73,236.0

67,600.3

5,635.6¥ 74,288.8¥ 69,095.9

Total

¥

5,192.8

Notes:1. Above figures are presented net of partial direct write-offs, the amounts of which are indicated in the table below.
2. Reserve for Indemnification of Impairment and Reserve for Possible Losses on Entrusted Loans of 3.2 billion and 4.0 billion for March 31, 2006 and 2005, respectively, are not included in theabove figures for Trust Accounts.
Billions of yen

2006

Amount of Partial Direct Write-offs

¥

725.0

2005

¥

865.4

Change¥(140.4)

Ratio of Disclosed Claims under the FRL (the Three Banks) (Banking Accounts and Trust Accounts)%

At March 31,

2006

2005

ChangeClaims against Bankrupt and Substantially Bankrupt Obligors
Claims with Collection Risk
Claims for Special Attention

0.17%
0.47
0.76

0.30%
1.16
0.69

(0.12)%(0.68)
0.06

Subtotal

1.41

2.16

(0.74)

Normal Claims

98.58

97.83

0.74

100.00%100.00%/Total
Note: Above figures are presented net of partial direct write-offs.

Disclosed Claims under the FRL and Coverage Amount (the Three Banks) (Banking Accounts)
Billions of yen

At March 31,

Claims against Bankrupt and Substantially Bankrupt Obligors
Collateral, Guarantees, and equivalent
Reserves for Possible Losses
Claims with Collection Risk
Collateral, Guarantees, and equivalent
Reserves for Possible Losses
Claims for Special Attention
Collateral, Guarantees, and equivalent
Reserves for Possible Losses
Total
Collateral, Guarantees, and equivalent
Reserves for Possible Losses
Note: Above figures are presented net of partial direct write-offs.

88

2006

2005

Change

¥

130.8
117.0
13.8
355.2
194.6
117.2
566.6
200.1
124.5

¥

206.7
185.4
21.2
804.2
313.0
370.4
474.9
152.6
95.9

¥

(75.8)(68.3)(7.4)(449.0)(118.4)(253.2)
91.7
47.5
28.6

¥

1,052.8
511.7
255.6

¥

1,485.9
651.0
487.6

¥

(433.1)(139.2)(232.0)Coverage on Disclosed Claims under the FRL (the Three Banks) (Banking Accounts)
Billions of yen, %At March 31,

Coverage AmountReserves for Possible Losses
Collateral, Guarantees, and equivalent

2006

¥

767.3
255.6
511.7

2005

¥

1,138.7
487.6
651.0

Change¥(371.3)(232.0)(139.2)

Coverage Ratio
Claims against Bankrupt and Substantially Bankrupt Obligors
Claims with Collection Risk
Claims for Special Attention(Claims against Special Attention Obligors)

72.8%
100.0
87.7
57.2
59.5

76.6%
100.0
84.9
52.3
54.0

(3.7)%
—
2.7
4.9
5.5

Reserve Ratio against Non-collateralized Claims
Claims against Bankrupt and Substantially Bankrupt Obligors
Claims with Collection Risk
Claims for Special Attention(Claims against Special Attention Obligors)

100.0%
72.9
33.9
34.3

100.0%
75.4
29.7
31.9

—%
(2.4)
4.2
2.4

(Reference) Reserve Ratio
Claims against Special Attention Obligors
Claims against Watch Obligors excluding Claims against Special Attention Obligors
Claims against Normal Obligors

21.11%
11.35
0.11

21.56%
8.28
0.11(0.44)%
3.06
0.00

Note: Above figures are presented net of partial direct write-offs.

89

Financial Analysis of Mizuho

Status of Asset Quality

 Status of Non-Accrual, Past Due & Restructured Loans (Consolidated)(Consolidated)
Non-Accrual, Past Due & Restructured Loans
Billions of yen

At March 31,

Loans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for Three Months or More
Restructured Loans

2006

32.8
454.7
13.9
553.3

¥

Change

89.7
971.8
27.7
448.5

¥

(56.9)(517.1)(13.7)
104.8¥ 1,054.9¥ 1,537.9¥(483.0)

2006

2005

782.7

¥ 1,015.4

At March 31,

2006

2005

ChangeLoans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for Three Months or More
Restructured Loans

0.05%
0.69
0.02
0.84

0.14%
1.54
0.04
0.71

(0.09)%(0.84)(0.02)
0.13

1.61%

2.44%

(0.83)%

2006

2005

814.1
615.7
194.9
3.4

¥ 1,146.7
637.3
503.9
5.5

2006

2005

805.6

¥ 1,042.7

At March 31,

2006

2005

After Partial Direct Write-offs

77.18%

74.56%

Total

¥

2005

Note: Above figures are presented net of partial direct write-offs, the amounts of which are indicated in the table below.
Billions of yen

Amount of Partial Direct Write-offs¥

Change¥(232.6)

Ratio to Total Loans%

Non-Accrual, Past Due & Restructured Loans / Total Loans
Note: Above figures are presented net of partial direct write-offs.

Reserves for Possible Losses on Loans
Billions of yen

At March 31,

Reserves for Possible Losses on Loans
General Reserve for Possible Losses on Loans
Specific Reserve for Possible Losses on Loans
Reserve for Possible Losses on Loans to Restructuring Countries¥

Change¥(332.6)(21.5)(309.0)(2.0)

Note: Above figures are presented net of partial direct write-offs, the amounts of which are indicated in the table below.
Billions of yen

Amount of Partial Direct Write-offs¥

Change¥(237.1)

Reserve Ratios for Non-Accrual, Past Due & Restructured Loans%

Note: Reserve Ratio = Reserves for Possible Losses on Loans / Total Non-Accrual, Past Due & Restructured Loans.

90

Change2.61%

(Trust Accounts)
Non-Accrual, Past Due & Restructured Loans
Billions of yen

At March 31,

2006

Loans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for Three Months or More
Restructured Loans
Total

2005

Change

¥

—
—
—
0.0

¥

1.2
3.2
0.0
5.1

¥

(1.2)
(3.2)
(0.0)
(5.0)

¥

0.0

¥

9.6

¥

(9.6)

Ratio to Total Loans%

At March 31,

2006

2005

ChangeLoans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for Three Months or More
Restructured Loans

.—%
.—
.—
0.03

0.29%
0.73
0.02
1.18

(0.29)%(0.73)(0.02)(1.14)

0.03%

2.23%

(2.19)%

2006

2005

Non-Accrual, Past Due & Restructured Loans / Total Loans(Consolidated and Trust Accounts)
Non-Accrual, Past Due & Restructured Loans
Billions of yen

At March 31,

Loans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for Three Months or More
Restructured Loans
Total

¥

32.8
454.7
13.9
553.4

¥

91.0
975.1
27.8
453.6

Change¥(58.1)(520.3)(13.8)
99.7¥ 1,054.9¥ 1,547.6¥ (492.6)

At March 31,

2006

2005

ChangeLoans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for Three Months or More
Restructured Loans

0.05%
0.69
0.02
0.84

0.14%
1.53
0.04
0.71

(0.09)%(0.84)(0.02)
0.12

1.61%

2.44%

(0.83)%

Note: Above figures are presented net of partial direct write-offs.

Ratio to Total Loans%

Non-Accrual, Past Due & Restructured Loans / Total Loans
Note: Above figures are presented net of partial direct write-offs.

91

Financial Analysis of Mizuho

Status of Asset Quality

 Status of Non-Accrual, Past Due & Restructured Loans (the Three Banks)(Banking Accounts and Trust Accounts)
Non-Accrual, Past Due & Restructured Loans
Billions of yen

At March 31,

Loans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for Three Months or More
Restructured Loans
Total

2006

¥

28.7
432.5
13.9
552.3

2005

¥

Change

85.3
895.3
27.8
452.1

¥

(56.5)(462.8)(13.8)
100.2¥ 1,027.6¥ 1,460.6¥(432.9)

2006

2005

Note: Above figures are presented net of partial direct write-offs, the amounts of which are indicated in the table below.
Billions of yen

Amount of Partial Direct Write-offs

¥

703.5

¥

840.1

Change¥(136.6)

Ratio to Total Loans%

At March 31,

2006

2005

ChangeLoans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for Three Months or More
Restructured Loans

0.04%
0.65
0.02
0.83

0.13%
1.41
0.04
0.71

(0.09)%(0.76)(0.02)
0.11)

1.55%

2.31%

(0.76)%

2006

2005

Non-Accrual, Past Due & Restructured Loans / Total Loans
Note: Above figures are presented net of partial direct write-offs.

Reserves for Possible Losses on Loans
Billions of yen

At March 31,

Reserves for Possible Losses on Loans
General Reserve for Possible Losses on Loans
Specific Reserve for Possible Losses on Loans
Reserve for Possible Losses on Loans to Restructuring Countries

¥

703.7
568.2
132.0
3.4

¥

980.6
579.4
395.6
5.5

Change¥(276.8)(11.2)(263.6)(2.0)

Note: Above figures are presented net of partial direct write-offs, the amounts of which are indicated in the table below.
Billions of yen

2006

Amount of Partial Direct Write-offs

¥

725.1

2005

¥

865.6

Change¥(140.4)

Reserve Ratios for Non-Accrual, Past Due & Restructured Loans%

At March 31,

2006

2005

ChangeAfter Partial Direct Write-offs

68.48%

67.58%

0.89%

Note: Reserve Ratio = Reserves for Possible Losses on Loans / Total Non-Accrual, Past Due & Restructured Loans.

92 Status of Loans by Industry
Outstanding Balances by Industry (Consolidated)
Billions of yen, %At March 31,

2006
Outstanding
Balance Composition

2005
Outstanding
Balance Composition

ChangeOutstanding
Balance Composition

Domestic Total (excluding Loans Booked Offshore)
Manufacturing
Agriculture
Forestry
Fishery
MiningConstruction
Utilities
Communication
Transportation
Wholesale & Retail
Finance & Insurance
Real Estate
Service Industries
Local Government
Other¥ 58,465.2
7,364.0
41.6
1.1
4.2
131.9
1,465.9
949.0
775.2
2,903.2
6,426.3
6,760.6
6,989.0
10,388.6
540.2
13,723.8¥ 58,265.6
7,511.0
44.2
1.3
6.0
136.8
1,621.7
988.3
884.0
2,966.1
6,909.0
6,457.3
6,585.8
9,889.1
430.2
13,834.3¥

Overseas Total (including Loans Booked Offshore)
Governments
Financial Institutions
Other

6,943.3
250.5
1,379.5
5,313.2

100.00
3.61
19.87
76.52

4,651.6
157.7
642.8
3,851.0¥ 65,408.6/¥ 62,917.3

Total

100.00%
12.60
0.07
0.00
0.01
0.23
2.51
1.62
1.33
4.97
10.99
11.56
11.95
17.77
0.92
23.47

100.00%
12.89
0.08
0.00
0.01
0.24
2.78
1.70
1.52
5.09
11.86
11.08
11.30
16.97
0.74
23.74

199.6
(146.9)
(2.6)
(0.1)
(1.8)
(4.8)
(155.7)(39.2)(108.8)(62.8)(482.6)
303.3
403.1
499.5
109.9
(110.4)/(0.29)%(0.01)
0.00
0.00(0.01)(0.27)(0.08)(0.19)(0.12)(0.87)
0.48
0.65
0.80
0.18
(0.27)

100.00
3.39
13.82
82.79

2,291.7
92.8
736.7
1,462.1

/
0.22
6.05
(6.27)/¥ 2,491.3/

Note: Domestic Total = MHFG and its domestic consolidated subsidiaries (excluding their overseas offices).
Overseas Total = Overseas offices of MHFG's domestic consolidated subsidiaries and MHFG's overseas consolidated subsidiaries.

Outstanding Balances by Industry (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen, %At March 31,

2006
Outstanding
Balance Composition

2005
Outstanding
Balance Composition

ChangeOutstanding
Balance Composition

Domestic Total (excluding Loans Booked Offshore)
Manufacturing
Agriculture
Forestry
Fishery
MiningConstruction
Utilities
Communication
Transportation
Wholesale & Retail
Finance & Insurance
Real Estate
Service Industries
Local Government
Other¥ 60,685.2
7,389.2
41.6
1.1
4.2
131.9
1,472.7
949.1
779.3
2,967.7
6,441.8
8,136.2
7,059.4
10,399.3
587.7
14,323.5¥ 59,700.4
7,550.7
44.2
1.3
6.0
138.1
1,646.9
1,057.2
892.2
3,027.1
6,929.1
6,982.9
6,598.2
9,945.3
478.5
14,401.9¥

Overseas Total (including Loans Booked Offshore)
Governments
Financial Institutions
Other

6,302.3
247.7
1,281.3
4,773.2

100.00
3.93
20.33
75.74

4,192.9
154.8
632.2
3,405.8¥ 66,987.5/¥ 63,893.4

Total

100.00%
12.18
0.07
0.00
0.01
0.22
2.43
1.56
1.28
4.89
10.61
13.41
11.63
17.14
0.97
23.60

100.00%
12.65
0.07
0.00
0.01
0.23
2.76
1.77
1.50
5.07
11.61
11.70
11.05
16.66
0.80
24.12

984.8
(161.5)
(2.6)
(0.1)
(1.8)
(6.2)
(174.2)(108.1)(112.9)(59.3)(487.3)
1,153.2
461.2
454.0
109.1
(78.3)/(0.47)%
0.00
0.00
0.00
(0.01)(0.33)(0.21)(0.22)(0.18)(1.00)
1.71
0.58
0.48
0.17
(0.52)

100.00
3.69
15.08
81.23

2,109.3
92.8
649.1
1,367.3

/
0.24
5.25
(5.49)/¥ 3,094.1/

Note: Loans to Finance & Insurance sector as of March 31, 2006 include loans to MHFG of ¥965.0 billion from MHCB (¥342.0 billion) and MHBK (¥623.0 billion).

93

Financial Analysis of Mizuho

Status of Asset Quality

Disclosed Claims under the FRL by Industry and Coverage Ratio (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen, %At March 31,

2006
Disclosed Claims
under the FRL Coverage Ratio

2005
Disclosed Claims
under the FRL Coverage Ratio

ChangeDisclosed Claims
under the FRL Coverage Ratio

Domestic Total(excluding Loans Booked Offshore)
Manufacturing
Agriculture
Forestry
Fishery
MiningConstruction
Utilities
Communication
Transportation
Wholesale & Retail
Finance & Insurance
Real Estate
Service Industries
Local Government
Other¥ 1,002.3
95.3
0.4
0.0
0.0
0.0
46.7
0.1
6.0
217.9
177.8
4.9
176.0
129.7
—
147.1

¥ 1,425.8
116.2
0.7
—
0.0
—
97.5
1.0
11.8
76.8
335.1
8.3
294.7
275.9
—
207.5

¥

Overseas Total(including Loans Booked Offshore)
Governments
Financial Institutions
Other

50.4
2.9
7.5
39.9

Total

¥ 1,052.8

73.0%
73.7
85.3
100.0
72.3
100.0
73.4
100.0
70.1
67.4
61.4
55.6
85.9
63.8
—
88.2
69.7
17.5
93.4
69.1
72.8%

69.7
10.5
0.6
58.5
¥ 1,495.6

77.3%
78.7
93.0
—
100.0
—
82.2
100.0
68.4
68.5
69.1
76.1
85.7
68.9
—
90.5
61.8
24.4
100.0
68.0
76.6%

¥

(423.5)(20.9)
(0.2)
0.0
0.0
0.0
(50.7)
(0.8)
(5.7)
141.1
(157.3)(3.3)(118.7)(146.2)—(60.3)(4.3)%
(4.9)
(7.6)
100.0
(27.6)
100.0
(8.7)
—
1.7
(1.1)
(7.6)
(20.5)
0.1
(5.0)
—
(2.3)

(19.2)(7.5)
6.9(18.6)

7.9
(6.8)
(6.5)
1.0

(442.8)(3.7)%

Non-Accrual, Past Due and Restructured Loans by Industry (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

At March 31,

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
Overseas Total(including Loans Booked Offshore)
Governments
Financial Institutions
Other
Total

94

2006

2005

981.9
91.9
0.4
0.0
0.0
0.0
46.0
0.1
6.0
217.7
176.6
4.9
174.7
128.8
—
134.4

¥ 1,396.0
113.4
0.7
—
—
—
92.0
0.3
11.7
76.0
331.9
8.3
291.8
274.8
—
194.6

45.7
2.9
6.7
35.9

64.6
10.5
—
54.1

¥ 1,027.6¥ 1,460.6¥

Change¥(414.0)(21.5)
(0.2)
0.0
0.0
0.0
(46.0)
(0.1)
(5.7)
141.7
(155.3)(3.3)(117.0)(145.9)—(60.2)(18.9)(7.5)
6.7(18.1)¥(432.9) Status of Loans by Nationality of Borrowers
Loans to Foreign Governments, and equivalent, by Country (Consolidated)
Billions of yen, %At March 31,

2006

Billions of yen, %At March 31,

2005

Indonesia
Others (5 Countries)¥ 25.20.0

Indonesia
Others (5 Countries)¥ 41.1
0.3

Total
Ratio to Total Assets¥ 25.30.01%

Total
Ratio to Total Assets¥ 41.40.02%

Note: Listed are loans to the government and related agents in restructuring countries for which Reserves for Possible Losses on Loans to Restructuring Countries are accounted as stipulated under theJapanese Institute of Certified Public Accountants (JICPA) Banking Audit Committee Report No. 4.

Balance of Loans to Restructuring Countries (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen, Number of countries

At March 31,

2006

Loan Amount
Number of Restructuring Countries

¥

33.8
5

¥

2005

Change51.4
6¥ (17.5)(1)

Notes: 1. Loans are subject to Reserve for Possible Losses on Loans to Restructuring Countries under JICPA Banking Audit Commitee Report No. 4.
Notes: 2.“Number of Restructuring Countries” indicates the number of countries whose loans are subject to the above Reserve and are accounted for on the balance sheets of the Three Banks.

Outstanding Balances and Non-Accrual, Past Due and Restructured Loans by Nationality of Borrowers (the Three Banks)(Banking Accounts and Trust Accounts)
Billions of yen

At March 31,

2006
Non-Accrual,
Outstanding
Past Due &Restructured Loans
Balance2005

ChangeNon-Accrual,
Outstanding
Past Due &Balance
Restructured Loans

Outstanding
Balance

Non-Accrual,
Past Due &Restructured Loans

Asia
China
ThailandHong Kong¥ 1,872.6
348.5
273.2
323.1

¥ 14.42.3
1.6
1.4¥ 1,335.8
268.9
211.6
204.0

¥ 26.0
0.4
4.8
2.3

Central and South America

1,156.9

0.7

903.8

2.9

253.1

(2.1)

North America

1,894.6

36.1

1,544.7

38.6

349.9

(2.4)

Eastern Europe

29.1

—

39.4

—

(10.2)—

Western Europe

1,836.2

8.9

933.0

7.5

903.1

1.4

Other

550.4

1.3

401.9

26.5

148.4

(25.2)

Total¥ 7,340.1¥ 61.6¥ 5,158.9¥ 101.7¥ 2,181.2

¥

536.8
79.5
61.5
119.1

¥

¥

(11.5)
1.8
(3.2)
(0.9)

(40.0)

95

Financial Analysis of Mizuho

Status of Asset Quality

 Results of Removal of NPLs from the Balance Sheet
Outstanding Balances of Claims against Bankrupt and Substantially Bankrupt Obligors and Claims with Collection Risk
(under the FRL) (the Three Banks) (Banking Accounts and Trust Accounts)

Billions of yen

Before September 30, At March 31, At September 30, At March 31, At September 30, At March 31, At September 30, At March 31,
2002
2003
2003
2004
2004
2005
2005 (a)2006 (b)Amount Categorized as below
before September 30, 2002of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Amount Newly Categorized as below
during the Second Half of Fiscal 2002

¥ 6,630.3 ¥ 1,070.7 ¥773.6¥ 429.7 ¥302.6 ¥

122.2 ¥

83.5 ¥

49.7 ¥ (33.7)

751.8

399.8

323.8

194.2

137.2

65.7

44.1

16.3

(27.7)

1,994.3
4,636.0

526.0
544.7

420.6
353.0

236.9
192.7

172.8
129.7

71.3
50.8

45.6
37.9

18.2
31.5

(27.3)
(6.4)

809.5

603.5

321.0

187.8

49.0

38.8

24.6

(14.1)

57.0

74.0

45.2

32.6

15.9

14.2

5.6

(8.5)

89.1
720.3

82.1
521.4

83.4
237.6

62.9
124.9

30.8
18.1

25.1
13.7

16.1
8.5

(9.0)
(5.1)

390.3

192.0

95.3

37.0

18.1

11.4

(6.6)

40.9

23.4

20.8

11.3

5.8

2.9

(2.8)

45.7
344.5

28.1
163.9

23.5
71.8

9.5
27.4

6.3
11.7

3.0
8.4

(3.3)
(3.3)

525.9

161.1

60.4

28.6

17.3

(11.2)

83.7

62.7

25.8

10.5

4.0

(6.4)

87.3
438.5

75.1
86.0

31.2
29.1

13.1
15.4

5.6
11.6

(7.4)
(3.7)

515.7

72.3

46.3

35.5

(10.8)

39.9

25.6

17.6

14.9

(2.7)

65.8
449.9

26.3
46.0

20.8
25.5

17.5
17.9

(3.3)
(7.5)

674.1

499.7

114.8

(384.9)

24.1

22.6

13.9

(8.6)

40.1
634.0

22.8
476.8

38.2
76.6

15.3
(400.2)

148.9

81.6

(67.2)

23.0

12.1(10.9)

27.5
121.4

15.8
65.8

(11.7)(55.5)

150.8

150.8

14.4

14.4

of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Amount Newly Categorized as below
during the First Half of Fiscal 2003
of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Amount Newly Categorized as below
during the Second Half of Fiscal 2003
of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Amount Newly Categorized as below
during the First Half of Fiscal 2004
of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Amount Newly Categorized as below
during the Second Half of Fiscal 2004
of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Amount Newly Categorized as below
during the First Half of Fiscal 2005of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Amount Newly Categorized as below
during the Second Half of Fiscal 2005of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Total

96

Change(b)-(a)/ ¥ 1,880.2 ¥ 1,767.6 ¥ 1,468.7 ¥ 1,262.8 ¥ 1,015.3 ¥864.2 ¥

16.2
16.2
134.5
134.5
486.1 ¥ (378.0)

of which the amount in the processof being removed from the balance sheet

/

456.9

438.8

346.6

293.4

168.7

138.0

84.4

(53.6)

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk

/
/

615.1
1,265.0

548.6
1,218.9435.9
1,032.8

400.2
862.5

209.5
805.8

161.4
702.7

130.8
355.2

(30.6)(347.4)

Progress in Removal from the Balance Sheet (Accumulated Removal Amount and Removal Ratio)(the Three Banks) (Banking Accounts and Trust Accounts)

As of September 30, 2002
Second Half of Fiscal 2002
First Half of Fiscal 2003
Second Half of Fiscal 2003
First Half of Fiscal 2004
Second Half of Fiscal 2004
First Half of Fiscal 2005
Second Half of Fiscal 2005
Total

Billions of yen%

AmountNewly
Categolized

Balance
at March 31,
2006

Accumulated
RemovalAmountModifiedAccumulated
Removal Ratio¥ 6,630.3
809.5
390.3
525.9
515.7
674.1
148.9
150.8

¥

49.7
24.6
11.4
17.3
35.5
114.8
81.6
150.8

¥

6,580.6
784.8
378.8
508.5
480.2
559.3
67.2
/

99.2%
96.9
97.0
96.7
93.1
82.9
45.1
/

99.4%
97.6
97.8
97.4
96.0
85.0
53.3
/

¥ 9,845.8

¥

486.1

¥

9,359.7//

Accumulated
Removal Ratio

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.

97

Financial Analysis of Mizuho

Status of Asset Quality

Breakdown of Reasons for Removal from the Balance Sheet(the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

Newly Categorized as Claims against Bankrupt and Substantially Bankrupt Obligors or Claims with Collection Risk Amount Removed
Accumulated as of Second Half ofFirst Half of Second Half ofFirst Half of Second Half ofFirst Half of from BS in the Second
September 30, 2002
Fiscal 2002
Fiscal 2003
Fiscal 2003
Fiscal 2004
Fiscal 2004
Fiscal 2005 Half of Fiscal 2005

Liquidation(31.8) ¥(1.3) ¥

(0.8) ¥

(4.4) ¥

(1.6)

Restructuring(10.3)(24.3)

(0.2)

(7.7)

Improvement in Business Performancedue to Restructuring
Loan Sales—(17.9)

—
(0.9)

—
(3.9)

Direct Write-off

61.7

26.1

Other
Debt Recovery
Improvement in Business Performance(35.2)(33.6)(1.6)(33.7) ¥

Total

¥

¥

¥

(0.5) ¥

(0.0) ¥

(40.7)

(0.4)

(0.4)

(12.3)(55.8)

—
(3.6)

—
(8.2)

—
(9.9)

(3.1)
(2.9)

(3.1)
(47.6)

2.1

18.2

9.4

(69.1)

(2.6)

45.8

(13.7)(11.5)
(2.2)

(3.8)
(2.8)
(0.9)

(13.7)(12.4)
(1.2)

(9.9)
(7.1)
(2.7)

(304.8)(114.3)(190.4)(46.1)(35.0)(11.0)(427.3)(217.0)(210.2)(14.1) ¥(6.6) ¥

(11.2) ¥(10.8) ¥ (384.9) ¥(67.2) ¥(528.9)(Reference) Breakdown of Accumulated Amount Removed from the Balance Sheet(the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

Before March 31,
2003*

Liquidation
Restructuring¥

Breakdown of Amount Removed
First Half of Second Half ofFirst Half of Second Half of
Fiscal 2003
Fiscal 2003
Fiscal 2004
Fiscal 2004

(962.2) ¥(20.6) ¥ (129.5) ¥(27.3) ¥ (160.3)

Accumulated AmountFirst Half of Second Half of Removed from BSfrom Second Half
Fiscal 2005
Fiscal 2005of Fiscal 2000¥

(28.5) ¥(40.7) ¥ (1,369.4)(994.5)(46.4)(320.8)(139.5)(98.6)(12.5)(55.8)(1,668.4)

Improvement in Business Performancedue to Restructuring
Loan Sales(121.2)(2,637.6)(6.4)(116.0)(43.9)(411.9)(0.5)(254.1)(2.9)(502.5)(1.0)(153.2)(3.1)(47.6)(179.4)(4,123.3)

Direct Write-off

1,761.8

19.3

519.6

128.6

363.0

99.2

45.8

2,937.6

Other
Debt Recovery
Improvement in Business Performance(2,605.8)//(332.6)(224.2)(108.3)(438.1)(313.7)(124.4)(428.7)(160.7)(267.9)(520.0)(291.4)(228.6)(203.8)(148.5)(55.2)(427.3)(217.0)(210.2)(4,956.6)
/
/

Total

¥ (5,559.7) ¥ (502.9) ¥ (824.7) ¥ (721.7) ¥ (921.6) ¥ (300.0) ¥ (528.9) ¥ (9,359.7)* From the Second Half of Fiscal 2000 to the Second Half of Fiscal 2002.

