UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of February 2017

Commission File Number 001-33098

Mizuho Financial Group, Inc.

(Translation of registrant’s name into English)

5-5, Otemachi 1-chome

Chiyoda-ku, Tokyo 100-8176

Japan

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒    Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes   ☐    No  ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-                    .

 

 

 

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THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE INTO THE PROSPECTUS FORMING A PART OF MIZUHO FINANCIAL GROUP, INC.’S REGISTRATION STATEMENT ON FORM F-3 (FILE NO. 333-213187) AND TO BE A PART OF SUCH PROSPECTUS FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

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UNAUDITED QUARTERLY CONSOLIDATED JAPANESE GAAP FINANCIAL STATEMENTS

AS OF AND FOR THE NINE MONTHS ENDED DECEMBER 31, 2016

On February 14, 2017, we published our unaudited quarterly consolidated financial statements as of and for the nine months ended December 31, 2016 prepared in accordance with Japanese GAAP as part of our quarterly securities report (shihanki hokokusho) for the same period filed by us with the relevant Japanese authorities. We have included in this report on Form 6-K an English translation of the unaudited quarterly consolidated financial statements and the notes thereto included in such quarterly securities report. Japanese GAAP differs in certain respects from U.S. GAAP. For a description of certain differences between U.S. GAAP and Japanese GAAP, see “Item 5. Operating and Financial Review and Prospects - Reconciliation with Japanese GAAP” in our most recent annual report on Form 20-F filed with the U.S. Securities Exchange Commission.

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Financial Information

 

1.

The quarterly consolidated financial statements of Mizuho Financial Group, Inc. (“MHFG”) are prepared in accordance with the “Ordinance on the Terminology, Forms, and Preparation Methods of Quarterly Consolidated Financial Statements” (Cabinet Office Ordinance No. 64 of 2007). The classification of assets and liabilities and that of income and expenses are in accordance with the “Ordinance for Enforcement of the Banking Act” (Ordinance of the Ministry of Finance No. 10 of 1982).

 

2.	Ernst & Young ShinNihon LLC conducted a quarterly review on the quarterly consolidated financial statements of MHFG for the nine months ended December 31, 2016, pursuant to Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act.

 

- 1 -

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I.

Quarterly Consolidated Financial Statements

    (1) Quarterly Consolidated Balance Sheet

 

		(Millions of yen)
		As of March 31, 2016						As of December 31, 2016
Assets
Cash and Due from Banks					36,315,471						42,239,153
Call Loans and Bills Purchased					893,545						3,350,216
Receivables under Resale Agreements					7,805,798						9,310,323
Guarantee Deposits Paid under Securities Borrowing Transactions					3,407,390						4,783,893
Other Debt Purchased					2,979,797						2,737,380
Trading Assets					13,004,522						12,316,374
Money Held in Trust					175,638						252,372
Securities		*2			39,505,971			*2			33,668,600
Loans and Bills Discounted		*1			73,708,884			*1			77,590,637
Foreign Exchange Assets					1,447,743						1,955,482
Derivatives other than for Trading Assets					3,157,752						3,474,571
Other Assets					4,144,131						4,978,265
Tangible Fixed Assets					1,085,791						1,075,255
Intangible Fixed Assets					804,567						1,013,233
Net Defined Benefit Asset					646,428						686,895
Deferred Tax Assets					36,517						56,178
Customers’ Liabilities for Acceptances and Guarantees					4,798,158						5,350,103
Reserves for Possible Losses on Loans					(459,531	)					(455,906	)
Total Assets					193,458,580						204,383,032

 

- 2 -

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		(Millions of yen)
		As of March 31, 2016						As of December 31, 2016
Liabilities
Deposits					105,629,071						117,403,443
Negotiable Certificates of Deposit					11,827,533						10,809,023
Call Money and Bills Sold					2,521,008						1,579,470
Payables under Repurchase Agreements					16,833,346						19,366,683
Guarantee Deposits Received under Securities Lending Transactions					2,608,971						1,703,370
Commercial Paper					1,010,139						817,561
Trading Liabilities					10,276,133						9,620,533
Borrowed Money					7,503,543						7,289,235
Foreign Exchange Liabilities					492,473						450,124
Short-term Bonds					648,381						249,471
Bonds and Notes					6,120,928						7,431,022
Due to Trust Accounts					5,067,490						4,532,960
Derivatives other than for Trading Liabilities					2,571,597						3,232,460
Other Liabilities					5,532,596						4,888,867
Reserve for Bonus Payments					62,171						35,992
Reserve for Variable Compensation					2,836						2,264
Net Defined Benefit Liability					51,514						54,255
Reserve for Director and Corporate Auditor Retirement Benefits					1,685						1,422
Reserve for Possible Losses on Sales of Loans					267						69
Reserve for Contingencies					5,271						4,885
Reserve for Reimbursement of Deposits					16,154						14,209
Reserve for Reimbursement of Debentures					39,245						33,079
Reserves under Special Laws					2,024						2,301
Deferred Tax Liabilities					414,799						328,728
Deferred Tax Liabilities for Revaluation Reserve for Land					67,991						67,155
Acceptances and Guarantees					4,798,158						5,350,103
Total Liabilities					184,105,335						195,268,698
Net Assets
Common Stock and Preferred Stock					2,255,790						2,256,275
Capital Surplus					1,110,164						1,134,449
Retained Earnings					3,197,616						3,515,270
Treasury Stock					(3,609	)					(4,875	)
Total Shareholders’ Equity					6,559,962						6,901,119
Net Unrealized Gains (Losses) on Other Securities					1,296,039						1,296,618
Deferred Gains or Losses on Hedges					165,264						33,796
Revaluation Reserve for Land					148,483						146,904
Foreign Currency Translation Adjustments					(53,689	)					(88,398	)
Remeasurements of Defined Benefit Plans					51,752						71,666
Total Accumulated Other Comprehensive Income					1,607,851						1,460,587
Stock Acquisition Rights					2,762						1,754
Non-controlling Interests					1,182,668						750,872
Total Net Assets					9,353,244						9,114,333
Total Liabilities and Net Assets					193,458,580						204,383,032

