Mizuho Financial Group, Inc. (MFG) Q1 FY2027 20-F and 6-K Summary: Business, Risk Factors, MD&A

Business

Source: Form 20-F for the fiscal year ended March 31, 2026, accession 0001193125-26-283791 (Items 4 and 5).

Mizuho Financial Group is a Tokyo-based bank holding company and one of Japan's three major banking groups; the other two are Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group. Through Mizuho Bank, Mizuho Trust & Banking and Mizuho Securities, it takes deposits and lends to individuals, small and mid-sized companies, large corporations, financial institutions and public bodies in Japan and abroad. It also underwrites and trades securities, provides trust, custody and asset management services, and advises on M&A. Most of its money comes from net interest income on loans, deposits and securities holdings. Fees and commissions (securities brokerage, loan arrangement such as syndicated loans, trust, asset management, remittance and guarantees) add to that, along with trading and investment gains. In fiscal 2025, under U.S. GAAP, net interest income was $11.19 billion, fee and commission income $9.13 billion and total noninterest income $18.70 billion. Mizuho is designated a global systemically important bank (G-SIB).

The group is run through five customer-based "in-house companies", which are also its reportable segments. Two further units, Global Transaction Banking and Research & Consulting, support all five. The company's management measure of segment revenue is gross profits plus net gains related to ETFs and others. On that measure, and under Japanese GAAP, fiscal 2025 segment revenue totalled $23.33 billion:

• Retail & Business Banking Company (RBC) ($6.53 billion): individuals, SMEs and middle-market firms in Japan. It covers deposits, housing and card loans, NISA and other asset-building products, inheritance and business-succession services, and lottery-ticket sales on behalf of prefectures. It has alliances with Rakuten Securities and, from 2026, Rakuten Bank. Mizuho Bank bought 76.9% of Upsider Holdings, which combines AI technology with credit expertise, on September 19, 2025 for about $311.17 million.
• Corporate & Investment Banking Company (CIBC) ($4.91 billion): large Japanese corporations, financial institutions and public-sector entities. It provides lending, bond and equity underwriting, M&A advisory and real-estate solutions. Bank and securities staff cover these clients jointly under a "dual-hat" structure.
• Global Corporate & Investment Banking Company (GCIBC) ($5.69 billion): Japanese companies operating overseas and non-Japanese companies. A "Global 300" strategy targets roughly 300 blue-chip non-Japanese clients, built on the group's position in U.S. capital markets. In December 2025 Mizuho Securities agreed to buy more than 60% of India's Avendus Capital for up to 47 billion Indian rupees (about $519.91 million at the agreement-date rate).
• Global Markets Company (GMC) ($4.41 billion): sales and trading for clients, plus the group's asset-liability management and its investment portfolios of bonds, equities and other securities.
• Asset Management Company (AMC) ($487.83 million): investment products for retail and institutional investors through Asset Management One (70% owned), working with partners including BlackRock, Partner Group AG and Golub Capital.

The business leans heavily on Japan, but the United States contributes a large share of earnings. At March 31, 2026, 59.6% of total assets were booked in Japan and 21.7% in the United States. Among the regions that made a profit in fiscal 2025, the United States produced 82.3% of the total and Japan 4.6% (U.S. GAAP geographic allocation, which the company says rests on estimates).

The group is still reshaping itself. It sold its global custody business outside Japan to State Street (completed October 2, 2025) and bought Augusta & Co, a European renewable-energy advisory firm (completed October 31, 2025). Mizuho Research & Technologies was merged into Mizuho Bank on April 1, 2026. The group also keeps selling down its cross-shareholdings in other listed Japanese companies, with $760.61 million sold in fiscal 2025 (Japanese GAAP, acquisition cost basis). Its main competitors at home are the other megabanks, trust and regional banks, Japan Post Bank and other government institutions, securities firms and fintech entrants. Abroad it competes with major global banks.

