What kind of financial institution is the Mizuho Financial Group?
The Mizuho Financial Group is
a comprehensive financial
services group that precisely
and swiftly meets its
customers' diverse financial
needs through the expertisepossessed by and the close
collaboration of its groupcompanies which includes
Mizuho Corporate Bank,
primarily serving large
corporations and overseas
corporations, and Mizuho
Bank, dealing primarily withindividuals, small and mediumsized enterprises, and middle
market corporations as well as
securities, trust banking andasset management companies.

Mizuho Financial Group, Inc. (MHFG: financial holding company)
Banking and Securities Business Sector

How did the group perform infiscal 2003?

Corporate Revitalization

Mizuho Holdings, Inc. (MHHD: intermediate holding

Financial subsidiaries forcorporate revitalizationcompany for banks and securities subsidiaries)

Mizuho Corporate
Bank, Ltd. (MHCB)

Mizuho Securities
Co., Ltd. (MHSC)

Mizuho Bank, Ltd.
(MHBK)

Mizuho Investors
Securities Co., Ltd.
(MHIS)

500

For fiscal 2003, the group recorded consolidated ordinary
profits of ¥896.4 billion and net income of ¥406.9 billion.
This was a significant improvement compared to our net
loss in the previous fiscal year.
The principal factors contributing to the improvement in
profitability were higher non-interest income, reductions in
expenses and credit-related costs, and gains
on the sale of securities.
page

Mizuho Corporate, Ltd.
ShinkoSecurities
Co., Ltd.

Mizuho Global, Ltd.

Mizuho Project, Ltd.

3

Trust and Asset Management Sector
Mizuho Trust & Banking Co., Ltd. (MHTB)

Mizuho Asset, Ltd.

Trust & Custody Services Bank, Ltd. (TCSB)

Advisory company forcorporate revitalization

Dai-Ichi Kangyo Asset Management Co., Ltd. (DKA)
Fuji Investment Management Co., Ltd. (FIMCO)DLIBJ Asset Management Co., Ltd. (DIAM)

page

Is the group's
restructuring efforts
progressing?

Strategic Subsidiaries
Credit card company
UC Card Co., Ltd.

We realized a significant reduction of¥108.6 billion in expenses. This was
accomplished by proceeding withrestructuring plans including reviewing
compensation and benefits for senior
executives and employees, reducing thenumber of employees, closing andconsolidating duplicate domestic
branches, and selling the head officebuildings of Mizuho
Corporate Bank andpage
Mizuho Bank.
page

Information & technology

20

Fiscal 2003

(500)
(1,000)(1,500)(2,000)(2,500)Mizuho Advisory, Inc.

Mizuho Research Institute Ltd.

6

Fiscal 2002

0

Asset management companies

Research institution

page

Net Income (MHFG)(billions of yen)

DKB Information Systems Inc. (DKIS)
Fuji Research Institute Corporation (FRIC)IBJ Systems, Limited (KSD)

Venture capitalMizuho Capital Co., Ltd.

Has the group made progress in resolving its
non-performing loan issue? NPL Balance and NPL Ratio(Claims for Special Attention or Worse)(the Three Banks)

As a result of implementing corporate
revitalization projects and removing nonperforming loans (NPLs) from their balance
sheets, the Three Banks reduced theiroutstanding balance of NPLs to ¥3,191.0
billion at the end of fiscal 2003 bringing
the group's NPL ratio to 4.4%.
page4(trillions of yen)
7

(%)
7

6

6

5

5

4

4

3

3

2

2

1

1

39

0
September
2002

March
2003

March
2004

We plan to drastically increase our earning power by focusing on
the strategic plans of each group company that are formulated
for each customer segment and business area, as well as bystrengthening synergies among group companies.
Mizuho Corporate Bank will further strengthen its “originate to
distribute” business model based on asset turnover with loan
syndication as its core, and also continuously offer
sophisticated and multi-faceted financial solutions
to customers.
page

10

Mizuho Bank will fortify its business in the individual customer
sector by strengthening its capability to provide financial consulting
services, reinforcing marketing in the housing loan business andutilizing its customer base by launching Mizuho
Mileage Club, a new membership service.
page

General & Administrative Expenses(the Three Banks)

14

Mizuho Securities, Mizuho Trust & Banking and other groupcompanies will continue to enhance their expertise andstrengthen their strategies while maximizing synergies
through dynamic collaboration with the group
page
companies.

(billions of yen)

1,000

900

0

What is the group's core business strategy?

800

700

100

18
7 22

page

0
Fiscal 2002

Fiscal 2003

page

*Figures are described as follows:
MHFG: Mizuho Financial Group (consolidated)
The Three Banks: Mizuho Corporate Bank + Mizuho Bank + Mizuho Trust & Banking + their financial subsidiaries for corporate revitalization (non-consolidated)Financial Highlights of Mizuho Financial Group, Inc. (Consolidated)
Millions of yen
2004

For the Fiscal Years ended March 31,

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

¥

2003

3,342,957
2,461,716
881,240
406,982
77,748¥

Thousands of U.S. dollars
2004

3,441,810
5,703,982(2,262,172)(2,377,172)
22,147$31,647,800
23,305,088
8,342,712
3,852,902
736,045*Non-consolidated basis.

Millions of yen
2004

At March 31,

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

2003

Thousands of U.S. dollars
2004¥ 134,032,747
23,816,574
69,210,035
72,222,642¥ 2,861,066$ 1,304,081,143
303,622,311
626,771,450
733,574,510$
34,501,524

2004

2003

U.S. dollars
2004

36,153.27¥ (254,524.65)

3,000

—

28.40

22,5008,200
14,00047,60042,00011,0008,000
17,5005,380
20,0002,500
30,00022,5008,200
14,00047,60042,00011,0008,000
17,500
5,380
165
21
247

213.01
77.63
132.54450.63397.61104.1475.74
165.6750.93
189.3423.67
284.01

2004

2003

11.35%

9.53%¥ 137,750,091
32,071,624
66,205,868
77,487,475¥ 3,644,396

Yen
For the Fiscal Years ended March 31,

Per Share of Common StockNet Income (Loss)
Cash Dividends per Share*
Common Stock
Preferred StockFirst Series Class I Preferred Stock
Second Series Class II Preferred Stock
Third Series Class III Preferred Stock
Fourth Series Class IV Preferred Stock
Sixth Series Class VI Preferred Stock
Seventh Series Class VII Preferred Stock
Eighth Series Class VIII Preferred Stock
Ninth Series Class IX Preferred Stock
Tenth Series Class X Preferred Stock
Eleventh Series Class XI Preferred Stock
Twelfth Series Class XI Preferred StockThirteenth Series Class XIII Preferred Stock¥$342.26*Non-consolidated basis.

At March 31,

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

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

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

A–
A–
A–
A–
A–
A–

a–1
a–1
a–1
a–1
a–1
a–1

—
—
A
A
A
A–

—
—
—
—
J–1
—

—
—
A3
A3
—
A3

—
—
P–1
P–1
—
P–1

—
—
BBB+
BBB+
—
BBB+

—
—
A–2
A–2
—
A–2

—
—
BBB+
BBB+
—
BBB+

—
—
F2
F2
—
F2

(as of July 5, 2004)

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

Moving from a Year of Achievement
to a Year of Proving the True Value of Mizuho

2

Mizuho Corporate Bank, Ltd.

Providing Solutions that Will Contributeto Higher Corporate Value for Customers

10

Mizuho Bank, Ltd.

Business with Individuals, Small and Medium-Sized
Enterprises, Middle Market Corporations, and Local
Governments

14

Securities, Trust and Asset Management
Business Strategies

18

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

20
22

Providing Cutting-Edge Solutions
Targeting SMEs and Middle Market Corporations
Approaches to Individual Customers
Business Results Highlights of Mizuho

32Community Activities andEnvironmental Awareness of Mizuho

34Management Structure of Mizuho

36Internal Control Systems of Mizuho

39

Financial Analysis of Mizuho

51

Financial Data of Mizuho Financial Group, Inc.

85

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

133

Senior Executives of Mizuho

144

Office Network of Mizuho

145

Investor Information on Mizuho Financial Group, Inc.

147

Disclosure Policy of Mizuho

148

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

Major Improvements in Profitability
For fiscal 2003 (ended March 31, 2004), the group recorded consolidated ordinary profits of ¥896.4 billion and net income of ¥406.9 billion. This was well
above initial targets and a significant improvement compared to our net loss inthe previous fiscal year. We resumed payment of cash dividends on common
stocks of ¥3,000 per share, and, as in fiscal 2002, we paid the prescribed dividends on preferred stocks.

Moving from
Terunobu Maeda
President & CEO
Mizuho Financial Group, Inc.

a Year of Achievement
to a Year of Proving the True Value of Mizuho
The key to this major improvement lies in our developing a range of policies

Fiscal 2002

realignments in the group's corporate structure, taking major steps to deal withrealignments in the group's management systems and the steps we took to address financial
issues, including the raising of more than ¥1 trillion in new capital. I am pleased to report

to augment our capability to provide comprehensive financial services, strengthen

Fiscal 2003

(1,000)(1,500)earning power, and further improve the group's financial position. As a result,(2,000)we were able to realize a significant improvement in the group's profitability.

(2,377.1)

The principal factors contributing to the improvement in profitability werethat fiscal 2003 was, indeed, a year of major achievements and a year of enhancing Mizuho's

higher non-interest income, and reductions in expenses and credit-related

value for shareholders. We reported consolidated net income of ¥406.9 billion, well above

costs. The increase in non-interest income was due to expansion of syndicatedour initial target, and a major improvement from the net loss reported in fiscal 2002.

0
(500)

Furthermore, we designated fiscal 2003 as a year of achievement and worked

ment for Mizuho. This followed on from the strong foundation we created in fiscal 2002 with

406.9

500

to reform the group's management in fiscal 2002, such as implementing
outstanding financial issues, and raising more than ¥1 trillion in new capital.

Last year we made a promise. The promise was that fiscal 2003 would be the year of achieve-

Net Income (MHFG)(billions of yen)

(2,500)Net Business Profits andCredit-Related Costs (The Three Banks)
2,095.2(billions of yen)

2,000

loans, foreign exchange, and other fee-based businesses.
The other contributing factor was a reduction in expenses by ¥108.6 billion

In summary, in line with our promise last year, we made decisive progress inon an aggregated basis by the Three Banks. This was accomplished by proceed-

 increasing earning power,

ing with restructuring plans, including reviewing compensation and benefits for strengthening the group's financial position,

senior executives and employees, reducing the number of employees, closing

 realizing group synergies to broaden ties with our strong customer base, andand consolidating duplicate domestic branches, and selling the head office

 moving closer to tapping the full power of group strengths to enhance profitability.

buildings of the Two Banks.

Credit-related
Costs

1,500

1,000

500

890.9
Net
Business
Profits

237.9
0
Fiscal 2002

Our mission for fiscal 2004 is to build on our achievements in fiscal 2003 and “to prove theProgress of Restructuring Plan (The Holding Companies + the Two Banks)
March 2003

March 2004 (Plan)

March 2004 (Results)

true value of Mizuho.” We are devoting all our energy to responding to your expectations by

Employees

27,90026,80026,575

focusing our energy and resources on boosting corporate value and further developing theDomestic branches

562

458

440

Overseas branches and subsidiaries

49

43

41

group's capabilities for offering comprehensive financial services.
In the following pages, I would like to review the group's performance in fiscal 2003 and954.1

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

Fiscal 2003

*Figures are described as follows:
MHFG: Mizuho Financial Group (consolidated)
The Three Banks: Mizuho Corporate Bank +Mizuho Bank (the Two Banks) + Mizuho Trust& Banking + their financial subsidiaries
for corporate revitalization (non-consolidated).
The Holding Companies + the Two Banks: Mizuho
Financial Group + Mizuho Holdings + the Two
Banks + financial subsidiaries of the Two Banksfor corporate revitalization (non-consolidated).

outline our management strategies for fiscal 2004.
2

3

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

Credit-related costs decreased by ¥1,857.2 billion to ¥237.9 billion in fiscal
2003. This reflected the accelerated disposal of non-performing loans (NPLs) inthe previous fiscal year and a decrease in loans newly classified as non-performing as a result of the economic recovery and the general improvement in corporate performance. The group also benefited from a reversal of reserves inremoving certain NPLs from its balance sheets through collection or sale of outstanding claims.
The group also continued to make reductions in its stock portfolio, as stock
prices recovered, and reported ¥189.3 billion in gains on the sale of securities.
As a result, the Three Banks reported net business profits of ¥954.1 billion,
ordinary profits of ¥806.1 billion, and net income of ¥447.9 billion on an
aggregated basis.

Significant Progress toward Strengthening Our Financial Position
Another major development in fiscal 2003 was the substantial improvement in
the group's financial position. In order to achieve this, we launched the
Corporate Revitalization Project, which is centered principally on the group's
financial subsidiaries specializing in corporate revitalization to help certain customers turn around their operations. Due to this initiative and as a result of theremoval of NPLs from the balance sheets, the Three Banks reported a reductionof ¥1,594.9 billion in NPLs, leaving a balance of ¥3,191.0 billion at the end of
fiscal 2003. As a result, the NPLs ratio fell from 6.2% to 4.4%.
We plan to further reduce this percentage to the 3% range in fiscal 2004.
We have further increased our loan
Reduction of Disclosed Claims under the Financial Reconstruction Law (the Three Banks)

other major financial groups in Japan in(trillions of yen)
6order to strengthen our position in deal-

5

Claims forSpecialAttention

4

50%
Reductionof NPLs

3

Claims with
Collection
Risk

2
1
0

Claims against
Bankrupt &Substantially
Bankrupt September 2002
Obligors

NPL amount
NPL ratio

4

loss reserve ratios to a level higher than

¥ 5,424.9 bn.
6.4%

March 2003

March 2004

March 2005 (Plan)¥ 4,785.9 bn.

¥ 3,191.0 bn.

¥ mid-2 tn.

6.2%

4.4%

3% range

ing with future credit risk.

Increase in Reserve Ratios
The Mizuho Financial Group(the Three Banks)
MTFG
March 2003
March 2004

SMFG

UFJ

83.6%

Claims with Collection Risk(for uncovered portion)

74.5%

+ 4.4

78.9%

64.98%(Intensive
Control
Obligors*)

81.38%

Special Attention Obligors*(for uncovered portion)

38.3%

+ 2.9

41.2%

29.76%

39.0%

48.54%

Other Watch Obligors*(reserve ratio against
total claims)

7.5%

+ 2.8

10.3%

4.81%

4.2%

7.62%

Claims subject to DCF
method(for uncovered portion)

Approx.
45%

Approx.
50%

Obligors subject to DCF method

Note: Based on fiscal 2003 financial results of each group.
*Reserve ratios for obligor classification based on
self-assessment of assets.

• Approx. 60% of Special
Attention Obligors*• 85% of Special Attention
Obligors* of MHCB

To minimize the risk of price fluctuations in our stock portfolio, we reduced
our stockholdings by approximately ¥500 billion in fiscal 2003. Moreover, as aresult of the recovery in stock prices, the unrealized gains of the group's stock

Net DTAs (MHFG)(trillions of yen)
2.5
2.12
2.0

portfolio have increased substantially.

1.33

1.5

In managing our Japanese government bond (JGB) portfolio, while responding flexibly to profit-taking opportunities, we have shortened the average

1.0

maturity of our holdings to minimize the risk of declines in value if long-term

0.5interest rates begin to rise.
Our consolidated net deferred tax assets (DTAs) decreased by ¥792.9 billion
to ¥1,332.9 billion as a result of recording taxable income for fiscal 2003 and0(For reference)

Ratio to Tier1
CapitalMarch 2003

March 2004

60.8% –26.9%

33.8%

the use of more conservative estimates of future taxable income. The ratio of
net DTAs to the group's Tier I capital declined from 60.8% at the end of fiscal
2002 to 33.8% as of the end of fiscal 2003.

MHFG's BIS Capital Adequacy Ratio(%)
12

With the support of investors in Japan and overseas for our drastic manage10

9.53%

11.35%

ment reform, we adopted a more proactive capital policy, as demonstrated byour raising of additional capital and repaying ¥625.0 billion of public funds in

8subordinated bonds last fiscal year.
At fiscal year-end, the group's consolidated capital adequacy ratio (BIS standards) stood at a sufficient level of 11.35%. We continue to take steps toimprove our capital position and are examining further repayments of public

20March 2003

March 2004

funds.

5

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

Realizing Group Synergies to Broaden Ties with Our Strong
Customer Base
The needs of our customers are evolving and becoming more diverse against
the continuing globalization of financial services, advances in financial andinformation technologies, and the rapid aging of the population.
A key strength of the group is its exceptionally strong customer base. We
have established a corporate structure that enables group companies to work
together effectively as a team in offering top-quality, comprehensive financial
services in response to the diversified needs of customers.
The group's two principal banks, Mizuho Corporate Bank, which serves
large corporations and provides international banking services, and Mizuho
Bank, which offers services mainly to individuals, small and medium-sizedenterprises (SMEs), and middle market corporations, are always attuned to the

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

Mizuho Bank, Ltd. (MHBK)

collaboration
between banks
and securities
subsidiaries«Advisory company for corporate revitalization»

Mizuho Advisory, Inc.

Mizuho Securities Co., Ltd.
(MHSC)

Mizuho Investors
Securities Co., Ltd. (MHIS)

ShinkoSecurities
Co., Ltd.

«Financial subsidiaries for corporate revitalization»

Mizuho Corporate, Ltd.
Mizuho Global, Ltd.

Mizuho Project, Ltd.
Mizuho Asset, Ltd.

BankingandSecurities
Business
SectorCorporate
Revitalization

Mizuho Trust & Banking Co., Ltd. (MHTB)
Trust & Custody Services Bank, Ltd. (TCSB)

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

«Research institution»

Mizuho Research Institute Ltd.

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

6Strategic
Subsidiaries

needs of their customers and are well positioned to offer the best financial
products and services, backed by sophisticated professional capabilities andcarefully tailored, flexible solutions.
In addition, we are working to add to the group's comprehensive range ofcapabilities. These activities begin with strengthening the structure for meeting
the requirements of specific customer segments by making the most ofsynergies and cross selling among our banking and securities subsidiaries. They
also include providing higher-value-added products and services, and offering
their services within the group as well as to a broad range of customers by
Mizuho Trust & Banking as well as the group's credit card and computer
systems companies.
Group companies are already beginning to realize important synergies. For
instance, Mizuho Bank is jointly developing branches with Mizuho Trust &Banking and Mizuho Investors Securities to provide customers with theconvenience of “one-stop shopping.” Similarly, Mizuho Corporate Bank utilizes
the investment banking function as well as the bond and equity-related
capabilities of Mizuho Securities to provide new and innovative financial
solutions for customers.

Fully Tapping Group Strengths to Make an Additional Major
Improvement in Profitability
During the current fiscal year, each principal group company continues tofocus on the specific details of the strategic plan formulated for each customer
segment and business area. In addition, by strengthening synergies amonggroup companies, we plan to take the maximum advantage of the strengths ofthe group to further increase earning power. Strategies of principal groupcompanies are as follows:
Mizuho Corporate Bank will further strengthen its “originate to distribute” business model based on asset turnover with loan syndication as its core,
and also offer continuous sophisticated and multi-faceted financial solutions tocustomers. Through these initiatives, Mizuho Corporate Bank will aim to raise
its ratio of non-interest income to gross profits to over 50%.
Mizuho Bank will strengthen its capability to provide financial consulting
services to individual customers with the aim of expanding higher-margin
assets under management. It will also reinforce marketing in the housing loanbusiness, a mainstay of earnings in the retail banking area.

7

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

The Mizuho Mileage Club, a new membership service, aims to expand andincrease transactions with customers who have accounts with Mizuho Bankand encourage them to make Mizuho their main bank.
These initiatives will work to significantly strengthen the earning power ofretail banking operations and fully realize the potential of our customer base,which is one of our most important resources.
In the corporate banking area, Mizuho Bank will improve its capability toprovide financial solutions to meet the needs of SMEs and middle market corporations, thereby realizing new sources of loan demand. Along with offering
a range of unsecured loan products to provide SMEs with a responsive, highquality source of funding, Mizuho Bank will also work to secure a sufficientlevel of loan spreads in accordance with the risk-return profile of its borrowers.
Mizuho Trust & Banking will enhance synergies with Mizuho Corporate
Bank and Mizuho Bank, and will expand income from trust and asset management businesses by more actively allocating its resources to growth areas, suchas real estate, securitization, and private banking.
To improve synergy and cross selling among the group banks, we haveformed the Group Synergy Reinforcement Committee, which includes representatives from the holding company and the three banking subsidiaries. Itsrole includes formulating specific poliPursue Synergies Using Mizuho's Enormous Customer Base

Individuals/SMEs andMiddle Market Corporations

Supplementary Services
for each Customer Segment(Examples:Japanese Customers Overseas,
Employees of Corporate Customers)

cies and measures to maximize groupprofitability. This committee is already
Large Corporations/International Businessproducing solid results from operating
alliances it has arranged to generate

MizuhoCorporate Bank

Mizuho Bank
Group Synergy
Reinforcement Committee(Subsidiary)

Joint Branches
Fiscal 2003: 21 branches
Target: 100 branches atthe earliest feasible time

Mizuho Investors
Securities

Mizuho Trust &Bankingbase of Mizuho Corporate Bank andMizuho Bank.

Investment Banking
Services(Examples: M&A, equityrelated business)

Mizuho Securities will aim for(Subsidiary)

ShinkoSecurities

Trust Banking Agency Branches
Expand to all domestic branches ofMizuho Corporate Bank and Mizuho Bank

Professional & Specialized
Financial Services

8

additional business from the customer

rapid growth in profitability by rein-

MizuhoSecurities

forcing its equity business capabilities

Joint underwriting
business and utilization ofMizuho Securities'
overseas operations

cation and improving its management

through placing priority on staff alloinfrastructure.

At the same time, we are concentrating on implementing
further cost cuts while making our services more convenientthrough the expansion of our ATM network and its functions
as well as use of the Internet and other channels. In addition
to the measures we have implemented to date, such as theclosure and consolidation of branches and streamlining ourhuman resources, we will take further steps to reduce
expenses, including enhancing the efficiency of our existing
branches by switching those with full-line services to thosespecializing in services for individual customers and reducing
IT-related expenses after the completion of Mizuho Bank's
computer systems integration program.
We will continue to realize further cost efficiencies with theobjective of reducing our expenses to gross profits ratio to the
mid-30% range by fiscal 2006.
Mizuho Bank will integrate its operating computer systems beginning in July
2004. The safe and secure completion of this integration is the top priority of
the group.

A Year for Mizuho to Prove Its True Value
We have defined fiscal 2004 as “a year of proving the true value of Mizuho.”
To this end, we are working to further increase profitability while also further
strengthening our financial position. This means optimizing our strengths
through our enormous customer base, our broad branch network, and thesophisticated professional capabilities of our group companies. We will maximize synergies among group companies, while enhancing our capability toprovide carefully tailored, quick responses to the evolving and increasingly
diversified financial needs of our customers.
I sincerely look forward to your continuing support as we work to attain our
objectives.
July 2004

Terunobu Maeda
President & CEO
Mizuho Financial Group, Inc.

9

Providing Solutions that Will Contribute to Higher Corporate Value for Customers
At Mizuho Corporate Bank, we are accelerating ourtransformation from our conventional asset-dependent
financing business model to a market-oriented indirect
financing model. At the same time, we are working tofurther provide optimal solutions as we aim to become
the “Best Solutions Provider” by offering highlysophisticated solutions in response to customers'
increasingly diverse and sophisticated needs.
As our management and employees endeavor to
make Mizuho Corporate Bank even more profitable,
we look forward to the continued support of ourshareholders and customers.
July 2004
Hiroshi Saito
President & CEO, Mizuho Corporate Bank, Ltd.

In order to systematically provide solutions that will contribute tohigher corporate value for customers, we engage in the widest
range of financial services on a continuous, multi-faceted basis.
As you work to establish a businessmodel based on asset turnover,what sort of measures have you
taken in relation to the syndication
business, which is an area that is
expanding significantly in Japan?

effective use of bank assets and expand our noninterest income. We continue our hands-on efforts
to expand our syndication business using our enormous network of institutional investors consistingof financial institutions and the largest customer
base of any domestic financial group.

10

Amidst dramatic changes in Japan's economic

With respect to origination, in order to promote

structure and financial frameworks, we believe

the diversification of syndicated loans, we havedrastic reforms of asset and profit structures arerecently been making use of syndication functions

essential. Therefore, since 2002, we have taken var-that go beyond conventional corporate financing

ious steps to transform ourselves from our conven-techniques such as M&A and corporate revitaliza-

tional asset-dependent business model to a market-

tion. As for distribution, we have been working tooriented indirect financing model, or in other words,

expand our investor base by holding syndication

an “originate to distribute” business model based

seminars to pass on useful information concerningon asset turnover with loan syndication as its core.

syndicated loans. As a result, the domestic syndi-

In December 2002, we established the Syndicatedcated loan market has continued to expand dra-

Finance Business Unit—a world-class unit and thematically, reaching ¥19 trillion in fiscal 2003, oflargest of any Japanese bank—to respond to ourwhich the Mizuho Financial Group now has thecustomers' funding requirements and make morelargest market share at 40%.

Mizuho Corporate Bank — “Best Solutions Provider”
Offering customers the optimal solutions to their management issues.

Customers

Responding
to impairment
accounting

Sophisticated Product Line-Up

Reviewpension plans

Offer proposals that will help
enhance customers' corporate
value.

Entry into new
businesses

Management
issuesReduceinterest-bearing
debt

Sell off
non-corebusinesses
Diversify
fund-procurement
methods

Syndicated loans
M&A and MBO

Securitization

Offer continuous, multi-faceted solutions that combine multiple products
to suit customers' requirements.

Real estate finance

CMS

Mobilize the full range of groupcapabilities, including banking,securities and trust products.

Corporate revitalization

Support for companies
entering foreign markets

Support for the introduction ofdefined contribution pensions

Achieving high profitability levels to rank among the top global banks.

Moreover, based on our awareness that the cre-

October 2003. At a time when financial institutions

ation of a secondary market for trading in loans is

are required to adopt a strategic approach to credit

essential for the rapid development of the domestic

portfolio management, we expect demand for loan

syndicated loan arrangement market, we estab-trading to increase still further.

lished the Syndicated Finance & Loan Trading

As a front-runner in the syndicated loan market,

Division, the first division of its kind in the Japanese

we will work on further enlarging the primary mar-banking sector to specialize in the loan trading

ket while establishing and expanding the sec-business, and started broking loan assets inondary market.

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

20

Arrangement ofSyndicated Loans in JapanAs customers' needs become increasingly diverse

Mizuho's
Share:
40%

15

What sort of initiatives has Mizuho
Corporate Bank adopted to provide
the best solutions possible?
and sophisticated, the further reinforcement of ourcapability to provide optimal solutions gains inimportance as a management issue for us as a10“solutions bank.” We are working to further
strengthen our capabilities as we aim to become5

the “Best Solutions Provider” by offering speedy,
accurate, high-level solutions not only for cus-0

tomers' financial strategies, but also for manageFiscal
1998

Fiscal1999

Fiscal
2000

Fiscal
2001

Fiscal
2002

Fiscal
2003

Source: Fiscal 1998-Fiscal 2002: IFR Database
Fiscal 2003: Bank of Japan statistics(Market share calculated by Mizuho Corporate Bank)

ment and business strategies in such areas as thereconstruction of existing businesses and entry into
new business sectors.

11

Providing Solutions that Will Contributeto Higher Corporate Value for Customers

es to impairment accounting and other changes in

What is Mizuho Corporate
Bank doing to strengthen its
international business?

accounting systems as well as reviews of the pen-

Our international business is an essential element

sion system, and are considering various businessof our efforts to create a “Mizuho brand,” and we

strategies to strengthen their competitiveness.

have been working on strategic rebuilding of our

Meanwhile, our regional financial institution cus-business model to respond flexibly to changes intomers also face managerial issues in connection

the management environment.

Our large corporate customers are facing moredifficult financial issues than ever, such as respons-with their exploration into new business areas andWe believe one of our missions as Japan's leading

responses to new BIS rules while pushing ahead

financial group is to provide full-scale support forwith strengthening their relationship banking func-

Japanese companies engaged in global businesstions. At the same time, the needs of public sector

activities. We are strategically focusing management

entities have become more diverse and sophisticat-

resources on Asia, which we see as the group's

ed, as special public corporation and government

home ground, and because Japanese companies are

FILP (Fiscal Investment and Loan Program) reforms

highly active in developing their businesses there.

progress. Against this background, we engage inSince the pace of our customers' business develop-

the widest range of financial services on a continu-

ment in China has significantly increased, we haveous, multi-faceted basis, including M&As, syndicat-

created a framework to support their businessed loans and cash management services, as weefforts there by utilizing one of the largest networks

systematically provide optimal solutions designed

among Japanese banks, setting up business alliances

to contribute to higher corporate value for cus-with China's four major commercial banks, and con-tomers. To this end, we are working closely withcluding business cooperation agreements withother group companies by mobilizing all the prod-

regional governments and similar organizations.

uct lines offered by the group, including banking,securities and trust services.

As Japanese companies setting up operations in
China have increased sales there, their need to

To strengthen our product marketing capabilities,

avoid sales receivable collection risk has grown. In

in fiscal 2002 we undertook the reorganization of

February this year, therefore, we were among theour Financial Products Unit and Asset Management

first foreign banks to win permission to engage in& Transaction Banking Unit and greatly increased

renminbi transactions with Chinese companies andour human resources. In June 2004, we also

became the first Japanese bank to start purchasing

realigned our head office business promotion orga-

and factoring receivables held by customers

nization, establishing an industry-specific frame-

against Chinese companies. Also, foreign institu-

work in order that we can better respond to thetions, if they receive local regulatory approval, areunique and diversifying needs of customers in each

now allowed to enter the derivatives business inindustry. In this way, account officers in each busi-

China. Mizuho Corporate Bank was among theness promotion division can be more attuned to

first foreign banks to obtain this approval in June

their customer's sectoral trends than before.

this year, and based on this approval, we will fur-

By becoming a solutions bank and establishing abusiness model based on asset turnover, we aim toincrease the ratio of non-interest income to 50%
of gross profits.

ther strengthen our market-related business in
China.
From the point of view of securing a stable profit base, international operations play a major rolein maintaining portfolio distribution at certain

12

volumes by holding overseas exposures within aLaw) to ¥1,493.1 bil-

global asset allocation framework. In the U.S. andlion at the end of fiscal

Europe, we are enhancing our portfolio manage-

2003, a decrease ofment both in order to improve our profitability andover ¥800 billion, or

strengthen our credit risk management. Meanwhile,

approximately 35%,for customers with whom we maintain good long-compared with the pre-standing relationships, we have switched to a busi-

ceding year.

ness model that calls for proactively offering more

Based on our aware-sophisticated products and places non-interest

ness that industrial andincome at the core of our profits. In Europe, we

corporate revitalization will contribute to the revi-hold a top-tier position along with U.S. andtalization and further development of the JapaneseEuropean banks in MBOs and other products andeconomy, we will continue to fully support the cor-

services, and are working to strengthen this posi-

porate revitalization of those customers who are intion even further.

need of rehabilitation.

As a result of promoting efforts to reconstruct
our business model, the profitability of our international operations has greatly improved, and we

Finally, could you tell us about yourpolicies for the coming fiscal year?

feel we are closer to realizing a robust and lean

Designating last fiscal year as a year of achieve-

profit and management structure.

ment for Mizuho, the entire group worked in unison to enhance our comprehensive financial ser-

What are you doing in the area ofcorporate revitalization?

vices capabilities and strengthen our profitability.

Since highly specialist know-how and skills arepaid off as we posted a significant recovery innecessary for corporate revitalization, we brought

earnings that exceeded our initial estimates.

Our endeavors to improve our financial health also

these together by setting up our Corporate

We have designated this fiscal year as “A Year

Restructuring Business Unit in October 2002 and areof Proving the True Value of Mizuho” and we arenow endeavoring to support customer revitaliza-

committed to strengthening our profitability bytion amidst efforts to promote operations requiring

making this a year of significant progress and deci-a high degree of difficulty. Starting last year, thesive action that will serve as the culmination of ourgroup launched the “Corporate Revitalization

management strategies to date.

Project,” transferring loans, stocks and other claims

Japan is now entering the stage where it canof customers in need of revitalization/restructuringfortify the foundations for breaking out of theto the financial subsidiaries specializing in corporate

long-term deflation that has been affecting its

revitalization. We will complete the revitalization of

economy. Our management and staff are working

our customers in need of revitalization/restructur-

as one to achieve high profitability levels that willing in a time frame of three years. As we took up

put us among the ranks of the top global banks.

these challenges, we reduced our NPL balance

We look forward to the continuing support of our(claims disclosed under the Financial Reconstruction

shareholders and customers in these endeavors.

We have designated this fiscal year as “A Year of Proving the True Value of Mizuho”
and we are committed to strengthening our profitability to make this a year ofsignificant progress and decisive action.
13

Business with Individuals, Small and Medium-Sized Enterprises,
Middle Market Corporations, and Local Governments
As we fundamentally review our cost structure and allocation of management resources, we are pushing ahead
with business and management reforms with a view toestablishing a solid position as a top bank in terms ofcustomer satisfaction and profitability. Based on ourstrengths in providing information services backed byquality, volume and speed, we aim to realize a highprofit, high-efficiency business model that wins the solid
trust and support of our customers.
Our senior executives and employees are working very
hard to ensure that we become a bank that customers
can look to for assistance in meeting their financial
needs. We look forward to the continued support of ourshareholders and customers.
July 2004

Seiji Sugiyama
President & CEO, Mizuho Bank, Ltd.

In order to become a bank that customers can look to for assistance,
we aim to be proactive and accept challenges without fearing change.
What sort of bank do you wantMizuho Bank to become?

profitability, along with financial health, is gaining
in importance as a yardstick for evaluating management performance.

14

Last fiscal year, Mizuho Bank was able to make

Based on this understanding of the businessgreat strides both financially and in terms of busi-

environment, we have set out to implement ourness strategies.

strategic “Action CS” campaign, which is designed

Since becoming President & CEO in March thisto make us a top bank in terms of customer satis-

year, I have worked hand in hand with our senior

faction and profitability, and are pushing ahead

executives and employees with a strong sense ofwith management reforms. Needless to say, we

determination that we must respond to the highrealize that nothing is more important than mak-expectations that our customers have for us.

ing every possible effort to obtain a deeper under-

Looking at the business environment facing us,

standing of our customers' needs and satisfying

although we expect the economy to continue tothem as speedily as possible. In order to become arecover, our mainstay customers—small and medi-bank that customers can look to for assistance inum-sized enterprises (SMEs), and middle market

meeting their financial needs, everyone at Mizuho

corporations—still face severe conditions because

Bank aims to be proactive and accept challenges

the economic recovery has yet to really have an

without fearing change.

influence on their markets. Moreover, as deregu-

I would like to add that we are planning for fuller

lation leads to greater business opportunities,

systems integration and have made thoroughgoingcompetition between banks is increasing andpreparations for the safe and smooth branch-by-

The Strategic “Action CS” Campaign for Achieving Top Bank Status
The Top Bank in Customer Satisfaction and Profitability

Business Reforms
Full-scale efforts to strengthencore businesses by making themost of our capability to offer
information services.

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

Management Reforms
Resolute execution of cost
structure reforms.

Strengthen profitability in the
mass-retail sector.

[Overwhelming strengths]

Strengthen business promotion
capabilities by rebuilding ourchannel network.

Strength in providing information
services backed by quality,
volume and speed.

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

branch integration of our systems starting in July

resolutely pursue bold business and management

2004, with a view to completion by the end of the year.

reforms and use our overwhelming capability toprovide information services to achieve a high-What sort of strategy is“Action CS?”

profit, high-efficiency business model that wins
solid support from our customers.

“Action CS” is a bank-wide strategic campaign

For individual customers, we will strengthen ourdesigned to achieve our management objective ofconsulting services by boosting staff training andbecoming a top bank in terms of customer satis-

improving the information infrastructure with afaction and profitability.

view to promoting investment management prod-“Action” describes our determination to act

ucts such as investment trusts, foreign currency

proactively, while “CS” not only denotes

deposits and personal pension insurance. We will

“Customer Satisfaction” but also stands foralso review our credit evaluation system and“Consulting & Solutions,” that is, our ability tostrengthen our housing loan centers to boost ourprovide individual customers with consulting ser-housing loan business, which is one of the mostvices and corporate customers with solutions.

important elements of our earnings structure in the

We have some 26 million personal accounts
and approximately 90,000 borrowers amongindividual customer sector. We will also launch our
new Mizuho Mileage Club membership service.

SMEs and middle market corporations. The needs

Through these efforts, we will provide the best,of customers in both categories are becoming

most advantageous products and services to suitincreasingly diverse and sophisticated. By provid-

the changing lifestyles and financial needs of ouring carefully tailored solutions for these needs

customers. In addition to deepening and expand-

while strengthening group-wide cooperation, we

ing our transactions with our customers, we will

will work to build an earnings structure that befits

encourage more customers who disperse their

our enormous customer base. To do this, we willtransactions among several different financial

15

Business with Individuals, Small and Medium-Sized Enterprises,
Middle Market Corporations, and Local Governments
institutions to consolidate them with Mizuho as

3. Maintain our solid status in the mass-retailtheir main bank as part of a drive to greatly reinforce

market by launching the new Mizuho

our earnings from the individual customer sector.

Mileage Club membership service.

For corporate customers, we aim to secure aMore specifically, in addition to upgrading theposition as the top bank in providing solutions andcompetitiveness of our financial products to respondlending, deploying additional personnel and otherto a wider range of customer needs, we will train

resources and radically strengthening our ability toand deploy as many as 2,000 financial consultants

provide solutions for all customers, ranging from

who can respond to all kinds of consulting needs ofsmall enterprises to middle market corporations

customers by fiscal 2006, and also set up consultingthat aspire to go public and public sector entities.

counters. In cooperation with the group's securities

We will also seek to fulfill one of our social mis-company, its consultation booths have beensions by responding to a wider range of funding

installed in lobbies of 10 of our branches, and weneeds among SMEs, offering a stronger line-up ofplan to expand this number to 100 branches.

unsecured loan products while strengthening our

We are also working to speed up the screening

risk-taking capacity and making the loan spreadprocess for housing loans, making it possible tomore appropriate.

notify the results of screenings for a majority ofWhile business reforms are one key factor inloan applications on the day of application.

realizing a high-profit, high-efficiency business

Moreover, we will proactively expand our networkmodel, another is management reform. In additionof housing loan centers to respond precisely andto carrying out organizational reforms aimed at

speedily to customers' housing loan needs.

speeding up both customer services and in-house

Also, in the summer of 2004, we will launch ourdecision-making, we will implement drastic

new Mizuho Mileage Club membership service.

reforms of the cost structure in order to improve

Not having to pay any annual membership fees,

the expense ratio. We will boldly review the alloca-

Mizuho Mileage Club members are entitled to usetion of management resources, strengthening oura cash card equipped with credit card functions

branches specializing in individual customers andthrough which they can accumulate points accord-

rebuilding our office network to make it more effi-

ing to period and transaction content, and obtain

cient. With regard to reforming the humanbenefits that include preferential interest rates andresources management structure that underpins

free after-hours usage of ATMs.

business reforms, we will push ahead with training
staff, hiring specialists, and strengthening incentives in order to enhance the expertise of staff.

What is Mizuho Bank's strategy forthe corporate customer market?
The following three points are at the core of ourWhat is Mizuho Bank's strategy forthe individual customer market?
The following three points are at the core of ourstrategy for the individual customer market under
our “Action CS” campaign:
1. Be the leader in consulting services by
responding to the asset management needsof customers.
2. Be number one in the housing loan market.

16

strategy for the corporate customer market under
our “Action CS” campaign:
1. Be the top bank in providing solutions for
SMEs and middle market corporations.
2. Be the number one bank in corporate lending.
3. Expand the network of Mizuho Business
Financial Center.
More specifically, we will provide the best solutions for small enterprises, middle market corporations

and other corporations according to corporate sizeother claims of cus-and stage of growth, while simultaneously building

tomers in need of revi-a structure that can fully respond to funding

talization/restructuring

demand. In the corporate customer market, weto the financial sub-have precisely responded to customers' needs as asidiaries specializing inbank specializing in transactions with SMEs andcorporate revitalization.

middle market corporations.

We will complete the

As a result, we are developing new business

revitalization of our cus-

fields in this area through the accumulation of spe-

tomers in need of revi-

cialist know-how and expertise unique to Mizuho

talization/restructuring in a time frame of three

Bank. In the new business market in particular, ouryears.

know-how is far superior to that of other banks,

In addition to the above initiative, in May 2003,

and we proactively provide financing to customers

we concluded a comprehensive operating agree-

possessing core technologies with promising busi-

ment with the Resolution and Collection Corp.

ness potential, even if they are venture firms that

(RCC) with a view to supporting the revitalization

have been founded only recently. Mizuho Businessof the businesses of SMEs and middle market cor-

Financial Center offers accessible, speedy services

porations that were deemed capable of revival. In

to small enterprises.

April 2004, we worked together with the RCC to

Mizuho Bank brings together the group's comprehensive strengths to respond to the wide-rang-

develop a new restructuring scheme for real estatecompanies.

ing funding needs of domestic corporations, pro-

We are also contributing to the overall revitaliza-

viding a variety of structured products and sup-tion of the Japanese economy, playing a key role inporting bond and stock issues. We also offer thethe first domestic case of a company receiving the“Partner Series” of unsecured loan products insupport we requested to the Industrial Revitalization

response to the needs of companies of all sizes.

Corporation of Japan, which was established at

Through our nationwide network, we offer local

the government's initiative in April 2003.

governments financial services that are carefully

In the area of training “turnaround managers,”

designed to satisfy their need for greater adminis-

we have adopted a proactive approach to dis-trative efficiency, including PFIs and the Pay-easy

patching our staff to take part in courses for thepayment service for the electronic collection ofdevelopment of turnaround personnel for industri-

public charges.

al and financial revitalization held by the Ministryof Economy, Trade and Industry as part of its pro-

Please tell us more about your efforts
to tackle corporate revitalization.

ject for promoting the introduction of turnaroundpersonnel training.

Last year, the group launched the “Corporate
Revitalization Project,” transferring loans, stocks andWe are responding to the diverse needs of our individual, SME and middle market
corporate customers by providing comprehensive financial services throughcollaboration among group companies.

17

Securities, Trust and Asset Management Business Strategies
It occupies a top position among the major securi-

Basic Strategy for the Securities
Businessties 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 secured for itself a position among theIn addition to pursuing integrated banking and secu-

top five brokers for domestic institutional investors.

rities operations based on customer segmentation,

In terms of deals and transaction amounts, it has

the group's three securities companies—Mizuho

a top-level presence in the area of M&A and other

Securities (MHSC), Mizuho Investors Securities (MHIS)

financial advisory services for Japanese customers. It

and Shinko Securities—make the most of their capa-

also has a track record in structured finance that puts

bilities and advantages in order to ensure that theit among the market leaders in Japan.

group can maximize its comprehensive strengths.

MHSC also aims to satisfy the diversified needs ofcustomers who are active at home and abroad byIntegrated Banking and Securities
Operations

offering seamless domestic and overseas businessservices through its network of overseas securities
subsidiaries.

In the group's “Business Reorganization” implemented in March 2003, MHSC was made a sub-Mizuho Investors Securities

sidiary of Mizuho Corporate Bank (MHCB), and MHIS

MHIS offers various securities-related solutions in

a subsidiary of Mizuho Bank (MHBK) with the aim of

response to the asset management and funding

pursuing greater synergies by strengthening cooper-

needs of group customers, particularly individuals,

ation among group banks and securities companies

SMEs and middle market corporations. In addition toin accordance with customer segmentation. This

offering securities-related products in response toresulted in the creation of a framework for providing

the varied asset investment needs of individual cus-comprehensive solutions that make the most of the

tomers, it proactively engages in the bond and equity

respective functions of the group's banks and securi-

underwriting business in connection with the fundties companies.

procurement by SMEs and middle market corpora-More specifically, MHCB utilizes the investmentbanking function as well as the bond and equity-

tions, and consulting business in connection with
their capital structure planning.

related capabilities of MHSC to provide a broad
range of new and more specialized products for cus-

Shinko Securities

tomers.

Offering a full range of securities services based on a

MHBK offers its customers MHIS's equity andvast middle market/retail customer base and abond-related functions and, by jointly developing

nationwide network, Shinko Securities conducts

branches with MHIS, gives customers the conve-transactions with customers within and beyond thenience of “one-stop shopping.”

group. Shinko Securities and MHSC, focusing on
equity underwriting operations, are collaborating in a

Strengths and Characteristics of theGroup's Three Securities Companies

wide range of businesses including product development as well as joint marketing that exploits theadvantages of the two companies.

Mizuho Securities
MHSC is a wholesale securities firm that offers high-

These securities companies make the most of their

quality, specialized solutions in response to the vari-strengths and characteristics, and exert synergies toous needs of domestic and international institutional

develop a group presence that matches other major

investors, corporations, financial institutions andsecurities companies.

public sector entities.