Write-Offs of Loans (the Three Banks) (Banking Accounts)
Billions of yen

At March 31,

Write-offs of Loans

2006

¥

36.9

2005

¥

163.6

Change¥(126.6)

Principal Amounts of NPLs Sold (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

At March 31,

Principal Amounts of NPLs Sold
Sales of Loans to RCC
Other Sales

2006

¥

231.0
15.1
215.9

2005

¥

831.4
42.7
788.7

Change¥(600.3)(27.5)(572.8)

Note: RCC is the abbreviation for the Resolution and Collection Corporation.

Debt Forgiveness (the Three Banks) (Banking Accounts and Trust Accounts)
Number of cases, Billions of yen

At March 31,

2006

2005

Number of Cases of Debt ForgivenessBook Value

15
32.6

15
132.7

Note: The above figures do not include debt forgiveness following legal bankruptcy procedures.

98

¥

¥

Change¥—(100.1)

Financial Data of Mizuho Financial Group, Inc.
[Under Japanese GAAP]
Report of Independent Auditors

100

Consolidated Financial Statements

101

Notes to Consolidated Financial Statements

106

99

Financial Data of Mizuho Financial Group, Inc.

Report of Independent Auditors

The Board of Directors
Mizuho Financial Group, Inc.
We have audited the accompanying consolidated balance sheets of Mizuho Financial Group, Inc. and consolidated subsidiaries(the “Company”) as of March 31, 2006 and 2005, and the related consolidated income statements, consolidated statements ofshareholders' equity and cash flows for the years then ended, all expressed in yen. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial positionof Mizuho Financial Group, Inc. and consolidated subsidiaries at March 31, 2006 and 2005, and the consolidated results of theiroperations and their cash flows for the years then ended in conformity with accounting principles generally accepted in Japan.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2006
are presented solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our
opinion, such translation has been made on the basis described in Note 1.

Ernst & Young ShinNihon
June 27, 2006100

Financial Data of Mizuho Financial Group, Inc.

Consolidated Financial Statements

Consolidated Balance Sheets
Millions of yen
2006

At March 31,

AssetsCash and Due from Banks (Notes 12, 33 and 38)
Call Loans and Bills Purchased
Receivables under Resale Agreements
Guarantee Deposits Paid under Securities Borrowing Transactions
Other Debt Purchased (Note 38)
Trading Assets (Notes 4, 12 and 38)
Money Held in Trust (Note 38)
Securities (Notes 5, 12 and 38)
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 35)
Customers' Liabilities for Acceptances and Guarantees (Note 23)
Reserves for Possible Losses on Loans (Note 11)
Reserve for Possible Losses on Investments
Total Assets¥

5,016,216
938,435
5,976,043
8,643,570
2,476,132
10,007,149
49,89837,702,957
65,408,672
809,205
6,463,242
955,888267
423,572
5,556,929(814,178)(1,208)¥

2005

6,808,965
397,5075,004,683
8,680,334
1,007,826
11,047,601
28,67936,047,035
62,917,336
716,907
5,577,985
1,028,082
303
1,036,907
3,928,176(1,146,797)(5,300)Thousands of
U.S. dollars (Note 1)
2006$

42,702,105
7,988,727
50,872,931
73,581,085
21,078,852
85,188,983
424,772
320,958,179
556,811,715
6,888,612
55,020,371
8,137,301
2,281
3,605,790
47,305,095(6,930,949)(10,292)¥ 149,612,794¥ 143,076,236$ 1,273,625,558

Liabilities, Minority Interests and Shareholders' Equity
Liabilities
Deposits (Notes 12 and 13)¥ 82,367,125
Debentures (Note 14)
6,606,305
Call Money and Bills Sold (Notes 12 and 15)
9,466,054
Payables under Repurchase Agreements (Note 12)
10,079,585
Guarantee Deposits Received under Securities Lending Transactions (Note 12)7,301,540
Commercial Paper (Note 16)
50,000
Trading Liabilities (Note 4)
7,880,634
Borrowed Money (Notes 12 and 17)
2,768,811
Foreign Exchange Liabilities (Note 7)
389,638
Short-term Bonds (Note 18)
1,385,100
Bonds and Notes (Note 19)
2,488,498
Due to Trust Accounts
1,354,889
Other Liabilities (Notes 12 and 20)
5,382,931
Reserve for Bonus Payments
35,374
Reserve for Employee Retirement Benefits (Note 21)
38,616
Reserve for Contingencies
45,567
Reserves under Special Laws (Note 22)
2,352
Deferred Tax Liabilities (Note 35)
127,847
Deferred Tax Liabilities for Revaluation Reserve for Land (Note 24)
120,873
Acceptances and Guarantees (Note 23)
5,556,929¥ 80,368,058
7,795,073
8,359,912
8,357,544
7,635,035
1,397,200
7,942,784
2,634,433
292,905
260,300
2,356,972
1,367,569
5,092,621
34,475
37,137
10,1081,834
34,016135,984
3,928,176$

701,175,838
56,238,234
80,582,737
85,805,614
62,156,638
425,641
67,086,362
23,570,368
3,316,921
11,791,096
21,184,116
11,533,921
45,823,887
301,135
328,739
387,908
20,025
1,088,342
1,028,976
47,305,095

Total Liabilities

143,448,677

138,042,144

1,221,151,593

Minority Interests

1,359,122

1,128,364

11,569,958

Shareholders' Equity
Common Stock and Preferred Stock (Note 25)
Capital Surplus
Retained Earnings
Revaluation Reserve for Land, net of Taxes (Note 24)
Net Unrealized Gains on Other Securities, net of Taxes (Note 38)
Foreign Currency Translation Adjustments
Treasury Stock (Note 25)

1,540,965
411,160
1,498,143
170,384
1,279,216(48,062)(46,814)

1,540,965
1,022,571
1,048,530
198,945538,027(48,757)(394,555)

13,117,945
3,500,136
12,753,412
1,450,450
10,889,732(409,148)(398,520)

Total Shareholders' Equity
Total Liabilities, Minority Interests and Shareholders' Equity

4,804,993

3,905,726

40,904,007¥ 149,612,794¥ 143,076,236$ 1,273,625,558

See accompanying “Notes to Consolidated Financial Statements,” which are an integral part of these statements.

101

Financial Data of Mizuho Financial Group, Inc.

Consolidated Financial Statements

Consolidated Income Statements
Millions of yen
2006

For the Fiscal Years ended March 31,

IncomeInterest Income (Note 26)
Fiduciary Income
Fee and Commission Income
Trading Income (Note 27)
Other Operating Income (Note 28)
Other Income (Note 30)¥

Total Income
Expenses
Interest Expenses (Note 26)
Fee and Commission Expenses
Trading Expenses (Note 27)
Other Operating Expenses (Note 29)
General and Administrative Expenses
Other Expenses (Note 31 and 32)
Total Expenses
Income before Income Taxes and Minority Interests
Income Taxes:
Current
RefundDeferred
Minority Interests in Net Income
Net Income¥

1,935,048
78,843
650,549
211,029354,481502,212¥

2005

1,584,415
63,253566,120
165,059
341,506
735,297

Thousands of
U.S. dollars (Note 1)
2006$

16,472,706
671,183
5,538,006
1,796,458
3,017,638
4,275,241

3,732,166

3,455,653

31,771,232

872,403
94,614
6,088
254,408
1,095,243
429,265

477,983
93,492—
155,781
1,091,348
693,989

7,426,605
805,435
51,8302,165,732
9,323,601
3,654,259

2,752,024

2,512,594

23,427,462

980,142

943,059

8,343,770

64,038—185,035
81,16441,045
21,228235,227
60,630545,149—
1,575,173
690,938

649,903¥627,383$

5,532,510

Per Share of Common StockYen
At March 31,

Shareholders' Equity
Net Income:
Basic
DilutedCash Dividends

2006

2005

¥ 274,906.95¥ 131,016.15

55,157.14
46,234.51
4,000.00

54,625.61
37,719.13
3,500.00

See accompanying “Notes to Consolidated Financial Statements,” which are an integral part of these statements.

102

U.S. dollars (Note 1)
2006$

2,340.23
469.54393.5934.05

Consolidated Statements of Shareholders' Equity
Millions of yen

For the Fiscal Years
ended March 31, 2006 and 2005

Balance at April 1, 2004
Change during the period
Transactions of Treasury Stock(Common Stock)Repurchase of Preferred Stock
Cancellation of Preferred Stock
Effect of the Change
in Foreign Exchange Rate
Net Change in Unrealized Gains
on Other Securities, net of Taxes
Transfer from Revaluation
Reserve for Land, net of Taxes
Transfer from Deferred Tax Liabilities
Related to Land Revaluation
Effect of Exclusion of an Affiliate
from the Scope of the Equity Method
Cash Dividends
Net Income
Total Change during the period
Balance at March 31, 2005
Change during the period
MergerTransfer from Revaluation
Reserve for Land, net of Taxes
Cash Dividends
Net Income
Repurchase of Treasury Stock
Disposition of Treasury Stock
Cancellation of Treasury Stock
Other
Change during the period (net)Total Change during the period
Balance at March 31, 2006

Common Stockand Preferred
Stock

Revaluation Net Unrealized
Foreign
Gains onCurrency
Reserve
Translation
Retainedfor Land, Other Securities,
Earnings net of Taxes net of Taxes Adjustments

CapitalSurplus¥ 1,540,965 ¥ 1,262,526¥

462,594¥ 231,739¥ 392,772

Treasury
Stock

Total
Shareholders'Equity¥ (112,067) ¥ (134,134) ¥ 3,644,396

—
—
—

28
—
(239,971)

—
—
—

—
—
—

—
—
—

—
—
—

(460)
(499,931)
239,971(432)(499,931)
—

—

—

—

—

—

63,309—63,309————145,255——

145,255——

32,833(32,833)

—

—

—

—

—

—

—

39

—

—

—

39

—
—
—
—

(11)
—
—
(239,954)—(74,280)
627,383
585,936———(32,794)———
145,255———
63,309———(260,420)(11)(74,280)
627,383
261,330¥ 1,540,965 ¥ 1,022,571¥ 1,048,530¥ 198,945¥ 538,027¥ (48,757) ¥ (394,555) ¥ 3,905,726—

74,290(74,290)

—

—

—

—

—

—
—
—
—
—
—
—
—
—

—
—
—
—
441,972(1,127,672)——(611,410)

25,858(75,883)
649,903——(75,976)——
449,612

—
—
—
—
—
—
—
(28,560)(28,560)

—
—
—
—
—
—
—
741,189
741,189

—
—
—
—
—
—
—
695
695

—
—
—
(944,321)
88,416
1,203,648(2)—
347,740

25,858(75,883)
649,903(944,321)
530,388—(2)
713,323
899,266¥ 1,498,143¥ 170,384¥1,279,216¥ 1,540,965 ¥

411,160¥ (48,062) ¥ (46,814) ¥ 4,804,993

Thousands of U.S. dollars (Note 1)

Common Stockand Preferred
For the Fiscal Year ended March 31, 2006
Stock

Balance at March 31, 2005
Change during the period
MergerTransfer from Revaluation
Reserve for Land, net of Taxes
Cash Dividends
Net Income
Repurchase of Treasury Stock
Disposition of Treasury Stock
Cancellation of Treasury Stock
Other
Change during the period (net)Total Change during the period
Balance at March 31, 2006

CapitalSurplus

Revaluation Net Unrealized
Foreign
Gains onCurrency
Reserve
Translation
Retainedfor Land, Other Securities,
Earnings net of Taxes net of Taxes Adjustments

Treasury
Stock

Total
Shareholders'Equity$13,117,945 $ 8,704,959 $ 8,925,945 $1,693,582 $ 4,580,127 $ (415,067)$(3,358,774) $33,248,717—

632,417(632,417)

—

—

—
—
—
—
—
—
—
—
—

—
—
—
—
3,762,425(9,599,665)——(5,204,823)

220,129(645,985)
5,532,510——(646,770)——
3,827,467

—
—
—
—
—
—
—
(243,132)(243,132)

—
—
—
—
—
—
—
6,309,605
6,309,605

—

—

—

—
—
—
—
—
—
— (8,038,830)—
752,672— 10,246,435
—
(23)
5,919
—
5,919 2,960,254

220,129(645,985)
5,532,510(8,038,830)
4,515,097—(23)
6,072,392
7,655,290$13,117,945 $ 3,500,136 $12,753,412 $1,450,450 $10,889,732 $ (409,148)$ (398,520) $40,904,007

See accompanying “Notes to Consolidated Financial Statements,” which are an integral part of these statements.

103

Financial Data of Mizuho Financial Group, Inc.

Consolidated Financial Statements

Consolidated Statements of Cash Flows
Millions of yen
For the Fiscal Years ended March 31,

2006

I. Cash Flow from Operating Activities
Income before Income Taxes and Minority Interests¥
980,142
Depreciation
119,417
Losses on Impairment of Fixed Assets
22,360
Amortization of Consolidation Differences
68
Equity in Income from Investments in Affiliates(9,161)
Decrease in Reserves for Possible Losses on Loans(333,202)
Increase (Decrease) in Reserve for Possible Losses on Investments(5,042)
Increase (Decrease) in Reserve for Contingencies
35,459
Increase (Decrease) in Reserve for Bonus Payments
633
Increase in Reserve for Employee Retirement Benefits
1,330Interest Income—accrual basis(1,935,048)
Interest Expenses—accrual basis872,403
Gains on Securities(39,952)
Gains on Money Held in Trust(437)
Foreign Exchange Losses (Gains)—net(241,237)
Gains on Disposal of Premises and Equipment(3,723)
Net Decrease (Increase) in Trading Assets
1,122,067
Net Increase (Decrease) in Trading Liabilities(124,224)
Net Decrease (Increase) in Loans and Bills Discounted(2,266,529)
Net Increase in Deposits
1,955,474
Net Decrease in Debentures(1,188,767)
Net Increase in Borrowed Money (excluding Subordinated Borrowed Money)
161,779
Net Decrease (Increase) in Due from Banks (excluding Due from Central Banks)(399,103)
Net Increase in Call Loans, etc.
(2,722,165)
Net Decrease (Increase) in Guarantee Deposits
Paid under Securities Borrowing Transactions
36,770Net Increase (Decrease) in Call Money, etc.
2,552,697
Net Increase (Decrease) in Commercial Paper(1,347,200)
Net Decrease in Guarantee Deposits Received under Securities Lending Transactions (333,495)
Net Increase in Foreign Exchange Assets(91,837)Net Increase (Decrease) in Foreign Exchange Liabilities
96,563Net Increase in Short-term Bonds (Liabilities)
1,124,800
Net Increase in Bonds and Notes
104,042Net Increase (Decrease) in Due to Trust Accounts(12,680)
Interest and Dividend Income—cash basis
1,940,172
Interest Expenses—cash basis(879,807)
Other—net(618,666)
Subtotal
Cash Paid in Income Taxes
Net Cash Provided by (Used in) Operating Activities

104

2005

¥

943,059
129,567
67,143426(1,429)(703,361)
4,324(122,631)(4,157)
5,143(1,584,415)
477,983(243,429)
(306)
6,646
(5,334)(2,982,338)
1,848,161
3,334,370
2,873,864(1,664,440)
877,030
81,198(16,245)

Thousands of
U.S. dollars (Note 1)
2006$

8,343,770
1,016,579
190,352585(77,993)(2,836,486)(42,930)
301,861
5,390
11,326(16,472,706)
7,426,605(340,106)(3,728)(2,053,606)(31,700)
9,551,953(1,057,499)(19,294,540)
16,646,587(10,119,757)
1,377,200(3,397,493)(23,173,286)(709,725)(164,974)
559,400(526,766)(107,737)(59,235)
80,30086,3207,037
1,622,787(458,667)
905,750

313,019
21,730,637(11,468,460)(2,838,985)(781,793)
822,026
9,575,211
885,696(107,944)
16,516,321(7,489,633)(5,266,591)(1,426,099)(243,028)

4,555,314(137,303)(12,140,118)(2,068,856)(1,669,128)

4,418,011(14,208,974)

2006

2005

Thousands of
U.S. dollars (Note 1)
2006

II. Cash Flow from Investing Activities
Payments for Purchase of Securities(66,512,317)
Proceeds from Sale of Securities
30,852,118
Proceeds from Redemption of Securities
35,572,415
Payments for Increase in Money Held in Trust(50,347)
Proceeds from Decrease in Money Held in Trust
29,433
Payments for Purchase of Premises and Equipment(58,263)
Proceeds from Sale of Premises and Equipment
67,722
Payments for Purchase of Stocks of Subsidiaries (affecting the scope of consolidation)(25)(69,640,865)
34,321,694
31,505,073(19,605)
19,104(71,486)
98,715(734)(566,206,836)
262,638,277
302,821,281(428,599)
250,561(495,983)
576,512(217)(99,262)(3,788,105)(845,004)

278,000(307,054)
367,177(386,515)
141,857(75,725)(50,478)(944,321)
530,388

140,000(41,914)462,674(570,886)
75,010(74,280)(47,915)(500,476)
60

2,366,562(2,613,895)
3,125,713(3,290,330)
1,207,602(644,636)(429,714)(8,038,830)
4,515,097(446,671)(557,729)(3,802,431)

928

220

7,908

V. Net Increase (Decrease) in Cash and Cash Equivalents(2,214,133)

72,397(18,848,501)

VI. Cash and Cash Equivalents at the beginning of the fiscal year

5,602,062

5,529,664

47,689,305

Millions of yen

Net Cash Used in Investing Activities
III. Cash Flow from Financing Activities
Proceeds from Issuance of Subordinated Borrowed Money
Repayments of Subordinated Borrowed Money
Proceeds from Issuance of Subordinated Bonds
Payments for Redemption of Subordinated Bonds
Proceeds from Investments in Minority Shareholders
Cash Dividends Paid
Cash Dividends Paid to Minority Shareholders
Payments for Repurchase of Treasury Stock
Proceeds from Sale of Treasury Stock
Net Cash Used in Financing Activities
IV. Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents

VII. Cash and Cash Equivalents at the end of the fiscal year (Note 33)¥

3,387,929¥

5,602,062$

28,840,804

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
The accompanying consolidated financial statements have been prepared from the accounts maintained by Mizuho Financial
Group, Inc. (“MHFG”) and its consolidated subsidiaries in accordance with the provisions set forth in the Commercial Code ofJapan and the Securities and Exchange Law, and in conformity with accounting principles generally accepted in Japan (“Japanese
GAAP”) which are different in certain respects from the application and disclosure requirements of International Financial
Reporting Standards.
Certain items presented in the consolidated financial statements which were previously filed with the Director General of the
Kanto Local Finance Bureau are reclassified for the convenience of readers outside Japan. In addition, the consolidated statementsof shareholders' equity are presented and included in the consolidated financial statements, though they are not required to be
filed with the Director General of the Kanto Local Finance Bureau. The notes to the consolidated financial statements include
information which is not required under Japanese GAAP but is presented herein as additional information.
The amounts indicated in millions of yen are rounded down by truncating the figures below one million. Totals may not add up
exactly because of such truncation. Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The
rate of ¥117.47=US$1.00, the foreign exchange rate on March 31, 2006, has been used for translation. The inclusion of suchamounts is not intended to imply that Japanese yen has been or could be readily converted, realized or settled into U.S dollars atthat rate or any other rate.

2. Principles of Consolidation(1) Scope of Consolidation
The consolidated financial statements include the accounts of MHFG and its subsidiaries (collectively, the “Group”), including
Mizuho Corporate Bank, Ltd. (“MHCB”), Mizuho Bank, Ltd. (“MHBK”), Mizuho Trust & Banking Co., Ltd. (“MHTB”), Mizuho
Securities Co., Ltd. (“MHSC”) and certain other subsidiaries. The number of consolidated subsidiaries as of March 31, 2006 and2005 was 130 and 118, respectively. In the fiscal year ended March 31, 2006, Mizuho Private Wealth Management Co., Ltd.
and 20 other companies were newly consolidated on their establishment and for other reasons, and Mizuho Project, Ltd. and 8other companies were excluded from the scope of consolidation as a result of mergers and other reasons.
The consolidated financial statements for the fiscal years ended March 31, 2006 do not include the accounts of Mizuho
Advisory, Inc. and certain other subsidiaries, as they are considered immaterial in terms of the respective group ownership ofTotal Assets, Net Income / Net Loss and Retained Earnings.
The number of affiliates under the equity method as of March 31, 2006 and 2005 was 19 and 20, respectively. Investments
in affiliates include The Chiba Kogyo Bank, Ltd., Shinko Securities Co., Ltd., Japan Mortgage Co., Ltd. and certain other affiliates. In the fiscal year ended March 31, 2006, Japan Energy Investment, Inc. was newly included in the scope of the equitymethod affiliates as a result of establishment, and TVC Finance Company Limited and one other company were excluded fromthe scope of the equity-method affiliates as a result of liquidation and other reasons. Non-consolidated subsidiaries, including
Mizuho Advisory, Inc. and certain other affiliates, are not under the equity method, as they are not significant to the consolidated financial statements of MHFG.
In consolidation, all significant intercompany accounts and transactions have been eliminated. In addition, all significant
unrealized profit included in assets resulting from transactions within the Group has been eliminated.
The accounting standards applicable to the consolidated financial statements require a company to consolidate all subsidiaries of which the company controls the operations, irrespective of whether or not the company owns a majority of theirshares. Control is considered to exist where the company has (a) the power to appoint or remove the majority of the Board of
Directors or an equivalent governing body, and/or (b) the power to cast the majority of the votes at a meeting of the Board of
Directors or an equivalent governing body.
(2) Year-end Dates of Consolidated Subsidiaries
The accompanying consolidated financial statements include the accounts of subsidiaries whose fiscal year-ends are other thanMarch 31. Fiscal year-ends of such subsidiaries are principally December 31.

106

Consolidated subsidiaries with fiscal year-ends of the day before the last business day of June, of September 30 and of
October 31, performed tentative closings and prepared financial statements as of and for the period ended December 31.Other
consolidated subsidiaries were consolidated based on their financial statements as of their respective balance sheet dates.
The necessary adjustments have been made to the financial statements for any significant transactions that took place between
their respective balance sheet dates and the date of the consolidated financial statements.