 

- 3 -

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(2) Quarterly Consolidated Statement of Income and

      Quarterly Consolidated Statement of Comprehensive Income

      Quarterly Consolidated Statement of Income

 

 

		(Millions of yen)
		For the nine months ended December 31, 2015						For the nine months ended December 31, 2016
Ordinary Income					2,385,807						2,395,600
Interest Income					1,069,570						1,052,662
Interest on Loans and Bills Discounted					697,965						697,429
Interest and Dividends on Securities					224,603						187,902
Fiduciary Income					38,112						35,238
Fee and Commission Income					546,463						540,438
Trading Income					216,540						242,502
Other Operating Income					238,893						281,723
Other Ordinary Income		*1			276,227			*1			243,036
Ordinary Expenses					1,615,897						1,819,816
Interest Expenses					308,247						409,628
Interest on Deposits					121,425						156,732
Fee and Commission Expenses					115,441						117,695
Trading Expenses					2,836						1,852
Other Operating Expenses					57,151						64,352
General and Administrative Expenses					1,008,415						1,079,276
Other Ordinary Expenses		*2			123,804			*2			147,010
Ordinary Profits					769,909						575,783
Extraordinary Gains		*3			20,355			*3			57,866
Extraordinary Losses		*4			3,731			*4			4,834
Income before Income Taxes					786,533						628,816
Income Taxes:
Current					144,349						139,651
Deferred					78,970						(43,146	)
Total Income Taxes					223,320						96,504
Profit					563,213						532,311
Profit Attributable to Non-controlling Interests					43,722						27,655
Profit Attributable to Owners of Parent					519,491						504,655

 

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      Quarterly Consolidated Statement of Comprehensive Income

 

		(Millions of yen)
		For the nine months ended December 31, 2015						For the nine months ended December 31, 2016
Profit					563,213						532,311
Other Comprehensive Income					(216,137	)					(145,220	)
Net Unrealized Gains (Losses) on Other Securities					(222,776	)					2,523
Deferred Gains or Losses on Hedges					22,551						(131,523	)
Revaluation Reserve for Land					6						(6	)
Foreign Currency Translation Adjustments					(10,609	)					(23,131	)
Remeasurements of Defined Benefit Plans					(1,675	)					20,055
Share of Other Comprehensive Income of Associates Accounted for Using Equity Method					(3,634	)					(13,138	)
Comprehensive Income					347,075						387,090
(Breakdown)
Comprehensive Income Attributable to Owners of Parent					301,494						358,964
Comprehensive Income Attributable to Non-controlling Interests					45,581						28,126

 

- 5 -

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Notes to Quarterly Consolidated Financial Statements

Change in scope of consolidation and change in scope of equity method

For the nine months ended December 31, 2016

 

(1)	Important changes in scope of consolidation

DIAM Co., Ltd., an affiliate under the equity method, and Mizuho Trust & Banking Co., Ltd., Mizuho Asset Management Co., Ltd. and Shinko Asset Management Co., Ltd., each a consolidated subsidiary of MHFG, integrated on October 1, 2016.

The integration was implemented through the following steps: (i) a merger between Mizuho Asset Management Co., Ltd. as surviving company and Shinko Asset Management Co., Ltd. as absorbed company; (ii) a company split between Mizuho Trust & Banking Co., Ltd. and Mizuho Asset Management Co., Ltd. (after the merger in (i) above) as successor company whereby rights and obligations attributed to the Asset Management Division of Mizuho Trust & Banking Co., Ltd. were transferred to Mizuho Asset Management Co., Ltd.; and (iii) a merger between DIAM Co., Ltd. as surviving company and Mizuho Asset Management Co., Ltd. as absorbed company. The company was renamed “Asset Management One Co., Ltd.” upon the integration.

During the third quarter ended December 31, 2016, Asset Management One Co., Ltd. and five other companies were newly included in the scope of consolidation as a result of the aforementioned integration.

During the third quarter ended December 31, 2016, Shinko Asset Management Co., Ltd. and one other company were excluded from the scope of consolidation as a result of the aforementioned integration.

 

(2)	Important changes in scope of equity method

During the third quarter ended December 31, 2016, DIAM Co., Ltd. and four other companies were excluded from the scope of equity method as a result of the aforementioned integration.