18

Trust & Custody Services Bank

Basic Strategy for the TrustBusiness

Based on its advanced business management structure, TCSB uses the cutting-edge asset administration infrastructure it has created through proactive IT

The group recognizes the trust business as a growthinvestment to provide financial institutions, institu-

sector and is working to deliver the best solutions totional investors and other customers, as well as

customers through Mizuho Trust & Banking (MHTB),

group companies, with high-quality, high-value-

which offers a full range of trust services, and Trust

added trust and custody services and outsourcing& Custody Services Bank (TCSB), which offers high-models for comprehensive asset administration ser-level custody services. MHTB quickly and accurately

vices. TCSB also responds to customers' high-level

responds to today's increasingly diverse and sophisti-

custody requirements through its “account-keeping

cated needs of customers, and offers various prod-

institution business” developed in response to theucts to customers of MHCB and MHBK through the

Securities Settlement Systems and Infrastructure

franchise system, joint branches, and joint seminars.

Reform in Japan.

Mizuho Trust & Banking
In order to satisfy the asset management and invest-

Basic Strategy for the AssetManagement Businessment needs of individual customers, MHTB offers
various trust products and services through MHBK, atrust franchisee.

In the investment trust and pension markets, we aim

MHTB also frequently holds seminars in coopera-

to become one of the world's leading players intion with other group companies. MHTB responds toterms of both quality and assets under management.

the asset management and investment needs of a

Our asset management companies, Dai-Ichi

wide range of individual customers by introducing

Kangyo Asset Management, Fuji Investment

and proposing testamentary trusts and real estate forManagement and DLIBJ Asset Management, allinvestment.

make the most of their individual specialties in offer-

For corporate customers, MHTB cooperates with
MHCB and MHBK in offering optimal solutions ining high-quality products and services to both group
and non-group customers.

such areas as real estate, securitization, pensions,

In the distribution of investment trusts, we offer astock transfer agency business and asset manage-

widely varied line-up of products designed to meet

ment. In particular, through its sophisticated consult-the increasing complex and sophisticated needs ofing services, MHTB supports customers in formulat-

customers.

ing effective business strategies to deal with man-In the Japanese defined contribution pension

agement issues arising from changes in accounting

business, we are channeling our total resources intoand legal systems. These issues include the introduc-

providing solutions for corporate management issues

tion of impairment accounting, the return to theby supporting the formation of assets for individuals

Japanese government of the subrogated portion of

to enjoy in their retirement.

the Employees' Pension Fund, and revisions to theCommercial Code. MHTB also responds to customers' diversifying needs by proactively developing
new products and services.

19

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

Syndication Business Grows in
Sophistication

Securities
Business

Depth in Providing Solutions

Implementation ofInternational Business Strategies

ProvidingCutting-Edge
Solutions

Corporate Revitalization

Securities Business

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

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

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

MizuhoTrust & Banking Trust & Custody
Trust andServices Bank(MHTB)Asset(TCSB)
A full-line trust bank
Managementthat possesses
A highly specialized
strengths in both theBusinesstrust bank focusing on
corporate andTrust BusinessCorporate
Revitalization
Business

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

DefinedContribution
Plan Services(DCPS)

Dai-IchiKangyo AssetManagement
(DKA)

Fuji
Investment
Management(FIMCO)DLIBJ AssetManagement(DIAM)An assetmanagement company.

individual markets.

the custody business.

An entity that specializes
in managing defined
contribution pension plans.

An assetmanagement company.

An assetmanagement company.

MizuhoAdvisory

MizuhoCorporate

MizuhoGlobalMizuhoProject

MizuhoAsset

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

A financial subsidiaryfor corporate
revitalization.

A financial subsidiaryfor corporate
revitalization.

A financial subsidiaryfor corporate
revitalization.

A financial subsidiaryfor corporate
revitalization.

MizuhoResearch
Institute

DKB
Information
Systems(DKIS)

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

A think tank.

An IT-related company.

An IT-related company.

An IT-related company.

Providing Optimal Solutions

Targeting SMEs andMiddle Market
Corporations

Meeting Funding and
Financial Risk Management Needs
Support for Overseas Business Expansion
and Trading Business

Evolving Membership Services andCorporate Retail Services

Other
Businesses
Mizuho Bank(MHBK)MHBK serves primarily individuals,
SMEs, and middle market
corporations, and local governments
in Japan.

UC Card
A leader among
credit cardcompanies
in Japan.

MizuhoCapitalMizuhoFactors

A principal
venture capitalcompany.

A factoring company.

Aiming for No. 1 in Consulting Services

Approaches to Individual
Customers

Establishing a First-Class Reputation in
the Housing Loan Market

Overseas
Subsidiaries
Promoting Services Unique to Mizuho

20

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

21Advanced Financial Services of Mizuho

Targeting Businesses through Customer Segmentation

Providing Cutting-Edge Solutions

Syndication Business Grows in Sophistication
In recent years, Japan's syndicated loan market has expanded rapidly, and the group has established an overwhelming presence among Japanese banks in this area. MHCB is accelerating the switch away from its conventional asset-dependent business model to the “originate to distribute” business model (i. e., a business model based on
asset turnover) with loan syndication as its core.

Expansion of High Value-Added Syndicated Loans
MHCB has deployed teams specializing in structured loans and corporate revitalization to further expand the market for syndicated loans and increase their diversity. These expert teams are at the center of proactive use of syndication functions in new corporate financing techniques such as M&A and corporate revitalization that go beyond
traditional methodologies.
One example of a deal that exploited the features of syndicated loans to offer high value was a corporate revitalization scheme that used covenants for monitoring in cooperation with participating financial institutions. As afront-runner in the syndicated loan market, MHCB will continue to respond to the needs of both corporate borrowers and financial institutions.

Loan Trading Launched
In October 2003, MHCB established the Syndicated Finance & Loan Trading Division, which includes Japan's firstdepartment specialized in the loan trading business, and started market-making and broking of loan assets.
Like syndicated loans, loan trading promotes strategic portfolio management for financial institutions and helps
secure appropriate risk/return profiles. For corporate borrowers, on the other hand, it raises the possibility ofgreater borrowing capacity and lower funding costs.
MHCB's endeavor is attracting considerable attention in the expectation that this could make a large contribution to the creation of a loan trading market (secondary market), which is considered necessary for the reconstruction of the financial system and the smooth flow of funds in the domestic market.

Mechanisms of the Syndicated Loan Market and the Secondary Loan Market
 Diversification of portfolios
 Diversification of borrowing sources and investment instruments
 Realization of fair borrowing costs

Increasedliquidity ofloan assets

Further Expansion of the Syndicated Loan Market (Primary Market)

A front-runner in both markets, MHCB promotes market-oriented indirect financing.
Improvement and Expansion of the Loan Trading Market (Secondary Market)
Arrangement ofloan assets suitable
for loan trading22

 Enhanced flexibility of portfolio management
 Securing returns that match risks
 Greater borrowing capacity/Evolution of risk diversification effectDepth in Providing Solutions
As customer needs become increasingly diverse and sophisticated, the group is working to provide optimal solutions and has established a framework for responding to more specific requirements.

Products Designed to Establish Core Competences
Structured FinanceOur excellent record in satisfying customers' funding needs by providing ABCP (asset-backed commercial paper) andusing asset securitization to improve their management indices puts us in the ideal position to support customers inrealizing their financial strategies.
MHCB has developed a receivables integrated purchasing system (MIZUHO-GRIPS) to handle the monetaryclaims held by customers and their group subsidiaries, and has applied for a business model patent. It also offers avariety of structured finance products in response to the wider variety of securitization of assets including future
claims and intellectual property rights.

Real Estate Non-Recourse Loans
Our support for customers' financial strategies in the area of real estate assets extends from assistance and advice
with real estate development and acquisition projects to the provision of real estate non-recourse loans and thehandling of accounting for impairment of fixed assets.
MHCB has compiled one of the best records in putting together large-scale development finance projects
associated with urban renewal. These include a mezzanine finance deal for the Muza Kawasaki Symphony Hall
redevelopment project at the west exit of Kawasaki Station, and the Minami-Aoyama 1-Chome Housing Complex
Reconstruction Project, which is the first public land urban redevelopment project in Tokyo to receive approval.
GlossaryMezzanine Finance
Mezzanine finance stands part-way between corporate bonds and normal lending, and offers middle risks and middle returns.

MBO (Management Buyout)
We support customers in building the most appropriate portfolio for their needs through a full-line of advisory,acquisition finance and equity investment services handled by teams of professionals.
In addition to support from the group's banking units, Mizuho Corporate Advisory offers advisory services inconnection with MBOs and financial strategies. The group's core investment company, Mizuho Capital Partners,
also makes investments through its MBO fund.

Defined Contribution Pension BusinessAs a front-runner in the defined contribution pension business, MHCB offers integrated services ranging from feasibility studies and scheme designs to actual administration in the form of human resources and financial solutions.
In fiscal 2003, MHCB, MHBK and MHTB acquired ISO9001 certification (the international standard for quality management in business operations), the former two for their management and administration operations, the latterfor its asset management operations, providing proof of our proactive efforts to establish the Mizuho brand inthese areas.

23

Advanced Financial Services of Mizuho
Targeting Businesses through Customer Segmentation

Depth in Providing Solutions

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

Mizuho Global CMS
We offer Mizuho Global CMS to respond to the needs of customers with overseas offices for more efficient cash
management. As of the end of March 2004, this service was offered through 21 offices in 14 countries, allowing
customers to check their accounts and make transactions such as remittances via the Internet around the clock anywhere in the world. The service is available in Japanese, English, Chinese and Thai. In China especially, we are theonly Japanese bank to have obtained authorization to offer Internet banking and are developing our own services
that provide data in the Chinese language.
Mizuho's CMS Network

Improving the Efficiency of Overseas Fund Operations

Firm Banking Services
Fund Management Services
Mizuho Advanced CMS
Best Receiver

Overseas
Subsidiaries

Overseas Affiliates
Check balances andmove funds in overseas
accounts fromdomestic head office

Overseas Affiliates

Overseas Regional
Headquarters

Branches
Centralizing FundManagement at
Head Office

Customer's
Head Office

Overseas
Subsidiaries

Overseas Affiliates

Subsidiaries

Branches

Various Products to
Improve Efficiency ofFund Operations
Subsidiaries

Mizuho Global CMS

Improving the Efficiency of Domestic Fund Operations

Mizuho e-Market Financial
Mizuho e-Market Financial is the first e-procurement scheme set up by a Japanese bank with a view to reducing
procurement costs by increasing the efficiency of customers' materials procurement and purchasing operations.
Using the Internet, it offers customers' group companies greater flexibility in areas like centralized purchasing byincreasing the efficiency of operations ranging from estimates to fund settlements. In delivering these solutions, weare also able to offer advisory services based on rich experience and to propose effective operational methods.

Depth in Providing Solutions

Support for Business Risk Control
In the sales and trading sector, we are working to solidify our market reputation as a “solutions provider” by offering a variety of products, beginning with derivatives employing cutting-edge financial technologies, to customers
who face financial and business risks in areas like interest rates, foreign exchange and commodity prices. In fiscal
2003, MHCB became the first Japanese bank to be given the Asia Risk financial magazine's “House of the Year
(Energy and Commodities)” award for companies that have contributed to the derivatives business.

24

In order to propose sophisticated methods for hedging against market risk, we also introduce customers to ALM
analysis, EaR analysis methodologies, and approaches that incorporate correlation analysis.
Business Risks in the Balance Sheet and Corresponding Solutions
AssetsInvestment Products(Interest and Currency Options)

Cash and Deposits

Recovery Risk Hedges(Credit Derivatives)

Receivables

Inventory Price Fluctuation Risk Hedges(Commodity Derivatives)

Inventories

Foreign Exchange, Interest Rates
and Stock Price Risk Hedges(Currency/Interest Rate Swaps,
Equity Derivatives)

Securities,
Loan Receivables,
etc.

Real Estate Securitization Tools(Interest Rate Swaps)
Risk Hedges against Earthquake Damage
to Facilities

Tangible Fixed
AssetsRisk Hedges against Uncollectibles(Credit Derivatives)
Securitization Tools(Interest Rate Swaps)

Guarantee
Money Paid

Liabilities
Borrowings,
Bonds

Improvement in Financial Balance
Interest Rate Risk Hedge
Bond Issue Cost Contracts
Foreign Bond Hedges(Currency/Interest Rate Swaps,
Interest Rate Caps)

Reserves

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

CapitalCapitalCurbing Fluctuations in the Exchange
Adjustment Account(Currency Swaps)
Hedges against Weather-BasedEarnings Deterioration Risk
(Weather Derivatives)

Glossary
EaR (Earning at Risk)
Probabilistic estimate of the maximum fluctuation in earnings over a certain period that can be envisioned as a result of changes in market environment undercertain conditions.

Depth in Providing Solutions

Solutions for Financial Institutions and Public Sector Entities
Financial Institutions
In addition to the Japanese government's implementation of the “Action Program concerning Enhancement ofRelationship Banking Functions” announced in March 2003, our customers among regional financial institutions
have various requirements relating to new operations such as securities brokerage and over-the-counter insurance
sales, and the new BIS rules. In cooperation with other group companies, MHCB has built a framework to offer
solutions that satisfy the needs of financial institution customers in these areas.
More specifically, it offers know-how in areas like more sophisticated credit and market risk management,
securities portfolio management, business revitalization and overseas business expansion. It also responds
proactively to customers' needs in connection with off-balance-sheet transactions such as housing loan
securitization, foreign exchange administration, and the outsourcing of operations for handling principal andinterest on public and corporate bonds. During management integration, mergers and other realignments arising
within the banking industry, MHCB is able to offer the various kinds of expertise of MHSC and other groupcompanies.

Public Sector Entities
The needs of public sector entities have become more diverse and sophisticated as special public corporation andgovernment FILP (Fiscal Investment and Loan Program) reforms move ahead.
Customers who are close to privatization or transformation into independent administrative institutions need toformulate new business plans, build accounting systems and enhance their risk management programs.
We are employing state-of-the-art financial technologies and high-quality research and analysis capabilities aspart of our endeavors to provide the optimum solutions for such customers.

25

Advanced Financial Services of Mizuho
Targeting Businesses through Customer Segmentation

Implementation of International Business Strategies
As a leading financial institution in Japan, the group offers domestic and foreign customers engaged in global
business activities the best available solutions by dynamically combining our rich experience in overseas markets
with our powerful overseas network and our cutting-edge financial products.

Mizuho's Strong Presence in China

Office Network in China

We are strategically focusing management

4 Branches, 5 Representative Offices(excluding Hong Kong Branch)
Branches
Branches dealing with renminbi business
Representative Offices

resources on Asia, which we see as our homeground, where Japanese companies are highly

Dalian Branch

active in developing their business.
The pace of our customers' business development in China has significantly increased,
and we have built one of the largest networks among Japanese banks in China, withfour mainland branches (three of which arelicensed to handle renminbi (RMB) transac-

Beijing Branch
Tianjin Rep. OfficeBusiness cooperation agreements
entered with regional governments:
Shanghai Waigaogiao Free Trade Zone: Sept. '02
Dalian City: Feb. '03
Wuxi City: Mar. '03
Nantong City: Aug. '03
Qingdao City: Oct. '03
Guangzhou Municipal Board forInternational Investment: Oct. '03
Shanghai Songjiang Industrial Zone: Oct. '03
Wuhan City: Apr. '04

Shanghai Branch
Nanjing Rep. OfficeWuhan Rep. Office
Xiamen Rep. OfficeShenzhen Branch
Guangzhou Rep. OfficeHong Kong Branchtions) and five representative offices. We havealso set up comprehensive business alliances with China's four major commercial banks, and concluded businesscooperation agreements with the cities of Dalian, Wuxi and Guangzhou, creating a framework that makes themost of our deep, long-term ties with China to support our customers' business efforts.
In Japan, we established the China Business Promotion Division within MHCB to bring together the group's
China-related human resources and expertise. From the initial feasibility studies phase to proposing sophisticatedsolutions, we draw on many years of experience and the latest information to offer high value-added advisory services, earning high praise from customers.

Product Strategies for the Americas and European Markets
In the Americas and the European markets, we are switching to a business model that focuses on profits in theform of fee income from asset turnover, becoming more proactive in offering syndicated loan arrangements andsimilar sophisticated products to those customers with whom we have good long-standing relationships at the
global level. In the European MBO market, for example, the group holds a top-tier position along with U.S. andEuropean banks as an arranger. Moreover, we proactively introduce technologies developed in overseas markets
into Japan by, for example, proactively putting together securitization products such as collateralized debt obligations (CDO) that use advanced financial technology.

Corporate Revitalization
The group has been channeling all our efforts into the early achievement of corporate revitalization and a further
reinforcement of the credit creation function through our “Corporate Revitalization Project,” with the aim of completing corporate revitalization in a time frame of three years.
As part of these efforts, approximately 4.5 trillion yen in loans, stocks and other claims of the customers in needof revitalization/restructuring held by MHCB, MHBK and MHTB were transferred to the financial subsidiaries specializing in corporate revitalization. Also, with capital provided by the Development Bank of Japan and foreign institutions, the group established Mizuho Advisory, an advisory company that possesses advanced know-how in corporate revitalization.
The financial subsidiaries for corporate revitalization receive advice from Mizuho Advisory as they build up a
steady record in the area of corporate revitalization, restructuring customers' businesses through corporate splits
and business transfers, and implementing financial improvement schemes involving the underwriting of preferredstocks or debt-equity swaps.

26

Securities Business
Aiming to Become a Market Leader in the Securities and Investment Banking Businesses
MHSC operates as a wholesale securities firm that offers optimized solutions in the areas of securities and investment banking in response to the diverse needs of domestic and international institutional investors, corporations,financial institutions and public sector entities. It has established a top-class position in the bond and equity businesses, M&A and other aspects of the financial advisory business, and structured finance.

Strengthening the Customer BaseIn March 2004, MHSC completed the transfer of the entire business operations of Norinchukin Securities. Drawing
on the long-term customer relationships and expertise cultivated by Norinchukin Securities over many years, it now
offers a wide range of investment products to the Japan Agricultural Cooperative (JA) and other agriculture-related
financial institutions throughout Japan, and is strengthening its bond and equity businesses.
In the investment banking business, it is working to further expand its transaction base through a businessalliance with Resona Bank in the area of M&A. It has set up the Investment Banking Group to create more business
opportunities through cross-sectional product marketing, and is stepping up its efforts to win lead underwritings.

Global Network Gets Underway in Earnest
In March 2004, MHSC made its three overseas securities companies in the U.K., the U.S. and Switzerland into
wholly-owned subsidiaries. It is now poised to expand its cross-border transactions by further promoting global
management that includes its subsidiary in Hong Kong, and by strengthening ties with its overseas subsidiaries indealing with customers in the equity and bond-related businesses.

New Business
MHSC set up the Agent Business Promotion Arrangement Office in March 2004, which was reorganized to the
Securities Business Development Office in July 2004, and is examining the expansion of its network to incorporate
the securities intermediary brokerage business for wholesale securities. Further, to respond to the emergence ofincreasingly diversified and sophisticated products, it has established the Products Promotion Group with a view topromoting cross-selling that transcends the boundaries of bonds and equities, and strengthened its product planning and offering capabilities.

Trust Business
Pension Business
MHTB responds to customers' broadly-based needs as a pension trustee offering full services ranging from pension
planning and consultation to pension asset management.
In cooperation with Mizuho Pension Research Institute, MHTB provides ALM consultation and risk management
services offered by highly experienced professionals.
As a “Best Solutions Partner” in the area of corporate pensions, MHTB will continue to offer high-quality andappropriate services and products.

Using Trust Functions in the Real Estate Securitization Business
Against a background of growing demand for more effective asset utilization and greater diversity in fund procurement, real estate securitization schemes that utilize the trust function are coming into the spotlight.
Drawing on real estate business skills and expertise accumulated over many years, MHTB has earned an excellent
reputation for providing distinctive concrete solutions for the entrustment, purchase, disposal and development ofa wide range of real estate, from office buildings and commercial facilities to residential properties.
It is also actively engaged in the real estate advisory business and management services for listed Japan's realestate investment trusts (J-REIT).

27

Advanced Financial Services of Mizuho
Targeting Businesses through Customer Segmentation

Targeting SMEs and Middle Market Corporations

Providing Optimal Solutions
Expanding the Mizuho Business Financial Center
In October 2003, MHBK established Mizuho Business Financial Center as a subsidiary to take on the task of handling the business of comprehensive lending to small-scale companies. Staff with expertise in the lending businessstand ready to offer more personalized, high-quality services as part of a speedier response to borrowing needs. It
plans to increase the number of locations offering this service to 24 within two years, up from 10 as of the end of
March 2004.
For even greater convenience, preparations are underway for the introduction of electronic finance, whichallows customers to use the Internet to complete the procedures necessary for borrowing.

Support for Newly-Launched Businesses
MHBK provides proactive support for SME customers involved in the development of new technologies and products, developing funding methods that go beyond traditional methods, such as the copyright investment scheme,
which utilizes beneficial interests in trust, or making use of the Mizuho New Business Fund. The Mizuho New
Business Fund gave grants to an aggregate 94 companies in the period between its establishment in 1996 and fiscal 2003.
It also responds to IPO needs through multi-faceted collaboration with Mizuho Capital, Japan's leading bankaffiliated venture capital company, which has a strong record of investment and offering stocks of customers to the
public, as well as MHIS and MHTB.

 Specialists to Support Venture Businesses and New Businesses
MHBK has deployed some 10 specialists to the New Business Team of its Business Solutions Division to work
together with Mizuho Capital to strengthen its specialist support for promising growth companies that possess
advanced technologies or new business models in areas like IT, biotechnology, nanotechnology, media content andthe environment.
In October 2003, it set up the “New Business Lending Facility” to speed up its response to customers' fundingneeds.

Funding Schemes to Support Domestic Corporations
MHBK responds to the wide-ranging funding needs of domestic corporations through a full selection of structured
products, including loans with stock purchase warrants and vendor finances (with leasing company guarantees).
In fiscal 2003 it offered special purpose loans related to diesel-powered vehicles to satisfy replacement demandfor diesel-powered vehicles to meet the requirement of new exhaust emission controls introduced by the Tokyo
Metropolitan Government, Saitama Prefecture and Chiba Prefecture.
It is also responding proactively to the diversification of funding methods by arranging CLOs and CBOs as part of
the Tokyo Metropolitan Government's bond market program.
In the area of fund procurement using issues of private and public bonds, foreign bonds and equities, it also
provides support through the underwriting operations of group securities companies.

28

Support for the Transformation of National Universities into Independent Administrative
Institutions and Hospital Management
In cooperation with Mizuho Research Institute, MHBK has established a system for responding to the wide-ranging
needs of university management as national universities face transformation into independent administrative institutions. In addition to handling standard banking operations such as deposits, lending and settlements, it is actively
involved in offering factoring products, proposing systems associated with fund management, consulting andproposing various kinds of outsourcing.
It has strengthened its consulting services to address changes in the business environment affecting hospitalmanagement, providing comprehensive support through its own hospital management support services to national
hospitals and sanatoriums that have become independent institutions.

Meeting Funding and Financial Risk Management Needs“Partner Series” of Various Unsecured Loan Products for SMEs
To satisfy the diverse needs of companies of all sizes, MHBK provides a faster response to the borrowing requirements of SMEs by offering the wide-ranging “Partner Series” of unsecured loan products. To reinforce productquality even further, some products are offered in cooperation with Orient Corporation.
There are six products in the series, including “Mizuho Advance Partner,” a loan program that uses an automatic
credit-scoring model for small enterprises, “Mizuho Frontier Partner” for new customers, and “Mizuho Long
Partner,” which offers funding for up to a maximum of seven years.

Products to Support Risk Control Offered at All Branches
The group offers not only traditional financial services and instruments like foreign exchange and CP, but also a
broad line-up of cutting-edge products such as interest rate and currency derivatives, commodity derivatives (crudeoil, metals and other commodities) and weather derivatives in order to support customers in controlling financial
and various other business risks.
MHBK responds to a wide range of needs quickly by deploying a highly specialized sales support team to coverits nationwide branch network, offering timely market information through the Internet, and holding seminars forcustomers.

Support for Overseas Business Expansion and Trading BusinessSupport for Business Activities, International Cash Management and Trading Business in Asia
In order to satisfy the needs of Japanese companies that are increasingly active in Asian markets, particularly China,
specialist staff who are well-versed in overseas business provide assistance in customers' local projects through thegroup's overseas network, which is one of the most extensive among Japanese banks.
In the area of international cash management for customers, we offer the Mizuho Global CMS, which allows theaccounts of overseas subsidiaries to be managed from their head offices and facilitates a more diverse range of settlement methods.
Through our foreign exchange advisory services, professional staff offer operational support for foreign exchange
and foreign trade, suggest ideas to make trading operations more efficient and manpower saving, and provide
detailed assistance in connection with risk-mitigation policies in trading transactions.

29

Advanced Financial Services of Mizuho
Targeting Businesses through Customer Segmentation

Approaches to Individual Customers

Evolving Membership Services and Corporate Retail Services
New “Mizuho Mileage Club” Membership Service Inaugurated
MHBK will launch its new “Mizuho Mileage Club” membership service for individual customers in the summer of
2004. With no annual membership fees, Mizuho Mileage Club members are entitled to use a cash card equippedwith credit card functions through which they can accumulate points each month according to usage of the credit
card and bank products.
Points can be used to obtain preferential interest rates on housing loans and time deposits or exchanged for giftcards or Takarakuji lottery tickets. Various other benefits are available, including free after-hours usage of ATMs,
depending on the extent to which the customer uses the credit card and bank products.

Services for Corporate Employees
The group is working to improve in-house benefit schemes for employees of our large and middle market corporation customers, and to respond to the employees' needs for greater convenience through in-company banking andother services. We also draw up proposals for asset building savings and housing loans, as well as asset management.
Moreover, to cater to corporate in-house administrative rationalization needs, we formulate proposals for payroll
calculation services and the introduction of IC cash cards containing employee ID functions.
In January 2004, the Corporate Retail Sales Office was set up within MHBK to create a system whereby specialist
staff put together comprehensive proposals on benefit schemes in cooperation with MHCB.

Aiming for No. 1 in Consulting Services
Building the Foundations to Support Consulting Services
MHBK is striving to become the leader in consulting services to ensure that it remains the customer's bank ofchoice as a lifetime advisor at various stages of life. 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 personnel specializing as financial consultants by fiscal 2006 in business promotion for individual customers.
It will also establish consultation counters at all branches to enable customers to thoroughly discuss financial
matters.

Rich Line-Up of Investment Products
MHBK offers a rich line-up of investment products that customers can use in managing their assets. In addition toits mainstay investment trusts and foreign currency deposits, it has expanded its line-up of annuity products forindividuals.
To offer “one-stop shopping” for high-quality financial services, it is proactively working on tie-ups with othergroup companies.
Work is moving ahead on setting up MHIS consultation booths in the lobbies of MHBK branches with a view toestablishing a network of 100 joint branches as soon as possible. MHBK has also opened its first booth-type joint
branch with Shinko Securities.
Using the franchise system for trust businesses, MHBK handles MHTB products at all its branches.

30

Establishing a First-Class Reputation in the Housing Loan Market
Mizuho Housing Loans Successfully Satisfy a Wide Range of Needs
MHBK offers an extensive range of housing loans to match the diverse home ownership plans of customers. All of
its services feature a high degree of flexibility, allowing customers to select from various interest formats or specify
repayment amounts. For a limited period, it is offering “Mizuho Super Select” loans for new homes and refinancing, allowing borrowers to select preferential interest patterns. In April 2004, it also initiated a housing loan campaign offering a special two-year fixed interest rate of 0.9%.
It is building a system to allow rapid and appropriate responses to inquiries from customers by making flexible
use of its nationwide branch network to hold housing loan consultation sessions on holidays and expanding thenumber of housing loan centers to strengthen relationships with real estate vendors.

Promoting Services Unique to Mizuho
Mizuho's Ever More Convenient Settlement Services
MHBK works constantly to enhance the convenience of its settlement services for individual customers. It led thefield when it launched the “Pay-easy” tax and utility charge payment service, which allows customers to pay mobile
phone charges, national pension insurance charges, television reception fees and national taxes at any time and anywhere using a personal computer, mobile phone or ATM (excluding ATMs in convenience stores).
To promote the use of debit card services, it is proactively expanding the number of affiliated merchants where cash
cards can be used in cashless settlements of payments for goods.
Moreover, MHBK's “Mizuho Direct” allows customers to check their balances, make transfers between theiraccounts or transfers to other accounts, buy Takarakuji lottery tickets and execute various other transactions by personal
computer, telephone or mobile phone.

Takarakuji Lotteries
MHBK has been entrusted with the operation of Takarakuji lotteries by all prefectures and 13 designated cities inJapan.
As the “Takarakuji Bank,” it responds to customers' needs by making the most of its network of full-service
branches as well as new sales channels.

31

Advanced Financial Services of Mizuho

Business Results Highlights of Mizuho

Supporting the Financial Needs ofSupporting

Households

No. 1 in Industry Sector

Global BusinessNo. 1 among Japanese Banks
45% share in yen securities custody service forforeign investors
33% share in foreign exchange (yen clearing) services*Above figures are as of March 31, 2004.

10,440 testamentary trusts entrusted

Yen Securities Custody Service
for Foreign Investors

Foreign Exchange(Yen Clearing) Services
Mizuho's share
33%

Mizuho's share45%

No. 1 among Japanese Banks
8.1 million customers utilizing membership-style banking services

Source: MHCB

¥9.4 trillion in residential housing loan portfolio

Source: Tokyo Bankers Association*Aggregated figures of MHBK and MHTB, and excluding loans for residential housing for rent.
*Above figures are as of March 31, 2004.

No. 3 among Japanese Banks
US$1,095 million in arrangement of global project financeDomestic SB League Table*From January 1, 2003 to December 31, 2003.

Supporting the Financial Needs of(Lead Managed Issues)(Excluding city bank issues, self-financing issues,and issues targeting retail investors.)(Total Amount of Issues; ¥4,469 bn.)Amount of Lead
MarketManaging
Rank
Share (%)
Underwritings (¥bn.)
21.37
1 Nomura955

Corporations

No. 1 in Industry Sector¥1,571 billion and 35.2% share in administration of domestic public corporate bonds¥228.3 billion in lead management of wholesale electric power company bond issues

No. 1 among Japanese Banks

Ranked No. 1 in the general asset backed securities (ABS) bookrunner league table(¥434.3 billion, share 22.7%)¥7,717 billion and 40.4% share
Arrangement of Syndicatedin arrangement ofLoans in Japansyndicated loans in Japan*Above figures are from April 1, 2003 to March 31, 2004.

*From April 1, 2003 to March 31, 2004.

Mizuho's
share
40.4%

¥4.6 trillion in domestic pension funds under investment management*As of December 31, 2003.

¥2.6 trillion in securitized assets (real estate)under administration as trustee¥2.4 trillion in retirement benefit funds
under administration as trustee*Above figures are as of March 31, 2004.

Domestic Pension Funds under
Investment Management

Nomura Asset Management
Nissay Asset Management

No. 2 in Industry Sector

Source: MHCB based on statistics by Bank of Japan

Sumitomo Mitsui Financial Group(Daiwa SB Investments + Sumitomo
Mitsui Asset Management Company)

Marketvolume¥38.9
trillion*Aggregated figures of DKA, FIMCO and DIAM.
Source: Japan Securities Investment Advisers Association¥930.3 billion in lead management of domestic straight bond (SB)issues excluding city bank issues, self-financing issues,and issues targeting retail investors

Mizuho Securities

930

20.82

3

Daiwa Securities SMBC

726

16.26

4

Nikko Citigroup

597

13.37

5

Mitsubishi Securities

358

8.02

6

UFJ Tsubasa Securities

190

4.25

7

Goldman Sachs

180

4.04

8

Morgan Stanley

143

3.21

9

Shinko Securities

90

2.03

10

Norinchukin Securities

57

1.28

Source: MHSC based on I-N Information Systems

General ABS Bookrunner League Table(ABSs backed by assets in Japan: Domestic public
and private bonds and Eurobonds.)
Number Amount of Market
of Issues Issues (¥bn.) Share (%)

Rank

Mizuho* ¥4.6 trillion
Others2Overall Evaluation

No. 1

In bond analyst and economist divisions
in the 9th Nikkei Bonds & Financial Weekly rankings
published by Rating and Investment Information*No. 1428, March 8, 2004 issue.

1

Mizuho Financial Group20

434 22.7

2Merrill Lynch

4

268 14.0

3

Shinsei Bank4

207 10.9

4

Nomura8

193 10.1

5Daiwa Securities SMBC

7

170

8.9

6

Credit Suisse First Boston

5

150

7.9

7

Citigroup

5

114

6.0

8

Morgan Stanley

3

105

5.5

9

UFJ Group

3

62

3.3

10

Goldman Sachs

2

55

2.9

*Aggregate figures of MHSC and its overseas securities subsidiaries.
Source: Thomson Financial*From April 1, 2003 to March 31, 2004.

32

33

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

 Traffic Safety Campaign
As part of the group's annual “Yellow Badge Traffic Safety Campaign,” weprovide first graders throughout Japan with yellow badges that, when worn,
signify they are automatically covered by traffic accident insurance. 2004 marks the40th year of this campaign, which started in 1965, and is sponsored by MHFG,First graders taking part in Yellow Badge
Traffic Safety Campaign activities.

Sompo Japan Insurance, The Meiji Yasuda Life Insurance Company and The Daiichi Mutual Life Insurance Company. The campaign has now provided insurance
coverage for a total of approximately 50 million children in Japan.

 Support for the “All-Japan Elementary and Junior High SchoolStudents' Environmental Art Contest”
Since 1996, we have supported the “All-Japan Elementary and Junior High SchoolStudents' Environmental Art Contest,” which promotes environmental education
among elementary and junior high school students. Winners are commended andWinners of Mizuho's Environmental Art
Contest.

presented with books containing the winning entries.

 Mizuho Charity Fund
In August 2002, we established the Mizuho Charity Fund as a fund collection
method to promote community activities by the group's staff. Contributions inunits of ¥100 are collected directly from Mizuho employees' monthly salaries anddonated to group philanthropic foundations to purchase vehicles to be presented
to welfare facilities, used as relief funds during large-scale disasters andPresentation of vehicle for use by a welfare
facility.

contributed to volunteer organizations selected from groups recommended by
employees.

 Activities of Philanthropic Foundations
The group supports welfare assistance for senior citizens and physically challenged
persons, education and scholarships, international exchange and academic
research through the following philanthropic foundations.
Donation of children's books to elementary
schools in rural areas.

Mizuho Education Welfare
Foundation
Assistance for education in rural
areas, education of physicallychallenged children, and welfare
for senior citizens (grants, donations of sports equipment andwelfare vehicles).

Mizuho Welfare Foundation
Assistance in connection with thewelfare of the disabled. (Grants,
donations of electrically powered
wheelchairs and welfare vehicles.
Funds for translating books into
Braille for visually impaired university students.)

Mizuho International
Foundation
Scholarships for students fromoverseas studying in Japan.
Training for personnel to undertake work in the area of international exchange.

Mizuho Foundation for the
Promotion of Sciences

China study tour.

34

Research grants in the areas ofengineering and law. Public essay
contests in the areas of law andeconomics. Scholarships for students from overseas studying inJapan.

Mizuho ScholarshipFoundation
Scholastic loans for deserving students facing economic hardship.

Support for Art and Culture Coming-of-Age Day Concert
This year's “Coming-of-Age Day Concert” took place at the Suntory Hall in Tokyoon the Coming-of-Age Day national holiday on January 12, 2004. The concerts
have been held annually since 1990 with a view to supporting young artists andpopularizing classical music among the next generation of young people. One
hundred people who became 20 years old this year, the legal age of adulthood inJapan, were invited through a drawing to attend the event.

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

Environmental Activities~We are aware that it is our social responsibility to take into account environmental issues as we try tomaintain a balance between economic development and environmental preservation.
In compliance with laws and ordinances relating to the environment, we are working to contribute to the protection of theenvironment through energy and resource conservation efforts that include separating and collecting garbage by type andusing recycled materials. At the same time, we are tackling environmental issues as a financial institution by supporting
customers' programs for dealing with the environment and offering financial products and services that contribute toenvironmental preservation.

 Developing Environment-Related Financial Products and Advisory Services
Services related to
global warming
Project finance

Description
The latest information on greenhouse gas emissions, trading and advisory services concerning
the creation of trading systems, creation of schemes concerning CDM/JI (clean development
mechanisms and joint implementation) investments, and the development of funding methods
for validation and carbon funds.
Advisory services for CDM/JI investments, arranging finance for wind power generation andgarbage incineration facilities.

Natural energy-related
products

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

Environmental
management consulting

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

Support for
Implementation of LCA (life cycle assessments) in connection with products and services.
implementing LCA
 CDM/JI: The mechanism for the greenhouse gas emission reduction project adopted under the Kyoto Protocol.

Wind power generators at Teshio River in
Hokkaido.

 Environmental Risk Assessment in Financial Operations
We factor environmental risks into a growing number of credit decisions concerning companies and projects, and evaluations ofcorporate value in M&A transactions. Moreover, following the enforcement of the Law for the Prevention of Soil Pollution in
February 2003, cases of soil pollution uncovered in connection with evaluations of real estate collateral have caused properties todepreciate in light of strict application of real estate appraisal criteria.

 Adoption of the “Equator Principles”
MHCB is the first Japanese bank to adopt the Equator Principles, which are a standardized framework employed by private banks
that take into consideration the environmental and social impact of projects financed through project finance schemes.
The Equator Principles have been adopted by major western banks since June 2003, and 21 major banks around the world
adopted the Principles as of April 30, 2004.

35

Management Structure of Mizuho
remuneration, we have established two advisory bodies:Management Framework of Mizuho

the Nominating Committee and the Compensation

Group Management Framework

Committee, both of which include outside Directors.

The financial holding company MHFG 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 the core group compa-

execution by Directors is legal by attending board meetings

nies* and maximizing the benefits of customer segmenta-

and expressing their views.

tion based on legally separate subsidiaries, thereby realiz- Execution of Duties

ing synergies within the group and enhancing the special-

In respect of excution of duties, MHFG has adopted theization of individual group companies.

Executive Officer System in order to separate theGroup companies meanwhile carry out their businesses

managerial auditing function from the execution of duties,

in their respective sectors in line with the basic policies set

and clarify lines of authority and responsibility. The

by MHFG.

President & CEO controls MHFG's overall business withultimate responsibility for execution of duties. In addition

MHFG's Corporate Governance Structure

to establishing the Executive Management Committee as

MHFG devotes its efforts to make its corporate

an advisory body to the President & CEO, the group has

management more transparent and efficient and carry out

set up Business Policy Committees to serve as forums for

its business activities with integrity and fairness inthe discussion and coordination of company-wide issues ofconformity with social standards. To this end, MHFG

concern to the Executive Officers.

positions compliance as one of the fundamental principles

MHFG has also set up the Internal Audit & Complianceof sound business management and complies strictly with

Committee to fulfill an internal audit function under the

all laws, ordinances, rules and regulations.

chairmanship of the President & CEO by checking whether
operational execution is appropriate from the viewpoint of Board of Directors and Corporate Auditors

compliance and audit. Outside specialists (currently one

MHFG's Board of Directors sets management policies,

lawyer and one accountant) participate in the Internal

determines important matters for MHFG and its group

Audit & Compliance Committee as special members tocompanies, and supervises the manner in which Directors

reinforce its expertise and objectivity.

and Executive Officers fulfill their duties. Outside Directors

MHFG has also established an advisory board of outside

participate in board meetings from a position that is

experts who offer objective evaluations and advice fromindependent of the actual execution of duties toan independent standpoint, aiming for a more open stylestrengthen the management and monitoring functions ofof management.

the Board of Directors.
To ensure transparency and objectivity in personnel
matters relating to the Board of Directors and Directors'*Core group companies:
MHCB, MHBK, MHSC, MHTB, MHIS, TCSB, DKA, FIMCO, DIAM, UC Card,
Mizuho Research Institute, DKIS, FRIC, KSD, Mizuho Capital, Mizuho Advisory

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

Nominating Committee
Compensation Committee

Executive Management Committee
Business Policy Committees

President & CEO

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

(As of June 25, 2004)

36

Profit Management System of Mizuho

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

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

We have adopted the basic policy of reinforcing our

Consolidated Profit Management

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

cutting costs. Centered on MHFG, we conduct profit

profitability, we manage their profits on a consolidated

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

core companies.

that is balanced for the entire group.

approach best suited for its individual business models.

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

positions of the core group companies within the group

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

profits with those of the core group companies.

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

Allocation of Risk Capitalvalue.

In an environment where the financial sector faces

Based on the core group companies, MHFG is making

progressive deregulation and globalization, and financial

efforts to optimize our business portfolio, managing

technology grows in sophistication, financial institutions

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

types of risk.

income, and carrying out performance management,

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

built a management structure under which optimized

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

allocations of risk capital drawn from equity capital andother sources.

Further, most of the core group companies establish

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

their respective company's business group/units based on

capital at the level of the holding company and the core

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

allocations drawn up by MHFG.

efficiency by allocating resources more efficiently based on

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

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

Glossary

company engages in business activities within the limits of RAROC (Risk-Adjusted Return on Capital)

that risk capital and RAROC is then used as a performance

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

index to evaluate the return on allocated risk capital.

Risk capital allocation

Allocation of risk capital to the core group companies

Management resources allocation function

Risk-based profitability assessments

Risk control function

Management to preserve allocated risk capital

37

Management Structure of Mizuho

Human Resources System of Mizuho

Optimize Uniqueness of Group Companies andSynergies

Vision for Human Resources: ROE on Human
Resources Investment

Employees are employed by one of the group companies

The group and its employees have set a shared vision foraim of creating a group of specialists that can deliverhuman resources as follows:

maximum innovativeness and speed.

(MHFG, MHHD, MHCB, MHBK, MHSC, MHTB) with the“We promote the “ROE” principle for human resources

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

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

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

employees.”

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

Responsibility: Observe the principles of independent

Promotion of the “Professional Career Path”

judgment and self-accountability.
Opportunity: Provide equal opportunity.

We have put in place multi-featured compensation

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

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

Establishing a Corporate Culture Full of Vitality

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

group's common code of conduct. These values, serving as
general managers, along with the 360-degree employee

Rejuvenation of the Organization and Pursuitof Specialization

performance evaluation*, shall be instilled in all employees

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

system for branch general manager positions to encourage

the axis of our personnel evaluation system used by(1) Possessing a “customer-first” corporate objective.

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

employees. As of May 31, 2004, we achieved a dynamic(3) Being rational and fair in making decisions.

rejuvenation of the organization by selecting 39 applicants(4) Placing importance on speed.

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

managers.

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

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

Common Platform for Human Resources
MHFG

MHHD

MHCB

MHBK

MHSC

MHTB

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(Career paths, job groups, job grades, group internal recruiting system, etc.)

38

CommonPlatform

Internal Control Systems of Mizuho
Compliance Structure

Compliance Activities
Furthermore, we have drawn up the Mizuho Code of

Basic Compliance Policy

Conduct, which establishes clear and concrete standards ofWe are acutely conscious at all times of our social

ethical behavior, distributing it to all senior executives andresponsibilities and public mission as Japan's leading

employees of the group and ensuring that they are wellcomprehensive financial services group. We, therefore,aware of its contents and act in accordance with them.

work to ensure that we observe all laws and regulations,

Each group company has also prepared a complianceand pursue corporate activities in a fair and honest

manual, which serves as a practical guidebook formanner that conform to the norms accepted by society.

rigorously enforcing compliance, clarifying the laws andPlacing thoroughgoing compliance as one of theregulations that group companies must observe infundamental principles of sound business management,

pursuing their business activities and the complianceeach group company pursues compliance and establishes

activities they should follow.

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

Again, we are doing our utmost to ensure that senior
executives and employees are fully acquainted with thecontents of these manuals through compliance training.

Compliance Structure

To check compliance levels, we have established

In order to check that all business activities are appropriate

measures for ensuring that compliance is thoroughly

in terms of compliance and audits, MHFG, MHCB andenforced through primary self-checks by individual units

MHBK have established their respective Internal Audit &and secondary checks by the internal audit section.

Compliance Committees, which is headed by the CEO andEach fiscal year, group companies also draw up

includes Deputy Presidents, the Chief Compliance Officercompliance programs containing concrete measures for(CCO) and external specialists in legal and accounting

ensuring that compliance is thoroughly enforced, including

matters among its members. Moreover, the above

various measures associated with establishing acompanies have established individual Compliancecompliance framework, training and checks. Progress in

Divisions under the CCOs. These divisions are responsible

implementing the programs is monitored every half-year.

for compliance planning and implementation, and control
compliance management throughout each company. The
head of every organizational unit is responsible forCompliance Structure

guidance and implementation in connection with

MHFG

compliance, while the compliance officer/compliance

Board of Directors

administrator is deployed to check the status ofInternal Audit & Compliance Committee(Chairman: President & CEO)compliance.
Other core group companies such as MHSC and MHTB
have also established compliance structures that suit thecharacteristics of their respective business sectors.
MHFG monitors the status of compliance throughout
the group from reports submitted by the core groupcompanies, and adopts appropriate responses whenevernecessary.

