Mizuho Financial Group (8411) FY2026 Q3 Earnings Report

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Executive Summary

This earnings result requires attention because the increases in ordinary income and net income were primarily driven by cost controls and temporary factors, while the top line declined. Ordinary revenue (equivalent to revenue) was ¥6兆6,134.2B, down 6.5% year on year, while ordinary income was ¥1兆2,546.6B, up 11.3%, and net income was ¥1兆238.7B, up 19.2%. The decline in ordinary expenses and increases in net interest income and income from fees and commissions supported earnings growth, while the net extraordinary gain of ¥685.6B also contributed to net income growth.

Factors Affecting Performance

【Revenue】Ordinary revenue was ¥6兆6,134.2B, down 6.5% year on year. By component, interest and dividend income decreased 7.2% year on year to ¥4兆3,880.9B, while income from fees and commissions increased 14.3% to ¥9,393.1B, indicating expansion in the fee-based business. Trading income decreased 20.1% to ¥6,573.3B, with fluctuations in market-related revenue contributing to the decline in revenue.

【Profit and Loss】Ordinary expenses decreased 9.9% from ¥5兆9,469.8B to ¥5兆3,587.6B, primarily due to a decline in funding costs, which decreased 14.9% year on year. General and administrative expenses increased 11.1% to ¥1兆5,091.7B despite the decline in ordinary revenue, warranting attention from a cost-efficiency perspective. Ordinary income increased 11.3% to ¥1兆2,546.6B, while net income increased 19.2% to ¥1兆238.7B. The net amount of extraordinary income of ¥800.5B and extraordinary losses of ¥115.0B, or ¥685.6B, also contributed to the increase. Overall, the results represent declining revenue but rising profit.

Key Financial Indicators

【Profitability】The ordinary income margin was 19.0%, improving from 15.9% in the same period of the previous year, while the net income margin remained high at 15.5%. Annualized ROE was 12.1%, reflecting a structure in which the high financial leverage characteristic of the banking industry—total assets divided by net assets of approximately 26.4x—amplifies ROE. 【Cash Flow Quality】The net extraordinary gain of ¥685.6B contributed to net income and should be evaluated separately from recurring earnings power. 【Investment Efficiency】Total assets increased 5.0% year on year to ¥297兆5,701.7B, while ordinary revenue decreased 6.5%, indicating that the expansion in asset size has not translated directly into revenue. 【Financial Soundness】Net assets increased 7.0% year on year to ¥11兆2,587.5B, and the equity ratio was 3.8%. The loan-to-deposit ratio is estimated at approximately 62.0%, a level that leaves room for further loan expansion relative to the deposit base.

Cash Flow Analysis

The data does not include figures for operating cash flow, investing cash flow, or financing cash flow in the statement of cash flows. In the banking industry, changes in deposits, loans, repurchase transactions, and trading assets and liabilities constitute the principal components of fund flows. Loans increased 4.8% year on year to ¥98兆6,690.3B, while deposits increased only 0.2% to ¥159兆388.99B. Securities increased 21.2% to ¥41兆5,847.96B, indicating an expansion in invested assets. Net assets increased ¥7,349.9B year on year, with the improvement in valuation differences on securities contributing to capital accumulation.

Quality of Earnings

The increase in net income reflects a mixture of improvements in recurring earnings and temporary factors. Net interest income increased 4.2% year on year to ¥9,903.7B, while income from fees and commissions also increased 14.3%, indicating expansion in recurring revenue sources. On the other hand, trading income decreased 20.1%, leaving uncertainty regarding the repeatability of market-related revenue. Extraordinary income of ¥800.5B and extraordinary losses of ¥115.0B resulted in a net increase of ¥685.6B in profit before tax, up from ¥406.99B in the same period of the previous year. A certain portion of the 19.2% year-on-year increase in net income was attributable to this temporary factor, and the recurring earnings growth rate is therefore more moderate. Comprehensive income was ¥1兆2,934.9B, an increase of 103.0% from ¥6,370.0B in the same period of the previous year, as the improvement in valuation differences on securities resulted in capital growth exceeding the increase in net income.

Earnings Forecast and Guidance

The full-year forecast for net income attributable to owners of the parent is ¥1兆1,300B, and progress against Q3 cumulative net income of ¥1兆198.9B (this net income represents the amount attributable to owners of the parent) is 90.3%. This is 15.3 percentage points above the standard 75% level, indicating solid progress. The forecast would be achieved if approximately ¥1,101B in profit is secured in Q4. The full-year forecast EPS is ¥454.39, which is also consistent with Q3 cumulative basic EPS of ¥409.21.

Shareholder Returns

The full-year forecast dividend per share is ¥145.0, based on an assumed interim dividend of ¥72.5 in Q2 and a year-end dividend of ¥72.5. The forecast payout ratio against forecast full-year EPS of ¥454.39 is 31.9%, representing a conservative level when dividends alone are considered. Based on approximately 24.70B shares, calculated by deducting treasury shares from the number of shares issued, estimated total annual dividends amount to approximately ¥3,582B. Treasury shares increased by ¥865.7B from ¥94.6B in the same period of the previous year to ¥960.3B, indicating activity involving share repurchases or disposals as part of capital allocation. However, because the amount executed during the current period cannot be confirmed, the total return ratio combining dividends and share repurchases has not been calculated.

Risk Factors

1. Interest Rate and Spread Risk: Although net interest income increased 4.2% year on year, if the increase in deposit interest rates exceeds the improvement in asset yields, it could place pressure on the sustainable expansion of net interest income.

2. Market-Related Revenue Volatility Risk: Trading income decreased 20.1% year on year to ¥6,573.3B, and changes in market conditions and customer flows may readily affect quarterly profit.

3. Expense Increase Risk: General and administrative expenses increased 11.1% year on year, outpacing the 6.5% decline in ordinary revenue. If this trend continues, it could affect the sustainability of margin improvement.

Industry Benchmark (Reference; Compiled by the Company)

Industry Benchmark (bank)

Profitability and Returns

Growth and Capital Efficiency

※Source: Compiled by the Company

Key Points from the Earnings Results

1. Q3 cumulative net income attributable to owners of the parent increased 19.2% year on year, with progress against the full-year forecast at 90.3%, indicating solid performance. However, the fact that the net extraordinary gain of ¥685.6B accounted for part of net income growth should be considered when evaluating recurring earnings power.

2. While net interest income and income from fees and commissions increased, trading income decreased 20.1%, resulting in a mixed revenue composition. The fact that general and administrative expenses are increasing at a pace exceeding the decline in ordinary revenue is also a key point of attention regarding the cost structure.

3. The forecast payout ratio is approximately 32%, representing a conservative level relative to profit when dividends alone are considered. Treasury shares increased ¥865.7B year on year, and developments in capital policy will be an important factor in assessing the future shareholder return policy.

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company based on publicly available earnings data. Investment decisions should be made at your own responsibility, after consulting with professionals as necessary.

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