 

- 6 -

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Changes in Accounting Policies

Application of “Revised Implementation Guidance on Recoverability of Deferred Tax Assets”

MHFG has applied “Revised Implementation Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26, March 28, 2016) (hereinafter, the “Recoverability Implementation Guidance”) from the first quarter ended June 30, 2016 and partially revised the accounting method of recoverability of deferred tax assets.

The Recoverability Implementation Guidance has been applied in accordance with the transitional treatment set forth in Article 49(4) of the Recoverability Implementation Guidance. The differences between (i) the amounts of Deferred Tax Assets and Deferred Tax Liabilities when provisions applicable from ① to ③ of Article 49(3) of the Recoverability Implementation Guidance were applied as of April 1, 2016, and (ii) the amounts of Deferred Tax Assets and Deferred Tax Liabilities at the end of the fiscal year ended March 31, 2016, were added to Retained Earnings as of April 1, 2016.

As a result, Deferred Tax Assets (before offset) and Retained Earnings each increased by ¥1,426 million as of April 1, 2016.

Change in Presentation of Consolidated Financial Statements

Quarterly Consolidated Statement of Income

Refund of Income Taxes separately presented in the quarterly consolidated statement of income for the nine months ended December 31, 2015 has been included within Current Income Taxes from the nine months ended December 31, 2016 due to decreased materiality. To reflect this change in presentation, the quarterly consolidated financial statements for the nine months ended December 31, 2015 have been reclassified.

As a result of this, ¥(3,137) million presented in “Refund of Income Taxes” in the consolidated statement of income for the nine months ended December 31, 2015 has been reclassified as “Current Income Taxes.”

 

- 7 -

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Additional Information

The Board Benefit Trust (“BBT”) Program

Since MHFG operates its business giving due regard to creating value for diverse stakeholders and realizing improved corporate value through the continuous and stable growth of MHFG group pursuant to MHFG’s basic management policy defined under the Mizuho Financial Group’s Corporate Identity, MHFG has introduced a performance-based stock compensation program using a trust (the “Program”) that functions as an incentive for each Director, Executive Officer, and Specialist Officer to exert maximum effort in performing his or her duties, and also as consideration for such exertion of effort.

 

(1)	Outline of the Program

The Program has adopted the Board Benefit Trust (“BBT”) framework. MHFG’s shares on the stock market will be acquired through a trust established based on the underlying funds contributed by MHFG, and MHFG’s shares will be distributed to Directors, Executive Officers, and Specialist Officers of MHFG, Mizuho Bank, Ltd., Mizuho Trust & Banking Co., Ltd., and Mizuho Securities Co., Ltd. (the “Company Group”) in accordance with the Rules on Distribution of Shares to be prescribed in advance. The number of MHFG’s shares to be distributed will be determined pursuant to a performance evaluation based on the annual business plan.

A structure has been introduced for the distribution of MHFG’s shares under the Program, whereby the distribution will be deferred over three years, and the deferred portion will be subject to reduction or forfeiture depending on certain factors, including the performance of the Company Group or the relevant Directors, Executive Officers, and Specialist Officers.

Voting rights related to MHFG’s shares belonging to the trust assets under the trust shall not be exercised.

 

(2)	MHFG’s Shares Outstanding in the Trust

MHFG’s shares outstanding in the trust are recognized as Treasury Stock under Net Assets at the carrying amount (excluding the amount of incidental expenses) in the trust. The carrying amount of such Treasury Stock as of December 31, 2016 was ¥1,428 million for 9,000 thousand shares.

 

- 8 -

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Notes to Quarterly Consolidated Balance Sheet

 

*1.	Non-Accrual, Past Due & Restructured Loans, which are included in Loans and Bills Discounted, are as follows:

 

		(Millions of yen)
		As of March 31, 2016				As of December 31, 2016
Loans to Bankrupt Obligors			24,315				40,165
Non-Accrual Delinquent Loans			396,720				376,004
Loans Past Due for Three Months or More			907				31,190
Restructured Loans			463,108				429,790
Total			885,052				877,152

The amounts given in the above table are gross amounts before deduction of amounts for the Reserves for Possible Losses on Loans.

 

*2.	Amounts of liabilities for guarantees on corporate bonds included in Securities, which were issued by private placement (Article 2, Paragraph 3 of the Financial Instruments and Exchange Act)

 

		(Millions of yen)
		As of March 31, 2016				As of December 31, 2016
			1,039,783				1,112,468

Notes to Quarterly Consolidated Statement of Income

 

*1.	Other Ordinary Income includes the following:

 

		(Millions of yen)
		For the nine months  ended December 31, 2015				For the nine months  ended December 31, 2016
Gains on Sales of Stocks			216,034				179,627

 

*2.	Other Ordinary Expenses includes the following:

 

		(Millions of yen)
		For the nine months  ended December 31, 2015				For the nine months  ended December 31, 2016
System Migration-related Expenses			26,229				30,920

 

*3.	Extraordinary Gains includes the following:

 

		(Millions of yen)
		For the nine months  ended December 31, 2015				For the nine months  ended December 31, 2016
Gains and losses on step acquisition			—				56,226

 

*4.	Extraordinary Losses includes the following:

 

		(Millions of yen)
		For the nine months  ended December 31, 2015				For the nine months  ended December 31, 2016
Losses on Disposition of Fixed Assets			2,675				2,941
Losses on Impairment of Fixed Assets			708				1,615