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

MHHD
Joint management by
MHFG and MHHD

Compliance at subsidiaries of the core groupcompanies is monitored and managed through the coregroup companies themselves.
MHHD cooperates with MHFG in managing compliance
at MHCB, MHBK, MHSC, MHIS and their groupcompanies.

MHCB
MHBK
MHSC
MHIS

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

Subsidiaries of
the above group companies

Subsidiaries of
the above group companies

MHTB and other39

Internal Control Systems of Mizuho

Risk Management Structure

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

Commitment to Risk Management

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

Basic Approachagement for the group as a whole.

Further progress in financial deregulation and internationalization has led to rapid growth in the diversity and complexity of banking operations, exposing financial institutions more than ever to various kinds of risk, including
credit, market operations, IT, legal, settlement risks and soon. In order to raise our corporate value while ensuringthat the business of both the group as a whole and individual group companies remains healthy and stable, we
are well aware that adopting risk management and control measures that match our operations and their inherent
risks is an issue of key importance to management. For
this reason we are taking steps to strengthen our risk

More specifically, MHFG regularly and as required
receives reports and applications concerning the risk management situation from core group companies and gives
them appropriate instructions concerning risk management. MHHD cooperates with MHFG in managing the riskof MHCB, MHBK, MHSC, MHIS and their group companies.
Each core group company also has its own system for
managing different types of risk, regularly and as required
receiving reports on the status of risk at their own groupcompanies, and giving them appropriate instructions onrisk management.

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

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

Core group companies

MHFG
Report on therisk management situation.

MHHD

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

40

Manage risk of core group companies

MHTB
TCSB, etc.
MHCB
MHBK
MHSC
MHIS

Give instructions
concerning
risk management.

Report on the risk
management situation.

Subsidiaries
managed by thecore groupcompanies.

General Concept of Risk Management

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

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

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

MHFG also controls risk within managerially tolerable lim-

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

manage each type of risk according to its characteristics.

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

account and other measures of financial strength. To

we have established a risk management structure to iden-

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

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

proper grasp of the risk profile within this framework.

tative terms.

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

connection with risk management, the group identifies

ed to MHCB and MHBK by risk category, and frameworks

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

ther allocate it to their business units.

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

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

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

Capital account, etc.

Core groupcompanies'
risk exposure*

MHSC

Allocated risk capital

The group's financial
strength

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

Credit risk
Market risk

Allocation toeach business unit

Equity risk
Operational riskGroupcompanies, etc.

MHTB
MHBK

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

MHSC
MHTB

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

41

Internal Control Systems of Mizuho

to measure the potential for credit risk in order to identify

Credit Risk Management

it and devise appropriate responses. MHHD and MHFG

Basic Approachjointly manage risk for their group companies.

We define credit risk as the group's exposure to the riskthat it might incur losses because of a decline in, or total

Credit Risk Management Structure

loss of, the value of assets (including off-balance-sheet

 MHFG's Credit Risk Management Structure

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

MHFG's Board of Directors determines the most importantfinancial position. The group has already established thematters pertaining to credit risk. In addition, the Portfolio

methods and structures necessary for grasping and man-Management Committee discusses and coordinates basic

aging credit risk, which has become increasingly complex

credit risk policy and overall credit portfolio management

because of financial deregulation, internationalization andand monitoring for the group. The Chief Risk Officer

the growing sophistication of transactions.

(CRO) is responsible for matters relating to credit risk man-

MHFG manages credit risk for the group as a whole.

agement planning and operations. The Risk Management

More specifically, we have adopted two different but

Division and the Credit Risk Management Division jointly

mutually complementary approaches toward credit risk

monitor, analyze and submit suggestions concerning credit

management. The first of these is to curb losses arisingrisk, and formulate and execute plans in connection withfrom the emergence of credit risk by controlling the entire

basic matters pertaining to credit risk management.

process for each individual transaction, from granting the Credit Risk Management at Core Group Companies

credit through to recovery, on the basis of assessments ofCore group companies manage their credit risk according

the credit standings of the counterparties involved. The

to the scale and nature of their exposures in line with thesecond is to manage the portfolio using statistical methods

Basic Policy for Credit Risk Management set forth by
MHFG. Each company's Board of Directors determines key

Credit Risk Management Structure

matters pertaining to credit risk.

MHFG

Board of Directors

MHCB, MHBK and MHTB (the Three Banks) have eachestablished Business Policy Committees to discuss andExecutive Management
Committee

CEO

Portfolio Management
Committee

Head of Risk Management
Group (CRO)

coordinate overall management of their individual credit
portfolios and transaction policies towards borrowers. The
senior executive officer responsible for risk management
oversees matters relating to credit risk management plan-

Risk Management Division, Credit Risk Management Divisionning and operations. The Credit Risk Management Divisionand the Risk Management Division under the senior execu-•Set risk management policies•Give instructions concerning
risk management•Report on the risk
management situation

tive officer responsible for risk management are in chargeof credit management, and measuring and monitoring
credit risk, and regularly present reports on the risk man-Core group companies
MHCB

MHBK

MHTB

MHSC

Other coregroup
companies

agement situation to MHFG. Individual credit examination
divisions approve individual transactions in accordancewith the lines of authority stipulated by the basic policies
for credit risk management. To provide checks and bal-

Board of Directors
CEO

The Three Banks

ances, the Three Banks have also established Credit
Review Divisions to function as internal auditors that are

Executive Management Committee

independent of the business divisions.

Business Policy Committees

 Individual Credit Management

Senior executive officers
responsible for risk management

One of the most important elements of the Three Banks'
risk management infrastructure is the use of a 16-grade

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

unified credit rating system. In principle, credit ratings
apply to all borrowers and are subject to regular reviews at

42

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

NormalObligors

Watch
Obligors

A

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

B

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

C

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

D

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

E

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

F

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

Substantially
Bankrupt
Obligors

G

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

Bankrupt
Obligors

H

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

Intensive
Control
Obligors

Non-Accrual, Past
Due & Restructured
Loans

Claims Disclosed
under the FRL

Definition of Ratings

Normal Claims

Claims for Special
Attention

Claims with
Collection Risk

Claims against Bankrupt
and Substantially
Bankrupt Obligors,
and equivalent

Restructured Loans
Loans Past Due for
3 Months or More

Non-Accrual
Delinquent Loans

Loans to Bankrupt
Obligors

least once a year to promptly reflect their term-end corpo-

system and credit risk measurement tools to ascertain andrate results, as well as special reviews as required whenev-

monitor the status of their portfolios. They are also

er a borrower's credit standing changes. This enables the

improving their credit decisions and post-transaction man-Three Banks to monitor both individual borrowers and theagement functions by examining individual transactions

status of the overall portfolio in a timely fashion. Since wefrom these viewpoints, providing internal audits and risk

consider credit ratings to be a primary phase of the self-

management guidance to individual business promotion

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

obligor classifications used in asset self-assessments.

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

istics of their respective business sectors.

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

Portfolio Management

Accrual, Past Due & Restructured Loans.”)

 Expected Loss and Unexpected Loss

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

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

ods to calculate the possibility that our credit portfolio may

ment and in preparations for making the appropriate write-

generate bad debt losses. There are two key figures:

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

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

under the oversight of the senior executive officer responsi-

amount in the case where losses exceed the expected loss.

ble for risk management is in charge of overall control of“Expected loss” is covered out of profits on credit transac-

self-assessment of assets, cooperating with the administra-tions, and is used as a reference value when setting transac-

tive divisions specified for each type of asset, including loantion guidelines. “Unexpected loss” is covered out of total capi-

portfolios and securities in executing and managing self-

tal when it actually materializes. The credit portfolio is there-

assessments. This results in a structure that allows thefore monitored from various angles to ensure that unexpect-group to identify and control the actual quality of assets.

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

The Three Banks thus use the unified credit ratingtal, and limits are applied to the portfolio where necessary.

43Internal Control Systems of Mizuho

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

other customers in Japan.
Making the most of respective portfolios' features, theyFrequency
Average

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

endeavoring to reduce expected loss while simultaneously
using financial technology in strategic acquisitions andsales of assets. While keeping a sharp eye on the potential
for unexpected losses, they also aim to raise overall group
capital efficiency, boost profitability and shareholder value,and enhance the sophistication of its credit risk manage-

Loss amount

Expectedloss amounts

ment using this as a base.

Maximum loss amounts

To control credit concentration in certain companies,

Unexpected loss amounts

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

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

MHCB's Credit Portfolio

large a proportion of overall credit risk to be allocated inEuropecertain areas. One type is “credit concentration risks,”

Other

Asia

which stems from granting too much to certain individualNorth America

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

MHBK's Credit Portfolio
Public sector
entities

refer to the figure “Allocation of Risk Capital and Control

Otherof Credit Risk.”)

Individuals

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

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

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

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

Credit concentration risk
 Individual company ratings-based
credit guidelines

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

44Chain reaction default risk

Control

Equivalent to credit concentration risk amounts

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

Equivalent to chain reaction default risk amounts

Market and Liquidity Risk Management

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

Basic Approach

For banking activities, position limits based on interest rate

We define market risk as the risk that the group could

sensitivity are also set as needed.

incur losses because of fluctuations in interest rates, stock

These limits are discussed and coordinated by the ALM

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

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

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

significantly less favorable than usual (market liquidity

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

agement systems), profit targets and the market liquidity

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

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

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

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

group's exposure to market risk (MHCB, MHBK, MHSC andMHFG manages market and liquidity risk for the group

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

Basic Policy for Market Risk Management drawn up by MHFG.

Policies for Market and Liquidity Risk Management for the

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

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

MHFG

Board of Directors

Market Risk Management Structure

Executive Management
Committee

CEO Market Risk Management
MHFG's Board of Directors determines key matters per-

ALM & Market Risk
Management Committee

Head of Risk Management
Group (CRO)taining to market risk management policies. The ALM &Market Risk Management Committee broadly discusses

Risk Management Divisionand coordinates matters relating to basic ALM policies, riskplanning and market risk management, proposing
responses to emergencies such as sudden market changes.
The CRO is responsible for matters relating to market risk

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

management planning and operations. The Risk Management

Core group companies

Division is responsible for monitoring market risk, reports
and analyses, proposals, and setting limits and guidelines,

MHCB

MHBK

MHSC

MHTB

Other
core groupcompanies

and for formulating and implementing plans relating tomarket risk management.
The Risk Management Division assesses and manages
overall group market risk. It also receives reports from coregroup companies on their market risk management thatenable it to obtain a solid grasp of the risk situation, submitting reports to the CEO on a daily basis and to theBoard of Directors and the Executive Management
Committee on a regular basis.

Board of Directors
CEO
Senior executive officers
responsible for risk management

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

Offices
Risk Management Division

Middle Offices
Front Offices

To manage market risk, limits that correspond to risk
capital allocations are set according to the risk profiles of45

Internal Control Systems of Mizuho

relating to market risk management while their CEOs are

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

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

cash flow situation are submitted to the ALM & Market

Committees are responsible for overall discussion andRisk Management Committee, the Executive Management

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

committees discuss and coordinate matters relating to

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

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

ment, proposing responses to emergencies such as sudden

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

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

cussed further by the Executive Management Committee,

management. Based on a common group risk capital allo-

then determined by the CEO. MHFG has established classi-

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

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

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

tal allocated to market risk by MHFG.
These companies have established specialist company-cal,” and has laid down response procedures for dealing
with cases where they are deemed to fall into the “cause

wide market risk management divisions to provide inte-

for concern” or “critical” categories.

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

and proposals, set limits, and formulate and implement

The liquidity risk management structures of MHCB, MHBK,

plans relating to market risk management. The risk man-

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

status of market risk management to the CEO and top

executives responsible for risk management are responsi-

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

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

ALM and trading units are in charge of matters pertaining

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

market operations, they have established middle offices

The methodologies used for ensuring precise control of

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

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

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

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

control risk, the middle offices manage risk using addition-

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

response procedures for dealing with cases where they are

tor their market liquidity risk for individual financial prod-

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

ucts in the market while taking turnover and other factors

categories.

into consideration.

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

Liquidity Risk Management Structure

and cash flow management to the ALM & Market Risk

 Liquidity Risk Management

Management Committee and other Business Policy

MHFG's liquidity risk management structure is fundamental-

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

the CEO.

described above. However, the head of the Financial

46

Control & Accounting Group of MHFG is additionally

Status of Market Risk

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

cash flow management operations, while the Financial

The graph on page 47 depicts the status of VAR in fiscal

Planning Division is responsible for monitoring and adjusting

2003 (ended March 31, 2004). In particular, as shownMHFG's Fiscal 2003 VAR

MHFG's Fiscal 2003 Back Testing

Banking activities

Profits/losses (assumptive basis) (billions of yen)
6.0

(VAR, billions of yen)

(%)

350.0

1.4
VAR

JGB Yield (5-Year)

300.0

1.2

250.0

1.0

200.0

0.8

150.0

0.6

4.0
2.0
0

100.0

Maximum: ¥317.4 billion
Minimum: ¥78.9 billion
Average: ¥198.5 billion

50.0

0.4

(4.0)

0.2

(6.0)

0

1.0

2.0

3.0

4.0

03.11.11
03.11.25
03.12.09
03.12.23
04.01.06
04.01.20
04.02.03
04.02.17
04.03.02
04.03.16
04.03.30

03.09.02
03.09.16
03.09.30
03.10.14
03.10.28

03.08.05
03.08.19

03.05.27
03.06.10
03.06.24
03.07.08
03.07.22

03.04.29
03.05.13

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

5.0

6.0

VAR (billions of yen)

0.0
03.04.01
03.04.15

0.0

(2.0)

The graph above depicts daily VAR on trading activities
in fiscal 2003, and the corresponding paired distribution of
profits and losses. There were five cases where profits/

Trading activities

losses exceeded VAR during the period (one case of loss),(VAR, billions of yen)and this confirms that our internal models are sufficiently

5.0

accurate in measuring our group's market risk exposure.
4.0 Stress Testing

3.0

As a market risk measurement method, VAR is based on

2.0

statistical assumptions. For this reason, we carry out stressMaximum: ¥4.7 billion
Minimum: ¥1.4 billion
Average: ¥3.1 billion

1.0

testing to simulate the levels of losses that could be

04.03.16
04.03.30

04.03.02

03.12.23
04.01.06
04.01.20
04.02.03
04.02.17

03.10.14
03.10.28
03.11.11
03.11.25
03.12.09

03.09.30

03.08.19
03.09.02
03.09.16

03.04.29
03.05.13
03.05.27
03.06.10
03.06.24
03.07.08
03.07.22
03.08.05

03.04.01
03.04.15

incurred in cases where the market moves suddenly to lev0

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

els that exceed these assumptions.
The stress testing methods used include one methodthat calculates losses on the basis of the largest fluctuations occurring over a period of more than five years, andanother that calculates losses on the basis of market fluc-

MHFG's Fiscal 2003 Interest Rate Sensitivity by Maturity
At March 31, 2004 (billions of yen)Over 1 year,
up to and1 year or lessTotal
including Over 5 years
5 years
Interest rate sensitivity(10BPV)

(5)

(46)

(29)

tuations occurring during historical market events.
The figure below shows the assumed maximum loss
results of stress testing in trading activities using the above
methods.

(80)

MHFG's Fiscal 2003 Stress Testing

during the steep rise in the yen interest rates from June
through September 2003, market risk volume in the bank-

At March 31, 2004 (billions of yen)
Assumed maximum losses
Maximum loss result calculated by stress testing19

ing business has reduced considerably, demonstrating thatrisk management is functioning effectively.
We conduct interest rate sensitivity analyses in connection with interest rate risk, which constitutes the main
form of market risk facing the group. The above table
depicts the interest rate sensitivity of yen currency banking
operations, by maturity, as of the end of March 2004.

 Back Testing
In order to confirm the effectiveness of market risk measurements using VAR, MHFG carries out regular back tests
to compare VAR and profits/losses.

47Internal Control Systems of Mizuho

database for the entire group, measure operational risk on

Operational Risk Managementa regular basis.
We define operational risk as the risk of loss that our

The Basel Committee on Banking Supervision is current-group may incur resulting from inadequate or failed inter-ly working toward the introduction of new BIS rules,

nal processes, people and systems, or from external

which will include operational risk as well as market andevents.

credit risk within capital adequacy guidelines.

We recognize that operational risk includes IT risk,

We are participating in the international forum on theoperations risk, legal risk, human resources risk, tangible

new BIS rules, and are proactively pursuing more sophisti-

asset risk, regulatory risk, and reputational risk, and havecated operational risk management across the entire

laid down risk management policies concerning risk man-group.

agement structures and methods for each kind of risk.
MHCB, MHBK, MHSC and MHTB also manage risks in an

Operations Risk Management

appropriate manner in line with risk management policies

Operations risk is the risk that customers may suffer ser-they have laid down concerning the each type of risk.

vice disruptions, or that customers or the group may incur

We are working to improve and strengthen our management methods and structures in order to recognize, evalu-

losses because senior executives or employees fail to fulfill
their tasks properly, cause accidents or act improperly.

ate, monitor and control the various types of operational

In line with the Basic Policy for Operations Risk

risk arising from the growing sophistication and diversity ofManagement, we have established a structure for improv-

financial operations and progress in computerization.

ing operations by identifying and adopting appropriate

MHFG, MHCB and MHBK have laid down rules for datameasures for mitigating operations risk. More specifically,gathering, and in addition to developing a common loss

we have laid down clearly defined procedures for handling
operations and periodically checking the status of operational processes. Progress has been made in strengthening
operational guidance from head office and instructions in

Operational Risk Management Structureorder to improve the operational expertise of staff and the

MHFG

Board of Directors

Executive Management
Committee

CEO
Senior executive officers
responsible for each typeof risk management

risk management capabilities of managers. We are also
moving ahead with other policies, including the introduction of IT, office automation and centralization in order toensure efficient operations that reduce human error to aminimum. Further, we are working on improving theeffectiveness of our emergency responses by holding drills

Operational risk management(Risk Management Division)

IT risk management
division
Operations risk
management divisionand taking other steps to minimize the impact of any possible system failures or disasters on customers.
We are well aware that this kind of risk has a direct

Divisions
responsible
for each risk
management

impact on services to customers and are working hard tobuild a management structure that is better attuned to thesituation.

IT Risk Management•Set risk management policies•Give instructions concerning
risk management

IT risk is the risk that customers may suffer service disrup•Report on the risk
management situation

tions, or that customers or the group may incur losses arising from system defects such as failures, faults, or incom-

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

pleteness in computer operations, or illegal or unauthorized use of computer systems.
We continue to make determined efforts to ensure thestability of our IT operations and the protection and safety48

of informational assets relating to systems in line with the
Basic Policy for IT Risk Management and the Security
Policy. More specifically, we are pushing ahead with various efforts, identifying and evaluating IT-related risk,
implementing risk mitigation measures based on theseevaluation results, ensuring thoroughgoing project management in such areas as process management in systems
development and quality control, and strengthening security to prevent information leaks. Further, we are working
on improving the effectiveness of our emergency responses by improving our backup systems and holding drills andtaking other steps to minimize the impact of any possible
system failures or disasters on customers.
We are well aware that this kind of risk has a direct
impact on services to customers and are working hard tobuild a management structure that is better attuned to thesituation.

Reputational Risk Management
Reputational risk is the risk of incurring tangible or intangible losses as a result of damage caused to the group's
credibility or the Mizuho brand when market players learn
about or the media report various risk events that actuallyarise in connection with the group's operating activities, or
false rumors or vicious slanders.
When MHFG receives reports from group companies
concerning certain information that may have a serious
impact on group management, we identify and manage
the reputational risk for the group as a whole on an integrated basis, using the framework we have established for
dealing with such reputational risk in a manner appropriate to its scale and nature.
The group also works to quickly identify rumors andminimize possible losses by devising appropriate responses
depending on the urgency and possible impact of the situation.

49

Internal Control Systems of Mizuho

Internal Audit Structure

MHCB and MHBK have established Internal Audit
Divisions and Credit Review Divisions as internal audit

Basic Approach

divisions to carry out the audits at domestic and overseas

Internal audits are an integrated process for evaluating thebusiness offices, head office divisions and groupextent to which internal control achieves its objectives incompanies. Specifically, the Internal Audit Divisions assess

key areas—appropriate risk management, efficient andthe suitability and effectiveness of business activities

effective business operations, reliable financial reporting,associated with compliance and risk management. The

and compliance with laws, regulations and internal rules.

Credit Review Divisions audit credit ratings and the status

They are conducted from an objective and comprehensiveof credit management in addition to auditing self-

standpoint, independently of operational reporting lines,

assessment of assets, in order to verify the correctness andand extend as far as offering advice, guidance andsuitability of matters deemed necessary from theremedial recommendations in connection with any

viewpoint of assuring the soundness of the assets inproblems that may be uncovered.

question.

Through this integrated process, internal audits assist

Other Core Group Companies

the Boards of Directors of individual group companies in

MHSC, MHTB and other core group companies haveefficiently and effectively fulfilling their managerial duties

also established effective and efficient internal audit

under the self-responsibility principle.

structures that suit the characteristics of their respective

In line with the Basic Policy for Internal Audit laid downbusiness sectors.

by MHFG, the core group companies conduct internal
audits, which include the auditing of their own

Internal Audit Management Structure

subsidiaries. Also, in order to grasp the situation with
MHFG

respect to risk controls across the group, group companies

Board of Directors

carry out internal audits focusing on risks that arecommon to the group as a whole.

President & CEO
Chairman of Internal Audit& Compliance Committee

Internal Audit Management StructureInternal Audit & Compliance Committee

The core group companies submit reports to MHFG on theEveryorganizational
unit

results of internal audits and the status of follow-up steps

Audit

MHFG grasps and manages the status of conducting
audits at the core group companies through examining
above reports. The Internal Audit & Compliance Committeeof MHFG discusses and makes decisions on the results of
examinations and important matters pertaining to thegroup's internal audits. After it reaches decisions thereon,
reports are submitted to the Board of Directors.

MHHD

Advice, guidance andremedial recommendations

to deal with problems.

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

MHHD
DivisionEveryin charge:
organiAudit Internalzational
Audit
unit
Division

Report the results ofinternal audit, etc.

Advice, guidance andremedial recommendations

MHFG

Joint management by
MHFG and MHHD

MHHD cooperates with MHFG in managing mattersrelating to internal audits at MHCB, MHBK, MHSC, MHIS
and their group companies.
MHCB and MHBK

MHCB
MHBK
MHSC
MHIS

MHTB and othercore group companies
other than those to
the left (12 companies)

Subsidiaries of the abovegroup companies

Subsidiaries of the abovegroup companies

MHCB and MHBK have also established Internal Audit &Compliance Committees that are independent of businesspromotion divisions to ensure the independence of theinternal audit divisions and provide checks and balances.

50

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

52

Financial and Economic Environment

54

Results for the Fiscal Year ended March 31, 2004

56

Improvement of Asset Quality

68

51

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,

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

2004

¥

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

2003¥

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

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

Risk-based Capital Ratio (BIS Capital Ratio)

11.35%

9.53%

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

135.2%
12.39 x(183.7)%—xCash Flows from Operating Activities
Cash Flows from Investing Activities
Cash Flows from Financing Activities

6,014.9(7,402.2)(130.9)(2,196.1)(206.3)(394.0)Cash and Cash Equivalent at the End of the Year5,529.6

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.

52

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

As of or for the Fiscal Years ended March 31,

2004

2003

¥ 25.7
9.9

¥ 0.9
0.0

1,540.9
Common Stock 11,926,964.67 sharesFirst Series Class I Preferred Stock
33,000 shares
Second Series Class II Preferred Stock
100,000 shares
Third Series Class III Preferred Stock
100,000 shares
Fourth Series Class IV Preferred Stock
150,000 shares
Sixth Series Class VI Preferred Stock
150,000 shares
Seventh Series Class VII Preferred Stock
125,000 shares
Eighth Series Class VIII Preferred Stock
125,000 shares
Ninth Series Class IX Preferred Stock
140,000 shares
Tenth Series Class X Preferred Stock
140,000 shares
Eleventh Series Class XI Preferred Stock943,740 shares
Twelfth Series Class XI Preferred Stock
5,500 shares
Thirteenth Series Class XIII Preferred Stock
36,690 shares

1,540.9
Common Stock 10,582,426.71 sharesFirst Series Class I Preferred Stock
33,000 shares
Second Series Class II Preferred Stock
100,000 shares
Third Series Class III Preferred Stock
100,000 shares
Fourth Series Class IV Preferred Stock
150,000 shares
Sixth Series Class VI Preferred Stock
150,000 shares
Seventh Series Class VII Preferred Stock
125,000 shares
Eighth Series Class VIII Preferred Stock
125,000 shares
Ninth Series Class IX Preferred Stock
140,000 shares
Tenth Series Class X Preferred Stock
140,000 shares
Eleventh Series Class XI Preferred Stock943,740 shares
Twelfth Series Class XI Preferred Stock
101,500 shares
Thirteenth Series Class XIII Preferred Stock
36,690 shares

3,533.4
3,600.0

3,545.8
3,595.6

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

Total Shareholders' Equity
Total Assets
Total Shareholders' Equity per Share (Yen) (Note 1)
Common Stock
Dividends per ShareFirst Series Class I Preferred Stock(Interim dividends per share) (Yen)
Second Series Class II Preferred Stock
Third Series Class III Preferred Stock
Fourth Series Class IV Preferred Stock
Sixth Series Class VI Preferred Stock
Seventh Series Class VII Preferred Stock
Eighth Series Class VIII Preferred Stock
Ninth Series Class IX Preferred Stock
Tenth Series Class X Preferred Stock
Eleventh Series Class XI Preferred Stock
Twelfth Series Class XI Preferred StockThirteenth Series Class XIII Preferred Stock
Common StockFirst Series Class I Preferred Stock
Second Series Class II Preferred Stock
Third Series Class III Preferred Stock
Fourth Series Class IV Preferred Stock
Sixth Series Class VI Preferred Stock
Seventh Series Class VII Preferred Stock
Eighth Series Class VIII Preferred Stock
Ninth Series Class IX Preferred Stock
Tenth Series Class X Preferred Stock
Eleventh Series Class XI Preferred Stock
Twelfth Series Class XI Preferred StockThirteenth Series Class XIII Preferred Stock
Net Loss per Share (Yen) (Note 1)
Diluted Net Income per Share (Yen) (Note 1) (Note 2)
PER (Times) (Note 2)
Dividend Propensity (Note 3)

46,670.33
3,000
22,5008,200
14,00047,60042,00011,0008,000
17,5005,380
20,0002,500
30,000
—
—
—
—
—
—
—
—
—
—
—
—
—
(2,846.42)——x—%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
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 Stock46,568.86—
22,5008,200
14,00047,60042,00011,0008,000
17,500
5,380
165
21
247
/
/
/
/
/
/
/
/
/
/
/
/
/
(8,663.01)——x—%

Notes: 1. “Total Shareholders' Equity per Share”, “Net Loss per Share” and “Diluted Net Income per Share” are calculated in accordance with “Accounting Standard for Earnings per Share” (Financial
Accounting Standard No. 2) and “Implementation Guidance for Accounting Standard for Earnings per Share” (Financial Accounting Standards Implementation Guidance No. 4).
2. “Diluted Net Income per Share” and “PER” for the fiscal year ended March 31, 2003 and 2004 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). The Dividend Propensity for the fiscal year ended March 31, 2003 and 2004
are not required to be disclosed due to passing dividends for common stock and loss position of earnings per share, respectively.

53

Financial Analysis of Mizuho

Financial and Economic Environment

Economic Conditions in Japan and Overseas
Looking at global economic conditions in the fiscal year ended March 31, 2004, the U.S. economy initially appeared somewhat
weak as a result of the Iraq War and other factors. From mid-year onward, however, demand centered on consumer spending
and capital expenditure expanded and a recovery trend became increasingly apparent. The European economies gradually recovered as exports increased. In Asia, the end of the SARS epidemic and increase in exports fueled a sharp economic recovery, andthe Chinese economy in particular maintained its high growth rate. From the second half onwards, the overall recovery in the
global economy strengthened and took on a firmer tone.
The Japanese economy remained weak through the first half, but rising production driven by higher exports, clearer signs ofgrowth in capital expenditure and improvement in corporate earnings in the second half led to an overall recovery. However, several risk factors clouded hopes for full-scale economic growth, including a slower recovery in regional economies, continuing
deflation and sluggish growth in household incomes.

Financial Sector
Looking back at the financial markets in fiscal 2003, long-term interest rates went below 0.5% in June 2003, but generally fluctuated in the range of 1.0-1.5% level after climbing again on the back of the economic recovery toward mid-fiscal year. The stock
market generally followed an upward trend after mid-May. Faced with these conditions, the Bank of Japan maintained its easy
money policies and in July 2003 took a new initiative of purchasing asset-backed securities (ABS).
The government adhered to its policy of promoting financial and industrial revitalization as a single package and adopted several new measures, including the establishment of the Industrial Revitalization Corporation of Japan. There has also been progressin deregulation, including the removal of the ban on banks engaging in the stock-broking business and the entry of other typesof industries into the trust business. In light of these environmental changes, bringing the NPL issue closer to closure, ensuring
competitive advantage, and further strengthening profitability were all matters of considerable importance for financial institutions.

54Trends in Interest Rates in Japan
（％）

（％）

2.0

0.40

1.8

0.35

Long-Term Prime Rate (left scale)

1.6

0.30

1.4

0.25

1.2

Short-Term Prime Rate (left scale)

0.20

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

1.0
0.15
0.8

Euroyen TIBOR (3-month) (right scale)

0.6

0.10
0.05

0.4

0.00

0.2

Call Rate (Uncollateralized overnight) (right scale)

0.0(0.05)

Jan. 2003

Apr. 2003

July 2003

Oct. 2003

Jan. 2004

Apr. 2004

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

1,300

125

1,200

120

1,100
115
1,000
110
900

TOPIX (left scale)105

Yen / Dollar Exchange Rate(right scale)

800

700

Jan. 2003

Apr. 2003

July 2003

Oct. 2003

Jan. 2004

Apr. 2004

100

55

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2004

Consolidated Accounts of Mizuho Financial Group, Inc. (MHFG)
1. Scope of Consolidation and Application of the Equity Method
MHFG's consolidated subsidiaries decreased by 20 to 118, and the number of affiliates accounted for under the equity method
decreased by 5 to 28 from the end of 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. The major affiliates accounted for by the equity method are The Chiba
Kogyo Bank, Ltd. and Shinko Securities Co., Ltd.
companies

At March 31,

2004

2003

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

118
28

138
33

(20)
(5)

2004

2003

2. Consolidated Profits and Losses
Billions of yen

For the Fiscal Years ended March 31,

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

General and Administrative Expenses
Expenses related to Portfolio Problems +Provision for General Reserve for Possible Losses on Loans

2,112.4
1,185.0
62.0
426.6
231.8
206.9

¥

2,233.6
1,256.3
55.4
410.5
244.5
266.7

(121.2)(71.3)
6.6
16.0(12.7)(59.8)(1,125.9)(1,237.6)

111.7(292.8)(2,092.3)

1,799.4

190.8(924.9)1,115.7

Equity in Earnings (Losses) from Investment in Affiliates

1.7

(3.4)

5.2

Other

(4.9)

(237.3)

232.3

Income (Loss) before Income Taxes and Minority Interests

881.2(2,262.1)

3,143.4

Income Taxes–Current

28.0

22.2

5.7

Income Taxes–Deferred

387.8

30.5

357.3

Net Gains (Losses) related to Stocks

Minority Interests in Net Income (Loss)

58.3

62.2

(3.8)

Net Income (Loss)

406.9(2,377.1)

2,784.1

Net Income (Loss) per Share of Common Stock (Yen)
Credit-related Costs

36,153.27¥(298.8)(254,524.65)¥(2,111.5)

Notes: 1. Consolidated Gross Profits = Net Interest Income + Net Fiduciary Income + Net Fee and Commission Income + Net Trading Income + Net Other Operating Income.
2. Credit-related Costs = Expenses related to Portfolio Problems + Provision for General Reserve for Possible Losses on Loans + Credit Costs for Trust Accounts.

56

Change¥290,677.92¥

1,812.6

(1) Consolidated Gross Profits
Consolidated Gross Profits decreased by ¥121.2 billion to ¥2,112.4 billion in comparison with the previous fiscal year.
Net Interest Income decreased by ¥71.3 billion to ¥1,185.0 billion as weak domestic funding demand led to a decline in average outstanding loans.
Net Fiduciary Income increased by ¥6.6 billion to ¥62.0 billion.
Net Fee and Commission Income rose by ¥16.0 billion to ¥426.6 billion owing to increases in securities-related and trust-related
commissions.
Although gains on trading income increased, gains on derivatives decreased, causing Net Trading Income to decline by ¥12.7
billion to ¥231.8 billion.
Net Other Operating Income decreased by ¥59.8 billion to ¥206.9 billion as Net Gains related to Bonds declined, reflecting
market conditions.
(2) General and Administrative Expenses
General and Administrative Expenses fell by ¥111.7 billion to ¥1,125.9 billion as a result of rigorous cost reviews and cutbacks athome and overseas. These included reductions in personnel expenses through reassessments of salary and bonus levels and personnel reduction, and in non-personnel expenses through consolidations and closures of offices.
(3) Credit-related Costs
As a result of the acceleration of the final disposal of non-performing loans (NPLs) and an aggressive attitude to provisions against
the deterioration of asset quality in the previous fiscal year, Credit-related Costs decreased sharply by ¥1,812.6 billion to ¥298.8
billion.
Expenses Related to Portfolio Problems plus Provision for General Reserve for Possible Losses on Loans also decreased by¥1,799.4 billion to ¥292.8 billion.
(4) Net Gains related to Stocks
Net Gains related to Stocks rose by ¥1,115.7 billion to ¥190.8 billion as a result of gains on sales of stockholdings in an improving
stock market and a lower amortization burden.
(5) Equity in Earnings from Investment in Affiliates
Equity in Earnings from Investment in Affiliates benefited from an improvement in the performance of companies accounted forunder the equity method, increasing by ¥5.2 billion to ¥1.7 billion.
(6) Net Income and Other
As a result of the above, Income before Income Taxes and Minority Interests amounted to ¥881.2 billion.
Net Income increased by ¥2,784.1 billion to ¥406.9 billion after reflecting Income Taxes–Current, Income Taxes–Deferred andMinority Interests in Net Income in Income before Income Taxes and Minority Interests.

57

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2004

Use and Source of Funds (Consolidated)
Billions of yen

Change2004

Interest
2003

Use of Funds
Loans and Bills Discounted
Securities
Call Loans and Bills Purchased
Receivables under Resale Agreements
Guarantee Deposit Paid under Securities
Borrowing Transactions
Due from Banks¥ 111,512.0
67,464.4
27,241.9
1,717.1
4,173.4¥ 125,177.1
77,957.3
25,456.0
5,867.1
4,234.6¥ (13,665.0)(10,492.8)
1,785.9(4,150.0)(61.1)¥ 1,622.7
1,183.7
296.7
5.1
74.2

¥ 1,991.2
1,433.9
347.9
11.1
113.9

¥ (368.5)(250.2)(51.1)(5.9)(39.6)

7,048.8
1,721.4

2,846.6
5,506.9

4,202.2(3,785.5)

1.7
24.8

0.7
42.8

0.9
(17.9)

Source of Funds
Deposits
Debentures
Call Money and Bills Sold
Payables under Repurchase Agreements
Guarantee Deposit Received under Securities
Lending Transactions
Commercial Paper
Borrowed Money¥ 113,899.6
73,418.0
10,648.5
10,251.5
8,300.2¥ 126,911.2
79,247.3
13,767.2
15,027.0
8,365.4¥ (13,011.5)(5,829.3)(3,118.6)(4,775.5)(65.1)

734.4
193.9
120.9
7.0
189.9

¥ (296.8)(81.0)(28.1)(4.1)(73.6)

5,682.4
831.6
1,515.8

3,500.2
418.6
2,245.3

2,182.1
412.9(729.5)

12.1
1.0
34.5

8.7
0.8
44.2

3.4
0.1
(9.6)

For the Fiscal Years ended March 31,

2004

Yield
2003

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

1.45%
1.75
1.08
0.30
1.78

1.59%
1.83
1.36
0.19
2.69

(0.14)%(0.08)(0.28)
0.11(0.91)

0.02
1.44

0.02
0.77

0.00
0.67

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

0.38%
0.15
0.87
0.02
1.40

0.57%
0.24
0.87
0.04
2.27

(0.19)%(0.09)
0.00(0.02)(0.87)

0.21
0.12
2.27

0.24
0.20
1.97

(0.03)(0.08)
0.30

For the Fiscal Years ended March 31,

Average balance
2004
2003

¥

437.6
112.8
92.7
2.8
116.3

¥

Change%58

Net Fee and Commission Income (Consolidated)
Billions of yen

For the Fiscal Years ended March 31,

2004

2003

Change¥ 426.6¥ 410.5¥ 16.0Fee and Commission Income
Deposits, Debentures and Lending Business
Remittance Business
Securities-related BusinessAgency Business
Safe Custody and Safety Deposit Box Business
Guarantee Business
Trust-related Business¥ 515.3
106.1
116.4
92.4
36.7
6.9
22.9
37.1

¥ 490.1
102.7
113.4
75.5
35.3
8.7
35.6
23.1

¥ 25.1
3.3
2.9
16.8
1.3
(1.8)
(12.7)
14.0

Fee and Commission Expenses
Remittance Business

¥

¥

¥

Net Fee and Commission Income

88.7
28.9

79.6
27.9

9.1
0.9

3. Consolidated Assets and Liabilities
Consolidated Assets and Liabilites (Consolidated)
Billions of yen

At March 31,

2004

2003

ChangeTotal Assets
Cash and Due from Banks
Trading Assets
Securities
Loans and Bills Discounted¥ 137,750.0
6,813.5
8,016.5
32,071.6
66,205.8¥ 134,032.7
7,849.7
9,919.0
23,816.5
69,210.0¥ 3,717.3(1,036.2)(1,902.5)
8,255.0(3,004.1)

Total Liabilities
Deposits
Debentures
Call Money and Bills Sold133,069.5
77,487.4
9,459.5
8,680.5

130,133.6
72,222.6
11,696.3
11,185.8

2,935.9
5,264.8(2,236.8)(2,505.2)

1,036.1

1,038.0(1.8)

Minority Interests
Shareholders' Equity
Net Unrealized Gains (Losses) on other Securities, net of Taxes¥

3,644.3
392.7¥

2,861.0(24.6)

¥

783.3
417.3

(1) Assets
Securities increased by ¥8,255.0 billion from the end of the previous fiscal year to ¥32,071.6 billion. Unrealized Gains on Other
Securities amounted to ¥720.4 billion.
Loans and Bills Discounted fell by ¥3,004.1 billion to ¥66,205.8 billion. Non-Accrual, Past Due & Restructured Loans amounted
to ¥3,181.1 billion, or 4.80% of total Loans and Bills Discounted.
Total Assets increased by ¥3,717.3 billion to ¥137,750.0 billion.
(2) Liabilities and Minority Interests
Deposits increased by ¥5,264.8 billion to ¥77,487.4 billion. Debentures decreased by ¥2,236.8 billion to ¥9,459.5 billion. Total
Liabilities increased by ¥2,935.9 billion to ¥133,069.5 billion.
Minority interests decreased by ¥1.8 billion to ¥1,036.1 billion.
(3) Shareholders' Equity
Shareholders' Equity increased by ¥783.3 billion to ¥3,644.3 billion because of the Net Income posted and the increase in
Unrealized Gains on Other Securities that resulted from the turnaround in the stock market.
The consolidated Capital Adequacy Ratio (BIS standard) stood at 11.35%, continuing at a satisfactory level.

59

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2004

Fair Value of Other Securities (Consolidated)
Billions of yen

At March 31, 2004

Cost

Fair Value

Other Securities*1
Stocks*2
Bonds
Other

¥ 27,895.2
3,477.1
20,185.9
4,232.1¥ 28,615.6
4,361.7
19,994.7
4,259.2

Gross Unrealized
Gains
Losses¥1,018.8
967.2
9.3
42.2

¥

298.4
82.6
200.5
15.1

Net Unrealized
Gains (Losses)

¥

720.4
884.5
(191.1)
27.0
Billions of yen

At March 31, 2003

Cost

Fair Value

Other Securities*1
Stocks*2
Bonds
Other

¥ 21,804.5
3,946.4
12,289.0
5,569.0¥ 21,784.9
3,755.8
12,376.5
5,652.5¥

Gross Unrealized
Gains
LossesNet Unrealized
Gains (Losses)

359.3
166.0
88.5
104.7

¥

¥

378.9
356.6
1.0
21.2

(19.5)(190.5)
87.4
83.5
Billions of yen

ChangeOther Securities*1
Stocks*2
Bonds
Other

Cost

¥

6,090.7(469.2)
7,896.8(1,336.8)

Fair Value¥

6,830.7605.8
7,618.1(1,393.3)¥

Gross Unrealized
Gains
LossesNet Unrealized
Gains (Losses)

659.4
801.1
(79.2)(62.4)¥¥(80.5)(273.9)
199.4
(6.0)

740.0
1,075.1(278.6)(56.4)*1 In addition to the balances shown in the above table, Other Securities included securities without fair values such as unlisted stock (excluding OTC stock) of ¥837.2 billion and non-publicly offeredbonds of ¥1,299.5 billion as of March 31, 2004.
*2 Fair value of Stocks is determined based on the average market prices during one-month periods before the balance sheet date.

60

Consolidated Capital Adequacy Ratio (BIS)
Billions of yen

At March 31,

2004

2003

Capital Adequacy Ratio
Tier I Ratio

11.35%
5.75%

9.53%
4.86%

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

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

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

3,941.1
1,540.9
1,262.5
386.6
995.7
923.3
—
(134.1)(110.5)(0.0)—¥

3,941.1
325.4
175.5
1,175.8
2,803.9948.7
1,855.1
7,770.0¥ 68,424.1
67,368.7
63,093.7
4,275.0
1,055.4
84.4

1.82%
0.89%
¥

3,495.4—
287.3
1,515.4
2,877.9
1,270.7
1,607.2

112.2¥

3,495.4
1,540.9
2,599.5(1,427.9)
1,036.4
960.2(23.0)(134.1)(96.2)(0.1)—

Change445.7
325.4(111.7)(339.5)(74.0)(321.9)
247.8

143.4
¥

6,847.4¥ 71,823.5
71,144.9
66,644.0
4,500.8
678.6
54.2

445.7
—
(1,337.0)
1,814.5(40.6)(36.9)
23.0(0.0)(14.3)
0.0—(31.2)¥922.6¥ (3,399.3)(3,776.1)(3,550.3)(225.8)
376.8
30.1

61

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2004

Aggregated Figures of the Three Banks
For an early achievement of corporate revitalization, loans and stocks of customers in need of revitalization/restructuring held by
MHCB, MHBK and MHTB were transferred to their financial subsidiaries specializing in corporate revitalization in July 2003.
Aggregated figures of the Three Banks for the fiscal year ended March 31, 2003 are the aggregated non-consolidated figuresof MHCB, MHBK and MHTB.
Aggregated figures of the Three Banks for the fiscal year ended March 31, 2004 are the aggregated non-consolidated figuresof MHCB, MHBK, MHTB and their financial subsidiaries specializing in corporate revitalization.