(3) Amortization of Difference between Acquisition Cost and Underlying Interests
In principle, the difference between the fair value of net assets and the acquisition cost of acquired subsidiaries is being amortized over a period up to 20 years under the straight-line method, and the unamortized balance is recorded as “Consolidation
Differences” on the consolidated balance sheets. If these amounts have no material impact on the consolidated financial statements of MHFG, they are charged or credited to income in the fiscal year of occurrence.
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 consolidated balance sheet date. Derivative financial products, such as swaps, forward contracts and option transactions, are stated at their fairvalues, assuming that such transactions were terminated and settled at the consolidated balance sheet date.
Trading Income and Trading Expenses include the interest received and interest paid during the fiscal year, the gains or losses
resulting from any change in the value of securities and monetary claims between the beginning and the end of the fiscal year
and the gains or losses resulting from any change in the value of financial derivatives between the beginning and the end of
the fiscal year, assuming they were settled at the end of the fiscal year.
(2) Securities
In accordance with “Accounting Standard for Financial Instruments” (the Business Accounting Deliberation Council, January
22, 1999), MHFG classifies securities, excluding those of investments in non-consolidated subsidiaries and affiliates, into three
categories based upon management's intent. These securities are accounted for as follows:(i) Trading securities are carried at market value and included in Trading Assets.
(ii) Bonds held to maturity are stated at amortized cost, determined by the moving average method.
(iii)Other securities are securities which are not classified as either trading securities or bonds held to maturity. Other securities
which have readily determinable fair value are stated at fair value with changes in net unrealized gains or losses, net of
applicable income taxes after excluding gains and losses as a result of fair-value hedge method and other, included directly
in shareholders' equity. Fair value of stocks with a quoted market price is determined based on the average quoted market
price over the month preceding the consolidated balance sheet date. Fair value of securities other than stocks is determinedat the quoted market price if available, 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 are stated at acquisition cost or amortized cost as determined by the moving average method.
In addition, investments in non-consolidated subsidiaries and affiliates which are not under the equity method are stated atacquisition cost as determined by the moving average method.
Securities which are held as trust assets in Money Held in Trust accounts are valued in the same way as Securities above.
Certain Other Securities which have readily determinable fair value are devalued to the fair value, and the difference
between the acquisition cost and the fair value is treated as the loss for the fiscal year (“devaluation”), if the fair value (primarily the closing market price at the consolidated balance sheet date) has significantly deteriorated compared with the acquisition
cost (including amortized cost) unless it is deemed that there is a possibility of a recovery in the fair value, the fair value is taken

107

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

as the amount recorded. The amount of devaluation was ¥3,259 million ($27,745 thousand) and ¥355 million for the fiscal
years ended March 31, 2006 and 2005, respectively.
The criteria for determining whether a security’s fair value has “significantly deteriorated” are outlined as follows:
Security whose fair value is 50% or less of the acquisition cost
Security whose fair value exceeds 50% but is 70% or less of the acquisition cost and the quoted market price maintains
a certain level or lower(3) Securities Lending and Borrowing Transactions
Unsecured securities loaned that allow borrowers to sell, amounted to ¥23,862 million ($203,135 thousand) and ¥28,605 million as of March 31, 2006 and 2005, respectively, and were included in stocks in Securities and trading securities in Trading
Assets.
Securities loaned that do not allow borrowers to sell amounted to ¥570 million ($4,852 thousand) as of March 31, 2006,
and were included in Securities.
A portion of unsecured borrowed securities, securities purchased under resale agreements and securities borrowed with cash
collateral have the right to sell or repledge out of which securities repledged were ¥7,143,008 million ($60,807,090 thousand)and ¥4,242,038 million as of March 31, 2006 and 2005, respectively, securities re-loaned were ¥255 million ($2,173 thousand)and ¥2,355 million as of March 31, 2006 and 2005,respectively, and securities neither repledged nor re-loaned were
¥4,999,963 million ($42,563,750 thousand) and ¥5,911,831 million as of March 31, 2006 and 2005, respectively.
(4) Bills Discounted
In accordance with “Accounting and Auditing Treatment relating to Adoption of Accounting Standards for Financial
Instruments for Banks” (the Japanese Institute of Certified Public Accountants (“JICPA”) Industry Audit Committee Report No.
24), bills discounted are accounted for as financing transactions, although the banking subsidiaries have rights to sell or pledge
certain bankers' acceptances, commercial bills, documentary bills and foreign exchange bills. The principal amount of these bills
amounted to ¥889,999 million ($7,576,397 thousand) and ¥930,853 million as of March 31, 2006 and 2005, respectively.
(5) Derivatives
Derivative transactions are valued at fair value with changes in fair value included in current income. Derivatives qualifying ashedges are mainly accounted for using either the fair-value hedge method or the deferral method of hedge accounting (see thefollowing note).
(6) Hedge Accounting
Consolidated subsidiaries apply the deferred method, the fair-value hedge method or the exceptional accrual method for interest rate swaps as hedge accounting methods.
The portfolio hedge for large-volume, small-value financial assets and liabilities of domestic consolidated banking subsidiaries
and domestic consolidated trust banking subsidiaries is accounted for the method stipulated in “Accounting and Auditing
Treatment relating to Adoption of Accounting Standards for Financial Instruments for Banks”( JICPA Industry Audit Committee
Report No.24).
The effectiveness of hedging activities for the portfolio hedge for large-volume, small-value financial assets and liabilities isassessed as follows:(i) for hedging activities to offset market fluctuation risks, bracketing both the hedging instruments, such as interest-rate
swaps, and hedged instruments, such as deposits and loans, in the same maturity bucket, and assessing the effectivenessbetween hedging and hedged instruments.
(ii) for hedging activities to fix the cash flows, the effectiveness is assessed based on the correlation between a base interest
rate index of the hedged cash flow and that of the hedging instrument.
The effectiveness of the individual hedge is assessed based on the correlation between the fluctuation in the market or cash
flows of the hedged instruments and that of the hedging instruments.
Deferred hedge gains/losses recorded on the consolidated balance sheet resulted from the application of the macro-hedge
method based on “Tentative Accounting and Auditing Treatment relating to Adoption of Accounting Standards for Financial

108

Instruments for Banks” (JICPA Industry Audit Committee Report No.15), under which the overall interest rate risks inherent inloans, deposits and other instruments are controlled on a macro-basis using derivatives transactions. These deferred hedge
gains/losses are amortized as interest income or interest expenses over the average remaining maturity of the respective hedging instruments.
Until the fiscal year ended March 31, 2004, the deferred method has been applied to the hedge of interest rate risk associated with various financial assets and liabilities. In response to the price fluctuations in the bond market, effective the fiscal year
ended March 31, 2005, the fair-value hedge method has been applied to derivative transactions which hedge fluctuations inbond prices of Other Securities so that the effect of these hedge transactions will be presented more fairly in the financial statements. As a result of the application of the fair-value hedge method, Interest Income decreased by ¥3,810 million, Other
Operating Expenses increased by ¥7,297 million and Other Expenses increased by ¥14,412 million, and, as a consequence,
Income before Income Taxes and Minority Interests decreased by ¥25,520 million for the fiscal year ended March 31, 2005 ascompared with the corresponding amounts under the previously applied method. In addition, Other Assets decreased by¥79,471 million, deferred tax assets increased by ¥21,898 million, and Net Unrealized Gains on Other Securities, net of Taxes
decreased by ¥32,052 million for the fiscal year ended March 31, 2005. A certain domestic consolidated banking subsidiary has
not yet changed its hedge accounting method in the fiscal year ended March 31, 2005.
Since it was expected that significant losses would be incurred at maturity for hedge accounting due to changes in interest
rate trends during the fiscal year ended March 31, 2005, deferred hedge losses of ¥67,089 million were charged to Other
Expenses.
The unamortized amounts of gross deferred hedge losses on the macro-hedges were ¥363,399 million ($3,093,549 thousand) and ¥556,029 million as of March 31, 2006 and 2005, respectively. The unamortized amounts of gross deferred hedge
gains on the macro-hedges were ¥357,446 million ($3,042,878 thousand) and ¥545,978 million as of March 31, 2006 and2005, respectively.
Domestic consolidated banking subsidiaries and a certain domestic consolidated trust banking subsidiary apply the deferred
method of hedge accounting to hedge foreign exchange risks associated with various foreign currency denominated monetary
assets and liabilities as stipulated in “Accounting and Auditing Treatment relating to Adoption of Accounting Standards for
Foreign Currency Transactions for Banks” (JICPA Industry Audit Committee Report No.25). The effectiveness of the hedge isassessed by confirming both the amount for the foreign currency position of the hedging instruments of currency-swap transactions, exchange swap transactions and similar transactions as the method of hedging the foreign exchange risks of monetary
assets and liabilities denominated in foreign currencies and the amount for the foreign currency position of the hedged monetary assets and liabilities denominated in foreign currency are equivalent.
In addition to the above methods, these subsidiaries apply the deferred method or the fair-value hedge method to portfolio
hedges of the foreign exchange risks associated with investments in subsidiaries and affiliates in foreign currency and Other
securities in foreign currency (except for Japanese bonds and foreign bonds) identified as hedged items in advance, as long as
the amount of foreign currency payables of spot and forward foreign exchange contracts exceeds the amount of acquisition
cost of the hedged foreign securities in foreign currency.
Inter-company interest rate swaps, currency swaps and similar derivatives among consolidated companies or between trading
accounts and other accounts, which are designated as hedges, are not eliminated and related gains and losses are recognizedin the income statement or deferred under hedge accounting, because these inter-company derivatives are executed according
to the criteria for appropriate outside third-party cover operations which are treated as hedge transactions objectively in accordance with JICPA Industry Audit Committee Reports Nos.24 and 25.

(7) Translation of Foreign Currencies
Assets and liabilities denominated in foreign currencies and accounts of overseas branches of domestic banking subsidiaries anda domestic trust banking subsidiary are translated into Japanese yen primarily at the exchange rates in effect at the consolidated balance sheet date, with the exception of the investments in non-consolidated subsidiaries and affiliates not under theequity method, which are translated at historical exchange rates.
Assets and liabilities denominated in foreign currencies of the consolidated subsidiaries, except for the above transactions, aretranslated into Japanese yen primarily at the exchange rates in effect at each balance sheet date.

109

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements(8) Premises and Equipment
Depreciation of buildings is computed mainly by the straight-line method, and that of equipment is computed mainly by the
declining-balance method with the following range of useful lives:
Buildings
3 years to 50 years
Equipment
2 years to 20 years(9) Software
Development costs for internally-used software are capitalized and amortized under the straight-line method over their estimated useful lives of mainly five years as determined by MHFG and consolidated subsidiaries.
(10) Impairment of Fixed Assets
Until the fiscal year ended March 31, 2004, for fixed assets whose net realizable value was substantially lower than their bookvalue, the difference between the net realizable value and the book value had been written down. However, as permitted by“Accounting Standard for Impairment of Fixed Assets” (“Opinion Concerning Establishment of Accounting Standard for
Impairment of Fixed Assets” (the Business Accounting Deliberation Council, August 9, 2002)) and “Guidelines on
Implementation of Accounting Standard for Impairment of Fixed Assets” (the Accounting Standards Board of Japan (“ASBJ”)
Guidelines No. 6, October 31, 2003), effective the fiscal year beginning April 1, 2004, the impairment accounting was adopted
early in accordance with the standard and guidelines. As a result, Income before Income Taxes and Minority Interests decreasedby ¥39,318 million for the fiscal year ended March 31, 2005.
As fixed assets are carried on the consolidated balance sheet net of accumulated depreciation in accordance with the“Banking Law Enforcement Regulations” (Ministry of Finance Ordinance No. 10, 1982), the accumulated impairment losses arealso directly deducted from each asset balance.
A certain domestic subsidiary recognized the estimated unrecoverable amount of its investment in its branch premises as
Losses on Impairment of Fixed Assets. For the purposes of identifying impaired assets, the assets of an individual branch aregrouped as a unit. The relevant domestic subsidiary calculates the recoverable amount by measuring value in use, applying a
discount rate of 8.8%, for the fiscal year ended March 31, 2005.
Domestic banking subsidiaries, a certain domestic trust banking subsidiary and certain subsidiaries recognize Losses on
Impairment of Fixed Assets for branch premises to be closed, idle assets, and assets to be disposed of. For the purposes of identifying impaired assets in such cases, the individual asset is assessed as a unit. The recoverable amount is calculated based on
net realizable value. Net realizable value is calculated based on the valuation by road rating with reasonable adjustments tocompensate for sites with long depth, etc., and on the appraisal value, etc., less estimated cost of disposal.
(11) Deferred Charges• Bond issuance costs are expensed as incurred.
• Bond discounts are capitalized and amortized under the straight-line method over the term of the bond.
• 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 period permitted under the
Enforcement Regulations of the Commercial Code of Japan.
(12) Reserves for Possible Losses on Loans
Reserves for Possible Losses on Loans of major domestic consolidated subsidiaries are maintained in accordance with internallyestablished standards for write-offs and provisions:• For credit extended to obligors that are legally bankrupt under the Bankruptcy Law, Special Liquidation under the Commercial
Code or other similar laws (“Bankrupt Obligors”), and to obligors that are effectively in similar conditions (“Substantially
Bankrupt Obligors”), reserves are maintained at the amounts of claims net of direct write-offs described below and expectedamounts recoverable from the disposal of collateral and the amounts recoverable under guarantees.
• For credit extended to obligors that are not yet legally or formally bankrupt but are likely to be bankrupt (“Intensive Control
Obligor”), reserves are maintained at the amounts deemed necessary based on overall solvency analyses of the amounts ofclaims net of expected amounts recoverable from the disposal of collateral and the amounts recoverable under guarantees.

110• For credit extended to Intensive Control Obligors and Obligors with Restructured Loans (defined in Note 6 below) and others,
if the exposure to an obligor exceeds a certain specific amount, reserves are provided as follows:(i) if future cash flows of the principal and interest can be reasonably estimated, the discounted cash flow method is applied,
under which method the reserve is determined as the difference between the book value of the loan and its present valueof future cash flows discounted using the contractual interest rate before the loan was classified as a Restructured Loan,and(ii) if future cash flows of the principal and interest cannot be reasonably estimated, reserves are provided for the losses estimated for each individual loan.
• For credit extended to other obligors, reserves are maintained at rates derived from historical credit loss experience, etc.
• Reserves for Possible Losses on Loans to Restructuring Countries are maintained in order to cover possible losses basedon analyses of the political and economic climates of the countries.
All credit is assessed by each credit origination department, and the results of the assessments are verified and examinedby the independent examination department. Reserves for Possible Losses on Loans are provided for on the basis of suchverified assessments.
In the case of loans to Bankrupt Obligors and Substantially Bankrupt Obligors, which are collateralized or guaranteed by athird party, the amounts deemed uncollectible (calculated by deducting the anticipated proceeds from the sale of collateralpledged against the claims and amounts that are expected to be recovered from guarantors of the claims) are written off
against the respective loan balances. The total directly written-off amounts were ¥805,616 million ($6,858,062 thousand) and¥1,042,790 million as of March 31,2006 and 2005, respectively.
Other consolidated subsidiaries provide the amount necessary to cover the loan losses based upon past experience for generalclaims and the estimation for each individual loan for other claims.

(13) Reserve for Possible Losses on Investments
Reserve for Possible Losses on Investments is maintained to provide against possible losses on investments in securities, after
taking into consideration the financial condition and other relevant factors concerning the investee company.
(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.
(15) Reserve for Employee Retirement Benefits
Reserve for Employee Retirement Benefits, which is provided for future pension payments to employees, is recorded as therequired amount based on the projected benefit obligation and the estimated plan asset amounts at the end of the fiscal year.
Prior service cost and unrecognized actuarial gains (losses) are recognized mainly as follows:
Prior service cost (Gains on plan amendment): Recognized as income or expenses in the period of occurrence.
Unrecognized actuarial gains (losses): Recognized as income or expenses from the following fiscal year under the straight-line
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 employee retirement benefits has
been recognized equally as an expense primarily over five years until the fiscal year ended March 31, 2005.
Until the fiscal year ended March 31, 2004, the excess fair value of the plan assets over the projected benefit obligation of
the pension plan (“unrecognized plan assets”), which resulted from actuarial gains such as an excess of actual return over
expected return on plan assets or a gain on plan amendment due to reduction of plan benefits, had not been recognized as an
asset or a gain in accordance with Note 1 (1) to the “Accounting Standards for Retirement Benefits” (Business Accounting
Deliberation Council, June 16, 1998). Effective March 16, 2005, the Accounting Standards for Retirement Benefits wereamended and recognition of the former unrecognized plan assets as an asset or a gain was permitted, effective the fiscal year
ended March 31, 2005 as an early adoption. The “Guidelines on Implementation of Amendment of Accounting Standards for
Retirement Benefits” (ASBJ Guidelines No.7, March 16, 2005), effective the fiscal year ended March 31, 2005, were adopted,
and the former unrecognized plan assets allocated to actuarial gains and gains on plan amendment were recognized as gains
or reduction from expenses. As a result, Other Assets and Income before Income Taxes and Minority Interests both increased by¥31,523 million for the fiscal year ended March 31, 2005.

111

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

On July 1, 2005, a certain domestic consolidated subsidiary received approvals for an exemption from payments of benefits
related to past employee services in respect of the substitutional portion of their pension funds from the Minister of Health,
Labor and Welfare, based on the Law Concerning Defined Benefit Corporate Pension Plans. As a result, ¥1,216 million($10,352 thousand) was included in Other Income.

(16) Reserve for Contingencies
Reserve for Contingencies is maintained to provide against possible losses from contingencies, which are not covered by otherspecific reserves, in off-balance transactions and trust transactions and other. The balance is an estimate of possible future
losses, on an individual basis, considered to require a reserve.
(17) Lease Transactions
Finance leases of MHFG and domestic consolidated subsidiaries that do not involve the transfer of ownership to the lessee areaccounted for as operating leases.
Lease transactions of foreign consolidated subsidiaries are principally accounted for as either finance leases or operatingleases, depending on the terms and conditions of the lease.
(18) Scope of Cash and Cash Equivalents in Consolidated Statements of Cash Flows
In the Consolidated Statements of Cash Flows, Cash and Cash Equivalents consist of cash and due from central banks included
in “Cash and Due from Banks” on the consolidated balance sheet.
(19) Fiduciary Income
Until the fiscal year ended March 31, 2005, Fiduciary Income was primarily recognized at the end of each trust accounting
period. However, effective the fiscal year ended March 31, 2006, Fiduciary Income is accrued for the period elapsed with some
exceptions, such as not calculated for trust accounting periods, in order to improve the accuracy of earnings reports and continuously provide appropriate information considering present broader disclosure requirements. As a result of this change,
Fiduciary Income and Income before Income Taxes and Minority Interests, each increased by ¥2,059 million ($17,528 thousand)compared with corresponding amounts under the previously applied method.
(20) Income Taxes
Deferred income taxes are recorded for corporate tax, inhabitants' taxes and enterprise taxes based on the differences between
the tax bases of assets and liabilities and those reported in the consolidated financial statements and tax losses carried forward,
using enacted tax rates which will be in effect when the differences are expected to be reversed. The assets and liabilities
method is used to determine deferred income taxes.
(21) Consumption Taxes
MHFG and its domestic consolidated subsidiaries are subject to Japanese consumption taxes. Japanese consumption taxes are
excluded from transaction amounts.
(22) Enterprise Taxes
With the enactment of the “Revision of Law regarding Regional Taxation, etc.” (Law No.9 of March 2003) on March 31, 2003,
certain parts of the basis of the enterprise taxes were changed effective the fiscal year beginning April 1, 2004 or later to“added value” and “amount of capital, etc.” As a result, effective the fiscal year ended March 31, 2005, domestic banking
subsidiaries, domestic trust banking subsidiaries and certain other domestic subsidiaries included the enterprise taxes based on“added value” and “amount of capital, etc.” in “General and Administrative Expenses” on the consolidated income statement,in accordance with “Practical Treatment of Presentation of the External Standards Taxation Portion of Enterprise Taxes in theStatement of Operations” (ASBJ Report No.12).
(23) Appropriation of Retained Earnings
Cash dividends are recorded in the fiscal year in which the proposed appropriation of Retained Earnings is approved by the
Board of Directors and/or by the general meeting of shareholders.

112

(24) Net Income per Share
Consolidated Net Income per Share for the fiscal years ended March 31, 2006 and 2005 and related information are as follows:
(Yen)
2006

Consolidated Net Income per Share·····················¥(U.S. dollars)
2006

2005

55,157.14¥

54,625.61$

Consolidated Net Income···································· ¥ 649,903 million¥

627,383 million$ 5,532,510 thousand

Consolidated Net Income
attributable to common shareholders················· ¥ 616,229 million¥

589,462 million$ 5,245,843 thousand

Consolidated Net Income
not attributable to common shareholders···········¥¥

37,921 million$

33,674 million

469.54

286,666 thousand

Average outstanding shares of common stock(excluding treasury stock)··································· 11,172 thousand shares 10,790 thousand shares
Consolidated Net Income per Share (Diluted)·······¥

46,234.51¥

37,719.13/$

393.59Common stock equivalents to be used to calculate diluted per share information are as follows:
For the fiscal year ended March 31,2006: Class II, III, VII, VIII, X, and XI Preferred Stock
For the fiscal year ended March 31,2005: Class I, II, III, VII, VIII, IX, X, and XI Preferred Stock

4. Trading Assets and Liabilities
Millions of yen
2006

At March 31,

Trading Assets:
Trading Securities
Derivatives for Trading Transactions
Derivatives for Trading Securities
Total
Trading Liabilities:
Trading Securities Sold Short
Derivatives for Trading Transactions
Derivatives for Trading Securities
Total

¥

7,988,427
1,911,491
107,231¥

2005

Thousands of U.S. dollars
2006

8,829,136
2,173,215
45,250$68,003,982
16,272,163
912,838¥ 10,007,149¥ 11,047,601$

85,188,983¥

5,863,162
1,895,059
122,413¥

5,866,701
2,029,879
46,203$49,912,001
16,132,282
1,042,079¥

7,880,634¥

7,942,784$

67,086,362

Millions of yen
2006

2005

Thousands of U.S. dollars
2006¥ 20,464,627
176,0235,383
2,701,669
6,344,748
8,010,505¥ 22,651,836
151,067
2,999
2,075,937
5,084,227
6,080,966$ 174,211,522
1,498,453
45,82722,998,802
54,011,652
68,191,923¥ 37,702,957¥ 36,047,035$ 320,958,179

5. Securities
At March 31,

Japanese Government Bonds
Japanese Local Government Bonds
Japanese Short-term Bonds
Japanese Corporate Bonds
Stocks*1
Other*2
Total*1 Stocks included investments in non-consolidated subsidiaries and affiliates of ¥83,379 million ($709,793 thousand) and ¥71,943 million at March 31, 2006 and 2005, respectively.
*2 Other included investments in non-consolidated subsidiaries and affiliates of ¥12,461 million ($106,080 thousand) and ¥2,155 million at March 31, 2006 and 2005, respectively.

113

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

6. Loans and Bills Discounted
Millions of yen
2006

2005

Thousands of U.S. dollars
2006¥ 47,990,138
12,355,086
4,428,935
430,717
203,794¥ 46,568,909
11,441,766
4,118,742
490,153
297,765$ 408,531,020
105,176,524
37,702,693
3,666,613
1,734,865¥ 65,408,672¥ 62,917,336$ 556,811,715

At March 31,

Loans on Deeds
Overdrafts
Loans on Notes
Bills Discounted
Financing Receivables, including Factoring, Leasing and Property Financing
Total

Loans and Bills Discounted at March 31, 2006 and 2005 include the following:
Millions of yen
2006

At March 31,

Loans to Bankrupt Obligors*1
Non-Accrual Delinquent Loans*2
Loans Past Due for Three Months or More*3
Restructured Loans*4
Total*5

2005

Thousands of U.S. dollars
2006¥

32,821
454,712
13,995553,373¥

89,743
971,895
27,735448,569$

279,4073,870,885
119,137
4,710,768¥

1,054,903¥

1,537,944$

8,980,197*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 Ordinance (Article 97 of 1965
Cabinet Order).
*2 Non-Accrual Delinquent Loans represent non-accrual loans other than (i) Loans to Bankrupt Obligors and (ii) loans of which payments of interest are deferred in order to assist or facilitate therestructuring of obligors in financial difficulties.
*3 Loans to Bankrupt Obligors or Non-Accrual Delinquent Loans, both of which are classified as non-accrual, are not included in this category.
*4 Restructured Loans represent loans on which contracts were amended in favor of obligors (e.g., the reduction of or exemption from stated interest, the deferral of interest payments, the extension of
maturity dates, or renunciation of claims) in order to assist or facilitate the restructuring of obligors in financial difficulties.
*5 ¥1,992 million of these amounts are placed in an administrative trust established by the Resolution and Collection Corporation for eventual final disposal at March 31, 2005.

Commitment Line for Loans
Overdraft protection on current accounts and contracts for the commitment line for loans are contracts by which banking subsidiaries are bound to extend loans up to the prearranged amount, at the request of customers, unless the customer is in breachof contract conditions. The unutilized balance of these contracts amounted to ¥49,246,784 million ($419,228,611 thousand) and¥46,348,812 million as of March 31, 2006 and 2005, respectively. Of these amounts, ¥42,366,799 million ($360,660,592 thousand) and ¥42,227,207 million relate to contracts in which the original contractual maturity is one year or less, or which areunconditionally cancelable at any time as of March 31, 2006 and 2005, respectively.
Since many of these contracts expire without the rights exercised, the unutilized balance itself does not necessarily affect future
cash flows. A provision is included in many of these contracts that entitles the consolidated subsidiaries to refuse the execution ofloans, or reduce the maximum amount under contracts when there is a change in the financial situation, necessity to preserve aclaim, or other similar reasons. The banking subsidiaries obtain, moreover, real estate or securities as collateral at the time thecontracts are entered into, if needed, and periodically monitor a customer's business condition, based on and in accordance withestablished internal procedures, and take measures to control credit risks such as making amendments to contracts, if needed.

114

7. Foreign Exchange Assets and Liabilities
Millions of yen
2006

At March 31,

Foreign Exchange Assets:
Foreign Bills Bought
Foreign Bills Receivable
Due from Banks (Foreign)
Advance to Foreign Banks
Total
Foreign Exchange Liabilities:
Due to Banks (Foreign)
Foreign Bills Sold
Foreign Bills Payable
Advance from Foreign Banks
Total

2005

Thousands of U.S. dollars
2006¥

467,699
278,253
57,8055,446¥

447,131
211,489
52,244
6,041$

3,981,439
2,368,722
492,090
46,361¥

809,205¥

716,907$6,888,612¥

353,773
13,974
12,386
9,505¥

169,763
16,566
10,50096,074$

3,011,607
118,959
105,440
80,915¥

389,638¥

292,905$

3,316,921

Millions of yen
2006

2005

Thousands of U.S. dollars
2006¥ 1,624,054
334,916
303,961
38,1484,162,162¥ 1,797,133
267,82480,452
19,561
3,413,013$ 13,825,268
2,851,084
2,587,567
324,750
35,431,702¥ 6,463,242¥ 5,577,985$ 55,020,371

8. Other Assets
At March 31,

Derivatives
Accrued Income
Deferred Hedge Losses*1
Prepaid Expenses
Other
Total

*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 ¥629,416 million ($5,358,108
thousand) and ¥933,378 million ($7,945,676 thousand), respectively, at March 31, 2006, and ¥810,865 million and ¥891,317 million, respectively, at March 31, 2005.