 

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Notes to Quarterly Consolidated Statement of Cash Flows

We have not prepared Consolidated Statement of Cash Flows for the nine months ended December 31, 2016. Depreciation (including Amortization of Intangible Fixed Assets excluding Goodwill) and Amortization of Goodwill for the nine months ended December 31, 2015 and 2016 are as follows:

 

		(Millions of yen)
		For the nine months  ended December 31, 2015				For the nine months  ended December 31, 2016
Depreciation			119,584				121,775
Amortization of Goodwill			452				1,725

Changes in Net Assets

For the nine months ended December 31, 2015

 

1.	Cash dividends paid

 

Resolution

Type

Cash Dividends (Millions of yen)

Cash Dividends per Share (Yen)

Record Date

Effective Date

Resource of Dividends

May 15, 2015

Common Stock

98,452

4

March 31, 2015

June 4, 2015

Retained Earnings

The Board of Directors

Eleventh Series Class XI Preferred Stock

2,131

10

March 31, 2015

June 4, 2015

Retained Earnings

November 13, 2015

Common Stock

93,240

3.75

September 30, 2015

December 4, 2015

Retained Earnings

The Board of Directors

Eleventh Series Class XI Preferred Stock

1,440

10

September 30, 2015

December 4, 2015

Retained Earnings

For the nine months ended December 31, 2016   1.      Cash dividends paid

Resolution

Type

Cash Dividends (Millions of Yen)

Cash Dividends per Share (Yen)

Record Date

Effective Date

Resource of Dividends

May 13, 2016

Common Stock

93,838

3.75

March 31, 2016

June 3, 2016

Retained Earnings

The Board of Directors

Eleventh Series Class XI Preferred Stock

989

10

March 31, 2016

June 3, 2016

Retained Earnings

November 14, 2016

Common Stock

95,173

3.75

September 30, 2016

December 6, 2016

Retained Earnings

The Board of Directors

 

(Note)

Cash dividends based on the resolution of the Board of Directors on November 14, 2016 include ¥33 million of cash dividends on MHFG shares held by BBT trust account.

 

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Business Segment Information, etc.

Business Segment Information

 

1.	Summary of reportable segment

MHFG has introduced an in-house company system based on the group’s diverse customer segments as of April, 2016. The aim of this system is to leverage MHFG’s strengths and competitive advantage, which is the seamless integration of MHFG’s banking, trust and securities functions under a holding company structure, to speedily provide high-quality financial services that closely match customer needs.

Specifically, the company system is classified into the following five in-house companies, each based on a customer segment: the Retail & Business Banking Company, the Corporate & Institutional Company, the Global Corporate Company, the Global Markets Company, and the Asset Management Company.

The services that each in-house company is in charge of are as follows:

Retail & Business Banking Company:

Services for individual customers, small and medium-sized enterprises and middle market firms in Japan

Corporate & Institutional Company:

Services for large corporations, financial institutions and public corporations in Japan

Global Corporate Company:

Services for Japanese overseas affiliated corporate customers and non-Japanese corporate customers, etc.

Global Markets Company:

Investment services with respect to interest rates, equities and credits, etc. and other services

Asset Management Company:

Development of products and provision of services that match the asset management needs of its wide range of customers from individuals to institutional investors

The reportable segment information, set forth below, is derived from the internal management reporting systems used by management to measure the performance of the Group’s operating segments. Management measures the performance of each of the operating segments in accordance with internal managerial accounting rules and practices.

 

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2.	Gross profits (excluding the amounts of credit costs of trust accounts) and Net business profits or losses (excluding the amounts of credit costs of trust accounts, before reversal of (provision for) general reserve for losses on loans) by reportable segment

For the nine months ended December 31, 2015

 

		(Millions of yen)
		MHFG (Consolidated)
		Retail & Business Banking Company				Corporate & Institutional Company				Global Corporate Company				Global Markets Company				Asset Management Company				Others (Note 2)
Gross profits: (excluding the amounts of credit costs of trust accounts)			491,400				301,300				299,800				455,200				39,400				38,803				1,625,903
General and administrative expenses (excluding Non-Recurring Losses)			495,200				136,800				169,500				134,600				22,700				48,243				1,007,043
Others			—				—				—				—				—				(17,777	)			(17,777	)
Net business profits or losses (excluding the amounts of credit costs of trust accounts, before reversal of (provision for) general reserve for losses on loans)			(3,800	)			164,500				130,300				320,600				16,700				(27,217	)			601,082

 

(Notes)		1.		Gross profits (excluding the amounts of credit costs of trust accounts) is reported instead of sales reported by general corporations.
		2.		“Others” includes items which should be eliminated as internal transactions between each segment on a consolidated basis.
		3.		Following the introduction of an in-house company system based on customer segments made in April, 2016, reclassification was made on the above table to reflect the relevant change.