1. Differences between Consolidated Figures and Aggregated Figures of the Three Banks

Billions of yen

For the Fiscal Years ended March 31,

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

MHFG(Consolidated)(a)¥Credit-related Costs
Net Income (Loss)¥

2004
AggregatedFigures of theThree Banks (b)(a) – (b) (b) / (a)2,112.4 ¥1,185.0
62.0
426.6
231.8
206.9

1,805.6 ¥ 306.8
85.4%
1,130.7
54.2
95.4
62.0
0.0
99.9
268.5
158.0
62.9
111.9
119.8
48.2
232.3
(25.4) 112.3(298.8)(237.9)(60.8)

406.9 ¥

447.9 ¥

(40.9) 110.0%

MHFG(Consolidated)
(a)

¥

79.6
¥

2003
AggregatedFigures of theThree Banks (b)2,233.6 ¥1,256.3
55.4
410.5
244.5
266.7

(a) – (b) (b) / (a)1,837.8 ¥ 395.8
1,167.9
88.4
55.0
0.4
249.3
161.1
109.9
134.6
255.5
11.1

82.2%
92.9
99.2
60.7
44.9
95.8

(2,111.5)(2,095.2)(16.2) 99.2

(2,377.1) ¥(2,398.1) ¥20.9 100.8%

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

Billions of yen

62

2004
AggregatedFigures of theThree Banks (b)At March 31,

MHFG(Consolidated)(a)Total Assets
Securities
Loans and Bills Discounted¥ 137,750.0 ¥ 137,897.7 ¥ (147.6) 100.1%
32,071.6
35,359.9 (3,288.3) 110.2
66,205.8
66,132.4
73.4
99.8(a) – (b) (b) / (a)MHFG(Consolidated)
(a)

2003
AggregatedFigures of theThree Banks (b)(a) – (b) (b) / (a)¥ 134,032.7 ¥ 134,976.9 ¥ (944.2) 100.7%
23,816.5
24,550.4(733.8) 103.0
69,210.0
68,932.1
277.8 99.5

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

For the Fiscal Years ended March 31,

Domestic Gross Profits
International Gross Profits

2004

¥

1,327.8
477.7

2003

¥

1,463.5
374.3

Change¥(135.6)
103.4

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

1,805.6
1,130.7
62.0
268.5
111.9
232.3
115.1

1,837.8
1,167.9
55.0
249.3
109.9
255.5
204.4

(32.2)(37.2)
6.9
19.1
2.0(23.1)(89.2)

General and Administrative Expenses (Excluding Non-recurring Losses)(857.4)(966.0)108.6

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

954.1
838.9

890.9
686.5

63.1
152.4

Provision for General Reserve for Possible Losses on Loans

131.5(427.4)559.0

Net Business Profits

1,079.7

444.3

635.4

Net Non-recurring Losses
Net Gains (Losses) related to Stocks and Other Securities
Expenses related to Portfolio Problems
Other(221.4)189.3(363.6)(47.1)(2,857.7)(905.8)(1,648.6)(303.3)

2,636.3
1,095.1
1,285.0
256.1

Income (Loss) before Income Taxes

858.3(2,413.4)

3,271.7

0.6

1.0

(0.4)

Income Taxes–Current
Income Taxes–Deferred

409.7(16.2)Net Income (Loss)

¥

447.9

¥ (2,398.1)¥

2,846.1

426.0

Credit-related Costs¥(237.9)¥ (2,095.2)¥

1,857.2

Notes: 1. Net Business Profits (before Provision for General Reserve for Possible Losses on Loans) of MHTB denotes amounts before Provision for General Reserve for Possible Losses on Loans and Credit
Costs for Trust Accounts.
2. Credit-related Costs = Expenses related to Portfolio Problems + Provision for General Reserve for Possible Losses on Loans + 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

2004

¥

1,130.7
918.3
212.3

2003

¥

1,167.9
1,006.1
161.7

Change¥(37.2)(87.8)
50.6

Net Fiduciary Income
Domestic Operations
International Operations

62.0
62.0
/

55.0
55.0
/

6.9
6.9
/

Net Fee and Commission Income
Domestic Operations
International Operations

268.5
210.9
57.5

249.3
194.8
54.5

19.1
16.1
3.0

Net Trading Income
Domestic Operations
International Operations

111.9
42.9
68.9

109.9
68.2
41.7

2.0
(25.2)
27.2

Net Other Operating Income
Domestic Operations
International Operations

232.3
93.4
138.9

255.5
139.2
116.3

(23.1)(45.7)
22.5

Gross Profits¥

1,805.6¥

1,837.8¥(32.2)

63

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2004

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

2004

Yield
2003

¥ (13,720.2)(12,382.7)
3,921.4

1.36%
1.67
1.19

1.46%
1.77
1.35

(0.10)%(0.09)(0.15)

122,159.4
90,589.5(10,695.1)(7,576.0)

0.36
0.22

0.53
0.32

(0.16)(0.10)

/

/

/

1.00

0.93

0.06

/

/

/

1.44

1.44

0.00

Domestic Operations
Use of Funds
Loans and Bills Discounted
Securities

90,985.6
55,626.9
23,018.3

102,299.9
64,707.5
18,807.5(11,314.2)(9,080.6)
4,210.7

1.10
1.56
0.52

1.17
1.57
0.71

(0.06)(0.00)(0.19)

Source of Funds
Deposits and Debentures

95,696.1
74,100.0

103,913.3
79,994.7(8,217.2)(5,894.6)

0.16
0.14

0.22
0.19

(0.06)(0.04)

Interest Margins

/

/

/

0.94

0.94

(0.00)

Loan and Deposit Margin

/

/

/

1.41

1.37

0.04

International Operations
Use of Funds
Loans and Bills Discounted
Securities

16,516.1
5,795.8
5,104.2

20,390.0
9,098.0
5,393.5(3,873.9)(3,302.1)(289.3)

2.78
2.72
4.23

2.97
3.20
3.57

(0.18)(0.47)
0.65

Source of Funds
Deposits and Debentures

16,233.1
8,913.3

20,179.0
10,594.7(3,945.8)(1,681.4)

1.55
0.90

2.18
1.32

(0.63)(0.41)

Interest Margins

/

/

/

1.22

0.78

0.44

Loan and Deposit Margin

/

/

/

1.81

1.88

(0.06)For the Fiscal Years ended March 31,

2004

Average balance
2003

Total
Use of Funds
Loans and Bills Discounted
Securities¥ 107,036.7
61,422.8
28,122.6¥ 120,756.9
73,805.6
24,201.1

Source of Funds
Deposits and Debentures

111,464.2
83,013.4

Interest Margins
Loan and Deposit Margin

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

For the Fiscal Years ended March 31,

Net Fee and Commission Income

64

2004

2003

Change¥ 268.5¥ 249.3¥ 19.1

Fee and Commission Income
Deposits, Debentures and Lending Business
Remittance Business
Securities-related BusinessAgency Business
Safe Custody and Safety Deposit Box Business
Guarantee Business¥ 380.3
100.9
116.1
36.0
26.3
6.9
18.0

¥ 349.8
94.2
112.4
30.7
25.5
6.7
18.7

¥ 30.4
6.6
3.6
5.3
0.8
0.1
(0.6)

Fee and Commission Expenses
Remittance Business¥ 111.7
28.8¥ 100.4
27.8¥ 11.30.9

Breakdown of Net Other Operating Income (the Three Banks)
Billions of yen

For the Fiscal Years ended March 31,

2004

2003

Net Other Operating Income¥ 232.3¥ 255.5¥(23.1)¥ 232.3
93.2
115.1¥ 255.5
69.4
204.4

¥

(23.1)
23.8(89.2)

Domestic Operations
Net Gains related to Bonds

93.4
61.5

139.2
137.8

(45.7)(76.2)

International Operations
Profits on Foreign Exchange Transactions
Net Gains related to Bonds

138.9
93.2
53.5

116.3
69.4
66.5

22.5
23.8
(13.0)

Total
Profits on Foreign Exchange Transactions
Net Gains related to Bonds

ChangeBreakdown of General and Administrative Expenses (Excluding Non-recurring Losses) (the Three Banks)
Billions of yen

For the Fiscal Years ended March 31,

Personnel Expenses

2004

2003

¥ 277.6¥ 338.5

533.7

577.6

Non-personnel Expenses
Miscellaneous Taxes
Total

Change¥(60.8)(43.8)

45.9

49.8

(3.9)

¥ 857.4¥ 966.0¥ (108.6)

2004

2003

Change(905.8)75.3(385.5)(591.2)(4.8)
0.4¥ 1,095.1
172.5
363.6
571.0
2.9
(15.0)Breakdown of Net Non-Recurring Losses (the Three Banks)
Billions of yen

For the Fiscal Years ended March 31,

Net Losses related to Stocks and Other Securities
Gains on Sales of Stocks and Other Securities
Losses on Sales of Stocks and Other Securities
Losses on Devaluation of Stocks and Other Securities
Provision for Reserves for Possible Losses on Investments
Gains (Losses) on Derivatives other than for Trading

¥

189.3
247.9
(21.8)(20.2)(1.8)(14.5)¥

Expenses related to Portfolio Problems
Losses on Write-offs of Loans
Provision for Specific Reserve for Possible Losses on Loans
Losses on Sales of Loans to CCPC
Reversal of (Provision for) Reserve for Possible Losses on Loans Sold
Losses on Support of Specific Borrowers
Reversal of Reserve for Possible Losses on Support of Specific Borrowers
Reversal of Reserve for Possible Losses on Loans to Restructuring Countries
Reversal of (Provision for) Reserve for Contingencies
Other Losses on Sales of Loans(363.6)(173.1)(184.3)
(0.7)
5.0
—
3.2
7.2
4.7
(25.6)(1,648.6)(673.1)(383.5)(18.2)(10.7)
(0.5)
—
15.0
(6.3)
(571.1)

1,285.0
499.9
199.1
17.5
15.8
0.5
3.2
(7.8)
11.0
545.4

Other

(47.1)(303.3)256.1(221.4)¥ (2,857.7)¥ 2,636.3

Net Non-recurring Losses¥

Note: CCPC is the abbreviation for the Cooperative Credit Purchasing Company, Ltd.

65

Financial Analysis of Mizuho

Results for the Fiscal Year ended March 31, 2004

3. Aggregated Assets and Liabilities
Assets and Liabilities (the Three Banks) (Banking Accounts)
Billions of yen

At March 31,

Total Assets
Cash and Due from Banks
Call Loans
Securities
Loans and Bills Discounted
Customers' Liabilities for Acceptances and Guarantees
Total Liabilities
Deposits
Debentures
Call Money
Bills Sold
Acceptances and Guarantees
Shareholders' Equity
Net Unrealized Gains (Losses) on other Securities, net of Taxes

2004

2003

Change¥ 137,897.7
9,240.5
3,883.4
35,359.9
66,132.4
4,858.0¥ 134,976.9
9,390.6
7,410.5
24,550.4
68,932.1
5,371.4¥ 2,920.7(150.1)(3,527.1)
10,809.5(2,799.6)(513.3)131,021.5
79,895.8
9,554.7
9,746.6
2,369.4
4,858.0

131,623.2
73,728.9
11,797.6
13,215.6
4,933.7
5,371.4(601.7)
6,166.8(2,242.9)(3,469.0)(2,564.3)(513.3)

6,876.1
387.0

3,353.7(29.0)

3,522.4
416.1

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

2004

2003

¥ 12,335.6
9,398.0¥ 12,848.7
9,529.2

Change¥(513.1)(131.1)

Note: Above figures are aggregated banking and trust accounts. (Trust Accounts denotes trust accounts with contracts indemnifying the principal amount.)

Loans to Both Small and Medium-Sized Enterprises and Individual Customers (the Three Banks)(Banking Accounts and Trust Accounts)
Billions of yen

At March 31,

Loans to Both Small and Medium-sized Enterprises and Individual Customers
Percentage of Loans to Both Small and Medium-sized Enterprises
and Individual Customers of Total Domestic Loans

66

2004

2003

¥ 39,456.4¥ 39,791.7

62.0%

61.2%

Change¥(335.3)0.8%

Fair Value of Other Securities (the Three Banks) (Banking Accounts)
Billions of yen

At March 31, 2004

Cost

Fair Value

Other Securities*1
Stocks*2
Bonds
Other

¥ 27,458.8
3,460.7
20,056.9
3,941.1¥ 28,133.6
4,302.3
19,866.0
3,965.2¥

Gross Unrealized
Gains
LossesNet Unrealized
Gains (Losses)

973.0
924.9
9.3
38.7

¥

¥

298.2
83.3
200.2
14.6

674.8
841.6
(190.9)24.1
Billions of yen

At March 31, 2003

Cost

Fair Value

Other Securities*1
Stocks*2
Bonds
Other

¥ 21,342.1
3,948.0
12,130.6
5,263.4¥ 21,314.1
3,753.2
12,218.1
5,342.7¥

Gross Unrealized
Gains
LossesNet Unrealized
Gains (Losses)

348.9
160.4
88.5
99.9

¥

¥

376.9
355.2
1.0
20.6

(28.0)(194.8)
87.4
79.3
Billions of yen

ChangeOther Securities*1
Stocks*2
Bonds
Other

Cost

¥

6,116.6(487.3)
7,926.3(1,322.2)

Fair Value¥

6,819.5
549.0
7,647.9(1,377.4)¥

Gross Unrealized
Gains
LossesNet Unrealized
Gains (Losses)

624.1
764.4
(79.1)(61.1)¥¥(78.7)(271.9)
199.2
(5.9)

702.8
1,036.4(278.3)(55.2)*1 In addition to the balances shown in the above table, Other Securities includes securities without market values.
*2 Fair value of Stocks is determined based on the average market prices during one-month periods before the balance sheet dates.

67

Financial Analysis of Mizuho

Improvement of Asset Quality

For an early achievement of corporate revitalization, loans and stocks of customers in need of revitalization/restructuring held by
MHCB, MHBK and MHTB were transferred to their financial subsidiaries specializing in corporate revitalization in July 2003.
Consolidated figures are those for MHFG.
Aggregated figures of the Three Banks for the fiscal year ended March 31, 2003 are the aggregated non-consolidated figures of
MHCB, MHBK and MHTB.
Aggregated figures of the Three Banks for the fiscal year ended March 31, 2004 are the aggregated non-consolidated figures of
MHCB, MHBK, MHTB and their financial subsidiaries specializing in corporate revitalization.
Figures on the tables of “Trust Account” denote trust accounts with contracts indemnifying the principal amount, except for the
figures on the tables of Status of Loans by Industry and Status of Loans by Nationality of Borrowers.

 Disposal of Non-Performing Loans in the Fiscal Year ended March 31, 2004
Credit-related Costs in the aggregated figures of the Three Banks amounted to ¥237.9 billion, or approximately ¥100 billion lessthan the ¥340 billion forecast made at the beginning of the fiscal year. This was due to the positive effect of the group taking
steps to accelerate the early disposal of a significant portion of its non-performing loans (NPLs) in fiscal 2002, and the decrease in
the occurrence of new NPLs owing to the steady recovery of the Japanese economy.
The outstanding balance of NPLs decreased by ¥1.6 trillion compared to the end of the previous fiscal year to ¥3.2 trillion. At
the same time, the ratio of NPLs stood at 4.40%, or a 1.88% decrease from that at March 31, 2003. These figures indicate thatthe group is on track to meet its goal of reducing the outstanding balance of NPLs to about half of that at September 2002 by
the end of March 2005.
Discounted Cash Flow Method (the “DCF Method”)

The DCF method is a means of measuring the Reserve for Possible Losses on Loans, where future cash flows to bereceived from repayment of principle of and interest on loans are estimated and discounted to a present value, and thedifference between that present value and the book value of the loan is recorded in the Reserve for Possible Losses on
Loans.
The group has continuously adopted this method for the fiscal year ended March 31, 2004, for about 60% of theclaims against Special Attention Obligors, and for approximately 85% in the case of MHCB alone. The average reserve
ratio for the claims to which the DCF method is applied is about 50% against the uncovered portion. This ratio is considerably higher than the 40%, average reserve ratio among major banks for claims subject to special examination exerted
and announced by the Financial Services Agency.

 Credit-Related Costs
Credit-Related Costs (Consolidated)
Billions of yen

For the Fiscal Years ended March 31,

2004

2003

ChangeCredit-related Costs
Expenses related to Portfolio Problems + Provision
for General Reserve for Possible Losses on Loans¥ (298.8)¥ (2,111.5)¥ 1,812.6(292.8)(2,092.3)

1,799.4

Losses on Write-offs of Loans
Net Provision for Reserve for Possible Losses on Loans
Credit Costs for Trust Accounts(209.5)(65.4)(5.9)(735.1)(914.7)(19.1)

525.6
849.2
13.2

Note: Credit-related Costs = Expenses related to Portfolio Problems + Provision for General Reserve for Possible Losses on Loans + Credit Costs for Trust Accounts

68Credit-Related Costs (the Three Banks)
Billions of yen

For the Fiscal Years ended March 31,

Credit-related Costs
Expenses related to Portfolio Problems
Losses on Write-offs of Loans
Provision for Specific Reserve for Possible Losses on Loans
Losses on Sales of Loans to CCPC
Reversal of (Provision for) Reserve for Possible Losses on Loans Sold
Losses on Support of Specific Borrowers
Reversal of Reserve for Possible Losses on Support of Specific Borrowers
Reversal of Reserve for Possible Losses on Loans to Restructuring Countries
Reversal of (Provision for) Reserve for Contingencies
Other Losses on Sales of Loans
Reversal of (Provision for) General Reserve for Possible Losses on Loans
Credit Costs for Trust Accounts

2004

2003

Change¥ (237.9)(363.6)(173.1)(184.3)
(0.7)
5.0
—
3.2
7.2
4.7
(25.6)131.5(5.9)¥ (2,095.2)(1,648.6)(673.1)(383.5)(18.2)(10.7)
(0.5)
—
15.0
(6.3)
(571.1)(427.4)(19.1)¥ 1,857.2
1,285.0
499.9
199.1
17.5
15.8
0.5
3.2
(7.8)
11.0
545.4
559.0
13.2

Notes: 1.CCPC is the abbreviation for the Cooperative Credit Purchasing Company, Ltd.
2.Credit-related Costs = Expenses related to Portfolio Problems + Provision for General Reserve for Possible Losses on Loans + Credit Costs for Trust Accounts

 Overview of Disclosure of NPLs at March 31, 2004 (the Three Banks) (Banking Accounts)
Billions of yen

1. Self-Assessment
ObligorCategorization

Category I(Non-Categorization)

Category II

Category IV
Category III (Non-Collateralized)

431.7
Bankrupt and Substantially
Bankrupt Obligors
431.7

Watch Obligors

Intensive Control
Obligors
1,028.9

Claims for Special
Attention
1,706.6

Collateral, Guarantees, etc.:
389.6
Reserve for Possible Losses:
42.0

Reserve
Ratio
100%

898.8

130.1

Collateral, Guarantees, etc.:
409.9
Reserve for Possible Losses:
488.8

Reserve
Ratio
78.9%

DirectWrite-offs

2. Disclosed Claims
under the FRL

3. Non-Accrual, Past
Due & Restructured
Loans

Claims against Bankrupt
and Substantially Bankrupt
Obligors
431.7

Loans to Bankrupt Obligors
171.2

Coverage Ratio 100%Reserve Ratio for
Uncoverd Portion
41.5%

Claims with Collection Risk
1,028.9
Coverage Ratio 87.3%

73.9 (Note 2)

Claims for Special Attention(Note 1) 1,706.6

Collateral, Guarantees, etc.:
726.5
Reserve for Possible Losses:
406.8

Non-Accrual
Delinquent Loans
1,215.7

Coverage Ratio 66.4%

Loans Past Due for 3 Months
or More 24.9

Restructured Loans
1,681.4(Special Attention Obligors)
Other Watch Obligors
Normal Obligors

Total
71,923.3

Reserved based on
estimated credit losses·Other Watch Obligors 10.38%·Normal Obligors 0.13%

Aggregate Coverage
Ratio 77.7%

Total
3,167.3

Total
3,093.3

Notes: 1. Claims for Special Attention includes loans only and is equal to the total amount of Loans Past Due for 3 Months or More and Restructured Loans.
Claims against Special Attention Obligors includes all claims, not limited to loans, against Special Attention Obligors.
2. The difference between total Non-Accrual, Past Due and Restructuring Loans and total Disclosed Claims under the FRL represents claims other than loans included in Disclosed Claims under the FRL.

69

Financial Analysis of Mizuho

Improvement of Asset Quality

 Outstanding Balance of NPLs
Status of Disclosed Claims
The Three Banks' aggregated figures of Disclosed Claims under the Financial Reconstruction Law (FRL) decreased by ¥1,594.9 billion (an approximately 33% decrease) from the end of the previous fiscal year to ¥3,191.0 billion. The classifications of thoseloans are shown in the table on page 74.
Of the total, Claims with Collection Risk or worse claims decreased by ¥411.4 billion from the previous year to ¥1,468.7 billion
as a result of such measures for corporate revitalization and removal of NPLs.
At the same time, Claims for Special Attention decreased by ¥1,183.5 billion (an approximately 40% decrease) compared tothe end of the previous fiscal year to ¥1,722.2 billion, as the classification of some portion of Claims with Collection Risk
improved due to active efforts to proceed with corporate revitalization.
NPL Ratio
The aggregated NPL ratio for the Three Banks at the end of March 2004 decreased by 1.88% from the end of the previous fiscal
year to 4.40%.
As set forth in the Program for Financial Revival announced in October 2002, major Japanese banks must reduce their NPL
ratios by half by the end of March 2005. The group has already surpassed its target for reducing NPLs as set down in its initialplans. Also, it is progressing steadily toward meeting its planned goal of bringing its outstanding balance of NPL down to the midtwo trillion yen range, or an NPL ratio in the range of 3%, by the end of fiscal 2004. In order to achieve the goal, the group continues its efforts to make the most of its financial subsidiaries specialized in corporate revitalization and to remove NPLs from its
balance sheet.

 Management of Loans
Credit Ratings
A 16-grade unified credit rating system is one of the most important elements of MHCB and MHBK 's risk management infrastructure (MHTB has also adopted this system starting in the fiscal year beginning April 2004).
In principle, credit ratings apply to all borrowers and are subject to regular reviews at least once a year to promptly reflect theirterm-end corporate results, as well as to special reviews required whenever a borrower's credit standing changes. This enables thegroup to monitor both individual borrowers and the status of the overall portfolio in a timely fashion. Since credit ratings are a
primary phase of the self-assessment process described below, they are linked to the obligor classifications used in the self-assessment of assets.
Self-Assessment of Assets
Self-assessment of assets is one of the credit risk management measures that enables the group to ascertain actual asset status
for the preparation for appropriate write-offs and provisions based on accounting principles.
Specifically, borrowers are categorized into five obligor classifications according to creditworthiness, then assets are classified
into four categories according to asset recovery risk and risk of impairment (please refer to the Definition of Obligor Classifications
and Definition of Categories of Self-Assessment on the next page for details).
Write-Offs and Reserves
Write-offs and reserves are made according to obligor classifications and asset categories on the basis of results of the self-assessment.
The results of write-offs and reserves at the end of March 2004 are described on page 69.

70

Definition of Obligor Classifications and Definition of Categories of Self-Assessment
Definition of Obligor Classifications

NormalObligors

Obligors whose business conditions are favorable and who are deemed not to have any particular problems in terms of their financial
position.

Watch
Obligors

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

Intensive
Control
Obligors

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

Substantially
Bankrupt
Obligors

Obligors who have not yet gone legally or formally bankrupt but who are substantially bankrupt because they are in serious financial
difficulties and are not deemed to be capable ofrestructuring.

Bankrupt
Obligors

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

Category I

Category II

Category III(Non-Categorized)

Category IV(Non-Collateralized)

All credit given toNormal Obligors.

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

Credit to obligors
which has pledged
collateral oris covered byguarantees,considered of highquality, such as
deposit collateral.

Credit to obligors
which is coveredby general collateral, such as realestate and guarantees.

Credit given to
Intensive Control
Obligors otherthan thoseincluded in
Category I and
Category II.
The difference
between the assessedvalue and market
value of collateral on
credit to Bankrupt andSubstantially Bankrupt
Obligors (i.e., the portion of loans for which
final collection problems or losses are
anticipated).

Credit to Bankrupt
and Substantially
Bankrupt Obligors,other than those in
Category I,
Category II and
Category III (credit
that is judged to be
unrecoverable orwithout value).

Method for Write-Offs and Reserves

Normal Obligors

Calculate the value of estimated loss based on the probability of failure over the coming year for loans by credit rating andappropriate it for the General Reserve for Possible Losses on Loans.

Watch Obligors

Calculate the estimated loss on loans based on the probability of failure over the next three years and appropriate it for
the General Reserve for Possible Losses on Loans. Further, in regards to Special Attention Obligors, for obligors with large
claims more than a certain amount, if the cash flow from the return of principal and interest payments can reasonably be
estimated, set up a reserve under the DCF method.

Intensive Control Obligors

Provide an amount for Specific Reserve for Possible Losses on Loans as calculated by one of the following methods after
deducting amounts anticipated to be recoverable from the sale of collateral held against the claims and from guarantorsof the claims: a) an amount calculated based on the overall ability of the borrower to pay, or b) the estimated loss calculated on the basis of the balance and the probability of failure over the next three years.
Further, for obligors with large claims more than a certain amount, if the cash flow from the return of principal andinterest payments can reasonably be estimated, set up a reserve under the DCF method.

Substantially Bankrupt
Obligors
Bankrupt Obligors

Provide the entire balance after deducting amounts anticipated to be recoverable from the sale of collateral held against
the claims and from guarantors of the claims for Specific Reserve for Possible Losses on Loans, or write-off the entire balance.

71

Financial Analysis of Mizuho

Improvement of Asset Quality

 Credit Management
Credit Operations Standard
The Credit Operations Standard stipulates the basic stance for all senior executive officers and employees of the group engaged in
credit operations. Fundamental credit operations policies are determined therein in light of the appropriate public and social rolesof the bank, including social principles, safety principles, growth principles and earnings principles.
Credit Examination
In order to improve the quality of assets, it is extremely important to manage credit on a daily basis so as to prevent the occurrence of NPLs.
Basically each business promotion division and branch responsible is to conduct an impartial analysis and examination of eachcredit application separately, and matters that exceed the authority of the division or branch general manager are to be examinedby head office credit divisions. Industry-specific, customer size-specific and region-specific credit divisions have been established,
and they are able to promptly conduct specialized examinations depending on the characteristics of the customer and market,
and provide business promotion divisions and branches with appropriate advice.
From the point of view of preventing the occurrence of new NPLs, particularly where there is a low credit rating indicating highdownside risk, the business promotion division and branch work jointly with the credit divisions to clarify credit policy, and at thesame time, work to provide support for the early revitalization of the customer.

 Treatment of NPLs
Centralized management of recovery and final disposal of NPLs by a specialized division facilitate continued efforts to revitalize
corporations and collect debts through a disposal of collateral.
The division works to strengthen management and collection systems and realize efficient and expeditious disposals by utilizing
schemes for corporate revitalization including transfer of business and M&A, bulk sales of NPLs and working with the RCC(Resolution and Collection Corporation).
Mizuho Saiken Kaishu Co., Ltd., a servicer of the group, mainly collects NPLs for the group banks and affiliated companies, andthe group intends to gradually expand the scope of collection services in the future and to consider accepting requests from nongroup entities.

 Activities in Corporate Revitalization
The group considers support for corporate revitalization to be an important mission for a financial institution, and it is doing its
utmost as a group to provide that.
In May 2003, Mizuho announced its Corporate Revitalization Project, a comprehensive effort of the group to support corporate
revitalization. The Three Banks transferred their loans and stocks of the customers in need of revitalization/restructuring to theirfinancial subsidiaries for corporate revitalization, and established an advisory company for corporate revitalization that possesses ahigh level of financial expertise. As a result, the group has made steady progress in corporate revitalization by offering corporate
revitalization schemes backed by a combination of internal and external know-how in such areas as M&As, transfer of operations
and corporate reconstruction though corporate splits.

72 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 Baunkrupt Obligors
Claims with Collection Risk
Claims for Special Attention
Total

2004

¥

466.1
1,084.1
1,719.4

2003¥

Change680.1
1,300.7
2,883.6¥(214.0)(216.6)(1,164.2)¥ 3,269.7¥ 4,864.6¥(1,594.9)

2004

2003

¥ 1,379.0¥ 1,832.8

2004

2003

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¥(453.7)(Trust Accounts)
Billions of yen

At March 31,

Claims against Bankrupt and Substantially Baunkrupt Obligors
Claims with Collection Risk
Claims for Special Attention
Total

Change

¥

4.2
3.8
15.5

¥

11.1
5.4
24.9

¥

(6.9)
(1.6)
(9.3)

¥

23.6

¥

41.5

¥

(17.9)(Consolidated and Trust Accounts)
Billions of yen

At March 31,

Claims against Bankrupt and Substantially Baunkrupt Obligors
Claims with Collection Risk
Claims for Special Attention
Total

2004

¥

470.3
1,087.9
1,735.0¥ 3,293.3

2003¥

Change691.3
1,306.2
2,908.6¥(220.9)(218.2)(1,173.6)¥ 4,906.1¥(1,612.8)

73

Financial Analysis of Mizuho

Improvement of Asset Quality

Disclosed Claims under the FRL (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

At March 31,

Claims against Bankrupt and Substantially Baunkrupt Obligors
Claims with Collection Risk
Claims for Special Attention

2004

¥

Subtotal¥

3,191.0

Normal Claims
Total

435.9
1,032.8
1,722.2

2003

615.1
1,265.0
2,905.7

Change¥4,785.9

69,313.7

71,298.9¥ 72,504.7¥ 76,084.8

2004

2003

(179.1)(232.2)(1,183.5)(1,594.9)(1,985.1)¥(3,580.0)

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¥ 1,176.1¥

1,586.0

Change¥(409.9)Ratio of Disclosed Claims under the FRL (the Three Banks) (Banking Accounts and Trust Accounts)
At March 31,

2004

2003

Claims against Bankrupt and Substantially Baunkrupt Obligors
Claims with Collection Risk
Claims for Special Attention

0.60%
1.42
2.37

0.80%
1.66
3.81

Change(0.20)%(0.23)(1.44)

Subtotal

4.40

6.29

(1.88)

Normal Claims

95.59

93.70

1.88

100.00%100.00%/Total

Disclosed Claims under the FRL and Coverage Amount (the Three Banks) (Banking Accounts)
Billions of yen

At March 31,

Claims against Bankrupt and Substantially Baunkrupt Obligors
Collateral, Guarantees, and equivalent
Reserve for Possible Losses
Claims with Collection Risk
Collateral, Guarantees, and equivalent
Reserve for Possible Losses
Claims for Special Attention
Collateral, Guarantees, and equivalent
Reserve for Possible Losses
Total
Collateral, Guarantees, and equivalent
Reserve for Possible Losses

74

2004

¥

2003

Change

431.7
389.6
42.0
1,028.9409.9
488.8
1,706.6
726.5
406.8

¥

603.9
525.9
77.9
1,259.6
573.5
511.4
2,880.8
1,051.5
694.7¥(172.2)(136.2)(35.9)(230.6)(163.6)(22.5)(1,174.1)(324.9)(287.8)¥ 3,167.3
1,526.2
937.8¥

4,744.4
2,151.0
1,284.1¥(1,577.0)(624.8)(346.3)

Status of Coverage on Disclosed Claims under the FRL (the Three Banks) (Banking Accounts)
Billions of yen

At March 31,

Coverage AmountReserve for Possible Losses on Loans
Reserve for Possible Losses on Support of Specific Borrowers
Collateral, Guarantees, and equivalent2004¥ 2,464.0
937.8—
1,526.2¥

2003

Change3,435.2
1,261.3
22.8
2,151.0¥ (971.2)(323.5)(22.8)(624.8)Coverage Ratio (after Partial Direct Write-offs of Category IV Loans)
Claims against Bankrupt and Substantially Bankrupt Obligors
Claims with Collection Risk
Claims for Special Attention

77.7%
100.0
87.3
66.4

72.4%
100.0
86.1
60.6

5.3%
—
1.2
5.7

Reserve Ratio against Non-collateralized Claims
Claims against Bankrupt and Substantially Bankrupt Obligors
Claims with Collection Risk
Claims for Special Attention(Reserve Ratio regarding Total Claims for Special Attention)

100.0%
78.9
41.5
23.8

100.0%
74.5
37.9
24.1

—%
4.4
3.5
(0.2)

Reserve Ratio regarding Other Claims
Claims against Watch Obligors excluding Claims against Special Attention Obligors
Normal Claims

10.38%
0.13

7.53%
0.15

2.84%
(0.01)

75

Financial Analysis of Mizuho

Improvement of Asset Quality

 Status of Non-Accrual, Past Due & Restructured Loans (Consolidated)(Consolidated)
Non-Accrual, Past Due & Restructured Loans (After Partial Direct Write-offs of Category IV Loans)
Billions of yen

At March 31,

Loans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for 3 Months or More
Restructured Loans
Total

2004

¥

177.8
1,284.0
24.9
1,694.2

2003

¥

288.6
1,598.5
50.6
2,832.0¥ 3,181.1¥ 4,769.9

2004

2003

¥ 1,353.2¥ 1,767.7

Change¥(110.8)(314.5)(25.7)(1,137.7)¥ (1,588.8)

Note: Above figures are presented net of partial direct write-offs, the amounts of which are indicated in the table below.
Billions of yen

Amount of Partial Direct Write-offs

Change¥(414.5)

Ratio to Total Loans (After Partial Direct Write-offs of Category IV Loans)
At March 31,

2004

2003

ChangeLoans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for 3 Months or More
Restructured Loans

0.26%
1.93
0.03
2.55

0.41%
2.30
0.07
4.09

(0.14)%(0.37)(0.03)(1.53)

4.80%

6.89%

(2.08)%

2004

2003

¥ 1,850.5
1,175.8666.2
8.4¥ 2,211.3
1,515.4
678.5
17.3

—

25.5

2004

2003

¥ 1,379.6¥ 1,832.9

Non-Accrual, Past Due & Restructured Loans / Total Loans

Status of Reserves for Possible Losses on Loans
Billions of yen

At March 31,

Reserves for Possible Losses on Loans(After Partial Direct Write-offs of Category IV Loans)
General Reserve for Possible Losses on Loans
Specific Reserve for Possible Losses on Loans
Reserve for Possible Losses on Loans to Restructuring Countries
Reserve for Possible Losses on Loans Sold

Change¥(360.7)(339.5)(12.3)(8.9)(25.5)

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¥(453.2)

Reserve Ratios for Non-Accrual, Past Due & Restructured Loans
At March 31,

2004

2003

ChangeAfter Partial Direct Write-offs of Category IV Loans

58.17%

46.36%

11.81%

Note: Reserve Ratio = (Reserve for Possible Losses on Loans + Reserve for Possible Losses on Support of Specific Borrowers) / Total Non-Accrual, Past Due & Restructured Loans.

76

(Trust Accounts)
Non-Accrual, Past Due & Restructured Loans
Billions of yen

At March 31,

Loans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for 3 Months or More
Restructured Loans
Total

2004

2003

Change

¥

2.0
6.1
0.2
15.2

¥

5.1
12.5
0.7
23.0

¥

(3.1)
(6.4)
(0.4)
(7.7)

¥

23.6

¥

41.5

¥ (17.9)

Ratio to Total Loans
At March 31,

2004

2003

ChangeLoans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for 3 Months or More
Restructured Loans

0.34%
1.04
0.04
2.62

0.71%
1.73
0.10
3.18

(0.36)%(0.69)(0.06)(0.55)

4.06%

5.74%

(1.67)%

Non-Accrual, Past Due & Restructured Loans / Total Loans(Consolidated and Trust Accounts)
Non-Accrual, Past Due & Restructured Loans (After Partial Direct Write-offs of Category IV Loans)
Billions of yen

At March 31,

Loans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for 3 Months or More
Restructured Loans
Total

2004

¥

179.9
1,290.1
25.1
1,709.5¥ 3,204.7

2003

¥

293.8
1,611.1
51.4
2,855.1

Change¥(113.9)(320.9)(26.2)(1,145.5)¥ 4,811.4¥ (1,606.7)

Ratio to Total Loans (After Partial Direct Write-offs of Category IV Loans)
At March 31,

2004

2003

ChangeLoans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for 3 Months or More
Restructured Loans

0.26%
1.93
0.03
2.55

0.42%
2.30
0.07
4.08

(0.15)%(0.37)(0.03)(1.52)

4.79%

6.88%

(2.08)%

Non-Accrual, Past Due & Restructured Loans / Total Loans

77

Financial Analysis of Mizuho

Improvement of Asset Quality

 Status of Non-Accrual, Past Due & Restructured Loans (the Three Banks)(Banking Accounts and Trust Accounts)
Non-Accrual, Past Due & Restructured Loans (After Partial Direct Write-offs of Category IV Loans)
Billions of yen

At March 31,

Loans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for 3 Months or More
Restructured Loans
Total

2004

¥

173.3
1,221.8
25.1
1,696.7

2003

¥

278.1
1,528.5
50.1
2,853.5¥ 3,117.0¥ 4,710.3

2004

2003

¥ 1,152.5¥ 1,528.2

Change¥(104.8)(306.7)(24.9)(1,156.7)¥ (1,593.3)

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¥(375.7)

Ratio to Total Loans (After Partial Direct Write-offs of Category IV Loans)
At March 31,

2004

2003

ChangeLoans to Bankrupt Obligors
Non-Accrual Delinquent Loans
Loans Past Due for 3 Months or More
Restructured Loans

0.25%
1.83
0.03
2.54

0.39%
2.19
0.07
4.09

(0.13)%(0.36)(0.03)(1.55)

4.67%

6.76%

(2.09)%

2004

2003

ChangeReserve for Possible Losses on Loans(After Partial Direct Write-offs of Category IV Loans)
General Reserve for Possible Losses on Loans
Specific Reserve for Possible Losses on Loans
Reserve for Possible Losses on Loans to Restructuring Countries¥ 1,653.5
1,109.3
535.7
8.4¥ 1,969.0
1,273.0
678.6
17.3¥ (315.4)(163.6)(142.8)(8.9)

Reserve for Possible Losses on Support of Specific Borrowers

—

27.0

(27.0)

Reserve for Possible Losses on Loans Sold

—

25.5

(25.5)

2004

2003

Change¥ 1,176.6¥ 1,587.3¥ (410.7)

Non-Accrual, Past Due & Restructured Loans / Total Loans

Status of Reserves for Possible Losses on Loans
Billions of yen

At March 31,

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

Reserve Ratios for Non-Accrual, Past Due & Restructured Loans
At March 31,

2004

2003

ChangeAfter Partial Direct Write-offs of Category IV Loans

53.45%

42.75%

10.70%

Note: Reserve Ratio = (Reserve for Possible Losses on Loans + Reserve for Possible Losses on Support of Specific Borrowers) / Total Non-Accrual, Past Due & Restructured Loans.

78 Status of Loans by Industry
Outstanding Loans by Industry (Consolidated)
Billions of yen

At March 31,

2004
Outstanding
Balance Composition

2003
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¥ 62,071.4
8,759.8
55.1
1.9
8.3
123.7
1,939.6
943.9
1,101.3
3,066.8
7,824.2
6,885.8
6,862.0
10,299.9
365.0
13,833.7¥ 63,201.9
9,380.0
67.5
3.0
9.8
124.0
2,173.6
931.9
1,125.9
2,977.7
8,171.1
6,911.2
7,206.8
10,167.2
271.8
13,679.7

100.00%
14.84
0.11
0.00
0.02
0.20
3.44
1.47
1.78
4.71
12.93
10.94
11.40
16.09
0.43
21.64

¥ (1,130.4)(620.2)(12.4)
(1.1)
(1.4)
(0.3)
(234.0)11.9(24.5)
89.0(346.8)(25.4)(344.7)
132.7
93.2
153.9

/
(0.73)%(0.02)
0.00(0.01)
0.00(0.32)
0.05
0.00
0.23
(0.32)
0.15(0.34)
0.50
0.16
0.65

Overseas Total (including Loans Booked Offshore)
Governments
Financial Institutions
Other

4,134.4
148.0
367.3
3,618.9

100.00
3.58
8.89
87.53

6,008.1
200.4
512.0
5,295.5

100.00
3.34
8.52
88.14

(1,873.6)(52.3)(144.7)(1,676.6)

/
0.24
0.37
(0.61)¥ 66,205.8/¥ 69,210.0/¥ (3,004.1)

/

Total

100.00%
14.11
0.09
0.00
0.01
0.20
3.12
1.52
1.78
4.94
12.61
11.09
11.06
16.59
0.59
22.29

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 Loans by Industry (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

At March 31,

2004
Outstanding
Balance Composition

2003
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¥ 63,570.9
8,860.3
55.1
1.9
8.8
125.8
1,963.0
1,031.4
1,111.3
3,151.1
7,834.7
7,445.7
6,931.2
10,368.7
413.3
14,267.8¥ 64,974.3
9,595.0
67.5
3.0
10.4
128.5
2,211.5
1,044.7
1,252.7
3,111.8
8,201.0
7,484.4
7,316.6
10,292.9
323.8
13,929.7

100.00%
14.77
0.10
0.00
0.02
0.20
3.40
1.61
1.93
4.79
12.62
11.52
11.26
15.84
0.50
21.44

¥ (1,403.3)(734.7)(12.4)
(1.1)
(1.5)
(2.6)
(248.4)(13.3)(141.3)39.2(366.3)(38.6)(385.3)
75.7
89.5
338.1

/
(0.83)%(0.01)
0.00(0.01)
0.00(0.31)
0.01(0.18)
0.17(0.29)
0.19(0.36)
0.47
0.15
1.00

Overseas Total (including Loans Booked Offshore)
Governments
Financial Institutions
Other

3,815.2
143.9
401.2
3,270.0

100.00
3.77
10.52
85.71

5,516.3
172.0
517.3
4,826.9

100.00
3.12
9.38
87.50

(1,701.1)(28.1)(116.0)(1,556.9)

/
0.65
1.14
(1.79)¥ 67,386.2/¥ 70,490.7/¥ (3,104.4)

/

Total

100.00%
13.94
0.09
0.00
0.01
0.20
3.09
1.62
1.75
4.96
12.33
11.71
10.90
16.31
0.65
22.44

79

Financial Analysis of Mizuho

Improvement of Asset Quality

Disclosed Claims under the FRL by Industry and Coverage Ratio (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

At March 31,

2004
Disclosed
Coverage on
Claims Disclosed Claims
under the FRL
under the FRL

2003
Disclosed
Coverage on
Claims Disclosed Claims
under the FRL
under the FRL

Domestic Total(excluding Loans Booked Offshore)
Manufacturing
Agriculture
Forestry
Fishery
MiningConstruction
Utilities
Communication
Transportation
Wholesale & Retail
Finance & Insurance
Real Estate
Service Industries
Local Government
Other¥ 3,057.8
517.8
2.6
0.2
2.2
0.8
194.2
1.2
34.9
56.0
846.2
55.9
502.3
480.5
—
362.4

¥ 4,367.2
702.5
2.2
0.4
2.5
3.5
407.6
11.6
33.1
105.8
993.9
183.3
865.7
674.1
0.3
379.9

Overseas Total(including Loans Booked Offshore)
Governments
Financial Institutions
Other

133.1
10.7
1.0
121.3

Total

¥ 3,191.0

78.0%
85.3
97.2
50.7
92.0
99.3
68.4
93.7
76.3
72.7
77.9
54.0
82.4
67.8
—
84.4
74.1
25.4
83.3
78.4
77.7%

418.6
12.2
2.0
404.4
¥ 4,785.9

72.9%
71.6
90.3
82.6
93.3
111.9
77.2
96.9
79.5
77.4
69.3
55.0
76.5
70.1
66.5
82.4

ChangeDisclosed
Coverage on
Claims Disclosed Claims
under the FRL
under the FRL¥ (1,309.4)(184.7)
0.3
(0.2)
(0.3)
(2.6)
(213.3)(10.4)
1.8(49.7)(147.7)(127.4)(363.4)(193.6)(0.3)(17.4)

68.0
32.1
64.3
69.1

5.0%
13.6
6.9
(31.8)(1.2)(12.6)
(8.8)
(3.1)
(3.1)
(4.6)
8.6
(0.9)
5.9
(2.3)
(66.5)
1.9(285.4)(1.4)(1.0)(283.0)

72.4%

6.1
(6.7)
18.9
9.2

¥ (1,594.9)

5.3%

Non-Accrual, Past Due and Restructured Loans by Industry (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

At March 31,

2004

2003

ChangeDomestic Total(excluding Loans Booked Offshore)
Manufacturing
Agriculture
Forestry
Fishery
MiningConstruction
Utilities
Communication
Transportation
Wholesale & Retail
Finance & Insurance
Real Estate
Service Industries
Local Government
Other¥ 2,988.8
515.7
2.6
0.2
2.2
0.3
174.5
0.4
32.2
55.8
829.3
55.8
500.4
474.9
—
343.9

¥ 4,322.1
681.5
2.2
0.4
2.5
2.9
402.6
10.8
31.9
105.5
989.3
183.2
861.6
667.4
0.3
379.3

¥ (1,333.2)(165.8)
0.3
(0.2)
(0.3)
(2.6)
(228.0)(10.3)
0.3(49.6)(160.0)(127.3)(361.1)(192.5)(0.3)(35.4)

Overseas Total(including Loans Booked Offshore)
Governments
Financial Institutions
Other

128.1
10.7
0.3
117.0

388.2
12.2
1.2
374.7

(260.0)(1.4)(0.8)(257.7)¥ 3,117.0¥ 4,710.3¥ (1,593.3)

Total

80

앪 Status of Loans by Nationality of Borrowers
Loans to Foreign Governments, and equivalent, by Country (Consolidated)
Billions of yen

At March 31,

2004

Billions of yen

At March 31,

2003

Indonesia
Others (5 Countries)¥ 51.00.3

Indonesia
Others (7 Countries)¥ 73.6
4.6

Total(Ratio to Total Assets)¥ 51.4(0.03%)

Total(Ratio to Total Assets)¥ 78.2(0.05%)

Note: Listed are loans to the government and related agents in restructuring countries for which Reserves for Possible Losses on Loans to Restructuring Countries are accounted as stipulated under JICPA
Banking Audit Committee Report No. 4.

Balance of Loans to Restructuring Countries (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen, Number of Countries

At March 31,

2004

Loan Amount
Number of Restructuring Countries

¥

2003

54.9
6

¥

97.1
8

Change¥(42.1)(2)

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 the countries whose loans are subject to the above Reserves and are accounted for on the balance sheets of the Three Banks.