Risk factors

Source: Form 20-F, Item 3.D, accession 0001193125-26-283791.

These are the substantive risks the company describes:

• Macro and geopolitical conditions. Results track the Japanese economy and global markets. The company names instability in the Middle East, protectionism and trade tensions, possible overheating of equity markets amid AI-related investment, and credit risk building up in the fast-growing private credit market. Any of these could raise credit costs, cut asset values and strain liquidity.
• Credit concentration. Mizuho is the main lender to many large corporate borrowers. Its exposure is relatively concentrated in real estate, manufacturing and financial institutions. If the credit cycle turns, problem loans could rise sharply and collateral values could fall.
• Japanese equity holdings. The group holds large stakes in Japanese listed companies. A fall in Japanese share prices would bring unrealized losses, impairments and losses on sale, and would cut regulatory capital, because unrealized gains on these holdings count toward capital ratios.
• Interest rates. Large holdings of Japanese government bonds and U.S. Treasuries expose the group to rising rates. It recorded significant trading losses on foreign bonds in fiscal years ended March 2022 through March 2024 after U.S. rates rose. Mismatched maturities also mean rate moves can squeeze its spread.
• Foreign exchange and foreign-currency funding. A material part of the balance sheet is in U.S. dollars. Dollar funding depends more on capital markets than yen funding does, so market stress could raise funding costs or cause cash-flow problems.
• Credit ratings. A downgrade would raise funding costs and require more collateral. At March 31, 2026, the company estimated that additional derivative collateral of about $47.15 million would be needed for a one-notch downgrade and about $182.30 million for a two-notch downgrade.
• Capital, leverage, liquidity and TLAC rules. As a G-SIB, Mizuho must meet Basel III capital, leverage, liquidity (LCR and NSFR) and total loss-absorbing capacity (TLAC) requirements set by Japan's Financial Services Agency, and local rules in places such as the United States. A shortfall could lead to corrective orders, limits on capital outflows or restrictions on business. Most non-CET1 regulatory capital is raised by issuing debt, which may become unavailable or expensive when conditions are poor.
• Holding-company dividends. Almost all of the holding company's income comes from subsidiary dividends. Those dividends can be restricted by the Companies Act or by bank capital rules.
• IT systems and cyber-attacks. The company names the risk of system outages, including at cloud and outsourcing providers, and of increasingly sophisticated attacks, which it notes AI can automate. Such events could disrupt payments, leak customer data and draw regulatory action.
• AML, sanctions and conduct. Shortcomings in anti-money-laundering and counter-terrorism-financing controls could bring regulatory action, especially with the FATF's 5th Round Mutual Evaluation of Japan scheduled for 2028. The group also does a limited amount of business connected with U.S.-designated state sponsors of terrorism and keeps a representative office in Iran, which could deter some customers and investors or prompt U.S. regulatory action.
• Climate and environmental/social expectations. Clients exposed to carbon taxes, the energy transition or natural disasters could weaken. Financing activities that fall short of stakeholder expectations could damage the group's reputation and raise its credit costs.
• Strategy, AI and model risk. Strategic initiatives may not deliver their targets. Poor management of AI, or reliance on flawed models, could cause losses or regulatory breaches.
• Deferred tax assets, pensions and long-lived assets. A lower estimate of future taxable income, revised pension assumptions or impairment of long-lived assets could hit earnings and capital.
• ADS holders. ADS holders have fewer rights than registered shareholders and act through the depositary. The dollar value of the ADSs and their dividends falls when the yen weakens.

Management's discussion: fiscal 2025 (year ended March 31, 2026)

Source: Form 20-F, Item 5, accession 0001193125-26-283791. U.S. GAAP unless noted.