9. Premises and Equipment
Millions of yen
2006

At March 31,

Land
Buildings
Equipment
Other
Total
Accumulated Depreciation
Book value adjusted for gains on sales of replaced assets¥

463,404
254,949
94,839142,695¥

2005

519,131254,541
105,734
148,675

Thousands of U.S. dollars
2006$

3,944,871
2,170,338
807,350
1,214,742¥

955,888¥ 1,028,082$

8,137,301¥

729,088
44,647¥$

6,206,594
380,078

687,085
90,406

10. Deferred Debenture Charges
Millions of yen
2006

At March 31,

Deferred Discount on Debentures
Deferred Debenture Issuance Costs
Total

2005

Thousands of U.S. dollars
2006

¥

145
122

¥

181
122

$ 1,239
1,042

¥

267

¥

303

$ 2,281115

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

11. Reserves for Possible Losses on Loans
Millions of yen
2006

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

2005

Thousands of U.S. dollars
2006¥(615,775)(194,907)(3,495)¥(637,361)(503,927)(5,508)$(5,241,979)(1,659,214)(29,756)¥(814,178)¥ (1,146,797)$(6,930,949)

12. Assets Pledged as Collateral
The following assets were pledged as collateral:
Millions of yen
2006

At March 31,

Trading Assets
Securities
Loans and Bills Discounted
Other Assets
Premises and Equipment¥

4,241,579
13,508,075
5,524,711
329
99

¥

2005

6,263,905
11,651,064
5,630,348—
157

Thousands of U.S. dollars
2006$

36,107,766
114,991,701
47,030,827
2,805
844

The following liabilities were collateralized by the above assets:
Millions of yen
2006

At March 31,

Deposits
Call Money and Bills Sold
Payables under Repurchase Agreements
Guarantee Deposit Received under Securities Lending Transactions
Borrowed Money
Other Liabilities¥

1,035,947
4,837,900
4,868,827
6,493,464
1,435,575
90

¥

2005

1,221,225
4,960,500
4,435,138
7,413,857
1,330,193—

Thousands of U.S. dollars
2006$

8,818,826
41,184,132
41,447,411
55,277,638
12,220,785766

In addition, the settlement accounts of foreign and domestic exchange transactions or derivatives transactions and other werecollateralized, and margins for futures transactions were substituted by Cash and Due from Banks of ¥7,726 million ($65,775
thousand) and ¥10,301 million, Trading Assets of ¥535,821 million ($4,561,345 thousand) and ¥305,764 million, Securities of¥2,725,992 million ($23,205,862 thousand) and ¥2,311,761 million, and Loans and Bills Discounted of ¥349,759 million($2,977,434 thousand) and ¥290,716 million as of March 31, 2006 and 2005, respectively. None of the assets were pledged ascollateral in connection with borrowings by the non-consolidated subsidiaries and affiliates.
Premises and Equipment included guarantee deposits of ¥139,029 million ($1,183,533 thousand), and ¥142,143 million as ofMarch 31, 2006 and 2005, respectively, and Other Assets included collateral pledged for derivatives transactions of ¥342,567 million ($2,916,214 thousand) and ¥341,458 million as of March 31, 2006 and 2005, respectively, margins for futures transactionsof ¥72,138 million ($614,099 thousand) and ¥34,207 million as of March 31, 2006 and 2005, respectively, other guarantee
deposits of ¥3,261 million ($27,765 thousand) of March 31, 2006, guarantee deposits on when-issued transactions of ¥600 million and guarantee deposits on margin transactions of ¥258 million as of March 31, 2005.
Bills re-discounted are treated as financial transactions in accordance with the JICPA Industry Audit Committee Report No.24.
The total face value of commercial bills and foreign bills of exchange bought as a result of rediscounting as of March 31, 2005
was ¥6,208 million.

11613. Deposits
Millions of yen
2006

At March 31,

Current Deposits
Ordinary Deposits*1
Deposits at NoticeTime Deposits
Negotiable Certificates of Deposit
Other

¥

Total

6,443,127
33,424,056
656,525
27,186,388
9,359,131
5,297,896¥ 82,367,125

¥

2005

Thousands of U.S. dollars
2006

6,266,377
31,627,410
802,372
24,868,551
10,868,491
5,934,855$¥ 80,368,058

54,849,130
284,532,702
5,588,878
231,432,612
79,672,522
45,099,994$ 701,175,838*1 Ordinary Deposits include savings deposits.

14. Debentures
At March 31,
Description of Debentures

One-Year Discount Debentures

Millions of yen
2006¥

482,024[482,024]¥

2005

593,282

Thousands of U.S. dollars
2006$Interest rates
2006

2005

4,103,383[4,103,383]

0.05%–0.08%

0.05%
0.02%

One-Year Discount Debentures(custody only)

173,211[173,211]

219,161

1,474,515[1,474,515]

0.02%–0.05%

Five-Year Coupon Debentures(Series A)

4,469,090[1,309,650]

5,337,680

38,044,522[11,148,804]

0.35%–1.40% 0.35%–1.50%

Five-Year Coupon Debentures(Series B)

53,988[14,780]

79,645459,596[125,823]

0.10%–0.30% 0.10%–0.90%

Five-Year Coupon Debentures(with compound interest)

527,729[124,937]

662,642

4,492,458[1,063,570]

0.10%–0.30% 0.10%–0.90%

Five-Year Coupon Debentures(saving-type)

700,360[101,022]

709,6215,962,035[859,987]

0.10%–0.30% 0.10%–0.90%

Five-Year Coupon Debentures(saving-type with compound interest)

79,300[14,761]

82,557675,068[125,663]

0.10%–0.30% 0.10%–0.90%

Three-Year Coupon Debentures

100,800[100,800]

100,800

858,092[858,092]

19,801
9,682[6,459](US$ 109,000 thousand) (US$25,000 thousand)

168,565[54,990]

Debentures Denominatedin Foreign Currency
Total

¥

6,606,305¥

7,795,073

0.35%

0.35%

0.33%–4.98% 0.46%–4.19%$ 56,238,234

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 year ending March 31, 2007 ¥2,327,647 million ($19,814,827 thousand)2008 ¥1,219,783 million ($10,383,786 thousand)2009 ¥ 995,495 million ($ 8,474,465 thousand)2010 ¥ 983,442 million ($ 8,371,863 thousand)2011 ¥1,079,936 million ($ 9,193,295 thousand)4. No collateral was provided for the above debentures.

117

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

15. Call Money and Bills Sold
Millions of yen
2006

At March 31,

2005

Thousands of U.S. dollars
2006

Call Money
Bills Sold¥

6,192,054
3,274,000¥

5,017,512
3,342,400$ 52,711,791
27,870,946

Total

¥

9,466,054¥

8,359,912$ 80,582,737

16. Commercial Paper
Millions of yen
2006

At March 31,

Commercial Paper¥

50,000¥2005

1,397,200

Average interest rates*1
2006
2005

Thousands of U.S. dollars
2006$

425,641

0.13%

0.11%

*1 Average interest rates are the weighted-average interest rates of debts calculated from the interest rates and outstanding balances at the end of the fiscal year.

17. Borrowed Money
Millions of yen
2006

At March 31,

Bills Rediscounted
Other Borrowings*2,3
Total

2005

Average interest rates*1
2006
2005

Thousands of U.S. dollars
2006

¥

—
2,768,811¥

6,208
2,628,224$—
23,570,368

—%
0.80%

4.77%
0.97%

¥

2,768,811¥

2,634,433$ 23,570,368

0.80%

0.98%

*1 Average interest rates are the weighted-average interest rates of debts calculated from the interest rates and outstanding balances at the end of the fiscal year.
*2 Other Borrowings included subordinated debt of ¥792,011 million ($6,742,242 thousand) and ¥820,988 million at March 31, 2006 and 2005, respectively.
*3 Repayments for Other Borrowings are scheduled for the next five years as follows:
Fiscal year ending March 31, 2007
¥1,584,606 million ($13,489,454 thousand)2008¥ 77,685 million ($ 661,324 thousand)2009¥ 46,850 million ($ 398,830 thousand)2010¥ 32,423 million ($ 276,014 thousand)2011¥ 71,782 million ($ 611,074 thousand)

18. Short-term Bonds
Major components of Short-term Bonds at March 31, 2006 were as follows:
Issuer

Issue

MHFG

Jan. 2006–Mar. 2006

MHCB

Feb. 2006–Mar. 2006

MHSC
*1

Millions of yen

Thousands of U.S. dollars

Apr. 2006–
Jul. 2006

203,400[203,400]

1,731,506[1,731,506]

0.05%–0.09%

Apr. 2006–
Jun. 2006

Dec. 2005–Mar. 2006

258,700[258,700]

2,202,264[2,202,264]

0.04%–0.19%

Apr. 2006–
Nov. 2006

Jan. 2006–Mar. 2006

29,000[29,000]

246,872[246,872]

0.11%–0.39%

Apr. 2006–
Sep. 2006

1,385,100$Due

0.16%–0.20%¥

894,000[894,000]Interest rates

7,610,454[7,610,454]

Total

¥

$

11,791,096

Notes: 1. Figures indicated in brackets [ ] represent the amounts to be redeemed within one year.
2. No collateral was provided for the above short-term bonds.
*1 indicates the total amount of short-term bonds issued by the domestic consolidated subsidiary, Mizuho Investors Securities Co., Ltd.

Major components of Short-term Bonds at March 31, 2005 were as follows:
Issuer

Issue

MHCB

Jan. 2005–Mar. 2005

Total

Millions of yen

Interest rates¥

260,300

0.00%–0.05%¥

260,300

Note: No collateral was provided for the above short-term bonds.

118

Due

Apr. 2005–
May 2005

19. Bonds and Notes
Major components of Bonds and Notes at March 31, 2006 were as follows:
IssuerDescription

Issue

Millions of yen

MHCB

Straight Bonds

Sep. 1997–
Aug. 2004¥

Interest rates

Due

1,047,927[—]

2.10%–
3.00%

Nov. 2012 –Aug. 2014

MHBK

Straight Bonds

Sep. 2004–
Feb. 2006

311,600[—]

2,652,592[—]

0.39%–
2.49%

Sep. 2014 –MHTBStraight Bonds

Apr. 2001–
Mar. 2006

161,500[—]

1,374,819[—]

0.38%–
2.76%

Apr. 2011 –*1

Straight Bonds

Jan. 2004–
459,472
Mar. 2004[—](US$3,000,000 thousand)(EUR 750,000 thousand)

3,911,400[—]

4.75%–
8.37%

Apr. 2014 –*2

Straight Bonds

Jul. 1997–
Apr. 2001

16,000[—]136,205[—]

1.31%–
3.50%

Apr. 2011 –Jul. 2012*3

Straight Bonds

Sep. 1996–
Sep. 2004

449,821[21,500](US$110,000 thousand)

3,829,248[183,025]

0.29%–
5.77%

Sep. 2006 –*4

Straight Bonds

Jul. 1995–
Sep. 2005

623,056[—](US$760,001 thousand)(EUR 65,000 thousand)

5,303,959[—]

0.42%–
8.62%

Jul. 2007 –*5

Straight Bonds

Jun. 1996–
Mar. 2006

343,948[20,646](US$75,465 thousand)(EUR25,014 thousand)

2,927,966[175,759]

0.00%–
14.90%

Apr. 2006 –Mar. 2036¥ 2,488,498$ 21,184,116

Total

123,100[—]

Thousands of U.S. dollars$

Notes: 1. Figures indicated in brackets [ ] represent the amounts to be redeemed within one year.
2. The amounts of foreign currencies denominated bonds are shown in original currencies in parentheses ( ).
3. Repayments for Bonds and Notes are scheduled for the next five years as follows:
Fiscal year ending March 31, 2007 ¥ 42,146 million ($ 358,784 thousand)2008 ¥ 55,357 million ($ 471,246 thousand)2009 ¥ 22,291 million ($ 189,763 thousand)2010 ¥ 56,433 million ($ 480,404 thousand)2011 ¥125,717 million ($1,070,208 thousand)4. Bonds and Notes at March 31, 2006 included subordinated bonds and notes of ¥2,143,962 million ($18,251,149 thousand).
5. No collateral was provided for the above bonds and notes.
*1 indicates the total amount of straight bonds issued by the overseas consolidated subsidiary, Mizuho Financial Group (Cayman) Limited.
*2 indicates the total amount of straight bonds issued by the overseas consolidated subsidiary, Mizuho TB (Aruba) A.E.C.
*3 indicates the total amount of straight bonds issued by the overseas consolidated subsidiary, Mizuho Finance (Aruba) A.E.C.
*4 indicates the total amount of straight bonds issued by the overseas consolidated subsidiaries, Mizuho Finance (Cayman) Limited and Mizuho Finance (Curaçao) N.V.
*5 indicates the total amount of straight bonds issued by the domestic consolidated subsidiary, MHSC, and the overseas consolidated subsidiary, Mizuho International plc.

119

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

Major components of Bonds and Notes at March 31, 2005 were as follows:
IssuerDescription

Issue

Millions of yen

Interest rates

Due

MHCB

Straight Bonds

Sep. 1997–
Aug. 2004¥

123,100

2.10%–3.00%

Nov. 2012 –Aug. 2014

MHBK

Straight Bonds

Sep. 2004–
Mar. 2005

159,300

0.48%–2.09%

Sep. 2014 –MHTBStraight Bonds

Dec. 2000–
Mar. 2005

104,100

1.06%–2.76%

Dec. 2010 –*1

Straight Bonds

Jan. 2004–
426,366
Mar. 2004(US$3,000,000 thousand)(EUR 750,000 thousand)

4.75%–8.37%

Apr. 2014 –*2

Straight Bonds

Dec. 1995–
Apr. 2001

79,1000.56%–3.59%

Apr. 2010 –Jul. 2012*3

Straight Bonds

Feb. 1995–
Sep. 2004

628,915

0.00%–5.10%

Dec. 2005 –(US$110,000 thousand)*4

Straight Bonds

Jun. 1995–
598,226
Jul. 2004(US$1,049,959 thousand)

0.36%–8.80%

Feb. 2007 –*5

Straight Bonds

Jun. 1996–
Mar. 2005

0.05%–7.50%

Apr. 2005 –Dec. 2034

237,864(US$43,956 thousand)(EUR25,037 thousand)Total¥ 2,356,972

Notes: 1. The amount of foreign currency denominated bonds is shown in the original currencies in parentheses ( ).
2. Bonds and Notes at March 31, 2005 included subordinated bonds and notes of ¥2,118,575 million.
3. No collateral was provided for the above bonds and notes.
*1 Indicates the total amount of straight bonds issued by the overseas consolidated subsidiary, Mizuho Financial Group (Cayman) Limited.
*2 Indicates the total amount of straight bonds issued by the overseas consolidated subsidiary, Mizuho TB (Aruba) A.E.C.
*3 Indicates the total amount of straight bonds issued by the overseas consolidated subsidiary, Mizuho Finance (Aruba) A.E.C.
*4 Indicates the total amount of straight bonds issued by the overseas consolidated subsidiaries, Mizuho Finance (Cayman) Limited and Mizuho Finance (Curaço) N.V.
*5 Indicates the total amount of straight bonds issued by MHSC and the overseas consolidated subsidiaries, Mizuho Corporate Asia (HK) Limited and Mizuho International plc.

20. Other Liabilities
At March 31,

Derivatives
Accrued Expenses
Unearned Income
Income Taxes Payable
Other
Total

120

Millions of yen
2006

2005

Thousands of U.S. dollars
2006¥ 1,969,985
220,181
159,015
52,386
2,981,362¥ 1,742,862
204,793
136,50943,3082,965,147$ 16,770,117
1,874,367
1,353,670
445,957
25,379,776¥ 5,382,931¥ 5,092,621$ 45,823,887

21. Reserve for Employee Retirement Benefits(1) MHFG and domestic consolidated subsidiaries adopt the Corporate Pension Fund Plans (“Kigyo Nenkin Kikin Seido”), the Taxqualified Pension Plans (“Tekikaku-Taishoku-Nenkin Seido”), and the Termination Allowance Plans (“Taishoku Ichijikin Seido”)
as Defined-Benefit Corporate Pension Plans.
In April 2005, MHFG and certain domestic consolidated subsidiaries established Defined-Contribution Pension Plans.
On July 1, 2005, a certain domestic consolidated subsidiary received an approval for an exemption from payments of benefits related to past employee services in respect of the substitutional portion of its pension fund from the Minister of Health,
Labor and Welfare, based on the Law Concerning Defined Benefit Corporate Pension Plans.
In addition, certain domestic consolidated subsidiaries established employee retirement benefit trusts.
(2) Reserve for Employee Retirement Benefits was reconciled as follows:
Millions of yen
2006

At March 31,

Projected Benefit Obligations
Plan Assets

2005

Thousands of U.S. dollars
2006¥ 1,129,260(1,849,534)¥ 1,117,907(1,381,356)

Unfunded Projected Benefit Obligations
Unrecognized Actuarial Differences(720,273)
174,646(263,448)(287,633)(6,131,556)
1,486,733

Net Amounts
Prepaid Pension Cost

(545,627)
584,244(551,082)
588,219(4,644,823)
4,973,562

Reserve for Employee Retirement Benefits¥

38,616¥

37,137$$

9,613,183(15,744,739)

328,739

Notes: 1. The above Projected Benefit Obligations do not include additional retirement benefits paid to employees.
2. The above Projected Benefit Obligations include the amount measured by certain consolidated subsidiaries under the non-actuarial
method.

(3) Breakdown of Retirement Benefit Expenses was as follows:
Millions of yen
2006

For the Fiscal Years ended March 31,

Service Cost
Interest Cost
Expected Return on Plan Assets
Gains on Plan Amendment (Amortization of Prior Service Cost)
Amortization of Unrecognized Actuarial Differences
Amortization of Unrecognized Net Obligation at Date of Initial Applicationof the New Accounting Standard for Employee Retirement Benefits
Other (such as additional retirement benefits)¥

Net Retirement Benefit Expenses
Gains on return of substitutional portion of pension fund related
to past employee services
Net Expenses related to Retirement Benefits

21,936
27,590(50,622)(451)
44,294¥23,97028,282(46,672)(3,430)39,939Thousands of U.S. dollars
2006$

186,745234,874(430,938)(3,842)
377,067—
23,41424,5505,109—
199,325

66,162

71,748563,231(1,216)¥

2005

64,946—¥

71,748(10,352)$

552,879

Notes: 1. The amount of employee contribution to Mizuho Pension Fund is deducted from Service cost.
2. Retirement benefit expenses of some consolidated subsidiaries which adopt the non-actuarial method for calculating projected benefit
obligations are included in Service Cost in full.
3. Other at March 31, 2006 includes adjustment of ¥14,473 million ($123,209 thousand) resulting from a review of the method used to
calculate employee retirement benefits at the beginning of the fiscal year.

121Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements(4) Assumptions used in calculation of the above information were as follows:2006
mainly 2.5%
mainly 3.6%
Straight-line basis
Charged to Income(Loss) in the year
Primarily 10-12 years

Discount Rate
Expected Rate of Return on Plan Assets
Method of Attributing the Projected Benefits to Periods of Service
Prior Service Cost
Amortization of Unrecognized Actuarial Differences
Amortization of Unrecognized Net Obligation at Date of Initial Applicationof the New Accounting Standard for Employee Retirement Benefits—

2005
mainly 2.5%
mainly 3.4%
Straight-line basis
Charged to Income(Loss) in the year
Primarily 10-12 years
Primarily 5 years

22. Reserves under Special Laws
Millions of yen
2006

2005

¥

2,268
83

¥

1,750
83

$

19,315
710

¥

2,352

¥

1,834

$

20,025At March 31,

Reserve for Contingent Liabilities from Securities Transactions
Reserve for Contingent Liabilities from Futures Transactions
Total

Thousands of U.S. dollars
2006

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 balances of the accounts were as follows:
At March 31,

Guarantees
Letters of Credit
Acceptances
Total

Millions of yen
2006

2005

Thousands of U.S. dollars
2006¥ 5,415,858
132,876
8,194¥ 3,837,617
82,8687,690$ 46,104,188
1,131,148
69,759¥ 5,556,929¥ 3,928,176$ 47,305,095

Note: Effective the fiscal year ended March 31, 2006, Acceptances and Guarantees, and Customers' Liabilities for Acceptances and Guarantees
include those of certain domestic banking subsidiaries against bonds held by these subsidiaries.

(2) The principal amounts promised to be indemnified for money trusts and loan trusts, which are entrusted to domestic consolidated trust banking subsidiaries, were ¥1,008,955 million ($8,589,046 thousand) and ¥340,605 million ($2,899,511 thousand) as of March 31, 2006, respectively, and ¥812,747 million and ¥708,684 million as of March 31, 2005, 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 2-4 of the Enforcement Ordinance relating to the Land Revaluation
Law (Government Ordinance No.119 promulgated on March 31, 1998), the revaluation was performed by the method of calculating the value along with reasonable adjustments, such as for the condition of the land.
The income tax on the entire excess of revaluation is included in Deferred Tax Liabilities for Revaluation Reserve for Land, andthe remainder, net of Taxes, is stated as Revaluation Reserve for Land in Shareholders' Equity.
The difference at the consolidated balance sheet date between the total fair value of land for business operation purposes,
which has been revalued in accordance with Article 10 of the above-mentioned law, and the total book value of the land after
such revaluation was ¥186,648 million ($1,588,900 thousand) and ¥222,110 million as of March 31, 2006 and 2005, respectively.

12225. Common Stock and Preferred Stock
Common Stock and Preferred Stock at March 31, 2006 and 2005 were as follows:
Number of shares
As of March 31, 2006
Class of stock

Common Stock
Fourth Series Class IV Preferred Stock
Sixth Series Class VI Preferred Stock
Seventh Series Class VII Preferred Stock
Eleventh Series Class XI Preferred StockThirteenth Series Class XIII Preferred Stock

Authorized

Issued andoutstanding

Per share (Yen)InterimYear-end
cash dividend cash dividend

25,000,000 12,003,995.49
150,000
150,000
150,000
150,000//
1,398,500
943,740
1,500,000
36,690

¥

—
—
—
—
—
—

With
Liquidation Convertible redemption
value
or notor not¥ 4,000 ¥—47,600 2,000,000
42,000 2,000,000//
20,000 1,000,000
30,000 1,000,000

No
No
No
/
Yes
No

No
Yes
Yes
/
No
Yes

Notes: 1.Treasury Stock and stocks held by subsidiaries and affiliates are not excluded. The numbers are as follows:
Common Stock
396 thousand shares
2.The total number of shares of Class XII Preferred Stock, which are authorized to be issued, is 1,500,000.

Number of shares
As of March 31, 2005
Class of stock

Common Stock
Second Series Class II Preferred Stock
Third Series Class III Preferred Stock
Fourth Series Class IV Preferred Stock
Sixth Series Class VI Preferred Stock
Seventh Series Class VII Preferred Stock
Eighth Series Class VIII Preferred Stock
Ninth Series Class IX Preferred Stock
Tenth Series Class X Preferred Stock
Eleventh Series Class XI Preferred Stock
Twelfth Series Class XI Preferred StockThirteenth Series Class XIII Preferred Stock

Authorized

Issued andoutstanding

Per share (Yen)InterimYear-end
cash dividend cash dividend

25,000,000 12,003,995.49
100,000
100,000
100,000
100,000
150,000
150,000
150,000
150,000
125,000
125,000
125,000
125,000
33,00033,000140,000
140,000
943,740
1,398,500—
1,500,000
36,690

¥

—
—
—
—
—
—
—
—
—
—
—
—

With
Liquidation Convertible redemption
value
or notor not¥ 3,500 ¥—8,200 2,000,000
14,000 2,000,000
47,600 2,000,000
42,000 2,000,000
11,000 2,000,000
8,000 2,000,000— 1,250,000
5,380 1,250,000
20,000 1,000,000//
30,000 1,000,000

No
Yes
Yes
No
No
Yes
Yes
Yes
Yes
Yes
/
No

No
No
No
Yes
Yes
Yes
Yes
No
No
No
/
Yes

Notes: 1.Treasury Stock and stocks held by subsidiaries and affiliates are not excluded. The numbers are as follows:
Common Stock
1,158 thousand shares
Preferred Stock
137 thousand shares
2.The total number of shares of Class XII Preferred Stock, which are authorized to be issued, is 1,500,000.

123Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

Holders or registered pledgees of preferred stock are entitled to receive annual dividends, and distribution of residual assets of
MHFG, as set out above as liquidation value per share in priority to holders of common stock but pari passu among themselves.
MHFG may pay up to one-half of the annual dividend payable on each class of preferred stock as an interim dividend. Dividends
on the preferred stock are not cumulative. Holders of preferred stock are not entitled to vote at a general meeting of shareholders
except where the articles of incorporation entitle holders of preferred stock to vote.
Class IV Preferred Stock, Class VI Preferred Stock, and Class XIII Preferred Stock are callable (in full or in part) at the option of
the issuer after August 1, 2004, April 1, 2004, and April 1, 2013, respectively. Call prices are the sum of the liquidation value pershare and the accrued dividend for each class of preferred stock. Accrued dividend is calculated on a daily basis starting on thefirst day of the fiscal period in which the call date belongs and ending on the call date. If an interim dividend is paid during that
fiscal period, the amount of this interim dividend will be subtracted from the accrued dividend.

Class XI Preferred Stock is convertible into common stock at the option of the holder. Material terms and conditions of conversion are as follows:
Eleventh Series ClassXI Preferred Stock

Conversion period*1

Conversion ratio*2

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 stock 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 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 the lower of (x) the average price of daily closing prices (including closing
bid or offered price) of common stock 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 and (y) the conversion price effective as of the Reset Date, provided that theconversion price shall not be less than 60% of the initial conversion price or¥50,000.

Notes: 1. If the date to determine the shareholders entitled to exercise their voting rights at a general meeting of the shareholders of MHFG (the “Record Date”) is prescribed, the period from andincluding the date immediately following such Record Date to and including the date on which such general meeting is concluded shall be excluded.
2. Subject to adjustment, where issuance or disposal by MHFG of common stock for a price below the “current market price,” a stock split, issuance of securities convertible into common stock at a
price below the “current market price” at the time of issuance thereof or determination of the conversion price thereof, merger or amalgamation, or a capital decrease or stock consolidation
occurs and in certain other circumstances.