 

- 12 -

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For the nine months ended December 31, 2016

 

		(Millions of yen)
		MHFG (Consolidated)
		Retail & Business Banking Company				Corporate & Institutional Company				Global Corporate Company				Global Markets Company				Asset Management Company				Others (Note 2)
Gross profits: (excluding the amounts of credit costs of trust accounts)			461,800				305,200				283,100				462,500				37,400				9,034				1,559,034
General and administrative expenses (excluding Non-Recurring Losses)			506,500				139,500				171,300				149,100				22,900				54,935				1,044,235
Others			—				—				—				—				—				(5,972	)			(5,972	)
Net business profits or losses (excluding the amounts of credit costs of trust accounts, before reversal of (provision for) general reserve for losses on loans)			(44,700	)			165,700				111,800				313,400				14,500				(51,873	)			508,826

 

(Notes)			1.			Gross profits (excluding the amounts of credit costs of trust accounts) is reported instead of sales reported by general corporations.
			2.			“Others” includes items which should be eliminated as internal transactions between each segment on a consolidated basis.

 

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3.

The difference between the total amounts of Net business profits or losses (excluding the amounts of credit costs of trust accounts, before reversal of (provision for) general reserve for losses on loans) of reportable segments and the recorded amounts in the Quarterly Consolidated Statement of Income, and the contents of the difference (Matters relating to adjustment to difference)

The above total amounts of Net business profits or losses (excluding the amounts of credit costs of trust accounts, before reversal of (provision for) general reserve for losses on loans) derived from internal management reporting are different from Income before income taxes recorded in the Quarterly Consolidated Statement of Income.

The contents of the difference for the nine months ended December 31, 2015 and 2016 are as follows:

 

		(Millions of yen)
		For the nine months ended December 31, 2015				For the nine months ended December 31, 2016
Net Business Profits (excluding the amounts of credit costs of trust accounts, before reversal of (provision for) general reserve for losses on loans)			601,082				508,826
Credit Costs for Trust Accounts			—				—
General and Administrative Expenses (non-recurring losses)			(1,372	)			(35,040	)
Expenses related to Portfolio Problems (including reversal of (provision for) general reserve for losses on loans)			(24,825	)			(21,208	)
Gains on Reversal of Reserves for Possible Losses on Loans, and others			15,438				27,165
Net Gains (Losses) related to Stocks			184,131				137,805
Net Extraordinary Gains (Losses)			16,623				53,032
Others			(4,544	)			(41,763	)
Income before Income Taxes recorded in Quarterly Consolidated Statement of Income			786,533				628,816

 

- 14 -

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Business Combination, etc.

For the nine months ended December 31, 2016

DIAM Co., Ltd. (“DIAM”), an affiliate under the equity method, and Mizuho Trust & Banking Co., Ltd. (“MHTB”), Mizuho Asset Management Co., Ltd. (“MHAM”) and Shinko Asset Management Co., Ltd. (“Shinko Asset Management”), each a consolidated subsidiary of MHFG (collectively, the “Integrating Companies”), entered into an integration agreement, after obtaining approval by resolutions adopted by their respective boards of directors on July 13, 2016. The integration became effective on October 1, 2016. The integration was implemented through the following steps: (i) a merger between MHAM as surviving company and Shinko Asset Management as absorbed company; (ii) a company split between MHTB and MHAM (after the merger in (i) above) as successor company whereby rights and obligations attributed to the Asset Management Division of MHTB were transferred to MHAM; and (iii) a merger between DIAM as surviving company and MHAM as absorbed company.

The following is an overview of the merger between DIAM as the surviving company and MHAM as the absorbed company.

 

(1)

Name of the acquired company, business type, date of the combination, legal form of the combination, name of the company after the combination, shareholding ratio based on economic interests (shareholding ratio based on voting rights), grounds for determination of the acquiring company, and major reasons for the combination

 

 

- 15 -

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(2)	Period of the acquired company’s results included in the quarterly consolidated financial statements

From October 1, 2016 to December 31, 2016

 

(3)	Acquisition cost and its breakdown of the acquired company

 

Consideration for acquisition		Common stock of MHAM		¥100,948 million
Acquisition cost:				¥100,948 million

 

(4)	Merger ratio, calculation method, number of new shares to be issued, and gains and losses on the step acquisition

 

a.

Merger ratio

 

Company Name		DIAM Co., Ltd. (surviving company)		Mizuho Asset Management Co., Ltd. (absorbed company)
Merger Ratio		1		0.0154

The merger ratio has been calculated after combining shares of common stock and classified stock.

 

 

 

- 16 -

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(5)	Amount, cause, amortization method and amortization period of Goodwill

 

 

(6)	Amount and breakdown of Assets received and Liabilities undertaken on the combination date

 

The amount allocated to Customer-Related Assets (see (7) b. below) and the related amount of Deferred Tax Liabilities have not been included in a. Assets and b. Liabilities, respectively.

 

(7)	Amount allocated to Intangible Fixed Assets other than Goodwill, breakdown by major type, and weighted-average amortization period in total and by major type

 

 

- 17 -

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Securities

 

*

In addition to “Securities” on the quarterly consolidated balance sheet, Negotiable Certificates of Deposit in “Cash and Due from Banks,” certain items in “Other Debt Purchased” and certain items in “Other Assets” are also included. Unlisted stocks and others, the fair values of which are deemed extremely difficult to determine, are excluded.