Status of Loans by Nationality of Borrowers (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

At March 31,

2004
Non-Accrual,
Outstanding
Past Due &Balance
Restructured Loans

Outstanding
Balance

Non-Accrual,
Past Due &Restructured Loans

Asia
China
Hong Kong
ThailandSingaporeRepublic of Korea
Indonesia¥ 1,159.3
199.3
198.2
195.5
137.4
99.1
82.2

¥ 40.5
2.4
2.5
10.1
3.0
0.0
15.9

¥ 1,348.1
203.7
260.1
227.6
161.8
112.9
121.7

¥ 82.7
6.1
4.1
21.1
4.1
0.6
40.0

¥ (188.7)(4.3)(61.9)(32.1)(24.4)(13.8)(39.4)¥ (42.2)
(3.6)
(1.6)
(10.9)(1.0)(0.6)(24.1)

775.9
53.4
35.6
7.5

5.7
—
0.8
1.5

883.2
63.1
44.4
15.0

39.0
—
1.2
6.1

(107.2)
(9.7)
(8.8)
(7.4)

(33.2)
—
(0.3)
(4.6)

North America

1,641.3

150.8

2,664.2

268.0(1,022.8)(117.2)Eastern Europe

29.4

0.9

64.0

3.3

(34.6)(2.3)

Western Europe

815.9

20.5

966.7

18.7

(150.8)

1.8

Central and South America
MexicoBrazilArgentina

2003

ChangeNon-Accrual,
Outstanding
Past Due &Balance
Restructured Loans

Other

379.5

7.4

452.5

32.5

(73.0)(25.1)

Total¥ 4,801.6¥ 226.0¥ 6,378.9¥ 444.5(1,577.3)(218.4)81

Financial Analysis of Mizuho

Improvement of Asset Quality

 Results of Removal of NPLs from the Balance Sheet
Outstanding Balances of Claims against Bankrupt and Substantially Bankrupt Obligors and Claims with Collection Risk
(under the FRL) (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

At September 30, At March 31, At September 30, At March 31, At September 30, At March 31, At September 30, At March 31,
2000
2001
2001
2002
2002
2003
2003 (a)2004 (b)Amount Categorized as Problem Assets
before September 30, 2000

¥ 2,718.7 ¥ 1,912.3 ¥ 1,510.4 ¥

864.2 ¥of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
1,183.9
Claims with Collection Risk
1,534.7
Amount Newly Categorized as Problem Assets
during the Second Half of Fiscal 2000

622.5 ¥

155.6 ¥

109.0

265.6

103.8

73.2

45.0

(28.2)

697.6
812.7

438.5
425.6

342.7
279.7

112.9
42.7

78.9
30.1

49.8
13.5

(29.0)(16.5)

700.8

494.6

322.1

255.9

104.5

67.8

39.2

(28.6)

49.1

25.8

17.9

12.6

(5.2)

150.1
550.6

81.1
413.5

95.6
226.4

67.2
188.6

34.4
70.0

24.9
42.9

13.3
25.9

(11.5)(17.0)

1,385.0

927.3

727.4

347.5

278.7

158.6

(120.0)

199.7

136.4

125.5

75.2

(50.3)

277.9
649.3

230.1
497.3

183.6
163.9

157.5
121.1

85.3
73.2

(72.1)(47.8)

1,236.6

664.4

236.4

168.7

89.4

(79.3)

165.4

88.8

61.1

33.8

(27.2)

172.8
491.6

124.7
111.7

90.1
78.5

56.8
32.5

(33.3)(46.0)

589.1

226.5

149.2

78.9

(70.2)

71.8

44.8

45.9

27.3

(18.5)

85.0
504.0

70.2
156.2

69.0
80.2

31.4
47.5

(37.5)(32.7)

809.5

603.5

321.0

(282.5)

57.0

74.0

45.2

(28.8)

89.1
720.3

82.1
521.4

83.4
237.6

1.3
(283.8)

390.3

192.0

(198.2)

40.9

23.4

(17.4)

45.7
344.5

28.1
163.9

(17.6)(180.6)

525.9

525.9

83.7

83.7

of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Amount Newly Categorized as Problem Assets
during the Second Half of Fiscal 2001

261.8
1,123.1of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Amount Newly Categorized as Problem Assets
during the First Half of Fiscal 2002

313.3
923.3

of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Amount Newly Categorized as Problem Assets
during the Second Half of Fiscal 2002of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Amount Newly Categorized as Problem Assets
during the First Half of Fiscal 2003
of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Amount Newly Categorized as Problem Assets
during the Second Half of Fiscal 2003
of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Total

87.3
87.3
438.5
438.5
¥ 2,718.7 ¥ 2,613.2 ¥ 3,390.1 ¥ 3,350.3 ¥ 2,859.6 ¥ 1,880.2 ¥ 1,767.6 ¥ 1,468.7 ¥ (298.8)

of which the amount in the processof being removed from the balance sheet

82

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk

63.4 ¥ (45.6)

755.3
1,157.0of which the amount in the processof being removed from the balance sheet

Claims against Bankrupt andSubstantially Bankrupt Obligors
Claims with Collection Risk
Amount Newly Categorized as Problem Assets
during the First Half of Fiscal 2001¥

Change(b)-(a)1,183.9
1,534.7

905.4
1,707.7

1,040.6
2,349.5

1,125.5
2,224.8

751.8

456.9

438.8

346.6

(92.1)

898.1
1,961.4

615.1
1,265.0

548.6
1,218.9435.9
1,032.8(112.6)(186.1)

Progress in Removal of Problem Assets from the Balance Sheet (Accumulated Removal Amount and Removal Ratio)(the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

Balance
at March 31,
2004

Accumulated
RemovalAmount¥ 2,718.7
700.8
1,385.0
1,236.6
589.1
809.5
390.3
525.9

¥

¥

¥ 8,356.1¥ 1,468.7

AmountAs of September 30, 2000
Second Half of Fiscal 2000
First Half of Fiscal 2001
Second Half of Fiscal 2001
First Half of Fiscal 2002
Second Half of Fiscal 2002
First Half of Fiscal 2003
Second Half of Fiscal 2003
Total

63.4
39.2
158.6
89.4
78.9
321.0
192.0
525.9

2,655.3
661.6
1,226.3
1,147.2
510.1
488.4
198.2
/
/

Accumulated
Removal
Ratio

ModifiedAccumulated
Removal Ratio

Target of the Emergency
Economic
Policy Package

97.6%
94.3
88.5
92.7
86.5
60.3
50.7
/

99.3%
96.2
93.9
95.5
91.2
65.9
56.7
/

Almost Completed
Almost Completed
more than 80%
more than 80%
more than 50%
more than 50%
/
/

/

/

/

Note: Modified accumulated removal ratios are based on the accumulated removal amount including the amount which was in the process of being removed from the balance sheet.

Under the government's Emergency Economic Policy Package announced in April 2001, major banks are required to remove
Claims against Intensive Control Obligors or worse (under the FRL, Claims with Collection Risk or worse claims) from their balance
sheets by the end of March 2003 for claims originated before the first half of 2000. For new claims, half are required to be
removed within one year, 80% within two years and complete removal is required within three years.
Therefore, the group has proceeded with thorough collection and final disposal of NPLs as well as improvement of classifications by corporate revitalization.
The results of removal were approximately ¥1.3 trillion in fiscal 2003. As a result, based on the Emergency Economic Policy
Package, the removal ratio for loans due for disposal by the end of March 2004 has reached 96%, including the amount which
was in the process of being removed from the balance sheet, and removal from the balance sheet is complete.
The group surpassed its targets for the first two consecutive fiscal years by a significant amount, and it continues to takeaggressive measures to accelerate the final disposal of NPLs.
The group will steadily proceed with removal and reduce the balance of NPLs.

83

Financial Analysis of Mizuho

Improvement of Asset Quality

Breakdown of Reasons for Removal of Problem Assets from the Balance Sheet(the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

Problem Assets Newly Categorized as Problem Assets
Accumulated as of Second Half ofFirst Half of Second Half ofFirst Half of Second Half ofSeptember 30, 2000
Fiscal 2000
Fiscal 2001
Fiscal 2001
Fiscal 2002
Fiscal 2002

Liquidation(3.2) ¥

(20.7) ¥(7.9) ¥

(15.9)(9.5) ¥

(0.2) ¥

(129.5)

Restructuring(13.7)(0.0)(257.4)

(9.2)

(9.5)

(11.9)(18.8)(320.8)

Improvement in Business Performancedue to Restructuring
Securitization(0.5)(83.7)—(37.1)(3.7)(68.0)—(52.0)—(52.5)(14.7)(84.5)(24.9)(33.8)(43.9)(411.9)Direct Write-off

143.7

21.5

292.4

27.4

56.3

(9.8)

(12.0)

519.6

Other
Debt Recovery
Improvement in Business Performance(19.4)(14.0)
(5.3)

(9.6)
(6.9)
(2.6)

(62.5)(56.1)(6.3)(37.5)(27.7)(9.8)(48.5)(37.8)(10.7)(151.9)(89.5)(62.3)(108.3)(81.3)(27.0)(438.1)(313.7)(124.4)(45.6) ¥(28.6) ¥ (120.0) ¥(79.3) ¥(70.2) ¥ (282.5) ¥ (198.2) ¥

Total

¥

¥

(71.9)¥¥

Amount Removed
First Half of from BS in the Second
Fiscal 2003 Half of Fiscal 2003

(824.7)(Reference) Breakdown of Accumulated Amount Removed from the Balance Sheet(the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

Liquidation

Second Half of
Fiscal 2000

Breakdown of Amount Removed
First Half of Second Half ofFirst Half of Second Half of
Fiscal 2001
Fiscal 2001
Fiscal 2002
Fiscal 2002

First Half of Second Half of
Fiscal 2003
Fiscal 2003

¥ (229.4)¥ (155.0) ¥ (173.0) ¥ (190.2) ¥ (214.5)¥

Accumulated
from Second Halfof Fiscal 2000

(20.6) ¥ (129.5) ¥ (1,112.4)

Restructuring(84.6)(310.1)(47.9)(235.2)(316.5)(46.4)(320.8)(1,361.8)

Improvement in Business Performancedue to Restructuring
Securitization/(170.5)(9.9)(259.0)(4.7)(312.0)(47.8)(237.9)(58.7)(1,658.1)(6.4)(116.0)(43.9)(411.9)(171.7)(3,165.6)

Direct Write-off
Other
Debt Recovery
Improvement in Business Performance
Total

69.2

455.5

(98.3)

324.6

1,010.7

19.3

519.6

2,300.8(391.1)//(329.5)(305.5)(23.9)(640.2)(506.1)(134.0)(693.2)(387.5)(305.7)(551.5)(390.8)(160.7)(332.6)(224.2)(108.3)(438.1)(313.7)(124.4)(3,376.5)//¥ (806.4) ¥ (608.0) ¥(1,276.4) ¥(1,079.8) ¥(1,788.8) ¥ (502.9) ¥ (824.7) ¥ (6,887.4)

Write-offs of Loans (the Three Banks) (Banking Accounts)
Billions of yen

At March 31,

Write-offs of Loans

2004

¥

173.1

¥

2003

Change673.1¥ (499.9)

Principal Amounts of NPLs Sold (the Three Banks) (Banking Accounts and Trust Accounts)
Billions of yen

At March 31,

2004

2003

Change

548.1
54.4
493.7

¥ 2,033.6
619.6
1,414.0¥ (1,485.4)(565.2)(920.2)At March 31,

2004

2003

ChangeNumber of Cases of ForgivenessBook Value

22
58.0

22
283.9

—
¥ (225.8)

Principal Amounts of NPLs Sold
Sales of Loans to RCC
Other Sales¥

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

84

¥

¥

Financial Data of Mizuho Financial Group, Inc.
Report of Independent Auditors

86

Consolidated Financial Statements

87

Notes to Consolidated Financial Statements

92

85

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, 2004 and 2003, and the related consolidated statements of operations, shareholders' equity,and cash flows for the years then ended, all expressed in yen. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial positionof Mizuho Financial Group, Inc. and consolidated subsidiaries at March 31, 2004 and 2003, 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, 2004
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.

Shin Nihon & Co.
June 25, 2004

86

Financial Data of Mizuho Financial Group, Inc.

Consolidated Financial Statements

Consolidated Balance Sheets
Millions of yen
2004

At March 31,

AssetsCash and Due from Banks (Notes 12 and 37)
Call Loans and Bills Purchased
Receivables under Resale Agreements
Guarantee Deposit Paid under Securities Borrowing Transactions
Other Debt Purchased (Note 37)
Trading Assets (Notes 4, 12 and 37)
Money Held in Trust (Note 37)
Securities (Notes 5, 12 and 37)
Loans and Bills Discounted (Notes 6 and 12)
Foreign Exchange Assets (Notes 7 and 12)
Other Assets (Notes 8 and 12)
Premises and Equipment (Notes 9, 12 and 24)
Deferred Debenture Charges (Note 10)
Deferred Tax Assets (Note 34)
Customers' Liabilities for Acceptances and Guarantees (Note 23)
Reserves for Possible Losses on Loans (Note 11)
Reserve for Possible Losses on Investments
Total Assets¥

6,813,510
1,008,716
4,392,105
7,970,608
835,573
8,016,509
27,86332,071,624
66,205,868
608,792
5,496,845
1,143,807
446
1,361,766
3,647,613(1,850,586)
(975)

¥

2003

7,849,717
641,908
3,736,424
6,297,721
1,209,540
9,919,083
33,54023,816,574
69,210,035
720,519
4,904,656
1,632,851
1,041
2,130,243
4,145,411(2,211,366)(5,156)

Thousands of
U.S. dollars (Note 1)
2004$

64,503,559
9,549,524
41,580,098
75,457,815
7,910,376
75,892,359
263,788
303,622,311
626,771,450
5,763,441
52,038,679
10,828,438
4,229
12,891,850
34,531,981(17,519,517)(9,238)¥ 137,750,091¥ 134,032,747$ 1,304,081,143

Liabilities, Minority Interests and Shareholders' Equity
Liabilities
Deposits (Notes 12 and 13)¥ 77,487,475
Debentures (Note 14)9,459,514
Call Money and Bills Sold (Notes 12 and 15)
8,680,595
Payables under Repurchase Agreements (Note 12)8,031,106
Guarantee Deposit Received under Securities Lending Transactions (Note 12)8,161,802
Commercial Paper (Note 16)
837,800
Trading Liabilities (Note 4)
6,070,833
Borrowed Money (Notes 12 and 17)
1,643,343
Foreign Exchange Liabilities (Note 7)
352,136
Short-term Bonds (Note 18)
180,000
Bonds and Notes (Note 19)
2,359,370
Bonds with Stock Options (Note 19)—
Due to Trust Accounts
1,360,532
Other Liabilities (Notes 12 and 20)
4,406,174
Reserve for Bonus Payments
37,917
Reserve for Employee Retirement Benefits (Note 21)
31,979Reserve for Possible Losses on Loans Sold—
Reserve for Contingencies (Note 22)
132,739
Reserve under Special Laws (Note 22)
1,372
Deferred Tax Liabilities (Note 34)
28,792
Deferred Tax Liabilities for Revaluation Reserve for Land (Note 24)
158,467
Acceptances and Guarantees (Note 23)
3,647,613¥ 72,222,642
11,696,391
11,185,809
8,209,283
4,140,383
627,400
6,278,262
1,454,826
190,878—
2,468,606
3,858
1,489,463
5,526,554
36,96926,562
25,561
141,124
884
4,276
258,515
4,145,411$

733,574,510
89,553,292
82,179,259
76,030,550
77,267,847
7,931,459
57,472,630
15,557,548
3,333,676
1,704,061
22,336,180—
12,880,169
41,713,288
358,963
302,747—
1,256,643
12,995272,579
1,500,211
34,531,981

Total Liabilities

133,069,567

130,133,666

1,259,770,588

Minority Interests

1,036,127

1,038,013

9,809,031

Shareholders' Equity
Common Stock and Preferred Stock (Note 25)
Capital Surplus
Retained Earnings (Deficit)
Revaluation Reserve for Land, net of Taxes (Note 24)
Net Unrealized Gains (Losses) on Other Securities, net of Taxes (Note 37)
Foreign Currency Translation Adjustments
Treasury Stock

1,540,965
1,262,526
462,594
231,739392,772(112,067)(134,134)

1,540,965
2,599,552(1,404,992)
380,120(24,600)(95,786)(134,190)

14,588,327
11,952,344
4,379,388
2,193,878
3,718,380(1,060,942)(1,269,851)

Total Shareholders' Equity
Total Liabilities, Minority Interests and Shareholders' Equity

3,644,396

2,861,066

34,501,524¥ 137,750,091¥ 134,032,747$ 1,304,081,143

See accompanying “Notes to Consolidated Financial Statements,” which are an integral part of these statements.

87Financial Data of Mizuho Financial Group, Inc.

Consolidated Financial Statements

Consolidated Statements of Operations
Millions of yen
2004

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 29)¥

Total Income
Expenses
Interest Expenses (Note 26)
Fee and Commission Expenses
Trading Expenses
Other Operating Expenses (Note 30)
General and Administrative Expenses
Other Expenses (Note 31)
Total Expenses
Income (Loss) before Income Taxes and Minority Interests
Income Taxes:
Current
Deferred
Minority Interests in Net Income (Loss)Net Income (Loss)¥

1,622,704
62,064515,377
232,455
406,481503,872¥

2003

1,991,236
55,460490,182244,524
416,972
243,434

Thousands of
U.S. dollars (Note 1)
2004$

15,362,157
587,566
4,879,080
2,200,662
3,848,167
4,770,168

3,342,957

3,441,810

31,647,800

437,703
88,762651
199,620
1,125,905
609,073

734,859
79,647—150,217
1,237,641
3,501,617

4,143,738
840,3176,165
1,889,809
10,658,959
5,766,100

2,461,716

5,703,982

23,305,088

881,240(2,262,172)

8,342,712

28,055
387,855
58,34722,28830,50562,205

265,604
3,671,830
552,376

406,982¥ (2,377,172)$

3,852,902

Per Share of Common StockYen
At March 31,

Shareholders' Equity
Net Income (Loss):
Basic
DilutedCash Dividends¥

See accompanying “Notes to Consolidated Financial Statements,” which are an integral part of these statements.

88

2004

2003

61,980.34¥ (20,376.71)

36,153.27
18,754.94
3,000.00(254,524.65)——

U.S. dollars (Note 1)
2004$

586.77342.26
177.5528.40

Consolidated Statements of Shareholders' Equity
Millions of yen

For the Fiscal Years
ended March 31, 2004 and 2003

Common Stockand Preferred
Stock

CapitalSurplus

Balance at April 1, 2002
¥ 2,572,000
Transfer from Revaluation Reserve for Land—
Effect of the Change—
in Foreign Exchange Rate
Net Change in Unrealized Gains (Losses)
on Other Securities, net of Taxes—
Transfer to Deferred Tax Liabilities
Related to Land Revaluation—
Cash Dividends—
Bonuses to Directors andStatutory Auditors—
Net Loss—
Treasury Stock Transactions—
Issuance of Preferred Stock
540,965
Effect of the Business Reorganization
on March 12, 2003
(1,572,000)¥ 353,765—

Balance at March 31, 2003
Sale of Treasury Stock
Effect of the Change
in Foreign Exchange Rate
Net Change in Unrealized Gains (Losses)
on Other Securities, net of Taxes
Transfer from Revaluation
Reserve for Land
Transfer to Deferred Tax Liabilities
Related to Land Revaluation
Transfer to Retained Earnings
Cash Dividends
Net Income
Balance at March 31, 2004

¥ 1,540,965

Net Unrealized
Foreign
Retained Revaluation Gains (Losses) on
Currency
Earnings
Reserve Other Securities,
Translation(Deficit)for Land net of Taxes Adjustments¥ 997,265 ¥ 422,786 ¥ (558,485)
29,899(29,899)—¥ (69,121)—

Treasury
Stock

Total
Shareholders'Equity¥ (1,255) ¥ 3,716,954
—
—

—

—

—

—

(26,665)—(26,665)———

533,884——

533,884———(54,985)(12,766)
—

—
—

—
—

—
—

(12,766)(54,985)———
540,965(0)(2,377,172)
—
—

—
—
—
—

—
—
—
—

—
—
—
—

—
—
(113)
—

(0)
(2,377,172)(113)
1,081,930

1,704,822

—

—

—

—

(132,822)—¥ 2,599,552 ¥(1,404,992)¥ 380,120¥ (24,600)¥ (95,786) ¥(134,190) ¥ 2,861,066

—

269

—

—

—

—

56

325

—

—

—

—

—

(16,280)—(16,280)

—

—

—

—

417,373——

417,373——

145,456(145,456)

—

—

—

—

—
—
—
—

—
(1,337,295)———
1,337,295(22,147)
406,982(2,924)
—
—
—

—
—
—
—

—
—
—
—

—
—
—
—

(2,924)—(22,147)
406,982¥ 1,540,965¥ 1,262,526¥ 462,594¥ 231,739¥ 392,772 ¥ (112,067) ¥ (134,134) ¥ 3,644,396

Notes: 1. The balance of Capital Surplus at April 1, 2002 includes a decrease of ¥1,849,982 million arising from the corporate split and merger process of DKB, Fuji Bank and IBJ which took place on thatdate (the Combination and Reorganization).
2. The balance of Retained Earnings at April 1, 2002 includes an increase of ¥896,131 million arising from the corporate split and merger process of DKB, Fuji Bank and IBJ which took place onthat date (the Combination and Reorganization).
Thousands of U.S. dollars (Note 1)

Common Stockand Preferred
For the Fiscal Year ended March 31, 2004
Stock

Balance at March 31, 2003
Sale of Treasury Stock
Effect of the Change
in Foreign Exchange Rate
Net Change in Unrealized Gains (Losses)
on Other Securities, net of Taxes
Transfer from Revaluation
Reserve for Land
Transfer to Deferred Tax Liabilities
Related to Land Revaluation
Transfer to Retained Earnings
Cash Dividends
Net Income
Balance at March 31, 2004

CapitalSurplusNet Unrealized
Foreign
Retained Revaluation Gains (Losses) on
Currency
Earnings
Reserve Other Securities,
Translation(Deficit)for Land net of Taxes Adjustments$ 14,588,327 $ 24,609,983 $(13,301,075) $ 3,598,605

Treasury
Stock

Total
Shareholders'Equity$ (232,897) $ (906,816) $(1,270,385) $ 27,085,742

—

2,552

—

—

—

—

534

3,086

—

—

—

—

—

(154,126)—(154,126)

—

—

—

—

3,951,277——

3,951,277——

1,377,042 (1,377,042)

—

—

—

—

—
12,660,191(209,672)
3,852,902

—
—
—
—

—
—
—
—

—
—
—
—

(27,685)—(209,672)
3,852,902——— (12,660,191)————$ 14,588,327 $ 11,952,344(27,685)———$ 4,379,388 $ 2,193,878$ 3,718,380 $(1,060,942) $(1,269,851) $ 34,501,524

See accompanying “Notes to Consolidated Financial Statements,” which are an integral part of these statements.

89

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,

2004

2003

I. Cash Flows from Operating Activities
Income (Loss) before Income Taxes and Minority Interests¥
881,240
Depreciation
139,863
Amortization of Consolidation Differences(239)
Equity in Losses (Income) from Investments in Affiliates(1,761)
Increase (Decrease) in Reserves for Possible Losses on Loans(360,299)
Decrease in Reserve for Possible Losses on Investments(4,180)Decrease in Reserve for Possible Losses on Loans Sold
(25,561)
Increase (Decrease) in Reserve for Contingencies(8,384)
Increase in Reserve for Bonus Payments
1,105
Increase (Decrease) in Reserve for Employee Retirement Benefits
18,876
Interest Income—accrual basis(1,622,704)
Interest Expenses—accrual basis
437,703
Losses (Gains) on Securities(336,609)
Losses (Gains) from Money Held in Trust(417)
Foreign Exchange Losses—Net
10,190Losses on Disposal of Premises and Equipment
120,592
Gains on Establishment of Employee Retirement Benefit Trusts(60,677)
Net Decrease (Increase) in Trading Assets
1,991,740
Net Increase (Decrease) in Trading Liabilities(270,856)
Net Decrease in Loans and Bills Discounted
2,911,383
Net Increase (Decrease) in Deposits
5,605,562
Net Decrease in Debentures (excluding Subordinated Debentures)(2,236,876)
100,974
Net Increase in Borrowed Money (excluding Subordinated Borrowed Money)
Net Decrease (Increase) in Due from Banks (excluding Deposits with Central Banks)(648,501)
Net Increase in Call Loans etc.
(485,485)
Net Decrease in Cash Placed as Collateral on Securities Borrowed—
Net Increase in Guarantee Deposits Paid under Securities Borrowing Transactions(1,672,887)
Net Increase (Decrease) in Call Money, etc.
(2,816,946)
Net Increase (Decrease) in Commercial Paper
210,400
Net Decrease in Cash Received as Collateral for Securities Lent—
Net Increase in Guarantee Deposits Received under Securities Lending Transactions 4,021,419
Net Decrease in Foreign Exchange Assets
93,566Net Increase (Decrease) in Foreign Exchange Liabilities
163,902
Net Increase in Short-term Bonds (Liabilities)
180,000
Net Increase (Decrease) in Bonds and Notes
34,078Net Decrease in Due to Trust Accounts(128,931)
Interest and Dividend Income—cash basis
1,664,000
Interest Expenses—cash basis(488,800)
Other—net(1,373,879)¥ (2,262,172)
144,182
68,597
3,491
263,907(1,682)(24,085)
6,920
15,167(36,501)(1,991,236)
734,859
708,795
988
116,110
100,818(43,847)(2,111,812)
1,508,735
15,264,686(13,346,746)(3,614,499)
23,356
1,027,730(2,509,156)
3,313,727(6,297,721)
5,294,445(77,856)(4,050,050)
4,140,383
463,947(517,285)—(50,228)(286,941)
2,085,777(844,916)
671,265

Subtotal
Cash Paid in Income Taxes
Net Cash Provided by (Used in) Operating Activities

90

Thousands of
U.S. dollars (Note 1)
2004$

8,342,712
1,324,088(2,270)(16,675)(3,410,961)(39,578)(241,995)(79,380)
10,470178,701(15,362,157)
4,143,738(3,186,688)(3,948)96,4781,141,654(574,435)
18,855,818(2,564,198)
27,562,092
53,067,904(21,176,531)
955,923(6,139,367)(4,596,097)—(15,837,234)(26,668,053)
1,991,858—
38,070,808
885,793
1,551,669
1,704,061
322,621(1,220,593)
15,753,105(4,627,474)(13,006,525)

6,042,599(27,657)(2,108,846)(87,315)

57,205,334(261,831)¥ 6,014,942¥ (2,196,162)$ 56,943,503

2004

2003

Thousands of
U.S. dollars (Note 1)
2004

II. Cash Flows from Investing Activities
Payments for Purchase of Securities¥ (71,932,830)
Proceeds from Sale of Securities
46,486,466
Proceeds from Redemption of Securities
17,704,694
Payments for Increase in Money Held in Trust(14,899)
Proceeds from Decrease in Money Held in Trust
25,784
Payments for Purchase of Premises and Equipment(95,971)
Proceeds from Sale of Premises and Equipment
374,085
Payments for Purchase of Stocks of Subsidiaries (affecting the scope of consolidation)(258)
Proceeds from Sales of Stocks of Subsidiaries (affecting the scope of consolidation)
50,716¥ (59,435,925)
48,003,018
11,261,664(20,364)
54,340(94,326)
25,257——$ (680,988,649)
440,087,728
167,610,475(141,052)
244,100(908,567)
3,541,466(2,447)
480,138(7,402,213)(206,336)(70,076,808)

III. Cash Flows from Financing Activities
Proceeds from Issuance of Subordinated Borrowed Money
90,000
Repayments for Subordinated Borrowed Money(15,000)
Proceeds from Issuance of Subordinated Bonds, Notes and Bonds with Stock Options 601,406
Payments for Redemption of Subordinated Bonds, Notes and Bonds with Stock Options (731,797)
Proceeds from Issuance of Stocks—
Proceeds from Investments in Minority Interests—
Dividends Paid
(22,147)
Dividends Paid to Minority Interests(53,497)
Payments for Purchase of Treasury Stock(166)
Proceeds from Sales of Treasury Stock
208

243,000(1,335,000)
75,000(485,778)
1,081,930
118,500(54,985)(36,424)(263)—

852,031(142,005)
5,693,515(6,927,935)——(209,672)(506,459)(1,576)
1,975(130,994)(394,021)(1,240,126)

(381)

72

(3,615)

V. Net Decrease in Cash and Cash Equivalents(1,518,647)(2,796,448)(14,377,046)

VI. Cash and Cash Equivalents at the Beginning of the Year

7,048,505

9,847,366

66,728,251

Millions of yen

Net Cash Used in Investing Activities

Net Cash Used in Financing Activities
IV. Effects of Foreign Exchange Rate Changes on Cash and Cash Equivalents

VII. Net Decrease in Cash and Cash Equivalents Resulted
from Exclusion of Subsidiaries from the Scope of Consolidation
VIII. Cash and Cash Equivalents at the End of the Year (Note 32)

(193)
¥

5,529,664(2,413)¥

7,048,505(1,828)$52,349,377

See accompanying “Notes to Consolidated Financial Statements,” which are an integral part of these statements.

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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 as to the application and disclosure requirements of International Financial
Reporting Standards.
Certain items presented in the consolidated financial statements filed with the Director of the Kanto Finance Bureau are reclassified for the convenience of readers outside Japan. In addition, the Consolidated Statements of Shareholders' Equity are presented and included in the consolidated financial statements, though they are not required to be filed with the Director of the
Kanto Finance Bureau. The notes to the consolidated financial statements include information which is not required underJapanese 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 ¥105.63=US$1.00, the foreign exchange rate on March 31, 2004, has been used for translation. The inclusion of suchamounts is not intended to imply that Japanese yen has been or could be readily converted, realized or settled into U.S dollars atthat rate or any other rate.

2. Principles of Consolidation(1) Scope of Consolidation
The consolidated financial statements include the accounts of MHFG and its subsidiaries (collectively, the “Group”), including
Mizuho Corporate Bank, Ltd. (“MHCB”), Mizuho Bank, Ltd. (“MHBK”), Mizuho Securities Co., Ltd., Mizuho Trust & Banking
Co., Ltd. and other subsidiaries. The number of consolidated subsidiaries as of March 31, 2004 and 2003 was 118 and 138,
respectively. In the fiscal year ended March 31, 2004, Mizuho Advisory, Inc. and 9 other companies were newly consolidated asa result of incorporation and other reasons, and Chekiang First Bank Ltd. and 29 other companies were excluded from thescope of consolidation as a result of disposal by sale and other reasons. The consolidated financial statements for the fiscal
years ended March 31, 2004 and 2003 do not include the accounts of ONKD, Inc. and other subsidiaries, as they are considered immaterial in terms of the respective group ownerships of Total Assets, Net Income / Net Loss and Retained Earnings.
The number of affiliates accounted for under the equity method as of March 31, 2004 and 2003 was 28 and 33, respectively. Investments in affiliates include The Chiba Kogyo Bank, Ltd., Shinko Securities Co., Ltd., Japan Mortgage Co., Ltd., Fuyo
General Lease Co., Ltd., IBJ Leasing Co., Ltd. and other affiliates. In the fiscal year ended March 31, 2004, World Gateway, Inc.
and 4 other companies were excluded from the scope of the equity method as a result of liquidation and other reasons. Nonconsolidated subsidiaries, including ONKD, Inc. and certain affiliates, are not accounted for under the equity method, as they
are not significant for the consolidated financial statements of MHFG.
On consolidation, significant intercompany accounts and transactions have been eliminated. In addition, all significant unrealized profit included in assets resulting from transactions within the Group has been eliminated.
The accounting standard for the consolidated financial statements requires a company to consolidate all subsidiaries ofwhich the company controls the operations, irrespective of whether or not the company owns a majority of their shares.
Control is considered to exist where the company has (a) the power to appoint or remove the majority of the Board of Directors
or an equivalent governing body, and/or (b) the power to cast the majority of the votes at a meeting of the Board of Directors
or an equivalent governing body.
(2) Year-end Dates of Consolidated Subsidiaries
The accompanying consolidated financial statements include the accounts of subsidiaries whose fiscal year-ends are other thanMarch 31. Fiscal year-ends of such subsidiaries are principally December 31.
Consolidated subsidiaries with fiscal year-ends of the day before the last business day of June, or October 31 performed tentative closings and prepared financial statements as of and for the period ended December 31.
Other consolidated subsidiaries are consolidated based on their respective fiscal year-ends after making necessary adjustments for significant transactions recorded during the period between these subsidiaries' fiscal year-ends and the date of theconsolidated financial statements.
(3) Combinations and Reorganizations
On September 29, 2000, The Dai-Ichi Kangyo Bank, Limited (“DKB”), The Fuji Bank, Limited (“Fuji Bank”) and The Industrial
Bank of Japan, Limited (“IBJ”) (collectively, the “Three Banks”) established Mizuho Holdings, Inc. (“MHHD”) by way of stocktransfers (“kabushiki-iten”). As a result of this transaction, each of the Three Banks has become a wholly-owned subsidiary of
MHHD.
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The formation of MHHD and the stock-for-stock transfers of the Three Banks ( the “Initial Combination”) were accounted forusing the pooling-of-interests method in accordance with “Accounting for the Consolidation of a Holding Company
Established by Stock Exchange or Stock Transfers” (JICPA Accounting Committee Research Report No. 6) and, as such, theassets and liabilities of the Three Banks were combined at book value.
On April 1, 2002, the Three Banks were combined and reorganized (the “Combination and Reorganization”) into two banks,
MHCB and MHBK, by means of corporate split and merger. As a result of the Combination and Reorganization, MHFG's capitalsurplus decreased by ¥1,849,982 million and retained earnings increased by ¥896,131 million. The decrease in capital surplus
and the increase in retained earnings were reflected in the April 1, 2002 balances shown in the statements of shareholders'equity.
On January 8, 2003, MHFG was incorporated and a stock-for-stock exchange (“kabushiki-kokan”) was carried out by andbetween MHHD and MHFG on March 12, 2003, as a result of which MHHD became a wholly-owned subsidiary of MHFG (the“Business Reorganization”). In the Business Reorganization, certain subsidiaries of MHHD, MHCB and MHBK such as trust
banking subsidiaries were transferred to MHFG primarily by means of corporate splits. The Business Reorganization was
accounted for using the pooling-of-interests method in accordance with the JICPA Accounting Committee Research Report
No. 6.

(4) Amortization of Difference between Cost and Underlying Interests
In principle, the difference between the fair value of net assets and the cost of the acquired subsidiary is being amortized over a
period within 20 years from the date of acquisition, and the unamortized balance is recorded as “Consolidation Differences”
on the Consolidated Balance Sheets. If these amounts have no material impact on the consolidated financial statements of
MHFG, they are charged or credited to income in the year of acquisition.
3. Summary of Significant Accounting Policies(1) Trading Assets and Trading Liabilities
Trading transactions intended to take advantage of short-term fluctuations and arbitrage opportunities in interest rates,
currency exchange rates, market prices of securities and related indices are recognized on a trade date basis and recordedin Trading Assets or Trading Liabilities on the Consolidated Balance Sheets.
Securities and other short-term credit instruments held for trading purposes are stated at fair value at the consolidated balance sheet date. Derivative financial products, such as swaps, forward contracts and option transactions, are stated at their fairvalues, assuming that such transactions were terminated and settled at the consolidated balance sheet date.
Trading Income and Trading Expenses include the interest received and interest paid during the fiscal year, the gains or losses
resulting from any change in the value of securities and monetary claims between the beginning and the end of the fiscal year
and the gains or losses resulting from any change in the value of financial derivatives between the beginning and the end of
the fiscal year, assuming they were settled at the end of the fiscal year.
(2) Securities
In accordance with the Accounting Standard for Financial Instruments (the Business Accounting Deliberation Council, January1998), MHFG classifies securities into three categories based upon management's intent. These securities are accounted for as
follows:(i) Trading securities are carried at market value and included in Trading Assets.
(ii) Bonds held to maturity are stated at amortized cost as determined by the moving average method.
(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, included directly in shareholders' equity. Fair value of domestic equity securities with a quoted market price are determined based on the average quoted market price over the month preceding the consolidated balance
sheet date. Fair value of securities other than domestic equity securities with a quoted market price are determined at thequoted market price or other reasonable value at the consolidated balance sheet date (cost of securities sold is calculated
primarily by the moving average method). Other securities which do not have readily determinable fair values are stated atcost or amortized cost as determined by the moving average method.
In addition, investments in non-consolidated subsidiaries and affiliates which are not accounted for under the equity
method are valued at cost as determined by the moving average method.
Securities entrusted in Money Held in Trust which is managed independently and whose primary objective is to manage
securities investment are accounted for at fair value.

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Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements(3) Securities Lending and Borrowing Transactions
Unsecured securities loaned that allow borrowers to sell the borrowed securities, amounted to ¥20,023 million ($189,565
thousand) and ¥8,585 million as of March 31, 2004 and 2003, respectively, and are included in Trading Securities in Trading
Assets. Securities loaned that do not allow borrowers to sell the borrowed securities, amounted to ¥9 million ($95 thousand)and ¥1,448 million as of March 31, 2004 and 2003, respectively, and are included in Japanese National Government Bonds,
Japanese Local Government Bonds, or other categories in Securities. Subsidiaries have borrowed securities that may be sold or
pledged, securities borrowed with cash collateral, and securities purchased with resale agreements. Borrowed securities
pledged as collateral amounted to ¥4,519,460 million ($42,785,769 thousand) and ¥4,135,372 million as of March 31, 2004
and 2003, respectively. Borrowed securities re-loaned amounted to ¥1,947 million ($18,435 thousand) and ¥2,140 million as ofMarch 31, 2004 and 2003, respectively. Borrowed securities held without being pledged or sold amounted to ¥4,757,422 million ($45,038,550 thousand) and ¥3,499,257 million as of March 31, 2004 and 2003, respectively.
In addition, securities received as collateral for margin transactions in the amount of ¥1,911 million have been re-pledged ascollateral for Borrowed Money as of March 31, 2003.
(4) Bills Discounted
In accordance with “Accounting and Auditing Treatment Relating to Adoption of Accounting Standards for Financial
Instruments for Banks” (JICPA Industry Audit Committee Report No. 24), Bills Discounted are accounted for as financing transactions, although the subsidiary banks have rights to sell or pledge certain commercial bills and foreign exchange bills discounted. The principal amount of these bills amounted to ¥963,147 million ($9,118,121 thousand) and ¥1,162,352 million asof March 31, 2004 and 2003, respectively.
(5) Derivatives
Derivative transactions are valued at fair value with changes in fair value included in current income. Derivatives qualified ashedges are mainly accounted for using the deferral method of hedge accounting (see the following note).
(6) Hedge Accounting
Domestic consolidated banking subsidiaries and domestic trust banking subsidiaries apply the deferred method as hedge
accounting for the interest rate risk accompanying various financial assets and liabilities. Until the fiscal year ended March 31,
2003, as permitted by the transitional treatment in JICPA Industry Audit Committee Report No. 24, hedge accounting wasapplied to macro hedges under which overall interest rate risks inherent in loans, deposits and other instruments were managed on a net basis using derivatives.
Effective the fiscal year ended March 31, 2004, the general provisions of JICPA Industry Audit Committee Report No. 24 areapplied.
Under the general provision, the effectiveness of a fair value hedge is assessed by each of identified (i) group of hedged
deposits, loans or similar instruments and (ii) corresponding group of hedging instruments such as interest rate swaps in thesame maturity bucket. Also, under the general provisions, the effectiveness of a cash flow hedge is assessed based on the correlation between a base interest rate index of the hedged cash flow and that of the hedging instrument.
Deferred hedge gains/losses on the macro hedges recognized in the previous periods are amortized as interest
income/expenses or other income/expenses over the remaining maturity of the respective hedging instrument.
The unamortized amounts of Gross Deferred Hedge Losses and Gross Deferred Hedge Gains of the macro-hedges as ofMarch 31, 2004 were ¥1,246,462 million ($11,800,272 thousand) and ¥1,177,257 million ($11,145,103 thousand), respectively.
Domestic consolidated banking subsidiaries and domestic trust banking subsidiaries also apply the deferred method as hedge
accounting to hedges of foreign exchange risks associated with various foreign currency denominated monetary assets and liabilities. Until the fiscal year ended March 31, 2003, the transitional treatment in “Accounting and Auditing Treatment Relating
to Adoption of Accounting Standards for Foreign Currency Transactions for Banks” (JICPA Industry Audit Committee Report
No. 25) was applied to these transactions. Effective the fiscal year ended March 31, 2004, in accordance with the general provisions of JICPA Industry Audit Committee Report No. 25, hedge accounting is applied to currency-swap transactions, exchange
swap transactions and similar transactions intended to hedge risks of borrowing and lending in different currencies by swapping the borrowing currency for the lending currency.
The effectiveness of the above described currency-swap transactions, exchange swap transactions and similar transactions
hedging the foreign exchange risks of monetary assets and liabilities denominated in foreign currencies is assessed based oncomparison of foreign currency position of the hedged monetary assets and liabilities and the hedging instruments.
In addition to the above methods, the domestic consolidated banking subsidiaries apply the deferred method or the fair-value
hedge method to portfolio hedges of the foreign exchange risks associated with foreign securities (except for bonds) identified
as hedged items in advance, as long as the amount of foreign currency payables of spot and forward foreign exchange contracts exceeds the amount of acquisition cost of the hedged foreign securities in foreign currency.
94

Until the fiscal year ended March 31, 2003, gains and losses relating to foreign exchange swaps of some of the domesticbanking subsidiaries were reported in gross amounts in the statements of operations. However, effective the fiscal year ended
March 31, 2004, the net amount of gains and losses are presented as a result of the application of hedge accounting in accordance with JICPA Industry Audit Committee Report No. 25. Compared to the corresponding amounts under the previously
applied method, Interest Income and Interest Expenses, and Ordinary Income and Ordinary Expense each decreased by ¥13,254
million ($125,481 thousand).
Intercompany interest rate swaps, currency swaps and similar derivatives among consolidated companies or between trading
accounts and other accounts, which are designated as hedges, are not eliminated and related gains and losses are recognizedin the statements of operations or deferred under hedge accounting because these intercompany derivatives are covered byoutside third-party transactions executed in appropriate hedge operations without subjectivities in accordance with JICPA
Industry Audit Committee Reports Nos. 24 and 25.
Other subsidiaries also apply the deferred method, the fair-value method or the exceptional accrual method for interest rate
swaps as hedge accounting methods as described above.