Each share of preferred stock which has not been converted as described above by the end of the relevant conversion period
will be converted into common stock on the day following the end of the conversion period on the following terms:
Eleventh Series ClassXI Preferred Stock

Conversion dateConversion ratio

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 stock
as reported by the TSE for the 30 consecutive trading days (excluding trading dayson 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 priceshall not be less than 60% of the initial conversion price or ¥50,000.

* Subject to adjustment, where a stock split or consolidation of share capital occurs.

12426. Interest Income and Interest Expenses
Millions of yen
2006

2005

Thousands of U.S. dollars
2006¥ 1,071,892
456,749
9,981
50,844
260,132
3,819
81,628¥ 1,065,198
290,665
5,082
29,738110,248
3,612
79,869$ 9,124,815
3,888,226
84,973432,827
2,214,460
32,513694,892

1,935,048

1,584,415

16,472,706

273,085
48,208
6,402
383,156
24,274292
23,2582,258
70,04841,418125,969
68,6692,922
154,00312,754
1,033
26,59435
65,29920,702

2,324,725
410,387
54,502
3,261,737
206,6482,486
197,997
19,228596,309352,586

872,403477,983

7,426,605¥ 1,062,645¥ 1,106,432$ 9,046,101

For the Fiscal Years ended March 31,

Interest Income:Loans and Bills Discounted
Securities
Call Loans and Bills Purchased
Due from Banks
Receivables under Resale Agreements
Guarantee Deposits Paid under Securities Borrowing Transactions
Other Interest Income
Total
Interest Expenses:
Deposits
Debentures
Call Money and Bills Sold
Payables under Repurchase Agreements
Guarantee Deposits Received under Securities Lending Transactions
Commercial Paper
Borrowed Money
Short-term Bonds
Bonds and Notes
Other Interest Expenses
Total
Net

27. Trading Income and Trading Expenses
Millions of yen
2006

For the Fiscal Years ended March 31,

Trading Income:Net Gains on Trading Securities
Net Gains on Derivatives for Trading Transactions

¥

Total
Trading Expenses:
Net Losses on Trading Securities
Total
Net

¥

2005

Thousands of U.S. dollars
2006

101,965
63,094$ 1,272,556
523,902

211,029

165,059

1,796,458

6,088

—

51,8306,088—

51,830¥165,059$ 1,744,628

Millions of yen
2006

2005

Thousands of U.S. dollars
2006

149,487
61,542204,941¥

28. Other Operating Income
For the Fiscal Years ended March 31,

Gains on Foreign Exchange Transactions
Gains on Sales of Bonds
Other
Total

¥

220,788
70,81862,874¥

157,858
99,86083,786$ 1,879,534
602,869
535,235¥

354,481¥341,506$ 3,017,638

125

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

29. Other Operating Expenses
Millions of yen
2006

For the Fiscal Years ended March 31,

Losses on Sales of Bonds
Losses on Devaluation of Bonds
Expenses on Derivatives other than for Trading or Hedging
Amortization of Debenture Issuance Costs
Other
Total

2005

Thousands of U.S. dollars
2006¥

104,92975,866
15,587
164
57,861¥

66,462
1,337
26,530242
61,207$893,246645,834
132,691
1,400
492,561¥

254,408¥

155,781$

2,165,732

30. Other Income
For the Fiscal Year ended March 31, 2006

Gains on sales of stockReversal of reserve for possible losses on loans
Gains on disposition of investments in subsidiaries
Gains on disposition of premises and equipment
Recovery on written-off loans
Gains on return of substitutional portion of pension fund related to past employee services
Reversal of reserve for contingent liabilities from future transactions
Other
Total

For the Fiscal Year ended March 31, 2005

Gains on sales of stockReversal of reserves for possible losses on loans
Reversal of reserve for contingencies (Note)
Interest on the refund of provisional tax payments (Note)
Gains on disposition of premises and equipment
Recovery on written-off loans
Other
Total

Millions of yen
2006

Thousands of U.S. dollars
2006¥

230,470
142,249
42,43722,153
5,342
1,216
0
58,343$

1,961,954
1,210,940
361,259
188,589
45,477
10,352
0496,670¥

502,212$4,275,241

Millions of yen
2005

Thousands of U.S. dollars
2005¥

276,772
143,215
131,159
102,105
29,501
7,054
45,488$2,576,787
1,333,351
1,221,113
950,616
274,666
65,675423,504¥

735,297$

6,845,712

Note: Resulting from a ruling by the Supreme Court in favor of the petition of a certain domestic subsidiary for rescission of a correction notice fromthe Tokyo Regional Taxation Bureau.

12631. Other Expenses
For the Fiscal Year ended March 31, 2006

Losses on sales of bonds related to Japanese Government Bonds etc.,
resulting from revisions of the bond portfolio strategies
Loss resulting from the placement of an erroneous order by a certain domestic securities subsidiary
Write-offs of loans
Provision for reserve for contingencies
Losses on devaluation of stocks
Losses on impairment of fixed assets
Loss on a decline in the value in use of software used at domestic trust
banking subsidiaries as a result of revising system strategies (Note)
Losses on disposition of premises and equipment
Adjustment resulting from a review of the method used to calculate
employee retirement benefits at the beginning of the fiscal year

Millions of yen
2006¥

Provision for reserve for contingent liabilities from securities transactions
Other
Total

¥

85,305

Thousands of U.S. dollars
2006$

726,187

40,73937,18735,45929,93622,360346,812316,574
301,861
254,841
190,352

18,996

161,712

18,429156,889

14,473

123,209543
125,833

4,625
1,071,197

429,265$3,654,259

Note: The losses of domestic trust banking subsidiaries were incurred from an appropriate reduction in the amount of software assets booked onreconsideration of possible significant declines in their value in use arising from a shorter-than-estimated useful life. The reduction was madefor long-term use software relevant to the operating of the domestic trust banking subsidiaries, in the process of revision and reorganizationof system development and operating systems among consolidated group companies aiming to ensure mobility in system strategies,
reflecting a faster trend in the timing of abolition and replacement than originally planned at initial development because of noticeablechanges in the operating environment, system technology and system usage environment in the current trust banking sector.

For the Fiscal Year ended March 31, 2005

Write-offs of loans
Impairment of fixed assets
Write-offs of deferred hedge losses
Losses on sales of loans
Valuation losses on investments in subsidiaries
Expenses on IT system integration and losses on disposal of software
Losses on devaluation of stock
Amortization of unrecognized net obligation at date of initial applicationof the new accounting standard for employee retirement benefits
Losses on disposition of premises and equipment
Effect of applying the fair-value hedge method
Other
Total

Millions of yen
2005

¥

¥

161,461
67,14367,08961,921
59,66655,50948,752Thousands of U.S. dollars
2005$

1,503,226
625,112624,610576,498
555,505
516,798
453,895

24,550228,570

24,167
14,412
109,313225,000
134,1811,017,726

693,989$

6,461,121127

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

32. Losses on Impairment of Fixed Assets
The differences between the recoverable amount and the book value of the following assets were recognized as Losses on
Impairment of Fixed Assets:
For the Fiscal Year ended March 31, 2006
Area
Principal purpose of use

Tokyo
Metropolitan Area
Other

Branch premises to be closed
Idle assets
Assets to be disposed of
Branch premises to be closed
Idle assets
Assets to be disposed ofType

Millions of yen

12 branches
85 items

Land and premises, etc.

¥

9 branches
105 items

Land and premises, etc.

For the Fiscal Year ended March 31, 2005
Area
Principal purpose of use

Tokyo
Metropolitan Area
Other

Branch premises to be closed
Idle assets
Assets to be disposed of
Branch premises
Branch premises to be closed
Idle assets

40 branches
108 items
1 branch
5 branches
118 items

11,387

Thousands of U.S. dollars$

96,93910,973

93,413Type

Millions of yen

Thousands of U.S. dollars

Land and premises, etc.

¥

Land and premises, etc.

44,09623,047$

410,540

214,572

33. Cash Flows
Cash and Cash Equivalents on the consolidated statements of cash flows reconciles to Cash and Due from Banks on the consolidated balance sheets as follows:
At March 31,

Cash and Due from Banks
Less: Due from Banks excluding due from Central Banks
Cash and Cash Equivalents

128

Millions of yen
2006

2005

Thousands of U.S. dollars
2006¥ 5,016,216(1,628,286)¥ 6,808,965(1,206,902)$ 42,702,105(13,861,301)¥ 3,387,929¥ 5,602,062$ 28,840,804

34. 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

2006
OthersAcquisition Cost Equivalents
Accumulated Depreciation Equivalents¥

51,953(33,329)¥

Book Value Equivalents¥

18,624¥

Total

2,697 ¥ 54,650(1,949)(35,278)
747 ¥

19,371Equipment

2005
OthersTotal¥

52,375(29,826)¥

3,353 ¥ 55,729(2,251)(32,078)¥

22,548¥

1,101 ¥

23,650Thousands of U.S. dollars

At March 31,

Equipment

2006
Others

Total

Acquisition Cost Equivalents
Accumulated Depreciation Equivalents$ 442,273(283,728)$ 22,959 $ 465,232(16,595) (300,323)

Book Value Equivalents$ 158,545$

6,364 $ 164,909

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
2006

At March 31,

Due in One Year or Less
Due after One Year
Total

2005

Thousands of U.S. dollars
2006

¥

9,166
20,933¥

10,01923,665$78,031
178,207¥30,100¥33,684$ 256,238

Lease expense, depreciation equivalents and interest expense equivalents relating to finance leases accounted for as operatingleases amounted to ¥11,507 million ($97,959 thousand), ¥11,482 million ($97,752 thousand), and ¥989 million ($8,427 thousand), respectively for the fiscal year ended March 31, 2006, and ¥15,503 million, ¥15,297 million, and ¥1,209 million, respectively, for the fiscal year ended March 31, 2005.
Notes: 1. The computing method for the amount of depreciation equivalents is as follows:
Depreciation equivalents are calculated by the declining-balance method, computed by multiplying the amounts by 10/9, which itself iscomputed assuming that the useful life is the lease term and that the residual value at the end of the lease term is 10% of the acquisitioncost.
2. The computing method for the amount of interest expenses equivalents is as follows:
The amounts are defined as the difference between total lease payments and acquisition cost equivalents, which are allocated over thelease term by the interest method.

Operating Leases
The future lease payments subsequent to the end of the fiscal year for operating lease transactions were summarized as follows:
Lessees:Millions of yen
2006

At March 31,

Due in One Year or Less
Due after One Year
Total

¥

34,465
148,193¥ 182,659

2005¥

25,313
135,669

Thousands of U.S. dollars
2006$

293,398
1,261,546¥ 160,983$ 1,554,944

2005

Thousands of U.S. dollars
2006

Lessors:
Millions of yen
2006

At March 31,

Due in One Year or Less
Due after One Year
Total

¥

1,297
6,144

¥

—
—

$

11,04452,308

¥

7,441

¥

—

$

63,352129

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

35. Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities consisted of the following:
Millions of yen
2006

2005

Thousands of U.S. dollars
2006¥ 1,823,707
343,742
402,547
222,352
328,244¥ 1,920,951
1,007,619
580,593
218,536
287,145$ 15,524,878
2,926,214
3,426,810
1,892,844
2,794,281

3,120,593(1,652,098)

4,014,846(2,354,894)

26,565,027(14,064,002)¥ 1,468,495¥ 1,659,951$ 12,501,025¥(219,091)(872,696)(80,982)¥(221,835)(377,963)(57,262)$ (1,865,084)(7,429,102)(689,391)¥ (1,172,770)¥(657,061)$ (9,983,577)¥¥ 1,002,890

At March 31,

Deferred Tax Assets:
Tax Losses Carried Forward
Devaluation of Securities
Reserves for Possible Losses on Loans
Securities Contributed to Employee Retirement Benefit Trust
Other
Deferred Tax Assets Subtotal:
Valuation Allowance
Total
Deferred Tax Liabilities:
Prepaid Pension Cost
Net Unrealized Gains on Other Securities
Other
Total
Net Deferred Tax Assets

295,724$

2,517,448

Balances reported on the Consolidated Balance Sheets:
Millions of yen
2006

At March 31,

2005

Thousands of U.S. dollars
2006

Deferred Tax Assets
Deferred Tax Liabilities¥

423,572(127,847)¥ 1,036,907(34,016)$

3,605,790(1,088,342)

Net Deferred Tax Assets¥

295,724¥ 1,002,890$

2,517,448

MHFG and domestic subsidiaries are subject to a number of different income taxes.

For the Fiscal Years ended March 31, 2006 and 2005, the reconciliation of the statutory tax rate of MHFG to the effective income
tax rate was as follows.

130

For the Fiscal Year ended March 31, 2006

2006

Statutory tax rate
Adjustment
Reversal of temporary differences related to investments in financial subsidiaries for corporate revitalization due to mergers
Change in valuation allowance
Permanent differences (e.g. cash dividends received)
Other

40.69)%
70.91(74.38)(12.18)0.37

Effective income tax rate

25.41)%For the Fiscal Year ended March 31, 2005

2005

Statutory tax rate
Adjustments
Effect of a ruling in favor of the petition for rescission of a correction notice from the Tokyo Regional Taxation Bureau
Changes in valuation allowance
Permanent differences (e.g. cash dividends received)
Other

40.69)%

Effective income tax rate

27.04)%(6.27)(4.99)(1.59)(0.78)

36. Segment Information(1) Segment Information by Type of Business
Segment information by type of business at March 31, 2006 and 2005 and for the fiscal years ended March 31, 2006 and 2005
was as follows:
Millions of yen

2006
Type of Business

Ordinary Income Inter-segmentfrom Outside
Ordinary
Customers
IncomeOrdinary
IncomeOrdinary
Expenses

Ordinary
Profits

Banking Business ¥ 2,813,124 ¥ 24,379 ¥ 2,837,503 ¥ 2,121,573 ¥ 715,930
Securities Business
558,830
48,741
607,572
438,404
169,167
Other
185,594
115,480
301,075
258,50242,572
Total
Elimination

3,557,549—

Consolidated
Results¥ 3,557,549 ¥

188,600(188,600)

3,746,150(188,600)

2,818,479(181,999)

927,670(6,601)— ¥ 3,557,549 ¥ 2,636,480 ¥ 921,069

Losses on
Depreciation Impairment of
Total Assets
Expense Fixed Assets¥ 132,767,641 ¥
19,998,986
1,160,564
153,927,192(4,314,398)

CapitalExpenditure

99,927 ¥ 21,725 ¥ 154,988
9,134
390
11,302
10,355244
13,479119,417—

22,360—179,770—¥ 149,612,794 ¥ 119,417 ¥ 22,360 ¥ 179,770
Millions of yen

2005
Type of Business

Ordinary Income Inter-segmentfrom Outside
Ordinary
Customers
IncomeOrdinary
IncomeOrdinary
Expenses

Ordinary
Profits

Banking Business ¥ 2,509,411 ¥ 13,452 ¥ 2,522,864 ¥ 2,031,898 ¥ 490,965
Securities Business
344,439
27,139371,578
264,333
107,245
Other
185,334
106,538
291,872
228,229
63,643
Total
Elimination

3,039,186—

Consolidated
Results¥ 3,039,186 ¥

147,129(147,129)

3,186,315(147,129)

2,524,461(142,734)

661,854(4,394)— ¥ 3,039,186 ¥ 2,381,726 ¥ 657,459

Losses on
Depreciation Impairment of
Total Assets
Expense Fixed Assets

CapitalExpenditure¥ 126,488,096 ¥ 111,499 ¥ 64,895 ¥ 202,937
18,453,700
8,775
2,135
12,783
1,243,822
9,291
112
10,871
146,185,618(3,109,382)

129,567—

67,143—

226,592—¥ 143,076,236 ¥ 129,567 ¥ 67,143 ¥ 226,592
Thousands of U.S. dollars

2006Type of Business

Ordinary Income Inter-segmentfrom Outside
Ordinary
Customers
IncomeOrdinary
IncomeOrdinary
Expenses

Ordinary
Profits

Losses on
Depreciation Impairment of
Total Assets
Expense Fixed Assets

CapitalExpenditure

Banking Business $23,947,599 $ 207,535 $24,155,134 $18,060,555 $6,094,579
Securities Business 4,757,220
414,928 5,172,148 3,732,054 1,440,094
Other
1,579,934
983,061 2,562,995 2,200,580
362,415$1,130,225,942 $ 850,664 $ 184,943 $1,319,391
170,247,611
77,757
3,324
96,216
9,879,664
88,158
2,085
114,746

Total
Elimination

1,310,353,217 1,016,579(36,727,659)—

30,284,753 1,605,524 31,890,277 23,993,189 7,897,088— (1,605,524) (1,605,524) (1,549,326)(56,198)

Consolidated
Results$30,284,753 $— $30,284,753 $22,443,863 $7,840,890

190,352 1,530,353——$1,273,625,558 $1,016,579 $ 190,352 $1,530,353

Notes: 1. Ordinary Income represents Total Income less certain special income, and Ordinary Expenses represent Total Expenses less certain special
expenses.
2. Ordinary Profits represent Ordinary Income less Ordinary Expenses.
3. Major components of type of business are as follows:(1) Banking Business; banking and trust banking business(2) Securities Business; securities business(3) Others; investment advisory business and other131

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements(2) Segment Information by Geographic Area
Segment information by geographic area at March 31, 2006 and 2005 and for the fiscal years ended March 31, 2006 and 2005
was as follows:
Millions of yen

2006
Geographic Area

Ordinary Income
from Outside
Customers

Inter-segment
Ordinary
IncomeJapan
Americas
EuropeAsia / Oceania excluding Japan¥ 2,724,307
413,195
314,021106,025¥

Total
Elimination
Consolidated Results

3,557,549—

Ordinary
IncomeOrdinary
Expenses

Ordinary
Profits

Total Assets

52,129118,943
59,18340,604¥ 2,776,437
532,139373,205
146,629¥ 2,014,512 ¥
451,753
293,742
113,076

761,925
80,38579,46233,552¥ 134,979,559
13,610,516
10,587,137
5,790,487

270,861(270,861)

3,828,411(270,861)

2,873,084(236,603)

955,326(34,257)

164,967,701(15,354,907)—¥ 3,557,549¥ 2,636,480 ¥

921,069¥ 149,612,794¥ 3,557,549¥

2005
Geographic Area

Ordinary Income
from Outside
Customers

Inter-segment
Ordinary
IncomeJapan
Americas
EuropeAsia / Oceania excluding Japan¥ 2,591,325
197,894
177,01272,952¥Millions of yen

Total
Elimination
Consolidated Results

3,039,186—

Ordinary
IncomeOrdinary
Expenses

Ordinary
Profits

Total Assets

46,268
115,641
19,296
11,724¥ 2,637,593
313,536
196,308
84,677¥ 2,048,630 ¥
246,115
181,478
64,577588,963
67,42014,83020,099¥ 132,776,520
12,391,021
6,916,115
4,501,289

192,930(192,930)

3,232,116(192,930)

2,540,802(159,076)

691,313(33,853)

156,584,945(13,508,709)—¥ 3,039,186¥ 2,381,726 ¥

657,459¥ 143,076,236¥ 3,039,186¥

Ordinary Income
from Outside
Customers

Inter-segment
Ordinary
IncomeThousands of U.S. dollars

2006
Geographic Area

Japan
Americas
EuropeAsia / Oceania excluding Japan
Total
Elimination
Consolidated Results$ 23,191,519
3,517,455
2,673,208
902,571
30,284,753—$ 30,284,753$

Ordinary
Income443,773
1,012,546
503,817345,655$ 23,635,292
4,530,001
3,177,025
1,248,226

2,305,791(2,305,791)

32,590,544(2,305,791)$—$ 30,284,753

Ordinary
Expenses

Ordinary
Profits

Total Assets$ 17,149,165 $ 6,486,127
3,845,692
684,3092,500,572
676,453
962,596285,630$1,149,055,585
115,863,767
90,126,312
49,293,331

24,458,025(2,014,162)

8,132,519(291,629)

1,404,338,995(130,713,437)$ 22,443,863 $ 7,840,890$1,273,625,558

Notes: 1. Ordinary Income represents Total Income less certain special income, and Ordinary Expenses represent Total Expenses less certain special
expenses.
2. Ordinary Profits represent Ordinary Income less Ordinary Expenses.
3. Geographic analyses are presented based on geographic contiguity, similarities in economic activities, and relation of business operations.
4. Americas includes the United States of America and Canada. Europe includes the United Kingdom. Asia / Oceania includes Hong Kong andthe Republic of Singapore.

132

(3) Ordinary Income from Overseas Entities
Ordinary Income from Overseas Entities for the fiscal years ended March 31, 2006 and 2005 consisted of the following:
Millions of yen
2006

For the Fiscal Years ended March 31,

Ordinary Income of Overseas Entities
Total Ordinary Income
Ordinary Income of Overseas Entities' Ratio¥

833,2423,557,549
23.4%

¥

2005

Thousands of U.S. dollars
2006

447,860
3,039,186$ 7,093,234
30,284,753

14.7%

/

Notes: 1. Ordinary Income of overseas entities represents Ordinary Income recorded by overseas branches of MHCB and otheroverseas subsidiaries
excluding Inter-segment Ordinary Income.
2. Segment information on Ordinary Income from overseas entities is not presented as no such information is compiled.

37. Subsequent Events
Appropriation of Retained Earnings
The following Appropriation of Retained Earnings was approved at the ordinary general meeting of shareholders held on June 27,
2006.
Cash Dividends:
Fourth Series Class IV Preferred Stock
Sixth Series Class VI Preferred Stock
Eleventh Series Class XI Preferred StockThirteenth Series Class XIII Preferred Stock
Common Stock¥ 47,600 per Share¥ 42,000 per Share¥ 20,000 per Share¥ 30,000 per Share¥ 4,000 per Share

Millions of yen

Thousands of U.S. dollars

7,140
6,300
18,874
1,100
48,00560,781
53,631
160,678
9,370
408,662

133

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

38. Fair Value of Securities and Money Held in Trust
The following tables contain information relating to “Securities,” Trading Securities, Securities Held to Hedge Trading
Transactions, Negotiable Certificates of Deposit, Commercial Paper and other in “Trading Assets,” Negotiable Certificates of
Deposit in “Cash and Due from Banks,” certain “Other Debt Purchased,” certain “Other Assets,”and “Money Held in Trust.”
Millions of yen

At March 31, 2006

Bonds Held-to-Maturity:
Japanese Government Bonds
Japanese Local Government Bonds
Other
Other Securities*2:
Stocks*3
Bonds:
Japanese Government Bonds
Japanese Local Government Bonds
Japanese Short-term Bonds
Japanese Corporate Bonds
Other
Money Held in Trust
Other Money Held in Trust

Gross unrealized
Gains

Acquisition cost¥

1,536,148
1,168,205
51,435316,508
30,285,281
2,991,184
20,369,983
19,546,824
120,980
5,383
696,795
6,924,113

¥

584

96
96
—
—
2,575,989*4
2,492,771
1,166
280
479
0
406
82,050¥—Losses

15,767
4,510
354
10,902426,256*4
30,391
261,790
250,683
2,494
0
8,613
134,074

Fair value¥—

1,520,477
1,163,791
51,081
305,605
32,435,013
5,453,564
20,109,359
19,296,422
118,965
5,383
688,5886,872,089
584
Millions of yen

At March 31, 2005

Bonds Held-to-Maturity:
Japanese Government Bonds
Japanese Local Government Bonds
Other
Other Securities*2:
Stocks*3
Bonds:
Japanese Government Bonds
Japanese Local Government Bonds
Japanese Short-term Bonds
Japanese Corporate Bonds
Other
Money Held in Trust
Other Money Held in Trust

134

Gross unrealized
Gains

Acquisition cost¥

1,459,567
1,117,495
52,911
289,159
30,554,509
3,087,917
22,170,287
21,615,580
89,433
2,999
462,273
5,296,303
169

¥

7,192
6,622
570
—
1,232,628*4
1,174,385
15,873
9,891
2,144
—
3,837
42,369—¥Losses

5,954
—
—
5,954
235,927*4
64,78092,092
91,131354
0606
79,054—

Fair value¥

1,460,805
1,124,118
53,482283,204
31,551,210
4,197,523
22,094,068
21,534,341
91,222
2,999
465,505
5,259,618
169

Thousands of U.S. dollars

At March 31, 2006

Bonds Held-to-Maturity:
Japanese Government Bonds
Japanese Local Government Bonds
Other
Other Securities*2:
Stocks*3
Bonds:
Japanese Government Bonds
Japanese Local Government Bonds
Japanese Short-term Bonds
Japanese Corporate Bonds
Other
Money Held in Trust
Other Money Held in Trust

Gross unrealized
Gains

Acquisition cost$

13,076,947
9,944,713
437,8592,694,375
257,812,904
25,463,394
173,405,838
166,398,442
1,029,884
45,8255,931,687
58,943,672
4,977

$

821
821
—
—
21,928,910*4
21,220,496
9,930
2,384
4,083
3
3,460
698,484$

Losses134,227
38,4003,014
92,8133,628,645*4
258,7212,228,575
2,134,017
21,233
1
73,324
1,141,349—

Fair value$—

12,943,541
9,907,134
434,845
2,601,562
276,113,169
46,425,169
171,187,193
164,266,809
1,012,734
45,827
5,861,823
58,500,807
4,977*1 A summary of Trading Securities and Money Held in Trust for investment purposes and related unrealized gains and losses is as follows:

Fair value

Millions of yen
2006
Unrealized
gains (losses)
Fair value

2005
Unrealized
gains (losses)

Trading Securities¥ 7,988,427
Money Held in Trust for Investment Purposes
49,313¥ (33,323) ¥ 8,829,136
310
28,509¥ 23,528—

At March 31,

Thousands of U.S. dollars
2006
Unrealized
Fair value
gains (losses)$ 68,003,982
419,795$ (283,673)
2,643*2 In addition to the balances shown in the above table, Other Securities included securities without fair values such as unlisted stock of ¥807,804 million ($6,876,690 thousand) and ¥814,761 million
and non-publicly offered bonds of ¥2,018,703 million ($17,184,839 thousand) and ¥1,617,364 million as of March 31, 2006 and 2005, respectively.
*3 Fair value of Stocks is determined based on the average quoted market prices over the month preceding the consolidated balance sheet dates.
*4 Unrealized Gains (Losses) include ¥(51,680) million ($(439,948) thousand) and ¥54,074 million which was recognized in the income statements for the fiscal years ended March 31, 2006 and 2005,
respectively, by applying the fair-value hedge method and other.

