Mizuho Financial Group raised its fiscal 2026 profit outlook and doubled its planned share repurchases after strong first-quarter earnings and the Bank of Japan’s June policy-rate increase improved the outlook for domestic banking profitability.
Mizuho increased its forecast for profit attributable to owners of the parent by ¥100 billion, or approximately $644 million, to ¥1.4 trillion, or approximately $9.01 billion.
The company also raised its consolidated net business profit forecast by ¥120 billion, or approximately $773 million, to ¥1.75 trillion, or approximately $11.27 billion.
Management attributed the revisions to strong first-quarter earnings progress and the Bank of Japan’s latest rate increase.
Mizuho generated ¥575.8 billion, or approximately $3.71 billion, in consolidated net business profit during the first quarter, representing 35% of the revised full-year target.
Profit attributable to owners of the parent reached ¥422.9 billion, or approximately $2.72 billion, equivalent to 32% of the annual forecast.
Return on equity for the trailing 12 months improved to 12.5%.
Following the guidance increase, Mizuho now expects earnings per share to surpass its historical high of ¥551, or approximately $3.55 per share.
Management described that level as a milestone rather than a final objective.
Mizuho approved an additional ¥100 billion, or approximately $644 million, share-repurchase program, bringing total planned buybacks to ¥200 billion, or approximately $1.29 billion.
The company maintained its policy of returning at least 50% of earnings to shareholders while balancing capital adequacy, growth investment, and increasing risk-weighted assets.
The higher-rate environment supported wider domestic deposit-and-loan spreads.
Mizuho said domestic spreads continued improving as lending rates increased. Loan spreads remained solid in its retail and business banking operations and stable in its corporate and institutional business.
Total loans increased by ¥3.3 trillion, or approximately $21.25 billion, from the end of March, primarily because of strong corporate financing demand in Japan.
Deposits declined by ¥2.1 trillion, or approximately $13.52 billion, but management attributed the change to a seasonal reduction in corporate deposits. Retail deposits increased as new account openings grew.
Mizuho’s retail and business banking group increased net business profit by ¥44.4 billion, or approximately $286 million, while its corporate and institutional group added ¥54.3 billion, or approximately $350 million.
Rate increases supported earnings, while investment banking, real estate, and other fee businesses benefited from active corporate transactions and financing demand.
Markets Banking more than doubled its net business profit.
Sales and trading also grew in fixed income and equities across Japan and international markets.
Non-interest revenue increased across nearly all major divisions.
Investment banking performed strongly in Japan and overseas, while contributions from Mizuho’s acquisition of Greenhill became more visible.
The securities business generated record earnings, and the real estate and personal wealth management businesses also increased revenue.
Credit-related costs remained exceptionally low at ¥6.1 billion, or approximately $39 million.
Mizuho has accumulated approximately ¥165 billion, or about $1.06 billion, of forward-looking provisions to protect against changes in the Middle East and other external risks.
The company increased its Japanese government bond holdings but maintained an average portfolio duration of only 0.8 years.
Most medium- and long-term bonds had relatively short remaining maturities, limiting the bank’s sensitivity to additional interest-rate changes.
Mizuho reported an expense ratio of 47.7% as revenue growth outpaced operating expenses.
Management said the ratio was unusually low and expects the full-year figure to settle slightly below the prior-year level.
The company’s revised outlook reflects the growing benefit of higher Japanese interest rates, strong corporate lending demand, and improving fee revenue.
The additional buyback indicates that management believes Mizuho can increase capital returns while still funding loan growth and maintaining adequate reserves.
KEY QUOTES:
“We have revised our fiscal 2026 earnings outlook upward to consolidated net business profits of ¥1.75 trillion (approximately $11.27 billion) and profit attributable to owners of the parent of ¥1.4 trillion (approximately $9.01 billion).”
“This upward revision was decided based on solid earnings progress and the BOJ’s policy rate hike last month in June.”
Makoto Samejima, Group Chief Financial Officer Of Mizuho Financial Group