(7) Translation of Foreign Currencies
Assets and Liabilities denominated in foreign currencies and accounts of overseas branches of domestic banking subsidiaries
and a domestic trust banking subsidiary are translated into Japanese yen primarily at the exchange rates in effect at the consolidated balance sheet date, with the exception of the investments in non-consolidated subsidiaries and affiliates not accounted
for by the equity method, which are translated at historical exchange rates.
Until the fiscal year ended March 31, 2003, the transitional treatment permitted by JICPA Industry Audit Committee Report
No. 25 was applied to foreign currency transactions. However, effective the fiscal year ended March 31, 2004, in accordancewith the general provisions of JICPA Industry Audit Committee Report No. 25, hedge accounting is applied to currency-swap
transactions, exchange swap transactions and similar transactions intended to hedge risks of borrowing and lending in different
currencies by swapping the borrowing currency for the lending currency. A summary of the hedge accounting applied in thesetransactions is explained in 3 (6) above.
As a result of the application of the hedge accounting, currency-swap transactions and exchange swap transactions, whichwere accounted for on an accrual basis, are valued at fair value and the gross amount of the credit balance and the debt balance are recorded on the balance sheet in Other Assets and Other Liabilities. Other Assets and Other Liabilities increased by¥1,458 million ($13,805 thousand) and ¥1,415 million ($13,404 thousand), respectively, compared with the corresponding
amounts under the previous methods. Additionally, as a result of this change, Ordinary Profit and Income before Income Taxes
and Minority Interests both increased by ¥42 million ($401 thousand).
Until the fiscal year ended March 31, 2003, the net fair value of forward foreign exchange transactions other than those forthe above hedging purposes was recorded in Other Assets or Other Liabilities on the balance sheets. However, effective the fiscal year ended March 31, 2004, in accordance with JICPA Industry Audit Committee Report No. 25, the gross of fair value
amounts are presented in (i) Trading Assets and Trading Liabilities as Trading-Related Financial Derivatives and (ii) Other Assets
and Other Liabilities as Derivatives other than for Trading on the balance sheets. As a result, Trading Assets, Trading Liabilities,
Other Assets, and Other Liabilities increased by ¥101,928 million ($964,956 thousand), ¥234,226 million ($2,217,425 thousand), ¥780,758 million ($7,391,448 thousand), and ¥648,460 million ($6,138,979 thousand), respectively, compared with thecorresponding amounts under the previous method.
The consolidated subsidiaries' assets and liabilities denominated in foreign currencies, except for the above transactions, aretranslated primarily at the exchange rates in effect at each balance sheet date.
(8) Premises and Equipment
Depreciation of buildings is computed mainly by the straight-line method, and that of equipment is computed mainly by the
declining-balance method with the following range of useful lives:
Buildings
3 years to 50 years
Equipment
2 years to 20 years(9) Software
Development costs for internally used software are capitalized and amortized under the straight-line method over their estimated useful lives of mainly five years.
(10) Deferred Debenture Charges
Deferred Debenture Charges are amortized as follows:
Debenture discounts are amortized over the term of the debenture.
Debenture issuance costs are amortized over the term of the debentures, up to the maximum of three years, which is thelongest period permitted under the Enforcement Regulations of the Commercial Code of Japan.
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Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements(11) Stock Issuance Costs
Stock issuance costs are recognized as expenses when incurred.
(12) Bond Issuance Costs
Bond issuance costs are recognized as expenses when incurred.
(13) Reserves for Possible Losses on Loans
The Reserve for Possible Losses on Loans of major domestic consolidated subsidiaries is maintained in accordance with internallyestablished standards for write-offs and provisions:• For credit extended to obligors that are legally bankrupt under the Bankruptcy Law, Special Liquidation in the Commercial
Code or other similar laws (“Bankrupt Obligors”), and to obligors that are effectively in similar conditions (“Substantially
Bankrupt Obligors”), reserves are maintained at 100% of amounts of claims net of expected amounts recoverable from thedisposal of collateral and/or the amounts recoverable under guarantees.
• For credit extended to obligors that are not yet legally or formally bankrupt but who are likely to be bankrupt (“Intensive
Control Obligor”), reserves are maintained at the amount deemed necessary based on overall solvency analyses of theamount of claims less expected amounts recoverable from the disposal of collateral and/or the amounts recoverable underguarantees.
• For Intensive Control Obligors and Obligors with Restructured Loans as defined in Note 6 below, if the exposure to an obligor
exceeds a certain specific amount, reserves are provided as follows:(i) if future cashflows of the principal and interest can be reasonably estimated, the discounted cash flow method is applied,
under which method reserve is determined at the difference between the book value of the loan and its present value of
future cash flows discounted using the contractual interest rate before the loan was classified as a Restructured Loan, and(ii) if future cashflows of the principal and interest cannot be reasonably estimated, losses are estimated for each individualloan.
• For credit extended to other obligors, reserves are maintained at rates derived from historical credit loss experiences, etc.
• Reserves for Possible Losses on Loans to Restructuring Countries (including Reserves for Losses on Overseas Investments prescribed in Article 55-2 of the Exceptions to the Tax Laws Act) are maintained in order to cover possible losses based on analyses of the political and economic climates of the countries.
All credit is assessed by each credit origination department, and the results of the assessments are verified and examined by
the independent examination department. Reserves for Possible Losses on Loans are provided for on the basis of such verified
assessments.
In the case of loans to Bankrupt Obligors or Substantially Bankrupt Obligors, which are collateralized or guaranteed by a third
party, the amounts deemed uncollectible are written off against the respective loan balances. The total write-off amounts were
¥1,379,693 million ($13,061,571 thousand) and ¥1,832,935 million at March 31, 2004 and 2003, respectively.
Other consolidated subsidiaries provide the amount necessary to cover the loan losses based upon past experience for generalclaims and their management's assessment for other claims.
(14) Reserve for Possible Losses on Investments
The Reserve for Possible Losses on Investments is maintained to provide against possible losses on investments, after taking into
consideration the financial conditions and other relevant factors concerning the investee company.
(15) Reserve for Bonus Payments
Reserve for Bonus Payments, which is provided for future bonus payments to employees, is maintained at the amount accruedat the end of the fiscal year, based on the estimated future payments and service periods.
(16) Reserve for Employee Retirement Benefits
The Reserve for Employee Retirement Benefits, which is provided for future pension payments to employees, is recorded as theamount accrued at the end of the fiscal year, based on the projected benefit obligation and the estimated plan asset amounts
at the end of the consolidated fiscal year. Prior service cost and unrecognized actuarial gains (losses) are recognized mainly as
follows:
Prior service cost (Gain on plan amendment) is recognized as income in the period of occurrence.
Unrecognized actuarial gains or losses are recognized as income or expenses from the following fiscal year under the straightline method over a certain term within the average remaining service period of the current employees.
Unrecognized net obligation at the date of initial application of the accounting standard for retirement benefits has been recognized equally as an expense primarily over five years.
On September 25, 2003 MHFG and certain of its domestic consolidated subsidiaries received approvals for an exemption
from payments of benefits related to future employee services in respect of the substitutional portion of their pension funds
96

from the Minister of Health, Labor and Welfare, based on the Law Concerning Defined Benefit Corporate Pension Plans. In
accordance with the transitional treatment permitted by Paragraph 2 of Article 47 of “Practical Guidelines for Accounting for
Retirement Benefits (Interim Report)”(JICPA Accounting Committee Report No. 13),” MHFG and certain of its domestic consolidated subsidiaries derecognized the future retirement benefit obligations relating to the substitutional portion of the pension
funds and the pension assets on the date of the approvals. In consequence of the above, ¥45,169 million ($427,621 thousand)of extraordinary gain was recorded.
The amount of the substitutional amount of the retirement benefit obligations as of the consolidated balance sheet date was¥210,451 million ($1,992,344 thousand).

(17) Reserve for Possible Losses on Loans Sold
The Reserve for Possible Losses on Loans Sold is provided to cover possible losses on loans sold to the Cooperative Credit
Purchasing Company, Limited, taking into account the value of collateral pledged.
(18) Lease Transactions
Finance leases of MHFG and domestic consolidated subsidiaries that do not involve the transfer of ownership to the lessee atthe end of the lease term are accounted for as operating leases.
Lease transactions of foreign consolidated subsidiaries are principally accounted for as either finance leases or operatingleases.
(19) Scope of Cash and Cash Equivalents in Consolidated Statement of Cash Flows
In the Consolidated Statements of Cash Flows, Cash and Cash Equivalents consist of cash and due from central banks.
(20) Income Taxes
Deferred income taxes are recorded for the corporate tax, the inhabitants' taxes and the enterprise taxes based on the differences between the tax bases of assets and liabilities and those as reported in the consolidated financial statements, using
enacted tax rates which will be in effect when the differences are expected to reverse. The assets and liabilities method is used
to 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 the transaction amounts.
(22) Enterprise Taxes
With the promulgation of “Revision of Law regarding Regional Taxation, etc.” (Law No. 9 of 2003) on March 31, 2002, enterprise taxes imposed on banks through external standards taxation from the consolidated fiscal year beginning April 1, 2004 willbe levied on “added value,” “amount of capital, etc.” and “income and liquidation income,” as compared with the previous
legislation (“Law Regarding Regional Taxation” of 2003 before amendment, Article 72-12) under which enterprise taxes werelevied on “income and liquidation income.” It follows that enterprise taxes imposed through external standards taxation leviedon added value and amount of capital, etc., are not in keeping with a tax which is imposed through on income. As a result, asof March 31, 2003, there was a decrease in Deferred Tax Assets of ¥9,382 million, and an increase in Income Taxes–Deferredof ¥8,531 million. There was also an increase in Deferred Tax Liabilities on Land Revaluation of ¥14,027 million, and an equivalent decrease in the Revaluation Reserve for Land, net of Taxes of same amount, in addition to a decrease in the Unrealized
Losses on Other Securities, net of Taxes of ¥27 million at March 31, 2003.
With the implementation of the “Metropolitan Ordinance regarding the Imposition of Enterprise Taxes through ExternalStandards Taxation on Banks in Tokyo” (Tokyo Metropolitan Ordinance No. 145, April 1, 2000) (“the metropolitan ordinance”),
enterprise taxes which were levied on gyomu ararieki (Gross Profits) and enterprise taxes relating to banks in Tokyo wererecorded in Other Expenses in the amount of ¥27,948 million for the year ended March 31, 2003. As a result of lawsuits with
the Tokyo Metropolitan Government related to the metropolitan ordinance, MHFG's three banking subsidiaries reached a basic
agreement with the Tokyo Metropolitan Government and the Tokyo Governor to make settlement-at-court at the Supreme
Court. On October 2, 2004, the banking subsidiaries received the tax refund and the interest on the refund of ¥58,198 million($550,966 thousand), in aggregate, which is Other Income for the year ended March 31, 2004.
(23) Appropriation of Retained Earnings
Cash dividends and bonuses to directors and statutory auditors are recorded in the fiscal year in which the proposed appropriation of Retained Earnings is approved by the Board of Directors and/or by the general meeting of the shareholders.

97Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements(24) Net Income (Loss) per Share
Consolidated Net Income (Loss) per Share for the fiscal years ended March 31, 2004 and 2003 and related information are as
follows:
(Yen)
2004

Consolidated Net Income (loss) per Share············ ¥(U.S. dollars)
2004

2003

36,153.27¥(254,524.65)$

342.26

Consolidated Net Income (loss)····························¥ 406,982 million¥ (2,377,172) million$ 3,852,902 thousand

Consolidated Net Income (loss)
attributable to common shareholders················· ¥ 365,012 million¥ (2,399,319) million$ 3,455,573 thousand

Consolidated Net Income (loss)
not attributable to common shareholders···········¥

41,969 million¥$

Average number of shares of common stock·······

10,096 thousand

Consolidated Net Income per Share (Diluted)·······¥

18,754.94

22,147 million

397,330 thousand

9,426 thousand
¥

/
$

—

177.55

Common stock equivalents to be used to calculate diluted per share information are as follows:
Class I, II, III, VII, VIII, IX, X, and XI Preferred Shares
Bonds with Stock Options
Diluted Net Income per Share for the fiscal year ended March 31,2003 is not disclosed due to a loss position (anti-dilutive).

4. Trading Assets and Liabilities
Millions of yen
2004

At March 31,

Trading Assets:
Trading Securities
Derivatives for Trading Securities
Securities Held to Hedge Trading Transactions
Derivatives for Securities Held to Hedge Trading Transactions
Derivatives for Trading Transactions
Other Trading Assets
Total
Trading Liabilities:
Trading Securities Sold Short
Derivatives for Trading Securities
Securities Oversold to Hedge Trading Transactions
Derivatives for Securities Held to Hedge Trading Transactions
Derivatives for Trading Transactions
Total

2003

Thousands of U.S. dollars
2004¥

4,654,300
32,821
84,4751,051
2,390,452
853,408¥

5,273,367
6,216
167,479
2,077
3,527,856
942,084$

44,062,296
310,721799,730
9,958
22,630,433
8,079,221¥

8,016,509¥

9,919,083$

75,892,359¥

3,659,244
43,12789,473
1,072
2,277,916¥

2,960,091
2,466
130,057
288
3,185,358$

34,642,100
408,285
847,048
10,14921,565,048¥

6,070,833¥

6,278,262$

57,472,630

Millions of yen
2004

2003

Thousands of U.S. dollars
2004¥ 20,431,753
125,820
1,652,262
5,275,248
4,586,539¥ 11,968,696
128,837
1,305,316
4,439,291
5,974,433$ 193,427,562
1,191,145
15,641,981
49,940,818
43,420,805¥ 32,071,624¥ 23,816,574$ 303,622,311

5. Securities
At March 31,

Japanese National Government Bonds
Japanese Local Government Bonds
Japanese Corporate Bonds
Japanese Stocks and Shares*1
Other*2Total*1 Japanese Stocks and Shares included investments in non-consolidated subsidiaries and affiliates of ¥76,289 million ($722,229 thousand) and ¥101,841 million at March 31, 2004 and 2003, respectively.
*2 Other included investments in non-consolidated subsidiaries and affiliates of ¥16,460 million ($155,828 thousand) and ¥16,970 million at March 31, 2004 and 2003, respectively.

98

6. Loans and Bills Discounted
Millions of yen
2004

At March 31,

Bills Discounted
Loans on Notes
Loans on Deeds
Overdrafts
Financing Receivables, including Factoring, Leasing and Property Financing
Total

¥

610,001
4,969,989
47,602,650
12,738,383
284,843¥ 66,205,868

¥

2003

797,919
5,823,170
50,304,770
12,052,935
231,239¥ 69,210,035

Thousands of U.S. dollars
2004$

5,774,885
47,050,926
450,654,648
120,594,373
2,696,618$ 626,771,450

Loans and Bills Discounted at March 31, 2004 and 2003 include the following:
Millions of yen
2004

At March 31,

Loans to Bankrupt Obligors*1
Non-Accrual Delinquent Loans*2
Loans Past Due for 3 Months or More*3
Restructured Loans*4
Total*5

2003

Thousands of U.S. dollars
2004¥

177,883
1,284,036
24,9101,694,269¥

288,686
1,598,542
50,6702,832,049$

1,684,024
12,155,984
235,831
16,039,665¥

3,181,100¥

4,769,949$

30,115,504*1 Loans to Bankrupt Obligors represent non-accrual loans to obligors who are legally bankrupt as defined in Article 96-1-3 and 4 of the Japanese Tax Law Enforcement Regulation (Article 97 of 1965
Cabinet Order).
*2 Non-Accrual Delinquent Loans represent non-accrual loans other than (i) Loans to Bankrupt Obligors and (ii) loans of which payments of interest are deferred in order to assist or facilitate therestructuring of obligors in financial difficulties.
*3 Loans to Bankrupt Obligors or Non-Accrual Delinquent Loans, both of which are classified as non-accrual, are not included in this category.
*4 Restructured Loans represent loans on which contracts were amended in favor of obligors (e.g., the reduction of or exemption from stated interest, the deferral of interest payments, the extension of
maturity dates, or renunciation of claims) in order to assist or facilitate the restructuring of obligors in financial difficulties.
*5 ¥2,246 million ($21,265 thousand) and ¥9,988 million of those amounts are placed in an administrative trust established by the Resolution and Collection Corporation for eventual final disposal at
March 31, 2004 and 2003, respectively.

Sales of Loans to Participants

The total amount of loan participations outstanding as of March 31, 2004 and 2003, which was accounted for as sales of loans
to participants in accordance with the JICPA Accounting Standard Committee Report No. 3 issued June 1, 1995, was ¥583,005
million ($5,519,318 thousand) and ¥1,431,461 million, respectively.
Commitment Line for Loans
Overdraft protection on current accounts and contracts for the commitment line for loans are contracts by which consolidated
subsidiaries are bound to extend loans up to the prearranged amount, at the request of customers, unless the customer is inbreach of contract conditions. The unutilized balance of these contracts amounted to ¥43,249,003 million ($409,438,643 thousand) and ¥43,195,571 million as of March 31, 2004 and 2003, respectively. ¥39,966,604 million ($378,364,148 thousand) and¥39,548,144 million of these amounts relate to contracts of which original contractual terms are of a term of one year or less,or which are unconditionally cancelable at any time as of March 31, 2004 and 2003, respectively.
Since many of these contracts expire without the rights exercised, the unutilized balance itself does not necessarily affect future
cash flows of MHFG and its consolidated subsidiaries. A provision is included in many of these contracts that entitles the consolidated subsidiaries to refuse the execution of loans, or reduce the maximum amount under contracts when there is a change inthe financial situation, necessity to preserve a claim, or other similar reasons. The consolidated subsidiaries obtain, moreover, realestate or securities as collateral at the time the contracts are entered into, if needed, and subsequently monitor a customer's business condition periodically, based on and in accordance with established procedures, and take measures to control credit risks
such as amendments to contracts, if needed.

99

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

7. Foreign Exchange Assets and Liabilities
Millions of yen
2004

At March 31,

Foreign Exchange Assets:
Foreign Bills Bought
Foreign Bills Receivable
Advance to Foreign Banks
Due from Banks (Foreign)
Total
Foreign Exchange Liabilities:
Foreign Bills Sold
Foreign Bills Payable
Advance from Foreign Banks
Due to Banks (Foreign)
Total

2003

Thousands of U.S. dollars
2004¥

362,446
181,520
61,178
3,647¥

368,586
218,676
84,756
48,500$3,431,284
1,718,452
579,176
34,529¥608,792¥

720,519$

5,763,441¥

10,837
6,544
265,220
69,534

¥

6,780
9,576
149,148
25,372$

102,596
61,9522,510,842
658,286¥

352,136¥

190,878$

3,333,676

Millions of yen
2004

2003

8. Other Assets
At March 31,

Accrued Income
Prepaid Expenses
Deferred Hedge Losses*1
Derivatives
Other*2
Total¥

260,729
18,646
209,010
1,945,646
3,062,812¥ 5,496,845¥

296,089
14,30796,5691,350,282
3,147,407¥ 4,904,656

Thousands of U.S. dollars
2004$

2,468,329
176,527
1,978,702
18,419,449
28,995,672$ 52,038,679*1 Deferred Hedge Losses is the net realized or unrealized losses from hedging instruments. The gross amounts of deferred hedge gains and losses before netting are ¥1,516,244 million ($14,354,302
thousand) and ¥1,725,255 million ($16,333,003 thousand), respectively, at March 31, 2004, and ¥1,827,820 million and ¥1,924,390 million, respectively, at March 31, 2003.
*2 Other included provisional tax payments of ¥222,682 million ($2,108,137 thousand) made by a certain domestic subsidiary. These payments were made upon receipt of the Correction Notice from theTokyo Regional Taxation Bureau (“TRTB”) on August 23, 1996 in connection with the write-off of credits due from Japan Housing Loan, Inc., amounting to ¥376,055 million ($3,560,115 thousand)recorded in the fiscal year ended March 1996. The subsidiary disputed the rationale for the proposed correction and filed an application seeking to void the proposed correction to the National Tax
Tribunal for administrative review. This was dismissed on October 28, 1997. On October 30, 1997, the subsidiary filed a lawsuit with the Tokyo District Court seeking to void the TRTB's administrative
action against the subsidiary and won the case entirely on March 2, 2001. However, this was appealed to the Tokyo High Court on March 16, 2001 and the subsidiary lost the case on March 14, 2002.
On March 27, 2002, the subsidiary filed an appeal to the Supreme Court. The subsidiary believes that its claim is appropriate. Nevertheless, the subsidiary accrued Reserve for Contingency amounting
to ¥131,159 million ($1,241,691 thausand) and ¥134,806 million from the viewpoint of financial soundness and prudent accounting at March 31, 2004 and 2003, respectively.

9. Premises and Equipment
Millions of yen
2004

At March 31,

Land
Buildings
Equipment
Other
Total
Accumulated Depreciation¥

596,753
266,129
124,848
156,076

2003

Thousands of U.S. dollars
2004¥ 1,002,080
308,089
159,009
163,672$¥ 1,143,807¥ 1,632,851$ 10,828,438¥¥

735,934$

Millions of yen
2004

2003

Thousands of U.S. dollars
2004

695,6635,649,468
2,519,447
1,181,944
1,477,579
6,585,854

10. Deferred Debenture Charges
At March 31,

Deferred Discount on Debentures
Deferred Debenture Issuance Costs
Total

100

¥

244
202

¥

510
530

$ 2,315
1,914

¥

446

¥ 1,041$ 4,229

11. Reserves for Possible Losses on Loans
Millions of yen
2004

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

2003

Thousands of U.S. dollars
2004¥

1,175,873
666,255
8,458¥

1,515,414
678,593
17,358$

11,131,999
6,307,445
80,073¥1,850,586¥

2,211,366$

17,519,517

Millions of yen
2004

2003

12. Assets Pledged as Collateral
The following assets were pledged as collateral:
At March 31,

Trading Assets
Securities
Loans and Bills Discounted
Premises and Equipment¥

4,107,695
13,086,449
4,973,990—¥

3,879,743
13,001,395
4,134,653
63

Thousands of U.S. dollars
2004$

38,887,581
123,889,514
47,088,806—

The following liabilities were collateralized by the above assets:
Millions of yen
2004

At March 31,

Deposits
Call Money and Bills Sold
Payables under Repurchase Agreements
Guarantee Deposit Received under Securities Lending Transactions
Borrowed Money
Other Liabilities¥

613,370
4,763,500
4,552,666
7,561,629
497,696
137

¥

2003

706,101
7,672,000
5,554,998
3,940,824
331,760—

Thousands of U.S. dollars
2004$

5,806,788
45,096,090
43,100,129
71,586,007
4,711,695
1,302

In addition, the settlement accounts of foreign and domestic exchange transactions or margins for futures transactions are collateralized or substituted by Cash and Due from Banks of ¥6,755 million ($63,950 thousand) and ¥7,814 million, Trading Assetsof ¥365,978 million ($3,464,724 thousand) and ¥15,205 million, Securities of ¥2,297,837 million ($21,753,648 thousand) and¥1,792,238 million and Loans and Bills Discounted of ¥330,416 million ($3,128,058 thousand) and ¥466,821 million as of March
31, 2004 and 2003, respectively and Other Assets of ¥8,220 million as of March 31, 2003. None of the assets are pledged as collateral in connection with borrowings by the unconsolidated subsidiaries and affiliates.
Guarantee deposits amounting to ¥153,125 million ($1,449,637 thousand) and ¥151,387 million were included in Premises
and Equipment as of March 31, 2004 and 2003, respectively. Margins for futures transactions amounting to ¥25,596 million($242,321 thousand) and ¥42,031 million were included in Other Assets as of March 31, 2004 and 2003, respectively. Collateral
Pledged for derivatives transactions amounting to ¥321,544 million ($3,044,066 thousand) were included in Other Assets as ofMarch 31, 2004.
Bills re-discounted are treated as financial transactions in accordance with the Industry Audit Committee Report No. 24. The
total face value of commercial bills and foreign bills of exchange bought as a result of rediscounting as of March 31, 2004 and2003 was ¥12,379 million ($117,195 thousand) and ¥14,399 million, respectively.

13. Deposits
Millions of yen
2004

At March 31,

Current Deposits
Ordinary Deposits*1
Deposits at NoticeTime Deposits
Certificates of Deposit
Other
Total

¥

6,233,189
30,939,628
990,969
24,818,453
9,958,644
4,546,589¥ 77,487,475

¥

2003

4,413,253
28,802,608
1,263,237
26,265,714
6,964,740
4,513,086¥ 72,222,642

Thousands of U.S. dollars
2004$

59,009,655
292,905,697
9,381,519
234,956,481
94,278,565
43,042,593$ 733,574,510*1 Ordinary Deposits include savings deposits.

101

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

14. Debentures
MHCB and MHBK issue debentures and offer them to institutional and private investors as a main source of funds for their operations. They provide debentures with a variety of different terms in order to attract investors.
At March 31,
Description of Debentures

One-Year Discount Debentures

Millions of yen
2004¥

929,240[929,240]¥

2003

1,898,586

Thousands of U.S. dollars
2004$Interest rates
2004

2003

8,797,127[8,797,127]

0.05% 0.05%–0.08%

One-Year Discount Debentures(custody only)

256,842[256,842]

302,992

2,431,526[2,431,526]

0.02% 0.02%–0.06%

Five-Year Coupon Debentures(Series A)

6,351,800[1,703,530]

7,421,340

60,132,538[16,127,331]

0.35%–1.50% 0.65%–2.00%

Five-Year Coupon Debentures(Series B)

98,316[22,310]118,067

930,763[211,216]

0.10%–1.00% 0.14%–1.20%

Five-Year Coupon Debentures(with compound interest)

725,067[120,279]

775,8216,864,220[1,138,689]

0.10%–1.00% 0.14%–1.20%

Five-Year Coupon Debentures(savings-type)715,929[95,427]734,233

6,777,711[903,416]

0.10%–1.00% 0.14%–1.10%

Five-Year Coupon Debentures(savings-type with compound interest)

85,375[15,109]

89,003

808,247[143,045]

0.10%–1.00% 0.14%–1.10%

Two-year Coupon Debentures

151,400[151,400]

304,600

1,433,305[1,433,305]

0.65% 0.35%–0.65%

Three-year Coupon Debentures

115,800[15,000]

15,0001,096,280[142,005]

29,742
36,745[21,714](US$97,000 thousand) (US$57,000 thousand)

281,575[205,573](US$97,000 thousand)Debentures Denominatedin Foreign Currencies
Total¥ 9,459,514¥ 11,696,391

0.35%–0.90%

0.90%

0.46%–9.37% 1.00%–9.37%$ 89,553,292

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 2004 ¥3,330,855 million ($31,533,232 thousand)2005 ¥2,136,076 million ($20,222,253 thousand)2006 ¥1,664,066 million ($15,753,734 thousand)2007 ¥1,326,228 million ($12,555,412 thousand)2008 ¥ 994,787 million ($ 9,417,658 thousand)4. No collateral was provided for the above Debentures.

15. Call Money and Bills Sold
Millions of yen
2004

At March 31,

2003

Thousands of U.S. dollars
2004

Call Money
Bills Sold¥

6,311,195
2,369,400¥

6,252,109
4,933,700$ 59,748,132
22,431,127

Total

¥

8,680,595¥ 11,185,809$ 82,179,259

16. Commercial Paper
Millions of yen
2004

At March 31,

Commercial Paper¥

837,800¥

2003

627,400

Thousands of U.S. dollars
2004$

7,931,459*1 The average interest rates are the weighted-average interest rates of debts calculated from the interest rates and outstanding balances at the end of the year.

102

Average Interest rates*1
2004
2003

0.10%

0.24%

17. Borrowed Money
Millions of yen
2004

At March 31,

Bills Rediscounted
Other Borrowings*2,3
Total

2003

Thousands of U.S. dollars
2004

Average Interest rates*1
2004
2003

¥

12,3791,630,964¥

14,3991,440,427$

117,195
15,440,353

4.10%
1.43%

3.65%
2.28%

¥

1,643,343¥

1,454,826$ 15,557,548

1.45%

2.29%

*1 Average interest rates are weighted-average interest rates of debts calculated from the interest rates and outstanding balances at the end of the year.
*2 Other Borrowings included subordinated debt of ¥722,294 million ($6,837,966 thousand) and ¥647,431 million at March 31, 2004 and 2003, respectively.
*3 Repayments for Other Borrowings are scheduled for the next five years as follows:
Fiscal 2004 ¥853,392 million ($8,079,069 thousand)2005 ¥104,205 million ($ 986,511 thousand)2006 ¥ 27,575 million ($ 261,058 thousand)2007 ¥ 31,976 million ($ 302,724 thousand)2008 ¥ 28,839 million ($ 273,020 thousand)

18. Short-term Bonds
Issued or purchased dematerialized commercial paper under the Law Concerning Book-Entry Transfer of Corporate and Other
Debt Securities (Law No. 75 of 2001) which came into effect on January 6, 2003 are presented in Short-term Bonds on the liability side or in Securities on the asset side as short-term bonds purchased. Commercial paper issued or purchased in the form ofpromissory notes is included in Commercial Paper on the liability side or in Other Debt Purchased on the asset side.

103

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

19. Bonds and Notes and Bonds with Stock Options
Major components of Bonds and Notes at March 31, 2004 were as follows:
IssuerDescription

Issue

Millions of yen

Mizuho Holdings

Straight Bonds

Nov. 2000¥

Interest rates

Due

2,840,102[—]

0.72%–0.82%

Mar. 2010 –*1

Straight Bonds

Mar. 1998–
Mar. 2004

89,100[—]843,510[—]

1.21%–4.01%

Dec. 2010 –*2

Straight Bonds

Sept. 1997–
Feb. 2004

63,100[—]597,368[—]

2.10%–3.00%

Nov. 2012 –*3

Straight Bonds

Jan. 2004–
413,438
Mar. 2004[—](US$3,000,000 thousand)(EUR 750,000 thousand)

3,914,025

4.75%–8.37%

Apr. 2014 –*4Straight Bonds

Dec. 1995–
Apr. 2001

89,100[—]843,510[—]

0.57%–3.59%

Apr. 2010 –*5Straight Bonds

Feb. 1995–
Mar. 2004

639,719[—](US$110,000 thousand)

6,056,228[—]

0.00%–5.10%

Dec. 2005 –*6

Straight Bonds

Jun. 1995–
636,562
Dec. 2003[2,123](US$1,125,000 thousand)

6,026,338[20,102]

0.37%–8.80%

Jun. 2004 –*7

Straight Bonds

Nov. 1994–
Mar. 2004

128,350[43,679](US$89,000 thousand)(EUR 9,130 thousand)

1,215,099[413,515]

0.00%–8.00%

Apr. 2004 –Dec. 2033¥ 2,359,370$ 22,336,180

Total

300,000[—]

Thousands of U.S. dollars$

Notes: 1. Figures indicated in brackets [ ] represent the amounts to be redeemed within one year.
2. The amount of foreign currency denominated bonds is shown in the original currencies in parentheses ( ).
3. Repayments for Bonds and Notes are scheduled for the next five years as follows:
Fiscal 2004 ¥45,802 million ($433,617 thousand)2005 ¥12,054 million ($114,119 thousand)2006 ¥29,938 million ($283,426 thousand)2007 ¥ 6,545 million ($ 61,968 thousand)2008 ¥16,616 million ($157,307 thousand)4. Bonds and Notes at March 31, 2004 included subordinated bonds and notes of ¥2,211,785 million ($20,938,987 thousand).
*1 Indicates the total amount of straight bonds issued by the domestic consolidated subsidiary, Mizuho Trust and Banking Co., Ltd.
*2 Indicates the total amount of straight bonds issued by MHCB.
*3 Indicates the total amount of straight bonds issued by the overseas consolidated subsidiary, Mizuho Financial Group (Cayman) Limited.
*4 Indicates the total amount of straight bonds issued by the overseas consolidated subsidiary, MHAT Finance (Aruba) A.E.C..
*5 Indicates the total amount of straight bonds issued by the overseas consolidated subsidiary, Mizuho Finance (Aruba) A.E.C..
*6 Indicates the total amount of straight bonds issued by overseas consolidated subsidiaries, Mizuho Finance (Cayman) Limited and Mizuho Finance (Curaço) N.V.
*7 Indicates the total amount of straight bonds issued by the domestic consolidated subsidiary, Mizuho Securities Co., Ltd. and overseas consolidated subsidiaries, Mizuho Corporate Asia
(HK) Limited, Mizuho International plc and Mizuho Corporate Bank (USA).

104

Major components of Bonds and Notes at March 31, 2003 were as follows:
IssuerDescription

Issue

Millions of yen

Mizuho Holdings

Straight Bonds

Nov. 2000¥*1

Straight Bonds*2

Interest rates

Due

850,000[—]

0.62%–2.67%

Mar. 2008–

Mar. 1998–
Aug. 2001

127,900[—]

1.32%–4.02%

Dec. 2010–

Straight Bonds

Sept. 1997

3,100
[—]

3.00%

Nov. 2012*3

Straight Bonds

Dec. 1995–
Apr. 2001

89,100[—]0.57%–3.59%

Apr. 2010–*4

Straight Bonds

Mar. 1993–
Sep. 2002

655,794[—](US$110,000 thousand)

0.00%–5.10%

Dec. 2005*5

Straight Bonds

Jun. 1995–
Mar. 2000

649,490[—](US$1,283,374 thousand)

0.00%–8.80%

Apr. 2004*6

Straight Bonds

Aug. 1995–
Mar. 2003

93,220[44,337](US$81,922 thousand)(EUR9,130 thousand)

0.00%–9.00%

Apr. 2003–
Feb. 2021

Total¥ 2,468,606

Notes: 1. Figures indicated in brackets [ ] represent the amounts to be redeemed within one year.
2. The amount of foreign currency denominated bonds is shown in the original currencies in parentheses ( ).
3. Bonds and Notes at March 31, 2003 included subordinated bonds and notes of ¥2,355,788 million.
*1 Indicates the total amount of straight bonds issued by the domestic consolidated subsidiary, Mizuho Trust and Banking Co., Ltd.
*2 Indicates the amount of straight bonds issued by MHCB.
*3 Indicates the total amount of straight bonds issued by the overseas consolidated subsidiary, MHAT Finance (Aruba) A.E.C..
*4 Indicates the total amount of straight bonds issued by the overseas consolidated subsidiary, Mizuho Finance (Aruba) A.E.C..
*5 Indicates the total amount of straight bonds issued by overseas consolidated subsidiaries, Mizuho Finance (Cayman) Limited and Mizuho Finance (Curaço) N.V.
*6 Indicates the total amount of straight bonds issued by overseas consolidated subsidiaries, Mizuho Corporate Australia Ltd., Mizuho Corporate Asia (HK) Limited,
Mizuho International plc and Mizuho Corporate Bank (USA).

Bonds with Stock Options at March 31, 2003 were as follows:
Issuer*Description of Debentures

Issue

Bonds with Stock Options

Millions of yen

Interest rates¥

Jul. 1988

3,858[3,858](US$32,103 thousand)

Due

2.87%
Sep. 2003

Notes: 1. Figures indicated in brackets [ ] represent the amounts to be redeemed within one year.
2. The amount of foreign currency denominated bonds is shown in the original currency in parentheses ( ).
3. * indicates the total amount of bonds with stock options issued by the domestic consolidated subsidiary Mizuho Trust and Banking Co., Ltd.
4. Details are as follows:
Conversion
Description
Convertible period
price
Issuing share
Capitalization
US$ denominated Bonds with Stock Options due Sept. 30, 2003 Aug. 15, 1988–Sept. 22, 2003 ¥1,814.90
Common stock¥ 908/share

20. Other Liabilities
Millions of yen
2004

At March 31,

Accrued Expenses
Unearned Income
Income Taxes Payable
Securities Borrowed
Derivatives
Other
Total

¥

183,532
138,347
84,910—1,814,635
2,184,749¥ 4,406,174

¥

2003

228,144
160,337
97,910136
1,379,903
3,660,121¥ 5,526,554

Thousands of U.S. dollars
2004$

1,737,500
1,309,739
803,848—
17,179,165
20,683,036$ 41,713,288

105

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

21. Reserve for Employee Retirement Benefits(1) Employees of major domestic consolidated subsidiaries are entitled, with some conditions, to receive lump-sum indemnities orannuity payments for life upon their termination of employment. The amount of the benefits is determined by the current rateof pay, length of service and the conditions under which their termination occurs.
The major domestic consolidated subsidiaries have contributory funded defined benefit pension plans under the Japanese
Welfare Pension Insurance Law (the “JWPIL”) which are qualified by the tax authority and severance indemnity plans. The pension plans under the JWPIL cover a portion of the governmental welfare pension program, under which the contributions are
made by such subsidiaries and their employees.
Certain domestic consolidated banking subsidiaries have established self-insured pension plans.
In addition, domestic banking and certain trust banking consolidated subsidiaries have established employee retirement benefit trusts.
(2) Reserve for Employee Retirement Benefits was reconciled as follows:
Millions of yen
2004

2003

Thousands of U.S. dollars
2004¥ (1,141,686)
1,067,726¥ (1,491,244)
1,008,021$ (10,808,357)
10,108,175

Unfunded Retirement Benefit Obligations
Unrecognized Net Obligation at Date of Initial Application
Unrecognized Actuarial Differences(73,960)
24,550580,419(483,223)
63,219733,415(700,183)
232,4225,494,836

Net Amounts
Prepaid Pension Cost

531,010
562,989

313,410
339,973

5,027,076
5,329,823

At March 31,

Projected Benefit Obligations
Plan Assets

Reserve for Employee Retirement Benefits¥(31,979)¥(26,562)$(302,747)

Notes: 1. The above Projected Benefit Obligations does not include additional retirement benefits paid to employees.
2. The above Projected Benefit Obligations includes the amount measured by certain consolidated subsidiaries under the non-actuarial
method.
3. The above figures at March 31, 2003 includes the substitutional Portion of Mizuho Pension Fund.
4. The above Plan Assets at March 31, 2004 does not include ¥281,509 million ($2,665,055 thousand) of unrecognized plan assets.

(3) Breakdown of Retirement Benefit Expenses was as follows:
Millions of yen
2004

For the Fiscal Years ended March 31,

Service Cost*1
Interest Cost
Expected Return on Plan Assets
Gain on Plan Amendment (Prior Service Cost)
Amortization of Actuarial Differences
Amortization of Unrecognized Net Obligation at Date of Initial Application
Other (such as Extra Retirement Benefit)¥

Net Retirement Benefit Expenses
Gains on Return of Substitutional Portion of Mizuho Pension FundNet Expenses related to Retirement Benefit

27,98332,778(39,828)(14,426)
69,42328,081
1,915¥

105,928(45,169)¥

60,758

2003

Thousands of U.S. dollars
2004

27,20040,817(41,080)(571)
38,27932,967
6,945$

104,557—¥

104,557

264,917
310,313(377,058)(136,572)
657,235
265,852
18,135
1,002,822(427,621)$

575,201*1 Retirement benefit expenses of some consolidated subsidiaries which adopt the non-actuarial method for calculating projected benefit obligations are included in Service Cost in full.

(4) Assumptions used in calculation of the above information were as follows:
Discount rate
Expected rate of return on plan assets
Method of attributing the projected benefits to periods of services
Prior Service Cost
Amortization of unrecognized actuarial differences
Amortization of unrecognized net obligation at date of initial application

106

2004
mainly 2.5%
mainly 3.5%
Straight-line basis
Charged to Income(Loss) in the year
Primarily 10-12 years
Primarily 5 years

2003
2.1–2.5%
1.3–6.2%
Straight-line basis
Charged to Income(Loss) in the year
Primarily 10-12 years
Primarily 5 years22. Other Reserves
Millions of yen
2004

At March 31,

Reserve for Contingencies*1
Reserve for Contingent Liabilities from Futures Transactions
Reserve for Contingent Liabilities from Securities Transactions
Total

2003

Thousands of U.S. dollars
2004¥

132,739
80
1,292

¥

141,12464
819$

1,256,643
761
12,234¥

134,111¥142,008$

1,269,638*1 Reserve for Contingencies is maintained to cover losses arising from matters not covered by other specific reserves that are probable to take place and that are determinable in amounts.

23. Acceptances and Guarantees(1) All commitments and contingent liabilities of a material nature resulting from guarantees or otherwise are included in the contra-accounts “Acceptances and Guarantees” and “Customers' Liabilities for Acceptances and Guarantees.”
The outstanding balance of the accounts were as follows:
Millions of yen
2004

At March 31,

Acceptances
Letters of Credit
Guarantees
Total

¥

7,023
69,8443,570,745¥ 3,647,613

¥

2003

10,11042,004
4,093,296¥ 4,145,411

Thousands of U.S. dollars
2004$

66,490661,22133,804,270$ 34,531,981(2) The principal amounts promised to be indemnified for money trusts and loan trusts, which are entrusted to domestic consolidated trust banking subsidiaries, were ¥824,741 million ($7,807,839 thousand) and ¥869,287 million ($8,229,553 thousand)as of March 31, 2004, respectively, and ¥886,055 million and ¥1,167,331 million as of March 31, 2003, respectively.

24. Revaluation of Land
In accordance with the Land Revaluation Law, land used for business operations of domestic consolidated banking subsidiaries
was revalued on March 31, 1998. In accordance with Article 119 of the 1998 Cabinet Order Article 2-4 of the Enforcement
Ordinance relating to the Land Revaluation Law, the revaluation was performed by the method of calculating the value alongwith reasonable adjustments, such as for the condition of the land.
The income tax on the entire excess of revaluation is included in Deferred Tax Liabilities for Revaluation Reserve for Land, andthe remainder, net of the tax, is stated as Revaluation Reserve for Land in Shareholders' Equity.
The difference at the balance sheet date between the total fair value of land for business operation purposes, which has beenrevalued in accordance with Article 10 of the above-mentioned law, and the total book value of the land after such revaluation
was ¥253,406 million ($2,398,997 thousand) and ¥303,917 million as of March 31, 2004 and 2003, respectively.

107

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

25. Common Stock and Preferred Stock
Common Stock and Preferred Stock at March 31, 2004 and 2003 were as follows:
Number of shares
As of March 31, 2004
Class of stock

Common StockFirst Series Class I Preferred Stock
Second Series Class II Preferred Stock
Third Series Class III Preferred Stock
Fourth Series Class IV Preferred Stock
Fifth Series Class V Preferred Stock
Sixth Series Class VI Preferred Stock
Seventh Series Class VII Preferred Stock
Eighth Series Class VIII Preferred Stock
Ninth Series Class IX Preferred Stock
Tenth Series Class X Preferred Stock
Eleventh Series Class XI Preferred Stock
Twelfth Series Class XI Preferred StockThirteenth Series Class XIII Preferred Stock

Authorized

Issued andoutstanding

Per share (Yen)InterimYear-end
cash dividend cash dividend

25,000,000 11,926,964.67
33,00033,000100,000
100,000
100,000
100,000
150,000
150,000//
150,000
150,000
125,000
125,000
125,000
125,000
140,000
140,000
140,000
140,000
943,740
1,404,000
5,500
1,500,000
36,690

¥

—
—
—
—
—
—
—
—
—
—
—
—
—
—

Number of shares
As of March 31, 2003
Class of stock

Common StockFirst Series Class I Preferred Stock
Second Series Class II Preferred Stock
Third Series Class III Preferred Stock
Fourth Series Class IV Preferred Stock
Fifth Series Class V Preferred Stock
Sixth Series Class VI Preferred Stock
Seventh Series Class VII Preferred Stock
Eighth Series Class VIII Preferred Stock
Ninth Series Class IX Preferred Stock
Tenth Series Class X Preferred Stock
Eleventh Series Class XI Preferred Stock
Twelfth Series Class XI Preferred StockThirteenth Series Class XIII Preferred Stock

Authorized

Issued andoutstanding¥ 3,000 ¥—22,500 3,000,000
8,200 2,000,000
14,000 2,000,000
47,600 2,000,000//
42,000 2,000,000
11,000 2,000,000
8,000 2,000,000
17,500 1,250,000
5,380 1,250,000
20,000 1,000,000
2,500 1,000,000
30,000 1,000,000

No
Yes
Yes
Yes
No
/
No
Yes
Yes
Yes
Yes
Yes
Yes
No

No
No
No
No
Yes
/
Yes
Yes
Yes
No
No
No
No
Yes

Per share (Yen)InterimYear-end
cash dividend cash dividend

25,000,000 10,582,426.71
33,00033,000100,000
100,000
100,000
100,000
150,000
150,000//
150,000
150,000
125,000
125,000
125,000
125,000
140,000
140,000
140,000
140,000
943,740
1,500,000
101,500
1,500,000
36,690Note: All the outstanding Fifth Series Class V Preferred Stock was converted into Common Stock on February 1, 2002.

108

With
Liquidation Convertible redemption
value
or notor not

¥

—
—
—
—
—
—
—
—
—
—
—
—
—
—

¥

With
Liquidation Convertible redemption
value
or notor not— ¥—22,500 3,000,000
8,200 2,000,000
14,000 2,000,000
47,600 2,000,000//
42,000 2,000,000
11,000 2,000,000
8,000 2,000,000
17,500 1,250,000
5,380 1,250,000
165 1,000,000
21 1,000,000
247 1,000,000

No
Yes
Yes
Yes
No
/
No
Yes
Yes
Yes
Yes
Yes
Yes
No

No
No
No
No
Yes
/
Yes
Yes
Yes
No
No
No
No
Yes

Holders or registered pledgees of Preferred Stocks are entitled to receive annual dividends, and distribution of residual assets of
MHFG, as set out above in priority to holders of Common Stocks but pari passu among themselves.
MHFG may pay up to one-half of the annual dividend payable on each class of Preferred Stocks as an interim dividend.
Dividends on the Preferred Stocks are not cumulative. Holders of Preferred Stocks are not entitled to vote at a general meetingof shareholders except where the articles of incorporation entitle holders of Preferred Stocks to vote.

All Preferred Stocks except Class IV Preferred Stocks, Class VI Preferred Stocks and Class XIII Preferred Stocks are convertible into
Common Stocks at the option of the holder. Material terms and conditions of conversion are as follows:
Conversion period*1

Conversion ratio*2

First Series Class I
Preferred Stocks

March 12, 2003 toJuly 31, 2005

4.000 to be reset on August 1 of each year between 2003 and 2004 (each, a“Reset Date”) as ¥3,000,000/(current market price), where the current market
price is the average price of daily closing prices (including closing bid or offeredprice) of Common Stocks as reported by the Tokyo Stock Exchange (the “TSE”) for
the 30 consecutive trading days (excluding trading days on which no closing price,closing bid or offered price is reported) commencing on the 45th trading day prior
to the Reset Date, provided that the reset conversion ratio shall be neither lessthan the conversion ratio applicable on the date immediately prior to the Reset
Date nor more than 4.000.

Second Series Class II
Preferred Stocks

August 1, 2004 toJuly 31, 2006

¥2,000,000/(current market price x 1.025), where the current market price is thehigher of (x) the average price of daily closing prices (including closing bid oroffered price) of Common Stocks as reported by the TSE for the 30 consecutive
trading days (excluding trading days on which no closing price, closing bid oroffered price is reported) commencing on the 45th trading day prior to August 1,
2004 and (y) ¥637,600, to be reset on August 1, 2005 using the same formulamutatis mutandis.

Third Series Class III
Preferred Stocks

August 1, 2005 toJuly 31, 2008

¥2,000,000/(current market price x 1.025), where the current market price is thehigher of (x) the average price of daily closing prices (including closing bid oroffered price) of Common Stocks as reported by the TSE for the 30 consecutive
trading days (excluding trading days on which no closing price, closing bid oroffered price is reported) commencing on the 45th trading day prior to August 1,
2005 and (y) ¥637,600, to be reset on August 1, 2006 and August 1, 2007 using
the same formula mutatis mutandis.

Seventh Series Class
VII Preferred Stocks

October 1, 2006 to
January 31, 2011

¥2,000,000/(conversion price), where the conversion price is the higher of (x) the
average price of daily closing prices (including closing bid or offered price) of
Common Stocks as reported by the TSE for the 30 consecutive trading days
(excluding trading days on which no closing price, closing bid or offered price isreported) commencing on the 45th trading day prior to October 1, 2006 multiplied by 1.025 and (y) ¥420,000; to be reset on October 1 of each year between
2007 and 2010 (each, a “Reset Date”) as ¥2,000,000/(conversion price), where
the conversion price is the lower of (x) the average price of daily closing prices(including closing bid or offered price) of Common Stocks as reported by the TSE
for the 30 consecutive trading days (excluding trading days on which no closing
price, closing bid or offered price is reported) commencing on the 45th trading
day prior to the Reset Date and (y) the conversion price effective as of the Reset
Date, provided that the conversion price shall not be less than 80% of the initialconversion price.