135

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

Projected Redemption Amounts for Bonds Held to Maturity and Other Securities with Maturity
Millions of yen

At March 31, 2006

Bonds:
Japanese Government Bonds
Japanese Local Government Bonds
Japanese Short-term Bonds
Japanese Corporate Bonds
Other
Total

Within 1 year

1–5 years

5–10 years

Over 10 years¥ 10,842,092
10,538,741
3,575
5,383
294,391
631,850¥

7,796,580
5,924,665
95,301—
1,776,613
3,134,752¥

3,182,434
2,727,372
68,364—
386,697
1,429,072¥

1,526,595
1,273,847
8,781—
243,966
3,055,132¥ 11,473,942¥ 10,931,332¥

4,611,507¥

4,581,728

Within 1 year

1–5 years

Millions of yen

At March 31, 2005

Bonds:
Japanese Government Bonds
Japanese Local Government Bonds
Japanese Short-term Bonds
Japanese Corporate Bonds
Other
Total

5–10 years

Over 10 years¥ 13,547,124
13,283,905
2,258
2,999
257,961
588,578¥

6,479,224
4,984,641
97,401—
1,397,181
2,480,708¥

3,913,699
3,596,479
41,327—
275,893
820,550¥

921,792
786,810
10,079—124,901
1,868,267¥ 14,135,702¥

8,959,933¥

4,734,250¥

2,790,059

Thousands of U.S. dollars

At March 31, 2006

Bonds:
Japanese Government Bonds
Japanese Local Government Bonds
Japanese Short-term Bonds
Japanese Corporate Bonds
Other
Total

136

Within 1 year

1–5 years

5–10 years

Over 10 years$ 92,296,690
89,714,326
30,43945,8272,506,098
5,378,822$ 66,370,826
50,435,561
811,285—
15,123,980
26,685,554$ 27,091,470
23,217,610
581,977—
3,291,883
12,165,426$ 12,995,618
10,844,025
74,753—
2,076,840
26,007,772$ 97,675,512$ 93,056,380$ 39,256,896$ 39,003,390

Other Securities Sold during the Fiscal Year
Millions of yen

Proceeds
from sales

For the Fiscal Years ended March 31,

Other Securities

2006
Total amountof gains
on sales¥ 30,689,458 ¥Total amountof losses
on salesProceeds
from sales

2005
Total amountof gains
on sales291,439 ¥ 176,343¥ 34,932,326¥ 354,893

Total amountof losses
on sales¥

53,044

Thousands of U.S. dollars

Proceeds
from sales

For the Fiscal Year ended March 31,

Other Securities

2006
Total amountof gains
on salesTotal amountof losses
on sales$261,253,585 $ 2,480,967 $1,501,181

Net Unrealized Gains on Other Securities
Net Unrealized Gains on Other Securities as of March 31, 2006 and 2005 are as follows:
2005

Thousands of U.S. dollars
2006¥ 2,201,971
2,201,971—¥ 943,023
943,023—$ 18,744,965
18,744,965—

Deferred Tax Assets
Deferred Tax Liabilities
Difference between acquisition cost and fair value, net of Taxes

509
873,225
1,329,255

144
377,837
565,329

4,338
7,433,601
11,315,702

Amount corresponding to Minority Interests
Amount corresponding to Net Unrealized Gains on Other Securities
owned by affiliated companies, which corresponds to theshareholdings of their investor companies
Net Unrealized Gains on Other Securities, net of Taxes

55,60829,532

473,388

5,570

2,230

47,418¥ 1,279,216¥ 538,027$ 10,889,732

At March 31,

Difference between acquisition cost and fair value
Other Securities
Other Money Held in Trust

Millions of yen
2006

Note: Difference between acquisition cost and fair value excludes ¥(51,680) million ($(439,948) thousand) and ¥54,074 million which wasrecognized in the income statements for the fiscal years ended March 31, 2006 and 2005, respectively, by applying the fair-value hedge
method and other, and includes translation differences regarding securities which do not have readily determinable fair value.

137

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

39. Derivatives Information(1) Risk Control for Derivatives(a) Details of Derivative Financial Products
MHFG and its consolidated subsidiaries (the “group”) transact primarily in the following derivative financial products:(i) Interest rate-related products
Swaps, interest rate guarantees (FRA options), futures, futures options, and options(ii) Currency-related products
Futures, futures options, options, swaps, and forward trading(iii) Stock-related products
Index futures, index futures options, and over-the-counter options(iv) Bond-related products
Futures, futures options, and over-the-counter options(v) Other products
Credit derivatives, commodity derivatives, weather derivatives, etc.
(b) Purposes of Using Derivative Financial Products
The group uses derivative financial products in response to the diverse needs of customers, to control the risk related to the assets
and liabilities of the group, as part of its asset and liability management (“ALM”), and for trading purposes.
To control the risk related to assets and liabilities, the group primarily utilizes portfolio-hedges, grouping numerous financial
assets and liabilities, such as loans and deposits with similar interest risk in accordance with risk management policies, using interest rate swaps, etc., as hedging methods for cash-flow hedge or fair value hedge. The group applies hedge accounting to themajority of these products, treating them as deferred hedges. The effectiveness of the hedges is assessed by periodically checking,by regression analysis and other methods, whether the derivative financial products highly reduce the exposure to changes in fairvalue and variable cash flows from hedged items.
(c) Trading Guidelines
In accordance with the purposes for which the group uses derivative financial products, the group deals in derivative financial
products based on the following guidelines:(i) Responding to customer needs
After obtaining an adequate understanding of customer requirements, the group follows a common policy on selling financial
products by recommending the most appropriate financial vehicle for each customer's knowledge, experience and asset position. When actually making a sale, the group endeavors to give full explanations to its customers to ensure that they clearly
understand the nature of each product, the risks involved and other important matters.
(ii) Risk control of assets and liabilities of MHFG (ALM)
MHFG's ALM & Market Risk Committee meets periodically to confirm or revise the trading guidelines for the purposes of
securing stable income while appropriately controlling risk.
(iii) Trading activities
The group engages in trading activities to maximize income under reasonable risk limits and strict management.
(d) Details of Trading-Related Risk
The following are the main risks inherent in derivatives trading.
(i) Credit risk:
The risk of incurring a loss because the counter-parties are unable to fulfill their obligations due to bankruptcy or otherreasons.
(ii) Market risk:
The risk of incurring a loss because the value of the derivative products decreases due to fluctuations in market risk factors
such as interest rates, foreign exchange rates and bond and stock prices.
(iii) Market liquidity risk:
The risk of incurring a loss from the inability to execute transactions in the market and/or execution at unfavorable prices due
to illiquidity of the products.

138

(e) Derivative Trading Risk Control Structure(i) Credit risk management structure
The Board of Directors determines important items concerning credit risk in accordance with the Basic Policy for Credit Risk
Management. MHFG has established the Portfolio Management Committee as one of its business policy committees. This
committee conducts overall deliberation on and adjustment of the group's credit portfolio management procedures. Under
the authority of the Chief Risk Officer, the Risk Management Department and the Credit Risk Management Department
jointly formulate and implement plans for basic matters related to credit risk management.
The amount of credit risk on derivatives trading (credit risk equivalent) calculated into the capital adequacy ratio (BIS Capital
Ratio) was ¥4,038,161 million ($34,376,106 thousand) and ¥3,757,438 million on March 31, 2006 and 2005, respectively.
(ii) Market risk management structure
The Basic Policies for Market and Liquidity Risk Management are determined by the Board of Directors. MHFG's Risk Management Department is responsible for monitoring market risk, reports and analyses, proposals, setting limits, and for formulating
and implementing plans relating to market risk management as a specialized risk management section.
The group has established a solid management structure for market risk including comprehensive management (ALM) ofinterest rate risk and other types of risk. Through this structure, it comprehensively ascertains and manages risk, while managing assets to secure stable income and appropriately controlling risk.
MHFG has established the ALM & Market Risk Committee as one of the business policy committees charged with conducting overall deliberation on and adjustment of market risk management procedures. The committee decides the entire group's
monthly funding and investment policies, discusses and coordinates matters relating to ALM policies, risk planning and market
risk management, and responds to emergencies such as sudden market changes.
In regard to reporting, the Risk Management Department receives the relevant data from the five core subsidiaries, as well
as reports on risk profiles and compliance with risk limits, both on a regular basis and as considered necessary. Based on thesereports, MHFG obtains a solid grasp of the market risk management situation. Reports on the status of market risk and compliance with risk limits are submitted to the President on a daily basis, and to the Board of Directors and the Executive
Management Committee on a regular basis and as considered necessary.
Value at Risk

Value at Risk (VAR) related to MHFG’s trading activities is as follows:(a) The standards used for calculating VAR• Confidence interval: one-tailed 99.0% (two-tailed 98%)
• Holding period: 1 day• Historical observation period: 1 year (265 business days, 264 return)(b) VAR results during the period covered• Maximum: ¥5.5 billion and ¥4.3 billion for the fiscal years ended March 31, 2006 and 2005, respectively• Average: ¥3.2 billion and ¥2.9 billion for the fiscal years ended March 31, 2006 and 2005, respectively
The period covered is from April 1, 2005 to March 31, 2006 and April 1, 2004 to March 31, 2005, respectively.
Note: 1. Value at Risk (VAR) is a method of measuring market risk. It is defined as the maximum possible loss that could be incurred on the portfolio as a result of market movements within a certain
period (holding period) and degree of probability (confidence interval). The actual amount of the VAR may vary according to the length of the holding periods and the confidence interval, as
well as the models used for measuring the volatility of market risk factors.
2. The data related to the common stock position held between December 8, 2005 and December 12, 2005 as a result of an erroneous order with the Tokyo Stock Exchange made by Mizuho
Securities on December 8, 2005 is not included in the VAR shown above.

Credit Risk Equivalent Amounts

Credit risk equivalent amounts at March 31, 2006 and 2005 consisted of the following:
Millions of yen
2006

At March 31,

Interest Rate Swaps
Currency Swaps
Foreign Exchange Forward Transactions
Interest Rate Options (Bought)
Currency Options (Bought)
Other Financial Derivative Products
Effect of Reduction in the Credit Risk Equivalent Amount due toLump-sum Settlement Netting Contracts
Total

¥

8,209,262
951,372
831,380
229,937
825,526
428,122¥(7,437,441)¥

4,038,161¥

2005

Thousands of U.S. dollars
2006

7,898,568
941,238
875,448
186,594
699,510324,214$ 69,883,907
8,098,859
7,077,390
1,957,411
7,027,554
3,644,528(7,168,135)(63,313,543)

3,757,438$ 34,376,106

Note: The above credit risk equivalent amounts are based on the consolidated capital adequacy ratio (BIS Capital Ratio).

139

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements(2) Fair Value of Derivatives
The fair value of derivatives at March 31, 2006 and 2005 is shown in the tables below.
In the following tables:(i) Contract value represents notional amounts for swap transactions and contract amounts for other transactions.
(ii) Fair values of listed contracts are based on the closing prices of the Tokyo Stock Exchange, the Tokyo International Financial
Futures Exchange, the New York Mercantile Exchange and others. Fair values of over-the-counter contracts are based on the
discounted value of future cash flows or option pricing models.
(a) Interest Rate-Related Transactions
Millions of yen

Contract value
Total
Over one year

At March 31, 2006

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

54,455,891
47,856,720¥

13,646,039
12,236,367

Unrealized
gains (losses)

Fair value¥

260,381(259,140)¥

260,381(259,140)

24,989,164
25,033,118

1,118,453
960,151(14,886)
12,602

4,656
2,055

14,971,097
14,151,083

79,98031,510

(637)
933

(637)
933

405,772,439
390,770,702
30,634,398
212,105

273,245,016
265,487,227
18,634,794
145,843

1,208,652(1,240,360)
3,918
1,805

1,208,652(1,240,360)
3,918
1,805

12,288,919
13,660,289

7,734,504
7,399,554(97,928)
103,276(97,928)
103,276

/

/

/

¥

(12,387)
Millions of yen

Contract value
Total
Over one year

At March 31, 2005

Listed:Futures:
Sold
BoughtOptions:
Sold
BoughtOver-the-Counter:
FRAs:
Sold
BoughtSwaps:
Receive Fixed / Pay Float
Receive Float / Pay Fixed
Receive Float / Pay Float
Receive Fixed / Pay Fixed
Options:
Sold
Bought
Total

140

¥

41,771,933
41,457,046¥

9,950,327
9,938,328

Unrealized
gains (losses)

Fair value¥

116,646(116,918)¥

116,646(116,918)

23,351,884
25,241,977

2,292,004
2,169,003(19,778)
18,344

7,273(2,393)

13,261,163
11,505,768

1,252,295
704,297

3,015(3,644)

3,015(3,644)

345,084,379
339,974,536
41,733,275
326,995

238,537,832
238,674,825
26,273,538
254,456

4,543,335(4,577,275)
4,420
1,325

4,543,335(4,577,275)
4,420
1,325

9,487,745
10,292,782

4,725,832
5,224,610(71,809)
79,022(71,795)
78,995///¥(17,015)

Thousands of U.S. dollars

Contract value
Total
Over one year

At March 31, 2006

Listed:Futures:
Sold
BoughtOptions:
Sold
BoughtOver-the-Counter:
FRAs:
Sold
BoughtSwaps:
Receive Fixed / Pay Float
Receive Float / Pay Fixed
Receive Float / Pay Float
Receive Fixed / Pay Fixed
Options:
Sold
Bought$463,572,759
407,395,253$

116,166,170
104,165,892

Unrealized
gains (losses)

Fair value$

2,216,576(2,206,014)$

2,216,576(2,206,014)

212,728,054
213,102,229

9,521,182
8,173,588(126,725)
107,279

39,642
17,499127,446,137
120,465,512

680,858
268,246(5,428)
7,949(5,428)7,949

3,454,264,402
3,326,557,441
260,784,867
1,805,614

2,326,083,395
2,260,042,802
158,634,499
1,241,540

10,289,029(10,558,959)
33,356
15,368

10,289,029(10,558,959)
33,356
15,368104,613,261
116,287,474

65,842,385
62,991,013(833,644)
879,172(833,644)
879,172

/

/

/

Total

$

(105,454)

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the consolidated income
statements.
2. Derivative transactions qualifying for hedge accounting under “Accounting and Auditing Treatment Relating to Adoption of AccountingStandards for Financial Instruments for Banks” (JICPA Industry Audit Committee Report No.24) and others are excluded from the abovetable.

(b) Currency-Related Transactions
Millions of yen

Contract value
Total
Over one year

At March 31, 2006

Listed:Futures:
Sold
BoughtOver-the-Counter:
Swaps
Forwards:
Sold
BoughtOptions:
Sold
BoughtTotal¥

15,81815,680¥——

Unrealized
gains (losses)

Fair value

¥

(0)
0

¥

(0)
0

20,027,237

12,805,106

32,341

343,152

20,575,122
15,791,156

2,093,414
910,037(298,889)
137,014(298,889)
137,0148,204,410
8,097,076

4,950,532
5,061,459(403,904)
316,219

5,992
21,660///¥208,929141

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

Millions of yen

Contract value
Total
Over one year

At March 31, 2005

Listed:Futures:
Sold
Bought¥Over-the-Counter:
Swaps
Forwards:
Sold
BoughtOptions:
Sold
BoughtTotal

12,562
11,026¥——

Unrealized
gains (losses)

Fair value

¥

(27)
21

¥

(27)
21

18,563,080

13,328,073(70,042)

133,032

21,006,320
18,547,388

520,543
829,521(250,992)
310,997(250,992)
310,997

6,799,743
6,834,863

3,576,553
3,956,656(250,946)
311,792

70,731
83,219///¥346,982

Thousands of U.S. dollars

Contract value
Total
Over one year

At March 31, 2006

Listed:Futures:
Sold
BoughtOver-the-Counter:
Swaps
Forwards:
Sold
BoughtOptions:
Sold
BoughtTotal$

134,663
133,488$——

Unrealized
gains (losses)

Fair value

$

(7)
5

$

(7)
5

170,488,107

109,007,458

275,317

2,921,194

175,152,145
134,427,141

17,820,844
7,746,978(2,544,390)
1,166,377(2,544,390)
1,166,377

69,842,600
68,928,887

42,142,948
43,087,254(3,438,362)
2,691,913

51,012
184,390///$ 1,778,581

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the consolidated income
statements.
2. The following transactions are excluded from the above table:•Transactions qualifying for hedge accounting under “Accounting and Auditing Treatment Relating to Adoption of Accounting Standards
for Foreign Currency Transactions for Banks“ (JICPA Industry Audit Committee Report No.25) and others.
•Transactions which are specified for certain financial assets and liabilities denominated in foreign currencies and reflected on the
consolidated balance sheets.
•Transactions denominated in foreign currencies which are eliminated in consolidation.

142

(c) Stock-Related Transactions
Millions of yen

2006

At March 31,

Listed:Index Futures:
Sold
BoughtIndex Futures Options:
Sold
BoughtOver-the-Counter:
Options:
Sold
BoughtOther:
Sold
BoughtTotal

Contract value
Over
Total
one year¥ 493,341
11,019

¥

2005
Fair
Unrealized
value gains (losses)

Contract value
Over
Total
one year— ¥ (15,004) ¥ (15,004) ¥ 300,579
—
584
584
24,329¥Fair
Unrealized
value gains (losses)— ¥—1,551 ¥
171

1,551
171

27,52034,143

—
2,456

(216)
2,814

114
(114)

31,77063,548

—
—

(791)
602

(53)
(221)

488,483
553,742

261,706
312,035(91,931)
99,443(54,140)
63,299839,516
809,493

251,126
239,666(36,457)
34,671(2,973)
2,648—
71,668—71,668

—
(36)

—
(36)

3,314
49,927—47,453

541
648

541
648

/

/

(5,297)

/

/

/ ¥

/ ¥

2,311

Thousands of U.S. dollars

2006

At March 31,

Listed:Index Futures:
Sold
BoughtIndex Futures Options:
Sold
BoughtOver-the-Counter:
Options:
Sold
BoughtOther:
Sold
BoughtTotal

Contract value
Over
Total
one year$4,199,719
93,810234,273
290,658$

Fair
Unrealized
value gains (losses)— $(127,733) $(127,733)
—
4,979
4,979
—
20,908(1,839)23,959975(974)

4,158,365 2,227,859
4,713,903 2,656,301(782,599)
846,540(460,884)
538,853

—
(309)

—
(309)

—
610,103—
610,103/// $ (45,093)

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the consolidated income
statements.
2. Derivative transactions qualifying for hedge accounting are excluded from the above table.

143

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements(d) Bond-Related Transactions
Millions of yen

2006

At March 31,

Listed:Futures:
Sold
BoughtFutures Options:
Sold
BoughtOver-the-Counter:
Options:
Sold
BoughtTotal

Contract value
Over
Total
one year¥ 1,704,327
2,061,957¥

2005
Contract value
Fair Unrealized
value gains (losses)——¥ 6,292(6,390)203,226
895,666—
88(1,046)
2,569

102
708

525,294548,580

12,00012,000(2,544)
2,085

/

/

/

Total

¥ 6,292 ¥1,190,833(6,390) 1,393,019¥Over
one year¥

Fair Unrealized
value gains (losses)——¥ (4,009)
173¥ (4,009)
173

235,639
278,628

—
—

(577)
534

55
(339)

(606)
201

758,955
505,173

12,00012,000(2,799)
3,789

(421)
2,207

307

/

/

/

¥ (2,332)

Thousands of U.S. dollars

2006

At March 31,

Listed:Futures:
Sold
BoughtFutures Options:
Sold
BoughtOver-the-Counter:
Options:
Sold
BoughtTotal

Contract value
Over
Total
one year$14,508,621
17,553,053$

Fair
Unrealized
value gains (losses)——$ 53,563(54,405)$ 53,563(54,405)

1,730,026
7,624,644—
755(8,906)
21,870873
6,032

4,471,731
4,669,962

102,154
102,154(21,658)
17,757(5,162)
1,719

/

/

/

$ 2,620

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the consolidated income
statements.
2. Derivative transactions qualifying for hedge accounting are excluded from the above table.

144

(e) Commodity-Related Transactions
Millions of yen

2006
Contract value
Over
Total
one year

At March 31,

Listed:Futures:
Sold
BoughtOver-the-Counter:
Options:
Sold
Bought

2005

¥

Total

11,604 ¥14,084Contract value
Over
Total
one year

Fair
Unrealized
value gains (losses)— ¥86(583) ¥
729

(583)
729

¥

— ¥
—

Fair
Unrealized
value gains (losses)— ¥—431,987
431,408

283,677
280,743(176,537)
187,038(176,537)
187,038

368,593
370,334

229,663
231,501///¥ 10,647

/

/

— ¥
—

(119,674)
127,955——(119,674)
127,955

/ ¥

8,280

Thousands of U.S. dollars

2006
Contract value
Over
Total
one year

At March 31,

Listed:Futures:
Sold
BoughtOver-the-Counter:
Options:
Sold
BoughtTotal$

98,786 $119,896

— $
734

Fair
Unrealized
value gains (losses)(4,963) $ (4,963)
6,211
6,211

3,677,430 2,414,893 (1,502,828) (1,502,828)
3,672,497 2,389,915 1,592,221 1,592,221///$ 90,641

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the consolidated income
statements.
2. Derivative transactions qualifying for hedge accounting are excluded from the above table.
3. Commodities include oil, copper, aluminium and others.

145

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements(f) Credit Derivative Transactions
Millions of yen

2006

2005

Contract value
At March 31,

Over-the-Counter:
Credit Derivatives:
Sold
BoughtTotal

Contract valueOver
one year

Fair Unrealized
value gains (losses)

Total

Over
one year¥ 2,026,709 ¥ 1,843,281 ¥ 11,449 ¥ 11,449 ¥1,057,028 ¥ 825,424
2,181,950 2,075,002
741
741 1,153,468 1,112,025

Total

/

/

/ ¥ 12,191/

Fair Unrealized
value gains (losses)¥

2,296 ¥ 2,296
30,571
30,571// ¥ 32,868

Thousands of U.S. dollars

2006
Contract value
At March 31,

Over-the-Counter:
Credit Derivatives:
Sold
BoughtTotal

Over
one year

Fair
Unrealized
value gains (losses)$17,252,995 $15,691,508 $ 97,470 $ 97,470
18,574,533 17,664,102
6,311
6,311

Total

/

/

/ $ 103,781

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the consolidated income
statements.
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.

(g) Weather Derivative Transactions
Millions of yen

2006

2005

Contract value
At March 31,

Over-the-Counter:
Weather Derivatives:
Sold
Bought
Total

Total

¥

297
232

Contract valueOver
one year

¥

/

—
—

Fair Unrealized
value gains (losses)

¥

/

(34)
36

¥

(34)
36

/

¥

1

Total

¥

502
290
/

Over
one year¥——/

Fair Unrealized
value gains (losses)

¥

(52)
66

¥

(52)
66

/

¥

14

Thousands of U.S. dollars

2006
Contract value
At March 31,

Over-the-Counter:
Weather Derivatives:
Sold
Bought
Total

Total

$ 2,534
1,978
/

Over
one year

$

—
—
/

Fair
Unrealized
value gains (losses)

$

(297)
308

$

(297)
308

/

$

11

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the consolidated income
statements.
2. Transactions are related to temperature and others.

146

Non-Consolidated Financial Statements ofMizuho Financial Group, Inc. and Four
Subsidiaries[Under Japanese GAAP]
Mizuho Financial Group, Inc.
Non-Consolidated Balance Sheets

148

Non-Consolidated Income Statements

149

Mizuho Corporate Bank, Ltd.
Non-Consolidated Balance Sheets

150

Non-Consolidated Income Statements

151

Mizuho Bank, Ltd.
Non-Consolidated Balance Sheets

152

Non-Consolidated Income Statements

153

Mizuho Trust & Banking Co., Ltd.
Non-Consolidated Balance Sheets154

Non-Consolidated Income Statements

155

Mizuho Securities Co., Ltd.
Non-Consolidated Balance Sheets

156

Non-Consolidated Income Statements

158

147

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

Mizuho Financial Group, Inc.