Earnings roughly doubled. Net income attributable to MHFG shareholders was $7.69 billion, up 97.4%; in yen it rose 95.2%. Basic earnings per ADS were $6.19, against $3.08 a year earlier. Net income was 12.92% of average shareholders' equity, compared with 6.61% the year before. The rise came from three main sources:

• Net interest income rose to $11.19 billion (up 35.4%), and the average interest spread widened to 0.40% from 0.16%. The company attributes the wider spread mainly to a lower average rate on interest-bearing liabilities, which more than offset a lower average yield on interest-earning assets. In Japan, the Bank of Japan raised its policy rate (to about 0.5% and then, in December 2025, to about 0.75%), and the 10-year JGB yield climbed to 2.354% at March 31, 2026. As a result, the average yield on domestic loans rose 0.28 percentage points to 1.51%, while the average rate paid on domestic deposits rose only 0.18 points to 0.36%. Abroad, the average yield on foreign loans fell 1.11 points to 4.76% and the average rate on foreign deposits fell 1.03 points to 3.47%.
• Investment gains of $6.38 billion replaced the prior year's net loss of $1.22 billion. Gains on equity securities of $6.88 billion mainly reflected higher fair values of Japanese shares; the Nikkei rose 43.4% over the fiscal year.
• Fees and commissions rose to $9.13 billion (up 15.3%). The increase came mainly from syndicated-loan arrangement fees at the domestic bank and from securities-related fees at the securities subsidiaries.

Several items pulled the other way. Trading account gains fell to $683.62 million (down 87.0%), mainly because rising long-term rates reduced the value of receive-fixed interest-rate swaps, and because gains on foreign-currency securities carried at fair value were smaller. Noninterest expenses rose to $17.46 billion (up 10.6%). Salaries and benefits rose 8.0% in yen at the domestic bank, the domestic securities arm and certain U.S. subsidiaries, and general and administrative costs rose 16.5% in yen on property expenses and software amortization at the domestic bank. The provision for credit losses roughly doubled to $1.25 billion (up 96.6%), mainly on domestic corporate and foreign borrowers. The company also added management overlays to its allowance for the Middle East conflict and for weakening borrowers, including knock-on effects in the automotive supply chain.

Segments (Japanese GAAP management basis). Net business profits plus net gains related to ETFs and others reached $9.70 billion, up 29.2%:

• RBC: $1.58 billion, up 71.2%. Deposit income improved as yen rates rose, and profits from solution business increased.
• CIBC: $3.32 billion, up 24.5%. Deposit income also improved here, alongside higher solution and securities business income.
• GCIBC: $2.44 billion, up 1.8%. Higher capital-markets income and credit-related fees were almost entirely offset by a 10.2% rise in expenses (in yen).
• GMC: $1.72 billion, up 67.7%. Sales and trading in the Americas grew, and banking income improved.
• AMC: $130.09 million, up 68.0%, on revenue linked to assets under management.

Balance sheet and credit quality (U.S. GAAP, March 31, 2026). Total assets were $1.85 trillion, net loans $660.54 billion and deposits $1.13 trillion. Total MHFG shareholders' equity was $68.27 billion. Nonaccrual loans fell to $5.65 billion, from $7.08 billion a year earlier, or 0.9% of total loans against 1.1%. Most of the decline was in loans to large Japanese companies, while nonaccrual loans to foreign borrowers rose.

Capital (Japanese GAAP regulatory basis, March 31, 2026). The common equity Tier 1 (CET1) ratio was 13.16%, against a requirement of 8.13%. The Tier 1 ratio was 15.73%, the total capital ratio 17.61% and the leverage ratio 4.87%. Profit attributable to owners of parent under Japanese GAAP was $8.29 billion for the year.

Shareholder returns. The fiscal 2025 dividend was $1.92 per ADS (¥145 per share), up from $1.84 per ADS (¥140 per share) a year earlier. Under the November 2025 buyback program, extended in February 2026, the company repurchased 47,016,600 shares for $1.92 billion, finishing on March 11, 2026. It cancelled those shares on April 22, 2026. Its stated policy is to raise the dividend per share progressively, by about ¥5 per share a year ($0.07 per ADS), and to buy back shares from time to time, using a total payout ratio of 50% or more as a guide.