 

1.	Bonds Held to Maturity

As of March 31, 2016

 

		(Millions of yen)
		Consolidated Balance Sheet Amount				Fair Value				Difference
Japanese Government Bonds			3,760,032				3,816,652				56,619
Foreign Bonds			1,057,542				1,056,557				(984	)
Total			4,817,574				4,873,209				55,634

As of December 31, 2016

 

		(Millions of yen)
		Quarterly Consolidated Balance Sheet Amount				Fair Value				Difference
Japanese Government Bonds			3,309,986				3,350,380				40,393
Foreign Bonds			843,116				836,770				(6,345	)
Total			4,153,102				4,187,150				34,047

 

(Note)

The fair value is based on market prices as of December 31, 2016 (March 31, 2016) and other data.

 

2.	Other Securities

As of March 31, 2016

 

		(Millions of yen)
		Acquisition Cost				Consolidated Balance Sheet Amount				Difference
Stocks			1,847,182				3,457,627				1,610,444
Bonds			18,737,977				18,874,484				136,507
Japanese Government Bonds			15,670,031				15,765,873				95,841
Japanese Local Government Bonds			234,586				240,680				6,093
Short-term Bonds			99				99				—
Japanese Corporate Bonds			2,833,259				2,867,831				34,571
Other			12,208,667				12,343,583				134,915
Foreign Bonds			9,678,529				9,719,598				41,068
Other Debt Purchased			345,607				348,919				3,311
Other			2,184,530				2,275,065				90,534
Total			32,793,827				34,675,695				1,881,867

 

- 18 -

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As of December 31, 2016

 

		(Millions of yen)
		Acquisition Cost				Quarterly Consolidated    Balance Sheet Amount				Difference
Stocks			1,738,381				3,579,553				1,841,172
Bonds			13,999,529				14,036,364				36,835
Japanese Government Bonds			10,884,101				10,901,290				17,188
Japanese Local Government Bonds			292,052				297,229				5,177
Short-term Bonds			99				99				—
Japanese Corporate Bonds			2,823,274				2,837,744				14,470
Other			11,964,314				11,934,545				(29,769	)
Foreign Bonds			9,219,136				9,058,320				(160,816	)
Other Debt Purchased			274,724				276,527				1,803
Other			2,470,454				2,599,698				129,243
Total			27,702,224				29,550,464				1,848,239

 

(Notes)		1.		Unrealized Gains (Losses) include ¥26,715 million and ¥20,174 million, which were recognized in the statements of income for the year ended March 31, 2016 and the nine months ended December 31, 2016, respectively, by applying the fair-value hedge method.
		2.		As for the quarterly consolidated balance sheet amount (consolidated balance sheet amount), fair value of Japanese stocks with a quoted market price is determined based on the average quoted market price, or other reasonable value during the last month of the nine months ended December 31, 2016 (last month of the fiscal year ended March 31, 2016), and fair value of securities other than Japanese stocks is determined at the quoted market price if available, or other reasonable value as of December 31, 2016 (March 31, 2016).
		3.		Certain Securities other than Trading Securities (excluding Securities for which it is deemed to be extremely difficult to determine the fair value) are devalued to the fair value, and the difference between the acquisition cost and the fair value is treated as the loss for the nine months ended December 31, 2016 (the fiscal year ended March 31, 2016) (impairment (devaluation)), if the fair value (primarily the closing market price as of December 31, 2016 (March 31, 2016)) has significantly deteriorated compared with the acquisition cost (including amortized cost), and unless it is deemed that there is a possibility of a recovery in the fair value.
				The amount of impairment (devaluation) for the fiscal year ended March 31, 2016 was ¥9,161 million.
				The amount of impairment (devaluation) for the nine months ended December 31, 2016 was ¥1,241 million.
				The criteria for determining whether a security’s fair value has “significantly deteriorated” are outlined as follows:
				•       Securities whose fair value is 50% or less of the acquisition cost
				•       Securities whose fair value exceeds 50% but is 70% or less of the acquisition cost and the quoted market price maintains a certain level or lower
		4.		Floating-rate Japanese Government Bonds
				Fair values of Floating-rate Japanese Government Bonds, according to our determination that current market prices may not reflect the fair value, are based on the reasonably calculated prices as book value on the quarterly consolidated balance sheet (consolidated balance sheet).
				In deriving the reasonably calculated prices, we used the Discounted Cash Flow method as well as other methods. The price decision variables include the yield of 10-year Japanese Government Bonds and the volatilities of interest rate swap options for 10-year Japanese Government Bonds as underlying assets.

 

 

 

 

- 19 -

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Money Held in Trust

 

1.	Money Held in Trust Held to Maturity

There was no Money Held in Trust held to maturity.

 

2.	Other in Money Held in Trust (other than for investment purposes and held to maturity purposes)

 

As of March 31, 2016

(Millions of yen)

Acquisition Cost

Consolidated Balance Sheet Amount

Difference

Other in Money Held in Trust

2,578

2,578

—

As of December 31, 2016

(Millions of yen)

Acquisition Cost

Quarterly Consolidated Balance Sheet Amount

Difference

Other in Money Held in Trust

2,895

2,895

—

 

- 20 -

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Derivatives Information

 

(1)	Interest Rate-Related Transactions

As of March 31, 2016

 

(Millions of yen)
Classification		Type		Contract Value				Fair Value				Unrealized Gains (Losses)
Listed		Futures			31,175,328				(8,003	)			(8,003	)
		Options			925,860				(48	)			(191	)
Over-the-Counter		FRAs			25,263,855				(7,105	)			(7,105	)
		Swaps			974,012,524				219,860				219,860
		Options			15,668,365				(95,242	)			(95,242	)
Inter-Company or Internal Transactions		Swaps			15,950,267				(132,078	)			(132,078	)
Total					—				(22,617	)			(22,760	)

 

(Notes)		1.		The above transactions are marked to market, and changes in unrealized gains (losses) are included in the consolidated statement of income.
		2.		Derivative transactions qualifying for hedge accounting under “Accounting and Auditing Treatment Relating to Adoption of Accounting Standards for Financial Instruments for Banks” (JICPA Industry Audit Committee Report No. 24, February 13, 2002) and others are excluded from the above table.