Non-Consolidated Balance Sheets
Millions of yen
2006

At March 31,

AssetsCurrent Assets
Cash and Due from Banks
Other Current Assets
Fixed Assets
Tangible Assets
Intangible Assets
Investments in Subsidiaries and Affiliates
Other Investments
Deferred Assets
Total Assets
Liabilities and Shareholders' Equity
Liabilities
Current Liabilities
Short-term Borrowings
Commercial Paper
Short-term Bonds
Other Current Liabilities
Non-Current Liabilities
Total Liabilities
Shareholders' Equity
Common Stock and Preferred Stock
Capital Surplus
Retained Earnings
Appropriated Reserve
Voluntary Reserve
Unappropriated Retained Earnings
Net Unrealized Gains (Losses) on Other Securities, net of Taxes
Treasury Stock
Total Shareholders' Equity
Total Liabilities and Shareholders' Equity¥

279,234
2,361
276,873
4,513,521
771
4,304
4,505,283
3,162
304

2005

79,7822,601
77,181
3,098,215
925
4,477
3,089,775
3,037
609

$

2,377,075
20,1012,356,974
38,422,760
6,566
36,64238,352,633
26,9192,594¥ 4,793,061¥ 3,178,608$ 40,802,429¥ 2,039,479
965,000—
1,072,000
2,479
1,261

¥

191,247—
152,000—
39,2471,130$ 17,361,704
8,214,863—
9,125,734
21,107
10,7432,040,741

192,378

17,372,447

1,540,965
385,291
827,306
4,350—
822,956
12(1,255)

1,540,965
1,512,942
192,970
4,350
47,662140,957(24)(260,622)

13,117,945
3,279,918
7,042,701
37,031—
7,005,670
105(10,687)

2,752,319

2,986,230

23,429,982¥ 4,793,061¥ 3,178,608$ 40,802,429

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥117.47=US$1.00, the foreign exchange rate on March 31, 2006, has been used for translation.

148¥

Thousands of
U.S. dollars
2006Non-Consolidated Income Statements
Millions of yen
2006

For the Fiscal Years ended March 31,

Operating Income
Cash Dividends Received from Subsidiaries and Affiliates
Fee and Commission Income Received from Subsidiaries and Affiliates¥ 128,990
112,528
16,461Thousands of
U.S. dollars
2006

2005

¥

26,493
13,736
12,757$

1,098,069
957,934
140,135

Operating Expenses
General and Administrative Expenses

13,477
13,477

11,799
11,799114,735
114,735

Operating Profits
Non-operating Income
Non-operating Expenses

115,512683,187
8,466

14,69473,69356,940983,334
5,815,844
72,074

Income before Income Taxes
Income Taxes:
Current
Deferred

790,232

31,447

6,727,104

30
(38)

4
556

261
(329)

Net Income¥ 790,240¥

30,886$

6,727,172

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥117.47=US$1.00, the foreign exchange rate on March 31, 2006, has been used for translation.

149

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

Mizuho Corporate Bank, Ltd.

Non-Consolidated Balance Sheets
2005

Thousands of
U.S. dollars
2006¥ 2,608,394
441,553458,2132,580,438
200,368
2,934,429
6,908
15,929,624
28,263,509
667,800
4,642,734
135,6220—3,706,410(366,272)(1,114)¥ 2,705,567
366,161
560,095
1,905,791
102,848
3,139,093
2,002
16,150,759
24,059,414
580,630
3,371,405
142,4232
357,427
2,893,287(377,911)(6,299)$ 22,204,775
3,758,858
3,900,687
21,966,784
1,705,698
24,980,246
58,809135,605,898
240,601,934
5,684,863
39,522,726
1,154,532
5—
31,551,979(3,118,009)(9,490)¥ 62,208,622¥ 55,952,699$ 529,570,295¥ 26,620,674
4,657,501
8,198,832
4,272,086
2,771,715—
2,202,854
2,517,814
415,621203,400
123,100
3,180,497
2,379
33,557
100,373
27,5693,706,410¥ 23,589,172
5,547,662
7,223,622
3,936,149
2,332,412
210,000
2,108,692
2,356,414
291,520
260,300
123,100
2,557,876
2,271
10,108—29,912
2,893,287$ 226,616,793
39,648,432
69,795,120
36,367,468
23,595,094—
18,752,485
21,433,681
3,538,105
1,731,506
1,047,927
27,074,974
20,253285,666
854,461
234,690
31,551,979

59,034,387

53,472,502

502,548,634

1,070,965
330,334
795,060
5,000
790,060
38,355939,519

1,070,965
258,247
680,757
2,500
678,257
43,691
426,535

9,116,923
2,812,073
6,768,196
42,564
6,725,632
326,515
7,997,954

Millions of yen
2006

At March 31,

AssetsCash and Due from Banks
Call Loans
Receivables under Resale Agreements
Guarantee Deposits Paid under Securities Borrowing Transactions
Other Debt Purchased
Trading Assets
Money Held in Trust
Securities
Loans and Bills Discounted
Foreign Exchange Assets
Other Assets
Premises and Equipment
Deferred Debenture Charges
Deferred Tax Assets
Customers' Liabilities for Acceptances and Guarantees
Reserves for Possible Losses on Loans
Reserve for Possible Losses on Investments
Total Assets
Liabilities and Shareholders' Equity
Liabilities
Deposits
Debentures
Call Money and Bills Sold
Payables under Repurchase Agreements
Guarantee Deposits Received under Securities Lending Transactions
Commercial Paper
Trading Liabilities
Borrowed Money
Foreign Exchange Liabilities
Short-term Bonds
Bonds and Notes
Other Liabilities
Reserve for Bonus Payments
Reserve for Contingencies
Deferred Tax Liabilities
Deferred Tax Liabilities for Revaluation Reserve for Land
Acceptances and Guarantees
Total Liabilities
Shareholders' Equity
Common Stock and Preferred Stock
Capital Surplus
Retained Earnings
Appropriated Reserve
Unappropriated Retained Earnings
Revaluation Reserve for Land, net of Taxes
Net Unrealized Gains on Other Securities, net of Taxes
Total Shareholders' Equity
Total Liabilities and Shareholders' Equity

3,174,234

2,480,196

27,021,661¥ 62,208,622¥ 55,952,699$ 529,570,295

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥117.47=US$1.00, the foreign exchange rate on March 31, 2006, has been used for translation.

150

Non-Consolidated Income Statements
Millions of yen
2006

For the Fiscal Years ended March 31,

Thousands of
U.S. dollars
2006

2005

IncomeInterest Income
Loans and Bills Discounted
Securities
Fee and Commission Income
Trading Income
Other Operating Income
Other Income¥ 1,079,487
445,734
491,337
152,325
40,192
93,843
288,439

Total Income

Income before Income Taxes
Income Taxes:
Current
RefundDeferred
Net Income

705,631359,228
243,088
136,631
15,765131,015
389,709$9,189,471
3,794,452
4,182,668
1,296,722
342,148
798,876
2,455,434

1,654,288

1,378,753

14,082,651

594,734
248,199
45,37732,6806,514
91,799222,452
116,304

349,145
106,485
62,44437,355—51,766
216,879
320,396

5,062,865
2,112,875
386,292
278,200
55,459781,471
1,893,693
990,075

1,064,485

975,544

9,061,763

589,803403,2095,020,888

37—
103,205
486,560

35
21,228128,011296,391322—
878,568
4,141,998

Expenses
Interest Expenses
Deposits
Debentures
Fee and Commission Expenses
Trading Expenses
Other Operating Expenses
General and Administrative Expenses
Other Expenses
Total Expenses

¥

¥

¥

$

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥117.47=US$1.00, the foreign exchange rate on March 31, 2006, has been used for translation.

151

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

Mizuho Bank, Ltd.

Non-Consolidated Balance Sheets
2005

Thousands of
U.S. dollars
2006¥ 3,183,778
2,306,500—
2,070,550
1,553,257
609,371584
20,504,122
34,188,553
128,504
1,925,150
718,859267
369,956
2,834,710(306,951)(83,487)¥ 4,871,986
1,908,200
401,2022,497,765
335,946
783,816169
21,121,490
34,063,135
126,180
1,619,133
780,566300
589,021
1,838,888(347,514)(88,665)$ 27,102,907
19,634,800—
17,626,207
13,222,592
5,187,465
4,977
174,547,737
291,040,718
1,093,933
16,388,444
6,119,519
2,276
3,149,369
24,131,356(2,613,020)(710,714)¥ 70,003,728¥ 70,501,625$ 595,928,566¥ 54,556,847
2,016,614
1,663,800
464,968
2,480,278
311,363
1,260,744
19,949311,600
1,962,745
6,914
629
93,304
2,834,710¥ 56,382,325
2,346,925
2,042,100
202,328
1,997,832
517,939
1,406,757
19,433
159,300
1,653,684
7,008
51
106,072
1,838,888$ 464,432,176
17,167,056
14,163,616
3,958,192
21,114,140
2,650,579
10,732,480
169,824
2,652,592
16,708,487
58,861
5,360
794,286
24,131,355

67,984,470

68,680,647

578,739,004

650,000
762,345
268,529
268,529
132,028
206,353

650,000
762,345
232,471
232,471
155,253
20,906

5,533,328
6,489,707
2,285,940
2,285,940
1,123,935
1,756,652

Millions of yen
2006

At March 31,

AssetsCash and Due from Banks
Call Loans and Bills Purchased
Receivables under Resale Agreements
Guarantee Deposits Paid under Securities Borrowing Transactions
Other Debt Purchased
Trading Assets
Money Held in Trust
Securities
Loans and Bills Discounted
Foreign Exchange Assets
Other Assets
Premises and Equipment
Deferred Debenture Charges
Deferred Tax Assets
Customers' Liabilities for Acceptances and Guarantees
Reserves for Possible Losses on Loans
Reserve for Possible Losses on Investments
Total Assets
Liabilities and Shareholders' Equity
Liabilities
Deposits
Debentures
Call Money and Bills Sold
Payables under Repurchase Agreements
Guarantee Deposits Received under Securities Lending Transactions
Trading Liabilities
Borrowed Money
Foreign Exchange Liabilities
Bonds and Notes
Other Liabilities
Reserve for Bonus Payments
Reserve for Frequent Users Services
Deferred Tax Liabilities for Revaluation Reserve for Land
Acceptances and Guarantees
Total Liabilities
Shareholders' Equity
Common Stock and Preferred Stock
Capital Surplus
Retained Earnings
Unappropriated Retained Earnings
Revaluation Reserve for Land, net of Taxes
Net Unrealized Gains on Other Securities, net of Taxes
Total Shareholders' Equity
Total Liabilities and Shareholders' Equity

2,019,257

1,820,977

17,189,562¥ 70,003,728¥ 70,501,625$ 595,928,566

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥117.47=US$1.00, the foreign exchange rate on March 31, 2006, has been used for translation.

152

Non-Consolidated Income Statements
Millions of yen
2006

For the Fiscal Years ended March 31,

Thousands of
U.S. dollars
2006

2005

IncomeInterest Income
Loans and Bills Discounted
Securities
Fee and Commission Income
Trading Income
Other Operating Income
Other Income¥

Total Income

652,155
499,195
95,170267,778
5,441
200,194
100,273$

5,551,680
4,249,555
810,1712,279,548
46,3201,704,215
853,612

1,153,730

10,435,375

84,63831,184
3,354
51,686
6,669
101,831553,232
212,591

75,42423,493
6,224
53,115568
46,158578,549
290,146

720,515265,465
28,559439,998
56,774
866,8714,709,567
1,809,748

1,010,650

1,043,962

8,603,473

215,193

109,767

1,831,902

519
77,614518
87,1194,419
660,714

Income before Income Taxes
Income Taxes:
Current
Deferred
Net Income

668,085
552,498
65,245234,227
28,267138,135
85,0141,225,843

Expenses
Interest Expenses
Deposits
Debentures
Fee and Commission Expenses
Trading Expenses
Other Operating Expenses
General and Administrative Expenses
Other Expenses
Total Expenses¥¥

137,060¥

22,129$1,166,769

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥117.47=US$1.00, the foreign exchange rate on March 31, 2006, has been used for translation.

153

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

Mizuho Trust & Banking Co., Ltd.

Non-Consolidated Balance Sheets
Millions of yen
2006

At March 31,

AssetsCash and Due from Banks
Call Loans and Bills Purchased
Other Debt Purchased
Trading Assets
Securities
Loans and Bills Discounted
Foreign Exchange Assets
Other Assets
Premises and Equipment
Deferred Tax Assets
Customers' Liabilities for Acceptances and Guarantees
Reserves for Possible Losses on Loans
Total Assets¥

293,321
132,300
251,430
41,744
1,715,086
3,532,645
4,287
193,82240,9885,488
61,191(30,527)¥

Thousands of
U.S. dollars
2006

2005

633,355
100,000
109,363
34,0491,690,770
3,265,381
1,366
157,035
43,874
58,133140,085(36,673)$2,496,989
1,126,245
2,140,382
355,363
14,600,208
30,072,746
36,496
1,649,977
348,925
46,724
520,916(259,876)¥ 6,241,779¥ 6,196,743$ 53,135,095¥ 3,075,481
1,061,143
169,806
45,43137,065
11
161,500
1,124,099
37,954
1,345
10,007
12,01061,191¥ 3,364,789
680,370
214,706
40,381
83,210
6
104,100
1,149,320
37,161
1,278
8,555
—
140,085$ 26,180,992
9,033,312
1,445,529
386,754
315,52895
1,374,819
9,569,251
323,103
11,45485,196102,243
520,916

5,797,049

5,823,966

49,349,192

Common Stock and Preferred Stock247,231247,2312,104,639

Capital Surplus
Retained Earnings
Appropriated Reserve
Unappropriated Retained Earnings
Net Unrealized Gains on Other Securities, net of Taxes
Treasury Stock

15,371
75,6383,269
72,368106,573(84)

12,21552,785
1,634
51,15060,601(57)

130,853
643,894
27,835616,059
907,240(723)

Liabilities and Shareholders' Equity
Liabilities
Deposits
Call Money and Bills Sold
Guarantee Deposits Received under Securities Lending Transactions
Trading Liabilities
Borrowed Money
Foreign Exchange Liabilities
Bonds and Notes
Due to Trust Accounts
Other Liabilities
Reserve for Bonus Payments
Reserve for Employee Retirement Benefits
Reserve for Contingencies in Trust Transactions
Acceptances and Guarantees
Total Liabilities
Shareholders' Equity

Total Shareholders' Equity
Total Liabilities and Shareholders' Equity

444,729

372,776

3,785,903¥ 6,241,779¥ 6,196,743$ 53,135,095

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥117.47=US$1.00, the foreign exchange rate on March 31, 2006, has been used for translation.

154

Non-Consolidated Income Statements
Millions of yen
2006

For the Fiscal Years ended March 31,

2005

Thousands of
U.S. dollars
2006

IncomeFiduciary Income
Interest Income
Loans and Bills Discounted
Securities
Fee and Commission Income
Trading Income
Other Operating Income
Other Income¥

Total Income
Expenses
Interest Expenses
Deposits
Fee and Commission Expenses
Trading Expenses
Other Operating Expenses
General and Administrative Expenses
Other Expenses
Total Expenses
Income before Income Taxes
Income Taxes:
Current
Deferred
Net Income¥

77,94872,50752,237
18,782
59,7401,005
3,159
16,540¥62,807
66,61951,224
14,54450,222
424
7,915
16,800$663,562
617,245444,685
159,894508,561
8,561
26,893140,804

230,902

204,789

1,965,626

27,883
6,044
17,2193
5,425
83,96844,112

28,163
8,198
16,450—1,044
77,147
29,836237,371
51,454
146,58329
46,182
714,812375,525

178,613

152,642

1,520,502

52,28852,147445,124

39
21,222

54
21,151

333
180,664

31,027¥30,941$

264,127

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥117.47=US$1.00, the foreign exchange rate on March 31, 2006, has been used for translation.

155

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

Mizuho Securities Co., Ltd.

Non-Consolidated Balance Sheets
2005

Thousands of
U.S. dollars
2006¥ 10,530,330
30,06821,0935,400,149
5,248,118
4,588
147,441
18,672
11,018
4,943,175
19,33542,070
4
18,664
17,038
8,144
905
(11)
254,979
5,887
2,806
3,081
6,655
120
6,480
54
242,436
92,536131,225
13,000
3,236
8
2,429

¥ 11,429,667
43,2058,137
6,090,476
6,029,569—
60,9065,891
8,590
5,217,800
10,19324,807145—
13,170
6,392
863
(6)
205,115
5,140
2,675
2,464
6,447
181
6,209
57
193,526
57,563
131,190
—
2,839
13
1,919

$ 89,642,719
255,963
179,565
45,970,454
44,676,247
39,065
1,255,142
158,959
93,79942,080,320
164,598
358,136
41
158,890145,048
69,3347,706(94)
2,170,591
50,12023,89026,23056,656
1,022
55,168466
2,063,815
787,748
1,117,097
110,667
27,54975
20,679¥ 10,785,309¥ 11,634,782$ 91,813,310

Millions of yen
2006

At March 31,

AssetsCurrent Assets
Cash and Deposits
Cash Segregated as Deposits
Trading Assets
Trading Securities and Others
Loan Assets
Derivative Transactions
Operating Investment Securities
Margin Transaction Assets
Loans Secured by Securities
Payments for Subscription
Guarantee Deposits
Securities: Fail to Deliver
Variation Margin Paid
Accrued Income
Short-term Deferred Tax Assets
OthersAllowance for Doubtful Accounts
Fixed assets
Tangible Assets
Buildings
Furniture and Fixture
Intangible Assets
Goodwill
Software
OthersInvestments
Investment Securities
Investment in Affiliates
Long-term Loan to Affiliates
Long-term Guarantee Deposits
Long-term Prepaid Expenses
OthersTotal Assets

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥117.47=US$1.00, the foreign exchange rate on March 31, 2006, has been used for translation.

156

Non-Consolidated Balance Sheets
2005

Thousands of
U.S. dollars
2006¥ 9,974,588
4,379,593
4,228,830
150,762
297,405
12,3362,909,359
17,884
19,071——
1,987,836
308,700
1,300
467
11,723
20,135
7,937
836
417,166
213,100
168,383
24,700
4,266
6,686
29
1,700
1,616
83

¥ 10,969,311
4,360,335
4,302,353
57,981
210,844457
4,364,950
7,455
224
1,981
5,229
1,680,152
297,200
9,500
586
12,716
11,003
5,811
861
295,392
138,900
117,634
27,000
7,046
4,811
—
1,268
1,185
83

$ 84,911,792
37,282,653
35,999,242
1,283,411
2,531,756
105,017
24,766,828
152,250
162,354——
16,922,082
2,627,905
11,067
3,981
99,800171,407
67,5687,124
3,551,259
1,814,080
1,433,420
210,266
36,32356,918252
14,473
13,763710

10,393,454

11,265,973

88,477,524

195,146
125,288
35,969870
1,561
33,53635,451

195,146
125,288
34,064870
1,586
31,607
14,3101,661,241
1,066,558
306,198
7,409
13,297285,492
301,789

Millions of yen
2006

At March 31,

Liabilities and Shareholders' Equity
Liabilities
Current Liabilities
Trading Liabilities
Trading Securities and Others
Derivative Transactions
Payable - Unsettled Trades
Margin Transaction Liabilities
Borrowings Secured by Securities
Deposits Received
Cash Collateral Received from Customers
Securities: Fail to Receive
Variation Margin - Received
Short-term Borrowings
Commercial Paper
Short-term Bonds and Notes
Advance Receipt
Accrued Expenses
Income Taxes Payable
Reserve for Bonuses
Others
Non-Current Liabilities
Bonds and Notes
Long-term Borrowings
Long-term Borrowings from Affiliates
Deferred Tax Liabilities
Reserve for Retirement Benefits
OthersStatutory reserves
Securities Transaction Liability Reserve
Futures Transaction Liability Reserve
Total Liabilities
Shareholders' Equity
Common Stock
Capital Surplus
Retained Earnings
Appropriated Reserve
Voluntary Reserve
Unappropriated Retained Earnings
Net Unrealized Gains on Other Securities, net of Taxes
Total Shareholders' Equity
Total Liabilities and Shareholders' Equity

391,854368,8093,335,786¥ 10,785,309¥ 11,634,782$ 91,813,310

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥117.47=US$1.00, the foreign exchange rate on March 31, 2006, has been used for translation.

157

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

Mizuho Securities Co., Ltd.

Non-Consolidated Income Statements
For the Fiscal Years ended March 31,

Operating Income
Commission Income
Trading Income
Net Gains on Operating Investment Securities
Interest and Dividend Income
Less: Interest Expense¥ 138,874
66,53959,863
1,698
10,772(11,407)

Net operating Income¥ 104,417
49,10847,891813
6,604(10,983)$ 1,182,213
566,439
509,609
14,45891,707(97,110)

127,467

93,433

1,085,103

Selling, General and Administrative Expenses
Commission and Other Transaction-related Expenses
Compensation and Benefits
Occupancy
Data Processing and Office Supplies
Depreciation
Taxes and Dues Other than Income Taxes
Others

66,043
17,562
29,878
7,984
4,080
3,421
1,827
1,289

52,884
12,844
24,123
5,657
3,385
3,373
2,342
1,157

562,215
149,505
254,350
67,967
34,73529,123
15,56010,975

Operating Profits
Non-Operating Income
Non-Operating Expenses

61,4233,889
2,519

40,5491,790
2,248

522,888
33,10921,451

Ordinary Profits
Extraordinary Gains
Extraordinary Losses

62,793
2,547
41,25040,091
257
660

534,546
21,690351,158

Income before Income Taxes

24,09039,688205,078

29,515(19,038)

19,084(3,587)251,260(162,067)

Income taxes:
Current
Deferred
Net Income¥

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥117.47=US$1.00, the foreign exchange rate on March 31, 2006, has been used for translation.

158

2005

Thousands of
U.S. dollars
2006

Millions of yen
2006

13,612¥

24,191$

115,885

Senior Executives of Mizuho

Mizuho Financial Group

Tsuneo Morita

Mizuho Bank

Executive Officer

Board of Directors
Terunobu Maeda*
President & CEO

General Manager of Administration

Shuzo Haimoto
Executive Officer
General Manager of Human Resources

Shunichi Asada*
Deputy President
Head of Internal Audit Group /Chief Auditor (CA)Satoru Nishibori*Managing Director
Head of Financial Control and Accounting
Group / Chief Financial Officer (CFO)

Tetsuji Kosaki*
Managing Director
Head of Strategic Planning Group and Headof IT, Systems & Operations Group / Chief
Strategy Officer (CSO) / Chief Information
Officer (CIO)

Hiroshi Saito
Director

Seiji Sugiyama

Board of Directors
Seiji Sugiyama*
President & CEO

Mitsuru Machida*

Mizuho Corporate Bank

Deputy President

Toshikazu Kitano*

Board of Directors

Deputy President

Hiroshi Saito*

Takashi Nonaka*

President & CEO

Managing Director

Tsunehiro Nakayama*

Kiyotaka Noborihayashi*

Deputy PresidentManaging Director

Head of Internal Audit Group

Haruhisa Shiraishi*

Masayoshi Kanaji*

Managing Director

Deputy President

Hideaki Saito*

Takashi Okimoto*Managing Director

Deputy President

Norimasa Kuroda*

Corporate Auditors

Managing Director

Director

Toichiro Matsutani

Head of International Banking Unit

Corporate Auditor

Yoshiharu Fukuhara

Takashi Tsukamoto*Director

Shigeru Matsuura

Managing Director

Corporate Auditor

Mitsuo Ohashi
Director

Glen S. Fukushima
Director

Chief Strategy Officer / Head of Strategic
Planning Group
Chief Financial Officer / Head of Financial
Control & Accounting Group

Yasuhiro Sato*

Yukio Nozaki
Corporate Auditor

Toshiaki Hasegawa
Corporate Auditor

Managing Director

Corporate Auditors
Yoshiaki Sugita
Corporate Auditor

Junichi Iwabuchi
Corporate Auditor

Yukio Nozaki
Corporate Auditor

Masahiro Seki
Corporate Auditor

Masahiko Kadotani
Corporate Auditor

Executive Officers
Masayuki Saito
Managing Executive Officer
Head of Risk Management Group, Head of Human
Resources Group and Head of Compliance Group /Chief Risk Officer (CRO) / Chief Human Resources
Officer (CHRO) / Chief Compliance Officer (CCO)

Hiroshi Kiyama
Executive Officer
General Manager of Corporate Planning

Head of Corporate Banking Unit

Mizuho Securities
Corporate Auditors
Tsuyoshi Kusumoto
Corporate Auditor

Mitsuo Hirakata
Corporate Auditor

Yukio Nozaki
Corporate Auditor

Toshiaki Hasegawa
Corporate Auditor

Board of Directors
Makoto Fukuda
President

Yoneo Sakai
Deputy President

Keisuke Yokoo
Deputy President

Shigeyoshi Nishiyama
Deputy President

Executive Officers
Mitsuhiro Nagahama

Mizuho Trust & Banking

Managing Executive Officer
Head of the Americas

Akira Kawamura
Managing Executive Officer
Head of Europe, Middle East and Africa

Takeshi Hanai
Managing Executive Officer

Board of Directors
Teruhiko Ikeda
President and CEO

Chiharu Baba
Deputy President

Head of Asia & Oceania

Yoshiaki Ohashi
Executive Officer
General Manager of Corporate Communications

Tetsuro Sugiura
Executive Officer
Managing Executive Officer
Mizuho Research Institute, Ltd.

Notes: 1. * Indicates Directors concurrently serving as Executive Officers.
2. Executive Officers, excluding the Directors concurrently serving as Executive Officers and Executive Officers responsible for
global regional operations and the head of the International Banking Unit of Mizuho Corporate Bank, have not been listed.
3. Executive Officers, excluding Directors concurrently serving as Executive Officers of Mizuho Bank, have not been listed.
4. Members of the Board of Directors other than the President and the Deputy Presidents, and the Corporate Auditors as wellas the Executive Officers of Mizuho Securities, have not been listed.
5. Members of the Board of Directors other than the President and CEO and the Deputy Presidents, and the Corporate
Auditors as well as the Executive Officers of Mizuho Trust & Banking, have not been listed.