Current quarter: first quarter of fiscal 2026 (three months ended June 30, 2026)

Source: interim results on Form 6-K, "Consolidated Financial Statements for the First Quarter of Fiscal 2026 (Under Japanese GAAP)", filed July 30, 2026, accession 0001193125-26-324795. All figures are Japanese GAAP and were not reviewed by an audit firm. Capital ratios are from the Form 6-K filed August 14, 2026, accession 0001193125-26-350179. The results report gives the figures but no management commentary; it refers readers to a separate summary on the company's website.

Results. Profit attributable to owners of parent was $2.65 billion, against $2.01 billion a year earlier, up 32.0% in dollars (the company reports a 45.5% rise in yen). Ordinary profits were $3.76 billion, up 47.3% (62.5% in yen). Earnings per ADS were $2.18, against $1.60. The dollar growth rates are lower than the yen rates because the yen averaged ¥159.36 per dollar this quarter, compared with ¥144.49 a year earlier.

Consolidated gross profits rose to $6.44 billion (up 21.7%; 34.3% in yen), with gains across the main lines:

• net interest income of $2.28 billion (up 9.5%; 20.8% in yen);
• net fee and commission income of $1.67 billion (up 9.9%; 21.3% in yen);
• net trading income of $1.74 billion (up 35.5%; 49.4% in yen).

General and administrative expenses were $3.17 billion, flat in dollars and up 9.8% in yen. Net gains related to stocks rose to $463.72 million (up 68.4%), including $795.04 million of gains on sales. Credit-related costs were a net charge of $38.28 million, compared with a net reversal of $78.90 million in the same quarter a year earlier. Consolidated net business profits were $3.34 billion, up 54.7%.

Margins. At Mizuho Bank's domestic operations, the yield on loans rose to 1.60% from 1.21% a year earlier and the cost of deposits rose to 0.32% from 0.17%. The loan-deposit margin therefore widened to 1.27% from 1.04%.

Segments (management basis). Net business profits plus ETF-related gains totalled $3.61 billion, up 65.0%. Global Markets contributed $1.25 billion, against $508.39 million a year earlier, including $269.22 million of ETF-related gains, compared with $22.22 million a year earlier. The other segments:

• RBC: $515.93 million (up 97.0%);
• CIBC: $960.18 million (up 40.5%);
• AMC: $32.20 million (up 4.0%);
• GCIBC: $599.15 million, down 19.9% (11.7% in yen), the only segment to decline.

The prior-year segment figures were restated for a change in how expenses are allocated, made in April 2026.

Balance sheet (June 30, 2026). Total assets were $1.87 trillion. Loans and bills discounted were $633.91 billion, against $627.06 billion at March 31, and deposits were $1.02 trillion, against $1.04 trillion (the yen weakened between the two dates). Cash and due from banks fell to $320.55 billion from $387.02 billion, while securities holdings rose to $307.01 billion from $267.99 billion. Within that, Japanese government bonds classed as other securities grew to $126.66 billion, from $93.82 billion at March 31. Net unrealized gains on other securities were $11.53 billion, made up of $14.70 billion of gains on Japanese stocks offset by $2.24 billion of unrealized losses on foreign bonds. Non-performing loans under the Financial Reconstruction Act fell to $5.18 billion from $5.78 billion, which lowered the NPL ratio to 0.70% from 0.80%.

Capital (Basel III, June 30, 2026). The CET1 ratio rose to 13.51% from 13.16% at March 31. CET1 capital was $68.32 billion against risk-weighted assets of $505.59 billion. The Tier 1 ratio was 15.94% and the total capital ratio 17.74%. In June 2026 the company redeemed ¥87.0 billion ($535.02 million) of perpetual subordinated Additional Tier 1 bonds and ¥155.0 billion ($953.20 million) of Tier 2 subordinated bonds (Form 20-F, Item 5).