As of December 31, 2016

 

(Millions of yen)
Classification		Type		Contract Value				Fair Value				Unrealized Gains (Losses)
Listed		Futures			21,557,739				(5,256	)			(5,256	)
		Options			1,453,063				149				(95	)
Over-the-Counter		FRAs			40,766,097				(5,919	)			(5,919	)
		Swaps			862,895,230				288,850				288,850
		Options			14,073,445				(101,811	)			(101,811	)
Inter-Company or Internal Transactions		Swaps			17,939,604				(6,706	)			(6,706	)
Total					—				169,305				169,061

 

(Notes)		1.		The above transactions are marked to market, and changes in unrealized gains (losses) are included in the quarterly consolidated statement of income.
		2.		Derivative transactions qualifying for hedge accounting under “Accounting and Auditing Treatment Relating to Adoption of Accounting Standards for Financial Instruments for Banks” (JICPA Industry Audit Committee Report No. 24, February 13, 2002) and others are excluded from the above table.

 

- 21 -

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(2)	Currency-Related Transactions

As of March 31, 2016

 

(Millions of yen)
Classification		Type		Contract Value				Fair Value				Unrealized Gains (Losses)
Listed		Futures			94,095				(20	)			(20	)
Over-the-Counter		Swaps			42,725,365				81,081				67,031
		Forwards			88,458,808				155,743				155,743
		Options			6,016,845				(47,531	)			(49,912	)
Inter-Company or Internal Transactions		Swaps			4,031,159				(183,406	)			(17,723	)
		Forwards			149,337				869				869
Total					—				6,736				155,987

 

(Notes)		1.		The above transactions are marked to market, and changes in unrealized gains (losses) are included in the consolidated statement of income.
		2.		The following transactions are excluded from the above table:
				•       Transactions qualifying for hedge accounting under “Accounting and Auditing Treatment Relating to Adoption of Accounting Standards for Foreign Currency Transactions for Banks” (JICPA Industry Audit Committee Report No. 25, July 29, 2002) and others.
				•       Transactions which are specified for certain financial assets and liabilities denominated in foreign currencies and reflected on the consolidated balance sheet.
				•       Transactions denominated in foreign currencies which are eliminated in consolidation.

As of December 31, 2016

 

(Millions of yen)
Classification		Type		Contract Value				Fair Value				Unrealized Gains  (Losses)
Listed		Futures			93,107				—				—
Over-the-Counter		Swaps			44,958,844				5,134				73,714
		Forwards			105,524,072				53,333				53,333
		Options			5,279,815				(30,293	)			(34,691	)
Inter-Company or Internal Transactions		Swaps			3,964,961				(92,213	)			(9,801	)
		Forwards			137,699				6,490				6,490
Total					—				(57,549	)			89,045

 

(Notes)		1.		The above transactions are marked to market, and changes in unrealized gains (losses) are included in the quarterly consolidated statement of income.
		2.		The following transactions are excluded from the above table:
				•       Transactions qualifying for hedge accounting under “Accounting and Auditing Treatment Relating to Adoption of Accounting Standards for Foreign Currency Transactions for Banks” (JICPA Industry Audit Committee Report No. 25, July 29, 2002) and others.
				•       Transactions which are specified for certain financial assets and liabilities denominated in foreign currencies and reflected on the quarterly consolidated balance sheet.
				•       Transactions denominated in foreign currencies which are eliminated in consolidation.

 

- 22 -

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(3)	Stock-Related Transactions

As of March 31, 2016

 

(Millions of yen)
Classification		Type		Contract Value				Fair Value				Unrealized Gains  (Losses)
Listed		Index Futures			374,083				(340	)			(340	)
		Index Futures Options			1,540,882				(12,485	)			69
Over-the-Counter		Equity Linked Swaps			157,043				28,065				28,065
		Options			851,204				(4,958	)			(6,298	)
		Other			331,143				13,250				13,250
Total					—				23,530				34,745

 

(Notes)		1.		The above transactions are marked to market, and changes in unrealized gains (losses) are included in the consolidated statement of income.
		2.		Derivative transactions qualifying for hedge accounting are excluded from the above table.

As of December 31, 2016

 

(Millions of yen)
Classification		Type		Contract Value				Fair Value				Unrealized Gains  (Losses)
Listed		Index Futures			1,023,437				2,812				2,812
		Index Futures Options			2,153,274				(102,291	)			(9,312	)
Over-the-Counter		Equity Linked Swaps			241,244				11,670				11,670
		Options			953,716				(12,732	)			(16,220	)
		Other			447,751				32,390				32,390
Total					—				(68,151	)			21,340

 

(Notes)		1.		The above transactions are marked to market, and changes in unrealized gains (losses) are included in the quarterly consolidated statement of income.
		2.		Derivative transactions qualifying for hedge accounting are excluded from the above table.