(As of June 27, 2006)

159

Office Network of Mizuho

Domestic Network of Mizuho(As of July 31, 2006)

Mizuho Financial Group

Mizuho Corporate Bank

Mizuho Securities

Head Office

Head Office and Branches: 18

Head Office and Department: 2

Mizuho Bank

Mizuho Trust & Banking

Head Office and Branches: 375
Sub-branches: 72
Agencies: 47

Head Office and Branches: 37
Sub-branch: 1

International Network of Mizuho
Network of Mizuho Corporate Bank

Asia and Oceania(Country/Region)
China

Beijing Branch
8th Floor, Chang-Fu-Gong Office Building, Jia 26,
Jianguomenwai Street, Chaoyang District,
Beijing 100022, The People's Republic of China
TEL 86-10-6525-1888

Dalian Branch
6th Floor, Senmao Building, Zhongshan
Road 147, Xigang District, Dalian 116011,
The People's Republic of China
TEL 86-411-8360-2543

Shanghai Branch
25th Floor, HSBC Tower, 1000 Lujiazui Ring Road,
Pudong New Area, Shanghai
200120, The People's Republic of China
TEL 86-21-6841-0001

Shenzhen Branch
21st Floor, Shenzhen International Financial
Building, Jian She Lu, Shenzhen, Guangdong
Province 518001, The People's Republic of China
TEL 86-755-8222-1918

Wuxi Branch
8th Floor, Wuxi Software Park, No.16
Changjiang Road, WND, Wuxi,
Jiangsu Province, 214028
The People's Republic of China
TEL 86-510-8522-3939

Guangzhou Representative Office
12th Floor, Garden Tower, 368 Huanshi
Dong Lu, Guangzhou 510064,
The People's Republic of China
TEL 86-20-8385-8000

Nanjing Representative Office
Room 801, Nanjing Grand Hotel, 208 Guangzhou
Road. Nanjing, Jiangsu Province 210024,
The People's Republic of China
TEL 86-25-8332-9379

Tianjin Representative Office
Room 2202, Tianjin International Building 75,
Nanjing Road, Tianjin 300050,
The People's Republic of China
TEL 86-22-2330-5448

Wuhan Representative Office
Room 411, Shangri-la Hotel, 700 Jian She Dadao,
Wuhan 430015, The People's Republic of China
TEL 86-27-8578-1155

Xiamen Representative Office
Room 2102, The Bank Center, No.189 Xiahe Road,
Xiamen, Fujian 361003,
The People's Republic of China
TEL 86-592-239-5571

160(As of July 31, 2006)
Hong Kong

Philippines

Hong Kong Branch

Manila Branch

17th Floor, Two Pacific Place, 88 Queensway,
Hong Kong, S.A.R., The People's Republic of China
TEL 852-2103-3000

26th Floor, Citibank Tower, Valero Street corner
Villar Street, Salcedo Village, Makati City,
Metro Manila, Philippines
TEL 63-2-848-0001

Mizuho Capital Markets (HK) Limited
16th Floor, Two Pacific Place, 88 Queensway,
Hong Kong, S.A.R., The People's Republic of China
TEL 852-2537-3815

Mizuho Corporate Asia (HK) Limited
17th Floor, Two Pacific Place, 88 Queensway,
Hong Kong, S.A.R., The People's Republic of China
TEL 852-2103-3040

India

Mumbai Branch
Maker Chamber III, 1st Floor, Jamnalal Bajaj Road,
Nariman Point, Mumbai, 400021 India
TEL 91-22-2288-6638

New Delhi Branch
4th Floor, East Tower, Sood Tower, 25,
Barakhamba Road, New Delhi 110 001 India
TEL 91-11-3041-0900

Indonesia

PT. Bank Mizuho Indonesia
Plaza Bll Menara 2, 24th Floor, JL., M.H. Thamrin
No. 51, Jakarta 10350, Indonesia
TEL 62-21-392-5222

Korea

Seoul Branch
19th Floor, Seoul Finance Center, 84 Taepyung-ro
1-ka, Chung-ku, Seoul, Republic of Korea
TEL 822-3782-8500

Malaysia

Labuan Branch
Level 9 (B) & (C), Main Office Tower, Financial
Park Labuan, Jalan Merdeka, 87000 Federal
Territory of Labuan, Malaysia
TEL 60-87-417766

Labuan Branch, Kuala Lumpur
Marketing Office
Level 34, Menara Maxis, Kuala Lumpur City
Centre, 50088 Kuala Lumpur, Malaysia
TEL 60-3-2070-6880

Singapore

Singapore Branch
168 Robinson Road, #13-00 Capital Tower,
Singapore 068912, Republic of Singapore
TEL 65-6423-0330

TaiwanKaohsiung Branch
12th Floor, No.2, Chung Cheng 3rd Road,
Kaohsiung 800, Taiwan
TEL 886-7-236-8768

Taipei Branch
2nd Floor, Hung Kuo Building, 167 Tun Hua
North Road, Taipei 105, Taiwan
TEL 886-2-2715-3911

Thailand

Bangkok Branch
18th Floor, TISCO Tower, 48 North Sathorn Road,
Silom, Bangrak, Bangkok 10500, Thailand
TEL 66-2-638-0200

Mizuho Corporate Leasing (Thailand)Co., Ltd.
19th Floor, TISCO Tower 48/44 North Sathorn
Road, Silom, Bangrak, Bangkok 10500, Thailand
TEL 66-2-638-0900

VietnamHanoi Branch
Suite 403~407, 63 LTT Building,
63 Ly Thai To Street, Hanoi,
Socialist Republic of Vietnam
TEL 84-4-9363-123

Ho Chi Minh City Representative
Office18th Floor, Sun Wah Tower,
115 Nguyen Hue Boulevard, District 1,
Ho Chi Minh City, Socialist Republic of Vietnam
TEL 84-8-8228-638

Australia

Kuala Lumpur Representative Office

Sydney Branch

Level 34, Menara Maxis, Kuala Lumpur City
Centre, 50088 Kuala Lumpur, Malaysia
TEL 60-3-2070-6595

Level 33, 60 Margaret Street, Sydney, N.S.W. 2000,
Australia
TEL 61-2-8273-3888

Europe and the Middle East

The Americas

Mizuho Desk(Country/Region)(Country/Region)(Country/Region)

AustriaMizuho Corporate Bank-BA
Investment Consulting GmbH
Landhausgasse 4/7, 1010 Vienna, Austria
TEL 43-1-5355868

BelgiumMizuho Corporate Bank Nederland N.V.
Brussels Branch
Avenue Louise 480,1050 Brussels, Belgium
TEL 32-2-645-5280

FranceParis Branch
Washington Plaza 40, rue Washington,
75408 Paris Cedex 08, France
TEL 33-1-5383-4100

Germany

Düsseldorf Branch
Königsallee 60 D, 40212 Düsseldorf,
F.R. Germany
TEL 49-211-13020

Mizuho Corporate Bank (Germany)
Aktiengesellschaft
Taunustor 2, 60311 Frankfurt am Main,
F.R. Germany
TEL 49-69-27282-0

The Netherlands

Mizuho Corporate Bank Nederland N.V.
Apollolaan 171, 1077 AS, Amsterdam,
The Netherlands
TEL 31-20-5734343

United Kingdom

London Branch
Bracken House, One Friday Street,
London EC4M 9JA, UK
TEL 44-20-7012-4000

River Plate House Representative
OfficeRiver Plate House, 7-11 Finsbury Circus, London
EC2M 7DH, UK
TEL 44-20-7012-4000

Mizuho Capital Markets (UK) LimitedRiver Plate House, 7-11 Finsbury Circus,
London EC2M 7DH, UK
TEL 44-20-7972-9900

Bahrain

Bahrain Representative Office
Suite 201-202, Entrance 4,
2nd Floor, Manama Center, Manama, Bahrain(P.O. BOX 5759, Manama, Bahrain)
TEL 973-17-224522

Iran

Tehran Representative OfficeBrazilAsia and OceaniaSão Paulo Representative Office

Maybank

Avenida Paulista, 1274-11° andar, CEP. 01310-925,
São Paulo, SP, Brazil
TEL 55-11-3251-4199

Menara Maybank, 100 Jalan Tun Perak,
50050 Kuala Lumpur, Malaysia
TEL 60-3-2031-2346

CanadaEurope and the Middle East

Mizuho Corporate Bank (Canada)

Raiffeisen Zentralbank Osterreich AG

100 Yonge Street, Suite1102, Toronto, Ontario,
Canada M5C 2W1
TEL 1-416-874-0222

A-1030 Wein, Am Stadpark 9, Austria
TEL 43-1-71707-1375

Cayman Islands

Cayman Branch
Coutts House, 1446 West Bay Road,
P.O. Box 707GT, Grand Cayman, Cayman Islands,
British West Indies

MexicoMexico Representative Office
Edificio Omega, Campos Eliseos No.345-11,
Col. Chapultepec Polanco, Deleg. MiguelHidalgo, 11560 Mexico, D.F., Mexico
TEL 52-55-5281-5037

U.S.A.

Chicago Branch

Mashreqbank psc
P.O.Box 1250, Omar Ibn Al Khatab Rd,
Next to Al Ghurair Centre, Deira, Dubai
TEL 971-4-881-3390

The Americas

Unibanco
Av. Eusebio Matoso 891, 05423-901,
São Paulo, SP, Brazil
TEL 55-11-3097-5824”Mizuho Desk”
By forming tie-ups with major financial institutions in regions where Mizuho does not possess
offices, we offer our customers financial services
through various institutions. (Transactions are
conducted directly between the customer and the
local financial institution.)

311 South Wacker Drive, Suite 2020,
Chicago, IL 60606, U.S.A.
TEL 1-312-855-1111

New York Branch
1251 Avenue of the Americas,
New York, NY 10020, U.S.A.
TEL 1-212-282-3000

Los Angeles Agency
350 South Grand Avenue, Suite 1500,
Los Angeles, CA 90071, U.S.A.
TEL 1-213-243-4500

Atlanta Representative Office3353 Peachtree Road NE, Atlanta Financial Center,
Suite 500, Atlanta, Georgia 30326, U.S.A.
TEL 1-404-364-1550

Houston Representative Office5051 Westheimer Road, Galleria Tower II,
Suite 710, Houston, Texas 77056, U.S.A.
TEL 1-713-499-4800

Mizuho Capital Markets Corporation
1440 Broadway, 25th Floor,
New York, NY 10018, U.S.A.
TEL 1-212-547-1500

Mizuho Corporate Bank of California
350 South Grand Avenue, Suite 1500,
Los Angeles, CA 90071, U.S.A.
TEL 1-213-612-2700

Mizuho Corporate Bank (USA)1251 Avenue of the Americas,
New York, NY 10020, U.S.A.
TEL 1-212-282-3030

3rd Floor, No.1, 14th Street,
Khaled Eslamboli Avenue, Tehran 15117, IranTEL 98-21-872-6593

161

Office Network of Mizuho

Network of Mizuho Securities

Network of Mizuho Trust & Banking

Beijing Representative OfficeMizuho Trust & Banking(Luxembourg) S.A.

8th Floor, Chang-Fu-Gong Office Building, Jia 26,
Jianguomenwai Street, Chaoyang District,
Beijing 100022, The People's Republic of China
TEL 86-10-6523-4779

1B, Parc d'Activité Syrdall, L-5365 Munsbach,Grand Duchy of Luxembourg
TEL 352-4216171

Shanghai Representative OfficeMizuho Trust & Banking Co. (USA)24th Floor, HSBC TOWER, 1000 Lujiazui
Ring Road, Pudong New Area, Shanghai
200120, The People's Republic of China
TEL 86-21-6841-1000

666 Fifth Avenue, Suite 802,
New York, NY 10103, U.S.A.
TEL 1-212-373-5900

Mizuho Securities Asia Limited
10th Floor, CITIC Tower,
1 Tim Mei Avenue, Central, Hong Kong, S.A.R.,
The People's Republic of China
TEL 852-2685-2000

Mizuho Futures (Singapore) Pte.
Limited
5 Shenton Way, #15-01 UIC Building
Singapore 068808, Republic of Singapore
TEL 65-6221-3633

Mizuho Bank (Switzerland) Ltd.
Loewenstrasse 32, 8023 Zurich, Switzerland
TEL 41-1-216-9111

Mizuho International plc
Bracken House, One Friday Street,
London EC4M 9JA, UK
TEL 44-20-7236-1090

Mizuho Securities USA Inc.
1251 Avenue of the Americas, 33rd Floor,
New York, NY 10020, U.S.A.
TEL 1-212-209-9300

The Bridgeford Group, Inc.
445 Park Avenue, 20th Floor,
New York, NY 10022, U.S.A.
TEL 1-212-705-0880

162

Network of DLIBJ Asset Management
DLIBJ Asset Management
International Ltd.
Bracken House, One Friday Street,
London, EC4M 9JA, UK
TEL 44-20-7329-3777

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

Investor Information on Mizuho Financial Group, Inc.

Date of Establishment(Preferred Stock)
Percentageof shares
outstanding
Shares held(%)

January 8, 2003

Paid-in Capital¥1,540,965 million

The Resolution and Collection
Corporation

300,000

23.42

Outstanding Shares

The Dai-ichi Mutual Life Insurance
Company

27,0002.10

Meiji Yasuda Life Insurance Company

25,0001.95

Sompo Japan Insurance Inc.

19,000

1.48

Number of Shareholders

FUKOKU MUTUAL LIFE INSURANCECOMPANY

15,0001.17

Common Stock:
Preferred Stock:

ITOCHU Corporation

10,0000.78

THE KANSAI ELECTRIC POWER CO., INC.

10,0000.78

Shiseido Company, Limited

10,0000.78

SHIMIZU CORPORATION

10,0000.78

13,284,425.49 shares
Common Stock: 12,003,995.49 shares
Preferred Stock:
1,280,430 shares

298,920
3,400

Major Shareholders(Common Stock)
Percentageof shares
outstanding
Shares held(%)

Seiko Epson Corporation

10,0000.78

TAISEI CORPORATION

10,0000.78

Japan Trustee Services Bank, Ltd.
(Trustee account)

624,645.00

5.20

Electric Power Development Co., Ltd.

10,0000.78

The Master Trust Bank of Japan, Ltd.
(Trustee account)

601,728.00

5.01

The Tokyo Electric Power Company,
Incorporated

10,0000.78

Nippon Express Co., Ltd.

10,0000.78

Marubeni Corporation

10,0000.78

RBC DEXIA INVESTOR SERVICES TRUST,LONDON-CLIENTS ACCOUNT(Standing proxy agent: Standard
Chartered Bank)
402,627.00

3.35

Mizuho Financial Strategy Co., Ltd.

392,840.83

3.27

The Dai-ichi Mutual Life Insurance
Company

279,158.00

2.32

STATE STREET BANK AND TRUSTCOMPANY(Standing proxy agent:Mizuho Corporate Bank, Ltd.)

Note: In the table above, the figure for the number of shares held by The
Resolution and Collection Corporation is the total for the Fourth Series
and Sixth Series of Preferred Stock. For other companies, the figures represent the totals for the Eleventh Series and the Thirteenth Series ofPreferred Stock.
(As of March 31, 2006)

226,825.00

1.88

THE CHASE MANHATTAN BANK,
N. A. LONDON(Standing proxy agent:Mizuho Corporate Bank, Ltd.)

157,187.00

1.30

STATE STREET BANK AND TRUSTCOMPANY 505103(Standing proxy agent:Mizuho Corporate Bank, Ltd.)

153,058.00

1.27

Japan Trustee Services Bank, Ltd.
(Trustee Account 4)

139,138.00

1.15

Trust & Custody Services Bank, Ltd.
(Meiji Yasuda Life Insurance Company
Retirement Benefit Trust Accountre-entrusted by Mizuho Trust &Banking Co., Ltd.)
137,000.00

1.14(Reference)
1. All 150,000 shares of the Fourth Series Class IV Preferred
Stock and 150,000 shares of the Sixth Series Class VI
Preferred Stock held by The Resolution and Collection
Corporation have been repurchased and cancelled on July 4,
2006 by Mizuho Financial Group, Inc. (MHFG).
2. 131,800 shares of the Common Stock held by Mizuho
Financial Strategy Co., Ltd. have been repurchased and cancelled on July 7, 2006 by MHFG.

Note: The voting rights of the shares held by Mizuho Financial Strategy Co.,
Ltd. are restricted, pursuant to Article 241 Paragraph 3 of the former
Japanese Commercial Code.

163

Investor Information on Mizuho Financial Group, Inc.

Stock Listings
Tokyo Stock Exchange
Osaka Securities Exchange

Accounting Auditors
Ernst & Young ShinNihon

Shareholder Register Manager
Mizuho Trust & Banking Co., Ltd.

Fiscal Year
April 1 to March 31

Convocation of General Meetings of Shareholders
An ordinary general meeting of shareholders of theCompany shall be convened no later than 3 months fromthe last day of each business year and an extraordinary
general meeting of shareholders shall be convened whenever necessary.

Record Date
1. The Company shall deem shareholders having voting
rights appearing in writing or electronically in the registerof shareholders (including the register of beneficial shareholders; the same shall apply hereinafter) as of the end of
March 31 of each year as the shareholders who are entitled to exercise their rights at the ordinary general meetingof shareholders for the relevant business year.
2. In addition to the preceding paragraph, the Company may
temporarily set the record date whenever necessary, by aresolution of the Board of Directors and upon giving aprior public notice thereof.

Dividends from Surplus Approved by Resolution of
Ordinary General Meeting of Shareholders
Dividends from the surplus approved by a resolution of an
ordinary general meeting of shareholders shall be distributed
to the shareholders or registered stock pledgees appearing
in writing or electronically in the register of shareholders asof the end of March 31 of each year or to the holders offractional share appearing in writing or electronically in theregister of fractional share as of the end of March 31 ofeach year.

Interim Dividends
The Company may, by a resolution of the Board of Directors,
distribute interim dividends provided for in Article 454,
Paragraph 5 of the Company Law of Japan to the shareholders or registered stock pledgees appearing in writing or electronically in the register of shareholders as of the end of
September 30 of each year or to the holders of fractional
share appearing in writing or electronically in the register offractional share as of the end of September 30 of each year.

164Disclosure Policy

Basic Principles
We aim to win the highest regard of our shareholders and the market and to earn the trust of society as Japan's leading comprehensive financial services group. For this reason, we place one of the highest management priorities on continuing to disclose
information to our customers, shareholders, and investors both in and outside Japan in a fair, timely and appropriate manner, inorder that they may form proper judgments and appraisals of the group. To achieve this aim, we observe applicable domestic
and international laws and regulations as well as stock exchange rules relating to corporate disclosure, and we establish andimplement appropriate Disclosure Controls and Procedures.

Disclosure Controls and Procedures(1) Establishment and Implementation of Disclosure Controls and Procedures
Our Disclosure Controls and Procedures are established to observe applicable domestic and international laws and regulations as well as stock exchange rules and to implement fair, timely and appropriate corporate disclosure. The Disclosure
Controls and Procedures are the process carried out by directors, officers and employees of Mizuho Financial Group andinclude internal controls designed to provide reasonable assurance regarding the reliability of Financial Reporting and thePreparation of Financial Statements. We have established the basic principles underlying our Disclosure Controls andProcedures as well as our internal rules related to Disclosure Controls and Procedures that govern the management framework for the entire Mizuho Financial Group including group companies, and we endeavor to establish, implement and continuously improve our Disclosure Controls and Procedures. Our Disclosure Committee is the principal management body thatis responsible for discussing and exploring matters relating to Disclosure Controls and Procedures.
(2) Evaluation of Effectiveness of Disclosure Controls and Procedures
Our Disclosure Controls and Procedures are documented, and evaluation of the overall effectiveness of our Disclosure
Controls and Procedures is conducted regularly by reviewing the contents of such documentation and their implementation.
In addition, evaluation of the effectiveness and appropriateness of Disclosure Controls and Procedures is conducted throughinternal audits.
(3) Others
We established a “Code of Ethics for Financial Professionals” to be observed by all directors and executive officers, as well as
all managers and other employees within Mizuho Financial Group who engage in financial reporting, accounting or disclosure. We have also developed the “Internal Controls and Audit Hotline”, a system designed for obtaining concerns regarding
questionable accounting or auditing matters from both inside and outside Mizuho Financial Group.

Disclosure Methods, Other(1) Disclosure Methods
With respect to the information which is required to be disclosed pursuant to applicable domestic and international laws andregulations as well as stock exchange rules, we follow the defined disclosure procedures such as publishing such informationin business reports (Jigyo-Hokoku), annual securities reports (Yukashoken-Hokokusho) and other disclosure publications, aswell as providing such information through the information distribution systems of domestic and international stock
exchanges and through press releases. We also endeavor to disclose other information in a fair, timely and appropriate manner. When we disclose such information, we basically publish on our website the information we disclose. In addition, we
endeavor to utilize the latest disclosure methods and tools to provide more fair and widespread disclosure.
(2) Investor Relations Activities
In accordance with our Basic Principles described in section 1 above, and with due attention to two-way communication, we
endeavor sincerely to facilitate a proper understanding of our management strategies, financial condition and other matters.
In this way, we aim to earn the trust of the market and obtain an appropriate market reputation.
Beginning with the disclosure required by applicable domestic and international laws and regulations as well as stock
exchange rules, we endeavor to grasp properly the types of information desired by the market and to disclose useful andappropriate information voluntarily and proactively. Regarding disclosure of information we consider particularly important,
we communicate such information on an ad hoc basis as and when necessary, even if a press release has already been
issued, through such means as special briefing sessions.
In addition, we respect various disclosure principles including fair disclosure. Accordingly, at individual calls, private meetings or conferences hosted or attended by representatives of Mizuho Financial Group we endeavor to limit carefully our
explanations to matters already disclosed and facts commonly known.
(3) Correction of Misconceptions in the Markets
If we identify significant misconceptions regarding Mizuho Financial Group in the market due to the spread of rumors or otherwise, we endeavor to investigate their causes and correct such misconceptions promptly.

165

Privacy Policy Regarding Customer Information

Mizuho Financial Group, Inc. (“MHFG”) hereby establishes and announces the “Privacy Policy Regarding Customer Information”
applicable to Mizuho Financial Group which is composed of MHFG, its consolidated subsidiaries and affiliates (which areaccounted for by the equity method) that are listed in MHFG's Financial Reports.

Policy of Management
Mizuho Financial Group recognizes appropriate protection and use of personal information to be important social responsibilities, and makes every effort to appropriately protect and use personal information complying with the Personal Data Protection
Law in Japan, other related regulations and the internal rules of Mizuho Financial Group, including the “Privacy Policy Regarding
Customer Information” when Mizuho Financial Group conducts business.

Proper Acquisition
Mizuho Financial Group will acquire personal information that is necessary to conduct its business by proper and lawful means.

Purpose of Use
Mizuho Financial Group will specify the purpose of use of personal information and will not use it beyond the specified purpose.
Furthermore, Mizuho Financial Group will not use personal information beyond the purpose limited by related regulations.
The purpose of use of personal information is set forth through the web site or other measures provided by each company ofMizuho Financial Group.

Limitation on Providing Personal Information to a Third Party
Mizuho Financial Group will not provide personal information to any third party in principle unless the individual concerned has
agreed to such use or it is authorized by law. However, Mizuho Financial Group may provide personal information to relevant
entities without customer consent in following cases: Mizuho Financial Group entrusts management of personal information that is necessary to achieve the purpose of use to athird party.
 Mizuho Financial Group is one of the parties in a consolidation transaction.
 Mizuho Financial Group uses personal information jointly with designated entities that are publicly informed.

Management of Sensitive Information
Mizuho Financial Group will not acquire, use and provide to any third party sensitive information (e.g. political affiliation, religion, participation in labor union, race, ethnic group, family origin, legal address on family registry and medical information)
unless authorized by law or it is necessary to conduct business on condition that Mizuho Financial Group has customer consent.

Security Measures
Mizuho Financial Group will maintain and manage accurate and up to date personal information, and prevent leakage of information with rational security measures. Mizuho Financial Group will properly supervise employees and parties entrusted withhandling personal information.

Continuous Improvement
Mizuho Financial Group will continuously review this policy according to the development of information technologies and thechanges in social demand, and improve the management of personal information.

Procedures to Request Disclosure
Mizuho Financial Group will endeavor to properly and promptly cope with following requests from customers:
 notification of the purpose of use
 disclosure of personal data correction, addition and deletion of personal data that do not reflect the facts
 suspension of use and elimination of personal data suspension of providing personal data to a third party

Customer Request
Mizuho Financial Group will endeavor to cope with customer requests for the management of personal information sincerely
and promptly.

166

Contact Information

Mizuho Financial Group, Inc.
1-5-5, Otemachi,
Chiyoda-ku, Tokyo 100-0004,
Japan
Tel. +81-(0)3-5224-1111
URL: http://www.mizuho-fg.co.jp/

Mizuho Corporate Bank, Ltd.

 MHFG's “News Release E-mail Distribution
Service”
MHFG offers an e-mail service for notifying registered users the title and the URL page of thegroup's news releases when releases are placed on
the group's website.
If you wish to register for this service, please
access MHFG's website (http://www.mizuhofg.co.jp/english/), and click “News Release E-mailDistribution Service.”

1-3-3, Marunouchi,
Chiyoda-ku, Tokyo 100-8210,
Japan
Tel. +81-(0)3-3214-1111
URL: http://www.mizuhocbk.co.jp/

Mizuho Bank, Ltd.
1-1-5, Uchisaiwaicho,
Chiyoda-ku, Tokyo 100-0011,
Japan
Tel. +81-(0)3-3596-1111
URL: http://www.mizuhobank.co.jp/

Mizuho Trust & Banking Co., Ltd.
1-2-1, Yaesu,
Chuo-ku, Tokyo 103-8670,
Japan
Tel. +81-(0)3-3278-8111
URL: http://www.mizuho-tb.co.jp/

Mizuho Securities Co., Ltd.
Otemachi First Square,
1-5-1, Otemachi,
Chiyoda-ku, Tokyo 100-0004,
Japan
Tel. +81-(0)3-5208-3210
URL: http://www.mizuho-sc.com/

IS97580/BS7799 IJ01675/ISMS

167