109

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

Eighth Series ClassVIII Preferred Stocks

October 1, 2004 to
January 31, 2009

¥2,000,000/(conversion price), where the conversion price is the higher of (x) the
average price of daily closing prices (including closing bid or offered price) of
Common Stocks as reported by the TSE for the 30 consecutive trading days
(excluding trading days on which no closing price, closing bid or offered price isreported) commencing on the 45th trading day prior to October 1, 2004 multipliedby 1.025 and (y) ¥540,000; to be reset on October 1 of each year between 2005
and 2008 (each, a “Reset Date”) as ¥2,000,000/(conversion price), where the conversion price is the lower of (x) the average price of daily closing prices (including
closing bid or offered price) of Common Stocks as reported by the TSE for the 30
consecutive trading days (excluding trading days on which no closing price, closing
bid or offered price is reported) commencing on the 45th trading day prior to the
Reset Date and (y) the conversion price effective as of the Reset Date, provided thatthe conversion price shall not be less than 70% of the initial conversion price.

Ninth Series Class IX
Preferred Stocks

September 1, 2003 to ¥1,250,000/(conversion price), where the current conversion price is ¥331,000, andAugust 31, 2009
thereafter the conversion price is the higher of (x) the average price of daily closing
prices (including closing bid or offered price) of Common Stocks as reported by theTSE for the 30 consecutive trading days (excluding trading days on which no closing price, closing bid or offered price is reported) commencing on the 45th trading
day prior to September 1 of each year between 2004 and 2008 multiplied by 1.025
and (y) ¥331,000.

Tenth Series Class X
Preferred Stocks

July 1, 2003 toAugust 31, 2009

¥1,250,000/(conversion price), where the current conversion price is ¥331,000, andthereafter the conversion price is the higher of (x) the average price of daily closing
prices (including closing bid or offered price) of Common Stocks as reported by theTSE for the 30 consecutive trading days (excluding trading days on which no closing price, closing bid or offered price is reported) commencing on the 45th trading
day prior to September 1 of each year between 2003 and 2008 multiplied by 1.025
and (y) ¥331,000.

Eleventh Series ClassXI Preferred Stocks

July 1, 2008 toJune 30, 2016

¥1,000,000/(conversion price), where the conversion price is the higher of (x) the
average price of daily closing prices (including closing bid or offered price) of
Common Stocks as reported by the TSE for the 30 consecutive trading days
(excluding trading days on which no closing price, closing bid or offered price isreported) commencing on the 45th trading day prior to July 1, 2008 and (y)¥50,000; to be reset on July 1 of each year between 2009 and 2015 (each, a“Reset Date”) as ¥1,000,000/(conversion price), where the conversion price is thelower of (x) the average price of daily closing prices (including closing bid or offeredprice) of Common Stocks as reported by the TSE for the 30 consecutive trading
days (excluding trading days on which no closing price, closing bid or offered priceis reported) commencing on the 45th trading day prior to the Reset Date and (y)the conversion price effective as of the Reset Date, provided that the conversion
price shall not be less than 60% of the initial conversion price or ¥50,000.

Twelfth Series ClassXI Preferred Stocks

July 1, 2003 toJune 30, 2011

¥1,000,000/(conversion price), where the current conversion price is ¥71,400, andthereafter the conversion price is the lower of (x) the average price of daily closing
prices (including closing bid or offered price) of Common Stocks as reported by theTSE for the 30 consecutive trading days (excluding trading days on which no closing price, closing bid or offered price is reported) commencing on the 45th trading
day prior to July 1 of each year between 2004 and 2010 (each a “Reset Date”) and(y) the conversion price effective as of the Reset Date, provided that the conversion
price shall not be less than 60% of the initial conversion price.

Notes: 1. If the date to determine the shareholders entitled to exercise their voting rights at a general meeting of the shareholders of MHFG (the “Record Date”) is prescribed, the period from andincluding the date immediately following such Record Date to and including the date on which such general meeting is concluded shall be excluded.
2. Subject to adjustment, where allotment of new Common Stocks for a subscription price below the “current market price” or “conversion price,” a stock split, allotment of securities convertible
into Common Stocks at a conversion ratio more favorable than the Preferred Stocks, merger or amalgamation, or a capital decrease or consolidation occurs and in certain other circumstances.

110Each Preferred Stock which has not been converted as described above by the end of the relevant conversion period will be
converted into Common Stocks on the day following the end of the conversion period on the following terms:
First Series Class I
Preferred Stocks

August 1, 2005

¥3,000,000/(current market price), where the current market price is the average
price of daily closing prices (including closing bid or offered price) of Common
Stocks as reported by the TSE for the 30 consecutive trading days (excluding trading days on which no closing price, closing bid or offered price is reported) commencing on the 45th trading day prior to August 1, 2005, provided that theconversion ratio shall not be more than 4.000 (*).

Second Series Class II
Preferred Stocks

August 1, 2006

¥2,000,000/(current market price), where the current market price is the average
price of daily closing prices (including closing bid or offered price) of Common
Stocks as reported by the TSE for the 30 consecutive trading days (excluding trading days on which no closing price, closing bid or offered price is reported) commencing on the 45th trading day prior to August 1, 2006, provided that theconversion ratio shall not be more than 3.137 (*).

Third Series Class III
Preferred Stocks

August 1, 2008

¥2,000,000/(current market price), where the current market price is the average
price of daily closing prices (including closing bid or offered price) of Common
Stocks as reported by the TSE for the 30 consecutive trading days (excluding trading days on which no closing price, closing bid or offered price is reported) commencing on the 45th trading day prior to August 1, 2008, provided that theconversion ratio shall not be more than 3.137 (*).

Seventh Series Class
VII Preferred Stocks

February 1, 2011

¥2,000,000/(current market price), where the current market price is the average
price of daily closing prices (including closing bid or offered price) of Common
Stocks as reported by the TSE for the 30 consecutive trading days (excluding trading days on which no closing price, closing bid or offered price is reported) commencing on the 45th trading day prior to February 1, 2011, provided that theconversion ratio shall not be more than the figure obtained by dividing ¥2,000,000
by the amount equal to 60% of the amount obtained by dividing ¥2,000,000 by
the initial conversion ratio.

Eighth Series ClassVIII Preferred Stocks

February 1, 2009

¥2,000,000/(current market price), where the current market price is the average
price of daily closing prices (including closing bid or offered price) of Common
Stocks as reported by the TSE for the 30 consecutive trading days (excluding trading days on which no closing price, closing bid or offered price is reported) commencing on the 45th trading day prior to February 1, 2009, provided that theconversion ratio shall not be more than the figure obtained by dividing ¥2,000,000
by the amount equal to 60% of the amount obtained by dividing ¥2,000,000 by
the initial conversion ratio.

Ninth Series Class IX
Preferred Stocks

September 1, 2009

¥1,250,000/(current market price), where the current market price is the average
price of daily closing prices (including closing bid or offered price) of Common
Stocks as reported by the TSE for the 30 consecutive trading days (excluding trading days on which no closing price, closing bid or offered price is reported) commencing on the 45th trading day prior to September 1, 2009, provided that theconversion ratio shall not be more than the number obtained by dividing¥1,250,000 by ¥331,000.

* Subject to adjustment, where a stock split or consolidation of share capital occurs.

111

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

Tenth Series Class X
Preferred Stocks

September 1, 2009

¥1,250,000/(current market price), where the current market price is the average
price of daily closing prices (including closing bid or offered price) of Common
Stocks as reported by the TSE for the 30 consecutive trading days (excluding trading days on which no closing price, closing bid or offered price is reported) commencing on the 45th trading day prior to September 1, 2009, provided that theconversion ratio shall not be more than the number obtained by dividing¥1,250,000 by ¥331,000.

Eleventh Series ClassXI Preferred Stocks

July 1, 2016

¥1,000,000/(current market price), where the current market price is the average
price of daily closing prices (including closing bid or offered price) of Common
Stocks as reported by the TSE for the 30 consecutive trading days (excluding trading days on which no closing price, closing bid or offered price is reported) commencing on the 45th trading day prior to July 1, 2016, provided that the current
market price shall not be less than 60% of initial conversion price or ¥50,000.

Twelfth Series ClassXI Preferred Stocks

July 1, 2011

¥1,000,000/(current market price), where the current market price is the average
price of daily closing prices (including closing bid or offered price) of Common
Stocks as reported by the TSE for the 30 consecutive trading days (excluding trading days on which no closing price, closing bid or offered price is reported) commencing on the 45th trading day prior to July 1, 2011, provided that the current
market price shall not be less than 60% of initial conversion price or ¥50,000.

The number of common stocks held by subsidiaries and affiliates is 1,163 thousand and 1,166 thousand as of March 31, 2004
and 2003, respectively.

112

26. Interest Income and Interest Expenses
Millions of yen
2004

2003

Thousands of U.S. dollars
2004¥ 1,183,736
296,733
5,176
24,84074,2901,718
36,209¥ 1,433,961
347,927
11,12542,801
113,940770
40,710$ 11,206,440
2,809,174
49,006
235,161
703,311
16,269342,796

1,622,704

1,991,236

15,362,157

112,878
92,744—
2,858
116,306
12,130
1,006
34,54845,91447
19,267

193,915
117,776
3,146
7,024
189,919
8,724
841
44,22859,883
179
109,219

1,068,626
878,017—
27,0601,101,070
114,836
9,531
327,073434,670452
182,403

For the Fiscal Years ended March 31,

Interest Income:Loans and Bills Discounted
Securities
Call Loans and Bills Purchased
Due from Banks
Receivables under Resale Agreements
Securities Borrowing Transactions
Other Interest Income
Total
Interest Expenses:
Deposits
Debentures
Amortization of Deferred Debenture Charges
Call Money and Bills Sold
Payables under Repurchase Agreements
Securities Lending Transactions
Commercial Paper
Borrowed Money
Bonds and Notes
Bonds with Stock Options
Other Interest Expenses
Total
Net

437,703734,859

4,143,738¥ 1,185,001¥ 1,256,377$ 11,218,419

Note: In accordance with revision of the Enforcement Regulations of the Long-term Credit Bank Law, Amortization of Deferred Debenture Charges
for the fiscal year ended March 31, 2004 is included in Interest Expenses under Debentures.

27. Trading Income
Millions of yen
2004

For the Fiscal Years ended March 31,

Trading Income:Net Gains on Trading Securities and Derivatives
Net Gains on Securities Held to Hedge Trading Transactions
Net Gains on Derivatives for Trading Transactions
Other Trading Income
Total

2003

Thousands of U.S. dollars
2004¥

138,846—
91,753
1,855¥

65,294
5,777
171,487
1,965$ 1,314,458—
868,634
17,570¥232,455¥

244,524$ 2,200,662

Millions of yen
2004

2003

Thousands of U.S. dollars
2004

28. Other Operating Income
For the Fiscal Years ended March 31,

Gains on Foreign Exchange Transactions
Gains on Sales of Bonds
Other
Total

¥

96,058249,037
61,386¥74,342
276,107
66,523$909,389
2,357,636
581,142¥

406,481¥

416,972$ 3,848,167

113

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

29. Other Income
Millions of yen
2004

For the Fiscal Years ended March 31,

Gains on Sales of Stock and Other Securities
Gains on Money Held in Trust
Gains on Sales of Premises and Equipment
Recovery on Written-off Claims
Gains on Securities Contributed to Employee Retirement Benefit TrustEnterprise Tax Refund and Interest on the Refund
Gains on Return of Substitutional Portion of Mizuho Pension FundAmortization of Prior Service Costs
Other
Total

2003

Thousands of U.S. dollars
2004¥

251,929
526
8,413
2,555
60,73558,19845,16914,426
61,918¥75,862
792
1,285
4,210
43,847———
117,434$

2,385,014
4,989
79,651
24,190574,983
550,966
427,621
136,572
586,182¥

503,872¥

243,434$

4,770,168

Millions of yen
2004

2003

30. Other Operating Expenses
For the Fiscal Years ended March 31,

Amortization of Debenture Issuance Costs
Losses on Sales of Bonds
Losses on Devaluation of Bonds
Other
Total

Thousands of U.S. dollars
2004

¥

777
116,146
1,670
81,026¥

2,326
60,917
2,897
84,075$

7,362
1,099,557
15,811
767,079¥

199,620¥150,217$

1,889,809

Millions of yen
2004

2003

31. Other Expenses
For the Fiscal Years ended March 31,

Provision for Reserve for Possible Losses on Loans
Write-offs of Claims
Losses on Sales of Stocks and Other Securities
Losses on Devaluation of Stocks and Other Securities
Losses on Money Held in Trust
Provision for Reserve for Possible Losses on Loans Sold
Losses on Dispositions of Premises and Equipment
Equity in Losses from Investment in Affiliates
Amortization of Unrecognized Net Obligation at Date of Initial Applicationof the Accounting Standard for Employee Retirement Benefits
Transfer to Reserve for Contingencies
Other
Total

¥

¥

65,424
209,509
27,63918,900109—
129,006—¥

Thousands of U.S. dollars
2004

932,421735,111
389,498
607,474
1,780
10,763102,104
3,491

28,081—
130,400

32,967
6,920
679,082

609,073¥ 3,501,617$

619,375
1,983,426
261,667
178,932
1,040—
1,221,305—
265,852—
1,234,503$

5,766,100

32. Cash Flows
Cash and Cash Equivalents reconciles to Cash and Due from Banks on the Consolidated Balance Sheets as follows:
At March 31,

Cash and Due from Banks
Less: Due from Banks except for due from Central Banks
Cash and Cash Equivalents

114

Millions of yen
2004

2003

Thousands of U.S. dollars
2004¥ 6,813,510(1,283,846)¥ 7,849,717(801,212)$ 64,503,559(12,154,182)¥ 5,529,664¥ 7,048,505$ 52,349,377

33. Lease Transactions
Finance Leases (Lessees)
The Acquisition Cost Equivalents, Accumulated Depreciation Equivalents and Book Value Equivalents relating to finance leasetransactions accounted for as operating leases were summarized as follows:
Millions of yen

At March 31,

Equipment

2004
Others

Total

Equipment

2003
Others

Total

Acquisition Cost Equivalents
Accumulated Depreciation Equivalents¥

83,140(52,233)¥

4,706 ¥ 87,847(2,921)(55,154)¥

70,731(46,566)¥

2,250 ¥ 72,982(1,175)(47,742)

Book Value Equivalents¥

30,907¥

1,785 ¥¥

24,164¥

1,074 ¥

32,692

25,239Thousands of U.S. dollars

At March 31,

Equipment

2004
Others

Total

Acquisition Cost Equivalents
Accumulated Depreciation Equivalents$ 787,095(494,498)$ 44,556 $ 831,651(27,653) (522,151)

Book Value Equivalents$ 292,597$ 16,903 $ 309,500

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
2004

At March 31,

Due in One Year or Less
Due after One Year
Total

2003

Thousands of U.S. dollars
2004¥

14,47735,072¥

12,03129,809$ 137,060
332,031¥

49,550¥41,841$ 469,091

Lease expense, depreciation equivalents and interest expense equivalents relating to finance leases accounted for as operatingleases amounted to ¥14,433 million ($136,639 thousand), ¥13,754 million ($130,210 thousand), and ¥1,161 million ($10,992
thousand), respectively for the fiscal year ended March 31, 2004, and ¥13,242 million, ¥16,132 million, and ¥1,313 million,
respectively for the fiscal year ended March 31, 2003.
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 fiscal year for operating lease transactions were summarized as follows:
Lessees:Millions of yen
2004

At March 31,

Due in One Year or Less
Due after One Year
Total

¥

25,563
159,353¥ 184,917

2003¥

12,82890,492Thousands of U.S. dollars
2004$

242,014
1,508,602¥ 103,320$ 1,750,616

2003

Thousands of U.S. dollars
2004

Lessors:
Millions of yen
2004

At March 31,

Due in One Year or Less
Due after One Year
Total

¥

—
—

¥

79
106

$

—
—

¥

—

¥

186

$

—

115

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

34. Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities consisted of the following:
Millions of yen
2004

2003

Thousands of U.S. dollars
2004¥ 2,088,231
1,011,479
805,786
210,715
242,353¥ 2,257,910
515,460
1,026,644
132,214219,325$ 19,769,308
9,575,684
7,628,386
1,994,847
2,294,361

4,358,566(2,461,786)

4,151,554(1,809,550)

41,262,586(23,305,748)¥ 1,896,780¥ 2,342,003$ 17,956,838¥(213,062)(308,578)(42,165)¥(126,167)—(89,869)$ (2,017,066)(2,921,317)(399,184)¥(563,807)¥(216,036)$ (5,337,567)¥ 2,125,967$ 12,619,271

At March 31,

Deferred Tax Assets:
Tax Losses Carried Forward
Securities
Reserve for Possible Losses on Loans
Securities Contributed to Employee Retirement Benefit Trust
Other
Deferred Tax Assets Subtotal:
Valuation AllowanceNet
Deferred Tax Liabilities:
Prepaid Pension Cost
Net Unrealized Gains on Other Securities
Other
Total
Net Deferred Tax Assets¥ 1,332,973

Balances reported on the Consolidated Balance Sheets:
At March 31,

Millions of yen
2004

2003

Thousands of U.S. dollars
2004

Deferred Tax Assets
Deferred Tax Liabilities¥ 1,361,766(28,792)¥ 2,130,243(4,276)$ 12,891,850(272,579)

Net Deferred Tax Assets¥ 1,332,973¥ 2,125,967$ 12,619,271

MHFG and domestic subsidiaries are subject to a number of different income taxes.

As at March 31, 2004 and 2003 the reconciliation of the statutory tax rate of MHFG to the effective income tax rate was as follows. No figures are shown for 2003 as a net loss was recorded.

116

At March 31,

2004

Statutory tax rate
Changes in Valuation Allowance
Effect of tax rates of domestic subsidiaries
Investment in subsidiaries
Other
Effective income tax rate

42.05)%
12.11)(3.83)(1.30)(1.83)
47.19)%

2003

—)%
—)
—)
—)
—)
—)%

35. Segment Information(1) Segment Information by Type of Business
Segment information by type of business at March 31, 2003 and for the fiscal year ended March 31, 2003 has not beenpresented, as the percentages of those activities are insignificant. Segment information by type of business at March 31, 2004
and for the fiscal year ended March 31, 2004 was as follows:
Millions of yen

2004
Type of Business

Ordinary Income
from Outside
Customers

Inter-segment
Ordinary
IncomeBanking Business
Securities Business
Other¥ 2,752,455
273,290
174,880¥

Total
Elimination

3,200,626—

Consolidated Results ¥ 3,200,626

Ordinary
Expenses

Ordinary
Profit26,740 ¥ 2,779,196 ¥ 1,953,785 ¥ 825,411
28,821
302,111233,057
69,054
115,341
290,221
270,505
19,716
170,903(170,903)¥

Ordinary
Income3,371,529(170,903)

2,457,348(153,208)

914,181(17,694)— ¥ 3,200,626 ¥ 2,304,139 ¥ 896,486

Total Asset

Depreciation
CapitalExpense Expenditure¥ 127,414,246 ¥ 121,592 ¥ 161,011
13,111,932
8,398
6,449
1,152,880
9,872
5,667
141,679,059(3,928,967)

139,863—

173,127—¥ 137,750,091 ¥ 139,863 ¥ 173,127
Thousands of U.S. dollars

2004Type of Business

Ordinary Income
from Outside
Customers

Inter-segment
Ordinary
IncomeBanking Business
Securities Business
Other$26,057,520
2,587,240
1,655,594$ 253,152 $26,310,672 $18,496,499 $7,814,173
272,851
2,860,091
2,206,354
653,737
1,091,939
2,747,533
2,560,879
186,654$1,206,231,625 $1,151,114 $1,524,295
124,130,759
79,512
61,054
10,914,329
93,46253,651

Total
Elimination

30,300,354—

1,617,942 31,918,296 23,263,732 8,654,564(1,617,942) (1,617,942) (1,450,425) (167,517)

1,341,276,713 1,324,088 1,639,000(37,195,570)——$$1,304,081,143 $1,324,088 $1,639,000

Consolidated Results $30,300,354

Ordinary
IncomeOrdinary
Expenses

Ordinary
Profit— $30,300,354 $21,813,307 $8,487,047

Total Asset

Depreciation
CapitalExpense ExpenditureNotes: 1. Ordinary Income represents Total Income less certain special income, and Ordinary Expenses represent Total Expenses less certain special
expenses.
2. Ordinary Profit represents Ordinary Income less Ordinary Expenses.
3. Major components of Type of Business are as follows:(1) Banking Business: banking and trust banking business(2) Securities Business: securities business(3) Other: credit card business, investment advisory business and other117

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, 2004 and 2003 and for the fiscal years ended March 31, 2004 and 2003
was as follows:
Millions of yen

2004
Geographic Area

Ordinary Income
from Outside
Customers

Inter-segment
Ordinary
IncomeOrdinary
IncomeJapan
Americas
EuropeAsia / Oceania excluding Japan¥ 2,760,211
177,703
185,295
77,415¥ 143,450
89,8799,557
1,006¥ 2,903,662
267,582
194,852
78,4223,200,626—

243,893(243,893)—

Total
Elimination and General Corporate Assets
Consolidated Results¥ 3,200,626¥

2003
Geographic Area

Ordinary Income
from Outside
Customers

Inter-segment
Ordinary
IncomeJapan
Americas
EuropeAsia / Oceania excluding Japan¥ 2,716,129
327,148
278,081
114,637¥

Ordinary
Expenses

Ordinary
ProfitTotal Assets¥ 2,063,911 ¥
194,577
181,283
38,997

839,751
73,005
13,56839,424¥ 128,677,634
12,172,914
6,824,656
4,037,664

3,444,519(243,893)

2,478,769(174,630)

965,750(69,263)

151,712,869(13,962,777)¥ 3,200,626¥ 2,304,139 ¥

896,486¥ 137,750,091
Millions of yen

Total
Elimination and General Corporate Assets
Consolidated Results

3,435,997—

Ordinary
IncomeOrdinary
Expenses

Ordinary
Profit (Loss)

Total Assets

25,23792,80654,865
17,314¥ 2,741,366
419,954
332,947
131,952¥ 4,914,101 ¥ (2,172,734)
349,570
70,384
383,136(50,188)
98,83833,114¥ 126,050,751
13,504,905
7,543,064
5,016,293

190,224(190,224)

3,626,221(190,224)

5,745,645 (2,119,424)(179,101)(11,122)

152,115,014(18,082,267)—¥ 3,435,997¥ 5,566,544 ¥ (2,130,547)¥ 134,032,747¥ 3,435,997¥

Ordinary Income
from Outside
Customers

Inter-segment
Ordinary
IncomeOrdinary
IncomeJapan
Americas
EuropeAsia / Oceania excluding Japan$ 26,130,943
1,682,318
1,754,195
732,898$ 1,358,049
850,888
90,477
9,525$ 27,488,992
2,533,206
1,844,672
742,423

Total
Elimination and General Corporate Assets

30,300,354—

2,308,939(2,308,939)

32,609,293(2,308,939)$ 30,300,354$

Thousands of U.S. dollars

2004
Geographic Area

Consolidated Results—$ 30,300,354

Ordinary
Expenses

Ordinary
ProfitTotal Assets$ 19,539,062 $ 7,949,930
1,842,065
691,141
1,716,214
128,458
369,190373,233$1,218,192,126
115,241,070
64,609,070
38,224,601

23,466,531(1,653,224)

9,142,762(655,715)

1,436,266,867(132,185,724)$ 21,813,307 $ 8,487,047$1,304,081,143

Notes: 1. Geographic analyses are presented based on geographic contiguity, similarities in economic activities, and relation of business operations.
2. Ordinary Income represents Total Income less certain special income, and Ordinary Expenses represent Total Expenses less certain special
expenses.
3. Ordinary Profit (Loss) represents Ordinary Income less Ordinary Expenses.
4. Americas includes the United States of America and Canada. Europe includes the United Kingdom. Asia / Oceania includes Hong Kong andthe Republic of Singapore.
5. Until the fiscal year ended March 31, 2003, gains and losses relating to foreign exchange swaps for some of the domestic banking
subsidiaries were reported in gross amounts on the statements of operations. However, effective the fiscal year ended March 31, 2004, thenet amount of gains and losses are presented on the statements of operations as a result of the application of hedge accounting inaccordance with JICPA Industry Audit Committee Report No. 25. As a result, for the fiscal year ended March 31, 2004, compared to thecorresponding amounts under the previously applied method, Ordinary Income and Ordinary Expenses decreased by ¥6,798 million($64,361 thousand), ¥4,666 million ($44,182 thousand), and ¥1,789 million ($16,939 thousand) for Japan, Europe, and Asia/Oceania
excluding Japan, respectively.

118

6. Until the fiscal year ended March 31, 2003, the transitional treatment permitted by JICPA Industry Audit Committee Report No. 25 wasapplied to foreign currency transactions. However, effective the fiscal year ended March 31, 2004, in accordance with the generalprovisions of JICPA Industry Audit Committee Report No. 25, hedge accounting is applied to currency-swap transactions, exchange swap
transactions and similar transactions for domestic banking and trust banking subsidiaries.
aaAs a result of the application of hedge accounting, as of March 31, 2004, currency-swap transactions and exchange swap transactions,which were accounted for on an accrual basis, are valued at fair value and the gross amount of the credit balance and the debt balance arerecorded on the balance sheet in Other Assets and Other Liabilities, resulting in a decrease of Total Assets of ¥320 million ($3,033
thousand) and ¥43 million ($415 thousand) for Japan and Americas, respectively and an increase of Total Assets of ¥126 million ($1,198
thousand) and ¥1,695 million ($16,054 thousand) for Europe and Asia/Oceania excluding Japan, respectively, compared with thecorresponding amounts under the previous methods.
aaUntil the fiscal year ended March 31, 2003, the net fair value of forward foreign exchange transactions other than those for the above
hedging purposes was recorded in Other Assets or Other Liabilities on the balance sheets. However, effective the fiscal year ended March
31, 2004, the gross of fair value amounts are recorded on the balance sheet. As a result, as of March 31, 2004, Total Assets increased by¥782,767 million ($7,410,464 thousand), ¥25,964 million ($245,808 thousand), ¥44,623 million ($422,453 thousand), and ¥29,331
million ($277,679 thousand) for Japan, Americas, Europe, and Asia/Oceania excluding Japan, respectively, compared with thecorresponding amounts under the previous method.

(3) Ordinary Income from Overseas Entities
Ordinary Income from Overseas Entities for the fiscal years ended March 31, 2004 and 2003 consisted of the following:
Millions of yen
2004

For the Fiscal Years ended March 31,

Ordinary Income from Overseas Entities
Total Ordinary Income
Ordinary Income from Overseas Entities’ Ratio¥

440,4143,200,626
13.76%¥

2003

Thousands of U.S. dollars
2004

719,867
3,435,997$ 4,169,411
30,300,354

20.95%/

Notes: 1. Ordinary Income from Overseas Entities represents Ordinary Income recorded by overseas branches of MHCB, MHBK and other overseas
subsidiaries excluding Inter-segment Ordinary Income. Ordinary Income from international operations is presented in lieu of Sales as is thecase for non-financial companies.
2. Segment information on Ordinary Income from Overseas Entities is not presented as no such information is compiled.

119Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

36. Subsequent Events(1) Appropriation of Retained Earnings
The following Appropriation of Retained Earnings was approved at the shareholders' meeting held on June 25, 2004.
Millions of yen

Cash Dividends:
First Series Class I Preferred Shares
Second Series Class II Preferred Shares
Third Series Class III Preferred Shares
Fourth Series Class IV Preferred Shares
Sixth Series Class VI Preferred Shares
Seventh Series Class VII Preferred Shares
Eighth Series Class VIII Preferred Shares
Ninth Series Class IX Preferred Shares
Tenth Series Class X Preferred Shares
Eleventh Series Class XI Preferred Shares
Twelfth Series Class XI Preferred Shares
Thirteenth Series Class XIII Preferred Shares
Common Shares¥ 22,500 per Share¥ 8,200 per Share¥ 14,000 per Share¥ 47,600 per Share¥ 42,000 per Share¥ 11,000 per Share¥ 8,000 per Share¥ 17,500 per Share¥ 5,380 per Share¥ 20,000 per Share¥ 2,500 per Share¥ 30,000 per Share¥ 3,000 per Share

¥

742
820
1,400
7,140
6,300
1,375
1,000
2,450
753
18,87413
1,100
35,778

Thousands of U.S. dollars

$

7,029
7,763
13,254
67,594
59,64213,017
9,467
23,194
7,131
178,688130
10,420338,715(2) Other
One of MHFG’s domestic banking subsidiaries concluded the agreement of financial assistance to the business restructuring of
Kowa Real Estate Co., Ltd. (the “Company”) and its subsidiary Kowa Real Estate Sales Co., Ltd. on June 18, 2004. After the corporate split in the business restructuring, the loan to the Company in the amount of ¥175,700 million ($1,663,353 thousand) is
expected to remain. However since the Company will continue its business, the recoverable amount will fluctuate, and therefore
the loss amount for MHFG has not yet been determined.

120

37. Fair Value of Securities and Money Held in Trust
The following tables contain information relating to Securities, Cash and Due from Banks (negotiable certificates of deposit) and
Other Debt Purchased (commercial paper, etc.) at March 31, 2004 and 2003.
Millions of yen

At March 31, 2004

Bonds Held-to-Maturity:
Japanese National Government Bonds
Japanese Local Government Bonds
Other Securities*2:
Stocks*3
Bonds:
Japanese National Government Bonds
Japanese Local Government Bonds
Corporate Bonds
Other

Gross unrealized
Gains

Cost

¥

915,604
897,546
18,05827,895,257
3,477,151
20,185,912
19,725,985
97,725362,201
4,232,193

¥

1,147
1,119
28
1,018,867
967,246
9,366
5,699
2,321
1,345
42,254Losses

¥

482
482
—
298,435
82,677200,561
197,477
844
2,239
15,196

Fair value¥

916,270
898,183
18,08728,615,689
4,361,720
19,994,717
19,534,207
99,202
361,3074,259,251
Millions of yen

At March 31, 2003

Other Securities*2:
Stocks*3
Bonds:
Japanese National Government Bonds
Japanese Local Government Bonds
Corporate Bonds
Other
Money Held in Trust
Other Money Held in Trust

Gross unrealized
Gains

Cost

¥

21,804,533
3,946,430
12,289,041
11,889,955
110,364
288,7215,569,061

¥

1,786

359,370
166,085
88,571
79,316
6,703
2,550
104,713

Losses¥378,942356,656
1,073
575
40
457
21,212—

Fair value¥

15

21,784,962
3,755,859
12,376,539
11,968,696
117,027
290,815
5,652,563
1,771

Thousands of U.S. dollars

At March 31, 2004

Bonds Held-to-Maturity:
Japanese National Government Bonds
Japanese Local Government Bonds
Other Securities*2:
Stocks*3
Bonds:
Japanese National Government Bonds
Japanese Local Government Bonds
Corporate Bonds
Other

Gross unrealized
Gains

Cost

$

8,668,038
8,497,076
170,962
264,084,610
32,918,218
191,100,185
186,746,048
925,172
3,428,965
40,066,207$

10,864
10,594270
9,645,627
9,156,934
88,67153,96021,975
12,736400,022$

Losses

4,565
4,565
—
2,825,290
782,712
1,898,717
1,869,522
7,995
21,200143,861Fair value$

8,674,337
8,503,105
171,232
270,904,947
41,292,440
189,290,139
184,930,486
939,152
3,420,501
40,322,368*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
2004
Unrealized
gains (losses)
Fair value

2003
Unrealized
gains (losses)

Trading Securities¥ 5,592,183
Money Held in Trust for Investment Purposes
27,863¥ (2,702) ¥ 6,382,931
132
31,769¥ 4,976(26)

At March 31,

Thousands of U.S. dollars
2004
Unrealized
Fair value
gains (losses)$ 52,941,247
263,789$ (25,589)
1,252*2 In addition to the balances shown in the above table, Other Securities included securities without fair values such as unlisted stock (excluding OTC stock) of ¥837,239 million ($7,926,148 thousand)and ¥581,590 million and non-publicly offered bonds of ¥1,299,514 million ($12,302,510 thousand) and ¥1,026,310 million as of March 31, 2004 and 2003, respectively.
*3 Fair value of Stocks is determined based on the average market prices during one-month periods before the balance sheet dates.

121Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

Projected Redemption Amounts for Securities
Millions of yen

At March 31, 2004

Bonds:
Japanese National Government Bonds
Japanese Local Government Bonds
Corporate Bonds
Other
Total

Within 1 year

1–5 years

5–10 years

Over 10 years¥ 10,212,773
9,965,129
2,200
245,443873,745¥

7,348,507
6,183,640
39,105
1,125,761
2,032,448¥

3,892,826
3,656,500
73,798
162,527
791,538¥

735,730
626,483
10,716
98,530679,982¥ 11,086,518¥

9,380,955¥

4,684,364¥

1,415,712
Millions of yen

At March 31, 2003

Bonds:
Japanese National Government Bonds
Japanese Local Government Bonds
Corporate Bonds
Other
Total

Within 1 year

1–5 years

5–10 years

Over 10 years¥

3,677,837
3,567,541
7,691
102,604
745,266¥

5,138,277
4,143,028
36,671
958,576
3,192,613¥

4,420,842
4,148,350
71,943
200,548575,322¥

165,867
109,776
12,53043,561
1,256,281¥

4,423,104¥

8,330,890¥

4,996,165¥

1,422,149

Thousands of U.S. dollars

At March 31, 2004

Bonds:
Japanese National Government Bonds
Japanese Local Government Bonds
Corporate Bonds
Other
Total

Within 1 year

1–5 years

5–10 years$ 96,684,400
94,339,953
20,832
2,323,615
8,271,755$ 69,568,371
58,540,567
370,213
10,657,591
19,241,208$ 36,853,413
34,616,113
698,650
1,538,650
7,493,500$

Over 10 years$104,956,155$ 88,809,579$ 44,346,913$ 13,402,560

6,965,164
5,930,929
101,450
932,785
6,437,396

Other Securities Sold during the Fiscal Year
Millions of yen

For the Fiscal Years ended March 31,

Other Securities

Proceeds
from sales¥ 46,704,782

2004
Total amountof gains
on salesTotal amountof losses
on salesProceeds
from sales

2003
Total amountof gains
on sales¥ 483,208 ¥ 130,946¥ 48,709,089¥ 352,189

Total amountof losses
on sales¥ 435,822

Thousands of U.S. dollars

For the Fiscal Year ended March 31,

Other Securities

Proceeds
from sales

2004
Total amountof gains
on salesTotal amountof losses
on sales$442,154,529 $ 4,574,536 $1,239,673

Net Unrealized Gains (Losses) on Other Securities
Net Unrealized Gains (Losses) on Other Securities as of March 31, 2004 and 2003 are as follows:
2003

Thousands of U.S. dollars
2004¥ 720,256
720,256—¥ (19,752)(19,737)(15)$ 6,818,678
6,818,678—

Deferred Tax Assets
Deferred Tax Liabilities
Difference between cost and fair value, net of Taxes

105
305,409414,952560
3,891(23,084)997
2,891,312
3,928,363

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 (Losses) on Other Securities, net of Taxes

23,862

1,592

225,905

1,681¥ 392,77275¥ (24,600)

15,922$ 3,718,380

At March 31,

Difference between cost and fair value
Other Securities
Other Money Held in Trust

122

Millions of yen
200438. Derivatives Information(1) Risk Control for Derivatives(a) Details of Derivative Financial Products
MHFG transacts primarily in the following derivative financial products:(i) Interest rate-related products
Swaps, interest rate guarantees (FRA options), futures, futures options, and options(ii) Currency-related products
Futures, futures options, options, swaps, and forward trading(iii) Bond-related products
Futures, futures options, and over-the-counter options(iv) Stock-related products
Index futures, index futures options, and over-the-counter options(v) Other products
Credit derivatives, commodity derivatives, weather derivatives, etc.
(b) Purposes for Using Derivative Financial Products
MHFG uses derivative financial products in response to the diverse needs of customers, for risk controls related to the assets andliabilities of MHFG as a part of asset and liability management (“ALM”), and for trading purposes.
As risk controls related to assets and liabilities, MHFG primarily utilizes portfolio-hedges, grouping numerous financial assets andliabilities, such as loans and deposits, with similar interest risk in accordance with risk management policies, by using interest rate
swaps, etc., as hedging methods for cash-flow hedge or fair value hedge. MHFG applies hedge accounting to the majority ofthese products, treating them as deferred hedges. The effectiveness of the hedges are assessed by periodically checking, byregression analysis and other methods, whether the derivative financial products highly reduce the exposure to changes in fair values and variable cash flows from hedged items.
(c) Trading Guidelines
In accordance with the purposes of using derivative financial products, MHFG deals in derivative financial products based on thefollowing guidelines:(i) Responding to customer needs
After obtaining an adequate understanding of customer requirements, the group follows a common policy on selling financial
products by recommending the most appropriate financial vehicle according to each customer's knowledge, experience andasset position. When actually making a sale, the group endeavors to give full explanations to its customers to ensure that theyclearly understand the nature of each product, the risks involved and other important matters.
(ii) Risk control of assets and liabilities of MHFG (ALM)
MHFG's ALM & Market Risk Committee meets periodically to confirm or revise the trading guidelines for the purposes of
securing stable income while appropriately controlling risk.
(iii) Trading activities
MHFG engages in trading activities to maximize income under reasonable risk limits and strict management.
(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.

123Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements(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 MHFG's credit portfolio management procedures. Under theauthority of the Chief Risk Officer, the Risk Management Department and the Credit Risk Management Department jointly
formulate and implement plans for basic matters related to credit risk management.
The amount of credit risk on derivatives trading (credit risk equivalent) calculated into the BIS capital adequacy ratio (international capital adequacy standards) is ¥3,291,479 million ($31,160,464 thousand) and ¥3,159,626 million on March 31, 2004
and 2003, 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.
MHFG and its consolidated subsidiaries have established a solid management structure for market risk including comprehensive management (ALM) of interest rate risk and other types of risk. Through this structure, they comprehensively ascertain
and manage risk, while managing assets to secure stable income and appropriately controlling risk.
MHFG has established the ALM & Market Risk Committee as one of the business policy committees charged with conducting overall deliberation on and adjustment of market risk management procedures. The committee decides the entire group's
monthly funding and investment policies, discusses and coordinates matters relating to ALM policies, risk planning and market
risk management, and responds to emergencies such as sudden market changes.
In regard to reporting, the Risk Management Department receives the relevant data from the five core subsidiaries, as well
as reports on risk profile and compliance with risk limits, both on a regular basis and as considered necessary. Based on thesereports, MHFG obtains a solid grasp of the market risk management situation. Reports on the status of market risk and compliance with risk limits are submitted to the President on a daily basis, and to the Board of Directors and the Executive
Management Committee on a regular basis and as considered necessary.
Value at Risk

Value at Risk (VAR) related to MHFG’s trading activities is as follows:(a) The standards used for calculating VAR• Confidence interval: one-tailed 99.0% (two-tailed 98%)
• Holding period: 1 day• Historical observation period: 1 year (265 business days, 264 return)(b) VAR results during the period covered• Maximum: ¥4.7 billion and ¥4.1 billion for the fiscal years ended March 31, 2004 and 2003, respectively• Average: ¥3.1 billion and ¥2.9 billion for the fiscal years ended March 31, 2004 and 2003, respectively
The period covered is from April 1, 2002 to March 31, 2003 (MHHD's VAR results were used during the period from April 1,
2002 to January 7, 2003), and April 1, 2003 to March 31, 2004, respectively.
Note: Value at Risk (VAR) is a method of measuring market risk. It is defined as the maximum possible loss that could be incurred on the portfolio as a result of market movements within a certain
period (holding period) and degree of probability (confidence interval). The actual amount of the VAR may vary according to the length of the holding periods and the confidence interval, as
well as the models used for measuring the volatility of market risk factors.

Credit Risk Equivalent Amounts

Credit risk equivalent amounts at March 31, 2004 and 2003 consisted of the following:
Millions of yen
2004

At March 31,

Interest Rate Swaps
Currency Swaps
Foreign Exchange Forward Transactions
Interest Rate Options (Buy)Currency Options (Buy)
Other Financial Derivative Products
Effect of Reduction in the Credit Risk Equivalent Amount due toLump-sum Settlement Netting Contracts
Total

¥

8,081,842
859,968
810,997
190,952
457,033
154,6932003

Thousands of U.S. dollars
2004¥ 10,206,400
869,011550,671
137,792
277,023
136,174$ 76,510,863
8,141,325
7,677,722
1,807,746
4,326,743
1,464,488(7,264,008)¥

3,291,479¥(9,017,447)(68,768,423)

3,159,626$ 31,160,464

Note: The above credit risk equivalent amounts are based on the consolidated capital adequacy ratio (a uniform international standard).

124

(2) Market Value of Derivatives
The market value of derivatives at March 31, 2004 and 2003 was as follows:
In the following tables:(i) Contract value represents notional amounts for swap transactions and contract amounts for other transactions.
(ii) Market values of listed contracts are based on the closing prices of the Tokyo Stock Exchange and the Tokyo International
Financial Futures Exchange and others. Market values of over-the-counter contracts are based on the discounted value of
future cash flows or option pricing models.
(a) Interest Rate-Related Transactions
Millions of yen

Contract value
Total
Over one year

At March 31, 2004

Listed:Futures:
Sold
BoughtOptions:
Sold
Bought¥Over-the-Counter:
FRAs:
Sold
BoughtSwaps:
Receive Fixed / Pay Float
Receive Float / Pay Fixed
Receive Float / Pay Float
Receive Fixed / Pay Fixed
Options:
Sold
BoughtTotal

30,704,796
25,770,710¥

7,241,477
6,728,393

Unrealized
gains (losses)

Market value¥(180,409)
178,386¥(180,409)
178,386

18,791,169
19,322,815

2,598,498
2,527,514(28,215)
41,067

11,994
23,832

26,462,539
22,583,896

2,509,421
1,784,556

11,306(9,149)11,306(9,149)306,639,056
302,833,897
50,957,741
185,056

222,428,023
215,681,821
35,837,250
164,027

5,411,524(5,223,310)
(875)
3,900

5,411,524(5,223,310)
(875)
3,900

10,045,468
10,184,210

4,260,798
4,170,538(78,495)
83,418(78,425)
83,199///¥231,973
Millions of yen

Contract value
Total
Over one year

At March 31, 2003

Listed:Futures:
Sold
BoughtOptions:
Sold
BoughtOver-the-Counter:
FRAs:
Sold
BoughtSwaps:
Receive Fixed / Pay Float
Receive Float / Pay Fixed
Receive Float / Pay Float
Receive Fixed / Pay Fixed
Options:
Sold
BoughtTotal¥

30,372,072
31,180,316¥

2,736,609
2,709,882

Unrealized
gains (losses)

Market value¥(218,281)
222,582¥(218,281)
222,582

7,036,119
7,959,168

666,435
429,337

4,877
6,931

1,118
3,352

32,797,851
29,982,492

7,228,548
5,090,079

32,768(33,979)

32,768(33,979)

264,936,816
263,164,417
40,855,230
149,593

178,494,093
178,174,511
31,519,466
137,750

8,028,427(7,601,998)(13,189)
4,349

8,028,427(7,601,998)(13,189)
4,349

9,144,409
9,476,903

5,836,780
5,875,857(64,593)
68,092(64,593)
68,092///¥428,650

125

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

Thousands of U.S. dollars

Contract value
Total
Over one year

At March 31, 2004

Listed:Futures:
Sold
BoughtOptions:
Sold
BoughtOver-the-Counter:
FRAs:
Sold
BoughtSwaps:
Receive Fixed / Pay Float
Receive Float / Pay Fixed
Receive Float / Pay Float
Receive Fixed / Pay Fixed
Options:
Sold
BoughtTotal$

290,682,542
243,971,506$

68,555,120
63,697,755$

Market value

Unrealized
gains (losses)(1,707,940)
1,688,787$ (1,707,940)
1,688,787

177,896,141
182,929,243

24,600,000
23,928,000(267,121)
388,785

113,556
225,624

250,521,062
213,801,918

23,756,714
16,894,413

107,039(86,617)

107,039(86,617)

2,902,954,239
2,866,930,776
482,417,316
1,751,929

2,105,727,764
2,041,861,421
339,271,516
1,552,848

51,230,940(49,449,124)(8,288)36,93051,230,940(49,449,124)(8,288)36,93095,100,524
96,413,994

40,337,015
39,482,515(743,120)
789,722(742,459)
787,649

/

/

/

$

2,196,097

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the Consolidated Statements ofOperations.
2. Derivative transactions qualifying for hedge accounting are excluded from the above table.