 

- 23 -

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(4)	Bond-Related Transactions

As of March 31, 2016

 

(Millions of yen)
Classification		Type		Contract Value				Fair Value				Unrealized Gains (Losses)
Listed		Futures			1,220,803				930				930
		Futures Options			323,092				226				(120	)
Over-the-Counter		Options			903,279				(70	)			(77	)
Total					—				1,086				732

 

(Note)		The above transactions are marked to market, and changes in unrealized gains (losses) are included in the consolidated statement of income.

As of December 31, 2016

 

(Millions of yen)
Classification		Type		Contract Value				Fair Value				Unrealized Gains (Losses)
Listed		Futures			2,629,910				3,164				3,164
		Futures Options			878,768				(258	)			(212	)
Over-the-Counter		Options			1,094,238				102				(30	)
Total					—				3,008				2,920

 

(Note)		The above transactions are marked to market, and changes in unrealized gains (losses) are included in the quarterly consolidated statement of income.

 

(5)	Commodity-Related Transactions

As of March 31, 2016

 

(Millions of yen)
Classification		Type		Contract Value				Fair Value				Unrealized Gains (Losses)
Listed		Futures			6,192				(19	)			(19	)
Over-the-Counter		Swaps			230				0				0
		Options			320,350				4,143				4,143
Total					—				4,124				4,124

 

(Notes)		1.		The above transactions are marked to market, and changes in unrealized gains (losses) are included in the consolidated statement of income.
		2.		Commodities include oil, copper, aluminum and others.

As of December 31, 2016

 

(Millions of yen)
Classification		Type		Contract Value				Fair Value				Unrealized Gains (Losses)
Listed		Futures			12,533				271				271
Over-the-Counter		Swaps			5,515				1				1
		Options			309,098				1,881				1,881
Total					—				2,154				2,154

 

(Notes)		1.		The above transactions are marked to market, and changes in unrealized gains (losses) are included in the quarterly consolidated statement of income.
		2.		Commodities include oil, copper, aluminum and others.

 

- 24 -

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(6)	Credit Derivative Transactions

As of March 31, 2016

 

(Millions of yen)
Classification		Type		Contract Value				Fair Value				Unrealized Gains (Losses)
Over-the-Counter		Credit Derivatives			4,958,086				6,805				6,805
Total					—				6,805				6,805

 

(Note)		The above transactions are marked to market, and changes in unrealized gains (losses) are included in the consolidated statement of income.

As of December 31, 2016

 

(Millions of yen)
Classification		Type		Contract Value				Fair Value				Unrealized Gains (Losses)
Over-the-Counter		Credit Derivatives			4,197,377				(617	)			(617	)
Total					—				(617	)			(617	)

 

(Note)		The above transactions are marked to market, and changes in unrealized gains (losses) are included in the quarterly consolidated statement of income.

 

- 25 -

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Per Share Information

Net Income per Share of Common Stock and Diluted Net Income per Share of Common Stock are based on the following information:

 

				For the nine months  ended December 31, 2015				For the nine months  ended December 31, 2016
(1)    Net Income per Share of Common Stock		Yen			20.91				19.97
(The basis used for calculating Net Income per Share of Common Stock)
Profit Attributable to Owners of Parent		Millions of yen			519,491				504,655
Amount not attributable to Common Stock		Millions of yen			1,440				—
Cash Dividends on Preferred Stock		Millions of yen			1,440				—
Profit Attributable to Owners of Parent related to Common Stock		Millions of yen			518,050				504,655
Average Outstanding Shares of Common Stock (during the period)		Thousands of shares			24,767,389				25,259,486
(2)    Diluted Net Income per Share of Common Stock		Yen			20.46				19.88
(The basis used for calculating Diluted Net Income per Share of Common Stock)
Adjustment to Profit Attributable to Owners of Parent		Millions of yen			1,440				—
Cash Dividends on Preferred Stock		Millions of yen			1,440				—
Increased Number of Shares of Common Stock		Thousands of shares			619,574				121,757
Preferred Stock		Thousands of shares			601,534				110,154
Stock Acquisition Rights		Thousands of shares			18,039				11,603
Description of dilutive securities which were not included in the calculation of Diluted Net Income per Share of Common Stock as they have no dilutive effects and in which significant changes occurred after the end of the previous fiscal year					—				—

 

(Note)		In the calculation of Net Income per Share of Common Stock and Diluted Net Income per Share of Common Stock, MHFG shares outstanding in BBT trust account that were recognized as Treasury Stock in Shareholders’ Equity are included in Treasury Stock shares deducted in the calculation of the Average Outstanding Shares of Common Stock during the period. The average number of such Treasury Stock shares deducted during the period is 5,018 thousand.

Subsequent Events

There is no applicable information.

 

- 26 -

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II.

Others

At the meeting of the Board of Directors held on November 14, 2016, the interim cash dividends for the 15th term were resolved as follows:

 

Total amount of interim cash dividends			¥95,173 million
Interim cash dividends per share
Common Stock			¥3.75
Effective date and starting date of dividend payments			December 6, 2016

 

- 27 -