Shares. Issued shares fell to 2,442,831,994 at June 30, 2026, from 2,489,848,594 at March 31, after the April 22 cancellation; 9,294,931 shares were held in treasury. On May 15, 2026 the board approved a new buyback of up to 25,000,000 shares or ¥100 billion ($630.16 million), running from May 18 to August 31. By June 30, 5,302,700 shares had been repurchased for $246.89 million (Form 6-K, accession 0001193125-26-291413).

Guidance. On July 30, 2026, after the first-quarter results, the company raised its fiscal 2026 forecast for profit attributable to owners of parent (Japanese GAAP) to ¥1.4 trillion ($8.61 billion), from ¥1.3 trillion ($7.99 billion). The new forecast is 12.1% above fiscal 2025 in yen terms, and equals ¥575.08 per share ($7.07 per ADS). The dividend forecast is unchanged at ¥150 per share ($1.84 per ADS), paid as $0.92 per ADS (¥75 per share) at the interim and the same at year-end; the fiscal 2025 dividend was ¥145 per share ($1.92 per ADS at that year's average rate).

Subsequent events

Events after June 30, 2026, from the company's Form 6-K reports through September 24, 2026. The first-quarter results report itself contains no subsequent-events note.

• Senior notes ($6.6 billion). On July 13, 2026 Mizuho furnished the legal opinions for its offering outside Japan of $6.6 billion of senior callable notes in six tranches: four fixed-to-fixed reset tranches with coupons from 4.782% to 5.824% maturing between 2030 and 2047, and two floating-rate tranches due 2030 and 2032. The notes were sold under an underwriting agreement dated June 29, 2026 (accession 0001193125-26-301671).
• Buyback enlarged and completed. On July 30, 2026 the board raised the May program to up to 35,000,000 shares or ¥200 billion ($1.25 billion), extended it to September 30, and moved the planned cancellation date from September 24 to October 23, 2026 (accession 0001193125-26-324804). The program was completed on September 18, 2026 with 24,352,700 shares bought for ¥199,999,944,900 ($1.25 billion). All of those shares, 1.0% of shares outstanding before cancellation, are scheduled to be cancelled on October 23, 2026 (accession 0001193125-26-400092; monthly progress in 0001193125-26-329443 and 0001193125-26-377439).
• Perpetual subordinated notes ($1.0 billion). On September 14, 2026 the company furnished the documents for its offering outside Japan of $1.0 billion of 7.050% fixed-rate resetting perpetual subordinated notes. The notes are governed by a new perpetual subordinated indenture with The Bank of New York Mellon as trustee, dated September 14, 2026, and an underwriting agreement dated September 8, 2026. The indenture includes write-down provisions tied to the Additional Tier 1 framework (accession 0001193125-26-390052).
• Transactions announced before the quarter-end, three of them scheduled after it. The Form 20-F described these as pending. None of the Form 6-K reports furnished through September 24, 2026 reports that any of them has closed, and the first-quarter report states there was no significant change in the scope of consolidation during the quarter.
  • The Avendus Capital acquisition (more than 60%, for up to 47 billion rupees, about $519.91 million) was expected to complete by July 2026, subject to regulatory approvals.
  • The group was to transfer 24,574,200 common shares of Mizuho Leasing (a 23.6%-owned equity-method affiliate) to Nippon Steel Kowa Real Estate and subscribe for 32,000,000 special-class shares of Mizuho Leasing, effective July 1, 2026, subject to conditions.
  • Mizuho Bank was to transfer its shares in Rakuten Card to Rakuten Bank in exchange for 23,559,673 Rakuten Bank shares (10.52%) on October 1, 2026, subject to conditions, under a capital and business alliance agreed on May 20, 2026.
  • Under an alliance signed on May 15, 2026, Mizuho Bank is to transfer Orient Corporation shares representing 15% of the voting rights to Muninova Holdings. The Form 20-F gives no completion date for the transfer.