126

(b) Currency-Related Transactions
Millions of yen

Contract value
Total
Over one year

At March 31, 2004

Listed:Futures:
Sold
Bought¥Over-the-Counter:
Currency Swaps
Forwards:
Sold
BoughtOptions:
Sold
BoughtTotal

26,554
20,122¥——

Unrealized
gains (losses)

Market value

¥

(39)
7

¥

(39)
7

18,494,511

12,943,329(218,039)(48,329)

16,819,197
13,440,495

426,491
736,990

325,585(324,841)

325,585(324,841)

5,651,246
5,445,823

2,001,092
1,986,604(186,009)
237,12118,70084,568///¥55,652Thousands of U.S. dollars

Contract value
Total
Over one year

At March 31, 2004

Listed:Futures:
Sold
BoughtOver-the-Counter:
Currency Swaps
Forwards:
Sold
BoughtOptions:
Sold
BoughtTotal$

251,394
190,504$——

Unrealized
gains (losses)

Market value

$

(373)
73

$

(373)
73

175,087,675

122,534,593(2,064,179)(457,535)

159,227,467
127,241,267

4,037,600
6,977,099

3,082,322(3,075,279)

3,082,322(3,075,279)

53,500,397
51,555,651

18,944,357
18,807,203(1,760,953)
2,244,830

177,039
800,611

/

/

/

$

526,858

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the Consolidated Statements ofOperations.
2. Derivative transactions qualifying for hedge accounting and the following transactions are excluded from the above table.
•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.
3. Transactions such as currency forwards and currency options, which had been marked to market, are included in the above table from thisfiscal year.
4. Currency Swap Transactions which qualify for hedge accounting in accordance with “Accounting and Auditing Treatment Relating to
Adoption of Accounting Standards for Foreign Currency Transactions for Banks” (JICPA Industry Audit Committee Report No. 25) areexcluded from the above table.

127

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements

Millions of yen

At March 31, 2003

Over-the-Counter:
Currency Swaps

Contract value
Total
Over one year

¥ 19,455,734¥ 12,610,653

Market value

Unrealized
gains (losses)¥ (134,626)¥ (163,955)

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the Consolidated Statements ofOperations.
2. Derivative transactions qualifying for hedge accounting and the following transactions described in note 4 are excluded from the abovetable.
3. Currency Swap Transactions which are accounted for on an accrual basis in accordance with “Tentative Accounting and Auditing
Treatment relating to the Adoption of ‘Accounting for Foreign Currency Transaction’ for Banks” (JICPA Industry Audit Committee Report
No. 20) or “Accounting and Auditing Concerning Accounting for Foreign Currency Transactions for Banks” (JICPA Industry Audit
Committee Report No. 25), are excluded from the above table.
Currency swap transactions accounted for under the accrual method are as follows:
Millions of yen

At March 31, 2003

Currency Swaps

Contract value¥

370,040

Market value

Unrealized
gains (losses)

¥

¥

1,893

(1,622)

4. The following currency forwards, currency options and other transactions are excluded from the above table:* Transactions which are marked to market and of which changes in unrealized gains (losses) are included in the Consolidated Statementsof Operations.
* Transactions which are for financial assets and liabilities denominated in foreign currencies and recognized on the Consolidated Balance
Sheets.
* Transactions denominated in foreign currencies which are eliminated in the consolidation process.
Currency-related derivatives which are marked to market are as follows:
Millions of yen

At March 31, 2003

Listed:Futures:
Sold
BoughtOver-the-Counter:
Forwards:
Sold
BoughtOptions:
Sold
Bought128

Contract value

¥

2,644
3,173

13,474,009
17,495,358
4,065,115
4,124,246

(c) Stock-Related Transactions
Millions of yen

2004

At March 31,

Listed:Index Futures:
Sold
BoughtIndex Futures Options:
Sold
BoughtOver-the-Counter:
Options:
Sold
BoughtForwards:
Sold
BoughtTotal

Contract value
Over
Total
one year¥ 331,922
48,149¥MarketUnrealized
value gains (losses)— ¥ (16,288) ¥ (16,288)
—
2,874
2,874

2003
Contract value
Over
Total
one year¥ 61,583
3,170¥

MarketUnrealized
value gains (losses)——¥ 1,641(105)¥ 1,641(105)

54,18664,703——(1,355)
1,899

3
430

17,67150,796

—
—

256
390

(0)
33

363,284
418,229

107,326
112,618(16,774)
25,613367
5,295

40,09574,223

2,081
6,893

1,664
3,527

116
(938)

5,998
3,925

—
2,600

91
233

91
233

—
2,233

—
—

—
(142)

—
(142)

/

/

(6,992)

/

/

/

/ ¥

¥

604

Thousands of U.S. dollars

2004

At March 31,

Listed:Index Futures:
Sold
BoughtIndex Futures Options:
Sold
BoughtOver-the-Counter:
Options:
Sold
BoughtForwards:
Sold
BoughtTotal

Contract value
Over
Total
one year$3,142,309
455,833
512,981612,550$

MarketUnrealized
value gains (losses)— $(154,203) $(154,203)—
27,211
27,211——(12,829)
17,98537
4,077

3,439,218 1,016,061
3,959,381 1,066,157(158,806)
242,487

3,475
50,131

866
2,209

866
2,209

56,784
37,164—
24,616/// $ (66,197)

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the Consolidated Statements ofOperations.
2. Derivative transactions qualifying for hedge accounting are excluded from the above table.

129

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements(d) Bond-Related Transactions
Millions of yen

2004

At March 31,

Listed:Index Futures:
Sold
BoughtIndex Futures Options:
Sold
BoughtOver-the-Counter:
Options:
Sold
BoughtTotal

Contract value
Over
Total
one year¥ 407,599
1,001,632¥

2003
MarketUnrealized
value gains (losses)

Contract value
Over
Total
one year——¥ (1,661)
1,151¥ (1,661)
1,151¥ 624,250
852,153

192,651
175,447——(1,805)
1,610

(728)
79

833,058
800,9455,455—(6,562)
2,069

/

/

/

¥

MarketUnrealized
value gains (losses)——¥ (503)3,293¥ (503)
3,293

173,073
133,577

—
—

409
465

164
(129)

(2,762)(1,016)

31,51368,548

—
707

114
563

41
144

¥ (4,937)///¥ 3,011

Thousands of U.S. dollars

2004

At March 31,

Listed:Index Futures:
Sold
BoughtIndex Futures Options:
Sold
BoughtOver-the-Counter:
Options:
Sold
BoughtTotal

Contract value
Over
Total
one year$3,858,751
9,482,463$

MarketUnrealized
value gains (losses)——$(15,728)
10,905$(15,728)
10,905

1,823,833
1,660,962——(17,092)
15,251(6,893)753

7,886,574
7,582,556

51,649—(62,128)
19,595(26,155)(9,623)///$(46,741)

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the Consolidated Statements ofOperations.
2. Derivative transactions qualifying for hedge accounting are excluded from the above table.

130(e) Commodity-Related Transactions
Millions of yen

2004

2003

Contract value

Contract valueOver
one yearMarketUnrealized
value gains (losses)

Total

Over
one year

Over-the-Counter:
Options:
Sold
Bought¥ 190,382 ¥ 134,895
190,382
134,895¥ (8,777) ¥ (8,777)
14,713
14,713¥ 131,197
131,197¥ 77,335
77,335¥ 6,174
3,607¥ 1,779
1,004

Total

/

/

/

/

¥ 2,784

At March 31,

Total

/

/

¥ 5,935

MarketUnrealized
value gains (losses)

Thousands of U.S. dollars

2004
Contract value
Over
Total
one yearMarketUnrealized
value gains (losses)

Over-the-Counter:
Options:
Sold
Bought$1,802,348 $1,277,060
1,802,348 1,277,060$ (83,100) $ (83,100)
139,289
139,289

Total/

At March 31,// $ 56,189

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the Consolidated Statements ofOperations.
2. Derivative transactions qualifying for hedge accounting are excluded from the above table.
3. Commodities are oil, copper, aluminium and others.

(f) Credit Derivative Transactions
Millions of yen

2004

2003

Contract value
At March 31,

Total

Contract valueOver
one year

Over-the-Counter:
Credit Derivatives:
Sold
Bought¥ 272,177 ¥ 161,783
784,247
705,377

Total/

MarketUnrealized
value gains (losses)¥/

1,434 ¥ 1,434
32,30532,305/ ¥ 33,740

Total

Over
one year¥ 19,669 ¥ 16,278
502,951498,680//

MarketUnrealized
value gains (losses)¥
17
84,555/¥17
84,555¥ 84,572

Thousands of U.S. dollars

2004
Contract value
Over
Total
one yearMarketUnrealized
value gains (losses)

Over-the-Counter:
Credit Derivatives:
Sold
Bought$2,576,706 $1,531,610
7,424,474 6,677,816$ 13,578 $ 13,578
305,841
305,841

Total/

At March 31,// $ 319,419

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the Consolidated Statements ofOperations.
2. Derivative transactions qualifying for hedge accounting are excluded from the above table.
3. “Sold” and “Bought” indicate assumption and cession of credit risk, respectively.

131

Financial Data of Mizuho Financial Group, Inc.

Notes to Consolidated Financial Statements(g) Weather Derivative Transactions
Millions of yen

2004

2003

Contract value
At March 31,

Over-the-Counter:
Weather Derivatives:
Sold
Bought
Total

Total

¥

934
674

Contract valueOver
one year

¥

/

—
—
/

MarketUnrealized
value gains (losses)

¥

Total

Over
one yearMarketUnrealized
value gains (losses)

(106)
102

¥

(106)
102

¥ 166
166

¥—
—

¥8
7

¥ (2)
5

/

¥

(3)

/

/

/

¥ 2

Thousands of U.S. dollars

2004

At March 31,

Over-the-Counter:
Weather Derivatives:
Sold
BoughtTotal

Contract value
Over
Total
one year$ 8,844
6,387/$

MarketUnrealized
value gains (losses)——$ (1,008)
974

/

/

$ (1,008)
974
$

(34)

Notes: 1. The above transactions are marked to market, and changes in unrealized gains (losses) are included in the Consolidated Statements ofOperations.
2. Transactions are related to temperature, etc.

132Non-Consolidated Financial Statements ofMizuho Financial Group, Inc. and Four
Subsidiaries
Mizuho Financial Group, Inc.
Non-Consolidated Balance Sheets

134

Non-Consolidated Statements of Operations

135

Mizuho Corporate Bank, Ltd.
Non-Consolidated Balance Sheets

136

Non-Consolidated Statements of Operations

137

Mizuho Bank, Ltd.
Non-Consolidated Balance Sheets

138

Non-Consolidated Statements of Operations

139

Mizuho Trust & Banking Co., Ltd.
Non-Consolidated Balance Sheets

140

Non-Consolidated Statements of Operations

141

Mizuho Securities Co., Ltd.
Non-Consolidated Balance Sheets

142

Non-Consolidated Statements of Operations

143

133

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

Mizuho Financial Group, Inc.

Non-Consolidated Balance Sheets
Millions of yen
2004

At March 31,

AssetsCurrent Assets
Cash and Due from Banks
Other Current Assets
Non-current Assets
Tangible Assets
Intangible Assets
Investments in Subsidiaries and Affiliates (Stocks)
Other Investments
Deferred Assets
Total Assets
Liabilities and Shareholders' Equity
Liabilities
Current Liabilities
Commercial Paper
Other Current Liabilities
Non-Current Liabilities

¥

3,940
1,231
2,709
3,595,229
1,014
3,903
3,588,866
1,446
914

Total Shareholders' Equity
Total Liabilities and Shareholders' Equity

5,766
3,538
2,228
3,588,658—
187
3,588,471
0
1,219

$

37,30911,65425,65534,036,067
9,601
36,95033,975,826
13,6908,656¥ 3,595,643$ 34,082,032

¥

¥

$

66,01865,0001,018
568

49,75849,000758—

624,997615,356
9,641
5,384

66,58749,758630,381

1,540,965
1,752,885
239,832
4,350
235,482(10)(174)

1,540,965
1,752,885
252,043
4,350
247,693—(8)

14,588,327
16,594,580
2,270,496
41,181
2,229,315(98)(1,654)

3,533,497

3,545,885

33,451,651¥ 3,600,085¥ 3,595,643$ 34,082,032

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥105.63=US$1.00, the foreign exchange rate on March 31, 2004, has been used for translation.

134

2003

¥ 3,600,085

Total Liabilities
Shareholders' Equity
Common Stock and Preferred Stock
Capital Surplus
Retained Earnings
Appropriated Reserves
Unappropriated Retained Earnings
Net Unrealized Losses on Other Securities, net of Taxes
Treasury Stock¥

Thousands of
U.S. dollars
2004Non-Consolidated Statements of Operations
Millions of yen
2004

For the Fiscal Years ended March 31,

Operating Income
Cash Dividend Received from Subsidiaries and Affiliates (Stocks)
Fees and Commissions Received from Subsidiaries and Affiliates¥

25,748
14,836
10,911¥

2003

Thousands of
U.S. dollars
2004

957
—
957

$ 243,758
140,461
103,297

Operating Expenses
General and Administrative Expenses

11,761
11,761

604
604

111,349
111,349

Operating Profits
Non-operating Income
Non-operating Expenses

13,986
432
3,588

353
1,137
1,435

132,409
4,098
33,970

Income before Income Taxes
Income Taxes:
Current
Deferred

10,831

55

102,537

559
334

27
(2)

5,301
3,164

Net Income

¥

9,936

¥

30

$

94,072

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥105.63=US$1.00, the foreign exchange rate on March 31, 2004, has been used for translation.

135

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

Mizuho Corporate Bank, Ltd.

Non-Consolidated Balance Sheets
2003

Thousands of
U.S. dollars
2004¥ 3,468,597
283,436
1,273,316
2,725,918
120,726
2,973,185
4,754
18,482,622
23,703,886
457,593
3,387,387
166,61418
534,4772,773,479(434,250)(67)¥ 3,086,437
410,575
833,285
2,241,428
73,6203,877,428
19,754
14,716,782
27,632,516
540,1312,839,321
264,63438
1,064,486
3,073,167(1,075,211)(4,995)$ 32,837,237
2,683,298
12,054,493
25,806,294
1,142,918
28,147,171
45,013
174,975,124
224,404,867
4,332,045
32,068,420
1,577,339
172
5,059,903
26,256,548(4,111,054)(642)¥ 59,921,696¥ 59,593,402$ 567,279,146¥ 22,157,982
6,743,929
9,743,569
3,567,653
4,781,320
215,000
2,131,091
2,302,632
355,264
180,000
263,100
2,405,055
2,418—
131,749
35,3002,773,479¥ 18,386,659
7,878,927
13,967,075
4,568,114
2,191,613
62,0002,789,451
2,036,031
183,016—
653,100
2,190,013
3,192
1,435
141,124
63,9783,073,167$ 209,769,788
63,844,827
92,242,445
33,775,001
45,264,796
2,035,407
20,175,055
21,799,034
3,363,295
1,704,061
2,490,770
22,768,674
22,898—1,247,270
334,191
26,256,548

57,789,545

58,188,903

547,094,060

1,070,965
258,247
388,783—
388,783
51,539362,6141,070,965
1,271,230(1,012,982)
207,761(1,220,744)
104,740(29,453)

10,138,834
2,444,830
3,680,616—
3,680,616
487,928
3,432,878

Millions of yen
2004

At March 31,

AssetsCash and Due from Banks
Call Loans
Receivables under Resale Agreements
Guarantee Deposit Paid under Securities Borrowing Transactions
Other Debts Purchased
Trading Assets
Money Held in Trust
Securities
Loans and Bills Discounted
Foreign Exchange Assets
Other Assets
Premises and Equipment
Deferred Debenture Charges
Deferred Tax Assets
Customers' Liabilities for Acceptances and Guarantees
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 Deposit 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 Employee Retirement Benefits
Reserve for Contingencies
Deferred Tax Liabilities for Revaluation Reserve for Land
Acceptances and Guarantees
Total Liabilities
Shareholders' Equity
Common Stock and Preferred Stock
Capital Surplus
Retained Earnings (Deficit):
Appropriated Reserves
Unappropriated Retained Earnings (Deficit)
Revaluation Reserve for Land, net of Taxes
Net Unrealized Gains (Losses) on Other Securities, net of Taxes
Total Shareholders' Equity
Total Liabilities and Shareholders' Equity

2,132,150

1,404,499

20,185,086¥ 59,921,696¥ 59,593,402$ 567,279,146

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥105.63=US$1.00, the foreign exchange rate on March 31, 2004, has been used for translation.

136

Non-Consolidated Statements of Operations
Millions of yen
2004

For the Fiscal Years ended March 31,

Thousands of
U.S. dollars
2004

2003

IncomeInterest Income
Loans and Bills Discounted
Securities
Fee and Commission Income
Trading Income
Other Operating Income
Other Income¥

Total Income

742,275
408,942
260,485
129,877
55,192
197,586
297,935

980,833
621,727
256,108
129,065
65,031
180,666
131,839$

7,027,132
3,871,462
2,466,022
1,229,549
522,5111,870,553
2,820,557

1,422,867

1,487,436

13,470,302

329,575
72,712
84,94240,514465
91,626226,254
145,808

549,642
132,470
112,226
32,265—72,884
290,539
2,118,475

3,120,091
688,368
804,149
383,552
4,403
867,428
2,141,955
1,380,371

834,244

3,063,806

7,897,800

588,623(1,576,370)

5,572,502

71
248,363

39
57,032678
2,351,257

340,188¥ (1,633,441)

Expenses
Interest Expenses
Deposits
Debentures
Fee and Commission Expenses
Trading Expenses
Other Operating Expenses
General and Administrative Expenses
Other Expenses
Total Expenses
Income (Loss) before Income Taxes
Income Taxes:
Current
Deferred
Net Income (Loss)

¥

¥

$

3,220,567

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥105.63=US$1.00, the foreign exchange rate on March 31, 2004, has been used for translation.

137

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

Mizuho Bank, Ltd.

Non-Consolidated Balance Sheets
2003

Thousands of
U.S. dollars
2004¥ 4,695,419
4,269,900
3,175,215
182,827
720,641
15,238,948
37,001,430
146,193
1,551,238
867,535
428
707,488
1,912,132(460,530)(179,384)¥ 5,767,724
7,000,000
3,434,253
631,480
1,261,417
8,535,213
37,885,417
156,348
1,448,203
1,200,354
1,002
913,837
2,082,156(829,621)(182,013)$ 44,451,572
40,423,175
30,059,792
1,730,831
6,822,315
144,267,235
350,292,821
1,384,015
14,685,583
8,212,969
4,058
6,697,799
18,102,175(4,359,850)(1,698,235)¥ 69,829,484¥ 69,305,777$ 661,076,255¥ 54,647,737
2,810,806
2,135,200
7,119
2,932,870
600,955
1,538,115
14,9891,344,260
7,298
—
—
2
123,166
1,912,132¥ 52,165,166
3,918,740
3,741,700
42,967
953,358
1,101,390
1,495,032
10,712
1,860,847
8,072
24,936
22,8402
189,371
2,082,156$ 517,350,540
26,609,926
20,213,954
67,40527,765,509
5,689,254
14,561,347
141,908
12,726,126
69,095——22
1,166,020
18,102,175

68,074,656

67,617,297

644,463,281

650,000
762,345
195,070—
195,070
180,199(32,787)

650,000
981,668(219,322)
135,749(355,071)
277,061(927)

6,153,555
7,217,133
1,846,737—
1,846,737
1,705,950(310,401)

Millions of yen
2004

At March 31,

AssetsCash and Due from Banks
Call Loans and Bills Purchased
Guarantee Deposit Paid under Securities Borrowing Transactions
Other Debts Purchased
Trading Assets
Securities
Loans and Bills Discounted
Foreign Exchange Assets
Other Assets
Premises and Equipment
Deferred Debenture Charges
Deferred Tax Assets
Customers' Liabilities for Acceptances and Guarantees
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 Deposit Received under Securities Lending Transactions
Trading Liabilities
Borrowed Money
Foreign Exchange Liabilities
Other Liabilities
Reserve for Bonus Payments
Reserve for Possible Losses on Loans Sold
Reserve for Possible Losses on Support of Specific Borrowers
Reserve under Special Laws
Deferred Tax Liabilities for Revaluation Reserve for Land
Acceptances and Guarantees
Total Liabilities
Shareholders' Equity
Common Stock and Preferred Stock
Capital Surplus
Retained Earnings (Deficit):
Appropriated Reserves
Unappropriated Retained Earnings (Deficit)
Revaluation Reserve for Land, net of Taxes
Net Unrealized Losses on Other Securities, net of Taxes
Total Shareholders' Equity
Total Liabilities and Shareholders' Equity

1,754,828

1,688,479

16,612,974¥ 69,829,484¥ 69,305,777$ 661,076,255

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥105.63=US$1.00, the foreign exchange rate on March 31, 2004, has been used for translation.

138

Non-Consolidated Statements of Operations
Millions of yen
2004

For the Fiscal Years ended March 31,

Thousands of
U.S. dollars
2004

2003

IncomeInterest Income
Loans and Bills Discounted
Securities
Fee and Commission Income
Trading Income
Other Operating Income
Other Income¥

Total Income

722,349
619,248
75,511
208,774
57,982
165,625
192,491$

6,838,488
5,862,428
714,867
1,976,466
548,917
1,567,973
1,822,319

1,249,834

12,754,163

79,71023,9298,759
55,3091,491
47,189617,252
307,440

98,55639,046
11,53253,14460
29,268635,314
1,147,765

754,619
226,541
82,923
523,612
14,120446,741
5,843,534
2,910,541

1,108,393

1,964,108

10,493,167

238,829(714,273)

2,260,996

476
140,143938(86,656)

4,513
1,326,739

98,208¥ (628,556)

Income (Loss) before Income Taxes
Income Taxes:
Current
Deferred
Net Income (Loss)

793,797
686,10271,355
184,973
41,291
166,381
63,3901,347,222

Expenses
Interest Expenses
Deposits
Debentures
Fee and Commission Expenses
Trading Expenses
Other Operating Expenses
General and Administrative Expenses
Other Expenses
Total Expenses

¥

¥

$

929,744

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥105.63=US$1.00, the foreign exchange rate on March 31, 2004, has been used for translation.

139

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

Mizuho Trust & Banking Co., Ltd.

Non-Consolidated Balance Sheets
Millions of yen
2004

At March 31,

AssetsCash and Due from Banks
Call Loans
Other Debts Purchased
Trading Assets
Money Held in Trust
Securities
Loans and Bills Discounted
Foreign Exchange Assets
Other Assets
Premises and Equipment
Deferred Tax Assets
Customers' Liabilities for Acceptances and Guarantees
Reserves for Possible Losses on Loans
Reserve for Possible Losses on Investments
Total Assets¥

290,394
100,000
102,704
58,720—1,382,692
3,093,331
1,808
165,070
42,91989,259161,981(23,551)(676)¥

Thousands of
U.S. dollars
2004

2003

536,469—
84,111
124,720441
1,298,410
3,414,209
1,565
269,148
55,722141,092
216,089(64,183)—$2,749,162
946,701
972,302555,904—
13,089,957
29,284,592
17,122
1,562,726
406,318
845,016
1,533,483(222,960)(6,405)¥ 5,464,653¥ 6,077,797$ 51,733,918¥ 3,090,103
237,244
181,831
64,250101,2739
89,100—1,158,712
34,707
1,249
8,747
—
—
161,981¥ 3,177,171
440,600
325,055
114,751
142,835
10
127,900
4,731
1,094,630
159,402
1,475
7,589
624
4,200
216,089$ 29,254,033
2,245,991
1,721,402
608,258
958,75389
843,510—
10,969,538
328,578
11,83482,816——
1,533,483

5,129,211

5,817,067

48,558,285

Common Stock and Preferred Stock247,231247,2312,340,546

Capital Surplus
Retained Earnings (Deficit):
Appropriated Reserves
Unappropriated Retained Earnings (Deficit)
Net Unrealized Gains on Other Securities, net of Taxes
Treasury Stock

12,21330,018—30,01846,008(30)

117,203(104,990)
90(105,080)
1,299
(15)

115,627
284,187—
284,187435,559(286)

Liabilities and Shareholders' Equity
Liabilities
Deposits
Call Money and Bills Sold
Guarantee Deposit Received under Securities Lending Transactions
Trading Liabilities
Borrowed Money
Foreign Exchange Liabilities
Bonds and Notes
Bonds with Stock Options
Due to Trust Account
Other Liabilities
Reserve for Bonus Payments
Reserve for Employee Retirement Benefits
Reserve for Possible Losses on Loans Sold
Reserve for Possible Losses on Support of Specific Borrowers
Acceptances and Guarantees
Total Liabilities
Shareholders' Equity

Total Shareholders' Equity
Total Liabilities and Shareholders' Equity

335,442

260,729

3,175,633¥ 5,464,653¥ 6,077,797$ 51,733,918

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥105.63=US$1.00, the foreign exchange rate on March 31, 2004, has been used for translation.

140

Non-Consolidated Statements of Operations
Millions of yen
2004

For the Fiscal Years ended March 31,

2003

Thousands of
U.S. dollars
2004

IncomeTrust Fees
Interest Income
Loans and Bills Discounted
Securities
Fee and Commission Income
Trading Income
Other Operating Income
Other Income¥

Total Income
Expenses
Interest Expenses
Deposits
Borrowings and Rediscounts
Fee and Commission Expenses
Trading Expenses
Other Operating Expenses
General and Administrative Expenses
Other Expenses
Total Expenses
Income (Loss) before Income Taxes
Income Taxes:
Current
Deferred
Net Income (Loss)¥

62,04570,602
51,92816,471
40,566707
11,97041,364¥35,55180,011
61,50916,54022,215
3,656
11,28927,240$587,385
668,393491,610
155,935
384,042
6,699
113,326
391,597

227,256

179,963

2,151,442

33,441
9,981
2,034
15,9292
2,794
79,25544,49838,538
11,558
2,102
3,847
—
995
54,380169,703

316,591
94,496
19,260150,80427
26,456750,312421,267

175,922

267,464

1,665,457

51,334(87,500)

485,98547
21,26821
17,558454
201,345

30,018¥ (105,080)$

284,186

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥105.63=US$1.00, the foreign exchange rate on March 31, 2004, has been used for translation.

141

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

Mizuho Securities Co., Ltd.

Non-Consolidated Balance Sheets
Millions of yen
2004

At March 31,

AssetsCash and Cash Equivalents
Cash and Cash Equivalents Segregated as Deposits
Receivables:
Unsettled—Trades
Short-term Loans
Accrued Income
Other
Trading Assets
Securities Borrowed
Property, Equipment and Leasehold Improvements, at Cost
Less: Accumulated Depreciation
Investments in Securities
Deferred Tax Assets
Other Assets
Total Assets
Liabilities and Shareholders' Equity
Liabilities
Short-term Borrowings
Commercial Paper
Payables:Unsettled—Trades
Other Payables to Customers
Other
Trading Liabilities
Securities Sold under Repurchase Agreements
Securities Loaned
Accrued Liabilities and Other:
Income Taxes Payable
Other
Long-term Borrowings
Bonds Issued
Deferred Tax Liabilities
Statutory Reserves
Total Liabilities¥

35,211
6,086

36,562
1,304$

333,350
57,617

—
70
8,890
3,480
3,373,694
2,438,639
8,826(3,715)71,861
3,668
12,6791,150,564—
84,035
190,204
27,358,011
28,507,332
96,259(45,083)
1,882,760
36,117287,251¥ 6,331,295¥ 5,955,961$ 59,938,417¥¥

391,255
91,400$ 7,261,728
2,251,254

—
3,100
3,435
2,644,249
206,7712,024,617

426,960129
1,704
1,894,275
419,584
2,475,373—
29,35532,521
25,033,130
1,957,509
19,167,072

15,862
17,00535,50075,40012,700
804

4,326
7,652
—
—
—
439

150,175
160,991
336,079
713,812120,2367,616

6,044,304

5,713,102

57,221,478

150,200
95,324
20,38721,078150,200
95,324(419)(2,245)

1,421,945
902,438
193,006
199,550

767,056
237,800

Total Shareholders' Equity

286,990242,859

2,716,939¥ 6,331,295¥ 5,955,961$ 59,938,417

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥105.63=US$1.00, the foreign exchange rate on March 31, 2004, has been used for translation.

142

2003

121,534—
8,876
20,0912,889,826
3,011,229
10,167(4,762)
198,875
3,815
30,342

Shareholders' Equity
Common Stock
Capital Surplus
Retained Earnings (Deficit)
Net Unrealized Gains (Losses) on Other Securities, net of Taxes
Total Liabilities and Shareholders' Equity¥

Thousands of
U.S. dollars
2004Non-Consolidated Statements of Operations
2003

Thousands of
U.S. dollars
2004¥ 34,162
40,2658,460
903¥ 32,747
16,4069,553
96$ 323,421
381,189
80,098
8,558

Subtotal
Less: Interest Expenses

83,792(4,618)58,804(2,461)

793,266(43,725)

Total Income

79,17456,342

749,541

42,117822

33,58913,685

398,722
7,790

42,93947,274

406,512

36,234

9,067

343,029

18,877(3,449)

5,767
(742)

178,709(32,660)

4,043$ 196,980

Millions of yen
2004

For the Fiscal Years ended March 31,

IncomeCommission Income
Trading Income
Interest and Dividend Income
Other Income

Expenses
Selling, General and Administrative Expenses
Other Expenses
Total Expenses
Income before Income Taxes
Income Taxes:
Current
Deferred
Net Income¥ 20,807¥

Notes: 1. The amounts indicated in millions of yen are rounded down by truncating the figures below one million.
2. The rate of ¥105.63=US$1.00, the foreign exchange rate on March 31, 2004, has been used for translation.

143

Senior Executives of Mizuho

Mizuho Financial Group

Mizuho Corporate Bank

Mizuho Bank

Board of Directors

Board of Directors

Board of Directors

Terunobu Maeda*

Hiroshi Saito*

Seiji Sugiyama*

President & CEO

President & CEO

President & CEO

Keiji Torii*

Tsunehiro Nakayama*

Tsutomu Abe*

Deputy President

Deputy President

Deputy President

Head of IT, Systems & Operations Group /Chief Information Officer (CIO)

Chief Compliance Officer /Head of Audit & Compliance Group

Saburo Nishiura*

Satoru Nishibori*

Masayoshi Kanaji*

Managing Director

Deputy President

Head of Financial Control and Accounting
Group / Chief Financial Officer (CFO)

Takashi Goto*

Tetsuji Kosaki*

Deputy President

Deputy President

Yasuo Tsunemi*
Senior Managing Director

Mitsuru Machida*
Managing Director

Managing Director

Toshikazu Kitano*

Head of Strategic Planning Group and Headof Audit and Compliance Group / Chief
Strategy Officer (CSO) / Chief Compliance
Officer (CCO)Managing Director

Syunichi Asada*

Head of Corporate Banking Unit
Chief Information Officer / Head of IT &Systems GroupManaging Director

Hiroshi Saito

Makoto Kigawa*Director

Managing Director

Seiji Sugiyama
Director

Yoshiharu Fukuhara
Director

Glen S. Fukushima

Chief Risk Officer / Head of Risk Management
Group
Chief Human Resources Officer / Head of
Human Resources Group

Mareto Sako*
Managing Director

Corporate Auditors

Chief Strategy Officer / Head of Strategic
Planning Group
Chief Financial Officer / Head of Financial
Control & Accounting Group

Yukio Obara

Corporate Auditors

Director

Corporate Auditor

Hidemi Ueda
Corporate Auditor

Yukio Nozaki
Corporate Auditor

Masahiko Kadotani
Corporate Auditor

Toshiaki Hasegawa
Corporate Auditor

Executive Officers
Koichi Ikeda
Managing Executive Officer
Head of Risk Management Group and Headof Human Resources Group / Chief Risk
Officer (CRO) / Chief Human Resources
Officer (CHRO)

Junichi Miyazaki

Tetsuo Narukawa*
Managing Director

Corporate Auditors
Kiyotaka Noborihayashi
Corporate Auditor

Nobuyoshi Naka
Corporate Auditor

Toshiaki Hasegawa
Corporate Auditor

Hidemi Ueda
Corporate Auditor

Mizuho Securities

Corporate Auditor

Tsuyoshi Kusumoto
Corporate Auditor

Yukio Nozaki
Corporate Auditor

Yukio Obara
Corporate Auditor

Board of Directors
Yoshio Osawa
President

Makoto Fukuda
Deputy President

Seiichiro Sato
Deputy President

Executive Officers
Norimasa Kuroda

Yoneo Sakai
Deputy PresidentManaging Executive Officer
Head of International Banking Unit

Masatsugu Nagato
Managing Executive Officer
Head of the Americas

Mizuho Trust & Banking
Board of Directors
Teruhiko Ikeda

Yoshiaki Sugita

Takashi Tsukamoto

Executive Officer

Managing Executive Officer

Assistant to Head of IT, Systems & Operations
Group

Head of Europe, Africa and the Middle East

Hidehiko Naito
Deputy President

Katsuyoshi Ejima

Yasufumi Miyazaki
Managing Executive Officer

Executive Officer

President and CEO

Head of Asia and Oceania

General Manager of Credit Risk Management

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 well as the Executive Officers of Mizuho Securities, have not been listed.
5. Members of the Board of Directors other than the President and CEO and the Deputy Presidents, and the Corporate Auditors as well as the Executive Officers of Mizuho Trust & Banking, havenot been listed.

(As of June 25, 2004)

144

Office Network of Mizuho

Domestic Network of Mizuho(as of March 31, 2004)

Mizuho Financial Group

Mizuho Corporate Bank

Mizuho Securities

Head Office

Head Office and Branches: 18

Head OfficeMizuho Bank

Mizuho Trust & Banking

Head Office and Branches: 528
Sub-branches: 100
Agencies: 14

Head Office and Branches: 38
Sub-branch: 1

International Network of Mizuho
Asia and Oceania
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, 101 Yin Cheng
East 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, The People's Republic of China
TEL 86-755-8222-1918

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,
The People's Republic of China
TEL 86-25-8332-9379

Tianjin Representative Office
Room 2202, Tianjin International Building 75,
Nanjing Road, Tianjin,
The People's Republic of China
TEL 86-22-2330-5448

Wuhan Representative Office
Room 411, Shangri-la Hotel, 700 Jian She Dadao,
Wuhan 430020, The People's Republic of China
TEL 86-27-8578-1155

Xiamen Representative Office
Room 915, East Ocean Building Hotel, No.1
Building, Zhongshan Road, Xiamen, Fujian
361001, The People's Republic of China
TEL 86-592-202-1111(ext. 2915)(as of July 31, 2004)

Hong Kong Branch
17th Floor, Two Pacific Place, 88 Queensway,
Hong Kong, S.A.R., The People's Republic of China
TEL 852-2103-3000

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

Mizuho Securities Asia Limited*
Suites 901-907, Level 9, CITIC Tower,
1 Tim Mei Avenue, Central, Hong Kong, S.A.R.,
The People's Republic of China
TEL 852-2685-2000

India

Mumbai Branch
Maker Chamber III , 1st Floor, Jamnalal Bajaj
Road, Nariman Point, Mumbai, 400021 India
TEL 91-22-2288-6638

New Delhi Representative Office
DBS Business Centre, 1st Floor, World Trade
Tower, Barakhamba Lane, New Delhi 110 001
India
TEL 91-11-2341-2190

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
8th Floor, Seoul City Tower, 581, Namdaemunro,
5-ka, Chung-ku, Seoul, 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

Kuala Lumpur Representative Office
Level 34, Menara Maxis, Kuala Lumpur City
Centre, 50088 Kuala Lumpur, Malaysia
TEL 60-3-2070-6595

Philippines

Manila Branch
26th Floor, Citibank Tower, Valero Street corner
Villar Street, Salcedo Village, Makati City,
Metro Manila, Philippines
TEL 63-2-848-0001

Singapore

Singapore Branch
168 Robinson Road, #13-00 Capital Tower,
Singapore 068912, Republic of Singapore
TEL 65-6423-0330

Mizuho Futures (Singapore) Pte.
Limited*Six Battery Road, #18-05 Singapore 049909,
Republic of Singapore
TEL 65-6221-3633

TaiwanKaohsiung Branch
12th Floor, No.2, Chung Cheng 3rd Road,
Kaohsiung 800, Taiwan
TEL 886-7-236-8768

Taipei Branch
2nd Floor, Hung Kuo Building, 167 Tun Hua
North Road, Taipei 105, Taiwan
TEL 886-2-2715-3911

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

Note: All overseas offices are those of Mizuho Corporate Bank except for offices indicated as follows:* Subsidiary of Mizuho Securities** Subsidiary of Mizuho Trust & Banking*** Subsidiary of DLIBJ Asset Management

145

Office Network of Mizuho

VietnamU.S.A.

Hanoi Branch

London Branch

Chicago Branch

Suite 403~407, 63 LTT Building,
63 Ly Thai To Street, Hanoi,
Socialist Republic of Vietnam
TEL 84-4-9363-123

River Plate House, 7-11 Finsbury Circus,
London EC2M 7DH, UK
TEL 44-20-7012-4000

311 South Wacker Drive, Suite 2020,
Chicago, IL 60606-6620, U.S.A.
TEL 1-312-855-1111

DLIBJ Asset Management
International Ltd.***New York Branch

Ho Chi Minh City Representative
Office7th Floor, The Landmark, 5B Ton Duc Thang
Street, District 1, Ho Chi Minh City,
Socialist Republic of Vietnam
TEL 84-8-8228-638

Australia

Sydney Branch
Level 33, 60 Margaret Street, Sydney, N.S.W. 2000,
Australia
TEL 61-2-8273-3888

Europe and The Middle East
AustriaMizuho Corporate Bank-BA
Investment Consulting GmbH
Landhausgasse 4/7, 1010 Vienna, Austria
TEL 43-1-5355868

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

Luxembourg

Mizuho Trust & Banking(Luxembourg) S.A.**
1B, Parc d'Activité Syrdall, L-5365 Munsbach,Luxembourg
TEL 352-4216171

Switzerland

Mizuho Bank (Switzerland) Ltd.*
Loewenstrasse 32, 8023 Zurich, Switzerland
TEL 41-1-216-9111

The Netherlands

Mizuho Corporate Bank Nederland
N.V.
Apollolaan 171, 1077 AS, Amsterdam,
The Netherlands
TEL 31-20-5734343

146

United Kingdom

Bracken House, One Friday Street,
London, EC4M 9JA, UK
TEL 44-20-7329-3777

Mizuho Capital Markets (UK) LimitedRiver Plate House, 7-11 Finsbury Circus,
London EC2M 7DH, UK
TEL 44-20-7972-9900

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

Mizuho International plc*

DLIBJ Asset Management U.S.A.
Inc.***

Bracken House, One Friday Street,
London EC4M 9JA, UK
TEL 44-20-7236-1090

1133 Avenue of the Americas, 28th Floor,
New York, NY 10036, U.S.A.
TEL 1-212-350-7650

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

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
555 West Fifth Street,
Los Angeles, CA 90013, U.S.A.
TEL 1-213-612-2700

Tehran Representative OfficeMizuho Corporate Bank (USA)

3rd Floor, No.1, 14th Street,
Khaled Eslamboli Avenue, Tehran 15117, IranTEL 98-21-872-6593

1251 Avenue of the Americas,
New York, NY 10020, U.S.A.
TEL 1-212-282-3030

Mizuho Securities USA Inc.*

The Americas
BrazilSão Paulo Representative Office
Avenida Paulista, 1274-11° andar, CEP. 01310-926,
São Paulo, SP, Brazil
TEL 55-11-251-4199

CanadaMizuho Corporate Bank (Canada)
100 Yonge Street, Suite1102, Toronto, Ontario,
Canada M5C 2W1
TEL 1-416-874-0222

CaymanCayman 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

Waterfront Corporate Center, 111 River Street,
11th Floor, Hoboken, NJ 07030, U.S.A.
TEL 1-201-626-1000

Mizuho Trust & Banking Co. (USA) **666 Fifth Avenue, Suite 802,
New York, NY 10103 , U.S.A.
TEL 1-212-373-5900

The Bridgeford Group, Inc.*
445 Park Avenue, 20th Floor,
New York, NY 10022, U.S.A.
TEL 1-212-705-0880

Investor Information on Mizuho Financial Group, Inc.

Date of Establishment

Accounting Auditors

January 8, 2003

Shin Nihon & Co.

Paid-in Capital

Transfer Agent¥1,540,965 million

Mizuho Trust & Banking Co., Ltd.

Outstanding SharesFiscal Year

13,975,894.67 shares
Common Shares: 11,926,964.67 shares
Preferred Shares:
2,048,930 shares

April 1 to March 31

Convocation of General Meetings of Shareholders
A regular general meeting of shareholders of the Company
shall be convened no later than 3 months from the last dayof each business year and an extraordinary general meetingof shareholders shall be convened whenever necessary.

Number of Shareholders
Common Shares:
Preferred Shares:

256,975
3,415

Principal Shareholders (Common Stock)

Record Date

Percentageof shares
outstanding
Shares held(%)

Mizuho Holdings, Inc.

1,155,840.83

9.69

Japan Trustee Services Bank, Ltd.
(Trustee account)642,797.00

5.38

The Master Trust Bank of Japan, Ltd.
(Trustee account)

490,527.00

4.11

ROYAL TRUST CORPORATIONOF CANADA, LONDON–NON
TREATY ACCOUNT(Standing proxy agent:Standard Chartered Bank)

352,476.00

2.95

The Dai-ichi Mutual Life Insurance
Company

279,158.00

2.34

Trust & Custody Services Bank, Ltd.
(Meiji Yasuda Life Insurance Company
Retirement Benefit Trust Accountre-entrusted by Mizuho Trust &Banking Co., Ltd.)
137,000.00

1.14

Nippon Life Insurance Company

1.11

132,630.76

STATE STREET BANK AND TRUSTCOMPANY(Standing proxy agent:Mizuho Corporate Bank, Ltd.)124,202.00

1.04

LEHMAN BROTHERS ASIA
CAPITAL COMPANY(Standing proxy agent: LEHMAN
BROTHERS JAPAN INC.,
TOKYO BRANCH)

122,337.62

1.02

Asahi Mutual Life Insurance
Company

110,000.00

0.92

The Company shall deem shareholders having voting rights
appearing in writing or digitally on the last register of shareholders (including the register of beneficial shareholders; thesame shall apply hereinafter) as of March 31 of each year as
the shareholders who shall be entitled to exercise their rights
at the regular general meeting of shareholders for the relevant fiscal term.
In addition to the preceding paragraph, the Company may
temporarily set the record date whenever necessary, pursuant
to a resolution of the Board of Directors and upon giving aprior public notice thereof.

Dividends
Dividends on shares shall be paid to the shareholders or
registered pledgees appearing in writing or digitally on thelast register of shareholders as of March 31 of each year or tothe holders of fractional shares appearing in writing or digitally on the last register of holders of fractional shares as ofMarch 31 of each year.

Interim Dividends
The Company may, by a resolution of the Board of Directors,
make cash distributions pursuant to the provisions of Article
293-5 of the Commercial Code (referred to as “Interim
Dividends” in these Articles of Incorporation) to the shareholders or registered pledgees appearing in writing or digitally on the last register of shareholders as of September 30
of each year or to the holders of fractional shares appearing
in writing or digitally on the last register of holders of fractional shares as of September 30 of each year.

Stock Listings
Tokyo Stock Exchange
Osaka Securities Exchange(as of March 31, 2004)147

Disclosure Policy of Mizuho

 Voluntary, Proactive Disclosure
By winning the highest regard of our shareholders and the market, we aim to earn the trust of society as Japan's leading comprehensive financial services group. For this reason, we place one of the highest management priorities on continuing to disclose
information to our customers, shareholders, and investors both in and outside Japan in a timely, fair and appropriate manner inorder that they may form accurate judgments and appraisals of the group.
Specifically, we intend to use the following tools to promote further understanding of the group:*IR meetings and other presentations by top executives, and disclosure of these contents on our Web site.
*Highly detailed annual reports and other publications as well as constantly upgrading the contents of our Web site.
*Effective use of diversified disclosure channels such as conferences in both Japanese and English via the Internet.

Mizuho's IR Home Page

 Disclosure in Compliance with Relevant Laws
In accordance with the provisions of the Japanese Banking Law, the Securities and Exchange Law and the relevant regulations laid
down by stock exchanges in Japan and around the world, we will endeavor to disclose pertinent information in a timely andappropriate manner.

148

Contact Information

Mizuho Financial Group, Inc.
1-5-5, Otemachi,
Chiyoda-ku, Tokyo 100-0004,
Japan
Tel. +81-(0)3-5224-1111
URL: http://www.mizuho-fg.co.jp/

Mizuho Corporate Bank, Ltd.
1-3-3, Marunouchi,
Chiyoda-ku, Tokyo 100-8210,
Japan
Tel. +81-(0)3-3214-1111
URL: http://www.mizuhocbk.co.jp/

Mizuho Bank, Ltd.
1-1-5, Uchisaiwaicho,
Chiyoda-ku, Tokyo 100-0011,
Japan
Tel. +81-(0)3-3596-1111
URL: http://www.mizuhobank.co.jp/

Mizuho Securities Co., Ltd.
Otemachi First Square,
1-5-1, Otemachi,
Chiyoda-ku, Tokyo 100-0004,
Japan
Tel. +81-(0)3-5208-3210
URL: http://www.mizuho-sc.com/

Mizuho Trust & Banking Co., Ltd.
1-2-1, Yaesu,
Chuo-ku, Tokyo 103-8670,
Japan
Tel. +81-(0)3-3278-8111
URL: http://www.mizuho-tb.co.jp/

This report contains statements concerning the group's future performance.
These statements, however, do not guarantee the ultimate outcome of the group's
performance in the future, and take into consideration the risks and uncertainties that
may be caused by such factors as changes in the business environment.

149